CLA: causation – not liable for plaintiff’s intervening act

Gratrax Pty Ltd v TD & C Pty Ltd [2013] QDC 63

 

JUDGE: McGill SC DCJ
ORDER: Judgment that the Defendant pay the Plaintiff $12,901 including $4,154 by way of interest.
CATCHWORDS: CONTRACT – breach – damages – causation – whether damages increased by unexpected voluntary inappropriate action of plaintiffNEGLIGENCE – causation – novus actus interveniens – test of – limited damages awardedNEGLIGENCE – professional negligence – engineer – preparation of construction drawings for road – incorrect pavement materials specified – breach

 

Third Issue: Causation

 

The damages claimed by the plaintiff were those set out in Exhibit 1: the pavement costs thrown away, being the cost of trimming and compaction of the subgrade, a final trim to the road pavements, the cost of purchasing the sub-base class 3 material and half the cost of purchasing the class 2 material used as the road base, on the basis that some of that could have been re-used, and a figure for the increase in costs which had occurred over a period of 18 months. As well, the plaintiff claimed for the cost of standing down its plant for two weeks, the cost to remove the existing material and to re-trim and re-compact the sub-base, and an amount for additional survey costs and wasted engineering fees.

 

[37] The first issue is to what extent these amounts were caused by the defendant‘s negligence at all, leaving aside the question of whether there was a break in the chain of causation because of the conduct of the plaintiff. The first thing that occurs to me is that I cannot see any logical justification in allowing both the cost of the original trimming and compacting the subgrade and the cost of re-trimming and compacting the subgrade after the material which ought not to have been placed there was removed. The class 3 material which was placed as sub-base was unsuitable and had to be removed, and the class 2 material which was placed as road base was in the way and also had to be removed. It is understandable that after that had occurred some re-trimming and re-compacting of the subgrade would be necessary, but I do not see why the plaintiff should recover both the trimming and compaction of the subgrade prior to the laying of the incorrect material and re- trimming and re-compaction of the subgrade after the incorrect material had been removed. Presumably if the correct material had been laid the subgrade would have still needed one lot of trimming and compaction. Accordingly in my opinion item 1(a) is not recoverable.26

 

[38] The next matter is the allowance for the increase in costs over a period of 18 months. It is understandable that there would be some delay in the construction schedule and that might well have produced some increase in the cost of laying the pavement, but I can see no reason why the defendant is responsible for that increase in costs. No explanation was given to justify the delay other than the fact that there was some few days occupied in negotiating with the Council about the pavement design, and thereafter there was some disruption caused by heavy rain. There was no evidence to suggest that either of those things produced a delay of anything like the order of 18 months. Not only was there no evidence led to connect the delay in completing the road, whether for 18 months or any other period, with the negligence of the defendant, the further delay after the problems caused by wet weather was entirely unexplained by the evidence. There is therefore no evidentiary basis for the claim in paragraph 1(d). In relation to the other items, although the justification for them was not always entirely obvious, there was no particular contention about them, and indeed the defendant‘s expert essentially accepted the plaintiff‘s calculations in relation to quantum. That does not, I think, compel me to include items 1(a) and (d), which struck me as clearly unjustified, but otherwise subject to the issues of causation I am prepared to accept that the plaintiff‘s damages have been proved at $91,668.40.

 

[39] It is clear enough that the ―but for‖ test of causation can be satisfied here:  but for the incorrect specification of class 2 and class 3 material on the drawing, the plaintiff would not have laid class 2 and class 3 material, and would therefore not have thrown away the cost of doing so. It is recognised that one example of an exception to the ―but for‖ test of causation is a situation where the deliberate act of the plaintiff or another does something which makes the consequences of the wrongful act more serious than they otherwise would have been: March v E & MH Stramare Pty Ltd (1991) 171 CLR 506.

