New South Wales Court of Appeal CITATION: PORT STEPHENS COUNCIL v THEODORAKAKIS [2006] NSWCA 70 HEARING DATE(S): 23/03/2006 JUDGMENT DATE: 6 April 2006 JUDGMENT OF: Giles JA at 1; Ipp JA at 2; Bryson JA at 3 DECISION: Leave to appeal refused. CATCHWORDS: NEGLIGENCE - highway - trip and fall on footpath - application for leave to appeal from judgment for plaintiff - consideration of - whether in fact obvious risk - whether issue under Civil Liability Act s.42 - financial and other allocation of resources - observations that reliance on CLAct s.42 or s.45 should be pleaded - on assessment of prospects of success on appeal, leave to appeal refused. Civil Liability Act 2002 ss.13, 42 & 45 LEGISLATION CITED: District Court Rules Pt.9 r.9(2) Uniform Civil Procedure r.14.14 PARTIES: Port Stephens Council - Claimant Maria Theodorakakis - Opponent FILE NUMBER(S): CA 40422/05 COUNSEL: Mr P.R. Garling SC & Mr P. Cummings - Claimant Mr M.R. Aldridge SC & Ms E. Welsh - Opponent SOLICITORS: Phillips Fox - Claimant Bryden's Law Office - Opponent LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 654/03 LOWER COURT JUDICIAL OFFICER: Rein DCJ IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40422/2005 GILES JA IPP JA BRYSON JA THURSDAY 6 APRIL 2006 PORT STEPHENS COUNCIL v MARIA THEODORAKAKIS Judgment 1 GILES JA: I agree with Bryson JA. 2 IPP JA: I agree with Bryson JA. 3 BRYSON JA: The claimant seeks leave to appeal from judgment for the opponent given by Judge Rein SC in the District Court on the opponent's claim for damages for personal injuries suffered when she tripped and fell on the footpath on the south side of Shoal Bay Road, Shoal Bay on 18 January 2002. Damages were assessed and judgment was entered for $67,936.16. The opponent made a cross-application for leave to cross appeal, claiming that the award of damages was too low; her application was conditional upon grant of leave to appeal to the claimant. The parties presented their arguments on the proposed appeals with their applications for leave. 4 The opponent claimed and the Trial Judge found that she tripped on a lip at the edge of a depression in an otherwise regular concrete pavement. At some time in the past, probably 20 or more years earlier, the previous concrete path in this area was raised and resurfaced, probably as part of redevelopment of the adjacent dwellings. A telephone pit was set in the footpath at the previous level of the footpath. The area in which the pit was set was filled or partly filled in a way which left the pit accessible: a rectangular concrete patch was put over the pit, and the patch was less well formed than the surrounding footpath and created an irregular depression. It is not known by whom this work was done; it was not necessarily done by the claimant and may have been done by a developer; and the work on the pit was not necessarily done at the same time as the new footpath surface was laid. The claimant however was aware that there was a lip at the junction between the depression and the footpath; its records show that, as part of a systematic observation of the footpath in which a number of defects were recorded, officers observed the 20 mm lip on or shortly before 30 November 2000. (The Trial Judge referred to this lip as "the differential".) 5 The inspection which led to this observation was probably carried out under a direction by Mr Murray, of the claimant's Engineering Services, for inspections of high priority footpaths and cycleways. Mr Murray's direction to other council officers said among other things (White 293) "The inspections will be limited to the high priority areas (i.e. near schools and shopping centres) and a number of officers have allocated the task since the timeframe is tight". (The relevant area is near a shopping centre one block away, and an accompanying map indicated the footpath as one of the high priority areas to be inspected). The direction also said "Collecting information in this form also allows any high risk faults to be repaired immediately." The material in evidence does not indicate that in or about November 2000 a decision was made to classify the lip as a high risk fault, but I note (White 300) that, in a record relating to 207 m of footpath in Shoal Bay road, this is one of three observations of 20 mm lips, and that none of the other observations, as far as can be judged from the brief descriptions recorded, seems to present any corresponding risk. 6 No work was done on the differential until 21 May 2002, when Council staff obtained a Telstra box from a Telstra depot, used it to replace and raise the smaller box located in the footpath, and made good the footpath in a way illustrated by a photograph in evidence which appears to overcome the risk hazard completely. There was no formal approval by the claimant for carrying out this work, which appears to have been done by Council staff as a matter of routine and was completed in the course of one day. In the meantime there had been a number of significant events, not least the opponent's trip, fall and injury on 18 January 2002. 