New South Wales Court of Appeal CITATION : Shoalhaven City Council v Smith [2001] NSWCA 469 FILE NUMBER(S) : CA 40086/01 HEARING DATE(S) : 10/12/01 JUDGMENT DATE : 13 December 2001 PARTIES : Shoalhaven City Council v Kirk Smith JUDGMENT OF : Powell JA at 1; Hodgson JA at 2; Ipp AJA at 6 LOWER COURT JURISDICTION : District Court LOWER COURT DC 74/99 FILE NUMBER(S) : LOWER COURT Phelan DCJ JUDICIAL OFFICER : COUNSEL : J E Machonachie QC (Claimant/Appellant) D Elliott (Opponent/Respondent) SOLICITORS : Phillips Fox (Claimant/Appellant) Kells (Opponent/Respondent) CATCHWORDS : NEGLIGENCE - duty of care - breach of duty - unsealed roads - failure to maintain - local authority.ND CASES CITED: Miller v McKeon (1905) 3 CLR 50 Brodie v Singleton Shire Council (2001) 75 ALJR 992 DECISION : (1) Application for leave to appeal dismissed (2) Claimant to pay the Opponent's costs. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40086/01 DC 74/99 POWELL JA HODGSON JA IPP AJA Thursday, 13 December 2001 SHOALHAVEN CITY COUNCIL v KIRK SMITH Judgment 1 POWELL JA: I agree with Ipp AJA. 2 HODGSON JA: The circumstances relating to this appeal are set out in the judgment of Ipp AJA. 3 Although I perhaps see more force in the arguments for the claimant than does Ipp AJA, his Honour's judgment shows that there was a basis on which the primary judge could, consistently with principle, have found a verdict for the opponent. I agree with Ipp AJA that no question of principle is raised which requires consideration by this Court. 4 Accordingly, while I may not necessarily have come to the same conclusion as the primary judge, I do not think a case is made out for the grant of leave to appeal. 5 I agree with the orders proposed by Ipp AJA. 6 IPP AJA: This is an application for leave to appeal and an appeal that were heard at the same time. 7 The claimant seeks leave to appeal against a judgment of Phelan DCJ in an action for damages for personal injuries brought by the opponent against it. 8 The action concerned injuries the opponent sustained while riding his motor cycle on an unsealed gravel section of Yalwal Road in the upper Shoalhaven region. His motor cycle struck a sandstone rock embedded in the road, careered off the road and hit a tree. 9 The rock protruded above the gravel surface of the road by about 100 millimetres. The opponent did not see the rock prior to the accident. 10 The cause of the rock being at a higher level than the surrounding gravel surface was that rain water had run along a channel in the centre of the road and scoured out gravel alongside the rock. 11 Phelan DCJ found that the claimant negligently caused the accident by failing to remove the rock or by failing to create a "better level of drainage" across the section of the road where the accident occurred. 12 It was not in dispute that, under the legislation applicable, the claimant had "the care, control, conduct and management and maintenance of the road". The essential issue was whether the claimant, in exercising its duties to maintain the road, had exercised reasonable care in all the circumstances to avoid danger to persons using the road: Miller v McKeon (1905) 3 CLR 50. 13 Mr Clark, an expert called by the claimant, explained that when an unsealed gravel road is first constructed surface water is shed to its sides by the effect of the longitudinal gradient and cross-fall of the road. Water flowing along the ruts and windrows or "laying on the pavement" causes scours and potholes. Mr Clark said that this was an inevitable occurrence with unsealed gravel roads. Such disturbances in the soil are corrected by grading and, sometimes, by the addition of material to replace soil losses. 14 In the course of maintaining the road, the claimant caused it to be graded once or twice a year. Grading is an operation whereby material that has been displaced from the road is recovered and redistributed over the road to provide a smoother surface. 15 Grading for such a purpose had so taken place three to four weeks before the accident on Yalwal Road in the vicinity of the sandstone rock. This was a steep section of the road and Mr Upitis, the claimant's asset maintenance manager, acknowledged that it was an area that, in the ordinary course, would "get some attention". 16 The grading had the effect that, immediately after it had been completed, the top of the rock was level with the gravel portion of the road and the rock did not constitute any danger to traffic. 17 Over the period of three to four weeks between the grading and the accident, largely through the action of water, part of the gravel adjacent to the rock was scoured away. This erosion led to the edge of the rock protruding some 100 millimetres (4 inches) above the gravel section of the road. 18 Phelan DCJ found: "Despite a drain under the road some eight metres before the piece of sandstone, I am satisfied at the time of the accident water scarred the centre of the road exposing one side of the rock, estimated by the [opponent] to be 100 millimetres or some four inches. The left hand side of the rock was flush with the gravel on the left hand side of the road. The rock itself is irregularly shaped, on its left side being fairly straight but on its right side being indented in such a way that about half way along its length there is an irregular step of the dimension described above". 