 

[40]  The effect of intervening negligence was considered, though not in depth, in Caltex Oil (Australia) Pty Ltd v The Dredge “Willemstad” (1976) 136 CLR 529. In that case an undersea pipeline was damaged by a dredge which had strayed out of the designated area for dredging. One issue was whether a company whose employee had incorrectly marked a navigation chart which was being used at the relevant time by those in charge of the dredge to assist them in avoiding the pipeline was a cause of the damage to the pipeline, in circumstances where there was also negligence on the part of the officers navigating the dredge.

 

[41]        Gibbs J said at p 543:

―It is true that those in charge of the dredge should have observed the error on the track plotter chart. They might also have checked their position by conventional means. But the fact that they were negligent  does  not  in  the  circumstances  mean  that  the  chain  of

 

 

26             This item was not supported by the analysis in Exhibit 29, nor was item 1(d). causation between the negligence of Decca and the damage was broken. It is unnecessary to discuss the principles governing questions of causation. Here the negligence of the officers of the dredge was not independent of the negligence of Decca. They continued to rely on Decca’s chart, but failed to check its correctness or to notice its inaccuracies. The negligence of the navigators of the dredge, and of Decca, were concurrent causes leading to a common result. The effect of the errors on the chart persisted  until  the damage occurred. The negligence of Decca was a cause of that damage.‖

 

[42]        Stephen J at p 583 said to similar effect:

―The position is not, in truth, one of a break in the casual sequence of events but rather of two different acts of negligence, each of which played its part in causing the damage sued for. Decca’s negligence was not disarmed of its harmful potentiality, and superseded, by the other negligent conduct; on the contrary it remained fully operative, although had conventional navigation been properly adhered to this might well have resulted in the damage being wholly averted. In these circumstances there was, in my view, no novus actus interveniens and Decca remains liable for what was a consequence of its negligence.‖

 

[43] Mason J agreed with Stephen J (p 593) and Jacobs J also agreed with Stephen J on this point: p 605. Murphy J agreed with Stephen J that Decca was negligent, but does not appear to have addressed the issue of causation. It follows that, if there is a difference on this point between Gibbs J and Stephen J, it is the latter who gave the authoritative statement of the majority.

 

[44] The issue was considered again by the High Court in Medlin v SGIC (1995) 182 CLR 1. The plaintiff was injured as a result of which he was suffering from chronic pain which was generally at a low level, though in some circumstances it could become quite severe. The alleged intervening event was his decision to retire early from an academic position. He was not under any pressure from his employer to leave, but on the analysis adopted by the majority of the High Court the injury was a contributing cause to the reasoning which had been found to motivate his decision to retire early. The pain produced fatigue and loss of intellectual energy, and meant that his teaching duties occupied so much time that he had little time for research and creative work which he wanted to devote himself to, with the result that he was not performing at the level he thought was desirable. Significantly the trial Judge did not consider the question of whether, had the plaintiff not been injured, his premature retirement would nevertheless have occurred. Their Honours at p 9 said:

―If … that subsidiary ‗but for‘ question were answered in the negative, that negative answer would be a factor supporting, but not compelling, the conclusion that the premature termination of the plaintiff’s appointment had been caused by the accident.‖

 

[45]        Four of the five Judges constituting the court said at p 6:

―For the purposes of the law of negligence, the question whether the requisite causal connection exists between a particular breach of duty and particular loss or damage is essentially one of fact to be resolved, on the probabilities, as a matter of common sense and experience. And that remains so in a case such as the present where the question of the existence of the requisite causal connection is complicated by the intervention of some act or decision of the plaintiff or a third party which constitutes a more immediate cause of the loss or damage. In such a case, the ‗but for‘ test, while retaining an important role as a negative criterion which will commonly (but not always) exclude causation if not satisfied, is inadequate as a comprehensive positive test. If, in such a case, it can be seen that the necessary causal connection would exist if the intervening act or decision be disregarded, the question of causation may often be conveniently expressed in terms of whether the intrusion of that act or decision has had the effect of breaking the chain of causation which would otherwise have existed between the breach of duty and the particular loss or damage. The ultimate question must, however, always be whether, notwithstanding the intervention of the subsequent decision, the defendant’s wrongful act or omission is, as between the plaintiff and the defendant and as a matter of common sense and experience, properly to be seen as having caused the relevant loss or damage. Indeed, in some cases, it may be potentially misleading to pose the question of causation in terms of whether an intervening act or decision has interrupted or broken a chain of causation which would otherwise have existed. An example of such a case is where the negligent act or omission was itself a direct or indirect contributing cause of the intervening act or decision. It will be seen that, on the plaintiff’s evidence, the present was such a case.

