Jarvis v Scrase[1998] QCA 441

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Appeal No. 4030 of 1998

[Jarvis & Anor v. Scrase & Ors]

BETWEEN:

HENRY JAMES JARVIS

(First Defendant) First Appellant

AND:

SURFSIDE BUS LINES PTY LTD

(ACN 010 957 552)

(Second Defendant) Second Appellant

AND: 

JEFFREY LAURENCE SCRASE

(Plaintiff) First Respondent

AND:

KEVIN JOHN LYNCH

(Third defendant) Second Respondent

AND:

NZI INSURANCE AUSTRALIA LIMITED

(ACN 001 948 278)

(First Third Party) Third Respondent

AND:

ZURICH AUSTRALIAN INSURANCE LIMITED

(ACN 000 296 640) 

(Second Third Party) Fourth Respondent

AND:

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LIMITED

(ACN 000 456 799)

(Third Third Party) Fifth Respondent

Appeal No. 4031 of 1998

[Jarvis & Anor v. Scrase & Ors]

BETWEEN:

HENRY JAMES JARVIS

(First Defendant) First Appellant

AND:

SURFSIDE BUS LINES PTY LTD

(ACN 010 957 552)

(Second Defendant) Second Appellant

AND: 

JEFFREY LAURENCE SCRASE

(Plaintiff) First Respondent

AND:

KEVIN JOHN LYNCH

(Third defendant) Second Respondent

AND:

NZI INSURANCE AUSTRALIA LIMITED

(ACN 001 948 278)

(First Third Party) Third Respondent

AND:

ZURICH AUSTRALIAN INSURANCE LIMITED

(ACN 000 296 640) 

(Second Third Party) Fourth Respondent

AND:

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LIMITED

(ACN 000 456 799)

(Third Third Party) Fifth Respondent

Pincus J.A.

Williams J.

Muir J.

Judgment delivered 22 December 1998

Separate reasons for judgment of each member of the Court; Williams J dissenting in part.

APPEALS DISMISSED WITH COSTS.

THIRD RESPONDENT TO PAY TO THE OTHER PARTIES, INCLUDING THE THIRD PARTIES OTHER THAN THE THIRD RESPONDENT, THEIR COSTS OF AND INCIDENTAL TO THE NOTICES OF CONTENTION.

CATCHWORDS: NEGLIGENCE - motor vehicle accident - whether driver of a school bus has a duty to warn - meaning of “fault of the owner or driver of the vehicle in the use or operation of the vehicle” within the meaning of those words in schedule 1 to the Motor Accidents Act 1988 (NSW).

Counsel:  Mr R.G. Bain Q.C., with him Mr G.K. Flint for the appellants

Mr A.J. Bellanto Q.C., with him Mr P.J. Woods for the first respondents

Mr J.D. Hislop Q.C., with him Mr E.G. Romaniuk for the second respondent

Mr G. Greenwood S.C., with him Ms R. Pepper for the third respondent

Mr J.A. Griffin QC, with him Mr R.D. Green for the fourth respondent

Mr G.T.W. Miller Q.C. for the fifth respondent

Solicitors:  Dunhill Madden Butler for the appellants

Attwood Marshall Lawyers for the first respondents

Moray and Agnew for the second respondent

Phillips Fox for the third respondent

Gadens for the fourth respondent

Corrs Chambers for the fifth respondent

Hearing Date:  13 November 1998

IN THE COURT OF APPEAL     

SUPREME COURT OF QUEENSLAND

Brisbane

Before  Pincus J.A.

Williams J.

Muir J.

 Appeal No. 4030 of 1998

[Jarvis & Anor. v. Scrase & Ors.]

BETWEEN: 

HENRY JAMES JARVIS

(First Defendant) First Appellant

AND:

SURFSIDE BUS LINES PTY LTD

(ACN 010 957 552)

(Second Defendant) Second Appellant

AND: 

JEFFREY LAURENCE SCRASE

(Plaintiff) First Respondent

AND:

KEVIN JOHN LYNCH

(Third defendant) Second Respondent

AND:

NZI INSURANCE AUSTRALIA LIMITED

(ACN 001 948 278)

(First Third Party) Third Respondent

AND:

ZURICH AUSTRALIAN INSURANCE LIMITED

(ACN 000 296 640) 

(Second Third Party) Fourth Respondent

AND:

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LIMITED

(ACN 000 456 799)

(Third Third Party) Fifth Respondent

Appeal No. 4031 of 1998

[Jarvis & Anor. v. Scrase & Ors.]

BETWEEN: 

HENRY JAMES JARVIS

(First Defendant) First Appellant

AND:

SURFSIDE BUS LINES PTY LTD

(ACN 010 957 552)

(Second Defendant) Second Appellant

AND: 

JEFFREY LAURENCE SCRASE

(Plaintiff) First Respondent

AND:

KEVIN JOHN LYNCH

(Third defendant) Second Respondent

AND:

NZI INSURANCE AUSTRALIA LIMITED

(ACN 001 948 278)

(First Third Party) Third Respondent

AND:

ZURICH AUSTRALIAN INSURANCE LIMITED

(ACN 000 296 640) 

(Second Third Party) Fourth Respondent

AND:

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LIMITED

(ACN 000 456 799)

