Wills v Bell & Ors [2002] QCA 419

SUPREME COURT OF QUEENSLAND

CITATION: Wills v Bell & Ors [2002] QCA 419

PARTIES: Timothy Patrick Wills (plaintiff/respondent) v James William Bell (defendant) VACC Insurance Co LIMITED ACN 000 327 855 (defendant by election/appellant) Erindell Pty Ltd ACN 055 118 637 (first third party) John Francis Stone (second third party)

FILE NO/S: Appeal No 82 of 2002 SC No 715 of 1995

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED ON: 11 October 2002

DELIVERED AT: Brisbane

HEARING DATE: 20 May 2002

JUDGES: McMurdo P, Mackenzie and White JJ Separate reasons for judgment of each member of the Court, Mackenzie and White JJ concurring as to the orders made, McMurdo P dissenting in part

ORDERS: (i)by varying the amount of administrative charges not reduced by virtue of contributory negligence; / (ii)to include the management fees in respect of the fund awarded to the respondent to be calculated as the difference between Perpetual Trustees Queensland Limited’s administration fee and the fee charged on the fund by the Public Trustee.

CATCHWORDS: TORTS – NEGLIGENCE – STATUTES, REGULATIONS, ETC – ADMISSIBILITY AND EFFECT IN ACTIONS FOR NEGLIGENCE – RELATING TO VEHICLES AND TRAFFIC – PARTICULAR STATUTES, REGULATIONS, ETC – claim by injured passenger – Motor Vehicles Insurance Act (Qld) 1936 – Motor Vehicles Insurance Regulation (Qld) 1936 / TORTS – NEGLIGENCE – CONTRIBUTORY NEGLIGENCE – PARTICULAR CASES – ROAD ACCIDENT CASES – where passenger has been drinking alcohol in company of driver – whether defences apply / TORTS – NEGLIGENCE – MISCELLANEOUS DEFENCES ILLEGALITY OF PLAINTIFF’S ACTIVITY – where injured passenger permits driver affected by alcohol to drive vehicle – whether sufficient to establish a joint illegal enterprise / TORTS – NEGLIGENCE – INJURIES TO PASSENGERS – DEFENCES OF VOLENTI NON FIT INJURIA, NO BREACH OF DUTY, AND CONTRIBUTORY NEGLIGENCE – WHERE AFFECTED BY ALCOHOL – whether defences apply where both passenger and driver have consumed alcohol / TORTS – NEGLIGENCE – INJURIES TO PASSENGERS – DEFENCES OF VOLENTI NON FIT INJURIA, NO BREACH OF DUTY, AND CONTRIBUTORY NEGLIGENCE – FAILURE TO WEAR SEAT BELT – reduction of damages for failure to wear a seat belt / PROCEDURE – COSTS – CERTIFICATE FOR COSTS: COSTS ON OTHER THAN INFERIOR COURT SCALE – CERTIFICATE FOR COSTS OR “OTHER” ORDER – CIRCUMSTANCES WHEN GRANTED – costs under Appeal Costs Fund Act 1973 (Qld) / INSURANCE – THIRD-PARTY LIABILITY INSURANCE – MOTOR VEHICLES – COMPULSORY INSURANCE LEGISLATION – OTHER CASES – QUEENSLAND – where injured passenger is owner of vehicle – whether insurer is entitled to recover from owner of vehicle / Appeal Costs Fund Act 1973 (Qld), s 15 / Criminal Code Act 1899 (Qld), s 328A(2)(a) / Motor Vehicles Insurance Act 1936 (Qld), s 2, s 9, s 10 Traffic Act 1949 (Qld), s 16 / Motor Vehicles Insurance Regulation 1936 (Qld), reg 10, reg 11, reg 13, reg 17 / Campbell v Nangle (1985) 40 SASR 161, applied / Cook v Cook (1986) 162 CLR 376, applied / Evans v Accident Insurance Mutual Holdings Limited [1998] 2 Qd R 350, applied / Gala v Preston (1991) 172 CLR 243, considered / Goode v Thompson & Suncorp General Insurance Limited [2001] QSC 287, unreported decision of Ambrose J of 2 July 2001, considered / Insurance Commissioner v Joyce (1948) 77 CLR 39, applied / Jackson v Harrison (1978) 138 CLR 438, considered / Jansons v Public Curator [1968] Qd R 40, referred to / McPherson v Whitfield [1996] 1 Qd R 474, applied / Mullins v Duck [1988] 2 Qd R 674, referred to / Nettleship v Weston [1971] 2 QB 691, referred to / Nominal Defendant v Gardikiotis [1995-1996] 186 CLR 49, applied / Progress and Properties Ltd v Craft (1976) 135 CLR 651, considered / South Tweed Heads Rugby League Club Limited v Rosellie Jonnell Cole and Anor [2002] NSWCA 205, referred to / State Government Insurance Office (Qld) v Wilmott [1984] 1 Qd R 639, considered / Redford v Ward (1990) Aust Torts Reports 81-064, considered / Roggenkamp v Bennett (1950) 80 CLR 292, applied

COUNSEL: S L Doyle SC, with M J Liddy, for the appellant / J S Douglas SC, with R C Morton, for the respondent

SOLICITORS: McInnes Wilson for the appellant / Murphy Schmidt for the respondent

MCMURDO P: The respondent was seriously injured when his vehicle, driven by the defendant, who is not a party to this appeal, crashed into the Gap Creek Bridge, 16 kilometres west of Anakie in Central Queensland. The defendant was grossly intoxicated with a blood alcohol concentration of about .27 per cent at the time of the accident. The appellant, the defendant by election, is the insurer of the respondent's vehicle under the provisions of the Motor Vehicles Insurance Act 1936 (Qld) (“the Act”). The learned primary judge rejected the appellant's contention that the defendant owed no duty of care to the respondent because they were jointly involved in an illegal enterprise, namely allowing the defendant to drive the respondent's vehicle whilst grossly intoxicated; that the respondent voluntarily assumed the risk of driving with the intoxicated defendant or, alternatively, that the respondent was contributorily negligent in travelling with the defendant when he was so drunk that his capacity to drive the vehicle was impaired. Her Honour also concluded that reg 17 of the Regulations to the Act does not allow the appellant to recover the judgment sum from the respondent. The appellant appeals against all these conclusions.

Her Honour found that the appellant discharged its onus in relation to contributory negligence on the respondent's part because of his failure to wear a seatbelt and apportioned liability against the respondent on that account at 20 per cent. There is no appeal in respect of that finding. Nor is there any appeal from the primary judge’s dismissal of the claim against the third party hoteliers.

The respondent cross-appeals in respect of two matters relating to the quantum of damages.

The primary judge's findings relevant to this appeal

The respondent has no recollection of the events immediately preceding the accident and, because he suffered serious head injuries resulting in permanent intellectual deficits, her Honour placed little weight on the accuracy of his evidence.

Whilst her Honour regarded the defendant as a critical witness, she expressed reservations about the accuracy of his recollection of events preceding and surrounding the accident, which was severely impaired by his prior consumption of alcohol. Her Honour noted that she was "cautious about accepting any evidence of the defendant on critical events which is not in some respect supported by other evidence". She did not accept his evidence as to the respondent’s state of intoxication.

The respondent and the defendant travelled to Jericho to inspect a property, “Winooka”, which they were considering buying in partnership. On Thursday, 3 February 1994, they met at Emerald and arrived at the Jordan Valley Hotel, Jericho in the early evening where they booked and paid for a room for three nights. They twice purchased beer from the hotel to take away, once to take with them on a visit to Mr Arthur Cox, who lived on a property outside Jericho. On Friday, 4 February 1994, the respondent and defendant spent most of the day inspecting "Winooka". They returned to the hotel at about 8.00 pm where they ate dinner and drank beer in the bar until midnight. The defendant drank XXXX Gold¹ with an alcohol strength of 3.5 per cent and the plaintiff drank "heavy" beer with an alcohol strength of 4.9 per cent. After the bar closed, they went to a party near the hotel where they continued drinking; they took beer they had purchased from the hotel and remained at the party until about 4.30 am on Saturday, 5 February. They then slept for some hours. They were next seen in the hotel bar in the late morning, again drinking beer. They showed some effects of a night out but they did not seem really drunk. They drank steadily at a rate of three to four pots of beer each hour. Mr De Landelles saw the respondent outside the hotel at about Saturday midday and returned to the hotel to drink beer with the respondent and defendant for about two or two and a half hours. They were not slurring their speech and were steady when they walked to the toilet. The defendant said he wanted to see his son play football at a place about four hours’ drive away but the respondent said he was going to stay in Jericho that night and tried to persuade the defendant to stay. The hotelier, Mr Stone, also recalled them having a conversation about the defendant's son playing football at Tieri but as the respondent did not want to go to Tieri they decided to stay. Mr De Landelles left the respondent and the defendant drinking in the bar at about 2 or 2.30 pm when he described their condition as "reasonably good"; "they wouldn't have been sober and they weren't very drunk".

The defendant said he and the respondent left the hotel at about 1 pm or 2 pm to visit a friend’s place where they had a few beers. He could not remember who drove them or whose place they visited. The hoteliers, Mr and Mrs Stone, did not see them after they left the hotel; at that time they were over the limit to drive but were not exhibiting any signs of significant intoxication; the respondent and the defendant said they were going to have a sleep when they left the hotel.