 

Nor can the question of causation of damage in a negligence action be automatically answered by classification of operative causes as

‗pre-eminent‘ or ‗subsidiary‘. Regardless of such classification, two or more distinct causes, without any one of which the particular damage would not have been sustained, can each satisfy the law of negligence’s common sense test of causation. This can be most obviously so in a case where a ‗subsidiary‘ cause operates both directly as a cause of the particular damage and indirectly as a contributing component of a ‗pre-eminent‘ cause. As will also be seen, the findings of the learned trial judge left open the likelihood that the present was such a case.‖

 

[46]  One of the issues raised as relevant in that passage is whether the original negligent act or omission was a direct or indirect contributing cause of the intervening act or decision. In the present case, that was not so. The original negligent act was the specification of the wrong grade of material for the base and sub-base. The intervening act or decision was the plaintiff‘s decision to begin laying the pavement without first doing soaked CRR testing, arranging for the Council inspection and obtaining the final pavement design approval from the Council. On the hypothesis that the plaintiff would in any case have done the work itself, that decision was not in any way caused directly or indirectly by the error of the defendant.

 

[47] Mr Haggar said that he had previously had difficulty laying class 1 material, and that he would not have sought himself to lay class 1 material, but would have secured the services of a specialist contractor: pp 38 and 39. The effect of that evidence was that, if class 1A material had been correctly specified, the plaintiff would not have done the work itself, but it is not clear whether this applies to the whole pavement construction or just to the laying of the class 1 road base. That was an issue not explored in the evidence. Presumably if the plaintiff had secured a specialist paving contractor to lay the class 1 material, or the whole of the pavement, that contractor would have been aware of the usual procedure and would not have commenced to do whatever work it was to do before the final pavement design approval was obtained. In that sense it could be said that the defendant‘s negligent act was indirectly a cause of the plaintiff‘s act or decision. That strikes me as a very indirect causal connection, arising only because of an idiosyncratic attitude of the plaintiff not communicated to the defendant. But in any case, for reasons given earlier, I am not prepared to accept this evidence of Mr Haggar.

 

[48] Another significant feature of that passage is that it does not distinguish between the position where the intervening act or decision was that of the plaintiff and the position where it was that of some third party.

 

[49] Another point considered in Medlin was whether the question turned on whether it was unreasonable for the plaintiff to have retired early in the circumstances in which he found himself. The court at p 11 said that the question was not whether his decision to retired was not reasonable but whether, in the context of what was reasonable between the plaintiff and the defendant in determining the defendant‘s liability for damages, the premature termination of the plaintiff‘s employment was the product of the loss of the plaintiff‘s earning capacity notwithstanding that it was brought about by his own decision to accept a voluntary retirement. This point was reiterated at p 13. In the present case it was submitted for the plaintiff that the question was whether the plaintiff‘s conduct had been unreasonable, but it seems to me that the effect of this decision is that the question is rather whether it is reasonable to treat the plaintiff‘s own decision to commence laying the pavement when he did as reasonable as between the plaintiff and defendant in the context of determining the defendant‘s liability for damages for its negligence.

 

[50] The plaintiff‘s argument that the question was one of reasonableness of  the plaintiff‘s conduct was based on the analysis undertaken in Sherson & Associates Pty Ltd v Bailey [2000] NSWCA 275, in particular by Heydon JA from [77]. In that paragraph his Honour referred to a number of authorities on the point, not including Medlin, but including TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 at 162 where Priestly JA said in effect that a plaintiff cannot recover damages for losses which he would not have incurred had he acted reasonably in the ordinary course of his business.

