Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Bellingen Shire Council v Colavon Pty Limited [2012] NSWCA 34
• Hearing dates: 20 February 2012
• Decision date: 09 March 2012
• Before: Beazley JA at [1]; Whealy JA at [61]; Sackville AJA at [62]

Decision

Appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: TORTS - negligence - duty of care - roads - failure to install guide posts - public or other authorities - special statutory power under Civil Liability Act 2002, s 43A; TORTS - negligence - duty of care - roads - failure to install guide posts - identification of relevant risk - Civil Liability Act 2002, s 5B; TORTS - negligence - duty of care - roads - failure to install guide posts - public or other authorities - whether Council exercising special statutory power under Roads Act 1993, s 87; CIVIL PROCEDURE - pleadings - whether statutory defence pleaded under Civil Liability Act 2002 - Uniform Civil Procedure Rules 2005, r 14.7 - material facts - necessity to plead; CIVIL PROCEDURE - pleadings - failure to plead - ambush - fairness to opposing party - prejudice - Civil Procedure Act 2005, ss 14, 56, 59 and 60; CIVIL PROCEDURE - defence - matters that must be pleaded - Uniform Civil Procedure Rules 2005, r 14.14
• Legislation Cited: Civil Liability Act 2002; Civil Procedure Act 2005; Evidence Act 1995; Legal Profession Act 2004; Road Transport (Safety and Traffic Management) Act 1999; Roads Act 1993; Uniform Civil Procedure Rules 2005
• Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243; Bi v Mourad [2010] NSWCA 17; Colavon Pty Limited t/as Thormans Transport v Bellingen Shire Council [2008] NSWCA 355; Dennis v Australian Broadcasting Corporation [2008] NSWCA 37; GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710; Halpin v Lumley General Insurance Ltd [2009] NSWCA 372; 78 NSWLR 265; Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230; Hughes v Lord Advocate [1963] UKHL 1; [1963] AC 837; Richards v Cornford (No 3) [2010] NSWCA 134; Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited [2009] NSWCA 263; 77 NSWLR 360; Rosenberg v Percival [2001] HCA 18; 205 CLR 434; Sydney Water Corporation v Turano [2009] HCA 42; 239 CLR 51; Waverley Council v Ferreira [2005] NSWCA 418; Aust Torts Reports 81-818; Harmer v Hare [2011] NSWCA 229; 59 MVR 1; White v Overland [2001] FCA 1333
• Texts Cited: Commonwealth of Australia, Treasury, Law of Negligence Review Panel, Review of the Law of Negligence Report (September 2002)
• Category: Principal judgment
• Parties: Bellingen Shire Council (Appellant); Colavon Pty Limited t/as Thormans Transport (Respondent)
• Representation: R Sheldon SC (Appellant); D Campbell SC; I McGillicuddy (Respondent); DLA Piper (Appellant); Fraser Clancy Lawyers (Respondent)
• File Number(s): CA 2005/295587

Decision under appeal

• Citation: Colavon Pty Limtied T/as Thormans Transport v Bellingen Shire Council
• Date of Decision: 2010-11-11 00:00:00
• Before: McLoughlin DCJ
• File Number(s): DC 2005/295587

Judgment

1 BEAZLEY JA : On 22 March 2003, shortly after 8 pm, the respondent's prime mover and tanker rolled down an embankment adjacent to a narrow section of Billings Road, Dorrigo. The tanker was laden with milk collected from a number of properties in the area. At the time of the accident, the tanker driver was en route to the last pick up from Mr Billings' property. The road was wet due to recent heavy rain, although it was not raining at the time of the accident.

2 The accident occurred when the edge of the road gave way. The edge was not part of the formed roadway. Rather, it was a soft section of built-up soil and loose material, which had been pushed to the side of the road during periodic grading work.

3 The trial judge, McLoughlin DCJ, held that the accident was due to the negligence of the appellant in failing to install guide posts along the road so as to delineate the edge of the formed surface of the roadway from the soft edge. His Honour held that the appellant's breach was of a common law duty of care owed to the respondent. His Honour ordered a verdict for the respondent in the sum of $218,341 for the cost of repair of the damaged vehicle, plus interest.