Her Honour found that when the respondent left the hotel, he did not intend to travel in his vehicle that day. This was not a case of reckless conduct commencing on the Friday evening involving drinking and driving. Late on Saturday afternoon, the respondent and defendant packed and left the hotel without returning to the bar; it was not possible on the evidence to determine which of them was responsible for the decision to travel. As the accident occurred about 7.30 pm, they left the hotel to return to Blackwater at about 5.30 pm. It was not possible on the evidence to determine whether the respondent had sufficient knowledge or appreciation of the defendant’s intoxication when he left Jericho or when the defendant took over the driving.

Her Honour seems to have accepted the defendant's evidence that after they left Jericho the respondent was driving his vehicle but "wasn't making a real good fist of it” and was nodding off and wandering over the road. They “worked it out together [that the defendant] might be a better driver". The respondent said that the defendant had "better have a go". The respondent then fell asleep in the passenger seat. Her Honour found they did not drink alcohol after leaving Jericho. As to the defendant's recollection of bending down to pick cigarettes up off the floor immediately before the accident, her Honour concluded that the defendant's intoxication caused him to undertake this unsafe manoeuvre whilst rounding a curve at speed and his intoxication caused the accident.

At 9.29 pm the defendant had a blood alcohol reading of .23 per cent. On the basis of Dr Purssey’s calculations, which her Honour accepted, the defendant’s maximum blood alcohol concentration would have been around .31 per cent at 5.30 pm when they left Jericho and .27 per cent at 7.30 pm when the accident occurred. The respondent’s blood alcohol concentration was not analysed after the accident. The defendant subsequently pleaded guilty to driving the vehicle whilst under the influence of liquor or a drug under s 16(1) Traffic Act 1949 (Qld).

Duty of care and joint illegal enterprise

Whilst there is ordinarily a relationship of proximity between driver and passenger with the consequence that the driver owes the passenger a duty with the standard of care reasonably to be expected of an experienced competent driver, there may be special and exceptional circumstances which transform the relationship of driver and passenger into a special or different class or category: Cook v Cook.² By way of example, in Gala v Preston³ Mason CJ, Deane, Gaudron and McHugh JJ held that, for reasons of lack of proximity and policy, a passenger injured in a motor vehicle accident through the driver's carelessness could not recover damages in negligence when the two had jointly stolen the vehicle and were unlawfully using it at the time of the accident.

The onus of establishing the existence of these special facts which make it unreasonable to assert the existence of a duty of care lies on the party asserting it,⁴ here the appellant.

As her Honour rightly observed, this case is immediately distinguishable from Gala v Preston in that the respondent was not participating in a joy ride in a stolen car which could well be the subject of a police pursuit.⁵

Although community attitudes to driving whilst under the influence of liquor or a drug have rightly hardened in recent times, the offence remains one under the Traffic Act 1949 (Qld). Whilst its breach may result in a period of imprisonment, it is not an offence under the Criminal Code (Qld) (such as dangerous driving under s 328A Criminal Code) and nor does it involve dishonesty. The provisions of the Traffic Act 1949 (Qld) are primarily aimed at public safety. Breach of reg 13 of the Regulations to the Act⁶ does not constitute an offence and is not the sort of illegal behaviour contemplated in cases like Gala v Preston. Breach of safety statutes or regulations will not ordinarily preclude the existence of a relevant common law duty of care unless the circumstances of the parties' relationship are such as to make that finding unreasonable: Gala v Preston;⁷ Progress & Properties Ltd v Craft⁸ and Jackson v Harrison.⁹

In addition the respondent, unlike the defendant, was not charged with any offence under the Traffic Act 1949 (Qld). His involvement in any joint illegal enterprise under that Act requires his knowing involvement. Her Honour found the appellant had not established this knowledge on the evidence. For the reasons given later in my discussion of voluntary assumption of risk,¹⁰ this finding was open.

The appellant also claims that the respondent was acting illegally in breach of reg 13(2)(b) of the Regulations to the Act. For the reasons I develop later,¹¹ the appellant has failed to establish the respondent’s requisite knowledge of the defendant’s intoxication so as to breach that regulation.

The respondent and the defendant were not acting in a joint illegal enterprise of the type which displaces the ordinary duty of care. Her Honour found it was not possible on the evidence to determine whether the respondent had sufficient knowledge or appreciation of the defendant's intoxication when he allowed the defendant to take over the driving. That factual finding, which was open on the evidence has the effect that, despite the seriousness of the defendant's conduct in breaching s 16(1) of the Traffic Act 1949 (Qld), the appellant failed to demonstrate that the duty of care owed by the defendant to the respondent was displaced or that the standard of care should be other than that to be reasonably expected of an experienced and competent driver.¹²

This ground of appeal fails.

Voluntary assumption of risk

The appellant accepts that the learned primary judge correctly identified that to successfully raise the defence of voluntary assumption of risk, it must establish the respondent had a full appreciation of and fully accepted the risks involved in being driven by the intoxicated defendant.¹³ Her Honour found that the sparsity of evidence as to the respondent's intoxication when he and the defendant left Jericho meant that it was impossible to be satisfied that the respondent had a full appreciation of the risks involved in allowing the drunken defendant to take over the driving shortly before the accident.

The appellant contends that it may be inferred from evidence that a plaintiff appreciates the risks involved in being driven by an intoxicated person. That is undoubtedly so: see, for example, Roggenkamp v Bennett.¹⁴ But was her Honour required to draw that inference from the evidence here?

Whether this defence is made out will depend on the facts of each case. Not surprisingly, the facts of this case are different from both Insurance Commissioner v Joyce¹⁵ and Roggenkamp where the defence was made out. In Joyce the primary judge found that the plaintiff passenger had voluntarily accepted the risk attendant on the defendant driver’s drunken condition; that finding was initially reversed on appeal by majority but the High Court affirmed the conclusion of the primary judge. There, the evidence was that the plaintiff passenger and defendant driver were sober when they left Morningside at about 5.00 pm to collect some passengers; they planned to return to a wedding celebration (also at Morningside) at about 7.00 pm that evening. The accident occurred just before 7.00 pm when the plaintiff was found unconscious in the passenger seat and smelling of liquor. The defendant driver who had probably caused the accident was not found until two hours later when he was observed to be very drunk.

In Roggenkamp the plaintiff passenger and defendant driver consumed alcohol together before their journey and continued to drink alcohol at a number of hotel stops during their journey, the last less than a mile from the accident scene.

On the facts of both those cases it was reasonable to infer that the plaintiff passenger and defendant driver probably drank alcohol to excess together, knowing that the defendant would be driving within a short time. By contrast, here the judge found this was not a case of reckless conduct involving drinking and driving; the respondent did not intend to leave Jericho on the Saturday until late in the afternoon when he changed his mind and decided to travel to Blackwater in his own car with the defendant. The accepted evidence of the respondent’s consumption of alcohol relates to the period when he intended to stay in Jericho. There is no accepted evidence as to when the respondent decided to travel to Blackwater; whether he continued to drink after that decision was made; or his state of intoxication when he left Jericho and later when he allowed the defendant to drive his car. The respondent was capable of driving for a period but it seems her Honour accepted that his quality of driving was poor; he was falling asleep and weaving over the road. Immediately upon the defendant taking over the driving, the respondent fell asleep. The accepted evidence does not necessitate the drawing of the inference on the balance of probabilities that when the respondent allowed the defendant to drive his car he knew and had a full appreciation of and fully accepted the risks involved in being driven by the intoxicated defendant.¹⁶ Whilst another judge may have reached a different conclusion on the evidence, I am unpersuaded that the facts found by her Honour, which were open on the evidence, prohibited her Honour’s ultimate conclusion on this issue.

This ground of appeal also fails.

Contributory negligence

The learned primary judge found that the appellant's claim of contributory negligence, that the respondent travelled with the defendant when he knew the defendant was so drunk that his capacity to drive the vehicle was impaired, failed for the same reason that the defence of voluntary assumption of risk failed, namely the appellant did not establish that the respondent fully appreciated and fully accepted the risks of being driven by the defendant in his drunken state.

The appellant contends that her Honour misapprehended the test required to establish contributory negligence, which is whether the respondent acted as would a reasonable person in his position, taking reasonable care of his own safety.

The difficulty in applying the objective test of contributory negligence to facts involving a drunken person was discussed by Macrossan CJ, with whom McPherson JA agreed and Lee J generally agreed, in McPherson v Whitfield.¹⁷

"The test involved in assessing the extent of the failure to take reasonable care of one's own safety which is what the issue of contributory negligence is concerned with, invites attention to the level of care which can be expected of the reasonable man in the circumstances as they present themselves. If a person should reasonably foresee that he may subsequently be confronted by the necessity to choose whether or not he will as a passenger in a car driven by an intoxicated driver, but nevertheless imprudently proceeds to drink to excess diminishing his capacity to discriminate and reducing his ability to make a reasonably careful decision when the occasion does arise, he may well not escape a finding of contributory negligence. The test which will apply in these circumstances will regard the behaviour to be expected of a reasonable man when the risk of the future eventuality to be confronted should reasonably have been apparent. This is a different situation from that in which a person will be placed where he allows himself to become intoxicated in circumstances where no reasonably foreseeable specific risk to his safety should have been apparent to him. If, in these circumstances, while lacking relevant conscious awareness he is placed into or induced to enter into the car of an intoxicated driver he should not on that account be held responsible for a failure to take reasonable care for his own safety."