 

[51]      The decision in TCN Channel 9, and in particular the comment of Priestley JA at p 162, were specifically in the context of mitigation of damages, and referable to the decision of Irvine CJ in Driver v War Service Homes Commissioner (1923) 44 ALT 130, which was also directed to the question of mitigation of loss in the context of a claim for damages for breach of contract.   In the present case no argument was advanced before me that the plaintiff had been guilty of failure to mitigate its loss, and there was no plea of failure to mitigate in the defence.

 

[52]     A complicating feature of Sherson is the fact that the alleged failure of the plaintiff to behave reasonably was said to be relevant to the extent of the liability of the defendants on the basis of one or more of the issues of aggravation of damage, failure to mitigate damage, breaking the chain of causation, and contributory negligence: [56]. It appears to have been assumed that the issue of whether the defendants had proved unreasonableness on the part of the plaintiff was relevant to all of these issues, and that the first question was whether the appellant defendants could upset the finding of the trial Judge that the plaintiffs had not behaved unreasonably. What was actually decided was that, given that the trial Judge‘s decision as to reasonableness was one turning on matters of judgment and degree and on the evaluation of competing considerations, the defendant appellants had failed to show that it was appropriate for an appellate court to overturn it: [80].

 

[53] The House of Lords considered the question of causation in South Australian Asset Management Corporation v York Montague Ltd [1997] AC 191. That was a case where valuers were negligent in valuing property, and lenders entered into transactions in reliance on the negligent valuation, in circumstances where, had they been aware of the correct value of the property in question, the transactions would not have been entered into at all. The Court of Appeal held that as a result the valuers were liable for the full loss suffered, in circumstances where the market had fallen substantially after the transactions were entered into.27    On appeal that was varied to limit the liability of the valuers to the difference between the valuations they gave and the correct value of the property.   Lord Hoffmann, with whom the other members of the House agreed, said at 213:

―Rules which make the wrongdoer liable for all the consequences of his wrongful conduct are exceptional and need to be justified by some special policy. Normally the law limits liability to those consequences which are attributable to that which made the act wrongful. In the case of liability in negligence for providing inaccurate information, this would mean liability for the consequences of the information being inaccurate.

 

I can illustrate the difference between the ordinary principle and that adopted by the Court of Appeal by an example. A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee. He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee.

 

On the Court of Appeal‘s principle, the doctor is responsible for the injury suffered by the mountaineer because it is damage which would not have occurred if he had been given correct information about his

 

27              Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1995] QB 375.

 

knee. He would not have gone on the expedition and would have suffered no injury. On what I have suggested is the more usual principle, the doctor is not liable. The injury has not been caused by the doctor‘s bad advice because it would have occurred even if the advice had been correct.‖

 

[54] That approach seems to me to favour the plaintiff. If the defendant‘s advice had been correct, that is to say if class 2 and class 3 material had been appropriate or acceptable for the base and sub-base, the plaintiff would not have suffered the loss. That however is a limitation on the general concept of causation, rather than the application of a test for determining whether some intervening event has broken the chain of causation. What if, in that example, the mountaineer choose to undertake without a safety rope a climb which would usually be made, and ought to have been made, using one, the knee gave way during the climb, and because of the absence of a safety rope, the climber suffers significant injury which would have been avoided had he been using the rope?

 

[55] The approach of the House of Lords was rejected in Australia, at all levels of the court process in Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413. All members of the High Court rejected the approach of the House of Lords. Gaudron J referred to the limitations of the ―but for‖ test at [19] and said at [21]:

―As the valuation was a decisive consideration in MGICA’s decision to insure the loan from Permanent Custodians to Beca, it is simply common sense to treat that transaction as resulting from the valuation. And subject to a qualification shortly to be mentioned, once that is accepted, it is also common sense to hold a valuer responsible for the loss arising out of that transaction, save to the extent that it is attributable to some other cause.‖

 