4 The appellant appeals from his Honour's verdict. Before turning to the determination of the issues raised on the appeal, it is to be noted that this is the second appeal to the Court in the matter. On 19 December 2008, the Court allowed an appeal from the decision of Hughes DCJ in which his Honour had ordered a verdict for the present appellant. The Court ordered that the matter be remitted to the District Court for retrial of the issues of liability other than the liability of the appellant for failure to carry out roadworks and its immunity under the Civil Liability Act 2002, s 45.

Issues on the appeal

5 The appellant contended on the present appeal that:

(1) his Honour should have determined that the appellant's authority to install guide posts along the roadway was pursuant to a " special statutory power " within the meaning of the Civil Liability Act , s 43A; and

(2) his Honour erred in failing to properly apply the Civil Liability Act , s 5B. During oral argument, this issue was redefined to allege that his Honour erred in the identification of the 'relevant risk' for the purposes of s 5B.

6 By its notice of contention, the respondent contended that the trial judge erred in allowing the appellant to rely, by way of defence, upon the Civil Liability Act , s 43A.

7 It is convenient to deal with the notice of contention at the outset.

Did his Honour err in allowing the appellant to rely on s 43A?

8 By its second amended statement of claim, the respondent alleged the accident was due to the negligence of the appellant. For the purposes of this appeal, the allegedly negligent conduct was the failure to install guide posts to guide heavy vehicles away from the edge of the downhill slope, particularly at night or during wet weather: second amended statement of claim, para 10(l). The respondent pleaded more specifically that the negligence was due to a failure to install guide posts in the vicinity of the accident site: second amended statement of claim, para 10(m). Paragraph 10(m) undoubtedly focused on the location of the accident site, due to the narrowness of the road at that point.

9 In its amended notice of grounds of defence, the appellant, in answer to the whole of the allegations in the second amended statement of claim, pleaded, at para 8:

"In further answer to the whole of the allegations made in the Statement of Claim the [appellant] says:

(a) the provisions of Part 5 of the Civil Liability Act 2002 apply to the determination of the [appellant's] liability to the [respondent], if any;

(b) the provisions of section 45 of the Civil Liability Act 2002 apply to the allegations made in the Statement of Claim;

(c) that accordingly it is not liable to the [respondent]."

10 There was no particularisation in the notice of grounds of defence of sub-paragraphs (a), (b) and (c) and the appellant has not sought particulars of these sub-paragraphs.

11 On the first appeal, the Court held that the respondent's case, based on a failure to carry out roadwork, was not open to it, having regard to the provisions of the Civil Liability Act , s 45: Colavon Pty Limited t/as Thormans Transport v Bellingen Shire Council [2008] NSWCA 355. Section 45 provides:

" 45 Special non-feasance protection for roads authorities

(1) A roads authority is not liable in proceedings for civil liability to which this Part applies for harm arising from a failure of the authority to carry out road work, or to consider carrying out road work, unless at the time of the alleged failure the authority had actual knowledge of the particular risk the materialisation of which resulted in the harm."

12 The Court held that, if the respondent intended to assert that the appellant Council " had actual knowledge of the particular risk the materialisation of which resulted in the harm ", it was required to prove facts to support the assertion: see at [98]. As such facts had to be established before the cause of action was complete, they were " material facts " within the meaning of the Uniform Civil Procedure Rules 2005 (UCPR), r 14.7 and thus were required to be pleaded. The Court concluded, per Campbell JA (Beazley JA and Handley AJA agreeing) at [100]:

"There was no pleading by [Colavon] that the Council had knowledge of any condition in the bank that made it prone to failure. While a submission was put that the Council's grader driver would inevitably know that the way he had carried out the grading had caused gravel to go over the edge, the evidential base for that submission arose only indirectly and tangentially in the course of the trial. It could not be said to be an issue that had been litigated, even assuming for present purposes that the knowledge of the grader driver would count as knowledge of the Council for the purpose of section 45 (cf North Sydney Council v Roman [2007] NSWCA 27; (2007) 69 NSWLR 240). Thus, to the extent to which the case that the Appellant wished to make against the Council was one arising from its failure to carry out road work, it was not open to [Colavon]."

13 Section 43A was not in issue at the first trial before Hughes DCJ, nor was it in issue on the first appeal. The first time s 43A was raised in the course of these proceedings was in the appellant's written submissions dated 29 July 2010, following the completion of the evidence in the second trial on 18 June 2010.

