Part 1A - Negligence

Parkview Constructions Pty Ltd was the builder and the second respondent was the developer of a residential apartment building. The first respondent commenced proceedings claiming damages under the statutory warranties in s 18B of the Home Building Act 1989 (NSW). This appeal concerned a decision by the primary judge granting The Owners leave to include three new alleged defects on the basis that there was a single cause of action to enforce the promises made in each of the six statutory warranties. The Court of Appeal granted leave but dismissed the appeal.

On s 5B

The Civil Liability Act provides examples of statute modifying the general law of contract: in the law of apportionable claims in Part 4, and the tests for breach and causation of contractual promises to take reasonable care in Part 1A of the Civil Liability Act (because “negligence” is defined to include some contractual claims). Breach is determined by ss 5B and 5C, causation is determined by ss 5D and 5E, and there are many new defences and modifications of common law defences contained in the balance of Part 1A. If damages are sought for personal injury, their availability and quantum will be governed by Part 2, and if they extend to damages for mental injury, their availability and quantum will be governed by Part 3.

Horne v J K Williams Contracting Pty Ltd

[2023] NSWCA 58

Mr Horne and his son were riding their bicycles on the side of the road at around 9pm. As they crossed an intersection, Mr Horne collided with a barricade that was next to the roadway. The barricade was there as part of on-going construction work. Mr Horne commenced proceedings in the District Court against J K Williams Contracting Pty Ltd claiming that it was negligent in failing to ensure that the area around the newly installed barricade was illuminated enough at night. Mr Horne also claimed that the respondent should have put up signage to alert cyclists to the barricade. The primary judge found that there was no breach of duty owed by the respondent to the appellant; and, had there been a duty to take extra steps to prevent a collision, the failure to take those steps was not causative of Mr Horne’s injuries. The Court of Appeal dismissed the appeal.

On s 5B:

Section 5B, being formulated in the negative, reflects the burden of proof which lies upon the injured party: [23]. The plaintiff must plead an appropriately formulated risk of harm because each paragraph in s 5B presupposes a ‘risk of harm’ against which it is alleged that precautions should have been taken: [24]- [25]. Once the relevant risk has been identified, it is necessary to consider whether the risk was “foreseeable”, and “not insignificant”, in accordance with pars (a)

and (b) or s 5B(1). Subsection (2) requires considerations of what precautions a reasonable person in the position of the defendant would have taken against such a risk, pars (a) and (b) being the elements of foreseeability and significance: [32].

The relationship between the concept of duty and the elements of s 5B is not easy to determine. On the one hand, careless behaviour is readily foreseeable, and the risk of injury to those who are careless of their own safety may be significant: [35]-[36].

Unlike par (c) in s 5B(1), the criteria specified in pars (a) and (b) do not use the language of assessment by a

reasonable person in the position of the defendant, but rather, suggests an objective standard: [38].

High Court decisions referred to in discussion:

Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA

42

Court of Appeal decisions referred to in discussion:

Uniting Church in Australia Property Trust (NSW) v Miller (2015) 91 NSWLR 752;

[2015] NSWCA 320

The appellant, Ms Collins, was driving along a highway. She turned a long bend in the road and was confronted with a line of stationary vehicles backed up from an accident between two vehicles. To avoid a collision with the rear-most vehicle, Ms Collins steered her vehicle up the road embankment, causing her car to overturn and suffering injury. Ms Collins commenced proceedings against the third-party insurer of one of the drivers in the original accident. The primary judge held that the insurer was not liable because Ms Collins’ injuries did not result from a “dangerous situation caused by the driving of the vehicle” within the meaning of s 3A(1)(d) of the Motor Accidents Compensation Act 1999 (NSW). Ms Collins appealed that decision. The Court of Appeal allowed the appeal.

On s 5B: Section 5B(1)(b) does not set a high threshold for what is a “not insignificant” risk. The provision sets “a slightly more demanding standard” than the “undemanding” test at common law of the risk being real and not far-fetched or fanciful: [35]-[36]. This “not particularly demanding” test was readily met here: [37], [122], [130]-[132].

There could be no dispute that a reasonable person in the position of the insured driver would have taken precautions to avoid causing the risk of harm at issue: that was because foresight is not required of the precise manner or character of the risk of harm; the distance in space and time between the original accident and Ms Collins’ accident had no real relevance to the likelihood of the risk; and a risk may have a low likelihood of occurrence but still be characterised as not insignificant.