[56] Her Honour went on to note that, because the valuation was given in a context where the property was treated as security only to the extent of 65% of the valuation, if the lender had advanced more than 65% of the valuation that part of the loss might have been referable to the actions of the lender: [24]. That issue however did not arise on the facts of that case. Her Honour went on to note that the fall in the market price was not to be treated as a supervening cause, because a factor contributing to a foreseeable risk of injury is not to be treated as a supervening cause if the risk eventuates: [25]. This was subject to the following qualification at [26]:

―A person who negligently provides information or advice should not be held liable for loss that would have been suffered if the information or advice were correct. Thus, if some part of the loss suffered by Permanent Custodians would have been suffered even if the property were worth $5.5 million, the appellants cannot be held liable for it.‖

 

[57] Once that qualification was accepted, however, it was said to be contrary to commonsense to adopt the approach adopted by the House of Lords: [28]. McHugh J at [35] said that ―speaking generally, the valuer is liable only for such losses as a reasonable person would regard as flowing naturally from the negligent valuation or which are of a kind that should have been within the valuer’s contemplation.‖ That qualification seems to me to parallel the approach adopted by Lord Hoffmann in the passage quoted.

 

[58]    Gummow J identified the question in terms of who should bear the risk of a decline in the property market, bearing in mind that the cause of action and hence the quantum of damages crystallised at the point when the loss or damage became manifest. His Honour said at [92]:

―In this way, the temporal question is resolved in a fashion which imposes on the negligent party both the benefit and the burden of the contingency. Other possible contingencies which may affect the value of the property may not reasonably be foreseen by the negligent party, or may be too remote from or not caused by the act of negligence. Losses arising from such contingencies would not be recoverable. The party which is not at fault should not carry the burden of a contingency when that party has no control over it, in circumstances where the contingency is not remote and is reasonably foreseeable by the party at fault and where the legal wrong, in this case careless representations, induces the faultless party to expose itself to the contingency.‖

 

[59] Kirby and Callinan JJ, in a joint judgment, noted that this was not a case where the respondent sought to hold the appellant liable for consequences which would have arisen even if the advice had been correct, because on the facts if the advice had been correct the loss would not have been suffered. As well, if there had been no negligence, the transaction would not have proceeded at all, that is to say the plaintiff would not have provided the mortgage insurance at all. Their Honours said at [120]:

―To adopt this approach involves giving content to, or defining the duty of care by having regard to the kind of loss or damage in respect of which the tortfeasor must exercise reasonable care. The duty devolving on the appellant was a duty to exercise reasonable care inter alia to enable the respondent to decide whether to enter into an insurance transaction, which turned out to be imprudent, at all, if an accurate valuation suggested that it should not.‖

 

[60] Kenny & Good was concerned more with the limits of the test for causation, rather than the effect of a supervening event. Medlin was cited, but the approach adopted in that case was not discussed in any detail. Since the whole point of the valuation was to enable the insurers to decide whether to provide finance insurance, which depended on the strength of the security compared to the amount sought to be advanced, entering into the transaction which it would not have entered into had it had a valuation prepared with reasonable care and skill and therefore at a lower amount was really the very thing that the insurer sought to guard against by the valuation. What the financier and the insurer did in response to the valuation was exactly what one would expect them to have done in response to a valuation in those terms.

 

[61] The question of causation was considered by the Court of Appeal in Victoria in Mallesons Stephen Jaques v Trenorth Ltd [1999] 1 VR 727. The vendor of a commercial building subject to a lease engaged a solicitor to attend to the conveyancing in connection with which the solicitor negligently prepared answers to requisitions on title which failed to disclose a relevant agreement collateral to the lease. When these draft documents were provided to the vendor, it knew they were wrong but used them to make a fraudulent misrepresentation to the purchaser. The purchaser subsequently recovered damages for fraud against the vendor, who brought third party proceedings against the solicitors and at first instance recovered damages for negligence and breach of retainer.

