Liverpool City Council v Estephan Estephan (Executor and Administrator of the late Joscelyn Estephan & Ors) [2009] NSWCA 161

Giles JA, McColl JA and Basten JA.

In Brief

  • The Court of Appeal upheld the principle in Tarabay v Leite [2008] NSWCA 259, namely that questions of apportionment give rise to findings which cannot easily be characterized as right or wrong.
  • Where the level of apportionment is challenged and a finding as to fact or law is not, the appellate court will be reluctant to disturb the findings of the court below.
  • The failure of a driver to slow down their vehicle at an intersection is not in itself negligence.
  • The issue is whether there is a reasonable expectation that a collision will occur if the defendant does not slow his or her vehicle.


The NSW Court of Appeal handed down its decision in Liverpool City Council v Estephan Estephan on 3 July 2009.

On 25 May 2001, Mrs. Estephan and her son Steven were killed in a motor vehicle accident at the intersection of King Street and Devonshire Road, Rossmore. Mrs. Estephan was driving a Ford Falcon station wagon which collided with a truck and trailer combination driven by Mr. Finch and owned by Rock Excavations and Plant Hire Pty Ltd. Mrs. Estephan's two daughters who were also in the car survived, however they were critically injured.

The road where the accident occurred was in the local government area of Liverpool City Council, (the "Council").

At the trial, five sets of proceedings were brought against Mr. Finch, Rock Excavations and the Council, by members of the Estephan family alleging nervous shock. Rock Excavations were vicariously liable for any negligence of Mr. Finch.

In each set of proceedings, there were cross claims for contribution between Mr. Finch and the Council. The Council also cross claimed against Mr. Estephan as executor of Mrs. Estephan's estate, in that Mrs. Estephan had been contributorily negligent.

The matter came before the trial judge to be heard on liability only. The trial judge held that Mr. Finch had been negligent in driving the truck and the Council, as the responsible road authority, had been negligent in failing to have appropriate warning signs and markings at the intersection. His Honour apportioned liability 20:80 against Mr. Finch and the Council. Mrs. Estephan was found not to be negligent.

In relation to costs, the trial judge ordered that the Council pay Mr. Finch and the plaintiff's costs on an indemnity basis and Mr. Finch to pay the plaintiff's costs on an ordinary basis.

The Council appealed the following decisions of the trial judge;

  1. That the trial judge's finding that Mrs. Estephan was not guilty of contributory negligence was erroneous;
  2. In the event that Mrs. Estephan was negligent, the trial judge's apportionment of negligence between the Council and Mr. Finch was erroneous; and

Court of Appeal

Mrs. Estephan's negligence. In relation to the Council's first challenge to the trial judge's findings, the Court of Appeal held that Mrs. Estephan was not negligent.

The Council's only submission to the Court of Appeal regarding Mrs. Estephan's negligence was that she failed to slow down at the intersection. In assessing the question of reasonableness, the Court of Appeal upheld the decision in Sibley v Kais (1967) 118 CLR 424, and Giles JA stated at paragraph 37:

"...failing to slow down or stop is [not] negligent if there is a possibility of the other vehicle continuing. If it did, intersections would become static. It must reasonably be expected that continuance will bring collision. Reasonable expectation depends on the facts, and the facts include that drivers will generally obey the road rules."

The Court of Appeal held that the following facts were determinative that Mrs. Estephan's conduct in failing to slow down was not unreasonable;

  • Mrs. Estephan had knowledge of the intersection and she knew that she had the right of way;
  • Irrespective of her personal knowledge of the intersection, Mrs. Estephan also knew that she had the right of way at the intersection based on the road markings;
  • The trial judge was correct in not accepting that Mrs. Estephan shared the knowledge of the "locals" that the intersection was dangerous, as she did not live close by to the intersection and had not previously witnessed or heard accidents;
  • There was no error in the trial judge considering that the right hand blinker of the truck was not activated; and
  • Mrs. Estephan would have been unable to readily judge the speed of the truck which was supported by expert evidence. No evidence on this point was led to the contrary by the Council during the trial.


