Accident Compensation: Forty Years on
A Celebration of the Woodhouse Report,
Compensation for Personal Injury in New Zealand:
Report of the Royal Commission of Inquiry
A View from Abroad
Harold Luntz*
Introduction
1
In Part 3 of its report, the Woodhouse Commission examined common criticisms of
the common law action for negligence in relation to personal injury.2 These included
the risk of litigation, in the sense that only a small proportion of claims succeeded;3
the reduction of damages if there was any contributory negligence by the claimant;4
long delays before receipt of compensation, if any;5 the high costs of determining who
was and who was not entitled;6 the need to find a solvent defendant;7 adverse effects
on rehabilitation;8 and the inappropriateness of lump-sum awards of damages to
provide for long-term incapacity.9 The Commission concluded that “the time [had]
clearly come for the common law action to yield to a more coherent and consistent
remedy in the whole area of personal injury”; and it recommended “that the Court
action based on fault should now be abolished in respect of all cases of personal
injury, no matter how occurring”.10
This paper will examine the continued application of the common law of
negligence in relation to personal injury in Australia, with particular reference to
decisions of the highest court, the High Court of Australia (HCA), in this century. It
will demonstrate that the criticisms made by the Woodhouse Commission remain
valid 40 years later and the arguments for its total abolition are as strong as ever. It
will contrast the decisions of the Australian courts with how similar injuries would be
*
Professorial Fellow, Law School, The University of Melbourne. My thanks to Rosemary Tobin,
Joanna Manning and Donal Nolan for their comments on my first draft.
1
New Zealand, Royal Commission of Inquiry into Compensation for Personal Injury, Compensation
for Personal Injury in New Zealand: Report of the Royal Commission of Inquiry, R E Owen, Govt
Printer, Wellington, 1967.
2
For a recent re-articulation of these going beyond personal injury, see J Smillie, “The future of
negligence” (2007) 15 TLJ 300.
3
Summarised above n 1, para 171 (2): “erratic and capricious in operation”.
4
Ibid, paras 71 and 79.
5
Ibid, para 82 (“long delays inseparable from the very nature of the process”); paras 106-110,
summarised in para 171 (4): “cumbersome and inefficient”.
6
Ibid, paras 111-114, summarised in para 171(4): “extravagant in operation”.
7
Ibid, para 170: “(always assuming that the defendant is insured or has means)”.
8
Ibid, paras 123-125; summarised in para 171(1): “hinders the rehabilitation of injured persons”.
9
Ibid, paras 115-122.
10
Ibid, para 14.
dealt with under the Injury Prevention, Rehabilitation, and Compensation Act 2001
(NZ) (IPRCA).
For pragmatic reasons, the Woodhouse Commission confined its recommendations
to accidental injuries.11 It hoped that other forms of incapacity could be
accommodated later.12 The later Australian Woodhouse Report13 recommended the
extension of its proposed scheme to incapacity caused by congenital conditions and
sickness, but that scheme was never implemented. The failure to extend the New
Zealand scheme in this way means that some of the HCA decisions on the common
law deal with situations on the borderline of the ACC and are likely to give rise to
similar problems here.
Some statistics
A surprisingly large number of negligence cases have proceeded all the way to the
HCA in 2000-07. Seventy-nine decisions during this period have involved personal
injuries. In 44 of them, the court has decided the legal issue in favour of the
defendant; in 29 the relevant issue was decided in favour of the plaintiff; the
remaining six might be seen as neutral. Graphically, the decisions may be represented
as on the following chart:
The pro-defendant stance has been attributed by the Chief Justice of Australia to
resistance to attempts in recent years by plaintiffs’ lawyers to “push the envelope”.14
Although this may be true of some of the cases,15 many merely involved the
11
Ibid, para 290(a) and (b).
12
Ibid, para 17.
13
Australia, National Rehabilitation and Compensation Committee of Inquiry (Chairman, A O
Woodhouse), Compensation and Rehabilitation in Australia: Report of the National Committee of
Inquiry, Australian Government Publishing Service, Canberra, 1974.
14
M Priest, “A Man for Consensus but Not at All Costs”, Australian Financial Review, 3 March 2006.
15
Eg, Harriton v Stephens (2006) 226 CLR 52 (wrongful life).
application of long-standing principles in a way that favoured defendants.16 In some
46 of the cases, there was at least one dissentient. The outcome merely emphasises the
lottery nature of the negligence action.
In para 110 of its report, the Woodhouse Commission illustrated the operation of
the common law at the time by describing the two most recent cases then heard before
juries in Hamilton. One arose out of an industrial accident; the other from a motor
accident. These would have been the types of accident most frequently, if not almost
entirely, coming before the courts, at the time. They are still common in the cases that
reach the HCA, though they no longer predominate as they once did.17 This paper will
start by considering some of these, taking motor accidents first.
Motor accident cases
A comparatively rare case of unanimity in the HCA is to be found in Derrick v
Cheung.18 The court acknowledged that the facts of the case were tragic and that the
trial judge had accurately described them as “a parent's worst nightmare”. A 21-month
old child wandered into the road and was run down while her mother was talking to a
friend. The trial judge found the motorist to be negligent, a finding upheld by a
majority of the NSW Court of Appeal, though it offered the defendant the
“consolation” of stating that she was not morally to blame (and, of course, she would
not personally have to pay the damages, since her compulsory third party insurer
would). The HCA held that to introduce the notion of moral blame was to obscure the
real issue, which was “to determine the issues according to law: in this case, by not
finding an absence of care in circumstances in which reasonable care was … in fact
being exercised”. The child’s action accordingly failed.
One much criticised aspect of motor accident cases at the time of the Woodhouse
report was the problem of determining many years after the event whether the
defendant had indeed failed to exercise reasonable care. By their nature motor
accidents tend to happen quickly and evidence in court is often more reconstruction
than accurate recollection. In Derrick v Cheung the HCA decision was handed down
6.64 years after the date of the accident. In another motor accident case in the HCA,
Fox v Percy,19 the most highly-paid judges and, arguably, the best judicial minds in
the country — assisted by two QCs and two junior barristers, briefed by two of
Sydney’s leading law firms — devoted an afternoon examining skid marks in order to
decide on which side of the road a collision occurred between a motor vehicle and
woman riding a horse, a process at least one journalist described as astonishing. Even
more astonishing to the journalist was that this happened 11 years after the accident.20
The ostensible reason for this exercise was to lay down the principle on which an
16
Eg, occupiers’ liability cases such as Hoyts Pty Ltd v Burns (2003) 201 ALR 470 and Neindorf v
Junkovic (2005) 222 ALR 631; or school liability cases such as Trustees of the Roman Catholic
Church for the Diocese of Canberra and Goulburn (as St Anthony’s Primary School) v Hadba
(2005) 221 CLR 161.
17
Of the 79 personal injury cases that were decided by the HCA in 2000-07, 43 were road or industrial
cases (some of the cases fell into more than one category).
18
(2001) 181 ALR 301.
19
(2003) 214 CLR 118.
20
See A Crossland, “Negligence Review Fails to Cut The Cost of Proving Fault”, Australian Financial
Review, Sydney, 4 October 2002.
intermediate appellate court should interfere with decisions given at first instance. In
the end, the decision went in favour of the defendant. So did the decision in
Commissioner of Main Roads v Jones, where the HCA more than 13 years after the
accident restored the trial judge’s decision, which had been reversed by the WA Full
Court.21
As with any lottery, there are some winners. For example, in Anikin v Sierra,22 the
plaintiff, who having got lost was walking on a dark road at night when he was run
down by a bus, ultimately succeeded in the HCA by a majority of four to one. So, too,
in Manley v Alexander,23 the plaintiff succeeded, when a narrow majority of the HCA
upheld the decision of the WA Full Court, overturning the decision of the trial judge.
The latter had exonerated the defendant of negligence in running over the plaintiff,
who was intoxicated and lying in the road at 4.15 am. But both these “lucky”
plaintiffs paid the penalty of substantial deductions for contributory negligence, 25%
in Anikin and 70% in Manley. Furthermore, they had to wait 7.7 years and over 5
years from the date of the accident respectively until they knew whether they would
receive any compensation at all. Another case that took 7.7 years from the accident to
final resolution by the courts, with a trip to the HCA on the way, was Joslyn v
Berryman.24 In this case the HCA held that the NSW Court of Appeal should not have
set aside a finding of contributory negligence on the part of a passenger who, on the
way to obtain breakfast, handed over the driving to a companion whom he should
have known was still intoxicated from the previous night’s carousing. The HCA
remitted the case for further consideration of the degree of responsibility to be
attributed to the passenger and the Court of Appeal then increased the trial judge’s
attribution of 25% to 60%.25 Thereafter, the matter came again before the Court of
Appeal on an issue as to costs.26
In Joslyn v Berryman the passenger sued not only the driver, but also the local
authority on whose road the accident occurred. It is not unusual for persons injured in
motor accidents to seek a defendant other than the driver of a vehicle, either because
the plaintiff was the driver in a one-car accident (as in Commissioner of Main Roads v
Jones) or because an attempt to prove that a driver was at fault fails. Thus, in South
Tweed Heads Rugby League Football Club Ltd v Cole27 the NSW Court of Appeal set
aside a judgment finding that the driver of a vehicle was negligent in running down
the plaintiff, but the action against the club at which the plaintiff had been drinking
proceeded to the HCA.28 There, two judges held that the club did not owe the
defendant a duty of care to protect her from the consequences of her own drinking;
21
(2005) 215 ALR 418.
