Wagga Truck Towing Pty Limited v O'Toole; IAG Limited t/as NRMA Insurance v O'Toole

Judgment 1GILES JA: I agree with Hodgson JA, save that I would prefer not to rest fault in the use or operation of the vehicle on fault in its parking. It is sufficient that the fault was in its maintenance. 2HODGSON JA: On 30 March 2010, Garling DCJ gave his decision in proceedings in which the first respondent to both appeals (Mr O'Toole) had sued Rhett Russell (for whom the appellant in the second appeal (NRMA) was later substituted) and the appellant in the first appeal (Wagga Towing), and in which Mr Russell had cross-claimed against Wagga Towing. The primary judge found a verdict for Mr O'Toole against NRMA for $782,057 and against Wagga Towing for $788,557, and apportioned liability between the defendants as 70 per cent to NRMA and 30 per cent to Wagga Towing. The appeal papers do not disclose the precise terms of any judgment entered into pursuant to those findings. 3Each appellant brings an appeal from that decision.

Outline of facts 4In early October 2002, Mr O'Toole commenced employment as a courier with a company run by Mr Russell. 5Mr Russell raced a V8 Holden. Before Mr O'Toole commenced employment with Mr Russell's company, Mr O'Toole accompanied Mr Russell to a race meeting; and after he commenced employment, he attended other race meetings with Mr Russell. At these meetings, Mr O'Toole helped Mr Russell in various ways, for example changing stickers on the car, washing the car, and unloading spare wheels and other things. 6On the weekend before 28 October 2002, Mr O'Toole accompanied Mr Russell to Melbourne, where there were races on both the Saturday and Sunday in which Mr Russell's V8 Holden competed. On Monday 28 October 2002, Mr Russell drove back towards Sydney, driving an Isuzu truck which he owned, towing a trailer carrying the V8 Holden, with Mr O'Toole as a passenger in the truck. 7In the vicinity of Gundagai, the truck developed engine problems, and Mr Russell pulled into an emergency lane on the side of the road. According to a finding of the trial judge, not challenged on appeal, Mr Russell put the truck into second gear and put the handbrake on. Mr Russell said he would ring a mechanic, and made a telephone call. Mr Russell then said he would have to call a tow-truck and he called Wagga Towing, and asked that a tow-truck come and tow the truck to Wagga Wagga. Mr Russell and Mr O'Toole then commenced to have lunch by the side of the road. 8According to a finding by the primary judge, not challenged on appeal, there was then a second phone conversation between Mr Russell and Wagga Towing, in which Mr Cool of Wagga Towing asked Mr Russell to remove the front bumper-bar and the tail-shaft of the truck, as he did not want his tow-truck delayed when it arrived. 9Mr Russell and Mr O'Toole completed their lunch, and about half an hour after they had first stopped, Mr Russell went about taking off the front bumper-bar, and Mr O'Toole went under the truck to remove the tail-shaft. Before doing so, Mr O'Toole asked if the vehicle was safe, and Mr Russell told him the handbrake was on. 10Mr O'Toole went under the truck to remove the tail-shaft. He undid nuts and bolts, and the tail-shaft came away from the vehicle. The vehicle then commenced to roll forward. It had been parked on an incline, and the wheels had not been chocked. Mr O'Toole was run over by the truck, was dragged along under it for a time, and was severely injured. The truck went on down the hill, crossed to the other side of the road and ultimately crashed into the bank at the side of the road and stopped. Fortunately, it did not collide with any other vehicle.

Statutory provisions 11The case against Mr Russell (and thus NRMA) required consideration of the definitions of "motor accident", "use or operation of a motor vehicle", "driver" and "injury" in s 3 of the Motor Accidents Compensation Act 1999 ( MAC Act ) as in force at 28 October 2002: motor accident means an accident or incident caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle which causes the death of or injury to a person. use or operation of a motor vehicle includes: (a) the maintenance or parking of the vehicle, or (b) in the case of a motor vehicle that is not a trailer-the use or operation of a trailer attached to the motor vehicle and a trailer running out of control having become detached from the motor vehicle towing it, or (c) in the case of a motor vehicle that is a tow truck-the use or operation of an uninsured motor vehicle that is being towed or carried by the tow truck. Note . As a result of the above definition, a third-party policy for a motor vehicle extends to cover the matters mentioned in the definition. driver means a person driving a motor vehicle, and includes: (a) a person riding and operating a motor cycle, and (b) a person for the time being in charge of a motor vehicle. injury : (a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during: (i) the driving of the vehicle, or (ii) a collision, or action taken to avoid a collision, with the vehicle, or (iii) the vehicle's running out of control, or (iv) such use or operation by a defect in the vehicle, and (b) includes: (i) pre-natal injury, and (ii) psychological or psychiatric injury, and (iii) damage to artificial members, eyes or teeth, crutches or other aids or spectacle glasses,

