Australia: Court of Appeal defines test for unreasonable conduct of public authority under Section 43(A) of the Civil Liability Act

Allianz Australia Insurance Ltd v Roads & Traffic Authority [2010] NSWCA 328
Last Updated: 15 December 2010
Article by Ty Hickey

Court of Appeal defines test for unreasonable conduct of public authority under Section 43(A) of the Civil Liability Act

Judgment date: 9 December 2010

Allianz Australia Insurance Ltd v Roads & Traffic Authority; Kelly v Roads & Traffic Authority of NSW [2010] NSWCA 328

New South Wales Court of Appeal1

In Brief

  • Section 43(A) of the Civil Liability Act 2002 (the CL Act) requires an objective assessment of the public or other authorities' conduct;
  • The unreasonableness of an authority's conduct under s 43(A) of the CL Act must be of a high level, to the extent that the act was so unreasonable that no authority having the same special statutory power could properly consider the act a reasonable exercise of that power.

Background

The case relates to a motor vehicle accident that occurred at approximately 6:25 pm on 4 February 2005 when the insured vehicle, driven by Mr Mark Kelly, collided with an oncoming truck on the Riverina Highway outside a large farm property. The incident occurred between the towns of Howlong and Cowra. It was common ground that at the time of the accident water was flowing across the roadway. It was also common ground that Mr Kelly's vehicle was travelling at a speed when it encountered the water, causing it to aquaplane so that he lost control and collided with the oncoming truck. As a result of the collision Mr Kelly and a fellow passenger, Mr Dennison, were killed whilst another passenger, Mr Wheeler, and the driver of the oncoming truck, Mr Rickard, suffered serious injuries.

Prior to the accident a local Howling resident had contacted the Cowra Council, at approximately 4:15 pm, to report seeing water on the roadway at the accident location. In turn the Council, having used all its road signs, contacted the RTA Maintenance Works Supervisor for assistance, reporting the water and requesting a team be sent to inspect the roadway. A team was despatched and arrived at the site at approximately 5:20 pm. Following a survey of the area, and confirmation of the presence of water on the roadway, the RTA team proceeded to place a "Water Over Road" sign on the southern side of the road facing westbound traffic, approximately 924 metres from the site of the water.

Both Allianz and Woolworths, the owner of the subject vehicle, cross-claimed against the RTA for indemnity or contribution for failure to erect any signs warning motorists of the danger caused by water running across the Highway. Ms Christine Kelly claimed directly against the RTA on substantially the same basis.

Supreme Court

At first instance, extensive evidence was adduced from experts regarding the optimum distance that a warning sign of that type should be placed from a hazard. The evidence was that the sign should be placed far enough away from the hazard to enable an approaching driver sufficient time to react, but close enough so that the driver would recognise the hazard when he or she came to it.

The trial judge, Hoeben J, found that the "Water Over Road" sign should have been placed 150 to 300 metres to the east of the accident site, and that the RTA had breached its duty of care in not so placing it. Justice Hoeben considered that the water was a hazard known to the RTA and that the placing of the sign 924 metres east of the hazard was not an appropriate response in the sense set out in Wyong Shire Council v Shirt. He also considered that breach of duty had been established in accordance with s 5B of the CL Act.

In turning to the defence raised by the RTA under s 43(A) of the CL Act, His Honour adopted a two step approach as suggested by Campbell JA in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited. The approach required:

  1. A finding of negligence against the RTA; and
  2. An objective determination that the decision to place the sign was so unreasonable that no authority having the necessary power would have properly considered it reasonable to so place the sign.

Justice Hoeben held that in placing warning signs, the RTA was exercising a special statutory power and found that its acts or omissions were unreasonable, in the sense required by s43(A) of the CL Act. However, His Honour concluded that the breach of duty of care was not causative of the accident.

Court of Appeal

The Appellants appealed on the basis that the trial judge had erred on the issue of causation. The RTA filed a Notice of Contention that the trial judge had erred in finding that it had breached its duty of care, and, furthermore, that His Honour ought to have found that its acts or omissions did not give rise to civil liability by reason of s 43(A) of the CL Act.

Giles JA delivered the unanimous judgment of the Court of Appeal. He noted that Hoeben J had correctly identified that Section 43(A) required an approach of objectivity in assessing the RTA's conduct and considered that His Honour had erred in placing emphasis on the decision maker's subjective thought process. Giles JA noted that there was a danger in framing the relevant question as whether the decision was irrational because this tended to focus on the subjective thought process despite a requirement that it be objectively determined.

The court considered that s 43(A) was modelled on the administrative language of Wednesbury2 unreasonableness with the intention of raising the bar for plaintiffs in proof of breach of duty of care. Following a review of the relevant case law Giles JA noted that "a constant is that Wednesbury unreasonableness must be at a high level". The court held that irrationality was not necessarily an equivalent test in private law of reasonable response to foreseeable injury. Giles JA considered that in the circumstances the RTA's actions did not constitute an act so unreasonable that no authority having the RTA's special statutory power to erect warning signs could properly consider it to be a reasonable exercise of that power.

On the issue of causation the court referred to sections 5D and 5E of the CL Act. Giles JA noted that s 5E placed an onus on the plaintiff, in the current case Allianz and Woolworths, to prove, on the balance of probability, any fact relevant to the issue of causation. The court confirmed that the "necessary condition" test in s 5D(1)(a) takes up the "but for" test of the common law, whereby if it could not be concluded on the balance of probabilities that the harm would not have happened but for the negligence, then it could not be concluded that the harm was caused by the negligence.

The Court considered that, on the circumstances presented, Mr Kelly's driving was unlikely to have changed if the warning sign were placed 150 to 300 metres closer, and, accordingly, causation was held not to be proved on the balance of probabilities.

It should also be noted that the court, in obiter, questioned whether the trial judge's assessment of a two step approach to Section 43(A) was in fact correct, making reference to the decision in Refrigerated Roadways3 where it was said that the preferable reading of s 43(A) was that it "either replaces or supplements" the pre-existing standard for liability.

Implications

The decision confirms the view that a high level of unreasonableness will be required to be shown when seeking to implicate liability on a public or other authority under s 43(A) of the CL Act. In assessing claims against public, or other authorities, it is essential to take an objective view of the entirety of the facts surrounding the claim, whilst also bearing in mind the high cross-bar that must be met by the plaintiff (or a cross-claimant).

The decision highlights the danger associated with framing the relevant question under s 43(A) of the CL Act as whether the decision taken was irrational, which focuses on the decision makers subjective thought process. It is important that the process of assessment remains an objective one, although a decision maker's subjective thought process can help to inform the objective determination required under s 43(A).

The decision leaves open the question of whether the two step approach taken by Hoeben J is the correct approach to be taken in relation to s 43(A) of the CL Act. The Court also left open the question of whether s 43(A) should be seen as re-stating an authority's liability or as providing a statutory defence.

The decision also confirms that the appropriate test for causation under s 5D(1) of the CL Act is taken in line with the "but for" test at common law as stated in Adeels Palace Pty Ltd v Moubarak4.

1. Giles JA; McColl JA and Sackville AJA

2. Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223

3. Ibid at 352

4. Adeels Palace Pty Ltd v Moubarak [2009] HCA 48

Ranked No 1 - Australia's fastest growing law firm' (Legal Partnership Survey, The Australian July 2010)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Ty Hickey
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Law Practice Management
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.