19 His Honour's reference to the left hand side of the rock is to the opponent's left hand side as he was travelling along Yalwal Road. The rock was towards the centre and right hand side of the half of the road on which the opponent was riding (that is, his correct or left hand side of the road). The indentation of the rock described by Phelan DCJ, which protruded above the gravel and constituted the 100 millimetre step, ran diagonally across that part of Yalwal Road that I have described. From the direction the opponent was riding, the raised step in the rock was difficult to discern, and, as I have mentioned, he did not see it. 20 There was expert evidence that the raised step constituted a hazard for motor cycle riders. His Honour described the step as "a very real danger, particularly to cyclists". The claimant's records established that it knew that that section of the road was regularly used by motor cyclists. 21 His Honour found that "those responsible for supervising the repair of the road would have been aware of the rock and the danger it presented". He pointed out that the sandstone rock could have been removed at small cost with the use of a jackhammer. 22 Additionally, Phelan DCJ said: "Likewise, if the left hand side of the road had been built up, as is now the case, the scouring [which caused the gravel to be eroded from the side of the rock] would not have occurred". 23 His Honour held that at the time of the accident the cross-fall on the road was inadequate and the grading that had taken place was ineffective to deal with sandstone rock in question. 24 These findings led Phelan DCJ to conclude that the claimant was negligent in allowing the exposed rock to remain on the road when, with due care, the danger constituted thereby could have been avoided by removing the rock or by creating a better level of drainage. He upheld the opponent's claim, held that the claimant was negligent, and ordered the claimant to pay the opponent damages of $64,094. 25 26 In submitting that Phelan DCJ erred, Mr Machonachie QC, senior counsel for the claimant, pointed out that the claimant was responsible for 500 kilometres of unsealed gravel road in which there was a widespread occurrence of sandstone rocks. There was evidence that sandstone rocks are typically found in access roads constructed in rocky country and it was usual for such rocks to be found on the surface of roads such as Yalwal Road. Indeed, there were many similar rocks on Yalwal Road. 27 The unsealed section of Yalwal Road substantially comprised a variety of natural and processed gravel. During long periods of dry weather gravel tends to unravel as the lack of moisture reduces the binding effect of fine particles that then tend to blow away. This process caused corrugations on the surface of Yalwal Road. During wet conditions the road was also adversely affected by the washing away of pavement materials causing slippery and rough areas. 28 The claimant's ability to deal, generally, with the rocks and the washing away of portions of the surface of Yalwal Road was limited by its financial resources and budgetary constraints. Mr Machonachie contended that, in the light of these matters, it was not reasonable for the claimant to have to "fund the removal of all these rock hazards". 29 In its written submissions, the claimant relied particularly on what was said in Brodie v Singleton Shire Council (2001) 75 ALJR 992 at paras 150 to 152, 158 to 162, 244 to 248. This was not an issue dealt with by Phelan DCJ in his reasons and the claimant contended that he had erred in this respect. The claimant argued that his Honour had erred in failing to consider what its appropriate response should have been to the presence of the rock in the road, "having regard to its resources and other responsibilities". 30 An "Unsealed Roads Manual" tendered in evidence stated that "unsealed roads are, by definition, a compromise between resources, needs and quality." Unsealed roads cannot be as safe as sealed roads. According to the Manual: "Unsealed roads are generally low-cost low-volume roads constructed to varying standards using locally available materials, to best meet the mobility needs of the community". The Manual makes it plain that suggested practices depend in each case on the availability of resources, the use of the road "and the reality of any safety hazard". 