Decision of primary judge 12Neither Mr Russell nor Mr Cool gave evidence, but statements made by them were admitted into evidence (in the case of Mr Cool, by way of an investigator's transcript of an interview with him). 13The primary judge accepted that Mr O'Toole was not a mechanic and had little knowledge of the mechanical side of motor vehicles. He found that the removal of the tail-shaft meant that the handbrake had no effect. 14He found that, at the time of the accident, Mr Russell was the driver of the vehicle; and that Mr Russell owed Mr O'Toole a duty of care, and was at fault in directing Mr O'Toole to get under the vehicle to remove the tail-shaft without chocking the wheels, when the vehicle was parked on a slope. 15In terms of the MAC Act , the primary judge held: (1) Mr Russell was the driver of the vehicle, and also the person for the time being in charge of it. (2) His fault was in the use or operation of the vehicle, namely the parking and maintenance of the vehicle. (3) Mr O'Toole's injury was caused by the vehicle running out of control. 16The primary judge found no contributory negligence by Mr O'Toole. 17As regards Wagga Towing, the primary judge found that Mr Cool was an expert in this area. He referred to the Civil Liability Act 2002, and found that Wagga Towing owed a duty of care to Mr O'Toole. He found that Wagga Towing breached its duty of care by providing advice to Mr Russell to remove the tail-shaft, without warning Mr Russell of the dangers of doing so. 18On the question of contribution, the primary judge considered Mr Russell to have been significantly negligent, being on the site, seeing the slope of the land, being a person who was quite adept at mechanical matters, and being the person who should have ensured that the truck would not have moved forward. He held that Mr Russell should carry the greater burden, and assessed his negligence at 70 per cent and that of Wagga Towing at 30 per cent.

Wagga Towing's grounds of appeal 19Wagga Towing did not press grounds 1 to 3 in its amended notice of appeal; and it relied on grounds 4 and 5: 4. If contrary to grounds 1-3, the trial judge was able on the evidence to find that the tailshaft's disconnection did render the parking brake inoperative in the absence of expert evidence: (a) the trial judge could not find that this is something which the Appellant knew or ought to have known; (b) the trial judge could not find that this is something which the Appellant knew or ought to have known that the Second Respondent was or might be unaware of; (c) in all the circumstances, the Appellant owed no duty to warn of the fact that disconnection of the tailshaft had such an effect. 5. The Respondent failed to prove that the Second Respondent Russell, was unaware that uncoupling the tailshaft disconnected the brakes. For this reason, the Respondents failed to show that the Appellant's acts or omissions caused the accident.