The relevant precautions were the same precautions the insured driver was required to take to avoid causing the original collision. The respondent admitted that the insured driver had breached his duty to the occupants of the car with which he collided. Consequently, breach of duty was made out: [38]-[42], [134]-[137].

On s 5R: Contributory negligence must be assessed according to the standard which would apply if the plaintiff were the defendant, under s 5R(1). Ms Collins was found to be 20% contributorily negligent because the vehicle behind her was able to stop in time and avoid a collision: [142]- [145].

NSWCA decisions referred to in discussion:

Bunnings Group Ltd v Giudice [2018] NSWCA 144

Motorcycling Events Group Australia Pty Ltd v Kelly (2013) 86 NSWLR 55; [2013] NSWCA

361

Prouten v Chapman [2021] NSWCA 207

Rail Corporation New South Wales v Donald; Staff Innovations Pty Ltd t/as Bamford Family Trust [2018] NSWCA 82

Shaw v Thomas [2010] NSWCA 16

Sibraa v Brown [2012] NSWCA 328

Stenning v Sanig [2015] NSWCA 214

Stojan v Kenway [2009] NSWCA 364

High Court decisions referred to in discussion

Chapman v Hearse (1961) 106 CLR 112;

[1961] HCA 46

March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506; [1991] HCA 12

Tapp v Australian Bushmen’s Campdraft & Rodeo Association Limited (2022) 399 ALR

535; [2022] HCA 11

Ms Powell injured her back when lifting a 25kg weight plate from the floor to replace it on the rack, in a gym operated by JFIT Holdings Pty Ltd (“JFIT”). The weight plate had been left on the floor by another gym user. While it was a rule of gym membership that users put away their weights after use, that rule was not enforced, with equipment often left out to be put away by subsequent gym users. This was known to be particularly problematic between 3pm and 5pm on weekdays, the period following which Ms Powell was injured. The primary judge, rejecting defences of contributory negligence, obvious risk and waiver, awarded Ms Powell damages for negligence. JFIT

appealed, arguing that the primary judge failed to properly identify the risk of harm for the purposes of s 5B. The primary judge formulated the relevant risk of harm as including “the risk of injury from lifting heavy weight plates from the floor in the course of undertaking housekeeping activity as distinct from undertaking an exercise regime, where those weight plates had been left strewn there in circumstances in which gymnasium staff had not taken steps to inspect the area, collect and appropriately store those weights”. The Court of Appeal dismissed the appeal.

On s 5B: The primary judge’s formulation was unduly narrow, focusing purely and precisely on the circumstances in which Ms Powell suffered her injury: [35]. However, the proposed alternative formulation – as “the risk of suffering injury whilst lifting up a weight and putting it away” – was not shown to yield any different result: [32]-[33]. The risk of harm, however formulated, was not insignificant. That standard, involving a combined evaluation of the significance of potential injury and the likelihood of its occurring, is not particularly high: [39].

Prouten v Chapman [2021] NSWCA 207

Ms Prouten was injured while delivering mail on a motorcycle when she collided with an extender bed left protruding from the rear of the Chapmans’ caravan, which was parked on the nature strip in front of their property. Ms Prouten’s claim was rejected, inter alia, on the basis that she had not established a breach of the Chapmans’ duty of care. Ms

Prouten appealed, and the Court of Appeal by majority dismissed the appeal.

On s 5B: The obviousness of the caravan to anyone using the right of way made the risk of harm for the purposes of s 5B a very specific one. As the primary judge found, the risk was that “a person travelling only from east to west, and only on the nature strip, and only at a speed at least somewhat above walking pace, and only following a route that led him or her around the caravan as opposed to past it, could collide or nearly collide with the stationary bed, and suffer some injury as a result”. Though the degree of generality or specificity with which a risk of harm is specified may be complex and contestable, in this case there were very few ways in which a stationary unconcealed object could cause harm to a plaintiff and thus there was no error in the primary judge’s very specific formulation: [21]. The duty owed to a motorist must account for drivers taking reasonable care for their own safety. With this in mind, it may be doubted that the owner of a large, highly visible and stationary object into which a moving vehicle collides is guilty of negligence: [22].

Though the test in s 5B(1)(b) is more demanding than that of a risk that is not far- fetched or fanciful, the difficulty in formulating, prospectively, a use of the nature strip likely to result in injury as a result of the defendants’ conduct speaks against a finding that the risk was not insignificant: [24]. For the purposes of s 5B(1)(c), the law of negligence must ordinarily reflect the foresight, reactions and conduct of ordinary members of the community, as holding defendants to higher standards can only bring the law of negligence into disrepute: [25].