The contributory negligence plea cannot be dismissed on the same basis as voluntary assumption of risk. Although the respondent was drinking alcohol with the defendant and intending to stay in Jericho, there remained a real possibility that in those circumstances he could still be driven by the defendant or another person; indeed, during their stay in Jericho they visited friends including Mr Cox on a property outside Jericho. This was not a case where a person becomes intoxicated and passes out at home, expecting to spend the night there but whilst unconscious is placed in a car, driven by a drunken driver and subsequently injured through the driver’s negligence. In those circumstances a plea of contributory negligence may not succeed. But here, despite the respondent’s intention earlier on the Saturday to spend the night in Jericho, it was reasonably foreseeable that if he drank alcohol to excess he would diminish his capacity to make a discriminating and reasonably careful decision about his own safety. That is exactly what happened when he allowed the drunken defendant to take over the driving of his vehicle shortly before the accident. The defendant’s intoxication was causative of the accident. The respondent’s drunkenness is the most likely explanation for him permitting the drunken defendant to drive his car. The respondent’s negligence in drinking to excess so that he was unable to take care of his own safety in this way was a real and significant contribution to the accident in which he was so seriously injured.

The apportionment legislation¹⁸ requires the court to reduce the defendant’s liability for the respondent’s share “to such extent as the court thinks just and equitable having regard to the [respondent’s] share in the responsibility for the damage”. The defendant’s negligence was undoubtedly the primary cause of the accident, but even taking into account the respondent’s earlier intention to stay in Jericho that night, the only rational inference from the evidence was that the respondent must take a significant share in the responsibility for the accident because he allowed himself to become so intoxicated that his judgment to make decisions about his own safety was impaired. In the circumstances, a finding that the respondent was 25 per cent contributorily negligent for his injuries on this basis was warranted,¹⁹ in addition to the finding of 20 per cent contributory negligence for his failure to wear a seatbelt.

The Regulations to the Act

The respondent’s standard insurance policy under the Act indemnified not only him as a registered owner of the vehicle but also the defendant.²⁰ Under reg 13(2)(b) of the Regulations to the Act the respondent was required not to permit or suffer someone under the influence of intoxicating liquor or a drug to drive or be in charge of his motor vehicle. The appellant contends it is entitled to recover from the respondent under reg 17 of the Regulations the amount of its liability to the respondent.

That regulation allows an insurer who could, but for reg 17, avoid his liability under the contract of insurance to indemnify the insured person, to elect to be joined in the proceeding²¹ and to conduct the proceedings on behalf of the person against whom the claim is made,²² subject to the enforceable liabilities and obligations imposed by regs 11 and 12.²³ Regulation 17 then continues:

“and for these purposes the insurer shall be deemed to be liable under the contract to indemnify the insured person concerned.

If, in such a case the insurer pays any sum by way of settlement of any proceeding or to satisfy any judgment or order made or entered against him then he may, by way of action in any court of competent jurisdiction, recover that sum as a debt due and owing but unpaid, from the insured person whose default constitutes the circumstance by reason whereof the insurer could, but for this regulation, have avoided his liability under the contract of insurance but only if the default is such that the court in which the proceeding for such recovery is taken is satisfied that it contributed in a material degree to the circumstances in which the insurer agreed to pay or otherwise became liable to pay that sum.”

The learned primary judge concluded that the appellant had not established on the evidence the knowledge of the respondent necessary to prove a breach of reg 13(2)(b) of the Regulations and that therefore reg 17 did not assist the appellant. In reaching that conclusion her Honour relied upon the following comments of Macrossan CJ, with whom Fryberg J generally agreed on this issue, in Evans v Accident Insurance Mutual Holdings Limited:²⁴

“The conclusion should be reached that for an insured person to be in a position where it can be said he has permitted or suffered ‘another who is under the influence of intoxicating liquor’ to drive his vehicle he must either know that the time at which or the period for which acquiescence is given is a time or period when the permittee is or will be under the influence or he must know facts from which it must be concluded that he knew the permittee was or would be under the influence.”

Effectively, this means that to establish a breach of reg 13(2)(b) of the Regulations the appellant must establish the respondent's actual knowledge that when he allowed the defendant to drive his motor vehicle, the defendant was under the influence of intoxicating liquor. A reasonable person who had spent some time with the defendant must have known he was drunk, but that is not sufficient to establish a breach of reg 13(2)(b). For the reasons already stated,²⁵ her Honour was entitled on the evidence to conclude that the appellant had not satisfied her that the respondent probably knew, that is, had a full appreciation that the defendant was under the influence of intoxicating liquor at the time he allowed the defendant to drive his vehicle. In those circumstances reg 17 cannot assist the appellant. It is therefore unnecessary to determine the interesting alternative arguments raised by the respondent as to the effect of reg 17. This ground of appeal also fails.

The appellant has, however succeeded on its ground of appeal as to contributory negligence. Her Honour assessed damages before apportionment at $2,398,507.69. I would reduce this award by 45 per cent to $1,319,180.00 because of the respondent’s contributory negligence relating to both his intoxication and his failure to wear a seat belt.

The Cross-Appeal

The first ground of the cross-appeal is uncontentious. The appellant concedes the learned primary judge ought not to have reduced the assessment of the administrative charges payable on this brain–damaged respondent’s estate on account of his contributory negligence. This is plainly right and the judgment must be increased by the amount of $13,400.

The appellant did not encourage her Honour to adopt this course and should be granted the certificate it requests under s 15 Appeal Costs Fund Act 1973 (Qld) as to the first ground of the cross-appeal.

The cross-appellant seeks leave to amend its cross-appeal to add a further ground, namely that the judge should have included in the damages awarded a sum of $203,251.15 representing the costs of selecting and managing the investment of the damages fund by Perpetual Trustees.

The learned primary judge found that this amount was incurred as a result of investing the respondent’s damages fund and was therefore not an allowable head of damage.

The management costs of plaintiffs who are so badly injured that they are incapable of managing their damages fund are both foreseeable and recoverable: Campbell v Nangle;²⁶ The Nominal Defendant v Gardikiotis;²⁷ Mullins v Duck.²⁸

Her Honour accepted that the respondent was capable of managing his own affairs prior to the accident and had visited Jericho with a view to investing in a rural property in the vicinity. On the other hand, like many others in the community, had he not been injured he may well have invested his capital in managed funds or in shares through a stockbroker, incurring management or brokerage fees. As a result of the accident, the respondent has lost the chance of investing his own funds; had he been able to do so he may have been a more or less successful manager than Perpetual Trustees. After balancing the competing considerations, including the reduction in the damages fund in accordance with these reasons, I am satisfied an award of $100,000 should be allowed under this heading.

Whilst the amendment to the cross-appeal was made out of time, the appellant has had ample opportunity to respond and has responded to it. It has not suffered any prejudice. In the circumstances I would grant leave to amend the cross-appeal. I would allow the cross-appeal and on the first ground increase the judgment sum by $13,400 and on the second ground by $100,000. These amounts must be added to the damages award after apportionment ($1,319,180), making a judgment sum of $1,432,580.

I would make the following orders:

Appeal allowed with costs.

Leave to amend the cross-appeal.

Cross-appeal allowed with costs.

Grant the appellant/cross-respondent an indemnity certificate under s 15 Appeal Costs Fund Act 1973 (Qld) on the first ground of the cross-appeal.

As to the order of the trial division of 14 December 2001, instead of ordering there be judgment for the plaintiff against the defendant by election in the sum of $1,972,406.10, order there be judgment for the plaintiff against the defendant by election in the sum of $1,432,580.00.

The order of 14 December 2001 is otherwise confirmed.

MACKENZIE J: The issues in the appeal and cross appeal in this matter are set out in the judgment of White J and need not be repeated. Logically, at the trial, the issues of lack of duty owed or no breach of duty arising from the relationship between the plaintiff and the defendant, joint illegal enterprise and voluntary assumption of risk should be considered first. If a defendant does not succeed at trial on those issues, contributory negligence then falls for consideration (Jansons v Public Curator (1968) Qd R 40, 45).

The learned trial judge found that none of the first three defences was made out. The only contributory negligence found related to failure to wear a seat belt and was assessed at 20 per cent.

There are a number of key findings of fact which must be given appropriate weight. The learned trial judge held that little weight should be given to historical information given by the plaintiff because of his intellectual deficit and lack of recall of events immediately preceding the accident. The defendant’s evidence should also be treated with reserve because he had little accurate recollection of events on the day of the accident and of events immediately preceding the accident. The learned trial judge found that many of the answers given by him were reconstructions rather than memory. The lack of accuracy and reliability of memory was consistent with the effects of the calculated blood alcohol concentration, which would have been no less than .27 per cent at the time of the accident. The learned trial judge’s approach was to exercise caution about accepting his evidence on critical events if not supported in some respect by other evidence. She preferred the evidence of a publican, Mr Stone, and his wife where there was disparity between the defendant’s evidence and theirs.

It was found that three nights accommodation had been paid for at an hotel at Jericho on arrival on Thursday 3 February 1994. Notwithstanding this, for reasons that were not satisfactorily explained the plaintiff and the defendant departed late on the afternoon of Saturday 5 February 1994, having collected their luggage which had remained in the room throughout the day. The vehicle in which they left belonged to the plaintiff.

Beer to take away had been purchased on two occasions, one of which was for the purpose of a visit to a friend of the plaintiff who lived on a property out of town, possibly on Thursday evening. On Friday, after inspecting a property for most of the day the plaintiff and defendant returned about 8 pm, had dinner and drank in the bar until midnight when it closed. The defendant had been drinking “heavy” beer and the plaintiff mid-strength. They continued on to a party nearby, taking beer purchased at the hotel with them. They remained there until about 4.30 am.