Wagga Towing's submissions 20The submissions for Wagga Towing were summarised as follows in its written submissions in reply: 2. In order to succeed against the Appellant, the Respondents had to prove that the Appellant:- a) Knew or ought to have known that uncoupling the tailshaft disabled the handbrake, and b) Ought to have warned the Second Respondent of this fact. 3. In this regard:- a) There was no evidence that the Appellant knew the make and model of the truck. b) There was no evidence that the Appellant knew or ought to have known that trucks sometimes have transmission brakes, and that this was in fact the case. The truck here was old and its braking system may have been very rare or unique. 4. Alternatively, no warning was in any event required on the facts here as a) The Second Respondent indicated that he owned and drove the truck and could reasonably be expected to be aware of its mechanical design. b) This was especially so as he represented himself as owning a racing team, and having a mechanic with him. c) He did not demur at the suggestion that he was capable of disconnecting the tailshaft, or request that it be done, and did not ask the Appellant for advice or assistance in the performing of the job, and elected to do it himself. 5. A duty of the kind claimed to exist here, to warn of a risk, is not owed to someone in a class of persons who might reasonably be expected to be aware of the risk, Stephens v Giovenco [No.1] [2011] NSWCA 53, Allsop P at [3]-[8] and Tobias JA at [135-139]. To the same effect is Fleming Law of Torts paragraph 8.40. 6. The fact that the vehicle was parked on a slope was not shown to be known to Mr Cool, but it was reasonable for him to assume that if it was so parked, the Second Respondent would chock the wheels of the vehicle since it would be obvious to him that in uncoupling the tailshaft he would remove the braking effect of locating the vehicle in gear. 7. For these reasons no duty was owed to warn the Second Respondent. 21In oral submissions, Mr Hewitt SC for Wagga Towing pointed to the evidence from Mr O'Toole that he knew that the handbrake on a motor car operated on the back wheels (Combined Book 37J), and he submitted that this confirmed the absence of evidence to show that the operation of the parking brake on the transmission was not unique to the particular type of truck involved in this case. 22Mr Hewitt also submitted that, in circumstances where Mr Russell was not called to give evidence, it was not shown that Mr Russell in fact did not know that the uncoupling of the tail-shaft would disable the braking system; so that causation was not proved.

Decision on Wagga Towing's appeal 23In my opinion, in circumstances where the truck was parked on an incline, where the primary judge accepted that Mr Russell had engaged the parking brake and put the truck in gear, where the truck did not move for at least half an hour, and where it did move immediately after the tail-shaft was uncoupled, it was clear that the parking brake of this truck did not engage directly with its wheels but rather engaged somewhere with the transmission between the engine and the wheels. (Indeed, at the hearing of the appeal, this was common ground.) If this was the case with this truck, then in my opinion plainly it could have been the case with other trucks. Mr O'Toole's acceptance that he "knew" that the handbrake of a motorcar operated on the back wheels could not detract from this. 24Although neither Mr Russell nor Mr Cool was called, the primary judge preferred the version of Mr Russell as to the circumstances and content of the conversation between them; and there is no suggestion that there was any error involved in this. Accordingly, this Court should proceed on the basis that the circumstances and content of the relevant conversation were as set out in Mr Russell's statement as follows (the reference to "Royans" being a reference to Wagga Towing, and the reference to "the guy" being a reference to Mr Cool): 8. About 15 minutes after the first call to Royans, I got a phone call from Royans Towing and they asked if the truck had a bulbar. I said no. He then asked me to remove the front bumper bar and the tail shaft for towing as he did not want his tow truck delayed when it arrived. Basically they said if the bumper bar and tail shaft was taken off, he would just have to tow the truck into Wagga. I recall the guy on the phone from Royans said along the lines of, 'you're [sic] a race team aren't you, you've got tools, you can take them off' I said, 'yes, I suppose so'. After the second phone call I turned around to Dean and told him they wanted us to take off the front bumper and tail shaft for towing. We continued to eat our lunch and sat there for about another 10 and 15 minutes and then we decided to get up and do it. 25In my opinion, it can be inferred from the circumstances and content of this conversation that Mr Cool was a person very familiar with the towing of trucks and with the effect of removing the tail-shaft of a truck. In circumstances where there was no evidence that trucks generally have parking brakes operating directly on the wheels, an inference was open that the feature of this truck, that its parking brake operated on the transmission, was a feature shared with other trucks, and that this was known to Mr Cool. Since Mr Cool was not called, in my opinion these are inferences that could confidently be drawn, and should be drawn. There is in my opinion no basis for any conclusion that this feature was unique to this one particular type of truck or that Mr Cool did not know that some trucks had this feature. 26In my opinion, it can also be inferred from the circumstance and content of this conversation that it was conveyed to Mr Cool that removal of the tail-shaft was not something with which Mr Russell was familiar. Although it had apparently been conveyed to Mr Cool that Mr Russell engaged in car racing and had some assistance, it was Mr Cool who raised the issue of removal of the tail-shaft and who pressed the point of Mr Russell being "a race team" and having tools; and Mr Russell's response "yes, I suppose so" conveyed unfamiliarity with the task. 27It is true that Mr Cool was not told that the truck was on an incline, but Wagga Towing had been told where the truck was to be collected, and Mr Cool must have known that it may have been parked on an incline. In my opinion, a reasonable person in Mr Cool's position would not assume that a truck owner (even one who raced cars) would be aware of the consequences of removing the truck's tail-shaft. 28In terms of s 5B of the Civil Liability Act : (1) Mr Cool should have known of a risk that, if he did not alert Mr Russel to this, removal of the tail-shaft of the truck, which he was requesting of Mr Russell, might disable the parking brake and gears of the truck and thereby permit the truck to move out of control. (2) Although the likelihood of this happening might have been very small, the consequences if it did happen could be horrendous, so that the risk was not insignificant. (3) A reasonable person in Mr Cool's position would have alerted Mr Russell to the risk, having regard to the extent of the risk and the minimal burden of the relevant precaution. 29As will be seen later, I accept that a reasonable person in the position of Mr Russell would have realised that removing the tail-shaft would disable any braking effect of the truck being in gear, and would not have directed Mr O'Toole to remove the tail-shaft, with the truck on an incline, without chocking the wheels. However, this is just one factor suggesting that the likelihood of the risk eventuating was small. In circumstances where, in my opinion, Mr Cool could not assume that Mr Russell was aware that removing the tail-shaft would also disable the parking brake, the risk was still there; and as mentioned above, the consequences could be horrendous if the risk eventuated. 30In my opinion, this is not a case like Stephens v Giovenco [2011] NSWCA 53, in that neither Mr Russell nor Mr O'Toole was in a class of persons who might reasonably be expected to be aware of the risk that the parking brake would be disabled. 31In these circumstances, in my opinion Mr Cool did owe a duty of care to Mr Russell and to Mr O'Toole, and breached that duty of care by not alerting Mr Russell to the risk that removing the tail-shaft would disable the parking brake. 32In my opinion also, even though Mr Russell was not called, it can and should be inferred from the content of his detailed statement and from his actions that he was not aware that removal of the tail-shaft would disable the parking brake; and it can and should be inferred that, had he been alerted to this by Mr Cool, he would not have permitted Mr O'Toole to go under the truck to remove the tail-shaft without first chocking the wheels. 33Accordingly, I would dismiss Wagga Towing's appeal.