The plaintiff, given the pseudonym PWJ1, commenced proceedings against the State of New South Wales claiming damages for physical and sexual assault. The plaintiff subsequently sought to make numerous amendments to his statement of claim, including the joinder of two further defendants, the Anglican Home Mission and the Salvation Army, each of which was responsible for one of the various institutions in which the plaintiff alleges that he was abused. The judge, in dismissing the notice of motion seeking to join the additional defendants and to rely on a further amended statement of claim, discussed the principles relevant to pleadings of negligence, in particular in relation to the requirements of s 5B of the Civil Liability Act.

On s 5B: The risk of harm for the purposes of s 5B is an essential element of liability in negligence and needs to be specifically formulated and pleaded: [57]-[67]. Section 5B(1) sets out the three separate elements which must be made out to establish a breach of duty, namely foreseeability of harm, probability of harm and reasonableness of precautions. Though these

elements are often conflated in the common law phrase “reasonable foreseeability”, the Civil Liability Act makes clear that each must be addressed separately: [68]-[72].

With respect to s 5B(1)(a), a plaintiff must prove and establish that the defendant, at the date of the alleged negligence, knew of the alleged risk of harm, or else, by reference to other facts, matters and circumstances ought to have known it. Those other matters will vary from case to case but may include such things as the prior behaviour of an institution with respect to similar behaviour by the perpetrator or even another perpetrator, common knowledge and experience of others in the similar position of the defendant, an accumulation of complaints being made, public notoriety of a particular risk of harm, publications and academic knowledge which might be expected to be read by people in the defendant’s position and the obviousness or the likelihood of the event happening in the application of common sense: [75].

With respect to s 5B(1)(b), the following principles are to be borne in mind:

(a) the assessment of the risk of harm is one made in prospect and not retrospect. Hindsight has no part to play;

(b) the phrase “not insignificant” is of a higher order than the common law test, and this was intended to limit liability being imposed too easily;

(c) the phrase “not insignificant” is intended to refer to the probability of the occurrence

of the risk;

(d) in the realm of tort law, the probability of an occurrence is both a quantitative measurement, which may (but does not necessarily), reflect a statistical and numerical assessment, and also an evaluative measurement. The statutory phrase is a protean one which depends upon the context of facts, matters and circumstances for its meaning; and

(e) whether a risk is “not insignificant” must be judged from the defendant’s perspective and must be judged on a broader base than a mere reductionist mathematical formula: [81].

Section 5B(1)(c) concerns the conduct of a reasonable person and is the element that perhaps most closely reflects the common law: [82].

In 2011 a five-year-old child was injured by falling through the railing of the Coffs Harbour Jetty onto the hard sand below.

There were large gaps between the railings, with no mesh infill or wiring. A sign at the entrance to the jetty warned that “USE OF THIS FACILITY MAY BE HAZARDOUS PLEASE

BE CAREFUL”. The jetty had been redeveloped by the State Government, with the Council’s involvement, before its opening as a public walkway in 1997. When it was handed over by the State Government to the Council in 2002, the State Government

advised the Council that the railing complied with relevant Australian building standards at the time of its redevelopment. However, in the years preceding the accident in 2011 the council had been aware of a number of incidents involving children falling or nearly falling from the jetty but had taken no action.

On s 5B: although heritage considerations contributed to the s 5B evaluation, it was difficult to see how such considerations would preclude installing wiring or a mesh infill on the railing. The representation by the State Government to the effect that the jetty complied with relevant building standards was not to the point: such standards may inform but cannot dictate the standard of reasonable care in a particular case. What is a reasonable response, in terms of what precautions a reasonable person in the position of the Council would have taken, will vary over time depending on the known history of a site and the risks that have manifested themselves: [106]-[110].

Mr gray injured his back lifting a box of water at a depot operated by Coles. It was common ground that he could not reach the box of water towards the back of the pallet without putting at least one foot on the pallet. Mr Gray accepted that he had made the mistake of “overreaching” for the pallet, explaining that he was concentrating on not hitting his head on the racks above. The primary judge found against Mr Gray on the question of liability.

On s 5B: It was not enough for Mr Gray to allege that Coles failed to provide a safe system of work. Mr Gray bore the onus of proving what Coles could, and should, have done which would have avoided the injury: [60].