(Third Third Party) Fifth Respondent

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 22 December 1998

1. I have read the reasons of Muir J. in which his Honour explains the circumstances which led to this litigation. At the hearing of this appeal, during which we had the benefit of the assistance of no fewer than 11 counsel, the only questions debated were whether the primary judge was right in his conclusion that the bus driver and bus company (the first and second appellants) are liable in negligence and whether his Honour was correct in holding that the bus insurer (the third respondent) is liable, under its policy, to indemnify the bus driver and bus company in respect of their liability to the plaintiffs.
2. With respect to the insurance point, I agree with the reasons and conclusion of Muir J.
3. As to the question of negligence, the relevant findings of the trial judge were made on two bases: first, that there was negligence having to do with the making and implementation of the bus company’s policy concerning bus passes and, secondly, that the bus driver, in breach of a duty of care, failed to warn the child who was killed, Kerryn Scrase, about the approach of an oncoming car as she left the bus.
4. Muir J. has found it necessary to deal only with the second ground of liability in negligence, not the first. I am in respectful agreement with that approach and also with his Honour’s conclusion, which affirmed that of the trial judge. I propose to add some observations of my own to the reasons Muir J. has given for his conclusion.
5. The only point I propose to discuss, then, is whether the judge was right in holding that the bus driver (and therefore, vicariously, the bus company) were liable in that the driver did not warn the child who was leaving the bus of the approach of the vehicle which struck and killed her. The challenge by the appellants to the trial judge’s view was based in substance on the contention that there was no duty of care.
6. Plainly, on the evidence, there was a foreseeable risk of injury to the child; Muir J. has set out the evidence which supports that. But it is not enough that foreseeability exists; there may be foreseeable injury, but no duty of care; Jaensch v. Coffey (1984) 155 C.L.R. 549, is one of the cases which deals with that possibility. In the present case, the plaintiffs were not themselves injured; they sued in respect of psychiatric injury caused by the death of their child Kerryn. The point argued in Jaensch v. Coffey, unsuccessfully, was that because the plaintiff was not at, and did not come to, the scene of the accident in which her husband was injured there was not sufficient "proximity" between the tortious act and the plaintiff - hence, no relevant duty of care. The High Court in rejecting that contention held that there was a duty of care on the "neighbour" principle enunciated in Donoghue v. Stevenson [1932] A.C. 562 (Gibbs C.J.), for policy reasons (Murphy J.), because there was proximity (Deane J.). In this Court no special reliance was placed, on behalf of the bus company and driver, on the circumstance that the plaintiffs were not themselves injured. The assumption on which the case was, at least substantially, argued was that if there was a duty to warn the alighting child that was owed to the parents as well as to the child. I am prepared to accept that in the circumstances of the present case that assumption is justified.
7. The existence or otherwise of the duty which the trial judge held to exist is a legal issue, but it is not one which is easily formulated. Mr Bain Q.C., who led Mr Flint for the bus company and driver, accepted that his submission was that the mere circumstance that an adult has an ability to control young children cannot give rise to a duty to warn against a risk, being one which merely ought to be perceived. Mr Bain did not seek to argue the correctness of that proposition as to actually perceived dangers. Translating that into terms relevant to the present case, the argument was that whereas there might have been a duty to warn if the bus driver saw the approaching vehicle, there was no such duty because when the child alighted the driver was unaware that the car was coming. A difficulty about that distinction is that a danger which is not actually perceived may nevertheless be foreseeable to a high degree if a bus driver, while not actually observing an approaching vehicle, knows that the road a young child is about to move across is ordinarily traversed by a constant stream of fast-moving vehicles. His or her ability to discern that what the child is about to do is risky may be no less than that of the driver who sees a particular vehicle approaching.
8. Putting that more shortly, Mr Bain’s argument uses as a criterion of duty a factor which rather bears upon foreseeability than duty. In truth, there can be no dispute that there was a duty owed by the bus driver to the alighting child; the real question is the scope and content of that duty: see Rogers v. Whitaker (1992) 175 C.L.R. 479 at 483, another warning case. The proper approach to be applied to the present case is that followed in Nagle v. Rottnest Island Authority (1993) 177 C.L.R. 423, where the Authority was held liable to a person who dived into water and was injured by a submerged rock. It was held that the Authority should have warned the plaintiff of the danger of diving at the spot in question; the process was to hold that there was a duty of care, generally expressed (429, 430) that the risk of injury was foreseeable (430, 431) and that there was a breach of the duty of care (431, 432).
9. Of course the answer to the third question depends on the scope and content of the duty; it appears to me that the argument the plaintiffs have to meet is that, although there was a duty of care, it did not extend so far as to require the administration of a warning in the circumstances then prevailing. In Rogers v. Whitaker it was pointed out that the doctor’s duty to the patient is a "single comprehensive duty" (489) which includes the provision of information and advice but, the Court said:

"That duty takes its precise content, in terms of the nature and detail of the information to be provided, from the needs, concerns and circumstances of the patient". (493)

By analogy, here it may be said that the limits of the bus driver’s duty to the child, in respect of foreseeable risks, must be determined in accordance with the circumstances in which the risk arises and, of course, those of the child.  It might be envisaged, for example, that the duty could extend so far as being one physically to assist a handicapped child who has, because of some emergency, a necessity to leave the bus in dangerous circumstances. 

10. Mr Bain did not contend that the bus driver, although lacking a legal power of control, was devoid of any ability to control the child’s movements. But just as a schoolmaster’s duty of care towards the pupil is a correlative of the power of control (Ramsay v. Larsen (1964) 111 C.L.R. 16 at 29), the admittedly limited, power of the bus driver to control or influence the movements of children getting off the bus supports the existence of a duty to exercise that control where circumstances plainly call for its exercise, in the interests of the child’s safety.
11. In Rogers v. Whitaker, the High Court’s decision did not depend upon any comprehensive definition of the circumstances in which a doctor’s duty to warn of material risks involved in treatment arises; so here, this Court should not attempt to enunciate a principle which comprehensively sets out when a person such as a bus driver will, and when that person will not, be liable for injuries sustained by a child alighting from a bus. In my opinion, in the circumstances explained in detail in the reasons of Muir J., the primary judge was right to hold, not merely that the injury to the child was foreseeable, but that the bus driver’s duty of care extended so far as to take the simple step of observing the approach of the oncoming car and giving the child an appropriate warning.
12. I agree with the orders proposed by Muir J.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Before  Pincus JA

Williams J

Muir J

Appeal No. 4030 of 1998

[Jarvis & Anor v Scrase & Ors]

BETWEEN: 

HENRY JAMES JARVIS

(First Defendant) First Appellant

AND:

SURFSIDE BUS LINES PTY LTD

(ACN 010 957 552)

(Second Defendant) Second Appellant

AND: 

JEFFREY LAURENCE SCRASE

(Plaintiff) First Respondent

AND:

KEVIN JOHN LYNCH

(Third defendant) Second Respondent

AND:

NZI INSURANCE AUSTRALIA LIMITED

(ACN 001 948 278)

(First Third Party) Third Respondent

AND:

ZURICH AUSTRALIAN INSURANCE LIMITED

(ACN 000 296 640) 

(Second Third Party) Fourth Respondent

AND:

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LIMITED

(ACN 000 456 799)

(Third Third Party) Fifth Respondent

Appeal No. 4031 of 1998

[Jarvis & Anor v  Scrase & Ors]

BETWEEN:

HENRY JAMES JARVIS

(First Defendant) First Appellant

AND:

SURFSIDE BUS LINES PTY LTD

(ACN 010 957 552)

(Second Defendant) Second Appellant

AND: 

JEFFREY LAURENCE SCRASE

(Plaintiff) First Respondent

AND:

KEVIN JOHN LYNCH

(Third defendant) Second Respondent

AND:

NZI INSURANCE AUSTRALIA LIMITED

(ACN 001 948 278)

(First Third Party) Third Respondent

AND:

ZURICH AUSTRALIAN INSURANCE LIMITED

(ACN 000 296 640) 