NRMA's grounds of appeal 34NRMA relies on the following grounds of appeal:

1. The Trial Judge erred in finding that the Appellant breached any duty of care owed to the First Respondent.
2. The Trial Judge erred in considering and finding breach of duty of care with the benefit of hindsight rather than by the application of foresight.
3. The Trial Judge erred in finding that when it came to removing the tailshaft from the vehicle by the First Respondent, the Appellant's driver was " the one who determined what should be done " in circumstances where the driver was doing no more than relaying directions received from the Second Respondent.
4. His Honour erred in concluding that the First Respondent's Injuries were sustained in a "motor accident" falling within the terms of the Motor Accidents Compensation Act 1999 ("the Act ").
5. His Honour erred in failing to identify adequately or at all the act of negligence by the Appellant's driver establishing "fault" on his part in the use or operation of the vehicle.
6. His Honour erred in failing to determine whether there was "fault" on the part of the Appellant's driver in the use or operation of the vehicle which caused the First Respondent's injuries.
7. His Honour erred in failing to conclude that there was no fault on the part of the Appellant's driver in the use or operation of the vehicle which caused the First Respondent's injuries.
8. The Trial Judge erred in finding that the Appellant was " a person who was quite adept at mechanical matters ".
9. Alternatively, in circumstances where the Appellant's driver did no more than relay an instruction provided by the Second Respondent (who did have expertise in matters mechanical) the Trial Judge erred in apportioning 70% of the responsibility for the injuries to the Appellant and only 30% of the responsibility to the Second Respondent.

