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Adverse inference

The Court may draw an adverse inference if a material witness does not attend Court to give evidence eg. if a passenger in a motor vehicle collision does not attend Court to give evidence.

The rule, known as the Rule in Jones v Dunkel is a rule of evidence which applies to civil proceedings when a party fails to comply with its duty to call all material witnesses without providing a reasonable explanation. The rule states that, in such cases, the Court may infer the evidence of that witness would not have assisted the party’s case.

To read the decision, click here.


CTP Policy – Indemnity

A CTP insurer was found to be entitled to refuse indemnity in a case where a bus operator’s liability arose from a fault in its system of work.

In the case of Waterworth v Bambling [2013] NSWDC 17, the Court found a bus operator’s liability (for injury to children alighting from the bus) did not arise as a result of its “use or operation of” the bus. Instead, the Court held the relevant liability arose from the operator’s use of a dangerous location to drop off school children and failure to carry out an audit of the route. This meant its conduct did not fall within relevant definitions under the Motor Accidents Compensation Act 1999 (a requirement in order to trigger the operation of the CTP policy) and the insurer was therefore entitled to refuse indemnity.

To read the decision, click here.


Damages – replacement costs

A Plaintiff is entitled to recover the cost of replacing items damaged beyond repair, not just the market value of the items.

In the case of Thomas v Powercor Australia Limited [2011] VSC 586, the Supreme Court held the Plaintiff was entitled to the cost of replacing items damaged beyond repair. While it was accepted the Plaintiff’s entitlement should be reduced to account for any betterment, the Court held the burden of proving betterment fell on the Defendant. In this case, the Defendant failed to discharge the burden of proving betterment, therefore the Plaintiff’s claim for the cost of replacement was allowed in full.

To read the decision, click here.


Duty of Disclosure

An insured has a duty to disclose to the insurer every matter they know to be relevant to the decision of the insurer or a reasonable person could be expected to know to be a matter relevant to the insurer.

This duty places a significant onus on an insured to disclose accurate and relevant information to an insurer. Where there is a failure to comply with the duty, an insurer will be able to avoid the contract in circumstances where the non-disclosure was fraudulent. Alternatively, where the non-disclosure was innocent, an insurer will be able to reduce its liability in respect of a claim so as to place itself in the position it would have been had the breach not occurred. A pertinent example is the ACT Supreme Court case of Duthie v Rolf H Wick & Associates (Aust) Pty Ltd (1994), where an insurer was entitled to reduce its liability to nil where an insured disclosed he had “about six” driving convictions when his driving record disclosed a significantly greater number of offences (59 offences, 44 of which were convictions).

To read the decisions, click here.

To read the relevant legislation, see below:


Formation of A contract of insurance

A contract of insurance may still be found to exist even in the absence of a written policy and where no invoice was issued and no premium paid.

In Leading Synthetics Pty Ltd v Adroit Insurance Group Pty Ltd & Anor [2011] VSC 467, a broker acting on behalf of the insured had agreed all essential terms with the insurer and had agreed on behalf of the insured that the contract commenced retrospectively. In finding that a contract of insurance had been formed despite the absence of a written policy and where no premium had been paid, Macauley J. noted that because it was conceded that all the essential terms of a credit risk contract of insurance had been agreed, the only real issue in dispute about the existence of a contract was whether there was an intention by the parties to create legal relations. He further found that the intention of the parties must be judged on an objective basis as to what their respective words and conduct would lead a reasonable person to believe and by consideration of what was known to the parties and what was written, said and done between them before and after the alleged contract was formed.

To read the decision, click here.


Liability of a builder and sub-contractor

A builder can be held liable for the negligent actions of its sub-contractor.

In the case of WB Jones Staircase & Handrail Pty Ltd v Richardson & Ors [2014] NSWCA 109, the Court found the builder liable for injury caused to a Plaintiff as a result of the failure of a staircase balustrade. The Court held even though the builder engaged an independent (and expert) subcontractor to manufacture and install the staircase, the builder still had an obligation to inspect the work and take reasonable care to detect and remedy defects. This includes (in some circumstances) being aware of relevant standards applicable to the construction. 