(Second Third Party) Fourth Respondent

AND:

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LIMITED

(ACN 000 456 799)

(Third Third Party) Fifth Respondent

REASONS FOR JUDGMENT - WILLIAMS J

Judgment delivered 22 December 1998

1. Background facts relating to the accident which gave rise to this litigation are set out in the reasons for judgment of Muir J which I have had the advantage of reading. I will not repeat facts which are non-contentious for present purposes. It will, however, be obvious that I take a somewhat different view of some facts from the majority and in consequence it will be necessary to deal with those matters in some detail.
2. I should say at the outset that, on the assumption that the first and second appellants were negligent and therefore liable to contribute to the satisfaction of the judgment in favour of the plaintiffs, I agree with Muir J on the insurance point.
3. There is no challenge to the finding that the second respondent (Lynch) was negligent and no challenge to the quantum of damages awarded. Even if the appeal by the appellants were successful the plaintiffs would be entitled to recover their damages from the second respondent.
4. The findings of the learned trial judge which resulted in him holding that the first appellant was guilty of negligence are stated in the following extract from his reasons:

“In the circumstances which I have outlined, I conclude that the first defendant was in breach of an obligation to warn Kerryn to be careful crossing the road as she left the bus to see what was holding up the return of her younger sister for whom the bus and the fifty to seventy school children were waiting. ... If he had looked in his rear vision mirror when Kerryn asked his permission to leave the bus, he would have seen the approach of the third defendant at a speed of 60 to 65km per hour and he was aware of the propensity of school children in the buses he drove to run across the road without looking properly.

In my view the position he occupied as driver of the school bus which enabled him as he said to control the children while on the bus ... indicates that he did exercise a degree of supervisory control of the children which they accepted while they were passengers on his bus to and from school.  He did, when driving the children home, give them advice about being careful as they crossed the road because he knew of their propensity for carelessness.  In the circumstances of the case, it is my view, that he ought to have told Kerryn as she left the bus to try to find out what was holding up the return of her sister to the bus, to be careful and to wait until the car that was approaching from the rear, of which even if he was unaware he ought in the circumstances to have become aware, had passed the bus before attempting to cross the road.  He must have known that the child was anxious to try to speed up the return to the bus of her younger sister.

In my view, this is a case in which the bus driver was clearly under an obligation because of the relationship of proximity between him and the child Kerryn, to warn her to take care and in particular, to be careful of the approaching vehicle which struck her, of which he ought to have been aware.”  (my emphasis)

5. There are a number of critical elements in that passage. Firstly, it is clearly assumed, though not expressly found as a fact, that the first appellant knew that Kerryn intended crossing the road. Secondly, the warning which the first defendant negligently failed to give was to take care and to be careful of the approaching vehicle which struck her. Thirdly, it assumes (without adverting to the relevant facts) that the first defendant had an opportunity, after the time he ought to have become aware of the approaching vehicle, to give an effective warning.
6. It is now necessary to consider each of those matters in more detail. After observing that the Scrase children knew the first appellant as the bus driver who regularly drove them to and from school, the learned trial judge went on:

“It is clear from the whole of the material that he also knew them, and I infer, that they lived down Kingston Drive.  If he did not know where they lived, he certainly knew the general area in which they resided.  At least I draw that inference from the evidence in the absence of any evidence from the first defendant.”