22
(2004) 211 ALR 621.
23
(2005) 223 ALR 228.
24
(2003) 214 CLR 552. The NSW Court of Appeal had remarked in relation to the separate defence of
illegality that “there is (unfortunately) no criminal offence involved in eating at McDonalds”
(Berryman v Joslyn (2001) 33 MVR 441 at [22]).
25
Berryman v Joslyn [2004] NSWCA 121 (23 April 2004, unreported, BC200402660).
26
Berryman v Joslyn (no 2) [2004] NSWCA 239 (16 July 2004, unreported, BC200404578).
27
(2002) 55 NSWLR 113.
28
Cole v South Tweed Heads Rugby League Football Club Ltd (2004) 217 CLR 469.
two judges held that, if they did owe her a duty of care, they were not in breach; and
two judges held that the club was liable to her.29 The plaintiff was left remediless.
Another incentive to seek a defendant other than a motor vehicle driver is that in
some jurisdictions at different times legislatures, in an attempt to keep compulsory
third party insurance premiums down, have restricted the damages recoverable from
such insurers, while not restricting the damages recoverable from others. One such
case was Pledge v Roads and Traffic Authority,30 where the dispute that came before
the HCA was among the three defendants. While in this case the time from the date of
the accident to the decision in the HCA was under just 10 years, the resolution of the
damages issue took another year and a further decision of the NSW Court of
Appeal.31 One hopes that the plaintiff, who was a child when injured and an adult
when judgment was finally given, was not kept waiting all the time for her
compensation.
One final example of the harsh operation of the common law in relation to motor
accidents is Batistatos v Roads and Traffic Authority of New South Wales.32 Callinan J
opened his judgment with the following words:
This appellant has had a most unfortunate life. The first of his many misfortunes was to be born
mentally retarded. The second was to lose his mother when he was one year of age. The third was
his separation from his siblings and his admission to a mental institution when he was six years old.
Another, in 1965, was to be rendered quadriplegic in a motor accident when the vehicle that he was
driving failed to take a bend in the road and overturned. The last was to have an action which he
brought in the Supreme Court of New South Wales to recover damages in respect of his
quadriplegia, brought within the limitation period, stayed by the Court of Appeal of New South
Wales, on the basis that effluxion of time alone produced the consequence that the action could not
be fairly tried.33
By a majority of four to three, the HCA visited further misfortune on the plaintiff by
dismissing his appeal.
Apart from this last case, where the accident would have preceded the coming into
force of the ACC, all the above cases would have presented no problem whatsoever if
their facts were replicated in New Zealand. All the injured parties would have had
cover under the various incarnations of the scheme that emanated from the
Woodhouse report and would have received their first payments of compensation
within days. Contrast the sorry tale of one unfortunate New Zealander, described in
the judgment as being “of Maori extraction”, who went on a working holiday to
Australia in 1976. On 13 July 1978 he was injured in a motor accident in South
Australia. He suffered severe brain damage and was left barely conscious. The Public
Trustee was appointed to represent him in litigation. An agreement was reached that
the plaintiff had to accept a 30% reduction in damages on account of contributory
negligence. Damages were eventually assessed by the court on 7 August 1992, 14
years later, at $761,022 after the reduction for contributory negligence. An appeal led
29
See G Orr and G Dale, “Impaired Judgements? Alcohol Server Liability and ‘Personal
Responsibility’ after Cole v South Tweed Heads Rugby League Football Club Ltd” (2005) 13 TLJ
103.
30
(2004) 205 ALR 56.
31
Roads and Traffic Authority v Ryan (2005) 62 NSWLR 609.
32
(2006) 226 CLR 256.
33
Ibid, at [192].
to an increase in the damages, including interest, to $856,922.34 Thereafter, the
plaintiff’s costs were taxed at about $361,000. Disputes as to costs and interest on
them came before the courts several times,35 including an application to the HCA for
leave to appeal, which was refused on 10 August 2000, no doubt incurring further
costs. A taxing master made some further errors in dealing with the costs and the
defendants again brought the matter before a single judge of the Supreme Court, who
remitted it back to the master.36 Thus, some 23 years after the accident, the case had
not been finally resolved and the costs on both sides probably far exceeded the
damages.
No doubt this case is exceptional, but probably not unique. In 1996 I wrote an
Editorial Comment on the medical negligence case of Rogers v Whitaker,37 in which I
observed that litigation concerning the tax consequences of the interest included in
and after her judgment for a little over $800,000 in respect of total blindness revealed
that her costs alone were almost $350,000.38 Recently, in a case brought before the
HCA for special leave to appeal against a judgment for a child plaintiff in a horseriding accident, the four judges of the NSW Supreme Court having been equally
divided on the liability of the defendant, the HCA approved a settlement in which the
only money that changed hands was a payment of $100,000 by the defendant towards
the plaintiff’s costs. Heydon J commented that if not for the settlement the outcome
could have been far worse for the plaintiff.39
New South Wales in 2006 introduced no-fault provisions providing lifetime care
and support for people who suffer “catastrophic injuries” in motor accidents. In
introducing the legislation, the relevant Minister said that “[u]nder the current Motor
Accidents Compensation Act only 65 of the 125 people catastrophically injured in a
motor vehicle accident [annually in NSW] are likely to be eligible for
compensation”.40 Similar proportions would probably apply in the remaining
Australian jurisdictions without no-fault motor accident schemes (Queensland, South
Australia and Western Australia). The Minister also made the point that “[e]ven those
in receipt of compensation are not guaranteed a lifetime of reasonable care and
medical treatment”. Apart from contributory negligence, which may account for this,
this point goes to the issue of the adequacy of the lump-sum form of compensation
34
Osborne v Kelly (1993) 61 SASR 308 (FC).
35
[1993] SASC 4357 (FC, King CJ, Bollen and Millhouse JJ, 23 December 1993, unreported); [1999]
SASC 486 (FC, Doyle CJ, Mullighan and Wicks JJ, 12 November 1999, unreported).
36
[2001] SASC 260 (Wicks J, 1 August 2001, unreported.)
37
(1992) 175 CLR 479.
38
See H Luntz, “Mrs Whitaker's Gothic Cathedral” (1996) 4 TLJ 195. For further litigation and
legislation arising out of this case, with more costs, see H Luntz, “Rogers v Whitaker: The
Aftermath” (2003) 11 HLB 102.
39
Ohlstein v E & T Lloyd trading as Otford Farm Trail Rides (2006) Aust Torts Reports 81-866 (NSW
CA), SLG Lloyd v Ohlstein [2007] HCATrans 262 (25 May 2007); case settled on basis of
judgment for defendants by consent: Lloyd v Ohlstein [2007] HCATrans 542 (13 September 2007);
formal order Lloyd v Ohlstein [2007] HCATrans 621 (23 October 2007).
40
Mr John Watkins, second reading speech on the Bill for the Motor Accidents (Lifetime Care and
Support) Act 2006 (NSW), which came into force on 1 October 2006. See NSW Hansard,
Legislative Assembly, 9 March 2006
<http://www.parliament.nsw.gov.au/prod/PARLMENT/HansTrans.nsf/V3ByKey/LA20060309>
(accessed 13 November 2007).
that is awarded at common law. I have dealt with this latter point elsewhere and will
not repeat the criticism of the common law in this respect in this paper.41 I shall
merely say that structured settlements have not provided an answer.42
At the same time as introducing legislation to make provision for lifetime care of
those catastrophically injured in motor accidents, New South Wales passed legislation
for so-called “blameless” motor accidents and for cases where children are injured,
such as in Derrick v Cheung. This came into operation very recently, on 1 October
2007, and it is too soon to see how well it will work. It will not cover drivers who
themselves cause accidents and the benefits for children are very limited. It would
seem to continue the lottery aspect of motor accident compensation in favouring some
victims over others. This is true also of the no-fault schemes operating in Victoria and
Tasmania. When the current no-fault motor accident scheme was introduced in
Victoria, the government hoped to model it on the report of the NSW Law Reform
Commission,43 which contained a comprehensive criticism of the common law action
and recommended its total abrogation. However, at the time, the Victorian
government did not have a majority in the upper house of Parliament and was forced
to compromise in the legislation, the Transport Accident Act 1986 (Vic). This
compromise allows motor accident victims who surmount a narrative threshold, so
that their injury satisfies a statutory definition of “serious”, to claim limited damages
at common law. One of the continuing problems that besets the courts in Victoria is to
distinguish those persons injured in motor accidents whose injuries are “serious” and
who are thus entitled to recover damages if they can prove fault.44
Industrial accidents and diseases
For about a century all Australian jurisdictions have had no-fault workers’
compensation schemes. However, until fairly recently, the option of suing at common
law was retained. Now several jurisdictions have made the no-fault compensation
under the legislation the exclusive remedy against the employer or have restricted the
damages recoverable in common law actions against the employer. This has
encouraged workers to seek remedies against third parties in the hope of recovering
larger amounts by way of damages. At least two such cases have reached the HCA in
consequence. In the first of these, Modbury Triangle Shopping Centre Pty Ltd v
Anzil,45 the HCA, with one dissent, reversed the two lower courts, which had held the
occupier of the shopping centre where the plaintiff worked liable for injuries sustained
when he was attacked by unknown persons in the centre’s car park as he made his
41
See H Luntz, Assessment of Damages for Personal Injury and Death: General Principles,
LexisNexis Butterworths, Sydney, 2006, Chap 2.