7 Council records in evidence (exhibit K) show information about budgeting in the financial year 2001-2002 for inspection, maintenance and repairs to footpaths and cycleways. A minute prepared for the Ordinary Meeting of 27 November 2001 (White Book 307) shows that the total budget under "current footpath and cycleway budget 2001/2002" was $187,000.00, the value of the repairs required to bring footpaths and cycleways up to proposed standards was estimated at $255,338.00 and there was a shortfall of $147,338.00 below the amounts in the budget for maintenance and repairs. Minutes of the same Ordinary Meeting (White Book 301) show that the Strategic Committee recommended that Council adopt a policy called "Assessment and Maintenance of Footpaths and Cycleways" and a "Footpath and Cycleway Assessment and Maintenance Strategy", and also that Council consider providing additional funding of $147,338.00 in the next monthly budget review "to attend to the backlog of existing footpath and cycleway problems to meet the standards used in the policy and procedures documents." Background material presented by the Civil Assets Engineer in support of this recommendation included these statements (White 301-302): Council has control of more than 140 kilometres of paved footpaths and 40 kilometres of cycleways. As the age of the various parts of the network increases the greater the likelihood that failure will occur. It is recognised that the current level of maintenance is inadequate based on the increasing complaints, insurance claims and knowledge of the network's condition. … The current budget was then compared with the calculated repair costs and it was evident that there was a significant shortfall in funds to achieve the nominated level of service. Based on the lower actual budget a priority program for repairs was developed. This only allowed repairs to be undertaken on 42% of the required area, and was based on performing repairs in areas of high priority such as the Central Business Districts and near shopping centres. LINKS TO CORPORATE PLANS The second objective of the Finance and Information section of the Management Plan is to implement risk management strategies for public liability to decrease the number and value of claims. The first objective of the Roads, Drainage, Waste Management section is design, build and maintain roads, cycleways and footpaths according to agreed priorities and community need, with the key performance indicator being the number of public liability insurance claims. 8 The Minutes of the claimant's meeting of 18 December 2001 (White 298) show that the claimant adopted a recommendation of the Operations Committee which included making a change to the budget so as to provide an additional $147,000.00 for additional footpath rehabilitation. 9 Extensive submissions were made to the Court of Appeal on the correct interpretation of and conclusions available from this material. I think the following propositions are clear: - the records in evidence, which were produced on subpoena served by the opponent on the claimant and were not put in evidence by the claimant, do not contain any information about budgeting or resources available, or any other information about resources relevant to carrying out repair work in the financial year in which the risk hazard was observed, that is the year ending 30 June 1991. - $104,000.00 was budgeted and available for maintenance and repairs to concrete surfaces of footpath and cycleways in the first state of the the claimant's budget. - This budget allowed repairs to be undertaken on 42% of the area which required repairs, and the allowance of this amount was based on performing repairs in areas of high priority such as central business districts and near shopping centres; and the area where the opponent fell is an area of high priority as so described. 10 I do not think that the material is open to the interpretation for which claimant's counsel contended to the effect that there was only enough money to do 42% of the work in areas of high priority, or to the interpretation that the whole 42% had already been expended by November 2001. The revised budget was regarded as appropriate to reach an adequate level of maintenance based on increasing complaints and insurance claims and knowledge of the network's condition. In my understanding from December 2001 onwards there were enough resources available not only to perform repairs in areas of high priority but also to perform all the maintenance work thought appropriate. 