7. It is true that the first defendant did not give evidence at the trial, but a number of statements he gave to investigating police officers were exhibits. The first appellant fully participated in those interviews with the police and the exhibits contain a fairly detailed account of the incident from his point of view. He made no statement therein indicating he knew where the Scrase children resided.
8. Other evidence clearly established that the Scrase children lived in Kingston Drive and that it was on the opposite side of Darlington Drive on which the bus was parked.
9. In the absence of evidence from the first appellant the inference was open from the general circumstances that he knew that the children lived in “the general area” around the bus stop. That seems to be the inference which the learned trial judge drew. When he said in the passage quoted above that he drew “that inference” I take that to mean that “he certainly knew the general area in which they resided”; it cannot logically be taken to be a finding by the learned trial judge that the first appellant knew they lived “down Kingston Drive”. Given the state of the evidence the inference could not be drawn, even given the first appellant did not give evidence, that he knew they lived “down Kingston Drive”. That means that he did not know that Kerryn had to cross the road. Such a conclusion could only be drawn if he knew the children lived in Kingston Drive.
10. It follows that, with respect to those who constitute the majority, I cannot accept the statement that there was a finding by the learned trial judge that the first appellant “knew the children and that they lived in or off Kingston Drive”.
11. Given the state of the evidence, and the findings by the learned trial judge as I have construed them, the first appellant did not know when Kerryn asked for permission to leave the bus and return home that she had to cross Darlington Drive. At least he ought to have realised that there was a possibility she would cross Darlington Drive, and his conduct must be assessed in the light of that.
12. It is accepted by the learned trial judge, and by the majority in this court, that the first appellant was under no obligation to look into his rear vision mirror until the time when Kerryn asked for permission to leave the bus. That must be correct. No driver while stationary at the kerb is under an obligation to look continuously into his rear vision to see what traffic may be approaching. A driver would, of course, be under an obligation to use the rear vision mirror before pulling out from the kerb or when circumstances indicated a prudent driver would do so.
13. Photographs of the bus are in evidence and they show that the front door is right at the very front of the bus; one can step out of the door and proceed immediately across the front of the bus. All the evidence suggests that Kerryn was running across the road when struck by the second respondent’s vehicle. It is patently obvious from looking at the photograph of the front of the bus that it would take a person of Kerryn’s age no more than about two seconds to get from the steps of the bus to a position in line with the driver’s side of the bus if she was moving fairly quickly.
14. In effect the learned judge found that in that space of about two seconds the first appellant should have looked in his rear vision mirror, seen the approach of the oncoming car, appreciated the danger it occasioned to Kerryn, and then given her a warning “to be careful of the approaching vehicle”. By the time the necessity for giving any such warning was obvious to a reasonable school bus driver taking all due care for his passengers the child would have been adjacent to the driver’s side of the bus and not in a position to hear any warning. Further, any warning then given would have been too late to be effective.
15. If he was under any duty to warn, and there certainly will be occasions when a bus driver was obliged to give some form of warning to an alighting passenger, it cannot be on the basis that he was aware of the approaching vehicle in time to give a warning. If he did not know, as in my view was the position, that she was intending to cross the road then there was no specific need to give a warning about being careful in crossing the road.
16. It is extremely doubtful that any general warning such as “be careful” would have been heeded or would have avoided the accident. The learned trial judge did not find negligence in failing to give such a general warning and little more need be said about that. However, I agree with Muir J that a driver of a school bus would not generally be obliged, as a matter of course, to issue a warning to be careful to children leaving the bus.
17. Even if the first appellant did know that Kerryn resided in Kingston Drive, perhaps more particularly if he did know that, there was no reason for him to believe that she would cross the road in front of the bus. Exhibit 6, the plan prepared by one of the investigating police officers, clearly shows the point of impact well north of the intersection of Kingston Drive and Darlington Drive. In broad terms Constable McFarlane (exhibit 7) placed the accident “about 27 metres north of Kingston Place”. The rear of Lynch’s motor vehicle was “30.35 metres north of the northern kerb alignment of Kingston Place” and there were “11.7 metres of black tyre marks, indicative of harsh braking, in a straight line to the rear of the vehicle, leading up to all four tyres.” Lynch admitted that the application of brakes and striking the child were almost simultaneous, so the initial point of impact would have been some short distance closer to Kingston Drive than the commencement of the skid marks. The length of the bus does not appear to be stated in the evidence but one can gauge its size from the photographs. The rear of the bus must have been fairly close to the northern alignment of Kingston Drive. For reasons which he gave the learned trial judge concluded that the bus was somewhat more to the south than its position marked on exhibit 6, and whilst that may be so to an extent it could hardly be that far back as placed by the learned trial judge - that is the front of the bus “roughly 12 to 14 metres north of the southern kerb alignment in Kingston Drive”. But be that as it may, the point nevertheless is that the front of the bus was significantly north of the mouth of Kingston Drive. For anyone alighting from the bus and intending to proceed into Kingston Drive the more normal course would be to go behind the bus. But even if the driver knew that Kerryn was proceeding to Kingston Drive it would have only been in that split second when she crossed the front of the bus that he realised the path she was taking. It was then too late, of course, for any warning.
18. It is true that at the time school bus stops were placed immediately opposite each other in Darlington Drive. Because of that the first appellant recognised that there was some general danger associated with that part of the street, and he was aware of previous occasions when he had seen some “near misses at that bus stop”. That is a relevant circumstance to bear in mind when one is considering whether or not the first appellant was negligent. But the fact that there were some dangers associated with the area does not necessarily mean that he ought to have given the warning in the terms found by the learned trial judge. As noted above it was virtually impossible for him to have given a timely warning “to be careful of the approaching vehicle”.
19. It follows, in my view, that the finding of negligence against the first appellant as made by the learned trial judge is not supported by the evidence and cannot stand.
20. As I would allow the appeal with respect to the finding that the first appellant was negligent, and therefore the second appellant vicariously liable for that, it is necessary for me to consider the other basis on which the learned trial judge held that the second appellant was negligent; the majority did not have to consider that point given they would dismiss the appeal with respect to the first ground.
21. The learned trial judge found that the second appellant had adopted a policy of requiring students to produce an appropriate school bus pass or other ticket in order to travel on one of its buses. If the appropriate pass or ticket could not be produced then the policy was either to require payment of a fare or not convey the student as a passenger.
22. On the day in question Laura, Kerryn’s younger sister, forgot her pass. The first appellant said to her words to the effect that she should go home and get it as he could not let her on the bus without it. Laura then left the bus and the first appellant awaited her return. Because of the delay in Laura returning Kerryn asked permission of the first appellant to leave the bus to go and see what was causing the delay. It was in those circumstances that Kerryn left the bus and was struck by the oncoming car.
23. The learned trial judge found that in adopting the policy which it did the second appellant was guilty of negligence. He said: “In my view the policy on its face and without any explanation from either the first or second defendant was a grossly unreasonable one which put school children of tender years at unnecessary risk.” Later he said: “I take the view that the relationship between the school children and the first and second defendants was such as to require them to take the precautions and to avoid implementing the policy relating to exclusion of children without a bus pass which I have already discussed in detail.”
24. Nowhere does his Honour consider the issue of causation, that is the link between the adoption of the policy in question and the death of Kerryn.
25. I can find nothing unreasonable in the policy as found by the learned trial judge to exist. It was not a case of a young child being abandoned in some remote, unfamiliar place. The pick-up bus stop was near the children’s homes and the children, and their parents, would have been well aware of the policy, reasonable in the circumstances, of the children either carrying a pass or being required to pay a fare. If the child was considered old enough and responsible enough by its parents to proceed to the bus stop without parental supervision then it could hardly be said that the bus company was negligent in requiring the child to return home to collect the forgotten pass.
26. There was clearly no risk to children if the well-known policy was adhered to by parents and children.
27. In any event it was not Laura who was injured. It is difficult to see how the existence of the policy affected in any way the duty which the bus driver, and the bus company, owed to Kerryn. The only relevance of evidence as to the policy is that it explains why the situation developed where Kerryn wished to leave the bus and return home. The policy cannot affect, one way or the other, the extent of the duty, if any, owed by the bus driver to Kerryn.
28. The existence of the policy cannot, in my view, afford a basis for a separate and distinct finding of negligence against the second appellant; the existence of the policy did not create in the second appellant any duty independently of the duty the driver of its bus owed to passengers.
29. In my view there is no basis for the finding by the learned trial judge that the second appellant was guilty of negligence because of the policy it adopted with respect to bus permits.
30. In my opinion the appeals by the first and second appellants should be allowed. The action should be dismissed against the first and second appellants. The second respondent’s claim for contribution or indemnity against the first and second appellants should be dismissed. The second respondent should pay the appellants’ costs of and incidental to the appeal.
31. I agree with the order for costs proposed by Muir J with respect to the notice of contention.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Before  Pincus J.A.

Williams J.

Muir J.