31 Mr Machonachie submitted that the need for reasonable compromise "between resources, needs and quality" quite properly underlay the claimant's policy in regard to the maintenance of unsealed gravel roads, generally. That policy, in regard to Yalwal Road, was manifest from a report, dated 15 March 1994, by the claimant's General Manager, Works concerning the condition of the road. 32 According to the report, the cost of grading Yalwal Road was $7,200 per service. The report stated: "It would be difficult to justify any additional grading of Yalwal Road considering the expense involved. There were other roads in the vicinity that carried significantly more traffic than the relevant part of Yalwal Road and according to the General Manager 'it seems reasonable that these roads should attract more maintenance'". 33 The report noted that about 5.5 kilometres of the unsealed part of Yalwal Road was "exhibiting a corrugated surface which would require re-sheeting". Re-sheeting involved importing quarried material and laying it on the surface of the road so as to create a new surface. The material is spread over the road to a depth of about 100 millimetres. The cost of re-sheeting that section was estimated as being $192,500. 34 The report stated that the unsealed part of Yalwal Road had low traffic volumes and serviced few permanent residents. That part of Yalwal Road carried on average 70 vehicles per day. According to the report, an increase in the current grading frequency of twice per year could not be justified in the light of the matters mentioned, and re-sheeting could only be undertaken in relatively small areas. 35 The report concluded: "Council maintains approximately 500 kilometres of unsealed pavements and an amount of $360,000 per annum is allocated for gravel re-sheeting works. Based on this level of expenditure, a road length of approximately 12 kilometres/annum will be re-sheeted, which means an excess of re-sheet interval of approximately 40 years. Based on a gravel loss rate of 10 millimetres loss/year, due to normal wear and tear, a 100 millimetre thick compacted gravel pavement will need re-sheeting every 10 years. To maintain high quality gravel roads throughout the city, the budget would need to be about $1.5m per year. Based on these figures, Council is locked into a process of 'patching', whereby the worst areas are attended to in order to provide a minimal level of service". 36 Mr Machonachie submitted that in the light of this evidence it would not have been reasonable for the claimant, prior to the accident, to have taken any steps in regard to the maintenance of the relevant section of Yalwal Road, other than the grading that it had carried out. 37 In essence, therefore, Mr Machonachie submitted that, in the light of the claimant's budgetary constraints, it was not reasonable to expect the claimant to incur the expense of inspecting the 500 kilometres of unsealed roads under its control in order to identify all the rocks to be found in those roads, and to remove them. 38 The difficulty with this argument is that Phelan DCJ found that, before the accident occurred, the claimant was or should have been aware of the danger constituted by the particular rock that caused the accident. His Honour considered that, having identified the particular rock as dangerous, the claimant could have rendered it harmless at relatively little cost. The judge found that the claimant could have done this by breaking up the rock, or creating an appropriate cross-fall across the road so that water would not readily scour out the gravel adjacent to the rock. These findings require further elaboration. 39 Mr Upitis, the claimant's asset maintenance manager, agreed that it would have been relatively simple to remove the rock by mechanical tools. The surface could then have been back-filled to form a uniform surface at road level. Mr Upitis did not express an opinion as to the cost of removing the rock. 40 Phelan DCJ found in this regard: "The removal of this piece of sandstone could have been achieved at small cost with the use of a jack hammer". There was no challenge to this finding. 41 Turning to the cross-fall, at the time of the accident there was a drain under the road, "some 8 metres before the piece of sandstone". At that point the section of the road was constructed in such a way that rain water flowed down the centre of the road in a v-shaped channel. The passage of water in this channel caused the scour alongside the rock and brought about the 100 millimetre step. 42 The opponent testified that after the accident the configuration of the surface of the road was changed. The judge summarised this evidence as follows: "[The road] had been widened and packed up, the grade was even steeper from the left to right if facing down the hill. The left hand side of the road was built up". Although this evidence was disputed, his Honour accepted the opponent's evidence about these changes. 