NRMA's submissions on liability 35Mr Deakin QC for NRMA submitted that the primary judge had erred: (1) In certain factual findings; and (2) In finding fault on the part of Mr Russell; and (3) In finding that any such fault fell within the scope of the MAC Act . 36As regards (1), Mr Deakin submitted that the primary judge was in error in finding that Mr Russell was "quite adept at mechanical matters" (Red 40N); and in finding that Mr O'Toole's evidence was that Mr Russell had told him to remove the tail-shaft (Red 31C), this evidence not being in dispute (Red 31H). 37As regards (2), Mr Deakin submitted that there was no finding by the primary judge that Mr Russell had any knowledge that removal of the tail-shaft would disconnect the handbrake or that the ordinary prudent driver would have such knowledge. It was only with hindsight that the primary judge found that the precaution of chocking the wheels was required. The finding of fault in Mr Russell was inconsistent with the finding that Mr O'Toole was not guilty of contributory negligence. On the evidence, neither Mr O'Toole nor Mr Russell had greater mechanical knowledge than the other, each acted on the basis of a request by Mr Cool, and neither foresaw any risks in the removal of the tail-shaft. 38As regards (3), Mr Deakin submitted that the primary judge made no finding that the fault of Mr Russell was in the use or operation of the vehicle, as required by both the definition of "motor accident" and the definition of "injury" in the MAC Act ; or alternatively, did not justify any such finding and was in error insofar as such finding was made. At the time of any fault by Mr Russell, the vehicle had been parked for at least half an hour, so the fault could not be in parking the vehicle; and the fault was not in the maintenance of the vehicle, because no maintenance of the vehicle was then being undertaken. If there were any fault, it was in the system of work being undertaken, which was not sufficient: Nominal Defendant v GLG Australia Pty Limited [2006] HCA 11; (2006) 228 CLR 529 at [27] and [41], Brambles Australia Limited v Sandy [2006] NSWCA 357; (2006) 47 MVR 207, JA & BM Bowden & Sons Pty Limited v Doughty [2009] NSWCA 82; (2009) 52 MVR 552.

Decision on NRMA's appeal on liability 39I note that the primary judge made a finding that Mr O'Toole had no particular mechanical expertise. I agree with the submission for NRMA that there was no basis for the primary judge to conclude that Mr Russell had greater mechanical expertise than Mr O'Toole. He did race a car, but there was no evidence that he performed mechanical work on it. He did not attempt to see what was wrong with his truck. Although he had a shed for his car to go into, the evidence as to that matter did not suggest that he himself did any substantial work on the car, but rather that he with the help of friends did some unspecified work on it. Accordingly, in my opinion there was no adequate basis for the finding in question, at least to the extent that it conveyed anything more than that Mr Russell raced a car and (with the help of friends) did unspecified work on it. 40On the question whether Mr Russell directed Mr O'Toole to disconnect the tail-shaft, I accept that the evidence does not express an explicit instruction to that effect. In his evidence in chief, Mr O'Toole said this: Q. At the conclusion of the telephone conversation did Mr Russell say something to you? A. He said he was advised to take the tail shaft out of the vehicle and the bull bar off the front. Q. And what happened then? A. From that stage there he went to the tool box pulled out some tools, handed them to me and then he proceeded to the front of the vehicle. In his cross-examination by counsel for Wagga Towing, Mr O'Toole said this: Q. My learned friend Mr Morris has asked you a number of questions, I don't want to repeat them, but it appears from your evidence that you were just given the instruction to do the work on the tail shaft, and then you did it. Is that right? A. Yes. Q. You didn't need any instruction? A. No, well he walked to the front of the vehicle so I just assumed I was given that task to do that job. Q. I am asking this question from a person who has no mechanical knowledge, but you were just given the instruction and you went and found the relevant place to undo the bolts? A. Yes. 41In circumstances where Mr O'Toole was the employee of Mr Russell's company, and was present in the role of assisting Mr Russell, in my opinion this shows, if not an explicit instruction, at least an implied direction by Mr Russell to Mr O'Toole to disconnect the tail-shaft. 42Taking these matters into account, my opinion is that a reasonable person in Mr Russell's position would have appreciated that disconnecting the tail-shaft would remove any braking effect from the engagement of the gears, and (even without any actual knowledge that disconnecting the tail-shaft would disable the parking brake) would have appreciated that to undo bolts under the truck, on an incline, without chocking the wheels, was a risky undertaking. In terms of s 5B of the Civil Liability Act : (1) Mr Russell should have appreciated that there was some risk, even without understanding precisely how that risk might eventuate. (2) The likelihood of the risk eventuating might, to his understanding, be quite small, but the consequences if it eventuated could be horrendous, so the risk was not insignificant. (3) A reasonable person in Mr Russell's position would not have directed Mr O'Toole to undertake the task, at least without first taking the simple precaution of chocking the wheels. 43It may be said that much the same considerations apply to Mr O'Toole himself, so that the primary judge's finding that there was no contributory negligence was an error; but no appeal has been brought against that finding. 44In my opinion, Mr Russell did have a duty of care to Mr O'Toole, which obliged him not to direct Mr O'Toole to undertake the task of disconnecting the tail-shaft, without first taking the simple precaution of chocking the wheels. In my opinion, Mr Russell did breach that duty of care, and the injury to Mr O'Toole resulted from that breach. 45Turning to the question of whether NRMA is liable, because the case falls within the MAC Act , there is no question but that Mr Russell was the owner of the motor vehicle in question and that the injury to Mr O'Toole was a result of and was caused during the vehicle running out of control. The only question is whether Mr Russell's fault was "in the use or operation of the vehicle", so as to satisfy the definition of "motor accident" and the definition of "injury". 46The definition of "use or operation of a motor vehicle" includes the maintenance or parking of the vehicle. Although the vehicle was parked at least half an hour before the fault occurred, the changed circumstances meant that the vehicle became inadequately parked, in the sense of being insufficiently held in its stopped position. In my opinion, this does mean that the fault was in the parking of the vehicle. Also, the arranging and preparing for the towing of the vehicle was part of a process of effecting the maintenance of the vehicle; and in my opinion the fault was also a fault in the maintenance of the vehicle. 47It follows that NRMA's appeal against liability to Mr O'Toole should be dismissed.