Appeal No. 4030 of 1998

[Jarvis & Anor v. Scrase & Ors]

BETWEEN:

HENRY JAMES JARVIS

(First Defendant) First Appellant

AND:

SURFSIDE BUS LINES PTY LTD

(ACN 010 957 552)

(Second Defendant) Second Appellant

AND: 

JEFFREY LAURENCE SCRASE

(Plaintiff) First Respondent

AND:

KEVIN JOHN LYNCH

(Third defendant) Second Respondent

AND:

NZI INSURANCE AUSTRALIA LIMITED

(ACN 001 948 278)

(First Third Party) Third Respondent

AND:

ZURICH AUSTRALIAN INSURANCE LIMITED

(ACN 000 296 640) 

(Second Third Party) Fourth Respondent

AND:

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LIMITED

(ACN 000 456 799)

(Third Third Party) Fifth Respondent

Appeal No. 4031 of 1998

[Jarvis & Anor v. Scrase & Ors]

BETWEEN:

HENRY JAMES JARVIS

(First Defendant) First Appellant

AND:

SURFSIDE BUS LINES PTY LTD

(ACN 010 957 552)

(Second Defendant) Second Appellant

AND: 

JEFFREY LAURENCE SCRASE

(Plaintiff) First Respondent

AND:

KEVIN JOHN LYNCH

(Third defendant) Second Respondent

AND:

NZI INSURANCE AUSTRALIA LIMITED

(ACN 001 948 278)

(First Third Party) Third Respondent

AND:

ZURICH AUSTRALIAN INSURANCE LIMITED

(ACN 000 296 640) 

(Second Third Party) Fourth Respondent

AND:

MERCANTILE MUTUAL INSURANCE (AUSTRALIA) LIMITED

(ACN 000 456 799)

(Third Third Party) Fifth Respondent

REASONS FOR JUDGMENT - MUIR J

Judgment delivered 22 December 1998

Introductory comments

1. Kerryn Scrase, aged 10, was killed on Darlington Drive, Banora Point on 17 November 1993 when she ran out in front of a school bus from which she had alighted and was struck by a car. Her father, Jeffrey Scrase, and mother, Carol Scrase, in separate actions, sued the bus driver, Henry James Jarvis (the first appellant), the owner of the bus and employer of the bus driver, Surfside Bus Lines Pty Ltd (the second appellant) and Kevin Lynch (the driver of the car). In each action the bus driver and the bus company joined NZI Insurance Australia Limited, (“the third respondent”) the bus company's compulsory third party insurer, Zurich Australian Insurance Limited, the bus company's public risk insurer and Mercantile Mutual Insurance (Australia) Limited, another of the bus company's insurers. The first respondents succeeded in their respective claims against each of the first and second appellants and the driver of the car, liability being apportioned between the first and second appellants on the one hand and the car driver on the other in the proportions of 40% and 60% respectively. The third respondent was held liable to indemnify the first and second appellants against their liability under the judgment. The third parties (other than the third respondent) were exonerated from liability.
2. The first and second appellants appealed against the whole of the judgment. The third respondent filed a notice of contention seeking that the appellants' third party claim against the third respondent be dismissed with costs. The other third parties, NZI Insurance Australia Limited and Mercantile Mutual Insurance (Australia) Limited, both sought to uphold the judgment and, in particular, the liability of the third respondent.

Relevant facts

3. The respondents' three daughters Kerryn (aged about 10), Laura (aged 8) and Michelle (aged 6) had travelled to and from school on one of the second appellant's buses for the whole of the school year preceding 17 November 1993. The first appellant regularly drove the bus on which they travelled. He knew the children and that they lived in or off Kingston Drive, a short street running into Darlington Drive at right angles from the east. The latter is a reasonably well used road which collects traffic from Benowa near Tweed Heads. The learned primary judge described it as “a significant traffic collector road in this area at 8.30 in the morning”. The general width of Darlington Drive is 10.5 metres from kerb to kerb, but at each junction of side roads such as Kingston Drive with Darlington Drive, the footpath protrudes a further distance of about 2.4 metres into Darlington Drive. Bus stops were situated more or less opposite each other on either side of Darlington Drive, just to the north of where the northern side of Kingston Drive meets Darlington Drive.
4. The record does not reveal the carrying capacity of the bus, but the evidence shows it to be about the size of buses generally used by public transport authorities in major Australia cities. There were 50 to 70 children on the bus at the time of the accident.
5. On 17 November 1993 the policy of the first respondent was, and since 26 July 1993 had been, to refuse to carry students who failed to produce “either a school bus pass, proper fare, weekly ticket or school travel authority”. There is some evidence to the effect that the second appellant's drivers had the right to issue a courtesy ticket, it would seem, if they recognized a child without a pass and, I infer, concluded that he or she probably possessed one. However, as events transpired, it is of no particular relevance whether or not the first appellant had a discretion to issue a complimentary ticket.
6. The first appellant had a perception that the bus stop at which relevant events occurred was situated so as to pose a danger to children crossing the road and that children were often disposed to take insufficient care when crossing the road. In the course of an interview between the first appellant and a police officer on 3 March 1994, the following exchange occurred -

“Q. Is there anything you feel you could have done to avoid this accident happening?”

A. “No, it happened that quick, I didn't realise it was going to happen. I have seen a few near misses at that bus stop, not with my bus but with kids off other buses.”

Q. Is there anything further you would like to add in relation to this matter?

A. I have seen kids off other buses at this particular bus stop many times and they run across the road without looking. They do it a lot. The kids have got to learn how to cross the road, look before they run out in traffic. There is a lot of traffic on that road and the bus stop is in a bad place.”

He said in another record of interview -

“I tell the kids on my bus every day not to go round in front of the bus when leaving it and to wait for the bus to leave before crossing the road. I also tell them to watch out when crossing the road.”

There is no evidence that such a warning was given on 17 November.

7. On the morning of 17 November 1993, the three Scrase children walked from their house about eight doors down Kingston Drive to the bus stop across Darlington Drive from the end of their street. Laura, who had forgotten her bus pass, attempted to get on the bus, but was told by the first appellant that she was not allowed on without it. She asked if she could go home to get it and the first appellant gave his approval. According to Laura he told her to “hurry up and go get it because I couldn't get on without it”. In a record of interview he said the words he used were “Yes, if you don't take too long”. At the time there were a number of other children waiting at the bus stop. He then checked them into the bus. When this was done he remained in the driver's seat and waited for Laura. When Laura failed to reappear Kerryn approached him and asked if she could go and see if her sister was coming. He said “yes” and nothing more. The primary judge found that the first appellant “... must have known that the child was anxious to try to speed up the return to the bus of her younger sister”. There was no challenge to that finding. It was an inference reasonably open to the primary judge on the evidence.
8. Laura gave evidence, which was not objected to, that she had been taught that once she was on the bus she was under the control of the driver and, in effect, was obliged to follow his directions.
9. From his position in the driver's seat, the first appellant had an unobstructed view down Darlington Drive in his rear vision mirror for approximately 250 metres. If he had looked in the mirror when Kerryn spoke to him he would have seen the car which struck Kerryn approaching. Kerryn, upon alighting, ran out from in front of the bus in order to cross Darlington Drive and was struck by a car travelling in the same direction as the bus at a speed of between 60 and 65 kph.
10. As a result of their daughter's death in the circumstances outlined above, the first respondents suffered severe psychiatric injury for which they were awarded damages. There is no challenge to the findings that the first respondents suffered such injury in consequence of the conduct which the primary judge found to be negligent.