43 The effect of the changes was to increase the camber of the road and steepen the slope from left to right. This had the result that water no longer flowed down the v channel in the centre of the road but from left to right across the road and into the drain. There was evidence that the creation of a cross-fall of this kind was good practice. 44 According to the evidence of the opponent, these changes to the road had been effected about 6 to 8 weeks after the accident. Photographs taken on 14 September 2000 showed some scouring but not nearly to the same degree as had occurred prior to the accident. Moreover, the scouring that had occurred was not longitudinal and, hence, did not tend to create a step of the kind that caused the accident. 45 Despite the road being graded only some three to four weeks before the accident, there was relatively deep scouring alongside the rock at the time of the accident. This is to be contrasted with the state of the road more than four years after the changes to the camber and cross-fall. 46 There was no evidence as to the cost to the claimant in carrying out the further works that resulted in the camber, and hence the cross-fall, being increased. But there was nothing to suggest that this was not simply done in the course of the claimant's maintenance operations. Mr Machonachie submitted that the changes to the road did not involve routine maintenance but accepted, nevertheless, that the work was maintenance work and was done as part of the claimant's maintenance function. That concession was correctly made. In my view, the inference to be drawn is that the work in question did not represent a strain on the claimant's budget and it was well able to afford the cost. 47 There is no evidence as to what motivated the claimant to alter the camber and cross-fall. The fact that the change was made within a few weeks of the accident suggests that the claimant might have realised that the work was necessary for the safety of users of the road. On the other hand, the work may simply have been planned and executed in the ordinary course. Whatever the position, there was nothing in the evidence to indicate that the cost of the work was otherwise than part of the claimant's normal budget. 48 In the light of these findings, financial considerations were not the cause of the claimant's failure, timeously, to break up the rock, or to create a steeper camber and cross-fall at the relevant section of the road. 49 There is certainly force in the claimant's argument that it was not required to inspect all the unsealed roads within its jurisdiction and remove every sandstone rock found there. But the opponent's case was not put on this basis. The opponent's case was that the claimant should have taken steps to remove the known danger presented by the particular rock, when the cost of doing so would have been relatively low. This was the case the claimant was required to meet. 50 The claimant argued that it could not be required to remove all known rocks constituting a known danger because the danger was relatively small and the cost of removing them relatively large in relation to the claimant's budget. The merits of this argument depended to a large extent on the number of rocks that were potentially dangerous, the extent to which each was dangerous, and the cost of removing them. There was, however, no evidence of these matters. In any event, the argument did not meet the opponent's case as described in the preceding paragraph. 51 There may be force in the proposition advanced on the claimant's behalf that it would be unreasonable to remove a particular rock which constitutes a known danger when the cost of removing the rock would be excessive and out of proportion to all other relevant circumstances. But, as I have indicated, that is not this case. 52 In the present case there was a paucity of evidence concerning the specific question whether the claimant could have afforded to expend the necessary money to remove the particular rock or to do the work necessary to increase the camber and correct the cross-fall. What evidence there was indicated that the cost of removing the rock was not high (and his Honour so found) and the cost of altering the road was absorbed in the claimant's budget. These matters are material in the light of the finding that some three to four weeks before the accident the claimant knew of the danger constituted by the rock. In these circumstances, none of the broader considerations discussed in Brodie v Singleton Shire Council is called into question. 53 In my view, the case is merely one of the claimant failing to take steps to remove a known danger, when, had it carried out appropriate maintenance practices, it would have done so without making significant inroads into its budgetary constraints. I do not see any point of principle arising. 54 I would dismiss the application for leave to appeal and order the claimant to pay the opponent's costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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