14 Section 43A provides:

" 43A Proceedings against public or other authorities for the exercise of special statutory powers

(1) This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a public or other authority's exercise of, or failure to exercise, a special statutory power conferred on the authority.

(2) A special statutory power is a power:

(a) that is conferred by or under a statute, and

(b) that is of a kind that persons generally are not authorised to exercise without specific statutory authority.

(3) For the purposes of any such proceedings, any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power.

..."

15 The appellant's written submission in which it raised s 43A as a defence was introduced by the following paragraph:

"Even if the court was to find that the council's grading of the road had created a 'pseudo embankment', and it was reasonable in the circumstances for the council to have erected guide posts, the [respondent] is still unable to establish any liability in the council as a result of the statutory protection provided to the council as a road authority by s 43A of the Civil Liability Act 2002."

16 In its written submissions in the second trial, the respondent objected to the appellant's entitlement to rely upon s 43A. The respondent pointed out that its case was that the appellant owed it a common law duty of care in relation to the installation of guide posts and that no special statutory duty had been pleaded. The respondent submitted that in any event, the obligation did not arise out of the exercise of a " special statutory power " and thus s 43A had no application. The respondent argued that as the appellant had not pleaded s 43A in its defence, it should not be entitled to rely upon it. Moreover, the appellant had not provided particulars of a defence under that section and had not adduced evidence to prove that its entitlement to install guide posts was pursuant to a " special statutory power ".

17 The matter was listed for oral argument before the trial judge on 13 August 2010. The questions as to whether the appellant had pleaded s 43A in its defence and whether it should be entitled to rely upon the provision were the subject of specific argument.

18 Up until this point of the proceedings, the appellant had conducted its case upon the basis that Billings Road was a classified road pursuant to the Roads Act 1993, s 46. In its written submissions to the trial judge, the respondent had accepted this as an " uncontroversial fact ". At the commencement of the oral submissions, the respondent withdrew the concession that Billings Road was a classified road. The respondent also submitted that the appellant's argument based upon s 43A had " caught it by surprise to some extent ". The respondent reiterated that s 43A had not been pleaded by the appellant in its defence. The appellant responded to this complaint, by asserting that the matter had been pleaded in para 8(a) of its defence in that s 43A falls within the Civil Liability Act , Pt 5.

19 The trial judge commented in the course of argument that he treated the s 43A point as having been pleaded. He confirmed this in his reasons, at 25:

"As to the defence raised by the [appellant] of s 43A of the Civil Liability Act , this was raised late. It was raised in further written submissions and s 43A itself was not specifically pleaded. However pt 5 of the Civil Liability Act was and no particulars of it were sought. When objection was taken during the course of the trial I accepted that the [appellant] was entitled to rely on it as a defence. Having said so I propose to maintain that ruling. However I must say that this case was conducted in a manner that had not been relied upon earlier and was only introduced well after the completion of evidence, and one would have thought as an afterthought. Be that as it may, the [appellant's] argument is that the power to undertake traffic control work on or near a road is a special statutory power for the purposes of s 43 of the Civil Liability Act ..."

The pleading rules

20 UCPR, r 14.7 provides that a party's pleading must contain only a summary of the material facts upon which the party relies.

21 UCPR, r 14.14 makes provision for matters that are to be specifically pleaded. In relation to a defence, r 14.14(2) provides as follows:

"(2) In a defence ... a party must plead specifically any matter:

(a) that, if not pleaded specifically, may take the opposite party by surprise, or

(b) that the party alleges makes any claim, defence or other case of the opposite party not maintainable, or

(c) that raises matters of fact not arising out of the preceding pleading."

I will refer to this as the defeasance aspect of s 43A.

22 Section 43A provides a complete defence to a claim against a public authority based upon the exercise or failure to exercise a " special statutory power " conferred on the public authority, unless a plaintiff can prove that the act or omission was:

"... so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power."

23 Any statutory provision that provides a complete, even if defeasible, defence to a claim, if not pleaded, would take a party by surprise. Any such defence is required to be pleaded: see r 14.14(2)(a). In any event, s 43A was required to be specifically pleaded because it raised a defence, which if successful, would make the claim of the plaintiff not maintainable: r 14.14(2)(b). The appellant's defence, therefore, failed to comply with the pleading rules.