To read the decision, click here.


Liability for Defective Goods

The question as to whether goods are defective is whether “their safety is not such as persons generally are entitled to expect”. It is not necessary to prove the precise defect that led to damage.

In Batchelder & Anor v Holden Limited [2009] VSC 29 the Court found the manufacturer of a motor vehicle liable on the basis the evidence established a fire originated in the engine compartment and was caused by an electrical fault. The evidence did not precisely identify what the “electrical fault” was; however, the Court held the defect does not need to be “identified with any particular level of precision”.

To read the decision, click here.


Liability of an insurer of a deregistered company

The Corporations Act 2001 allows insurers to be pursued for the liabilities of deregistered companies.

Section 601AG of the Corporations Act 2001 allows a person to recover from the insurer of a deregistered company if the company has a liability to that person and had an insurance contract covering that liability immediately prior to deregistration.

In the case of Allianz Australia Insurance Ltd v Mercer [2014] TASFC 3, the Court found the limitation period to bring an action against an insurer of a deregistered company pursuant to Section 601AG is the limitation period of the cause of action underlying the claim. However, if a Section 601AG action is statute barred, an action may be brought pursuant to Section 601AH seeking orders that the company be reinstated and the time between deregistration and reinstatement be nullified.

To read the decision, click here.

To read the terms of Section 601AG, click here.

To read the terms of Section 601AH, click here.


Liability of registered owner for damage caused to road infrastructure – Section 48 Transport Infrastructure Act 1994 (Qld)

In Queensland, the registered owner of a vehicle can be held liable for damage caused to road infrastructure in some circumstances. 

 In Queensland, when damage is caused to “road works” or “ancillary works” by the negligent operation of a motor vehicle, and the driver of the vehicle is unknown or cannot be located, the person in whose name the vehicle is registered is liable for the cost of repair, replacement or reconstruction for which the driver would be liable. “Road works” and “ancillary works” include bridges, tunnels, rest area facilities, advertising signs, traffic and service signs and lighting poles.

To read the legislation, click here.


Liability of road authorities and independent contractors

Road authorities, such as Councils, are not vicariously liable for the negligent actions of the employees of independent contractors.

In Leichhardt Municipal Council v Montgomery [2007] HCA 6 the High Court held a road authority (the Council) did not owe a road user (the Plaintiff) a non-delegable duty of care.  In this case, the Council engaged an independent contractor to upgrade a footpath.  While undertaking the works, the contractor placed carpet over a damaged pit lid.  When the Plaintiff walked on the carpet, the pit lid gave way, resulting in the Plaintiff suffering injuries to his knee.  The High Court held the Council owed road users an ordinary duty to take reasonable care to prevent injury but the Council did not owe a non-delegable duty to ensure the employees of an independent contractor did not act negligently.  Although the Council had an ordinary duty to exercise reasonable care in supervising a contractor or in approving a contractor’s plans and system of work, it had discharged this duty and therefore was not liable for the negligence of the employees of its independent contractor.

To read the decision, click here.


LIABILITY OF ROAD AUTHORITIES to warn of obvious risk

In Collins v Clarence Valley Council [2015] NSWCA 263, the plaintiff bike rider suffered significant  injuries after falling over the edge of a bridge as a result of the wheels of her bike becoming stuck in a gap located between wooden planks on the bridge.  The defendant Council, in its capacity as the road authority, was responsible for the care, control and management of the bridge.  The Plaintiff gave evidence that she was aware of the gaps on the bridge and rode across the bridge with caution, from side to side, to avoid her wheels from becoming caught in the gaps. Council asserted, amongst other reasons, that it did not owe a duty of care to the Plaintiff as the risk of injury was obvious in accordance with sections 5F-5H of the Civil Liability Act 2002 (NSW) (“CLA”) and that, even assuming it had failed to carry out road work as the relevant road authority, it did not have actual knowledge of the particular risk which resulted in the harm.  Council succeeded at first instance and the Court of Appeal dismissed her appeal.