The Appellant had engaged in mediation with his brother, the executor of each of his parents’ estates, in relation to a Family Provision Act 1982 (NSW) (‘FPA’) claim. Most of the parents’ assets were held by the mother’s estate, but no FPA proceedings had been commenced against the mother’s estate prior to the mediation. A settlement was reached at the mediation and orders made by the registrar which, due to the absence of any proceedings on foot against the mother’s estate, simply contained a note that the orders were agreed to in contemplation of such a claim. The unusual form of these orders led to difficulties in their enforcement and ultimately a significant shortfall in the amount recovered by the Appellant.

The Appellant brought proceedings against the Respondents, his solicitors, for breach of a contractual or tortious duty of care in relation to the failure to commence proceedings against the mother’s estate prior to the mediation. The Respondents advanced a defence that the Appellant’s barrister and his brother were concurrent

wrongdoers for the purposes of Part 4 of the

Civil Liability Act 2002 (NSW).

On s 5B: In circumstances where the Respondents were aware that most of the assets were in the mother’s estate, and that the brother was in financial difficulty, there was a not insignificant, foreseeable risk that if clear, readily enforceable orders against the mother’s estate were not obtained in any settlement reached during mediation, any FPA provision agreed to could be difficult to recover: [63]-[65], [73]. The obvious,

easily-adopted method of avoiding this risk was to commence proceedings in relation to the mother’s estate prior to the mediation: [67]. In acting for a claimant, a solicitor must take reasonable steps to ensure that his or her client is able to obtain the fruits of what the solicitor is instructed to seek in litigation or by agreement: [75].

The plaintiff participated in a campdraft event organised by the defendant. She fell from her horse whilst completing late on the second day of a three day event and suffered a significant spinal injury. She is wheelchair bound. The plaintiff alleged that her fall was caused by the negligence of the defendant.

The primary judge found in favour of the defendant and she brought an appeal.

On s 5B: The fact that the arena was ploughed on the Sunday morning would be an impermissible use of hindsight: [57].

Ms Jones and her company, Yambiana Pty Ltd, carried on a farming business in the Murrumbidgee Irrigation Area (the MIA) on a property known as North Corynnia.

Murrumbidgee Irrigation Limited (MI) owned infrastructure for water delivery and drainage in the MIA and was responsible for delivering irrigation water to Ms Jones and Yambiana at the relevant times.

Ms Jones and Yambiana sued MI alleging that water delivered by MI to North Corynnia in 2009/10 was contaminated, turbid or otherwise unsuitable for use in irrigation. A major part of the case concerned whether the rice crops on certain paddocks failed because of the quality of the water delivered by MI in late 2009 and early 2010 and whether thereafter those paddocks were left contaminated. The statement of claim identified the duty of care as being to take reasonable care to ensure that the plaintiffs did not suffer loss or damage by reasons of any act or omission on the part of the Defendant in the supply of water. They alleged that MI was negligent by supplying water to the plaintiffs in relation to failure to take any or any reasonable steps to ensure the water was suitable for its purposes, to test the water to see if it was fit for purpose, address unsustainable levels of turbidity and salinity, or improve the quality of the water.

On s 5B: The plaintiffs did not establish that the irrigation water which MI delivered to North Corynnia in 2009/10 or subsequently was contaminated or not fit for purpose or that it harmed the crops, or that it harmed the land to which it was applied, in 2009/10 or subsequently, which prevented their success in their claims for substantial damages: [838]-[839].

The plaintiffs did not establish on the balance of probabilities that there were steps which a reasonable person in MI’s position would have taken, but MI did not take, to ensure that the irrigation water delivered at the relevant times was fit for purpose, or that the water delivered to North Corynnia was not suitable for the purpose of growing rice or any other irrigation purpose disclosed by Ms Jones to MI: [844].

The Kossaifis brought an action in professional negligence against their former solicitors. The solicitors were retained to assist the plaintiffs in finalising/ terminating their business relationship with other persons with whom they were involved in a property development. The Kossaifis established a company with the Elias family, who they then had a falling out with

such that their business arrangement became unworkable. Administrators were appointed to the company and they entered into a deed of company arrangement. The Kossaifis asserted that, as a consequence of the company being placed into voluntary administration, rather

than a creditors’ voluntary liquidation, they lost a significant sum due to the reduction in the value of their shares. In the proceedings, the plaintiffs did not rely upon s 5O of the CLA.

On s 5B: It is not necessary to consider the causes of action in contract and tort separately. The foundation for both causes of action is a failure to take care in the provision of the professional services. A solicitor owes a duty to his client both in contract and in tort. The scope of the tortious duty will normally be set by the terms of the retainer: [46].