The evidence was not wholly consistent as to the time spent by them drinking in the bar on Saturday. There is evidence that they were there in the latter part of the morning. Each of them later spoke of having a sleep and left the bar. However, the learned trial judge found on the basis of evidence from the defendant that after they left the bar they went to a friend’s house and continued drinking. It was found that at the time the plaintiff left the bar, he had no intention to leave Jericho by car that afternoon. Nevertheless they departed at about 5.30 pm, with the accident happening about 2 hours later. While each had consumed alcohol to an extent which rendered them unfit to drive a motor vehicle, there was evidence from the publican that at the time the defendant left the bar he was not showing signs of gross intoxication. After the accident the police officer who investigated the incident made a similar observation.

The defendant was driving at the time of the accident which occurred when the vehicle struck the structure of a bridge while he was bending down to pick up cigarettes that he had dropped. He had taken over the driving from the plaintiff 10 to 15 minutes before after the plaintiff had displayed that he was incapable of controlling the vehicle properly. There was evidence of broken brown glass on the floor of the vehicle after the accident but the learned trial judge was not satisfied that the plaintiff or the defendant had consumed more beer on route. She observed that the glass was consistent with bottles being left in the vehicle from a previous occasion.

I have had the opportunity of reading in draft form the reasons of the President and White J. White J’s extensive analysis of the law is one with which I generally agree.

The authorities in relation to the “no breach of duty” defence are articulated in different ways. In Insurance Commissioner v Joyce (1948) 77 CLR 39 Latham CJ said, in a case where the plaintiff had been aware that the defendant was very drunk and voluntarily entered the motor vehicle with him, that the case might be described as involving a dispensation from all standards of care so that there was no breach of duty by the defendant. Dixon J also said that no breach of duty was involved. While the actual decision turned on other considerations the availability of the defence was accepted in Roggenkamp v Bennett (1950) 80 CLR 292.

The majority judgment in Cook v Cook (1986) 162 CLR 376, which was not a case of drunk driving but one where the driver was known by the plaintiff to be very inexperienced explains the relevant principle in the following passages:

“In the ordinary action in negligence where the plaintiff is a passenger who has been injured in a motor vehicle driven by the defendant, the relevant relationship of proximity is simply that of driver and passenger and the category of case is the general one which reflects that relationship. In that general category of case, the standard of care required, being objective and impersonal, is not modified or extended by the personal driving history, ability or idiosyncrasy of the particular driver. It is the degree of care and skill which could reasonably be expected of an experienced and competent driver. That is not, however, to say that, regardless of the circumstances of the particular case, the relationship between a driver and a passenger is, for the purposes of the law of negligence, a completely standardised one or that the content of the duty of care where that general relationship exists is necessarily immutable. While the personal skill or characteristics of the individual driver are not directly relevant to a determination of the content or standard of the duty of care owed to a passenger, special and exceptional facts may so transform the relationship between driver and passenger that it would be unreal to regard the relevant relationship as being simply the ordinary one of driver and passenger and unreasonable to measure the standard of skill and care required of the driver by reference to the skill and care that are reasonably to be expected of an experienced and competent driver of that kind of vehicle.

…

Where such special and exceptional facts transform the relevant relationship, questions of the requisite proximity of relationship and of the standard of any duty of care must be determined by reference to the more precisely confined category into which the particular relationship falls. Assuming that the requirement of proximity remains satisfied, the standard of care, while remaining an objective one, must be adjusted to the exigencies of the relevant relationship in that it will be the degree of care and skill reasonably to be expected of the hypothetical reasonable person of the law of negligence projected into that more precisely confined category of case.”

The learned trial judge did not analyse the defence separately from that of joint illegal enterprise. In that context she referred to Gala v Preston (1991) 172 CLR 243, 249-250 and 252 where the question of negation of the existence of a duty of care is discussed. She held, consistently with that authority, that where the illegality alleged only consisted of being a party to an offence of driving a motor vehicle whilst under the influence of liquor the ordinary duty of care was not displaced, and that the defence had not been made out. A further argument based on the proposition that the plaintiff had been a party to an offence of dangerous driving (which had not been pleaded) was rejected. The learned trial judge was not wrong to not consider that argument having regard to the state of the pleadings.

A critical point for the purpose of disposing of the appeal is that, for a defence of voluntary assumption of risk or the “no breach of duty” species of defence to succeed, it is necessary that the plaintiff passenger actually knew that the driver was so intoxicated that he was unable to drive safely but nonetheless can be said to have elected to take the risk from which the injury arose. For that reason the plaintiff’s own condition is relevant. If he himself was deprived of the ability to assess the defendant’s condition when the decision to travel was made the defence would generally not be made out.

On the other hand contributory negligence may have its origin in actual knowledge of the driver’s condition, constructive knowledge of it, especially from association with the defendant in circumstances where he is consuming alcohol, or in a situation where the plaintiff is aware of the likelihood that he will travel in the vehicle with the person, that the person is likely to consume alcohol to excess and the plaintiff deprives himself of the ability to assess the defendant’s capacity to drive. The degree of intoxication of the defendant need not be as severe as in the case of voluntary assumption of risk or “no breach of duty” since the focus in relation to contributory negligence is whether impairment of a degree where a reasonable person would consider it unsafe to be driven by the defendant exists. The level of incapacity need not be as high and the knowledge as direct as for the other two defences.

Cases where it is found that there was no breach of duty or the standard of care required is affected by special and exceptional facts arising from the relationship of plaintiff and defendant are comparatively rare. One troubling aspect of the present case is that the plaintiff and the defendant spent long periods in each other’s company during the period they were in Jericho. During those periods each was drinking. The defendant was very significantly affected by alcohol, according to the objective measurement after the accident, although the extent of his intoxication was not apparent to the publican or the police officer who investigated the accident. Even if one were inclined to discount the evidence of the publican in that respect (which would be contrary to the learned trial judge’s findings) the police officer’s assessment is not easily discounted.

While a different conclusion might have been open on the evidence, I have finally come to the conclusion that it is not possible, consistent with principle, to say that the learned trial judge’s conclusions that there was no basis in the relationship between the plaintiff and the defendant for imposing a lesser standard of care and that the defendant had not established that the plaintiff had sufficient actual knowledge or appreciation of the degree to which the defendant was intoxicated at the time the defendant took over driving the vehicle can be set aside. I agree with what White J has said in her reasons for judgment concerning joint illegal enterprise. In the result all of these grounds must fail.

With regard to contributory negligence, the learned trial judge did not accept as reliable the defendant’s evidence that the plaintiff had fastened his seat belt, or that he observed the plaintiff wearing it after the accident. It is implicit in the assignment of 20 per cent contributory negligence for failure to wear the seat belt that the plaintiff retained sufficient insight at material times that he should do so although there is no specific reference to this in the reasons for judgment. That is perhaps not surprising since the focus was largely on conflicting evidence from experts as to inferences that could be drawn from the plaintiff’s injuries and the dynamics of the collision.

In my opinion the learned trial judge’s finding that the claim that the plaintiff was guilty of contributory negligence was not made out for the same reasons as applied to voluntary assumption of risk cannot be sustained. Irrespective of whether the plaintiff actually knew that the defendant was intoxicated to such an extent that he should be taken to have voluntarily assumed the risk of travelling with him as a passenger, it is in my view an inevitable conclusion on the evidence that the plaintiff must have had good reason to think that the defendant would have been affected to a significant extent by alcohol when he allowed him to drive his vehicle and that there was a substantial risk that he would not drive safely because of the quantity of alcohol he had consumed. In the circumstances a finding of contributory negligence should have been made.

With respect to the second basis upon which it was argued that the plaintiff was guilty of contributory negligence, I agree with White J, for the reasons given by her, that contributory negligence was established by that route as well. I agree with her reasons for assessing equal apportionment. I also agree with White J’s analysis of the issues involved in the ground of appeal concerning recovery of the judgment from the plaintiff by virtue of his contravention of s 13(2)(b) of the Motor Vehicles Insurance Regulations 1936 and with her reasons concerning the cross appeals. I agree with the orders proposed by her.

WHITE J: This appeal by the Defendant by Election from a judgment given in the Trial Division awarding damages to a passenger in a motor vehicle accident seriously injured due to the careless driving of the defendant, Bell, (not a party to the appeal), raises important questions of principle. Briefly stated, the respondent, (“Wills”), the plaintiff below, and Bell who had been drinking together over a lengthy period set off on a journey of some hours in Wills’ car with him driving initially. Bell took over the driving because Wills’ driving was erratic. The car ran into the pillars of a bridge whilst Bell was reaching down to recover cigarettes from the car floor.

The Defendant by Election pleaded as defences to Wills’ claim for damages, no duty owed (or breach of duty) by virtue of the relationship defined by the excessive consumption of alcohol; no duty owed because the men were engaged in the illegal enterprise of driving or permitting to drive whilst intoxicated; voluntary assumption of risk; and contributory negligence. The Defendant by Election was unsuccessful on all defences (save that her Honour below apportioned 20 per cent liability to Wills for his failure to wear a seat belt which is not sought to be disturbed). All of the findings on the defences are challenged on appeal.