Relevant conclusions of the learned primary judge in relation to the negligence of the first and second appellants and grounds of appeal.

11. Although there are some 22 grounds of appeal, they fall into two broad categories. The first is that it was erroneous for the primary judge to conclude that that the second appellant was negligent in forming and/or implementing the bus pass policy and that the first appellant was negligent in implementing such policy. The appellants submit that the second appellant was entitled to impose whatever conditions in respect of travel in its buses it saw fit and that if the conditions imposed had been met there would have been no risk to passengers such as Kerryn. It is further argued that the formulation and/or implementation of such a policy could not, of itself, have given rise to any duty of care. In view of the conclusion I have reached on the other major basis of challenge to liability on the part of the first and second appellants, it is unnecessary for me to express a view on this ground. On the hearing of the appeal the appellants' counsel focussed most of their oral submissions on the other major ground of appeal, probably because of a perception (justified in my view) that it posed the more difficult hurdle to surmount.
12. That ground, broadly expressed, is that the conclusion the first appellant (and the second appellant, through vicarious liability), had a duty to warn Kerryn on leaving the bus to be careful when crossing the road was erroneous. The main thrusts of the appellants' arguments were that -

a. as a general proposition, a driver of a public bus has no duty of care to passengers  whether very old or very young exiting the bus;

b. the first appellant, as the driver of a public bus, had no “relevant power, authority or control over his passengers” and was thus not in a position in which he had any duty of care. Such a duty could not arise merely out of realisation that a child may attempt to cross the road in circumstances of some predictable risk.

13. The following points were made in support of the contention that the particular facts of the case did not give rise to a duty to warn by the first and/or second appellants -

1. the finding that the bus stop was in a “dangerous position” was not open on the evidence as, when the first appellant informed an interviewing police officer that “the bus stop was in a bad place”, he was speaking merely of the bus stop being on a busy road;

2. the fact that the first appellant had seen “some near misses” on previous occasions could not of itself give rise to a duty to warn. To conclude to the contrary would suggest a duty which “embrace(d) an unidentifiable range of persons to an impracticable and unreasonable extent”;

3. the finding that the first appellant ought to have seen the car approaching in his rear vision mirror is insupportable having regard to the number of children on the bus and the other demands which it may be inferred the driver had on his attention;

4. the primary judge was wrong to find that, because of Kerryn's age and the propensities of youth, the first appellant should have known that she was at risk in crossing the road. It is pointed out that the three Scrase sisters had walked unsupervised to and from the bus stops at which they caught and left the school bus on all other school days during the 1993 school year. Kerryn impressed one of her teachers as “a mature young lady, well-behaved, a very sensible 10 year old”; and that neither Kerryn's demeanour nor anything she said manifested or would have manifested to a reasonable person that she was under pressure at the time of leaving the bus.

14. In support of the broad argument against liability, the appellants contend -

“There are strong policy grounds for denying that a driver ... of public transport owes a duty of care to passengers as -

1. at the time the duty is said to arise, the driver's occupational responsibilities may lie elsewhere;

2. it is unreasonable to impose upon a driver such a duty given his conflicting responsibilities;

3. to discharge the separate duty owed to each passenger of such type may put the driver in a position of conflict where he would be required to leave the passengers in the vehicle unsupervised while he had to leave the vehicle to escort someone across the road.”

15. It is further submitted that -

“... to ascribe a duty in the ways suggested by the learned trial judge is contrary to principle. It elevates persons in the appellants' position, common carriers to insurers of safety. That runs quite contrary to the limitations in principle and the responsibility of those having custody of children let alone those, like the appellants, who have no such responsibility: see, for example, Towart v. Adler (1989) 52 SASR 373, 375, Robertson v. Swancer (1989) 52 SASR 356, 361.”

Existence and breach of a duty of care

16. A duty of care to Kerryn on the part of the first appellant will have arisen if “... there exists between them a sufficient relationship of proximity, such that a reasonable man in the (first appellant's) position would foresee that carelessness on his part may be likely to cause damage to” Kerryn: Wyong Shire Council v. Shirt (1979-1980) 146 CLR 40 at 44 per Mason J, with whose reasons Stephen and Aickin JJ agreed.
17. The risk that Kerryn might, in the absence of a warning by the first appellant, attempt incautiously to cross Darlington Drive in such a manner as to imperil her safety, was foreseeable. A risk may constitute a foreseeable risk even though it is unlikely to occur. It is enough that the risk is not farfetched or fanciful: Wyong Shire Council v. Shirt (1980) 146 CLR 40 at 48 per Mason J and Nagle v. Rottnest Island Authority (1992-1993) 177 CLR 423 at 431 per Mason CJ, Deane, Dawson and Gaudron JJ. It is notorious that children will sometimes behave incautiously and impulsively when crossing roads, particularly when distracted or under pressure. The first appellant was conscious of this propensity. It would have occurred to a reasonable man that there was a possibility, which was more than merely fanciful, that Kerryn might act incautiously in attempting to cross the road and thus expose herself to the risk of being killed or injured by a car.
18. Existence of reasonable foreseeability does not, of itself, establish liability. It must be shown also that there existed the requisite degree of “proximity” between the first appellant and Kerryn: see, for example, Jaensch v. Coffey (1984) 155 CLR 549 and Bryan v. Maloney (1995) 182 CLR 609 at 617.
19. The concept of “proximity” as a determinative of negligence, although under challenge, remains part of orthodox theory. In Gala v. Preston (1991) 172 CLR 243, it was said in the judgment of Mason CJ, Deane, Gaudron and McHugh JJ at 252-253 -

“However, it is necessary to take account of developments affecting the concept of the duty of care since Smith v. Jenkins, Progress and Properties and Jackson v. Harrison were decided. Commencing with Jaensch v. Coffey, ... this Court, in a series of decisions, has accepted that a relevant duty of care will arise under the common law of negligence only in a case where the requirement of a relationship of proximity between the plaintiff and the defendant has been satisfied. ... The requirement of proximity constitutes the general determinant of the categories of case in which the common law of negligence recognises the existence of a duty to take reasonable care to avoid a reasonably foreseeable and real risk of injury. In determining whether the requirement is satisfied in a particular category of case in a developing area of the law of negligence, the relevant factors will include policy considerations.”

Brennan J, in separate reasons, did not accept the role given to the concept of “proximity” in the joint judgment. Dawson J also expressed some reservations on the role of proximity.