 On Appeal the Court agreed with the judge at first instance that the identification of a risk of injury should be performed prospectively (i.e. without hindsight) and that “it is neither necessary nor appropriate to identify such a risk by reference to the precise mechanism by which the Plaintiff suffered injuries”.  The Court of Appeal identified the risk of injury as being that “to a cyclist whose wheel became stuck in one of the gaps between the wooden planks, leading to a fall”. It further found that the identified risk was one that would have been obvious to “a reasonable person in the plaintiff’s position, exercising ordinary perception, intelligence and judgment” (i.e. an objective test).  Accordingly, Council did not owe a duty of care to warn of the obvious risk.

 The Court also allowed the Council to rely on the defence contained in s45 of the CLA, which states a road authority has no civil liability for failing to carry out road works unless it has “actual knowledge of the particular risk the materialisation of which resulted in the harm”.   The Could held the Plaintiff had failed to establish that Council had actual knowledge of the particular risk and had failed to undertake road works (such as repairs to the bridge surface).  The Court agreed with the judge at first instance that Council could not be found to have had actual knowledge of the risk unless an officer of Council, with the delegated or statutory authority to carry out the duties of the roads authority (e.g. repairs to the bridge), had actual knowledge. 

To read the decision, click here.


Liability for straying animals

Animal owners may be immune from liability in respect of damage caused by their animals straying onto the highway in Queensland.

Queensland retains an old English principle commonly referred to as the rule in Searle v Wallbank [1947] AC 341. At common law, animal owners do not have a legal obligation to prevent their animals from straying onto the highway (i.e. they do not have an obligation to fence and hedge their property).

To learn more about how the rule applies in Queensland, read the Queensland Court of Appeal decision in Smith v Williams [2006] QCA 439 by clicking here.


Liability of water authorities for damage caused by the flow of water

All actions for property damage, personal injury or economic loss in Victoria which are caused by the flow, or interference with the flow, of water, must be brought under the Water Act 1989.

The Water Act 1989 offers important protection to landholders in Victoria, which does not exist for landholders in other States.   Section 16 prescribes that persons are liable if they cause a “not reasonable” flow of water from their land onto another’s land, or if they interfere with the reasonable flow of water onto any land and damage results.  This is construed as a strict liability provision.  To succeed, a Plaintiff does not need to establish the wrongdoer acted negligently.

To read the terms of Section 16, click here.

Section 157 prescribes where a flow of water occurs from the works of a water authority, onto any land, the onus is on the water authority to establish it did not occur intentionally or due to their negligence. Consequently, there is a “reverse onus” which applies – the authority is presumed to be liable for any resultant damage, unless it can prove otherwise.

To read the terms of Section 157, click here.


Occupier’s liability – latent defects

A landlord cannot be held liable for injury caused by a latent defect. Residential premises cannot be expected to be absolutely “hazard free”.

In Jones v Bartlett [2000] HCA 56, the majority of the High Court held landlords have a duty to avoid foreseeable risk of injury to tenants, members of their families and people lawfully on their premises. However, the duty did not extend to require the landlord to engage an expert to inspect the premises for latent defects. It also noted the duty was less stringent in a residential setting than in a commercial setting.

To read the decision, click here.

In Neindorf v Junkovic [2005] HCA 75 the High Court held although owners of residential premises owe a duty to entrants to take reasonable care, this does not extend to eliminating all potential hazards, particularly given the defect (a raised concrete paver in a driveway) was obvious.  It also noted the response of most people to many hazards at their premises is to do nothing, which in this instance, was a reasonable response.

To read the decision, click here.



Occupier’s Liability – no duty to light your driveway

This decision handed down by the Victorian Court of Appeal concerns the liability of an occupier to a Plaintiff who sustained injury when he slipped or tripped in a puddle/depression in their gravel driveway in the dark at night. The Plaintiff had failed at trial and he appealed to the Court of Appeal, which also dismissed the matter.