 

[62] On appeal it was held that the vendor‘s act broke the chain of causation. Kenny JA with whom the other members of the court agreed said at pp 736-7:

―It is plain enough that the solicitor’s negligence was a necessary pre- condition (in the ‗but for‘ sense) for the fraud committed by Trenorth, but I do not think that it is to be accurately characterised as a ‗cause‘ of the fraud. This is a case in which the negligent act (by Samuel) ‗set the scene‘ for a deliberate wrongful act (by Trenorth). In effect, Trenorth took advantage of the opportunity created by Samuel’s negligence to transform the outcome of her conduct into a fraud. The true cause of Trenorth’s loss was its own deliberate and wrongful act, the solicitor’s negligence being but an antecedent (though necessary) pre-condition. Alternatively, if it was a link in a chain of causes, the chain was severed by Trenorth’s fraud.

 

The fact that there is a supervening deliberate wrongful act does not, in all cases, mean that the chain of causation between the negligent act and the loss is broken. It will not necessarily be broken if the negligent act was in breach of a duty of care not to expose the injured plaintiff to a risk of injury arising from deliberately wrongful conduct.‖

 

[63] Her Honour went on to give Curmi v McLennan [1994] 1 VR 513 as an example of such a case. After discussing the facts of that case, and referring to some other similar cases, her Honour continued:

―This is not such a case. I do not think it can be said, as a matter of commonsense and experience, that the perpetration of a fraud by Trenorth was something which ‗in the ordinary course of things‘ was likely to occur if Mallesons was negligent in advising its client on the sale of the Preston premises. The supervening act, namely the fraud, was so irregular as to break the chain of causation.‖

 

[64] Her Honour had previously cited Medlin (supra) at p 6 as well as March v Stramare. There was however no express reference to the formulation of the test in that case, and the test that was actually applied as formulated on p 737 is in somewhat different terms. That case has the unusual feature that the supervening act was a particularly serious one, fraud, and as Callaway JA pointed out in his concurring remarks at p 728, ―it will usually be found that fraud breaks a chain of causation the antecedent link in which is negligence or at all events is the sole cause of any increase in the loss.‖

 

[65]  In the present case it could be said that as a matter of commonsense and experience the plaintiff‘s proceeding to lay the pavement without obtaining the appropriate testing, inspection by the Council inspector and approval of the pavement design was not something which in the ordinary course of things was likely to occur if the defendant was negligent in the identification of the grades of material to be used to the base and sub-base. On the other hand, the supervening act was not as irregular as a fraudulent act, and hence inherently less likely to break a chain of causation.

 

[66] The test in Medlin (supra) to which  I have referred was  cited and applied by Keane JA, with whom the other members of the court agreed, in Hirst v Nominal Defendant [2005] 2 Qd R 133 at [27]. His Honour went on to say at [29]:

―The reasoning in Medlin confirms the propositions that voluntary or deliberate or unusual conduct on the part of a plaintiff does not necessarily sever the causal nexus so as to relieve a negligent defendant from liability for loss suffered by a plaintiff; and that it is necessary to have regard to the extent to which the plaintiff’s voluntary conduct has been constrained by the defendant’s misconduct, and then to ask whether as between plaintiff and defendant it was reasonable of the plaintiff to make the choice which was the immediate cause of the loss. … [These propositions] recognize that there may be a point at which it is possible to say that it is not reasonable as between the plaintiff and defendant that the defendant is responsible for the voluntary conduct of the plaintiff,

e.g.  because the choice made by the plaintiff may be so unexpected a response to the defendant’s conduct that the defendant should not bear any of the consequences of that decision, it cannot be said that this point was reached in this case.‖

 

[67] In that case the plaintiff was a police officer who was pursuing a speeding vehicle which had failed to stop when lights and siren were activated, and was then involved in the collision with another innocent vehicle on the road in circumstances where the Court of Appeal confirmed a finding of contributory negligence against the plaintiff, and the trial Judge‘s apportionment of liability. At [44] Keane JA summarised the circumstances under which the collision occurred and continued:

―In these circumstances, I consider that the learned primary judge was correct to conclude that this decision further to escalate the danger was unreasonable, and not merely an error of judgment.‖