20. In Bryan v. Maloney (1995) 182 CLR 609, Mason CJ, Deane and Gaudron JJ said at 617-618:

“The cases in this Court establish that a duty of care arises under the common law of negligence of this country only where there exists a relationship of proximity between the parties with respect to both the relevant class of act or omission and the relevant kind of damage. In more settled areas of the law of negligence concerned with ordinary physical injury to the person or property of a plaintiff caused by some act of the defendant, reasonable foreseeability of such injury will commonly suffice to establish that the facts fall into a category which has already been recognized as involving a relationship of proximity between the parties with respect to such an act and such damage and as ‘attracting a duty of care, the scope of which is settled.’”

21. Brennan J, at 652-655, questioned the utility of proximity as a concept. Toohey J, in a separate judgment, expressed approval of the concept.
22. In Hill v. Van Erp (1997) 188 CLR 159, Dawson J, at 177-8, referred to the joint judgment in Burnie Port Authority v. General Jones Pty Ltd (1994) 179 CLR 520 at 543 and said -

“Reasoning by analogy from decided cases by the processes of induction and deduction, informed by rather than divorced from policy considerations, is not, in my view, dependent for its validity on those cases sharing an underlying conceptual consistency. It is really only dependent upon the fact that something more than reasonable foreseeability is required to establish a duty of care and that what is sufficient or necessary in one case is a guide to what is sufficient or necessary in another.

Nevertheless, and notwithstanding the criticism of the concept by Brennan J, whose approach has found favour in the House of Lords, I retain the view which I expressed in Gala v Preston that the requirement of proximity is at least a useful means of expressing the proposition that in the law of negligence reasonable foreseeability of harm may not be enough to establish a duty of care. Something more is required and it is described as proximity. Proximity in that sense expresses the result of a process of reasoning rather than the process itself, but it remains a useful term because it signifies that the process of reasoning must be undertaken. But to hope that proximity can describe a common element underlying all those categories of case in which a duty of care is recognised is to expect more of the term than it can provide.

...

Reasonable foreseeability of harm does not, of itself, always give rise to a duty to take care. Something more is required according to the category of the case in question, and that something more is called proximity.”

Toohey J expressed general agreement with Dawson J's views. Brennan CJ and Gaudron J did not find it necessary to discuss proximity. McHugh J, noting that he was a party to the joint judgment in Gala v. Preston, commented at 210 -

“But the present case has reinforced my scepticism as to whether the concept of proximity gives any real guidance in determining the existence of a duty of care in difficult and novel cases.”

Gummow J expressed the view that “there is real difficulty in treating the requirement of a relationship of proximity as an overriding requirement which provides the conceptual determinant (or a determinant) for the recognition of an existence of a duty to take reasonable care to avoid reasonably foreseeable risk of injury”. His Honour concluded his discussion of proximity as follows (p.  239) -

“To speak of ‘proximity’ is to invite a series of questions which spring from the particular circumstances of the case in question. Put another way, as it was in the Supreme Court of Canada (by La Forest J in Canadian National Railway Co v Norsk Pacific Steamship Co), proximity ‘expresses a result, rather than a principle’. Nevertheless, I would, with respect, accept (as Dawson J put it in Gala v Preston) that it would be going too far to say that the notion of proximity is entirely without legal content and that no principles emerge from the process of extrapolation from decided cases or categories of decided cases.”

23. In Romeo v. Conservation Commission of the Northern Territory (1998) 192 CLR 431, Brennan CJ, McHugh and Hayne JJ, in separate judgments, did not find it necessary to revisit the role of proximity and neither did Toohey and Gummow JJ, in their joint judgment. Gaudron J said at 457 -

“The notion of ‘proximity’ is not without its difficulties. However, it is a useful term indicating that a duty of care depends on some definite relationship, some assumption of responsibility or some significant feature of the position of one person in relation to another, and not simply the foreseeability of injury to that person.”

Kirby J at 476 said -

“In Pyrenees Shire Council v Day (1998) 192 CLR 330 at 419, I have expressed my preference for the conclusion that three considerations are involved in deciding whether a duty of care exists:

1. Whether it was reasonably foreseeable to the alleged wrong-doer that particular conduct or an omission on its part would be likely to cause harm to the person who has suffered damage or a person in the same position;

2. Whether there exists between the alleged wrong-doer and such person a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’; and

3. Whether it is fair, just and reasonable that the law should impose a duty of a given scope on the alleged wrong-doer for the benefit of such person.”

24. The following circumstances combine to establish a sufficient degree of proximity or to demonstrate that, having regard to the reasoning and conclusions in broadly analogous negligence cases, the circumstances were such, as to lead to the conclusion that a duty of care ought be imposed on the first appellant and, in consequence, on the second appellant.
25. The first appellant was not merely a driver of a public bus. He was the driver of a school bus carrying school children to and from school. That he exercised a measure of control over his passengers appears to have been accepted by him and his passengers. Kerryn spoke to him in order to obtain his permission to leave the bus. The learned primary judge observed of the first appellant and Kerryn - “... both she and the first defendant obviously assumed that she did have to get his permission ”, and implied he gave her the permission sought. The first appellant derived a degree of authority from the fact that he was the only adult on the bus and also from being in charge of the vehicle. There is the added consideration that the first appellant knew Kerryn and her two sisters from regularly driving them to and from school. He knew that they lived down Kingston Drive and was ideally placed to warn of the dangers posed by traffic, of which he was quite conscious. According to him, he customarily availed himself of the opportunity to issue such warnings. He also played a role in creating the occasion for Kerryn to leave the bus and seek her sister by refusing entry to Laura and by electing to wait for her return.
26. Some comparisons may be drawn between the respective positions of teachers and drivers of school buses. In both cases the child is beyond the control and protection of his or her parent. In Geyer v Downs (1977) 138 CLR 91 at 93 Stephen J (with whose reasons Mason and Jacobs JJ agreed) referred with apparent approval to a passage from the judgment of Winneke CJ in Richards v Victoria [1969] VR 136 at 138-9 in which his Honour had said -

“The reason underlying the imposition of the duty would appear to be the need of a child of immature age for protection against the conduct of others, or indeed of himself, which may cause him injury coupled with the fact that, during school hours the child is beyond the control and protection of his parent and is placed under the control of the schoolmaster who is in a position to exercise authority over him and afford him, in the exercise of reasonable care, protection from injury.”