The Defendant by Election also appeals a finding that the appellant was not entitled to recover the judgment sum from Wills by virtue of his contravention of reg 13(2)(b) of the Motor Vehicles Insurance Regulations 1936 by permitting Bell, an intoxicated person, to be in charge of his motor vehicle.

There are cross-appeals relating to the amount allowed below for the cost of establishing the fund of damages awarded to Wills reduced by virtue of Wills’ contributory negligence in not wearing a seatbelt and the costs of advice about managing the investment fund for which no sum was allowed.

The facts

Wills was a passenger in his own 1993 Toyota Landcruiser driven by Bell on Saturday, 5 February 1994 when the vehicle crashed into the concrete post on the railing of the Gap Creek Bridge on the Capricorn Highway in Central Queensland, approximately 16 kilometres from Anakie and 168 kilometres from Jericho from where the men had driven. The accident occurred at approximately 7.30 pm. When Bell was tested for blood alcohol two hours later his reading was 0.23 per cent. He subsequently pleaded guilty and was convicted of driving under the influence of liquor contrary to s 16 of the Traffic Act 1949. Wills was never tested.

Wills sustained*, inter alia*, severe head injuries in the collision. He gave evidence at the trial but had no recollection of the events immediately preceding the accident or the accident itself. Her Honour noted that because of his disabilities she placed little weight on the accuracy of historical information conveyed by him in his oral evidence. She was cautious about accepting Bell’s evidence concerning critical events which was not in some respects supported by other reliable evidence, due to his excessive consumption of alcohol prior to the accident. However it is clear that her Honour did accept Bell’s evidence about events immediately prior to the accident about some matters, such as his speed and that both he and Wills had shared the driving. Her Honour did not find Bell’s evidence unreliable because he was not an honest witness and the perusal of his evidence reveals a certain frankness about his drinking and driving in the past. Her Honour thought that Bell deduced what had happened in response to certain questions rather than being able to recall what had actually happened and his response to many questions was simply that he could not recall.

Wills was a man of 35 who was employed with South Blackwater Coal Limited at South Blackwater as a plant operator. Bell was also a plant operator at Blackwater but he lived in the town whereas Wills lived in the single persons’ quarters at the mine. They had known each other for some years and had socialised from time to time “having a few beers”. Wills was interested in purchasing a rural property near the town of Jericho and had discussed with Bell the possibility of doing so in partnership with him. To this end on 3 February 1994 after seeing a number of people such as accountants and solicitors in Emerald they left in the mid afternoon in Wills’ Landcruiser for Jericho. Wills had fractured his left scaphoid bone in December 1993 and his arm was in a fibreglass plaster cast which immobilised the thumb but left the fingers free to move. Wills denied that he had been able to drive his vehicle but her Honour concluded that he could and had done so when he and Bell left Emerald.

The men booked into the Jordan Valley Hotel in Jericho and paid for a shared room for three nights. The owner (Erindell Pty Ltd) and nominee (John Stone) of the hotel were joined as third parties to the action on the ground that they or their employees had supplied alcohol to Wills and Bell in circumstances where they were grossly intoxicated knowing that they were proposing to drive and would likely harm themselves as a consequence. Her Honour dismissed the third party proceedings and there is no appeal from that order.

After this matter was reserved counsel for the Defendant by Election provided the court with the judgment in South Tweed Heads Rugby League Club Limited v Rosellie Jonnell Cole and Anor [2002] NSWCA 205 (Heydon, Santow JJA and Ipp AJA). The first instance decision, named Cole v Lawrence, was discussed in her Honour’s reasons. The appellate decision is principally of relevance to the issue of the liability of the third parties save for some general statements about the personal responsibility of those who voluntarily ingest alcohol and the law of negligence. Since the liability of the third parties is not a matter for appeal the decision need not further be considered.

Mr Stone recalled that on two occasions during their stay the men purchased beer to take away. At some stage they visited a Mr Arthur Cox, a friend of Wills, who lived on a property outside Jericho, possibly on the evening they arrived. According to Bell, Mr Cox, deceased by the time of the trial, was a heavy drinker. It may have been Mr Cox whom they visited on the afternoon of the accident, if, indeed, they visited anyone.

On Friday 4 February Wills and Bell looked over the property they were contemplating purchasing. According to Bell it proved to be unsuitable. They returned to the hotel about 8.00 pm, had dinner at the hotel and drank beer in the bar until midnight when the bar closed. Bell drank XXXX Gold as was his practice with an alcohol strength of 3.5 per cent and Wills drank heavy beer with an alcohol strength of 4.9 per cent as was his practice. After the bar closed they went to a house-warming party for some employees of the hotel nearby and continued drinking, taking with them beer purchased from the hotel. They remained at the party until about 4.30 am on the Saturday morning and then returned to the hotel. They slept for a few hours. Bell, at least, had breakfast and they recommenced drinking beer when the bar opened mid-morning. Mr Stone and his wife, both of whose evidence her Honour accepted as reliable, thought the men showed the effects of a heavy night out drinking but there was nothing unusual about their conduct. Their drinking at the bar on Saturday was described as “steady” consuming three or four pots of beer an hour.

Another witness, Mr De Landelles, spent about two and a half hours drinking with Wills, whom he had known for many years, and Bell from about midday on Saturday. He said they were not slurring their speech, were steady on their feet, “… they wouldn’t have been sober and they weren’t very drunk”. The men mentioned watching a football match at some other town about four hours drive away but Wills was not keen to go. Wills was heard to express the intention of staying at the hotel for another night. There was some talk overheard by Mrs Stone about having a sleep in the afternoon. When Wills and Bell left the bar on Saturday afternoon Mr and Mrs Stone said they were not overly intoxicated, and while conceding that they would have been over the limit to drive, Mr Stone said they were not exhibiting any signs of intoxication as described in a publication for the benefit of operators of licensed premises circulated by the Department of Tourism Racing and Liquor Licensing. Wills and Bell were thought to be in the same state of sobriety (or lack of it) by Mr and Mrs Stone and Mr De Landelles.

According to Bell, he and Wills left the hotel in the middle of the afternoon to visit a friend, driven by a third party, where they “had a few beers” but he could not recall who drove or where they went. The men’s clothing was left in their room during Saturday which, as her Honour found, supported the inference that it was not until after they left the bar on Saturday afternoon that they decided to leave Jericho. Her Honour concluded that when they left the bar on Saturday afternoon Wills had no intention of returning to Blackwater “or otherwise travel in his vehicle on that day”. They were not seen by any other witness who gave evidence prior to leaving Jericho.

The men departed the hotel after collecting their gear from their room probably around 5.30 pm since the accident occurred at about 7.30 pm and the Gap Creek Bridge is about one and a half to two hours drive from Jericho. Although not mentioned by her Honour, the only vehicle available to the men to return to Blackwater, so far as the evidence reveals, was Wills’ Landcruiser. It is highly unlikely that they would have left in it had Wills not agreed to do so. There is no suggestion that Wills was incapacitated by the consumption of alcohol from making that decision.

Her Honour apparently accepted Bell’s evidence that he and Wills took turns in driving on the return trip to Blackwater and that they did not consume any more alcohol after leaving Jericho. They stopped from time to time for “comfort stops” and to change driver. When changing positions in the vehicle each man walked around the vehicle to get into his new seat.

The condition of Wills when they were leaving the hotel was described by Bell:

“What is your recollection of how Tim was by the time you left the hotel? – I presume he was in much the same state as I was. He was about my height and build and we drank much the same probably.

And was he falling about all over the floor or anything like that: -- No.

And what about his walking, could he walk and talk okay? – Yeah, he was getting around all right, yeah.

Was he making sense? – Well, probably I thought he was making sense. He wasn’t cold sober. You probably wouldn’t have thought so. I don’t know.”

Her Honour said she did not find this evidence about Wills’ state of intoxication of assistance because of Bell’s “lack of reliability about these events”. Nonetheless this evidence is consistent with the evidence of the witnesses who saw Wills at about 2.30 pm and since her Honour accepted Bell’s evidence that both men took turns driving, Wills’ evidence may not have been short of the mark.

Her Honour set out a passage from Bell’s evidence as to how he came to be driving which she seems to have accepted:

“And how did you come to be driving it then? – Well, Tim was driving us, but he wasn’t making a real good fist of it and we worked it out together I might be a bit better driver than he was.

What did he say; can you remember? – ‘I better have a go’.

He said that to you? – Yeah.

You both got out and swapped sides? – That’s correct.

And did you feel any different at that stage? – How do you mean?

You described before how you weren’t very drunk and you weren’t sober. I was wondering whether you had ----- ? – Much the same thing.

Much the same. And how competently did you think you were driving? – I thought I was going great.

And when you say that Tim wasn’t making too good a fist of it, can you be a bit more specific? – Sort of wandered all over the road. He’d look over at me and have a bit of a yarn to me and forget to look back.

Anyway, when it came for you to take over I gather from what you said that you had much the same amount. Did you have any worries about driving the vehicle? – No, not really.

What happened then after you began to drive? – I got up the road a bit and I lost the cigarettes and bent down to pick them up and run into a bridge.

And you weren’t actually smoking at the time; you were just looking for your cigarettes? – I was going to light a smoke and lost them.”