11 The Footpath and Cycleway Assessment and Maintenance Strategy adopted on 27 November 2001 contained material about control of risk exposure and risk action response time which allocated four response times, namely low - as resources permit, medium - within 40 days, high - within five days and very high - within 48 hours. Applying this classification to the known information about the risk hazard which the opponent encountered, and using the table at White 313, the appropriate risk action response (according to the table at 314) was "Make safe immediately, effect repairs within 5 days". 12 The Strategy cannot be used as an index or a test of the claimant's performance for any period earlier than its coming into effect at the end of November 2001, and the Trial Judge did not use it in that way. A finding of the Trial Judge which the claimant wishes to challenge on appeal is (White 28, Judgment [47]) "The fact is that the differential was known to the Council from November 2000 and not repaired until May 2002, and in my view a period in excess of a year to rectify problems in the footpath was not a reasonable response to the risk, even accepting that the risk of significant injury could reasonably be viewed as limited." In view of the material in evidence relating to the resources available, the claimant's knowledge of the existence of the risk, the claimant's view that it was in a high priority area near a shopping centre, the view expressed in November 2000 that collecting information would allow high risk faults to be repaired immediately, and the classification, albeit in a strategy not adopted until November 2001, of risks of this kind as high risks requiring rectification within five days, I am of the view that the claimant has no realistic prospect of upsetting on appeal the Trial Judge's conclusion that it was not a reasonable response to take over a year to rectify problems in the footpath. 13 The Trial Judge found that the risk was not a risk which was obvious to the opponent. The claimant's counsel in submissions to the Court of Appeal extensively reviewed the evidence bearing on this subject, most strikingly the photographs. The Trial Judge concluded (White 25 [Judgment 42]) that the lip was not obvious to a person exercising reasonable care for her or his own safety. The Trial Judge gave in five paragraphs the basis for this conclusion. The significance of some of the reasons given by the Trial Judge is open to debate, and those reasons differ in their relative importance. The Trial Judge referred to the opponent's evidence that she was keeping a proper lookout; I regard this as relevant, although the question of obviousness is not to be determined upon the opponent's subjective state of mind or on her observations. I do not think that the Trial Judge committed an error of this kind, as he had regard to other considerations as well. With the assistance of the photographs in evidence which I have examined closely I regard the fifth of the reasons which the Trial Judge gave as cogent, that is (White 26) "(5) the top of the lid is covered in concrete and although, close up, differences between footpath and lid can be seen, the colours are similar. The existence of sand is likely to have acted as a further camouflage of the differential." The Trial Judge's second reason in terms shows that he regarded the footpath as not obviously affected by other imperfections: this is also significant. 14 In my opinion the claimant has no real prospect of obtaining a decision on appeal setting aside the Trial Judge's conclusion that the risk was not obvious to a person exercising reasonable care for her own safety. Once it is understood that the risk is not the depression itself, but the lip at its junction with the footpath, this conclusion seems well justified, indeed almost inevitable. I see no ground on which to conclude that the Trial Judge's determination at Judgment [42] was wrong in fact or requires appellate reconsideration. 15 The Trial Judge referred briefly, as was appropriate, to s.45 of the Civil Liability Act 2002, which posed no real difficulty for the opponent. His Honour did not refer at all to s.42 of the Civil Liability Act, although it was accepted, by counsel who conducted the appeal, not being counsel who were present at the trial, that some reference was made to s.42 in submissions to the Trial Judge. I accept that that this was so, but I regard it as significant that such submissions did not claim the Trial Judge's attention to the extent of making express reference to them. Neither s.42 nor s.45 was referred to by the claimant in its Notice of Grounds of Defence. If s.42 was to be relied on, I am of the view that it was a matter which ought to have been referred to in the claimant's pleading, having regard to District Court Rules Pt.9 r.9(2); see now Uniform Civil Procedure r.14.14. As well as indicating reliance on s.42, the pleading should have given particulars of the facts which were said to give rise to consideration of s.42. Unless reliance is notified in this way and with particularity, procedural unfairness will arise, particularly as, irrespective of whether the onus of proof of facts under s.42 lies upon a plaintiff or on a defendant, a public authority is in a far better position to know and to adduce evidence relating to the facts with which s.42 deals than any litigant contending with it is likely to be. 16 I do not regard the present application as an appropriate occasion to examine or to come to any conclusion on the law relating to the onus of proof. As a matter of procedural justice however I do not regard it as open to doubt that a public authority relying on s.42 must indicate its reliance fully and clearly in its pleading. 