New South Wales Court of Appeal CITATION : Ward Enterprises Pty Limited v Ahern [2000] NSWCA 184 FILE NUMBER(S) : CA 40994/98 HEARING DATE(S) : 8 June 2000 JUDGMENT DATE : 1 August 2000 PARTIES : R L & B A Ward Enterprises Pty Limited v Rae Ahern & TNT Management Pty Limited JUDGMENT OF : Mason P at 1; Meagher JA at 4; Clarke AJA at 25 LOWER COURT JURISDICTION : District Court LOWER COURT 9904/97 FILE NUMBER(S) : LOWER COURT Cooper DCJ JUDICIAL OFFICER : Appellant: A.R. Ashburner COUNSEL : First respondent: L. King/J. Kernich Second respondent: J. Sharpe. Appellant: Ferguson Holz SOLICITORS : First respondent: Jones Staff & Co Second respondent: Ebsworth & Ebsworth CATCHWORDS : Negligence, apportionment, joint tortfeasors, death of employee, delay in bringing action, lapse of time from damage to judgement of 19.5 years, calculation of interest, s.94 Supreme Court Act is there a right to interest, return to workforce, financial benefit resulting from death. LEGISLATION CITED : s. 94 Supreme Court Act,, 1970. CASES CITED: Kondis v State Transport Authority (1984) 154 CLR 672, Burnie Port Authority v General Jones Pty Limited (1994) 179 CLR 520, Carroll v Purcell (1961) 107 CLR 73, Dominish v Astill (1979) 2 NSWLR 368. DECISION : 1. Appeal allowed in part; 2. Order 3 of the judgment of Cooper DCj dated 1 December 1998 set aside; 3. In lieu thereof, order that RL & BA Ward Enterprises Pty LImited contribute 15% and TNT Management Pty Limited contribute 85% of the plaintiff's damages and costs; 4. The appellant RL & BA Ward Enterprises Pty Limited should pay the costs of the first respondent, Rae Ahern in full, and the second repondent, TNT Management Pty Limited, indemnify the appellant as to one half its costs of the appeal - 1 - RL & BA WARD ENTERPRISES PTY LTD V Rae AHERN and TNT MANAGEMENT PTY LTD DUTY OF CARE-BREACH OF DUTY-WHERE BREACH RESULTED IN DEATH OF EMPLOYEE-DAMAGES-APPORTIONMENT-EXTENT OF LIABILITY OF EMPLOYER-WHERE EMPLOYER HAD AGREEMENT WITH THIRD PARTY- WHERE EMPLOYEE CARRYING OUT WORK WITH THIRD PARTY Facts: Mr Ahern was employed by RL & BA Ward Enterprises Pty Ltd ("Wards") as a truck driver. He was killed in an accident when the load on the semi-trailer he was driving shifted, the brakes failed, and the vehicle veered into the end of a bridge. His widow successfully sued Wards and TNT Management Pty Ltd ("TNT"). TNT were responsible for loading the semi-trailer and for the maintenance of the vehicle. She alleged that Wards had been negligent in not ensuring the brakes were in good working order, and that TNT had been negligent for not loading the semi-trailer in a safe and secure manner. The trial judge held that Wards and TNT were equally responsible for the damage, and that each party should pay its own costs. Wards appealed against this decision. They submitted that as a result of an agreement between themselves and TNT, it was TNT's negligence which brought about the accident and death of Mr Ahern, and that Wards' share of the liability should be indemnified by TNT. Held: Mason P, Clarke AJA: (1) Wards failed in their obligation to their employee to see that care was taken to properly inspect the trailer and also failed to ensure the trailer was properly maintained. In relying completely on TNT, Ward failed to meet those obligations owed to its employees: Burnie Port Authority v General Jones Pty Limited (1994) 179 CLR 320. In this way, Wards is proportionately liable for an amount of 15%, and TNT for the remaining 85%. (2) It is not open to the Court to accept the submission that the return to the workforce by the plaintiff is a financial benefit resulting from the death to be offset against the verdict amount: Carroll v Purcell (1961) 107 CLR 73. Mason P, Meagher JA, Clarke AJA: (3) The appeal on damages fails. Meagher JA: (4) The finding of negligence based on the fact of defective brakes and an unstable load is supported by the evidence and cannot be disturbed. (5) The lapse of time between the cause of action and judgement was unusually long at 19.5 years and resulted partly from the indolence of the plaintiff's former solicitors and partly from the process of the Court. However, his Honour's decision to award interest for the whole of the period is correct. The award of interest on moneys owing is a plaintiff's right. (4) TNT should indemnify Wards by 100% as the failure to check the brakes on the semi-trailer and the failure to secure the load were acts of negligence attributable to TNT. Wards was not in a position to know about the faulty brakes or to repair them, and had no dealings with the loads carried on the semi-trailers. ORDERS 1. Appeal allowed in part; 2. Order 3 of the judgment of Cooper DCJ dated 1 December 1998 be set aside. 3. In lieu thereof, order that RL & BA Ward Enterprises Pty Limited contribute 15% and TNT Management Pty Limited contribute 85%, of the plaintiff's damages and costs. 