Campbelltown City Council v Linknarf Limited (Formerly Franklins Ltd) [2006] NSWCA 242

New South Wales Court of Appeal

CITATION: Campbelltown City Council v Linknarf Limited (Formerly Franklins Ltd) [2006] NSWCA 242

HEARING DATE(S): 30/08/06

JUDGMENT DATE: 13 September 2006

JUDGMENT OF: Hodgson JA at 1; Ipp JA at 2; Tobias JA at 51

DECISION: Appeal dismissed with costs.

CATCHWORDS: NEGLIGENCE - injury on road where pavement surface was delaminated - appeal by Council against order that it indemnify the respondent under s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) - whether Council breached its duty of care. ND

LEGISLATION CITED: Workers Compensation Act 1987 (NSW), s 151Z(1)(d)

Brodie v Singleton Shire Council (2001) 206 CLR 512 CASES CITED: Vairy v Wyong Shire Council (2005) 80 ALJR 1 Waverley Council v Ferreira (2005) Aust Torts Report 81-818

PARTIES: Campbelltown City Council (Appellant) Linknarf Limited (Formerly Franklins Ltd) (Respondent)

FILE NUMBER(S): CA 40091/06

COUNSEL: C E Adamson SC/R G Gambi (Appellant) L King SC/M Jenkins (Respondent)

SOLICITORS: Phillips Fox (Appellant) Turks Legal (Respondent)