24 A failure to comply with the rules of court, including the pleading rules, is not necessarily fatal to a party's right to rely upon the unpleaded matter. The court has power to dispense with its rules: see the Civil Procedure Act 2005, s 14. It has also been long accepted that a party may litigate an issue notwithstanding a failure to comply with a pleading rule. However, the entitlement of a party to do so is dependent upon a favourable exercise of the court's discretion if objection is taken by the opposing party. The exercise of the discretion is predicated upon fairness to the parties.

Was s 43A pleaded?

25 The Civil Liability Act , Pt 5 relates to liability of public and other authorities (the public authority) and provides four separate protections or defences available to the public authority: see ss 43, 43A, 44 and 45.

26 In para 8(a) of its amended defence, the appellant referred only to Pt 5. Paragraph 8(b) specified that s 45 applied to the allegations in the statement of claim. Paragraph 8(c) pleaded that " accordingly ", the appellant was not liable to the respondent. In my opinion, the structure of the paragraph makes it apparent that s 45 was the only provision of Pt 5 relied upon by the appellant.

27 In my opinion, therefore, his Honour erred in finding that s 43A was pleaded. Accordingly, it is open to this Court to exercise its own discretion to determine whether the appellant should have been entitled to rely upon s 43A.

Should the appellant have been allowed to rely on s 43A?

28 The appellant contended there was no prejudice to the respondent in raising the s 43A defence, as the question whether its power to install guide posts was pursuant to a " special statutory power " was a question of law and did not raise factual issues. The submission was that the evidentiary point raised by the respondent was without merit, but if for some reason a party was prejudiced by a late amendment " the cure for that is in costs ".

29 Such a proposition was answered by this Court in GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710 at 716, where Samuels JA said:

"... the emollient effect of an order for costs as a panacea may now be consigned to the Aladdin's cave which Lord Reid rejected as one of the fairy tales in which we no longer believe."

30 In Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175, the plurality, at [99], 213, observed in terms that are apt to this case:

"In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party's opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all ... The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment. In the present case it is difficult to see that such an order could be sufficient compensation, given that Aon would be required to again defend litigation which was, effectively, to be commenced afresh." (citations omitted)

31 Aon was concerned with the provisions of the Court Procedures Rules 2006 (ACT), r 21. In this Court, the relevant provisions to which regard must be had is the Civil Procedure Act , ss 56-60. Section 56 provides that the overriding purpose of the Civil Procedure Act and the UCPR is " to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings ". Sections 59 and 60 complement s 56. They provide:

" 59 Elimination of delay

In any proceedings, the practice and procedure of the court should be implemented with the object of eliminating any lapse of time between the commencement of the proceedings and their final determination beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute between the parties and the preparation of the case for trial.

60 Proportionality of costs

In any proceedings, the practice and procedure of the court should be implemented with the object of resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute."

The importance of these provisions is constantly stressed by this Court: see Dennis v Australian Broadcasting Corporation [2008] NSWCA 37; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160]-[161]; Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230; Halpin v Lumley General Insurance Ltd [2009] NSWCA 372; 78 NSWLR 265; Bi v Mourad [2010] NSWCA 17; and Richards v Cornford (No 3) [2010] NSWCA 134.

32 In the present case, if the appellant was to be successful in establishing that its authority to undertake traffic control work was pursuant to a " special statutory power ", the respondent would be entitled to a new trial in order to adduce evidence relating to the defeasance aspect of s 43A(3). That would involve a third trial in this matter and by then the fifth set of proceedings. In my opinion, to allow the amendment would involve this Court breaching its fundamental obligation under s 56(2). The Court cannot be put in that position. The accident occurred in 2003, the proceedings were commenced in 2005 and the parties still do not have a final resolution of the matter. A third trial and the potential for a third appeal would extend this period for another two years at least. Although the Court was not informed of the costs incurred to date, the combined costs of the parties must be close to the amount of the claim, if they have not already exceeded it. Regard also needs to be had to the significant actual costs to the court system to date.