17 In the present case the opponent went as far as her forensic opportunities appear to have extended by delivering interrogatories about the resources available to the claimant, and by subpoenaing production by the claimant of its papers relating to the resources available and putting them in evidence. As appears from the narration I earlier gave about the effect of those documents, they showed, so far as the information in them extended, grounds for finding that the discharge by the claimant of its duty of care was not adversely affected by any unavailability of financial or other resources, and there was no ground for thinking that there was any relevant general application of its resources which was inconsistent with using the modest resources required to repair the danger identified on 30 November 2000, either in the financial year then current, or in the financial year in which the injury occurred. In my opinion the claimant does not have prospects of obtaining a favourable decision if s.42 were addressed in a full way on the scant material available in evidence. On any reasonable view it must have been within the claimant's power to adduce a much more full and complete picture of the relevant facts than appears from the documents in exhibit K and in the answer to interrogatories. The information in evidence does not indicate any matter of excuse in terms of shortage or alternate allocation of resources. 18 Thus far I have marshalled, as temperately as I can, my reasons for refusing leave to appeal, but I cannot forebear to observe how stark indeed would be the poverty of a local government authority which was constrained by financial or other resources, or by some general allocation of resources, from carrying out so simple a repair: not for a short time, but for thirteen months and more. A tribunal of fact which applied reasonable scrutiny to fact-finding would not readily decide that repair was impeded for so long by such considerations. 19 The opponent sought leave to cross appeal upon one question relating to damages. The Trial Judge did not include any element in the award of damages for future economic loss. His Honour's observations (Judgment [70(4)]) on this were: (White 35) 70(4) Future Wage Loss: It seems that the Plaintiff will be able to obtain employment of the type which she desires. She has applied for work of a clerical nature at the children's school and she would be able to work in sedentary employment of the kind she previously engaged in or in work as a receptionist. She apparently will only be seeking part time work. 20 After referring to decisions of the Court of Appeal which established that a court can award a buffer in respect of future economic loss and still comply with the requirements of s.13 of the Civil Liability Act his Honour found: (White 36) 71 … It does not appear likely that the Plaintiff would have done work of a different kind to that which he now intends to do and is capable of doing. She is 38 years of age and will be looking for part time work of a sedentary nature, and that is what she would have been doing in any event. 21 His Honour made some further observations. The view which his Honour took was reasonably available upon the medical evidence, and the oral evidence of the opponent herself; it may well be that it was not the only reasonably available view, but counsel was unable to indicate any substantial ground upon which it should be thought that the Trial Judge was in error. Even if the application for leave to cross appeal had not been expressed to be conditional, I would not have thought this an appropriate case for the grant of such leave. 22 There is an outstanding question of costs which the Court did not have the opportunity to consider fully. For that reason the parties should be given an opportunity to make written submissions dealing with costs. 23 In my opinion the Court of Appeal should dismiss both ordinary summonses for leave to appeal. The Court should direct that each party should make a written submission within four business days of publishing judgment on any further question of costs which is said to arise; but if no such submissions are made the Court should order that the claimant pay the opponent's costs of the claimant's Summons for leave to appeal, and that each party pay her or its own costs of the opponent's Cross Summons. ********** 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.