TM Law’s Janine Liang looks at a recent case which highlights the importance of making sure you know your responsibilities under the new regime.

 

Le v Brown; Nguen v Brown; Monica v Brown; Huggett v Brown (No. 2) [2019] NSWSC 88

In the morning of 28 June 2012, at the intersection of the Cumberland and Hume Highways in Liverpool, New South Wales, a Freightliner truck collided with three vehicles, killing one person and injuring other occupants of the vehicles. Almost seven years after the incident, on 14 February 2019, the Supreme Court of New South Wales delivered judgment on liability in the personal injury claim brought by occupants of the three vehicles (the Personal Injury Proceedings).

In this article, we consider the proceedings brought against the consignee of the goods that were being carried in the truck in 2014 (the Regulatory Proceedings) and the Personal Injury Proceedings against the backdrop of the Chain of Responsibility provisions in the Heavy Vehicle National Law implemented in October 2018.

Key Players

Edwin Brown (Brown) was the driver of the Freightliner truck. His employer was ENG Haulage Contracting Pty Limited (ENG), who was the owner of the trailer. ENG also acted in the capacity of a freight forwarder. The prime mover was owned by Shark Group Pty Ltd, which upon its voluntary administration, was substituted with its compulsory third-party insurer, Zurich Australian Insurance Ltd (Zurich).

The prime mover and trailer in question was carrying a container of wood plastic composite decking for the owner and consignee, Futurewood Pty Limited (Futurewood). The shipper and manufacturer of the goods was Huangshun Huasu New Material Science and Technology Co Limited, also known as Hohecotech. Hohecotech was responsible for loading Futurewood’s product into containers in Shanghai, China, for transportation into Australia. Futurewood contracted with Bell Toll Logistics as its international freight forwarder and customs broker as well as Cargo and Logistics Management Pty Ltd who managed the freight forwarding process in China.

Once the containers arrived in Australia, Futurewood contracted with ENG to transport the containers from Port Botany to ENG’s warehouse before the containers were unpacked and distributed locally.

Regulatory Proceedings

On 21 July 2014, Futurewood was prosecuted by the Roads and Maritime Services New South Wales (RMS) under section 53(1) of the Road Transport (General) Act 2005 (NSW) for breaches of mass, dimension or load restraint requirements. The Local Court Magistrate found that Futurewood had not established on the balance of probabilities that it had taken all reasonable steps to prevent the contraventions. In particular, the directors of Futurewood did not know about the load restraint regulations in Australia, did not know of Hohetech’s qualifications in load restraint and merely relied on the absence of any previous incidents as evidence that the containers were stowed correctly.

The maximum penalty for a breach of section 53(1) was $5,500 for an individual and $27,500 for a corporation. The directors were each fined $4,500, and the company fined $25,000. In addition, Futurewood was ordered to pay the RMS’ legal costs of $170,000.

Personal Injury Proceedings

The key factual issues that the Court had to consider was why the truck rolled and how liability for the rollover should be apportioned between the relevant parties Brown, Zurich, Futurewood and ENG.

The products were placed on a trolley with wheels which was wheeled into a U-shaped channel welded to the floor of the container. While the channel prevented forward and backward movement, it did not prevent sideways movement. The Court accepted the evidence of the five expert witnesses that the restraints, which consisted of three dunnage bags, were inadequate and that the container was negligently packed and restrained.

The Court found that it was the shifting of the load which initiated the rollover. There were also a number of contributing factors leading to the collision, (a) the excessive speed at which Brown approached the intersection; (b) the failure to ensure that the load in the container was properly secured; (c) the failure to prevent the overweight container from being carried on the road; and (d) the failure to adequately restrain the contents of the container.

The experts found that Brown likely navigated the intersection at 45 km/h and a safe speed would have been 30 km/h. The Court found that a reasonable person in Brown’s position would not have driven at 45 km/h when he did not know the weight of the vehicle he was driving or whether the container was properly secured. A reasonable person would have made inquiries of his employer about the nature of the load he was transporting to determine the appropriate speed at which to drive his vehicle, but Brown failed to do so.

As for Futurewood, the Court reviewed the practice of loading the containers in China and found that Futurewood knew that its product could be damaged during transportation because of previous experiences of load movement due to inadequate restraints. The Court found that a reasonable person in Futurewood’s position would have sought to restrain its load adequately and that it failed to take proper precautions against the risk of load shift.

As for ENG, the Court found that a reasonable person in ENG’s position would have made contact with Futurewood to find out how the container’s load had been restrained and to obtain an assurance that the load was properly packed and secured. Further, given ENG was aware that Futurewood’s products had a history of inadequate packing, it ought to have known that a poorly secured load within a container caused a foreseeable risk of load shift within the container. A reasonable person would have inquired of Futurewood as to the manner of packing of the container in question. If a reasonable person did not make such an inquiry, it would have instructed its driver to drive the truck more cautiously around corners to reduce the risk of rollover. The fact that ENG failed to instruct its employee Brown to take relevant precautions was found to have caused the rollover.

As Brown’s fault contributed most significantly to the rollover in the Personal Injury Proceedings, the Court apportioned 70% liability to Brown (and Zurich jointly as the compulsory third party insurer of the owner of the prime mover), 20% to Futurewood, and 10% to ENG. Futurewood bore a greater responsibility than ENG because it was primarily responsible for securing the payload whereas ENG’s responsibility consisted of failing to check on Futurewood’s provisions in securing the payload.

Key takeaways

It needs to be emphasized that the penalties in the Regulatory Proceedings were based on superseded penalties. New increased penalties under the Chain of Responsibility legislation came into effect on 1 October 2018 and if prosecuted today, Futurewood may be looking at maximum penalties of $3 million for a corporation and $300,000 fine for individuals for a Category 1 breach involving reckless behaviour which created risk of death, serious injury or illness. This is in addition to the new primary duty imposed on Futurewood as a participant in the chain of responsibility to take steps so far as is reasonably practicable and the duty placed on its executive officers to exercise due diligence to ensure compliance.

In the Personal Injury Proceedings, the Court scrutinised the practice of loading containers and considered the knowledge and special experience of each party in the chain. The comments made by the Court in finding that the driver, consignee and freight forwarder had each not acted reasonably should be noted because it sets out what the Court expects reasonable persons in these circumstances should have done.

The Court found that it was in the public interest that freight forwarders take responsibility for the loads which they are required to facilitate transport. Wilful blindness or a failure to inform itself about the characteristics of the load was a complete disregard for responsibilities imposed upon drivers and controllers of heavy vehicles under the Road Transport (General) Act 2005. The Court also found it entirely appropriate for a freight forwarder to take responsibility for securing a load as it falls squarely within the common law duty of road users to take reasonable care for other road users. This was despite the fact that ENG did not, and many freight forwarders in ENG’s position would not, have had any opportunity to inspect the contents of the containers it was contracted to transport.

While the Court did not make any findings against the shipper Hohecotech and Hohecotech was likely not sued because it was a foreign company, under the new Chain of Responsibility regime it would be expected that parties further down the chain will need to actively engage with foreign shippers in the packing and transport process. Given the findings and comments by the Court, it is imperative that freight forwarders, consignees, drivers, controllers, and any other participant in the chain of responsibility seriously look at the obligations and duties they have in ensuring safe practices.

Janine Liang, Marine & Transport Lawyer

T: + 61(0)2 8262 5854
M: +61 423 284 890

janine.liang@tmlawltd.com