After the accident a roadside breath test was administered to Bell by Senior Constable Pearce. A reading of 0.245 per cent was obtained. Bell was formally analysed in Emerald at about 9.30 pm when a reading of 0.23 per cent was recorded. Her Honour accepted the expert evidence of Dr Purssey that Bell’s likely blood alcohol content at the time of the accident was about 0.27 per cent and would have been 0.31 per cent at 5.30 pm when the men left Jericho. By any standard that indicates a massive consumption of alcohol and it seems astonishing that he was capable of driving, however Senior Constable Pearce said in cross-examination that he did not form the opinion that Bell was under the influence of alcohol, meaning being over 0.15 per cent, until he had administered the roadside breath test. He was not challenged on this opinion. Senior Constable Pearce did not recall any other indicia of intoxication in Bell other than some slurring of words and slower speech than that of a non-intoxicated person. Her Honour accepted Dr Purssey’s opinion that with the levels of alcohol indicated Bell would have been excessively intoxicated with attendant disturbance of perception, reaction time, judgment, and, to a lesser extent, disturbance of muscular control and balance including on the eyes. Her Honour inferred that Bell’s intoxication was the reason he bent down to recover the cigarettes from the floor of the motor vehicle when it was clearly dangerous to do so, that is, approaching a bridge after rounding a curve at about 80 kilometres per hour.

The defences

At trial the Defendant by Election contended that Wills was injured during the course of a joint illegal enterprise such that no duty of care was owed by Bell to him, relying on statements in the judgment of Mason CJ, Deane, Gaudron and McHugh JJ in Gala v Preston (1991) 172 CLR 243. The illegality pleaded was Bell’s driving of the motor vehicle whilst intoxicated contrary to s 16(1) of the Traffic Act 1949 and reg 13(2)(a) of the Motor Vehicles Insurance Regulations to which Wills was a party. Before her Honour it was submitted by the Defendant by Election that Bell was engaged in dangerous driving contrary to s 328A(2)(a) of the Criminal Code in which Wills participated. Bell had not been charged with that offence nor had it been pleaded and her Honour correctly declined to consider the issue of illegality by reference to any possible breach of s 328A of the Code.

Whilst not abandoning the argument of no duty of care owed based on a joint illegal enterprise, Mr Doyle SC for the Defendant by Election directed his submissions to the special and exceptional relationship between Wills and Bell dictated by their consumption of excessive quantities of alcohol which negated any duty of care which a driver ordinarily owes to his passenger. This characterisation of the relationship which has its origin in Australia in Insurance Commissioner v Joyce (1948) 77 CLR 39 and its most recent application in the High Court in Cook v Cook (1986) 162 CLR 340 was not dealt with by her Honour separately from a consideration of the defence of joint illegal enterprise. The approach in Joyce was confirmed in Roggenkamp v Bennett (1950) 80 CLR 292. Both of those cases concerned circumstances where the plaintiff and the defendant were drinking together over a period of time and whilst one was driving and the other a passenger were involved in a motor vehicle accident which caused injury to the passenger. They also took place before the apportionment legislation came into force and any of the defences of no duty, volenti non fit injuria and contributory negligence, if established, was a complete answer to the plaintiff’s claim. This may explain the acceptance of volenti by Latham CJ and Rich J in Joyce and McTiernan and Williams JJ in Roggencamp. When discussing no breach of duty Latham CJ said at 46:

“In the case of the drunken driver, all standards of care are ignored. The drunken driver cannot even be expected to act sensibly. The other person simply ‘chances it’. Accordingly, the case may be described as involving a dispensation from all standards of care, so that, as the learned trial judge decided, on the facts as found by him, there was no breach of duty by the defendant Kettle.”

Dixon J, who dissented, preferred to analyse the facts on the basis of no duty or breach of duty rather than by the application of volenti or contributory negligence:

“In the case of a driver whose ability to manage and control a car when his judgment and discretion in doing so is impaired by drink, the position of the voluntary passenger has been variously determined by the application of three different principles. In the first place, he has been regarded as depending upon a relation which by accepting a place in the conveyance he sets up between himself and the person responsible for its management. For those who believe that negligence is not a general tort but depends on a duty arising from relations, juxtapositions, situations or conduct or activities, the duty of care thus arises. For those who take the contrary view, the standard of care is thus determined. But whatever be the theory, the principle applied to the case of the drunken driver’s passenger is that the care he may expect corresponds with the relation he establishes. If he knowingly accepts the voluntary services of a driver affected by drink, he cannot complain of improper driving caused by his condition, because it involves no breach of duty”, pp 56-7.

But a sufficient degree of knowledge or appreciation by the passenger of the conditions giving rise to the danger is necessary:

“It is not easy to see how the principle can be applied when no higher finding can be made than that he ought to have known”, p 57.

Webb J was the only one of the three judges in Roggenkamp to apply the reasoning in Joyce that there was no breach of duty by the intoxicated driver to the passenger.

The no breach of duty approach in Joyce was approved in Cook, not an intoxicated driver case. In that case the driver was inexperienced and unlicensed and was invited to drive the car by a relation who travelled as the passenger. In the course of the journey the driver accelerated quickly, failed to apply the brakes and crashed the car into a concrete electricity post breaching, the court held, even the standard of an inexperienced driver. Cook raises some concerns, with respect, in that it postulates or appears to, a reduced rather than no measurable standard of care applicable by virtue of the special and exceptional circumstances of the relationship between the driver and the passenger.

“It is only when special and exceptional circumstances clearly transform the relationship between a particular driver and a particular passenger into a special or different class or category of relationship that the case will be one in which the duty of care owed by the particular driver to the particular passenger will be either expanded or confined by reference to the objective standard of skill or care which is reasonably to be expected of a driver to a passenger in the category of a case where that special or different relationship exists”, p 387.

Although the majority, Mason, Wilson, Deane and Dawson JJ, identified, analysed and explained the relationship between the driver and passenger upon the extended view of proximity which now commands little, if any, adherence, their Honours accepted the approach of Latham CJ and Dixon J in Joyce and Webb J in Roggencamp:

“… that special and exceptional circumstances can transform the ordinary relationship of driver and passenger into a special one with the result that the hypothetical reasonable person of the law of negligence can no longer be credited with the degree of skill and experience that would otherwise be attributed to him or her”, p 384.

Brennan J, rejecting the concept of proximity other than encompassed in the reasonable foreseeability of injury as a tool for analysis for determining the existence of a duty of care, postulated a test for determining the standard to be applied consistently with the reasoning of Dixon J in Joyce:

“A passenger who accepts carriage in a vehicle with knowledge of the condition which disables the driver from exhibiting the standard of care ordinarily to be expected of a prudent driver or who knows of a defect in the vehicle establishes a relationship with the driver different from the driver’s relationship with other users of the highway. Knowledge of the disabling condition of the driver or the defect in the vehicle is knowledge of an unusual condition that may affect the application of the standard of care which would otherwise be expected”, pp 392-3.

As was recognised by Murphy and Teague JJ (two judges constituted the Victorian Full Court) in Redford v Ward (1990) Aust Torts Reports 81-064, the application of a reduced standard of care founders not only in want of principle but also difficulty of practical application and this problem is adverted to in Gala v Preston, pp 255, 279-280.

In that case the High Court largely ignored the excessive consumption of alcohol by the parties in the hours preceding stealing a motor vehicle and using it unlawfully in the course of which a passenger sustained injury. Mason CJ, Deane, Gaudron and McHugh JJ, analysing the relationship between the plaintiff and defendant as one based on proximity, assisted by the reasoning in Cook, concluded that the relationship based on the joint criminal activity involving the theft of a motor vehicle and its illegal use gave rise to the only relevant relationship between the parties and constituted the whole context of the accident. In those special and exceptional circumstances, their Honours concluded, the participants could not have had any reasonable basis for expecting that the driver would drive according to the ordinary standards of competence and care and it was neither possible nor feasible for a court to determine what was an appropriate standard of care.

What emerges from the cases is the emphasis placed on the rarity of the circumstances where the ordinary duty of care will be displaced. In Cook, Mason, Wilson, Deane and Dawson JJ at 387 referred with approval to the view expressed by Salmon LJ in Nettleship v Weston [1971] 2 QB 691 at 704 that to replace the ordinary duty of care:

“…to the knowledge of the passenger the driver [must be] so drunk as to be incapable of driving safely.”

If, because of his own intoxication the passenger did not fully appreciate the driver’s condition or its extent then the defence would, in general, not be made out.

Her Honour made no specific findings about Wills’ degree of intoxication but rejected the defences of volenti and contributory negligence. She did not address the no breach of duty defence separately from that of illegality. She rejected these defences on the failure by the Defendant by Election to discharge the onus of proof. Wills did not plead his own intoxication in reply to these defences. Nonetheless, in my view, there was ample evidence which was accepted by her Honour from which the inference could properly be drawn that Wills was affected by the consumption of alcohol and probably to at least the same extent as was Bell. This would have affected his ability to judge Bell’s capacity to drive carefully. The evidence of Senior Constable Pearce that Bell’s only indicia of intoxication were the smell of alcohol and some slurring and slowness of speech suggests that he was not perceptibly so drunk as to be thought incapable of driving safely. Although not relevant in establishing Wills’ appreciation of Bell’s capabilities when he permitted Bell to drive his car, that they drove 168 kilometres without a known mishap is consistent with Senior Constable Pearce’s opinion. Mr and Mrs Stone thought that Wills and Bell were not so intoxicated that they should not be served. Mr Stone conceded that although the men were over the legal limit to drive they were not obviously drunk. Mrs Stone thought that they seemed more tired than drunk and neither appeared particularly intoxicated to her. Her Honour accepted that Wills and Bell alternated in driving the motor vehicle. Accordingly the evidence did not support a finding that Wills knew that Bell was so drunk as to be incapable of driving safely. This ground of appeal must fail.