Apportionment 48It was submitted for NRMA that the apportionment of responsibility of 70 per cent to Mr Russell and 30 per cent to Mr Cool was vitiated by the erroneous finding that Mr Russell was quite adept at mechanical matters; and in any event that it was appellably disproportionate, having regard to Mr Cool's expertise and his role in initiating the train of events without giving any warning. 49It was submitted for Wagga Towing that the apportionment should not be altered in Mr Russell's favour. Mr Russell knew, as Mr Cool did not, that the vehicle was actually parked on a hill, described as quite a steep hill; and knew that the vehicle was not chocked. 50In my opinion, the appropriate finding as to the slope where the vehicle was actually parked was that it was slight: it was stopped at the top of a slight to medium hill (shown in photographs in evidence) "just as it started to go downhill" (Combined Book 134M). In my opinion, there was error in the primary judge's giving weight to the consideration that Mr Russell was quite adept at mechanical matters, such as to justify this Court considering itself how responsibility should be apportioned. 51I would not differentiate the degree of responsibility of Mr Cool from that of Mr Russell: Mr Cool was the expert who initiated the process without warning; while Mr Russell was on the site, knew of the slope and knew that the vehicle was not chocked, but still directed Mr O'Toole to undo bolts under the truck. I would adjust the apportionment to 50-50.

Conclusion 52Both appeals against liability to Mr O'Toole should be dismissed, and both appellants should pay Mr O'Toole's costs (apportioned 50-50 as between themselves). NRMA's appeal on apportionment should be allowed. I think this modest success in NRMA's appeal would justify an order that Wagga Towing pay one-third of NRMA's costs of both appeals. Accordingly, I propose the following orders: (1) Wagga Towing's appeal dismissed. (2) NRMA's appeal against Mr O'Toole dismissed. (3) NRMA's appeal against Wagga Towing allowed, and: (a) Decision to apportion responsibility 70 per cent to NRMA and 30 per cent to Wagga Towing and any consequential order set aside. (b) Declare that the liability be apportioned as to 50 per cent to NRMA and 50 per cent to Wagga Towing. (c) Liberty to either party to apply to the District Court for any appropriate consequential order. (4) Wagga Towing and NRMA to pay Mr O'Toole's costs of both appeals (apportioned 50-50 between themselves). (5) Wagga Towing to pay one-third of NRMA's costs of both appeals. 53McCOLL JA: I agree with Hodgson JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 July 2011