4. The appellant RL & BA Ward Enterprises Pty Ltd should pay the costs of the first respondent, Rae Ahern in full and that the second respondent TNT Management Pty Ltd, pay one-half of the appellant's costs of the appeal. THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA: 40994/98 MASON P MEAGHER JA CLARKE AJA Tuesday 1 August 2000 RL & BA WARD ENTERPRISES PTY LIMITED v AHERN & ORS JUDGMENT 1 MASON P: I have had the benefit of reading the judgments of Meagher JA and Clarke AJA 2 Like Clarke AJA, I think that the damages award is very high. However, for the reasons given by Meagher JA the appeal fails. My one qualification is that I would not describe a plaintiff's claim to interest under s94 of the Supreme Court Act 1970 as a right. 3 On the issue of apportionment I agree with Clarke AJA. Accordingly, I would make the orders proposed by Clarke AJA. 4 MEAGHER JA: On 27 May 1979 the late Terence Ahern was killed whilst driving a semi-trailer north on the Putty Road, New South Wales. His widow (the present first respondent) successfully sued both her late husband's employer, RL & BA Ward Enterprises Pty Limited("Wards"), the appellant, and TNT Management Pty Limited ("TNT"), the entity which loaded the trailer. She sued under the Compensation to Relatives Act alleging against Ward's that the semi-trailer's brakes were defective, and against TNT that the load on the semi-trailer was not properly and safely secured. Under various cross-claims by Ward and TNT each alleged that the other was responsible for the defective brakes. 5 The plaintiff succeeded against both defendants before Cooper DCJ, obtaining a verdict of $633,650 and her costs. His Honour ordered each defendant to contribute 50% of this amount to the plaintiff and each to pay its own costs. His Honour found two acts of negligence. First, the semi-trailer's brakes were defective and second that it had been unsafely loaded. Wards appeal. 6 It is not contested that the trailer was unsafely loaded. The finding of defective brakes is challenged by TNT, inasmuch as TNT submitted that the brakes had nothing to do with the accident. It also alleged that excessive speed was a major factor in causing the accident. It is not contested by anyone, including Wards, that Wards as employer was, as between itself and Mr Ahern, liable to Mrs Ahern for failure to provide a safe system of work for her late husband, an employer these days being a virtual insurer. 7 Wards were interstate carriers whose business was to transport goods from and about Toowoomba in Queensland, to Sydney, and back again. They had arranged a system, which they called a "quick hitch" system for weekend loads. Wards would leave a spare trailer at TNT's premises, so that Wards could arrive and unhitch its trailer attached to its prime mover and then re-hitch the prime mover to another trailer (being the spare trailer), which had been specially loaded for this purpose. In this way TNT did not have to employ an unnecessarily large weekend staff. 8 On the occasion in question, it was a weekend, and the "quick hitch" system was to operate. Mr Ahern, Ward's employee, drove his prime mover (with trailer attached) from Queensland to TNT's Sydney premises and unhooked that semi-trailer. He then set about hitching the prime mover to the already loaded spare semi-trailer. It was loaded with paper rolls from Australian Paper Manufacturers Pty Limited ("APM"), who wished the cargo to be transported to Brisbane. TNT's employees were responsible for the loading. The load was very heavy, consisting of about 16 large rolls of paper, each weighing about one tonne. Without going into details, it was noticed by both Mr Ahern and by an employee of TNT, Mr Anastas, that the packing of the rolls on the semi-trailer was precarious. 9 TNT's employees drove the trailer from APM's premises to TNT's premises, and in that short distance must have noticed that there was some defect in the brakes. Mr Ahern noticed the same thing in the much shorter distance from TNT's backyard to its main gate. Thus, there was a combination of defective brakes and unstable load, a combination which was to prove fatal. 10 The fatal accident occurred at a place called Boggy Swamp Bridge, just north of Windsor, on the Putty Road. There were three witnesses, now living: a Mr Bambick, who was a passenger in the semi-trailer, a Mr Kerrigan who was driving a motor car in the opposite direction, and a Mr Stevens who was riding a motor cycle behind Mr Ahern's truck. Each of their accounts is the same. As far as the speed of Mr Ahern's truck is concerned, it was, they all agreed, going slowly, at least less than 50 kph. It would be safer, of course, but less real, to go at 5 kph. As the semi-trailer went around a bend, the load shifted to the right, causing the semi-trailer to tilt markedly in that direction, a tilt which Mr Ahern was unable to correct in the usual manner by applying the brakes, because they did not work. As the learned trial judge said: "Once the load shifted and it became apparent that the trailer's near side wheels were lifting, there were only two avenues of escape open to the deceased from a rollover. The first avenue was to steer to the right hand side of the road. This was not available because of the presence of the on-coming car driven by Mr Kerrigan. The second was to apply the brakes on the trailer by means of the handle. The deceased tried this but the defective condition of the trailer's braking system closed off this avenue of escape as well." 11 In these circumstances, I cannot see how it can be said that the defective brakes had nothing to do with the accident. 