42
See J Campbell, “Compo, Lump Sums and Structured Settlements” [2006] Accord 14
43
Law Reform Commission (NSW), Accident Compensation: A Transport Accidents Scheme for New
South Wales, Report No 43, NSWLRC, Sydney, 1984,
<http://www.lawlink.nsw.gov.au/lrc.nsf/pages/R43TOC> (accessed 29 December 2004).
44
Some of the recent cases in the Victorian Court of Appeal are Dodoro v Knighting (2004) 10 VR 277
(CA); Hunter v Transport Accident Commission (2005) 43 MVR 130 (Vic CA); Spence v Gomez
(2006) 45 MVR 556 (Vic CA); Arthur v Transport Accident Commission (Vic) (2006) 47 MVR 182
(Vic CA)..
45
(2000) 205 CLR 254. For criticism, see H Luntz, “Torts Turnaround Downunder” (2001) 1 OUCLJ
95; J Dietrich, “Liability in Negligence for Harm Resulting from Third Parties' Criminal Acts:
Modbury Triangle Shopping Centre Pty Ltd v Anzil” (2001) 9 TLJ 152.
way to his car after work when the lights had already been turned out. Such an assault
in New Zealand would come within the general provisions for cover of IPRCA
s 20(2)(a) as “personal injury caused by an accident to the person”. Intentional attacks
on workers have from the earliest days of workers’ compensation been treated as
unexpected events from the workers’ point of view and therefore “accidents”.46 New
Zealand in fact pioneered criminal injuries compensation and the Woodhouse report
recommended that “[t]he general basis for protection should be bodily injury by
accident which is undesigned and unexpected so far as the person injured is
concerned”.47 ACC statistics show that 7657 claims were accepted for injuries
resulting from criminal acts (other than “sensitive” claims) in the past 11 years.48
Those who have cover would have no right to claim damages from anyone else.49
In the second of the two cases referred to above, Slivak v Lurgi (Australia) Pty
Ltd,50 the plaintiff again failed in the HCA with one dissentient when seeking to hold
the designer of the structure on which he was working liable. Callinan J, while
purporting not to comment on the policy of the legislature in removing the right to sue
the employer, suggested that the effect of the removal might be reduce the incentive
on employers to make the workplace safer.51 The Woodhouse report specifically
noted this argument in favour of retention of the common law,52 but found it
impossible to accept. Compulsory insurance is likely to remove any deterrent effect of
an actual award of damages. While it is often contended that adjustment of insurance
premiums provides an incentive for employers to take more care, the empirical
evidence for this is largely lacking53 and it may have adverse effects.54 Furthermore,
there are huge difficulties in applying experience rating to small firms and in respect
of long-delayed findings of fault.55 Prior risk-assessment by insurers and insistence on
the taking of precautions in return for reduced premiums is likely to be more
effective. Whatever incentives are applied to employers insured against common law
liability can equally be applied to the no-fault elements of any scheme.56 A systemic
46
Trim Joint District School v Kelly [1914] AC 667.
47
Above n 1, para 289(a).
48
ACC Injury Statistics 2006 (First Edition), Section 13.2, Criminal Acts http://www.acc.co.nz/aboutacc/acc-injury-statistics-2006/SS_WIM2_062850 (accessed 17 November 2007). As to “sensitive”
claims, see below at nn 116 and 117.
49
IPRCA s 317.
50
(2001) 205 CLR 304.
51
Ibid, at [64].
52
Above n 1, paras 90-91.
53
Productivity Commission, National Workers’ Compensation and Occupational Health and Safety
Frameworks, Report No 27, Canberra, 2004,
<http://www.pc.gov.au/inquiry/workerscomp/docs/finalreport> (accessed 6 December 2007), Chap
8, pp 227 (citing D N Dewees, D Duff and M J Trebilcock, Exploring the Domain of Accident Law:
Taking the Facts Seriously, Oxford University Press, New York; Oxford, 1996, p 355) and 296
(citing a working paper by Alan Clayton, 2002).
54
Ibid, pp 235-6, 248 (“delays rehabilitation and return to work”). See also T G Ison, “Changes to the
Accident Compensation System: An International Perspective” (1993) 23 VUWLR 25 at 34.
55
Ibid, pp 297-8 (recommending that experience rating on the basis of no-fault benefits be confined to
large employers). See also P S Atiyah, “Accident Prevention and Variable Premium Rates for
Work-Connected Accidents--I and II” (1975) 4 Industrial LJ 1 and 89.
56
See Productivity Commission, above n 53, Chap 10.
approach to accident-reduction, which is the favoured approach today,57 can best be
devised by a single insurer, such as the ACC, which collects and analyses all the data.
Despite his belief in the efficacy of the common law in making the workplace
safer, Callinan J joined the majority of the HCA in Liftronic Pty Ltd v Unver,58 where
a jury’s verdict reducing the plaintiff’s damages by 60% for contributory negligence
was restored, despite the NSW Court of Appeal having found it to be perverse and
having substituted a reduction of 20%.
The way in which work is carried out in Australia has changed since the days of
the Woodhouse report. There is now increased outsourcing of work that would
previously have been performed by employees. Former employees may do exactly
what they did before, but are now formally employed by their own companies or by
labour hire companies who hire them out to the former employers. What may have
once been relatively simple common law actions to determine whether employers
were at fault may be transformed into complicated disputes on the share the various
parties are to bear, if any,59 with the strong chance that the injured worker will lose
somewhere along the line. One such case that reached the HCA is Andar Transport
Pty Ltd v Brambles Ltd.60 I cannot do better than simply to refer you to the discussion
of this case by Harry Glasbeek.61 A similar problem confronts a member of the public
injured by such a worker in sheeting home vicarious liability to an employer.62
Complications abound in New South Wales because of the different levels of
damages recoverable from the employer and from third parties, which are exacerbated
by the “murky waters”63 of the Workers Compensation Act 1987 (NSW) s 151Z in
relation to the rights of the defendants to recover contribution from each other,64
especially when a compulsory third party motor insurer (or the nominal defendant)
also becomes involved.65 Cases may reach the HCA simply on the issue of which
insurer should bear the loss, though how much the injured worker is to receive may
also depend on the outcome.66 Although it is impossible to see any good coming from
these disputes, the cost to the community through insurance premiums of all types is
huge. These particular types of dispute are largely avoided in Victoria by having a
single fund as the statutory insurer and providing legislatively for disputes between
57
See the sources cited in H Luntz and D Hambly, Torts: Cases and Commentary, revised 5th ed,
LexisNexis Butterworths, Sydney, 2006, para [1.2.9].
58
(2001) 179 ALR 321.
59
Eg, TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1 (CA).
60
(2004) 217 CLR 424.
61
H Glasbeek, “The Legal Pulverisation of Social Issues: Andar Transport Pty Ltd v Brambles Ltd”
(2005) 13 TLJ 217.
62
See Hollis v Vabu Pty Ltd (2001) 207 CLR 21 (plaintiff succeeded); Sweeney v Boylan Nominees Pty
Ltd (2006) 226 CLR 161 (plaintiff failed), discussed below.
63
So described by Meagher JA in New South Wales v Kennelly [2001] NSWCA 71 (10 April 2001,
unreported, BC200101567).
64
Eg, Clout Industrial Pty Ltd (in Liq) v Baiada Poultry Pty Ltd (2004) 61 NSWLR 111 (CA).
65
Eg, Nominal Defendant v Hi-Light Industries Pty Ltd (2004) 61 NSWLR 585 (CA), SLR [2005]
HCATrans 368 (27 May 2005).
66
Recent ones are Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568 and
Nominal Defendant v GLG Australia Pty Ltd (2006) 225 ALR 643.
that fund and the motor accident fund.67 However, the reinstatement in that state of
the right to sue at common law for “serious” injuries provides the courts with plenty
of work in discriminating in favour of some workers and against others, just as in the
case of motor accident victims referred to above.68
Contribution claims also occupy the Australian courts in many cases of industrial
disease, such as where workers have developed asbestos-related diseases after
exposure to asbestos during their employment. The HCA has not yet considered
expressly the issues raised in the two decisions of the House of Lords of Fairchild v
Glenhaven Funeral Services Ltd69 and Barker v Corus (UK) Plc,70 which held that
workers who developed mesothelioma but unable to prove which exposure in their
working lives actually caused it, could recover proportional damages from each
tortious defendant. However, similar disputes have come before the lower courts and
so far the HCA has refused leave to appeal on the issues.71 They are sure to come up
again.72 In McPherson's Ltd v Eaton73 a worker succeeded against a number of
defendants at first instance, but was deprived of his judgment against the retailer on
appeal on the basis of an absence of a duty of care. Although an editorial note to the
report refers to an application for special leave to appeal to the HCA having been filed
by the plaintiff against this dismissal of his claim against the retailer, the application
must have been withdrawn, since the plaintiff apparently retained judgments against
other defendants.74 Just before the turn of the century the HCA did provide a remedy
for stevedores employed by different employers on a daily basis by holding, by
majority, that the authority that allocated them to the particular ships owed them a
duty of care.75
67
See Transport Accident Act 1986 (Vic), s 94A; Accident Compensation Act 1985 (Vic), s 137A.