 

[68] His Honour had previously characterised the question in relation to contributory negligence as whether the decision, taken in the particularly difficult circumstances that arose in that case where the police officer was confronted with the need to decide how to respond to the offender‘s high speed flight, should be characterised as an error of judgment or a failure to take reasonable care for his own safety: [36]. This analysis confirms that the test for a supervening event breaking the chain of causation is different from the test for contributory negligence, because the police officer‘s conduct was held to be contributory negligence, but not to break the chain of causation. It confirms my impression that the High Court in Medlin adopted a different test for whether conduct of the plaintiff broke the chain of causation from that contended for by counsel before me.

 

[69] That approach was also adopted by the Court of Appeal in New South Wales in Blaxter v Commonwealth of Australia [2008] NSWCA 87. In that case it was held that as a result of the defendant‘s negligence the plaintiff had suffered serious psychiatric injury, and that this had led to his drinking to excess, so that the plaintiff‘s voluntary choice to drink did not break the chain of causation. The same approach was adopted by the Court of Appeal in Western Australia in Burns v Pearce [2010] WASCA 214, a case involving two successive collisions by the defendant and the plaintiff with the same cow at night on a country road.

 

[70] More recently, Kiefel J, with whom Crennan J agreed, summarised the current Australian law in relation to causation in Tabet v Gett (2010) 240 CLR 537 at [111]- [112]. Her Honour noted that it was necessary to understand the purpose of making an inquiry about causation and that may require value judgments and policy choices. That reflects what was said in Travel Compensation Fund v Tambree (2005) 224 CLR 627 by Gummow and Hayne JJ at [46], where their Honours accepted that considerations of legal policy may enter into the selection of those causative factors which are determinative of liability, though this was not to adopt a quite different proposition that in any given case the ultimate issue was whether the defendant ought to be held liable to pay for the harm suffered. In the same case Callinan J at [81] said of the resolution of questions of causation:

―Value judgments may sometimes be inescapably involved, but that they may, does not justify the division of the question into a ‗but for‘ test and a further inquiry whether a defendant should in law be held responsible for a plaintiff’s damage.‖

 

[71] That however appears to have been precisely what was done by the legislature when enacting the Civil Liability Act 2003 s 11(1) which provides:

―(1) A decision that a breach of duty caused particular harm comprises the following elements—

(a)            the breach of duty was a necessary condition of the occurrence of the harm (factual causation);

(b)           it is appropriate for the scope of the liability of the person in breach to extend to the harm so caused (scope of liability).‖

 

[72] Subsection (2) deals with an exceptional case where subsection (1)(a) has not been satisfied, which does not arise here. Subsection (3) is concerned with an evidentiary issue which does not arise here.  Subsection (4) provides:

―For the purpose of deciding the scope of liability, the court is to consider (among other relevant things) whether or not and why responsibility for the harm should be imposed on the party who was in breach of the duty.‖

 

[73]    That suggests that the legislature requires an approach different from that adopted by the High Court in Tabet, at least to some extent. An example of the application of the statutory test is the decision in French v QBE Insurance (Australia) Ltd [2011] QSC 105. In that case a taxi driver who was conveying an inebriated passenger took the passenger to an incorrect address, although he had been given the correct address by someone else. Being at that address unable to arouse the passenger, he simply ejected him from the taxi and left him lying on the footpath. The passenger subsequently woke up and wandered in an intoxicated state for some time before collapsing on a busy road where he was struck and killed by passing motor vehicles. Fryberg J noted that the risks to which the deceased was exposed by the defendant‘s conduct were obvious and one of those risks eventuated. The defendant assumed some responsibility for the deceased‘s welfare and his conduct involved in abdication of that responsibility. Given the facilities available the taxi driver was in the best position to control the risks. Hence the death of the deceased was not too remote a consequence.