12 The result is, as I have said, a judgment in favour of Mrs Ahern, and in the amount of $633,650. This can be broken down into the following components: 1. Past loss of support $234,060. 2. Interest thereon: $188,545. 3. Loss of share of superannuation: $4,500 4. Future loss of support: $205,849 5. Burial expenses: $498 6. Transport costs: $198 13 Mrs Ahern has two children, Jason and Joshua. His Honour allowed Jason $25,000 and Joshua $50,000. The reason for the difference is that Joshua suffered from a mild cerebral palsy. 14 Both Wards and TNT challenged the first, second and fourth components. Part of the attack on the first and fourth components was upon his Honour's finding that if Mr Ahern did not die Mrs Ahern would have received (net) the sum of $100 per week from him. However, this attack evaporated when counsel conceded that the attack on this figure was based on a mathematical error. 15 Mr Ahern was born on 14 July 1947, and thus was 31 at the time of his death. Mrs Ahern was born two years later, on 30 January 1949, and thus was 30 at the date of her husband's death. They were married in 1970 and had the two children I have mentioned, Jason (born on 20 September 1970) and Joshua (born on 27 November 1973). Mrs Ahern first met her husband in about 1965, when he was in regular work driving trucks for the Australian Wheat Board. Then in 1977 he started driving semi-trailers interstate as an employed driver on behalf of the appellant Wards. He was in regular and constant employment. They had purchased a house shortly before his death, on which much money, secured by mortgage, was owing. 16 On marriage Mrs Ahern gave up the job she had, working as a salesgirl, and devoted herself to her husband and family. Since her husband's death she has managed to obtain a University degree and has re-entered the workforce as a school-teacher. She said in evidence that if her husband had not been killed she would not have sought employment. She said so in the plainest terms and his Honour believed her, saying so in the plainest terms. This being the case I do not see how this Court can entertain the submission made by both defendants that she would have re-entered the workforce in any event. 17 His Honour also found that if Mr Ahern had not been killed he would have worked until he was 65, and based his calculations on that assumption. His Honour's finding was attacked, but again I cannot see why. Appeals which are heard in this Court suggest that to work until age 65 is more the norm than the exception in the case of male plaintiffs. This must particularly be so when, as in the present case, the man's working life has demonstrated continued commitment to hard work. 18 At trial, the evidence of Mr Ahern's wages (both those he had received during his lifetime and those he would have received had he not been killed) was fairly thin. But, in the course of the trial, there was tendered on behalf of the plaintiff a document which when admitted became exhibit "S". Its admission was not the subject of any objection from either defendant, nor was it admitted for some limited purpose only. It was a document which set out the details of Federal Awards for inter-state truck drivers and upon which his Honour based many of his calculations upon it, a circumstance rendering the appellant's attack on it as being non-persuasive a little late. I might add that his Honour allowed a discount of 15% on past contributions (a somewhat unusual procedure) to allow for all configurations in the defendant's favour. 19 The computation of damages was not rendered any easier by the time which elapsed between the fatal accident and the hearing of the action - 19 ½ years. This is, in part, attributable to the fact that the action was not commenced until almost the eve of the expiration of the period prescribed by the Statute of Limitations. It was also attributable, in part, to a combination of the indolence of Mrs Ahern's previous solicitors and the sluggish processing of such cases by the Court. The relevance of the lapse of time is that it gives rise to the question whether interest should be awarded to the plaintiff for the whole of the period, or part only. His Honour decided the whole of the period, and I respectfully agree with him. The award of interest on moneys owing is a plaintiff's right; the granting or witholding of that right cannot legitimately be used in order to punish either party; but not to award interest for the full period is to deprive the plaintiff of moneys owing to him and to authorize the defendants to retain the plaintiff's money. After all, it was always open to the defendants to have the case set down for hearing earlier, or to move to strike out the proceedings for want of prosecution. Both the appellant and TNT submitted that to award interest for the full period was, in some way I cannot understand, to penalize the defendants for their failures; it was in my opinion, nothing of the sort. It was simply to refuse to reward them for their avarice. 