68
Some recent illustrations are Pope v W S Walker & Sons Pty Ltd (2006) 14 VR 435 (CA); Grech v
Orica Australia Pty Ltd (2006) 14 VR 602 (CA); Mutual Cleaning and Maintenance Pty Ltd v
Stamboulakis (2007) 15 VR 649 (CA); Kelso v Tatiara Meat Co Pty Ltd [2007] VSCA 267 (28
November 2007, unreported, BC200710238).
69
[2003] 1 AC 32.
70
[2006] 2 AC 572. The case has since been reversed on the proportionality point in relation to
mesothelioma by the Compensation Act 2006 (UK) s 3.
71
Eg, Wallaby Grip (BAE) Pty Ltd (in Liq) v Macleay Area Health Service (1998) 17 NSWCCR 355
(NSW CA), SLR sub nom Macleay-Hastings Area Health Service v Wallaby Grip (BAE) Pty Ltd
(in liq) [1999] 19 Leg Rep SL 2 (19 November 1999); E M Baldwin & Son Pty Ltd v Plane [1999]
Aust Torts Reps 81-499 (NSW CA), SLR [1999] 18 Leg Rep SL 4, sub nom Jsekarb Pty Ltd v
Plane (8 October 1999).
72
One contribution case did reach the HCA, only to be remitted to the lower courts for not having been
dealt with properly: Amaca Pty Ltd v State of New South Wales (2003) 199 ALR 596. After that had
been dealt with, another attempt to bring the case before the HCA was rejected: Amaca Pty Ltd v
New South Wales (2004) Aust Torts Reports 81-749 (NSW CA), SLR [2005] HCATrans 93 (4
March 2005). An earlier contribution case in the HCA involving exposure to asbestos was James
Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 196 CLR 53.
73
(2005) 65 NSWLR 187 (CA).
74
See the contribution proceedings in Amaca v CSR Ltd (re Eaton) (2006) 3 DDCR 573.
75
Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1. The Victorian Court of
Appeal, to which the case was remitted, upheld the liability of the defendant authority on the facts:
Stevedoring Industry Finance Committee v Henderson (for Estate of Crimmins) (2000) 2 VR 396
(CA).
Whether or not there are any problems for the ACC in allocating particular claims
to the accounts in which the funds are kept, none of these cases should arise in New
Zealand. The victims would all have cover in the ordinary accident cases under
IPRCA s 20(2)(a) and would receive their benefits immediately. The disease cases,
particularly those of long latency, may be a little more complicated, but would
probably be satisfactorily dealt with under ss 20(2)(e) and 30 and Schedule 2,
especially after the amendments proposed by the Injury Prevention, Rehabilitation,
and Compensation Amendment Bill (No 2) 2007 (NZ) cl 10, which will ease the
difficulty of proving the causal link between the work and the disease. However, not
all New Zealanders have been deterred from attempting to recover damages in
Australia from the manufacturers of asbestos to which they have been exposed in
New Zealand. In several the plaintiffs have not been allowed to proceed with their
actions, even after seeking leave to appeal to the HCA.76 Where, however, the
plaintiff was injured aboard a New Zealand ship tied up in Sydney harbour, the
common law action was allowed to go ahead in New South Wales under the law of
that state.77
Occupiers’ liability
The common law laid down rigid standards of care owed by occupiers to different
categories of entrants on to the land. This led to frequent disputes as to the
categorisation of particular entrants and the application of the relevant standards. New
Zealand, following statutory modifications of this regime elsewhere, reformed the law
in relation to some of these categories with the Occupiers’ Liability Act 1962 (NZ).
Although still on the statute books, this Act must have become a dead letter with
regard to personal injury once the ACC scheme came into operation. Some Australian
states also enacted occupiers’ liability legislation, but the HCA went further in
eventually largely sweeping away the categories and laying down a general duty of
reasonable care in the circumstances.78 However, minds can easily differ as to what is
reasonable care in the circumstances and thus cases continue to come before the HCA.
In Neindorf v Junkovic79 the plaintiff was injured when she tripped on the driveway of
a house in which a garage sale was being held. The case went through four levels of
courts: the plaintiff succeeded in the magistrates’ court, whose decision was reversed
by a judge of the Supreme Court of South Australia, who was in turn reversed by a
majority of the Full Court of the state, which decision was in turn reversed by a
majority of the HCA. If you have kept track of that, it means that the plaintiff finally
lost and so went remediless.
A similar reversal at each of only three stages occurred in Hoyts Pty Ltd v Burns,80
where a teacher’s aide looking after disabled children was injured when she sat down
76
James Hardie & Co Pty Ltd v Hall as administrator of estate of Putt (1998) 43 NSWLR 554 (CA),
SLR S76/1998 (7 August 1998); James Hardie & Co Pty Ltd v Carley [1999] NSWCA 80 (23
March 1999, unreported, BC9901423); Amaca Pty Ltd v Frost [2006] NSWCA 173 (4 July 2006,
unreported, BC200605025), SLR [2006] HCATrans 675 (8 December 2006). Cf James Hardie
Industries Pty Ltd v Grigor (1998) 45 NSWLR 20 (CA), SLR [1998] Leg Rep SL 2 (7 August
1998).
77
Union Shipping New Zealand Ltd v Morgan (2002) 54 NSWLR 690 (CA).
78
Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479.
79
(2005) 222 ALR 631.
80
(2003) 201 ALR 470.
on a seat that had retracted. Again, she lost in the end. Compensation awarded for an
injury caused in similar circumstances was taken away on appeal in another case; this
time the HCA did not give leave for a further appeal.81
We have already noticed two cases in which attempts to extend the occupiers’ duty
of care beyond the condition of the premises failed, in each instance by a majority:
Modbury Triangle Shopping Centre Pty Ltd v Anzil82 and South Tweed Heads Rugby
League Football Club Ltd v Cole.83
Every one of the five plaintiffs who failed in these Australian cases would have
had cover in New Zealand.
Landlords
Landlords at common law were not treated as occupiers of their land and enjoyed
immunity from liability in tort towards the tenants and their families.84 Occupiers’
liability legislation, where enacted, changed this.85 Australian common law on the
subject also evolved, so that the immunity was not even relied on when the child of a
tenant was electrocuted when she touched a tap in the garden which had become live
as a result of a faulty repair to a stove in the house carried out by an independent
contractor. She succeeded in the HCA in holding the landlord liable, but her victory
was only by four to three and the majority judges were divided two all in their
reasoning.86 The uncertainty thus created had to be dispelled quickly and the HCA
gave leave to appeal in a case where the son of a tenant cut his leg badly when a glass
door into which he walked shattered. While clarifying the law to some extent, the
majority of the court denied a remedy to the plaintiff.87 Both these plaintiffs would
clearly have had cover in New Zealand.
Slips and falls on the highway
Another immunity conferred by the common law was on highway authorities in
respect of “non-feasance”, or omissions to repair or remove dangers in the fabric of
highways under their control. The law had become so riddled with exceptions and fine
distinctions that a narrow majority of the HCA in Brodie v Singleton Shire Council88
overturned years of authority and held that the ordinary law of negligence applied.
This led to a spate of actions by pedestrians who had fallen and injured themselves on
highways. Two issues in particular made for disagreement among the lower courts. A
dictum in the joint judgment of three members of the majority in Brodie in relation to
an associated appeal in which the court unanimously dismissed the action of a
pedestrian stressed the importance of formulating the duty so as to “require that a road
81
University of Wollongong v Mitchell (2003) Aust Torts Reports 81-708 (NSW CA), SLR [2004]
HCATrans 181 (28 May 2004).
82
(2000) 205 CLR 254.
83
(2002) 55 NSWLR 113.
84
Cavalier v Pope [1906] AC 428.
85
See, eg, Occupiers’ Liability Act 1962 (NZ) s 8.
86
Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313. See G Orr, “The Glorious Uncertainty
of the Common Law?: Northern Sandblasting Pty Ltd v Harris” (1997) 5 TLJ 208.
87
Jones v Bartlett (2000) 205 CLR 166.