Neither, therefore, does the evidence support the defence of volenti non fit injuria for neither sciens nor volens was established as required for that defence to be successfully made out. That ground of appeal also must fail.

Her Honour was correct, in my view, to reject the defence based on no duty of care because of participation in an illegal enterprise. The community rightly abhors the conduct of those who consume alcohol to excess and drive a motor vehicle putting at risk the safety, not only of passengers in their own car, but all others in reasonable proximity on and around the road. But as Mason CJ, Deane, Gaudron and McHugh JJ observed in Gala v Preston at 250:

“There is no a priori reason why the illegality of a particular enterprise or activity should automatically negate the existence of a duty of care which might otherwise arise from the relationship with subsists between the parties, especially if it be accepted that the decision in Smith v Jenkins (1970) 119 CLR 397 does not rest on public policy.”

Progress and Properties Ltd v Craft (1976) 135 CLR 651 and Jackson v Harrison (1978) 138 CLR 438 clearly establish that in cases of illegality arising from infringement of statutory provisions such as traffic laws and industrial safety regulations illegality of that kind should not negate the existence of a duty of care. That ground of appeal also fails.

The Defendant by Election contended that Wills contributed to his injuries by failing to take care for his own safety. Contributory negligence in the context of an intoxicated driver may have two aspects. The first involves the passenger’s understanding, objectively assessed, of the capacity of the driver to drive safely. This may be impaired or extinguished because of the passenger’s own consumption of alcohol. The passenger may also be contributorily negligent if he should reasonably foresee when not so incapacitated that he may subsequently make a choice about whether to travel with an apparently intoxicated driver or not. Her Honour rejected the first basis of attributing contributory negligence to Wills because she held that his knowledge of Bell’s want of capacity was not established on the evidence. As I have discussed above, in my view the evidence does allow the inference to be drawn that while Wills was plainly intoxicated he was not so drunk that he was unable to appreciate that Bell’s capacity to drive safely was impaired and there would be a risk in being driven by him. In other words, his knowledge was sufficient.

Her Honour rejected contributory negligence on the second ground because of her finding that when Wills left the bar of the hotel in the early afternoon of the day of the accident he had no intention of returning to Blackwater or otherwise travelling in his vehicle on that day.

Macrossan CJ with whom McPherson JA agreed in McPherson v Whitfield [1996] 1 Qd R 474 at 478 said of this aspect of contributory negligence:

“The test involved in assessing the extent of the failure to take reasonable care for one’s own safety which is what the issue of contributory negligence is concerned with, invites attention to the level of care which can be expected of the reasonable man in the circumstances as they present themselves. If a person should reasonably foresee that he may subsequently be confronted by the necessity to choose whether or not he will travel as a passenger in a car driven by an intoxicated driver, but nevertheless imprudently proceeds to drink to excess diminishing his capacity to discriminate and reducing his ability to make a reasonably careful decision when the occasion does arise, he may well not escape a finding of contributory negligence. The test which will apply in these circumstances will regard the behaviour to be expected of a reasonable man when the risk of the future eventuality to be confronted should reasonably have been apparent. This is a different situation from that in which a person will be placed where he allows himself to become intoxicated in circumstances where no reasonably foreseeable specific risk to his safety should have been apparent to him. If, in these circumstances, while lacking relevant conscious awareness he is placed into or induced to enter into the car of an intoxicated driver he should not on that account be held responsible for a failure to take reasonable care for his own safety.”

On the evidence, Wills and Bell visited persons in the course of their stay who lived outside Jericho and needed to use a vehicle to get there. They expected to drive back to Blackwater a few days after arriving. Their plans could have changed (as they apparently did). They were interested in a property. Mr De Landelles reported that Wills told him he was thinking of another visit to it. The men would need to drive to it. Contrary to her Honour, I am of the view that if Wills deprived himself of the ability to judge Bell’s capacity to drive safely there was a real chance that he would have to make a decision to travel as a passenger in a car driven by Bell and that Bell was likely to have consumed alcohol given their pattern of conduct from shortly after arrival in Jericho. It could not be said, as was said by Macrossan CJ in McPherson v Whitfield, that there was no reasonably foreseeable specific risk to his safety which should have been apparent to him. Her Honour clearly was of the opinion that Wills had some consciousness for his own safety in attributing a 20 per cent reduction for failing to wear his seatbelt.

I would uphold the appeal insofar as it relates to Wills’ contributory negligence in riding in a vehicle driven by Bell. In assessing the amount of contribution Macrossan CJ in McPherson v Whitfield at p 477 noted that no scale can be derived from other decided cases to be used to determine appropriate apportionments of responsibility but are essentially factual assessments. However, the observation of Lucas J in Jansons v The Public Curator of Queensland [1968] Qd R 40 at 44 is apt:

“… now, of course, contributory negligence does not afford a complete defence; in a case of this type [intoxicated passenger and driver] in which that defence succeeds, it is difficult to see how the court can assess the degree of fault in other than equal proportions.”

The features of this case make equal apportionment appropriate.

Recovery from the owner of the motor vehicle

Wills as the registered owner of the Landcruiser was required pursuant to the Motor Vehicles Insurance Act 1936 to indemnify himself and all other persons by a contract of insurance with a licensed insurer against all sums for which he or any such other person should become legally liable by way of damages to any person including, in respect of such injury caused by any such other person, to the owner himself. The terms of the insurance policy issued under the Motor Vehicles Insurance Act are in the third schedule to the Regulations and were incorporated into the contract of insurance and in particular:

“… It is expressly declared that the indemnities contracted for under this policy are subject to the due and proper observance and fulfilment by the insured person concerned of the provisions of the said Act and Regulations …”

The Defendant by Election contends that Wills was in breach of the contract of insurance because he was in breach of reg 13(2)(b) which provides:

“An insured person shall not –

permit or suffer another who is under the influence of intoxicating liquor … to drive … a motor vehicle in respect of which he is an insured person.”

Regulation 17, the Defendant by Election contends, permits it to recover any sum awarded to Wills. Her Honour made a declaration in the Defendant by Election’s claim for indemnity and contribution against Bell that he was liable to indemnify the Defendant by Election in respect of the damages ordered to be paid to Wills because he drove the motor vehicle whilst intoxicated contrary to reg 13(2)(a). Regulation 17 provides:

“Notwithstanding that by reason of the provisions of a contract of insurance or policy or these Regulations and the circumstances of the case in question an insurer could, but for this regulation, avoid his liability under such contract to indemnify the insured person concerned upon a claim made thereunder by the insured person, the insurer –

(a)may exercise the powers and authorities conferred upon him by regulations 10 and 11 of these Regulations; and

(b)shall be subject to the liabilities and obligations imposed upon him by regulations 11 and 12 of these Regulations, the provisions whereof may be enforced against him according to their terms,

and for these purposes the insurer shall be deemed to be liable under the contract to indemnify the insured person concerned.

If, in such a case, the insurer pays any sum by way of settlement of any proceeding or to satisfy any judgment or order made or entered against him then he may, by way of action in any court of competent jurisdiction, recover that sum, as a debt due and owing but unpaid, from the insured person whose default constitutes the circumstance by reason whereof the insurer could, but for this regulation, have avoided his liability under the contract of insurance but only if the default is such that the court in which the proceeding for such recovery is taken is satisfied that it contributed in a material degree to the circumstances in which the insurer agreed to pay or otherwise became liable to pay that sum.”

The Defendant by Election in its amended defence and counterclaim alleged in the defence that Wills knew or should have known of the intoxicated state of Bell when he agreed to let him drive the Landcruiser and this default contributed in a material degree to the circumstances in which the Defendant by Election became liable to pay a sum by way of damages and was thereby entitled to set off any liability. In its counterclaim the Defendant by Election sought a declaration that upon payment in satisfaction of any judgment or order which might be obtained against it, it was entitled to recover from Wills, as a debt due and owing but unpaid, that sum.

Her Honour found that Wills did not have the requisite knowledge required by reg 13(2)(b) to constitute a breach of the terms of the contract of insurance and therefore was not required to make findings about other arguments advanced about the meaning of the regulations. Mr J S Douglas QC on behalf of Wills, submitted that on its proper construction reg 17 does not apply to Wills as the owner/claimant; that the construction of reg 17 must be read with regs 10 and 11 concerning the right of an insurer to elect to be joined; that Wills did not know of Bell’s intoxication when he let him drive; that Bell’s intoxication was not causative of the accident which rather was the search for the cigarettes dropped to the floor of the Landcruiser; and that there is no right of set off until judgment has been satisfied.

Some of these contentions can be disposed of briefly. Her Honour was correct in concluding that Bell’s intoxication was causative of him undertaking the dangerous manoeuvre of bending down to look for his cigarettes at a time when he had just rounded a curve at 80 kilometres per hour, approaching a bridge.

As to the requisite mental element for a breach of reg 13(2)(b), Evans v Accident Insurance Mutual Holdings Limited [1998] 2 Qd R 350 held that the insured person

“must either know at the time at which or the period for which acquiescence is given is a time or period when the permittee is or will be under the influence or he must know facts from which it must be concluded that he knew the permittee was or would be under the influence” p 359 per Macrossan CJ.