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 5761/03

LOWER COURT JUDICIAL OFFICER: Bishop DCJ

LOWER COURT DATE OF DECISION: 02/02/06

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40091/06 DC 5761/03

HODGSON JA IPP JA TOBIAS JA

Wednesday 13 September 2006 CAMPBELLTOWN CITY COUNCIL v LINKNARF LIMITED (FORMERLY FRANKLINS LTD) Judgment 1 HODGSON JA: I agree with Ipp JA. 2 IPP JA: This appeal concerns an action brought by Linknarf Limited against Campbelltown City Council for an indemnity under s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW). 3 Mr Ian Sullivan (a "worker" within s 151Z(1)(d) of the Act) recovered compensation from Linknarf under the Act. Linknarf thereupon brought proceedings against the Council. It contended that it was entitled to an indemnity from the Council under s 151Z(1)(d) on the ground that the Council was liable, by reason of its negligence, to pay Mr Sullivan damages. Bishop DCJ upheld Linknarf's claim and ordered judgment and a verdict of $87,750.48 in its favour. The Council appeals against this decision. 4 At about 4.00 am on 14 October 1997, Mr Sullivan, then an employee of Linknarf, was riding his motor cycle in an easterly direction along Stennett Road, Ingleburn. This particular area was not well lit. As Mr Sullivan was approaching the intersection between Stennett Road and Inglis Road, his front tyre hit "something" and he was thrown off onto the road. In consequence he sustained injuries. 5 The cause of Mr Sullivan's fall was a "delamination" in the eastbound lane of Stennett Road. The delamination was constituted by the collapse of the asphalt surface or pavement of the road. The delamination had occurred in an area of roadway showing signs of distress from 1.5 to 6 metres from the northern kerb, approximately 40 metres long, and ending approximately 20 metres west of the intersection between Stennett Road and Inglis Road, with the actual delamination being about 1.3 metres wide and 3.3 metres long. 6 According to an expert witness, Mr J A Clark, the delamination was probably caused by a heavy truck braking on the asphalt surface, either so as to be able to turn into Inglis Road or to slow down because of another vehicle proceeding from Inglis Road into Stennett Road. Mr Clark pointed out that heavy trucks and trailers with multiple axles constituted much of the traffic that travelled along Stennett Road near the intersection with Inglis Road. 7 It was common ground that the Council owed Mr Sullivan a duty of care. Bishop DCJ found that the Council had breached its duty of care by failing "to take warning steps" and to provide "barricades to lessen the wear on the eastern side of the carriageway". The Council contended that his Honour erred thereby. The appeal turns on this issue. 8 Linknarf relied on a notice of contention whereby it argued that Bishop DCJ should have found that the Council breached its duty of care in failing to inspect Stennett Road "for cracks, cracking, delamination, or other signs of possible road pavement failure" and in failing to carry out interim maintenance on Stennett Road "addressing cracks, cracking, delaminaton or other signs of possible road pavement failure". 9 In submitting that his Honour had erred in the findings he made, Ms Adamson SC, who together with Mr Gambi appeared for the Council, referred to the following statement by Gleeson CJ and Kirby J in Vairy v Wyong Shire Council (2005) 80 ALJR 1 at 6, [7]: "Furthermore, a conclusion that a public authority, acting reasonably, ought to have given a warning ordinarily requires a fairly clear idea of the content of the warning, considered in the context of all the potential risks facing an entrant upon the land in question. When a person encounters a particular hazard, suffers injury, and then claims that he or she should have been warned, it may be necessary to ask: Why should that particular hazard have been singled out?" 10 Bishop DCJ made no finding as to the content of the warnings, nor did he determine where they should have been placed along Stennett Road. He did not explain whether the warnings he had in mind were warnings against delamination or, perhaps, warnings that were relevant to speed or, indeed, something else. 11 No doubt, his Honour's omission to specify the content of the warnings and to determine where they should have been erected was brought about by Linknarf's omission to lead any evidence on this issue or to make submissions about it. 12 Without identifying the content of the warnings, it is not possible to determine what causative effect they might have. The omission to find precisely where the warnings should have been placed exacerbates the problem. 13 The written submissions filed on Linknarf's behalf made no real attempt to justify his Honour's findings about warnings and Mr King SC, who together with Mr Jenkins appeared for Linknarf, hardly mentioned the warning issue in his oral argument. In my view, it was not appropriate to make a finding of breach constituted by a failure to provide warnings without specifying what the warnings should have said and where they should have been placed. The Council's submissions as to the findings concerning warning signs should be upheld. 14 Similar considerations apply to the finding that the Council breached its duty by failing to erect barricades along Stennett Road. This was an issue that was not even pleaded. No evidence was led that bore on it. There was no evidence as to where the barricades should have been placed and what the practicalities were of erecting barricades along a road in an industrial area that was frequently used by industrial and other vehicles. In my view, this finding, too, cannot stand. 15 The argument on appeal concerning the warnings and the barricades took up little time. The principal issue on appeal was the question raised by the notice of contention. 16 Although oral evidence was led at the trial, none of it bore significantly on the matters raised by the notice of contention. In substance, the notice of contention falls to be resolved by consideration of reports by Douglas Partners, (consultants to the Council), Mr Clark's report, and matters that were not in dispute. Both parties accepted that this Court is in as good a position as the trial judge to make a decision on the issue. 17 On 29 November 1996 Douglas Partners provided the Council with its estimates of costs for "pavement investigation" of Stennett Road and another road. The investigation was to "assess the observed failures of various sections of the pavements, comment on the possible causes of the observed failures, estimate the future life and recommended remediation measures where appropriate". The letter of 29 November 1996 noted that observed defects in Stennett Road "comprises delamination of asphalt". The portion of Stennett Road, the subject of Douglas's investigations, was approximately 1.1 km in length and included the area that broke up, became delaminated and caused Mr Sullivan's accident. 18 In March 1997 Douglas produced its report. The Council received the report in April or May 1997. 19 The report identified positions on Stennett Road by reference to certain "chainages". The term "chainage" in this context was intended to mean a particular position on the road measured in metres. The accident occurred more or less at chainage 475m. 20 Under the heading "Visual Assessment" the report stated: "Stennett Road was generally in a good condition with low levels of pavement distress observed along some sections of the pavement, mainly between chainage 60m and 550m." 21 When dealing with the "observed pavement distress" along the eastbound carriageway at chainages 165m to 495m, the report stated: "Minor crocodile cracking with pumping on cracks, short sections of moderate crocodile cracking … The crocodile cracking was generally of significant length between chainages 172m and 260m, and 465m and 495m; elsewhere was in short isolated lengths. Most of the observed distress was between 1.5 and 3m offset from the kerb". 22 Douglas observed a "green tinge" in the base layer in certain areas. One such area was "bore 5". Bore 5 is very close to chainage 475m. The report stated that the green tinge "indicates the probable presence of the mineral picrite, which generally weathers rapidly when exposed to moisture potentially resulting in significant losses in strength of this layer". 23 The report stated: "Based on the findings of the investigation, it is considered that the observed pavement distress within Stennett Road between chainage 70m and 500m is due to fatigue failure of the asphalt wearing course. The relatively high curvature results indicate relatively low strengths within the upper section of the pavement and most likely indicates the cause of the observed [crocodile] cracking to be related to the base layer and upper section of the sandstone sub-base layer. At sections where cracking has occurred and pumping was observed indicates [sic] that the cracks fully penetrate the wearing course. Higher deflections and curvature readings within these cracked sections indicate a reduction in pavement material strength considered to be attributable to moisture infiltration into the pavement." 24 The indication that moisture infiltration had occurred at points where cracking and pumping was observed makes the presence of picrite at bore 5 particularly significant. On the day of the accident, major cracking was found in this area. 25 According to the report, contributing causes to the pavement distress included weathering and breakdown in the base layer, the relatively thin layer of base material observed, and the use of crushed sandstone as sub-base material under a relatively thin base layer. 26 Under the heading "Estimated Future Pavement Performance" the following was stated: "The estimated future life of the pavement is based on the deflection testing results and is summarised in Table 4 … The future pavement life for all sections of Stennett Road is governed by the curvature results with estimated future life ranging from 1 to 6 years (based on curvature) and 3 to 20 years based on deflection. The results indicate the upper section of the pavement is of relatively low strength and pavement failure by fatigue of asphalt would therefore be expected to occur. The estimation of future pavement life based on the curvature results from the deflectograph testing may be on the conservative side given the existing good condition of the pavement along most of its length for a pavement of 5 to 6 years service." 27 Under the heading "Estimate Future Life" in Table 4 the following was stated in regard to the eastbound lanes: "From curvature results: less than 1-2 years for left and right kerb lanes … From deflection results – less than 1 year for left kerb lane, Ch 0 – 750m – 6 to 10 years for right kerb lane …" 28 I understand the report as a whole to mean that, while the estimated future life for all sections of Stennett Road ranged from 1 to 6 years (based on curvature) and 3 to 20 years (based on deflection), the specific estimated future life of the eastbound lane from chainages 0m to 750m was less than 1 to 2 years for the left and right kerb lanes (from curvature results) and less than 1 year for the left kerb lane (from deflection results). This understanding is confirmed by the statement by Mr Clark in his report that, according to the Douglas report, "the future life of the pavement in the eastbound lane in the area of this accident was less than 1 year but [Douglas] acknowledged their estimation may have been on the conservative side".