88
(2001) 206 CLR 512.
be safe not in all circumstances but for users exercising reasonable care for their own
safety”.89 This has been interpreted by some courts as denying any duty of care
towards pedestrians who were not exercising such reasonable care,90 whereas other
courts preferred the view that a failure to exercise reasonable care for one’s own
safety went merely to factual issues of breach and contributory negligence.91
The other issue is the purely factual one which always emerges when the common
law requires determination of what is “reasonable”. It was always recognised that
pedestrians could not expect “bowling greens” wherever they walked,92 but often the
outcome seemed to be determined by whether a raised area of a footpath did or did
not exceed 20 mm.93
An Australian report into the burden of falls of elderly people leading to
hospitalisation deplores the lack of availability of data on the circumstances of the
injuries.94 However, a table, “Place of occurrence for fall injury incidents, males,
females and persons aged 65+ years, Australia, 2003–04” records that of a total of
60,497 such falls, 2693 occurred on streets and highways.95 In the argument for
special leave to appeal in one of the tripping cases, which was refused, counsel
referred to some statistics which stated, under the heading “Persons 65 Years And
Over Who Have Fallen In The Last Twelve Months”, that “Uneven/cracked manmade surfaces” were responsible for 16,500 incidents. Callinan J, however,
commented that in percentage terms, the figures did “not suggest that it is a very big
problem”.96 Whether or not the falls that occur on highways are “a very big problem”,
they, like all the other falls, would be covered by the ACC and there would be no
need to spend hundreds of thousands of dollars determining whether a small number
of those who fall should receive common law compensation, while the others received
nothing.
89
Ibid, at [163].
90
See, eg, Boroondara City Council v Cattanach (2004) 10 VR 109 (CA) (denying any higher standard
of care towards the elderly, the frail, joggers, skateboarders, drunks, etc); Moyne Shire Council v
Pearce (2004) 136 LGERA 434 (Vic CA), SLR [2005] HCATrans 752 (9 September 2005).
91
Eg, Whittlesea City Council v Merie [2005] VSCA 199 (11 August 2005, unreported,
BC200505656), SLR [2005] HCATrans 1046 (16 December 2005); Temora Shire Council v Stein
(2004) 134 LGERA 407 (NSW CA). See C Coventry, “You Had Better Watch Out: Liability of
Public Authorities for Obvious Hazards in Footpaths” (2006) 14 TLJ 81; The Hon Justice D A Ipp
AO, “The Metamorphosis of Slip and Fall” (2007) 29 Aust Bar Rev 150.
92
The phrase comes from Littler v Liverpool Corporation [1968] 2 All ER 343 at 345 per CummingBruce J , which was cited in, eg, Gondoline Pty Ltd v Hansford [2002] WASCA 214 (14 August
2002, unreported, BC200204570) at [58]; Burwood Council v Byrnes [2002] NSWCA 343 (4
November 2002, unreported, BC200206520) at [29].
93
See, eg, Sutherland Shire Council v Pallister [2002] NSWCA 66 (19 March 2002, unreported,
BC200201082); Richmond Valley Council v Standing (2002) Aust Torts Reports 81-679 (NSW
CA); Burwood Council v Byrnes [2002] NSWCA 343 (4 November 2002, unreported,
BC200206520), SLR [2003] HCATrans 462 (14 November 2003); Ryde City Council v Saleh
(2004) Aust Torts Reports 81-757 (NSW CA).
94
C Bradley and J E Harrison, Hospitalisations Due to Falls in Older People, Australia, 2003–04,
AIHW cat. no. INJCAT 96, Australian Institute of Health and Welfare, Canberra, 2007,
<http://www.nisu.flinders.edu.au/pubs/reports/2007/injcat96.php> (accessed 16 November 2007),
pp 50-2.
95
Ibid, Table 6.
96
Hansford v Gondoline Pty Ltd [2003] HCATrans 429 (24 October 2003).
In any event these developments in the common law have not been allowed to
continue unabated. Legislatures in the Australian jurisdictions have restored to some
degree, though not completely, the former immunity enjoyed by highway
authorities.97
Sport and other recreational injuries
New Zealand, of course, is a rugby-playing country. The ACC statistics reveal that
over 3000 new claims have been accepted in each of the past 10 years for injuries
incurred in rugby union games. In 2005-06 there were 930 of such claims still
ongoing, at a cost of $NZ16,402,000.98
Contrast that with the litigation that led to the decision of the HCA in Agar v
Hyde.99 Two men, aged 19 and 18 at the time, broke their necks playing rugby union.
They were injured while playing hooker (the middle position in the front row of the
scrum) for their respective teams. In consequence, both became quadriplegic. They
sued a range of different defendants, including the members of the International
Rugby Football Board (IRFB), an unincorporated body responsible for making the
rules of the game. They alleged that by the date of their injuries, 1986 and 1987
respectively, there was a body of evidence of the dangers to hookers from the manner
in which the members of the opposing teams who formed scrums came together. They
contended that the members of the IRFB owed them a duty of care to amend the rules
so as avoid these dangers. They pointed to the rules having in fact been amended in
1988 to require a phased engagement of the two opposing front-rows of the scrum in a
regulated sequence in which each of the front-rows crouch, touch, pause and only
then engage. Different aspects of the case came before three different judges in the
NSW Supreme Court. One judge held that the plaintiffs could not succeed against the
members of the IRFB because they owed them no duty of care. The NSW Court of
Appeal reversed the decision, holding that it could not be said that no duty of care was
owed until all the evidence was in. The members of the IRFB appealed successfully to
the HCA, whose judgment was handed down just under 13 and 14 years respectively
from the dates when the two boys were injured.
Although the case was criticised,100 and dealt essentially with procedural matters,
judges in New South Wales have considered it indistinguishable and held that local
boards do not owe a duty of care so to organise and regulate the playing of the game
as not to expose players to unnecessary risk of injury.101 Understandably, seriously
injured players continue to look for some defendant, be it another player, the referee
or one of the clubs, to sue in order to provide them with compensation.102
97
Eg, Civil Liability Act 2002 (NSW) s 45. See also Coventry, above n 91.
98
ACC Injury Statistics 2006 (First Edition), Section 20. Sport Claims <http://www.acc.co.nz/aboutacc/acc-injury-statistics-2006/SS_WIM2_062694> (accessed 16 November 2007).
99
(2000) 201 CLR 552.
100
Eg, H Opie, “The Sport Administrator's Charter: Agar v Hyde” (2001) 9 TLJ 131.
101
Haylen v New South Wales Rugby Union Ltd [2002] NSWSC 114 (Einstein J, 15 March 2002,
unreported, BC200200955); Green v Australian Rugby Football League Ltd [2003] NSWSC 749
(Harrison M, 14 August 2003, unreported, BC200304665).
102
One of the cases mentioned in n 101 was proceeding in the NSW Supreme Court as this paper was
being prepared: see G Jacobsen, “League advice not taken, court told”, Sydney Morning Herald, 6
Australians and New Zealanders share a love of cricket. The ACC statistics show
that during the last 11 years, almost 4600 claims have been accepted for injuries
arising from all forms of the game. Over 1000 of these resulted from indoor cricket.103
None of these people would have had to face the problems of Mr Woods, who
suffered a serious injury to his eye while playing at a commercial indoor cricket venue
and in the end lost his claim for damages by three judges to two in the HCA.104
It has been Australians’ love of swimming that has given rise to most problems for
the common law in recent years.105 On 7 November 1997, a young man became a
quadriplegic when he struck his head on a sandbank at Sydney’s iconic Bondi beach.
When a jury found that the local council was liable in negligence, the Premier of New
South Wales announced on the beach itself that legislation was to be introduced to
curb liability.106 The decision was subsequently reversed by a majority of the NSW
Court of Appeal, but restored by the HCA on 9 February 2005 in a three to two
decision. Other young men and boys severely injured when diving or jumping into the
water have not had Mr Swain’s “luck” in the courts: see Vairy v Wyong Shire
Council,107 which took 12¾ years to resolve against the plaintiff in a four to three
decision of the HCA; Mulligan v Coffs Harbour City Council;108 and Roads and
Traffic Authority of NSW v Dederer.109 In this last case, a 14-year-old boy jumped
from a bridge into water that was too shallow. The local council was held on appeal to
the NSW Court of Appeal to be protected by the newly-enacted legislation.110 The
case went to the HCA against the road authority which had constructed and
maintained the bridge and which, because the action had been commenced against it
before the new legislation took effect, was not similarly protected. By a majority of
three to two the HCA held that the authority had not been negligent and the plaintiff
failed. Note that of the nine judges who heard the case at all three levels, five found
November 2007, <http://www.smh.com.au/news/national/league-advice-not-taken-courttold/2007/11/05/1194117959756.html> (accessed 16 November 2007).
103
See n 98.
104
Woods v Multi-Sport Holdings Pty Ltd (2002) 208 CLR 460. For a perceptive commentary on the
masculine approach of the majority, see K Burns, “It's Just Not Cricket: The High Court, Sport and
Legislative Facts” (2002) 10 TLJ 234.
105
The ACC statistics, n 98 above, do show that more than 100 New Zealanders also injure themselves
each year while swimming, including at beaches and in rivers.
106
B McDonald, “The Impact of the Civil Liability Legislation on Fundamental Policies and Principles
of the Common Law” (2006) 14 TLJ 268 at 286; L Milligan, “Sandbar Victim Stripped of Payout”,
The Australian, Sydney, 4 April 2003 (referring to the announcement after the NSW Court of
Appeal reversed the decision).
107
(2005) 223 CLR 422.