As I have said above, the inferences to be drawn from the evidence accepted by her Honour establish that Wills knew that Bell was affected by the consumption of alcohol to the extent that his capacity to drive carefully was impaired. Regulation 13(2)(b) does not describe further what is meant by the expression “who is under the influence of intoxicating liquor” but it would be quite unrealistic to conclude that one who has been in the company of another and drinking alcohol at the rate which the evidence demonstrates over some days is not known to be in some relevant way “under the influence of intoxicating liquor”.

It is necessary then to turn to the construction of reg 17. Section 9 of the Motor Vehicles Insurance Act contains the regulation making power. Regulations, by s 10, form part of the Act but still must be within power. Section 9 is couched in wide terms and without limiting the generality of that broad power a number of specific topics which may be the subject of regulations are set out. The most relevant for these purposes is s 9(1)(h). Regulations may be made for:

“The circumstances in which the Office [State Government Insurance Office] or a licensed insurer may recover from an insured person any sum paid on his behalf …”

“Insured person” is defined in s 2 as:

“A person who under a contract of insurance in accordance with this Act is indemnified against all sums for which he … shall become legally liable by way of damages for accidental bodily injury … to any person … caused by the motor vehicle in respect of which such contract is in force.”

Bell is an insured person for the purposes of the contract of insurance. It is Bell who is sued as the negligent driver of the motor vehicle. By reg 13(2)(a) an insured person shall not drive or be in charge of a motor vehicle in respect of which he is an insured person while he is under the influence of intoxicating liquor. The Defendant by Election could therefore avoid his liability to indemnify Bell as the insured person but, in order to give effect to the scheme of comprehensive insurance, the insurer is deemed to be liable under the contract to indemnify the insured person concerned. That must be a reference to Bell. Regulation 17 then permits the insurer to recover that sum “from the insured person whose default constitutes the circumstance by reason whereof the insurer could … have avoided his liability under the contract of insurance”. Since the obligation is to indemnify the person against whom the claim is made, that is, the driver of the motor vehicle, by use of the expression in the recovery part of reg 17, “the insured person whose default…” rather than “an insured person whose default…” suggests that the draftsperson had in mind the same person referred to at the commencement of reg 17, that is,“the insured person” against whom a claim is made.

Mr Douglas SC argued further that regs 10 and 11, which are specifically linked to reg 17, makes clear that the reference to “the insured person” in reg 17 must be a reference to the person against whom a claim is made. By reg 10(1) a person who in a proceeding in any court claims against “an insured person” in respect of legal liability for which “the insured person is indemnified under a contract of insurance” is required to serve the insurer with a copy of the process. The insurer may then elect to be joined in the proceedings. By reg 11(1), if the insurer elects to be joined the insurer is entitled to conduct “on behalf of the person against whom the claim in question is made” all of the proceedings and the person against whom the claim is made must cooperate with the insurer. By reg 11(3), for the purpose of being involved in the legal proceedings “for the benefit of an insured person” the insurer is entitled to the sole conduct of the proceedings on behalf of “the insured person and to the use of the name of the insured person” for those purposes.

State Government Insurance Office (Qld) v Wilmott [1984] 1 Qd R 639 establishes that the right of an insurer to recover against the insured pursuant to reg 17 is not limited to a case where the insurer has exercised its right to be joined in the action. However, the wording of regs 10 and 11 is consistent with a construction of reg 17 which would confine the right of recovery to the person indemnified. Pincus JA in Evans at p 361, dissenting, expressed some unease at a construction of reg 17 which would allow the insurer a set off against the amount which a claimant would otherwise have been entitled. This was because there would then be no sum which the insurer had become legally liable to pay. Somewhat reluctantly, he conceded that although awkward, reg 17 sufficiently evinced an intention to catch the case in which the injured claimant is also the insured person. Fryberg J expressly reserved the question of the construction of reg 17. It was unnecessary in Evans to deal with the construction of reg 17 because of the finding by Macrossan CJ and Fryberg J that the injured owner/passenger claimant did not have the requisite knowledge for the purposes of reg 13(2)(b).

When reg 17 on its plain meaning is considered, together with complimentary expressions in regs 10 and 11, the “awkwardness” of the expression of the right of set off as applied to a claimant/insured, and the specific reference in the regulation making provision, s 9(h), to recovery from “an insured any sum paid on his behalf”, I am of the view that, on its proper construction, reg 17 does not apply to the situation where the claimant for damages is also the owner of the motor vehicle the subject of a compulsory contract of insurance. For these reasons this ground of appeal must fail.

The cross-appeal

The first ground of the cross-appeal is not contested. It is conceded that her Honour ought not to have reduced the assessment of the administrative charges payable in respect of Will’s estate on account of his contributory negligence. This concession is correctly made and the judgment ought to be adjusted to reflect this. This was no part of the Defendant by Election’s case and a certificate under the Appeal Costs Fund Act 1973 in respect of this aspect of the cross-appeal, ought to be granted.

The second ground of the cross-appeal has been made out of time and leave is necessary. It is an appeal from her Honour’s refusal to include in the assessment of damages the sum of $203,251.15 being the cost of selecting and managing the investments for the fund. Her Honour was required to chose which of the Public Trustee or Perpetual Trustees Queensland Ltd was to be the trustee of the damages fund. It was not disputed that the brain damage which Wills sustained in the motor vehicle accident rendered him incapable of looking after his own financial affairs. Evidence was received by her Honour from both potential trustees as to the fees each would charge and for what services. The Public Trustee invests funds such as these through the Public Trustee Investment Fund which is managed by Queensland Investment Corporation. The Public Trustee charges a fee as administrator of the fund but not an investment advisory fee as this is charged to the Public Trustee who indirectly passes this on to the beneficiary in terms of the return on the fund. Calculations were done to show what a notional management fee would be for the Public Trustee. Perpetual Trustees’ fees for administration solely were less than those of the Public Trustee and its combined investments management fee and advisory fee was less than the notional management fee of the Public Trustee.

Her Honour concluded that only the administration fee could be the subject of an order but also considered the overall benefit to the fund.

The High Court in Nominal Defendant v Gardikiotis [1995-1996] 186 CLR 49, concluded that the cost of fund management is not recoverable as damages from the defendant unless it is necessitated by disabilities resulting from the defendant’s negligence. Both Gummow J and McHugh J quoted with approval statements by Zelling J and King CJ (on appeal) in Campbell v Nangle (1985) 40 SASR 161 at 178 and 192. The passage from Zelling J’s judgment is as follows:

“If you injure a plaintiff so badly that he has permanent brain damage and he can neither manage the resulting fund for himself nor make any decision with regard to its management, then it is foreseeable that there is going to have to be a manager to do that for him and, with a large fund of this kind, a skilled manager whose fees must be paid for.”

That is the case here. Her Honour, in my respectful view, erred in not considering the management of the fund as a compensible head of damage. In selecting the appropriate trustee her Honour was influenced only by the cost of the administration and management of the fund, being satisfied that both proposed trustees would discharge their obligations appropriately, in selecting Perpetual Trustees. There was no evidence to show by how much having Perpetual Trustees invest the fund, the fund would be better off. The schedule of cases annexed to the submissions on behalf of the Defendant by Election shows that the management fees generally charged in respect of a fund of damages are in the vicinity of five per cent of the award. The percentage when the additional fees sought are included are likely to be almost three times that amount although the award will now be significantly reduced by Wills’ contributory negligence. In Goode v Thompson & Suncorp General Insurance Limited [2001] QSC 287, unreported decision of Ambrose J of 2 July 2001, the plaintiff sought only the amount of the Public Trustee’s charges although the fund was to be managed by Perpetual Trustees. There is insufficient evidence to consider what Wills might have been able to do with his damages fund were he not brain injured to make useful calculations.

I am of the view that leave should be given to amend the cross-appeal to add the second ground of appeal, that the cross-appeal should be allowed to the extent of including management fees but only to the extent of the difference between the fee to be charged by Perpetual Trustees and the fee which would be charged by the Public Trustee. The amounts will, of course, need to be recalculated in light of the outcome of the appeal.

The orders which I would make are:

Allow the appeal to the extent of ordering that the respondent’s damages be reduced by 70 per cent (which includes 20 per cent for not wearing a seat belt) of the damages assessed below before apportionment.

Give leave to amend the cross-appeal and allow the cross-appeal

(i)by varying the amount of administrative charges not reduced by virtue of contributory negligence;

(ii)to include the management fees in respect of the fund awarded to the respondent to be calculated as the difference between Perpetual Trustees Queensland Limited’s administration fee and the fee charged on the fund by the Public Trustee.

The respondent pay the appellant’s costs of the appeal.

The appellant pay the respondent’s costs of the cross-appeal.

Grant the appellant/cross-respondent an indemnity certificate under s 15 of Appeal Costs Fund Act 1973 (Qld) on the first ground of the cross-appeal.

Footnotes

1. XXXX Gold is a brand name for a mid-strength alcohol beer. ↩

2. (1986) 162 CLR 376. ↩

3. (1991) 172 CLR 243. ↩

4. Gala v Preston, 253-254. ↩

5. Ibid, 254. ↩

6. See these Reasons, [30]. ↩

7. Ibid 250. ↩

8. (1976) 135 CLR 651. ↩

9. (1978) 138 CLR 438. ↩

10. See these Reasons, [21]-[23]. ↩

11. See [33]-[35]. ↩

12. Cook v Cook at 387. ↩

13. Roggenkamp v Bennett (1950) 80 CLR 292, 300; McPherson v Whitfield [1996] 1 Qd R 474. ↩

14. (1950) 80 CLR 292, 300. ↩