 

[74] It is not clear whether s 11 was intended to be an exhaustive statement of the law in relation to causation, to the point of excluding any other rules in relation to the effect of a supervening event for example, though it occurs to me that, because of the width of subsection (4), the factors which on the authorities were at common law regarded as relevant to determining whether a supervening act or decision broke the chain of causation could be accommodated in the statutory scope of liability aspect of causation. For practical purposes what matters is that the legislation does not so far as I can see impose a different test for assessing the significance of a supervening act or decision.

 

[75] The statutory factual causation test is satisfied  here:  if  the  correct  classes  of material had been specified on the plan, the plaintiff would not have laid the pavement with the incorrect classes of material. As to the scope of liability test, laying pavement in the class of material specified in the drawings was the sort of thing which one would naturally expect to occur as a result of the specification of those classes of material in those drawings, and therefore the scope of liability test will be satisfied unless the plaintiff‘s decision or choice to lay that material at a time when, under the requirements of the Gold Coast City Council and the usual practice in the industry, such pavement ought not to have been laid excludes such causation. I therefore consider that the resolution of the question of causation turns on the application of the tests laid down by the High Court in Medlin, as expounded further by the Court of Appeal in Hirst.

 

[76] That involves a consideration of whether, in the context of what was reasonable as between the plaintiff and defendant in determining the defendant‘s liability in damages, the premature laying of the pavement by the plaintiff was the product of the defendant‘s incorrect design notwithstanding that it was brought about by the plaintiff‘s own decision to proceed to lay the pavement. That is to be considered bearing in mind the extent to which the plaintiff‘s voluntary conduct had been constrained by the defendant‘s misconduct, and whether the choice made by the plaintiff was so unexpected a response to the defendant‘s conduct that the defendant should not bear any of the consequences of that decision.

 

[77] In my opinion in this case a significant factor is that this is not a case where the plaintiff‘s voluntary conduct has been constrained by the defendant‘s misconduct. This is not a case where the defendant‘s action in specifying the incorrect grades of material in some way contributed to the plaintiff‘s choice to proceed to lay the pavement without obtaining the soaked CBR tests on the subgrade, without having the subgrade inspected by the Council officer, and without obtaining approval of the final pavement design, as required by the conditions of the approval for the operational works and the usual practice in the industry in relation to the construction of roads. I accept that this is the sort of thing that may happen from time to time, and that it could not be said to be an unforeseeable event, but there was no evidence that the constraints imposed by the guidelines and the usual practice are routinely or frequently disregarded.

 

[78] This was not simply a case where ordinary prudence, or a duty to take reasonable care for one‘s own financial well-being, indicated that particular conduct should not occur. Because of the operation of the applicable legislation, the construction of the road was under the control of the local authority, and the local authority required that that conduct not occur. This was not just a breach of the local authority‘s guidelines, it was a breach of the conditions of the approval for the construction of

the road, which relevantly required compliance with those guidelines.28 I was not taken to the provisions of the legislation constraining the undertaking  of  such works, so as to show what the consequence of a breach of such a condition is under that legislation, but obviously the intention of whatever structure is in place is that, when conditions are imposed in this way, they are to be complied with. The conduct was not as serious as fraud, but it was more serious than a mere failure to take reasonable care.

 

[79] If and insofar as value judgments may be relevant, either at common law or as a result of the wording of s 11, I do not consider that it is appropriate that the defendant‘s liability in damages for its negligence should be greater than it would otherwise have been because the plaintiff did the wrong thing, in circumstances where there was nothing in the defendant‘s conduct which caused the plaintiff to do the wrong thing. In this analysis, it is important to bear in mind that the ―wrong thing‖ that I am referring to is not the construction of the pavement in the wrong materials, but the laying of the pavement prematurely.

 

[80]     In those circumstances, I consider that insofar as the plaintiff‘s loss was the product of the premature laying of the pavement, damages associated with that are not recoverable, because that was, relevantly, caused by the plaintiff‘s decision to lay the pavement at that time without the required testing, inspection and approval, which in the traditional formula has broken the chain of causation. The defendant is liable only for such loss which the plaintiff would have suffered had it not acted in that way.

 

David Cormack – Brisbane Barrister.

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