108
(2005) 223 CLR 486. On this and the previous case, see N Foster, “Another Tale of Two Divers”
(2006) 14 TLJ 115, referring to my earlier Editorial Comment, “A Tale of Two Divers” (1993) 1
TLJ 199.
109
(2007) 238 ALR 761.
110
Great Lakes Shire Council v Dederer (2006) Aust Torts Reports 81-860 (NSW CA). On the
complications stemming from the different forms that the protection might take in the different
Australian jurisdictions, see J Dietrich, “Liability for Personal Injuries Arising from Recreational
Services: The Interaction of Contract, Tort, State Legislation and the Trade Practices Act and the
Resultant Mess” (2003) 11 TLJ 244.
for the plaintiff and four found for the defendant, but because three of those four were
in the highest court the plaintiff was left uncompensated.
All these young men would have had cover in New Zealand under IPRCA. Mr
Mulligan, who was a visitor from Ireland, might have received only limited
benefits.111 Indeed, the Woodhouse Report recommended that visitors be excluded,112
but IPRCA s 23 excludes only persons not ordinarily resident who are injured aboard
a ship or aircraft that brings them to or takes them from New Zealand or while
embarking or disembarking on the ship or aircraft.
School liability
Children injured in playground accidents at school in Australia have to prove
negligence if they are to recover any compensation. The difficulties they face are
illustrated by Roman Catholic Church Trustees for the Diocese of Canberra and
Goulburn v Hadba,113 another decision showing how different judges come to
different conclusions as to what amounts to reasonable care in the circumstances. The
plaintiff, an eight-year-old child was injured when she fell to the ground after being
pulled off a flying fox by a fellow student. The trial judge found that the school was
not negligent in its supervision; this was reversed by a majority of the ACT Court of
Appeal, which was in turn reversed by a majority of the HCA. Even the death of a
school child from an accident during a sports class may be held to involve no breach
of the duty of care.114
At the time of the Woodhouse report, there would have been little discussion of the
topic of child sexual abuse, let alone contemplation of tort actions in respect of such
events. New Zealand has not escaped the subsequent spate of litigation arising out of
the revelation of the reality of abuse.115 Victims of the sexual offences listed in
Schedule 3 of IPRCA now have cover, including, exceptionally, for purely mental
injuries not directly resulting from physical injuries.116 The ACC statistics record
111
His entitlement to weekly and lump-sum compensation outside New Zealand would be subject to
assessment by a person approved by the ACC and he would not be entitled to the costs of such
assessment: s 127. Under s 128, unless there were regulations making such provision, the ACC
could not pay for rehabilitation expenses once he had returned to Ireland, except for attendant care
expenses under s 129, which could be limited to 28 days.
112
Above n 1, para 287(a).
113
(2005) 221 CLR 161.
114
Trustees of the Roman Catholic Church for the Archdiocese of Sydney v Kondrajian [2001]
NSWCA 308 (24 September 2001, unreported, BC200105805), reversing the trial judge.
115
See R Tobin, “Civil Actions for Sexual Abuse in New Zealand” (1997) 5 Tort L Rev 190; R Tobin,
“Public Authorities and Negligent Investigations into Child Abuse: The New Zealand and English
Approaches” (1999) 7 TLJ 232; J Manning, “The Reasonable Sexual Abuse Victim: ‘A Grotesque
Invention of the Law’?” (2000) 8 TLJ 6; S Todd, “Tort Action by Victims of Sexual Abuse” (2004)
12 Tort L Rev 40.
116
IPRCA s 21. Cf S v Attorney-General [2003] 3 NZLR 450 (CA), where cover was held not to
extend to events occurring before 1 April 1974 and the issue of vicarious liability on the part of
foster parents had to be explored. Furthermore, as this case shows, even if there is cover under
IPRCA, the possibility of exemplary damages under s 319 may require consideration of issues of
vicarious liability.
these claims as “sensitive”.117 Since the actual perpetrators are seldom able to pay
damages, Australian courts, like others in the common law world,118 have been faced,
where the abuser was a school teacher, with claims against the school authorities. The
HCA in New South Wales v Lepore119, with one dissentient, rejected the view that a
school authority could be liable for breach of a non-delegable duty of care where a
pupil was sexually assaulted by a teacher. The majority judges were further divided
between those who thought that there could never be vicarious liability for such an
assault and those who contemplated that in some circumstances at least the actions of
the teacher could be seen as an improper mode of performing an authorised
activity.120
Vicarious liability
The uncertainty engendered by Lepore in relation to sexual assaults extends also to
assaults by security guards (bouncers) at entertainment venues of various types.
Numerous cases seeking to hold the employers liable have come before the Australian
courts recently.121 So far leave to appeal to the HCA in such cases has been refused on
the grounds that the particular facts did not raise sufficient doubt.122 However, it can
be only a matter of time before such a case occupies our most eminent judicial minds.
Several other aspects of vicarious liability have, however, already come before the
HCA in this century. Apart from Hollis v Vabu Pty Ltd,123 where the plaintiff was
knocked down by a courier on a bicycle on the footpath and the court, by majority,
held the courier company vicariously liable, all the plaintiffs who have sought to rely
on vicarious liability in these cases have failed. In Scott v Davis124 the owner of an
aeroplane was held, by a majority, not liable for the pilot’s negligence in crashing the
plane while giving the owner’s nephew a joy-ride at the owner’s request.125 In
117
ACC Injury Statistics 2006 (First Edition), Section 13.1, Sensitive Claims
<http://www.acc.co.nz/about-acc/acc-injury-statistics-2006/SS_WIM2_063154> (accessed 17
November 2007).
118
Eg, Lister v Hesley Hall Ltd [2002] 1 AC 215 (HL).
119
(2003) 212 CLR 511.
120
As to the uncertainty thus created, see S v Attorney-General [2003] 3 NZLR 450 (CA) at [63]; S
White and G Orr, “Precarious Liability: The High Court in Lepore, Samin and Rich on School
Responsibility for Assaults by Teachers” (2003) 11 TLJ 101; J Wangmann, “Liability for
Institutional Child Sexual Assault: Where Does Lepore Leave Australia?” (2004) 28 MULR 169.
121
Eg, Whitehouse Properties t/as Beach Road Hotel v McInerney [2005] NSWCA 436 (13 December
2005, unreported, BC200510724); Drinkwater v Howarth [2006] NSWCA 222 (3 August 2006,
unreported, BC200606119); Ryan v Ann St Holdings Pty Ltd [2006] QCA 217 (16 June 2006,
unreported, BC200604344); Sandstone Dmc Pty Ltd v Trajkovski [2006] NSWCA 205 (27 July
2006, unreported, BC200605689); Zorom Enterprises Pty Ltd v Zabow [2007] NSWCA 106 (4 May
2007, unreported, BC200703271); Sprod v Public Relations Oriented Security Pty Ltd [2007]
NSWCA 319 (9 November 2007, unreported).
122
See Riley v Francis [1999] NSWCA 52 (11 March 1999, unreported, BC9900825), SLR [2000] 7
Leg Rep SL 3 (17 March 2000); Starks v RSM Security Pty Ltd (2004) Aust Torts Reports 81-763
(NSW CA), SLR [2005] HCATrans 421 (17 June 2005).
123
(2001) 207 CLR 21.
124
(2000) 204 CLR 333.
125
See also Frost v Warner (2002) 209 CLR 509 (boating accident).
Sweeney v Boylan Nominees Pty Ltd,126 by majority, the court refused to extend the
notion of non-delegable duties so as to make the defendant, who supplied and was
under a duty to maintain a refrigerator in a shop, liable for the negligence of an
independent contractor who serviced the refrigerator in such a way as to cause the
door to fall on a customer. In Leichhardt Municipal Council v Montgomery,127 the
court refused to follow a line of English cases which had held that a road authority
was liable for the negligence of independent contractors who repaired the road.
In none of these cases, if they had occurred in New Zealand, would the plaintiffs
have needed, or been able, to explore the intricacies of the law of vicarious liability.
They were all injured in what were clearly “accidents”; they would have been covered
under IPRCA; they would have received their entitlements swiftly; and they would
have been precluded from launching common law actions.
Problem areas
The Woodhouse report recognised that “[n]o system of compensation or damages is
able to avoid all the ‘hard’ cases. In defining the area of protection the aim should be
clarity and certainty and the avoidance of future dispute or disappointment”.128
However, it recommended “the exclusion of incapacities arising from sickness or
disease”,129 other than those resulting from industrial diseases sustained by
workers.130 The report made the “further recommendation … that a small group of
medical and legal experts be appointed to study the question” of drawing the “line
between injury by accident and sickness or disease”.131 The subsequent failure to
extend the scheme to all incapacities resulting from sickness or disease, means that
the line remains obscure and common law actions may be available in areas that have
presented difficulty for the Australian courts. Some of these will now be indicated.