20 The final difficulty on the quantum of damages arose out of the rate of interest to be awarded. His Honour chose the figure of 15%, and his decision to do so was vigorously questioned by both defendants. According to Mr Ashburner, learned counsel for the appellant, his Honour should have used the Commonwealth Bond Rate, or, failing that, the rate established by Schedule J to the Supreme Court Act. Why chose either one was not established. The figure his Honour chose was one which sometimes exceeded the bond rate (which seems appropriate for Trustees) and sometimes did not. Likewise, 15% was sometimes higher than the figure permitted by the Supreme Court Act, sometimes lower. In any event, as Mr Sharpe, counsel for TNT pointed out, no submissions at all were addressed to his Honour on the matter at the trial. In these circumstances I feel some reluctance to interfere with his Honour's choice of the rate. 21 From the above, it follows that, in my opinion, the appeal fails on all matters relating to quantum. That leaves the appeal on contribution. His Honour ordered 50%-50% contribution between the appellant and TNT. Despite the great regard I have for the sacrosanctity of a trial judge's determinations on questions of contribution, I find his Honour's decision in this case quite indefensible. There were two acts of negligence, (a) improper loading of the trailer, and (b) failure to repair the semi-trailer's braking system. Both were the result of TNT's behaviour. Its servants must have known about the brakes, and did nothing about it. Wards were not in a position to know about them or repair them. Wards, naturally, relied on TNT to keep the brakes in good repair. TNT, likewise, were in command of loading the semi-trailer, an operation with which Wards had no concern. Every piece of negligence on the ground, as it were, was TNT's negligence. Wards was only liable on an insurance basis. 22 In my view, the appeal should be allowed to the limited extent of setting aside his Honour's orders as to contribution and instead ordering the second defendant to indemnify the first defendant to 100%. The appellant should pay the costs of the first respondent of the appeal in full, and the second respondent should pay one-half of the appellant's costs of the appeal. 23 In my opinion the following orders should be made: 1. Appeal allowed in part; 2. That Order 3 of the judgment of Cooper DCJ dated 1 December 1998 be set aside. 3. In lieu thereof a new Order 3 as follows be inserted "On the first and second cross-claims between the two defendants I order that each contribute 50 per cent toward the plaintiff's damages and costs and in this regard the second defendant, TNT Management Pty Limited is to indemnify the first defendant, R L and B A Ward Enterprises Pty Limited as to 100 per cent of its contribution and . each to pay its own costs of the cross-claims." 4. The appellant R L & B A Ward Enterprises Pty Limited should pay the costs of the first respondent, Rae Ahern in full and that the second respondent TNT Management Pty Limited should pay one-half of the appellant's costs of the appeal. 24 CLARKE AJA: I agree with Meagher JA that the trial judge's apportionment of responsibility cannot stand. However I am not persuaded that TNT Management Pty Limited (TNT) should bear 100% of the damages. 25 R L & B A Ward Enterprises Pty Limited (Ward) conceded that the facts found by his Honour established its breach of duty towards the plaintiff. It submitted, however, that it was liable only because it had failed to ensure that reasonable care was taken (Kondis v State Transport Authority (1984) 154 CLR 672 at 686.; Burnie Port Authority v General Jones Pty Limited (1994) 179 CLR 520 at 550.). 26 The latter case made it clear that the obligation undertaken by Ward extended to "seeing that care was taken". Ward clearly failed in this respect. 27 Indeed the trial judge found that Ward failed properly to inspect the trailer or to take reasonable care to ensure that it was properly maintained. Not only were those findings justified but there was no evidence that when the "quick hitch" system was employed Ward took any steps to ensure that the trailer was in a proper condition. Ward simply relied on TNT. 28 While it is easy to understand the difficulties of ensuring that reasonable care was exercised in the maintenance of the trailer the simple fact is that Ward did nothing in order to comply with its obligations to its servants. 29 In these circumstances my opinion is that Ward should bear a proportion, albeit small, of the responsibility, I would fix its liability at 15%. 30 On the question of damages, while my initial reaction was that the award was very high, I agree with Meagher JA that the challenge must fail. 31 I wish to add only one observation. It is not open to this Court to accept Ward's submission that the plaintiff's return to the workforce must be offset because it was a financial benefit resulting from the death. Carroll v Purcell (1961) 107 CLR 73. stands in the way of accepting that proposition. Any doubt on the question was removed by Dominish v Astill. (1979) 2 NSWLR 368 at 374, 386. 32 In the circumstances I agree with orders 1, 2 and 4 proposed by Meagher JA. I would, however, vary order 3 made by Cooper DCJ by setting it aside and in its place I would order that Ward contribute 15% and TNT 85% of the plaintiff's damages and costs. I would also order TNT pay 50% of Ward's costs of the cross-claims. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.