33 For my own part, I am also unimpressed by the submission that because the issues raised by s 43A involve the determination of legal questions, the respondent could not be prejudiced. A party to litigation is entitled to know the case it has to meet: see White v Overland [2001] FCA 1333. Just as costs are no longer the panacea for any prejudice arising from a late amendment, ambush is not an acceptable or accepted feature of modern litigation. The reasons for this are various. At the most basic level, a party is entitled to have legal advice as to the issues that are to be litigated. In particular, a party is entitled to have legal advice as to whether and how it is able to resist any claim that is to be made. If a party is not able to overcome a defence, its legal advisers have an obligation not to pursue the litigation: see the Legal Profession Act 2004, s 347. A party who pursues a claim without merit may have adverse costs orders made against it: see the Civil Procedure Act , s 56(5). It may have been that s 43A did apply. In this case, there may have been an available claim against the RTA: see the discussion as to the Roads Act 1993, s 87 below. A party is also entitled to advice as to what steps are to be taken, including the gathering of evidence, to meet any claim that is to be made. In my opinion, raising the s 43A defence after the evidence had concluded in the second trial involved a classic ambush and the respondent was denied any adequate opportunity to receive advice so as to consider its position.

34 In any event, the appellant's submission is not correct. Whether the appellant's power or right to install guide posts is pursuant to a " special statutory power " is not, in this case at least, purely a question of law. There are factual circumstances that have to be determined at a number of different levels in order to determine the question.

35 The appellant contended that its power to install guide posts was conferred by the Roads Act read in conjunction with the Road Transport (Safety and Traffic Management) Act 1999 . It was not in contest that the appellant was the roads authority in respect of Billings Road: see the Roads Act , s 7(4) and thus had the right to exercise functions in relation to the road conferred by that Act and any other Act or law: see s 7(5). " Function " includes " power, duty and authority ": see Dictionary to the Roads Act .

36 During the course of its oral submissions before the trial judge, the appellant argued that it functions in respect of the road were conferred by the Roads Act , s 87(2) and that was the conferral of a " special statutory power ". This was the first reference to s 87. That section provided:

" 87 Traffic control facilities

...

(2) The appropriate roads authority may carry out traffic control work on any classified road, but only with the consent of the RTA."

37 On the appeal, the appellant contended that its power derived from s 87(3), not s 87(2). Again, this was the first time s 87(3) was raised. That section provided:

"(3) The appropriate roads authority may carry out traffic control work on any unclassified road ... other than one in respect of which the RTA has notified the authority that the RTA proposes to carry out traffic control work."

38 The first question that arises is whether s 87, upon which the appellant relied for its authority to install guide posts, is a " special statutory power ". That requires a determination as to whether either s 87(2) or s 87(3) conferred a power of a kind that persons are not generally authorised to exercise without special statutory authority. There does not appear to be any rule that could or should be applied generally or uniformly to determine whether an entity acts pursuant to a " special statutory power ". In the present case the appellant owned the road and presumably had the rights of a property owner: see Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited [2009] NSWCA 263; 77 NSWLR 360 at [368] 435. If that is the case, it is difficult to see that the appellant's entitlement to install guide posts is pursuant to a " special statutory power ". However, at this point I am only concerned with whether the appellant should have been permitted to raise the s 43A defence.

39 Accepting that s 87 is the power under which the appellant has authority to install guide posts, the next question is whether the appropriate power arises under s 87(2) or s 87(3). The determination of that question depended upon whether Billings Road is a classified or unclassified road. That is question of definition under the Roads Act and thus is a legal question.

40 Contrary to the case run at trial, the appellant contended on the appeal that Billings Road is an unclassified road. That was not disputed by the respondent and appears to be correct. On the case actually run at trial, the question whether the appellant had authority to carry out traffic control work on Billings Road depended upon whether the RTA had given or would give its consent to do so. That is a factual question.

41 However, the correct authorising provision is s 87(3). Accordingly, the appellant would have authority to carry out traffic control work provided that the RTA had not given a notification that it proposed to carry out the work. Whether the RTA had done so is also a factual question.

42 The appellant acknowledged on the appeal that s 43A could involve evidentiary considerations. It also acknowledged that s 87(3) involved factual questions. It submitted, however, that it is a forensic decision on the part of both parties, in a particular case, whether to adduce evidence. That may be so. But, it is not possible to know whether evidence should be adduced unless the parties are aware of the issues. It is a trite proposition that only relevant evidence may be adduced and that depends upon the issues between the parties in the litigation: see the Evidence Act 1995, ss 55 and 56.