Mental injury
The IPRCA excludes mental injury not consequent on physical injury, except for
mental injury consequent on the mostly sexual offences listed in Schedule 3: s 21. An
amendment currently proposed by the Injury Prevention, Rehabilitation, and
Compensation Amendment Bill (No 2) 2007 (NZ) cl 6, inserting a new s 21B, will
extend cover to certain work-related mental injuries. Queenstown Lakes District
Council v Palmer132 opened the way for secondary victims of accidents who suffered
only mental injury to sue at common law. Fairly restrictive limits on recovery in such
circumstances were laid down in Van Soest v Residual Health Management Unit,133
126
(2006) 226 CLR 161; noted by N Foster, “Vicarious Liability for Independent Contractors
Revisited: Sweeney v Boylan Nominees Pty Ltd” (2006) 14 TLJ 219.
127
(2007) 233 ALR 200; noted by A Corkhill, “Vicarious Liability in Sheep's Clothing? NonDelegable Duties of Care in Leichhardt Municipal Council v Montgomery” (2007) 15 TLJ 111.
128
Above n 1, para 289(b).
129
Ibid, para 289(a).
130
Ibid, para 290(c).
131
Ibid, para 289(g).
132
[1999] 1 NZLR 549 (CA).
133
[2001] 1 NZLR 179 (CA); noted by A Barker, “Lights in the Fog: Secondary Victims and the
Recovery for Mental Injury in New Zealand” (2002) 10 TLJ 1. Cf H Teff, “Mental Suffering
Revisited in New Zealand” (2001) 9 Tort L Rev 109.
but Thomas J’s dissent gave an indication of how those limits might be swept aside.
This is what happened in the HCA in Tame v New South Wales,134 where although the
plaintiff failed on the facts, the plaintiffs in the companion case of Annetts v
Australian Stations Pty Ltd were successful. Once again the multiple judgments in
these two cases led to some uncertainty, including a misinterpretation by the
committee at the time reviewing the law of negligence for the Commonwealth and
state governments, which claimed that the case established “that a duty of care to
avoid mental harm will be owed to the plaintiff only if it was foreseeable that a person
of ‘normal fortitude’ might suffer mental harm in the circumstances of the case if care
was not taken”.135 That this is not necessarily so became clear from the subsequent
restatement of the new law by the members of the court in Gifford v Strang Patrick
Stevedoring Pty Ltd.136 Australian legislatures have regarded the removal by the HCA
of legal impediments, as opposed to merely factual ones, as undesirable and have
reintroduced restrictions to varying degrees.137
The HCA has itself shown its conservative side in relation to mental injury
resulting from work stress in two cases, Koehler v Cerebos (Australia) Ltd138 and, by
a majority of four to three, in New South Wales v Fahy.139 Since s 29(5)(a) of IPRCA
excludes cover for workplace personal injury related to non-physical stress, a situation
which would not be changed by the new provisions relating to mental injury in the
current Bill, New Zealand workers may want to try to see whether they can do better
than the unsuccessful plaintiffs in the two HCA cases.140 Work stress claims were not
stopped altogether in Australia by the first of those decisions.141
In one other case of alleged psychiatric injury after exposure to asbestos in the
workplace the plaintiff was successful in the HCA, in the sense that he won, by a
majority of three to two, a new trial on all issues after defeat at first instance: CSR Ltd
v Della Maddalena.142 This case again illustrates the vagaries of litigation, dependent
134
(2002) 211 CLR 317; noted by J Dietrich, “Nervous Shock: Tame v New South Wales and Annetts v
Australian Stations Pty Ltd” (2003) 11 TLJ 11.
135
Commonwealth of Australia, Reform of Liability Insurance Law in Australia, Commonwealth
Treasury, Canberra, 2004, para 9.13.
136
(2003) 214 CLR 269. The facts of this case, in which the claimants were members of the family of a
worker killed in horrific circumstances at work, would permit a claim in New Zealand too, even
after IPRCA is amended by the inclusion of the new s 21B, since the family member would not be
covered under s 28 and would have received the information from secondary sources.
137
See D Butler, “Gifford v Strang and the New Landscape for Recovery for Psychiatric Injury in
Australia” (2004) 12 TLJ 108.
138
(2005) 222 CLR 44; noted by P Handford, “Work Stress: Retreat or Revolution?” (2005) 13 Tort L
Rev 159.
139
(2007) 236 ALR 406; noted by N Foster, “Psychiatric workplace injury and breach of duty: New
South Wales v Fahy” (2007) 15 TLJ 227.
140
Such a claim succeeded in Attorney-General v Gilbert [2002] 2 NZLR 342 (CA) on the basis of
breach of an implied term of the employment contract, which incorporated occupational health and
safety legislation.
141
See State of New South Wales v Mannall [2005] NSWCA 367 (28 October 2005, unreported,
BC200509270); New South Wales v Burton (2006) Aust Torts Reports 81-826 (NSW CA); cf
Hegarty v Queensland Ambulance Service [2007] QCA 366 (26 October 2007, unreported,
BC200709094).
142
(2006) 224 ALR 1.
on the individual judges who happen to be sitting, and the long drawn out nature of
proceedings before any final resolution may be achieved.
Medical treatment
In 1963 Woodhouse J, as he then was, in Smith v Auckland Hospital Board143 upheld
a defendant’s motion objecting to the jury’s decision that a doctor had been negligent
in failing to answer a patient’s question as to the risk of a procedure that the patient
was to undergo. His decision was reversed by the Court of Appeal.144 Nearly 30 years
later, in Rogers v Whitaker145 the HCA, without reference to this case, held that the
single comprehensive duty of care of a medical practitioner in relation to examination,
diagnosis and treatment includes an obligation to advise the patient of material risks.
Failure to warn became a common allegation in numerous medical negligence
cases.146
In Smith v Auckland Hospital Woodhouse J had relied on Bolam v Friern Hospital
Management Committee,147 which held that a doctor could not be negligent in
following the practice of a responsible body of opinion within the profession. Rogers
v Whitaker rejected this view with regard to the giving of advice. Later, in Naxakis v
Western General Hospital,148 the HCA similarly rejected the Bolam rule in relation to
diagnosis and treatment. Afterwards, in Rosenberg v Percival149 Gleeson CJ explained
that in Rogers v Whitaker —
the relevance of professional practice and opinion was not denied; what was denied was its
conclusiveness. In many cases, professional practice and opinion will be the primary, and in some
cases it may be the only, basis upon which a court may reasonably act.150
The court in Rosenberg held that on the facts the WA Full Court should not have set
aside the trial judge’s decision that the plaintiff would have gone ahead with the
procedure even if warned of the risk which had not been disclosed.
Despite this reassuring turn, the medical profession became alarmed at the
litigation to which it was exposed and lobbied for changes.151 The lobbying bore some
fruit, with (differing) legislation in the various jurisdictions making several changes,
such as restoring the Bolam rule in a modified form, providing (probably
unnecessary) protection for Good Samaritans who go to the assistance of injured
people and introducing caps and thresholds on the recovery of damages.152 More
significantly, perhaps, in response to a crisis that beset the largest medical protection
143
[1964] NZLR 241.
144
Smith v Auckland Hospital Board [1965] NZLR 191 (CA).
145
(1992) 175 CLR 479.
146
See T Addison, “Negligent Failure to Inform: Developments in the Law since Rogers v Whitaker”
(2003) 11 TLJ 165.
147
[1957] 2 All ER 118.
148
(1999) 197 CLR 269.
149
(2001) 205 CLR 434.
150
Ibid, at [6].
151
See M Parker, “Reforming the Law of Medical Negligence: Solutions in Search of a Problem”
(2003) 11 TLJ 136.
152
See L Skene and H Luntz, “Effects of Tort Law Reform on Medical Liability” (2005) 79 ALJ 345;
H Luntz, “Damages in Medical Litigation in New South Wales” (2005) 12 JLM 280.
society in Australia owing to its failure to put aside sufficient reserves, the
Commonwealth government introduced a series of ill-thought out measures to
subsidise the medical indemnity insurance tort system.153 The tort reforms may have
stemmed the increase in claims, but did not stop it entirely. The Australian
Competition and Consumer Commission reported:
The ultimate number of claims increased by 91 per cent between 1997-98 and 2000-01 (from 1415
to 2707). The ultimate number of claims remained relatively constant over the next four years with
2487 claims in 2005-06.154
According to Insurance Statistics Australia Ltd, over the period from 1995/96 to
2005/06, using a rolling three-year average, claims against specialists practising
plastic and cosmetic surgery, increased from 238 per 1000 practitioners to 335 (or
41%), while those against non-procedural general practitioners increased from 27 per
1000 to 37 (or 52%). For all the groups combined, the increase was from 45 per 1000
to 51 (or 13%).155
Probably owing to the paucity of such actions at the time of the Woodhouse
report,156 medical liability litigation was not singled out for attention in the report or
the initial legislation.157 It is pleasing to this observer that the subsequent introduction
of a fault element in the coverage by the ACC of “medical misadventure” has now
been eliminated with the recent amendment of IPRCA so as to cover “treatment
injury”.158 However, since “‘Treatment injury’ does not include … (a) personal injury
that is wholly or substantially caused by a person’s underlying health condition”,159
there is still a need to distinguish between accident and sickness. The recent case of
Accident Compensation Corporation v Ambros,160 which arose under the former
legislation, will not necessarily be easier to decide under the new. Furthermore, while
“treatment” does include “(e) obtaining, or failing to obtain, a person’s consent to
undergo treatment, including any information provided to the person … to enable the
person to make an informed decision on whether to accept treatment”,161 what if a
medical practitioner does not inform the patient of the fact that a painful form of
treatment might not alleviate the underlying condition, the patient would not have
153
See F Tito Wheatland, “Medical Indemnity Reform in Australia: ‘First Do No Harm’” (2005) 33
Journal of Law, Medicine & Ethics 429.
