Section 45 of the Civil Liability Act 2002 (NSW) (CLA) provides Councils (and other road authorities) with statutory immunity for liability if there has been a failure to carry out works on roads and footpaths where the roads authority did not have 'actual knowledge' of the hazard or defect. The New South Wales Court of Appeal's recent decisions in Blacktown City Council v Hocking  NSWCA 144 and Angel v Hawkesbury City Council  NSWCA 130 considered the application of section 45.
The New South Wales Court of Appeal decision of North Sydney Council v Roman (2007) 69 NSWLR 240 (Roman) is the leading authority on the meaning of the words 'actual knowledge' within the context of section 45. In that decision, Justices Basten and Bryson held that for the purposes of section 45(1), 'actual knowledge' must be found in the mind of an officer within the Council who had delegated (or statutory) authority to carry out or to consider carrying out the relevant roadworks. If no officer at a decision making level had actual knowledge, it followed that the Council did not have such knowledge and the section 45 immunity prevailed.
Justice McColl dissented. In her view if an employee's duty includes the obligation to report hazards and defects as part of the system of maintaining the roads, and that employee, through the scope of their duties learns of a hazard or defect, then that knowledge should be attributed to the roads authority.
A successful special leave application to the High Court was filed by Mrs Roman. However, the proceedings settled before the High Court had an opportunity to consider the meaning of the term 'actual knowledge'.
Before the Court of Appeal were two appeals seeking leave to argue the decision in Roman was wrongly decided and that the dissenting judgment of Justice McColl should be adopted. The Chief Judge, Chief Justice Spigelman, directed the two appeals to be heard consecutively and considered concurrently by a bench of five.
On 25 June 2008, the Court of Appeal, comprising Chief Justice Spigelman and Justices Beazley, Giles, Tobias and Campbell, delivered their judgments in Blacktown City Council v Hocking  NSWCA 144 (Hocking) and Angel v Hawkesbury City Council  NSWCA 130 (Angel).
Facts in Hocking
Mrs Hocking was walking on the footpath in Reston Avenue, Hebersham. Along the footpath was a Telstra pit which was set partly within the footpath and the grass verge. As Mrs Hocking was walking she trod in the middle of the Telstra pit lid, causing the lid to rotate and fall into the pit. As a result, Mrs Hocking's leg fell into the pit and she sustained personal injuries in the accident.
Following construction of the footpath, Council's maintenance inspector, Mr Shackleton, inspected the footpath on a number of occasions. It was submitted that had those inspections been adequately carried out, warning signs of a potential problem with the pit lid should have been clear. Those warning signs should have prompted Council to investigate further and/or take steps to prevent vehicles from driving over the footpath and further damaging the pit. Mr Shackleton did not give evidence at the hearing.
The trial judge, District Court Judge Ainslie-Wallace, found Council liable for its negligent construction of the footpath and liable for its inspections of the footpath after construction. Telstra was not found liable to Mrs Hocking at trial.
The Council lodged an appeal against the trial judge's findings contending the judge erred in finding negligence on the part of Council. It was submitted that Council did not have actual knowledge of the risk, as defined in Roman, for the purposes of section 45 of the CLA and accordingly, the immunity afforded to it should prevail.
The Court of Appeal found there was no evidence to sustain a finding that the construction of the pit lid was in any way inadequate on the basis of a visual inspection of photographs taken in 2002, without any expert evidence.
In relation to the submission that Council did not have actual knowledge of the risk, according to Chief Justice Spigelman (with Justice Beazley and Justice Campbell agreeing), the trial judge failed to specifically address Council's reliance on section 45(1) in her judgment. However, the trial judge's conclusions on a breach were consistent with a finding that there was no 'actual knowledge' on the part of Council and accordingly, the immunity under section 45(1) was engaged.
Justice Tobias dissented on the finding that Council did not have 'actual knowledge'. His Honour found that given the pit lid clearly had a damaged appearance from the photographs, it demonstrated that Mr Shackleton was aware of its damaged appearance and that it could present a hazard to pedestrians.
Justice Tobias held that while Mr Shackleton had actual knowledge of the risk of harm, based on the majority judgment in Roman, he was not an officer within Council having delegated (or statutory) authority to consider or carry out necessary repairs to the footpath including the pit. On the basis of McColl's dissenting judgment in Roman, however, Mr Shackleton's knowledge would be that of the Council and accordingly, Council would not be entitled to rely on the immunity afforded to it by section 45.
Justice Tobias was of the opinion the decision in Roman should be reconsidered, and the dissenting judgment of McColl should be confirmed as the law in New South Wales.
Facts in Angel
Mrs Angel was walking along the footpath in George Street, South Windsor, when she tripped and fell on a footpath slab which had raised by 4-5cm because of tree roots. Mrs Angel said she did not see the raised footpath slab as it was obscured by the shadow of an adjacent tree. She sustained personal injuries in the fall.
Mrs Angel was unsuccessful at first instance. District Court Judge Sorby found in favour of Council as the hazard was obvious within the meaning of section 5F of the CLA. His Honour stated Mrs Angel was presumed to have been aware of the obvious risk and accordingly Council did not owe a duty of care to Mrs Angel to warn of that obvious risk.
As Roman had not been decided by the Court of Appeal when the trial judge delivered his judgment in Angel, he was not required to consider whether any 'actual knowledge' of the hazard on the part of Council rested with an officer who had who had delegated (or statutory) authority. The trial judge did find Council had knowledge of the raised footpath slab causing Mrs Angel to trip. This finding was based on the comments made by Ms Flanagan, Council's assistant insurance officer, to Mrs Angel that Council was aware of the hazard and that it had been earmarked for repairs, but that Mrs Angel's accident happened before those repairs could be carried out.
The finding of obviousness by the trial judge made the finding of knowledge on the part of Council irrelevant.
In the Court of Appeal, Council submitted Ms Flanagan's knowledge of the defect was not that of a person with delegated (or statutory) authority to carry out or to consider carrying out the relevant roadworks. The Court of Appeal rejected that argument and said that as the defect had been earmarked for repairs, those within Council responsible for repairs must have had actual knowledge of the defect which resulted in the harm to Mrs Angel.
The Court of Appeal held that:
Mrs Angel was also successful in satisfying the Court of Appeal that the hazard was not obvious and accordingly section 5F of the CLA was not relevant. The Court of Appeal allowed Mrs Angel's appeal, overturned the trial judge's verdict in favour of Council, and entered a verdict and judgment for Mrs Angel in the sum of $165,178.20.
The decision in Roman was a great result for road authorities in that it may drastically reduce the number of claims brought against them. The requirement to prove 'actual knowledge' on the part of the road authority, as seen in Roman, was onerous and as such an unappealing task for plaintiffs. It was only a matter of time for a case to be taken to the High Court to argue that Roman was incorrectly decided. It appears that this will occur with a special leave application having been filed by Mrs Hocking.
Given the controversy Roman had created, it is likely special leave will be granted as no doubt the High Court has been eagerly awaiting the right case to be able to sink its teeth into section 45.
Those that act for roads authorities and plaintiffs will be waiting in anticipation for the outcome of that case.
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