43 There is then a further factual question involved in the defeasance aspect of s 43A, namely, that the omission to undertake the traffic control works was so unreasonable that no authority having the " special statutory power " could properly consider the omission to be a reasonable failure to exercise the power.

44 The appellant's submissions to the trial judge recognised that the defeasance aspect of s 43A involved factual questions. Amongst other matters, the appellant's written submissions pointed out that: there was no evidence of any other accidents on the road; the road essentially serviced one or perhaps two properties; the respondent's vehicles had travelled the road " without difficulty " on about 700 occasions; and that there was no evidence that another council or road authority would have done anything different. All these matters involve factual questions.

45 The appellant submitted that the trial judge did not find the appellant guilty of unreasonableness within the meaning of s 43A, nor could his Honour have done so, in circumstances where there was no evidence directed towards the question. This submission, with respect to the appellant, sinks its ship. Of course there was no evidence directed to that question. The defence under s 43A was not raised until after the conclusion of the evidence in the second trial. There was no reason for the respondent to call evidence in respect of a matter that was not and had never been, at least until that point, in issue. The unfairness to a party in this circumstance is palpable.

46 The appellant sought to counter any question of unfairness by contending that the respondent had not at trial raised any question of prejudice caused to it by the amendment. That is not accurate. The respondent in its further written submissions to the trial judge, dated 25 August 2010, argued that the appellant ought not to be granted leave to rely upon s 43A. It stated:

"Procedural fairness dictates that the [appellant] should have:-

(a) Pleaded and particularised s.43A to put the [respondent] on notice of it's reliance on the section; and

(b) Brought evidence to prove the exercise of a special statutory power so that the [respondent] could test that evidence."

47 In my opinion, this is a complaint of prejudice. The failure to plead s 43A deprived the respondent of the opportunity, at any stage of the proceedings, to consider its position in relation to any such defence. Nor was it in a position to test evidence relevant to the existence of the alleged " special statutory power ".

48 It must be said that the respondent's submission did not directly complain of unfairness in not being in a position to adduce evidence to establish the unreasonableness of the appellant's conduct. The appellant seized upon that as demonstrating there was no prejudice or unfairness. With respect, I do not find that submission persuasive as it fails to meet the unfairness of which the respondent was complaining, namely, that the appellant had not adduced any evidence of its defence. It was not necessary at that point for the respondent to address any other prejudice.

49 In any event, it goes without saying that a party, confronted with a previously unpleaded defence, would almost certainly be prejudiced if such an amendment was allowed. In this case, the respondent had not had an opportunity to even consider whether to adduce evidence. A consideration of the most basic investigatory and evidentiary steps necessary to meet the defence indicated that the respondent would not have had a sufficient opportunity to adduce any necessary evidence. It must be said that the appellant had an uncanny knack for directing attention to the respondent's supposed omissions as a foil to its last minute reliance upon an unpleaded defence. It cannot be overlooked that the amended notice of grounds of defence was filed in April 2006. There was a trial in 2007 and an appeal in 2008. There were three separate days of hearing between 9 November 2009 and 18 June 2010. During the whole of this period, there was not a squeak from the appellant that a s 43A defence was in issue.

50 In my opinion, the unfairness to the respondent in allowing the defence pursuant to s 43A to be raised by the appellant is such that the defence should not and ought not to have been allowed.

51 It follows from that conclusion that the first issue raised by the appellant's appeal does not arise for determination. Nor is it appropriate, in my opinion, for the Court to enter upon a consideration of it. In the first place, as I have indicated, there are factual issues that were not the subject of evidence. More importantly, however, the meaning of " special statutory power " is unclear. The High Court has commented that the section has an " uncertain reach ": see Sydney Water Corporation v Turano [2009] HCA 42; 239 CLR 51 at [26], 65 and it is not appropriate for this Court to engage in a consideration of its meaning when it is not a matter in issue in the proceedings with which the Court is concerned.

The section 5B issue

52 The appellant submitted that his Honour erred in identifying the relevant risk under the Civil Liability Act , s 5B(1). Section 5B(1) provided:

" 5B General principles

(1) A person is not negligent in failing to take precautions against a risk of harm unless:

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

(b) the risk was not insignificant, and

(c) in the circumstances, a reasonable person in the person's position would have taken those precautions."