154
Medical Indemnity Insurance: Fourth Monitoring Report, ACCC, 2007,
<http://www.accc.gov.au/content/index.phtml/itemId/784517> (accessed 13 April 2007) at p 28.
155
Medical Indemnity Report, 2007, <http://www.miiaa.com.au/media/files/514.pdf> (accessed 26
September 2007), Table 1.
156
P Butler, “A Brief Introduction to Medical Misadventure” (2004) 35 VUWLR 811at 815 n 25, states
that there were only seven reported decisions between 1881 and 1972.
157
In fact, the report suggested that “some categories of therapeutic misadventure or late complications
of therapeutic procedures”, which were included among the external causes of injury in the relevant
categories of the International Classification of Diseases, should “perhaps” be excluded: above n 1,
para 289(c).
158
Sections 31 and 32. The history and interpretation are discussed by J Manning, “Treatment Injury
and Medical Misadventure” (Chap 24) in P D G Skegg et al (eds), Medical Law in New Zealand,
Thomson Brookers, Wellington [N.Z.], 2006. See also K Oliphant, “Beyond Misadventure:
Compensation for Medical Injuries in New Zealand” (2007) 15 Med L Rev 357.
159
IPRCA s 32(2).
160
[2007] NZCA 304 (20 July 2007, unreported).
161
IPRCA s 33(1).
undergone the treatment if he or she had been aware of this risk, and the underlying
condition is not in fact improved? According to the Act, “[t]he fact that the treatment
did not achieve a desired result does not, of itself, constitute ‘treatment injury’”.162
May the patient then sue the doctor for negligence if a reasonable practitioner would
have warned that there was a risk of not alleviating the underlying condition? Or if the
medical practitioner does not inform the patient of “a necessary part, or ordinary
consequence, of the treatment, taking into account all the circumstances of the
treatment”, which is excluded from the definition of “treatment injury” by s 32(1)(c)
and such “ordinary consequence” does occur? May the patient then sue at common
law when a reasonable practitioner would have warned of this consequence?
Assume that a medical practitioner fails to inform a patient undergoing a
sterilisation procedure that the procedure does not always achieve the desired result
and a child is then born. Will New Zealand courts be faced with the issues that came
before the HCA in cases that aroused an enormous amount of public controversy?163
In Cattanach v Melchior164 the HCA held, by a majority of four to three in judgments
that extended to 414 paragraphs covering over 140 pages in the Commonwealth Law
Reports, that the damages recoverable by the parents in such circumstances include
the costs of raising the child, even if born healthy, and that there is to be no set off of
benefits derived from the birth. Three states have passed legislation intended to
reverse this decision,165 but the other states and territories have chosen not to act. In
the companion cases of Harriton v Stephens166 and Waller v James; Waller v
Hoolahan,167 the HCA, with a lone dissenter, held that handicapped children either
born or conceived, naturally or by IVF, as a result of negligent medical advice or
diagnosis, could not themselves recover damages resulting from their birth. Such
congenitally injured children would have been compensated under the broader
Woodhouse proposals in Australia,168 where it was provided that a physical or mental
defect, including a disease, occurring or existing at or shortly after birth was to be
treated as a personal injury. Since there is no similar provision in IPRCA, such a child
would not have cover and could therefore sue, leading to the need for a court to
consider whether the view of the majority or the dissent in the Australian cases is to
be preferred.169
162
IPRCA s 32(3).
163
The issues are discussed by S Todd, “Wrongful Conception, Wrongful Birth and Wrongful Life”
(2005) 27 Syd L Rev 525.
164
(2003) 215 CLR 1.
165
Civil Liability Act 2002 (NSW) s 71; Civil Liability Act 2003 (Qld) s 49A; Civil Liability Act 1936
(SA) s 67.
166
(2006) 226 CLR 52.
167
(2006) 226 CLR 136.
168
Above n 13.
169
For a full discussion, contrary to the view of Stephen Todd, above n 163, and favouring the dissent
of Kirby J, see M Fordham, “A Life Less Ordinary: The Rejection of Actions for Wrongful Life”
(2007) 15 TLJ 123.
Products causing diseases to persons other than in the workplace
In Graham Barclay Oysters Pty Ltd v Ryan170 a class action was brought on behalf of
consumers who contracted hepatitis A from contaminated oysters grown in a lake in
New South Wales, one of whom had died. The defendants were the growers and
suppliers of the oysters, the local council in whose area the lake was, and the state of
New South Wales. The trial judge held all three sets of defendants liable in
negligence. He also held the growers liable under certain provisions of the Trade
Practices Act 1974 (Cth). On appeal to the full Federal Court, the council was
exonerated from liability, but differing majorities upheld the other decisions. On
further appeal to the HCA, the action against all three defendants in negligence failed,
unanimously in respect of the council and the state, who were held not to owe a duty
of care, and by four to three against the suppliers, who were held not to have breached
their duty of care. The liability under the TPA was not in issue in the HCA, though
there are some dicta suggesting that that should have failed too. Since an accident is
defined in IPRCA s 25(1)(ba) as not including “the ingestion of a virus, bacterium, or
protozoan, unless that ingestion is the result of the criminal act of a person other than
the injured person”, the consumers of similarly contaminated oysters in New Zealand
would not have cover and be able to sue. In such circumstances, the issues of duty of
care and breach would need to be rehashed.
New Zealand has already had an unhappy experience with litigation against
tobacco manufacturers in Pou v British American Tobacco (New Zealand) Ltd.171
Class actions in Australia have failed to reach trial, the HCA having refused special
leave to appeal against the repeated striking out of the plaintiffs’ pleadings.172 One
sole jury verdict in favour of a smoker after the defendants’ defence had been struck
out because of the defendants’ destruction of documents did not survive an appeal or
obtain special leave for a further appeal to the HCA.173 It may be expected that more
attempts will be made to sue tobacco companies. The “tort law reform” legislation in
most jurisdictions exempts from its restrictive provisions claims “where the injury or
death concerned resulted from smoking or other use of tobacco products”.174
Finally, one may point to the long, complex and mostly unsuccessful actions by
people who have been exposed to asbestos outside the workplace. Very recently,
several judgments at first instance in favour of home handymen who developed
mesothelioma many years later were set aside on appeal to the intermediate appellate
courts and the HCA refused leave to appeal.175
170
(2002) 211 CLR 540.
171
[2006] 1 NZLR 661 (CA) (interlocutory proceedings); Lang J, 3 May 2006, unreported
<http://www.justice.govt.nz/judgments/CIV2002404001729PouvBritishAmericanTobacco.pdf>
(trial).
172
Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487 (Fed Ct of A, FC), SLR [2000] 12 Leg
Rep SL 4 (21 June 2000).
173
British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524 (CA), SLR [2003]
HCATrans 384 (3 October 2003).
174
Eg, Civil Liability Act 2002 (NSW) s 3B(1)(c).
175
Seltsam Pty Ltd v McNeill [2006] NSWCA 158 (26 June 2006, unreported, BC200604772), SLR
[2006] HCATrans 474 (1 September 2006); Amaca Pty Ltd (Formerly James Hardie and Co Pty
Ltd) v Moss [2007] WASCA 162 (2 August 2007, unreported, BC200706108); Amaca Pty Ltd
(Formerly James Hardie and Co Pty Ltd) v Hannell [2007] WASCA 158 (2 August 2007,
Conclusion
The personal injury negligence cases in Australia that have reached the HCA in this
century and are discussed in this paper amply demonstrate that litigation is a lottery;
that many injured people who embark on that litigation (let alone the multitudes who
never obtain a chance to pursue claims) fail to achieve compensation; and that the
road to determining who “wins” and who loses is long, arduous, slow and expensive.
This paper has not dwelt on other flaws of the tort system, such as its adverse effects
on rehabilitation, its failure to deter negligence or to promote safety and its inability to
compensate long-term loss properly through an award of damages in a lump sum. All
these matters were identified 40 years ago by the Woodhouse Royal Commission,
which wisely recommended the abolition of the common law action for negligence
causing personal injury. When its recommendations for replacement of the common
law with an accident compensation scheme were implemented by means of a “social
contract”,176 New Zealand achieved the means of providing, as part of community
responsibility, a speedy, effective and comparatively cheap remedy for all who were
injured by accident. However, the boundary between injury by accident and sickness
is sometimes blurred and the failure to extend the scheme to incapacity caused by
illness threatens to provoke litigation with all its faults, thus putting at risk the
benefits which the existing scheme provides.
unreported, BC200706106), SLR Moss and Hannell v Amaca Pty Ltd (formerly James Hardie &
Co Pty Ltd) [2007] HCATrans 626 (24 October 2007).
176
IPRCA s 3.