The majority of the Court of Appeal, held that the trial judge's exercise of apportionment between the Council and Mr. Finch was correct.

Interestingly, during the trial and the Court of Appeal proceedings, the Council did not rely on the Civil Liability Act 2005 (NSW), dealing with the liability of public and other authorities. This was expressly commented on by both Giles and Basten JJA.

During the trial, evidence was led that the Council became aware of the intersection and its dangers as early as 1992, when a motor vehicle accident occurred. Up until the accident involving Mrs. Estephan in 2001, the Council had received letters from residents alerting them to the dangers of the intersection, and over time the Council had imposed various line markings and Give Way signs.

Justice Giles concluded that in weighing up the respective apportionment between Mr. Finch and the Council the competing factors were as follows:

  • Mr. Finch's failure to observe the modified T intersection sign;
  • Mr. Finch steering the truck onto the incorrect side of the roadway; and
  • The Council's poorly designed and ambiguous road signs.

Justice Giles upheld the decision of British Fame (Owners) v Macgregor (Owners) [1943] AC 197 and Tarabay v Leite [2008] NSWCA 259, namely, that a finding of apportionment is not a finding of fact and a balancing act is required, which may result in variation between individuals.

Of particular significance were Giles JA's comments in relation to appealing findings of apportionment. His Honour referred to the principles of restraint as discussed in Tarabay v Leite, namely that on appeal, where findings of fact and law are the same, it is a mistake to for the parties to conclude that the level of apportionment will be also be the same, as the exercise of apportionment is similar to a discretionary power.

The Council argued that its negligence lay in its breach of duty, according to the degree of departure from the standard of what was reasonable. The Council submitted that just because they were aware of the intersection some 9 years prior to Mrs Estephan's motor vehicle accident, it did not make them any more negligent.

Justice Giles concluded that this submission was ill founded. His Honour concluded at paragraph 71:

"Departure [from the standard of reasonable care] is not measured simply by comparing what was done or omitted to be done with what should have been done. The whole conduct of the Council included its knowledge of the risk of accidents at the intersection and the occasions on which it inadequately gave attention to the priority ambiguity of which the experts spoke, and it is of some importance that the Council contributed to the hazard by modifying the traffic priority. The Council had a department which may be taken to have had traffic engineering expertise. Failure over a long period to put in place the signage and line marking required for reasonable care increased the degree of departure from the standard of what was reasonable, and the Council's culpability was thereby greater."


Interestingly, Basten JA disagreed with Giles JA and McColl JA on the issue of apportionment.

Justice Basten held that apportionment should be decided 1/3 against Mr. Finch and 2/3 against the Council.

His Honour found that the trial judge had erred in matters of principle in his approach to the exercise of apportionment, namely:

  • The trial judge erred in treating the relevant negligence of the Council as extending over a period of 9 years;
  • The trial judge erred in his conclusions as to the mechanisms that the Council had in place for regulation of traffic at the intersection; and
  • The trial judge erred in the amount of weight given to the culpability of a driver who did not see a relevant sign and the authority responsible for erecting adequate signage.


The major points of interest in Liverpool City Council v Estephan Estephan are the Court of Appeal's comments on apportionment and contributory negligence.

When insurers are considering a denial of liability or allegation of contributory negligence in circumstances where the failure of one of the vehicles to slow down is material, consideration must be given as to whether or not, based on the facts, it can be reasonably expected that continuance of the vehicle which failed to slow, would have brought about a collision.

A driver is only negligent for failing to slow down at an intersection where continuing on the same line at the same speed may result in a collision. In relation to appealing matters based solely on the issue of apportionment, insurers should exercise caution in doing so in view of the comments of the Court of Appeal, especially when the findings as to fact are not in issue. Based on the well established principles in Tarabay v Leite, referred to by the Court of Appeal, it is accepted by the courts that the exercise of apportionment is a discretionary one which will vary from individual to individual and will not be lightly disturbed by higher courts.

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.