53 The appellant submitted that the trial judge erred in identifying the risk of harm for the purposes of s 5B. It is accepted that his Honour did not engage in any structured approach to s 5B, nor did he identify the risk of harm in express terms. Rather, his Honour recorded the respondent's submission as follows:

"[The respondent submitted] that it was the soft edge made up of the uncompacted material that failed. That soft edge could readily have been identified on simple inspection and could have been highlighted by guideposts. That installation of such guideposts were required in any event because of the narrowness of the roadway in that area, where the vehicle left the roadway and also because of the difficulty for drivers to observe the soft edges."

54 His Honour dealt with this submission, after having considered the expert and other evidence, as follows:

"This was a narrow and potentially dangerous piece of roadway of which at the time of the accident [the appellant] had actual knowledge for at least six years and had done nothing. Immediately post accident Mr Knight recognised this omission by the report he made and [the appellant] has well recognised it by their action immediately of installing guideposts at that site, which if they had have been erected prior to this accident would have been able to prevent the accident from occurring. I accept both the evidence of Mr Youdale and Mr Thorne that when guideposts are erected drivers see them in front of them and they drive their vehicles so that they come in the inside of them ... It was a very narrow section of a narrow road and had been highlighted as being a dangerous section of it because of the narrowness and in my view required guideposts to be placed at the edge of the pseudo embankment to enable approaching traffic to stay inside and away from the soft pseudo embankment."

55 The appellant accepted that if the risk of the road collapsing and the tanker rolling over was within the risk created by the edge being unclear, then there " probably isn't a s 5B point ". The appellant submitted, however, that there were in fact two quite distinct risks in this case. One was a risk that a vehicle would drive over the embankment because the driver would misjudge where the edge was. However, the appellant contended that the risk in this case was the collapse of the road beneath the weight of the vehicle, which was a distinct risk and the relevant risk for the purposes of s 5B(1). It was submitted there was no evidence that the appellant knew of that risk, nor evidence upon which a conclusion could be based that the appellant ought to have known of this risk.

56 In my opinion, the trial judge did not err in the identification of the relevant risk of harm. This was not a case of the formed road having collapsed underneath the respondent's vehicle. Rather, the soft edge, which was not delineated, collapsed. In Rosenberg v Percival [2001] HCA 18; 205 CLR 434 Gummow J , at [64], 455 said that the " relevant risk " is:

"... real and foreseeable ... [The] character of the injury or the precise sequence of events leading to the injury need not be foreseeable ... even if the extent of the injury was greater than expected."

This principle derives from Hughes v Lord Advocate [1963] UKHL 1; [1963] AC 837 where liability was held to be established in circumstances where the risk of fire was foreseeable although an explosion, which in fact occurred, was not.

57 Rosenberg v Percival was decided in accordance with common law principles. Subject to qualifications not relevant to the identification of the risk, s 5B essentially enacts the common law principles relating to breach of duty: see Commonwealth of Australia, Treasury, Law of Negligence Review Panel, Review of the Law of Negligence Report (September 2002), paras 7.5-7.18; Waverley Council v Ferreira [2005] NSWCA 418; Aust Torts Reports 81-818 at [45] and [46] per Ipp JA (Spigelman CJ and Tobias JA agreeing); Roads and Traffic Authority (NSW) v Refrigerated Roadways at [178]-[179] per Campbell JA; Harmer v Hare [2011] NSWCA 229; 59 MVR 1 at [208]-[210] per Whealy JA (Beazley JA and Sackville AJA agreeing).

58 In my opinion, the relevant risk was of harm occurring by travelling on the unformed section of the road. It was foreseeable that the unformed section of the roadway would give way underneath a heavy vehicle just as it was foreseeable, given the narrowness of the road, that the wheels of a vehicle would travel too close to the edge.

59 It follows, in my opinion, that this ground of appeal should also be dismissed.

60 I propose, therefore, that the appeal be dismissed with costs.

61 WHEALY JA : I agree with Beazley JA.

62 SACKVILLE AJA : I agree with Beazley JA.

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Decision last updated: 09 March 2012