The question of breach must always be considered prospectively. In contrast, in identifying the risk of harm, the Court may have regard to what actually happened. The risk of harm may be identified generally or more specifically. It is not to be confined to the precise set of circumstances which are alleged to have occurred: [61]. It is necessary to identify the risk of harm with reference to the true source of loss, and not by merely identifying that there may be loss

i.e. economic loss: [62].

The plaintiffs described the risk of harm as the risk of a significant reduction in the value of the plaintiffs’ shares. The defendants submitted that it was the risk that the value of the shares might be further diminished if the external administration process became costly and protracted without countervailing benefit for the plaintiffs. The Court held that the defendants’ description was too narrow or specific. The risk of harm was identified as being that the process of external administration would significantly dilute and diminish the value of the plaintiffs’ shares in the company: [63]. The Court held that risk of harm was reasonably foreseeable and not insignificant: [65].

In 2013 the respondent was delivering supplies to a building site. The builder’s supervisor directed him where to unload. In clearing the ground by removing an empty pallet, the first respondent fell into a stormwater retention pit, suffering severe injuries. The respondent sued the appellant in negligence. The appellant alleged contributory negligence on the part of the respondent and made several cross-claims seeking contribution.

On s 5B: The preferable course is to stand back from the known events and ask, in a prospective, objective way, what a reasonable employer would have done in the circumstances. The defendant’s conduct cannot simply be identified as providing the standard against which the same conduct is to be assessed because the employer is the alter ego of the worker: [39]. No breach of duty to provide a safe system of care by the respondent was established: [48].

Mr McMullen was a member of the Fire Brigade, employed by NSW. In 2007 Mr McCullen responded to an alarm at a shopping centre with a number of his colleagues. It was triggered from an air- conditioning unit on the roof of the centre. The access door was located at the top of a ladder with a metal locking bar. When descending the ladder, he knocked the locking bar with his elbow and was injured as a result of its falling. This led to workers compensation payments from NSW. The appellant was a joint manager of the shopping centre, entering this role 3 weeks before the incident. They challenged the District Court’s order for NSW to be indemnified for payments to McMullen in respect of an injury suffered in the course of his employment.

On s 5B: One employee of the appellant had performed the same role for the previous manager of the Centre. Her knowledge regarding the risk was imputed to the appellant who assumed the role of managing the Centre and employed her to perform the same role: [46]. The appellant ought to have known that the condition of the ladder, access door and locking bar was dangerous: [49]. It was correct to find that the risk involved a risk of death or serious injury, and therefore the risk of harm was not insignificant: [53].

The appellant’s duty of care was not lessened by the fact that it had taken over management of the premises three weeks prior to the incident: [68]. A contention that the appellant could discharge its duty to take certain steps imposes an evidential burden to show that it took those steps: [73]. The

appellant’s submission of an installation of a mechanism to stop the locking bar falling was unlikely to have been effective in preventing the risk from arising: [74]. The appellant breached the duty of care it owed to Mr McMullen: [75].

Mr McMullen’s action in accidentally knocking the locking bar was accidental inadvertence and not amount to contributory negligence: [86].

The appellant was an experienced truck driver. In 2011, while stopped at traffic lights in a right turning lane, the appellant’s oversized vehicle was struck in the rear by a car driven by Mr Stahlhut. At the time of the collision, the appellant’s trailer protruded into the through lane where Mr Stahlhut was driving wholly in his own lane. Mr Stahlhut suffered serious injuries, and received workers compensation. Payments to Mr Stahlhut had been made by the respondent, who commenced proceedings seeking recovery from the appellant. Judgment was entered against the appellant in the amount of $262,366.11 plus interest.

On s 5B: The mere fact that the breach of advancing 2-3m into the intersection would be an offence did not per se preclude it being something which the appellant was required to do in order to adhere to his duty to take reasonable care: [42]. However, the respondent did not establish that a reasonable person in the appellant’s position

would have taken the precaution of disobeying the law: [43].

Mr Gray injured his back lifting a box of water at a depot operated by Coles. It was common ground that he could not reach the box of water towards the back of the pallet without putting at least one foot on the pallet. Mr Gray accepted that he had made the mistake of “overreaching” for the pallet, explaining that he was concentrating on not hitting his head on the racks above. The primary judge found against Mr Gray on the question of liability.

On s 5C: a defendant is not required to do something which would merely have the effect of substituting one risk for another, potentially greater, risk: [63]. Thus the Appellant would have had to prove that the benefit of pallet-turning, in terms of the reduction of risk associated with lifting items from the back of the pallet, outweighed the increased risks to workers associated with doubling pallet movements: [64].