The Court of Appeal held the Defendants, as occupiers, had no duty to illuminate a private driveway which had no known hazards and where no prior accidents had occurred.  Accordingly they did not breach their duty of care to the Plaintiff by failing to provide sufficient lighting at night. The Plaintiff failed to establish the risk of harm due to the lack of lighting in the relevant driveway was not insignificant and the court held it was reasonable for the Defendants to expect the Plaintiff would have used his own artificial lighting. Further, it was held the Plaintiff also failed to establish a reasonable person in the position of the Defendants would have taken the alleged precautions of turning on or activating the sensor light (which they had switched off when they went away on holidays, while the Plaintiff rented their loft, which was otherwise used as a bed and breakfast facility) or advising the Plaintiff of the whereabouts of this light/switch.

 It is a timely reminder that the burden rests on the Plaintiff to prove the elements detailed in s48 of the Wrongs Act (which essentially mirror the former common law duty on occupiers), namely the risk of harm must be foreseeable, which is to be determined objectively, and prospectively (not retrospectively). Further, the Plaintiff must establish that a reasonable person would have taken the precautions alleged, and in this situation there was “nothing unusual or concealed in the type of hazard” , and therefore there was no duty to take the alleged precautions. 

 We note the trial judge at first instance did not accept the Plaintiff’s claim that the Defendants had failed to maintain their driveway and this was finding was not appealed.

To read the decision, click here.


Offers of Settlement – cost consequences

In any dispute, the making of an offer which is not beaten by an opposing party at trial may result in significant cost consequences for that party.

An informal offer (otherwise known as a “Calderbank” Offer) has the benefit of being flexible and can be made inclusive of costs.  No time period is prescribed under the Court Rules as far as the acceptance period for the offer is concerned, as long as the period is reasonable.  To ensure the party making the offer can later rely on it, the offer should be accompanied by an explanation as to why the offer is reasonable in the context of the dispute.  Some of the leading authorities in relation to informal offers are Calderbank v Calderbank [1975] 3 All ER 333; Hazeldene’s Chicken Farm v Victorian WorkCover Authority (No 2) [2005] VSCA 298; and Velvet Glove Holdings Pty Ltd v Mount Isa Mines Limited (No2) [2011] QSC 156.

Requirements for formal offers are prescribed by Court Rules, including the period they should be open for acceptance.  Formal offers cannot be made before the commencement of litigation, and are generally made on a plus costs basis.   An explanation why an offer is reasonable is not required when a formal offer is made.  Formal offers are generally more reliable as far as costs consequences are concerned, but less flexible than informal offers.


Recovery of general damages in personal injury actions in Victoria

A Plaintiff in a personal injury action in Victoria cannot recover general damages for non-economic loss unless he/she satisfies the “significant injury” threshold in the Wrongs Act.

Pursuant to Part VBA of the Wrongs Act, a Plaintiff cannot recover general damages unless he/she has suffered a greater than 5% whole person impairment in relation to a physical injury, or a greater than 10% whole person impairment in relation to a psychiatric injury (although there are some exceptions). If this is not conceded by the Defendant, the Plaintiff is required to obtain and serve a Certificate of Assessment completed by an approved medical practitioner which certifies the Plaintiff satisfies the relevant threshold. If the Defendant wishes to challenge the Plaintiff’s level of impairment, it has 60 days from the date the Certificate (and prescribed information) are served to refer the matter to the Medical Panel. It then will make a determination as to whether the Plaintiff’s injuries satisfy the relevant threshold.

To read the legislation, click here.


Section 51 of the Insurance Contracts Act 1984

Section 51 now applies to third party beneficiaries as well as named insureds.

Section 51 has changed to include “third party beneficiaries”. The amendment applies to contracts entered into, or renewed, after 28 June 2014. Subject to the other provisions of the section, recovery could previously be made against named insureds only, when they had died or could not be found after reasonable enquiry.

To read the terms of Section 51, click here.


Taxi Services Commission Public Register

The Taxi Services Commission maintains a public register of information relating to taxi operators and licences.

Recent legislative changes have been introduced in Victoria to govern the Taxi industry. The Victorian Taxi Services Commission is now required to keep and publish a public register of whether a driving instructor or taxi driver’s industry licence is current, the details of the operator of each taxi, and details regarding the number of taxi licences held by each operator. This information can identify the correct party to a proceeding. The Taxi Services Commission publishes this information on their website and can be accessed for free here.