27. The matters mentioned earlier of disparity in age and control over the vehicle provide further points of similarity.
28. I accept, however, that the nature of the control exercisable by a teacher on the one hand and the driver of a school bus on the other are different. The teacher has a more authoritarian role within a structure and environment which supports the teacher's exercise of authority and control over school children. I draw the comparison, principally, in order to assist in demonstrating that a finding of negligence in this case involves no novel application of principle.
29. I do not consider that there are any policy considerations which would prevent the conclusion that the circumstances of this case gave rise to a duty of care on the part of the first appellant which necessitated the giving of a warning. To the contrary, there are matters which suggest that a duty ought be found to exist. The second appellant was carrying school children for profit on a school bus. The first appellant was the driver of the bus. Clearly both appellants assumed a degree of responsibility for the safety of their young charges. It is well recognised that a factor which tends to give rise to the existence of a duty of care is the assumption by a defendant of responsibility for the plaintiff particularly where the plaintiff “might reasonably expect that due care will be exercised”: Kondis v. State Transport Authority (1984) 154 CLR 672 at 687.
30. I readily accept that the appellants were not in the position of insurers. It is unlikely that the driver of a school bus would be obliged, as a matter of course, to issue warnings to be careful to children leaving the bus. The driver would surely be entitled to have regard to the high degree of probability of tuition in road safety at school and at home as well as to prior warnings which he or she may have given to or in the presence of a student passenger. The circumstances under consideration though were unusual. There is a likelihood that Kerryn was anxious and distracted as a result of her younger sister's failure to return. Her anxiety was demonstrated, to a degree, by the fact that she sought permission to leave the bus to look for her sister. In his reasons the primary judge said -

“I infer that he was aware that Kerryn as the eldest of the three children exercised a degree of childish supervision over her two younger  sisters and on the day in question felt some responsibility for her younger sister’s delay in returning to the bus which had the consequence of delaying its departure for school. In my view, the first defendant upon the slightest reflection would have known and understood the moral or family obligation which Kerryn would, and almost certainly did feel, was imposed upon her to take what steps she could personally to hasten the return of her younger sister so that the bus could take the school children without further delay to school at Tweed Heads.

... Laura was after all only 8 years of age and it is common experience that children of that age do not always have the same perception of duration of time as more mature people.”

A reasonable person in the first appellant's position would have foreseen the existence of the risk of injury identified earlier. In Wyong Shire Council v. Shirt (supra) Mason J at 47-48, after stating that in deciding whether there has been a breach of a duty of care the tribunal of fact must first consider foreseeability of a risk of injury to the plaintiff or to a class of persons including the plaintiff, continued -

“If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position.”

31. A reasonable man in the position of the first appellant would have perceived there to be a risk of serious injury or death, and the probability of its occurrence to be rather more than slight or remote. In response to the risk he would have given a warning. At the very least he would have checked for approaching vehicles. He may well have done both. To do so would have taken very little time, involved almost no inconvenience and, on the first appellant's own evidence, would have been consistent with his practice of issuing frequent warnings. There were no conflicting responsibilities which, in any way, militated against the giving of a warning to Kerryn. There is no evidence that the first appellant, at relevant times, was distracted or engaged in another task or tasks. He did not give evidence. Even if the first appellant had been occupied on matters such as ticketing or maintaining control, his attention was engaged by Kerryn prior to her departure from the bus and in such a way that he was obliged to give consideration to the question of whether she be allowed to leave.
32. That Kerryn acted with exceptional carelessness does not exonerate the first appellant. Others must take account of the possibility that one or more of the persons to whom the duty is owed might fail to take proper care of his or her own safety: Nagle v Rottnest Island Authority (1993) 177 CLR 423 at 431.
33. In my view, there is no substance in the appellants' “conflicting responsibilities” point. Whether a duty of care exists and is breached is required to be assessed by reference to the particular circumstances of each case. In some circumstances, the existence of reasonable claims on a bus driver's time and attention which limit his or her ability to consider the circumstances of individual passengers and issue warnings of danger may well result in a conclusion that there was no duty to warn. But the facts under consideration indicate the existence of such a duty.
34. The formulation of principle by the appellants' counsel was far too broad even if it is taken as being confined to the absence of a duty to warn. For example, if a bus driver stops a bus to enable a passenger to alight beside deep excavation at the side of the road which the driver has observed on approaching it, but which the driver knows or ought reasonably to know will not be obvious to an alighting passenger, can it be supposed that the driver has no duty to warn? Numerous such examples can be given. In Prescott v Lancashire United Transport Co Ltd [1953] 1 WLR 232 (C.A.) a bus conductor was held to have had a duty to warn passengers not to alight from the bus. The bus had stopped in traffic at a place which was not a bus stop, the bus door opened and a passenger was injured when the driver, not knowing of the passenger’s movements, drove off as she was attempting to alight. Consequently, it is plain that there can be no absolute principle that a driver of a public bus has no duty to warn passengers whatever the circumstances. In the course of argument, it was submitted that if there was a duty to warn it was limited to cases in which the driver had an actual perception of the danger against which the warning ought be issued. It would be contrary to principle to limit liability in negligence with regard to the state of mind of the alleged wrongdoer. Consequently, in my view, the trial judge’s conclusion that the first appellant had a duty to warn was correct.

The liability of the third respondent as compulsory third party insurer

35. There was in existence at relevant times a policy of insurance issued by the third respondent in favour of the first and second appellants in the form of that in schedule 1 to the Motor Accidents Act 1988 (NSW). Clause 1 of the subject policy provides -

“The insurer insures the owner of the motor vehicle and any other person who at any time drives the vehicle ... against liability in respect of the death of or injury to a person by the fault of the owner or driver of the vehicle in the use or operation of the vehicle ...”

36. It was contended on behalf of the third respondent that, if contrary to the third respondent's contentions, the first appellant was negligent and death or injury had been caused “by the fault of the ... driver”, nevertheless, any such fault was not “in the use or operation of the” bus. It was submitted that if there was an actionable failure to warn, that failure related to the conduct of the business of the second respondent rather than to the way in which the bus was used or operated.
37. The meaning of the phrase “in the use or operation of the vehicle” in the context of policies of insurance issued under the Motor Accidents Act 1988 has been considered on numerous occasions by the Court of Appeal in New South Wales. In NRMA Insurance Ltd v NSW Grain Corporation (1995) 22 MVR 317 (CA), Clarke JA, with whose reasons Priestley and Powell JJA agreed, said at 321 -

“The expression ‘use or operation’ is not to be regarded in a narrow sense. Principles have been laid down in a series of cases in the High Court concerning the construction of the old Act which provide guidance in the approach to be adopted to the problem presently under consideration. In Fawcett v BHP By-Products Pty Ltd (1960) 104 CLR 80; [1967] ALR 180, Menzies J said, at CLR 87; ALR 182:

‘The Act is not, I think, concerned with fine distinctions but requires the issue of a policy that covers liability arising out of everything that falls fairly within the conception of the use of a motor vehicle.’

Again in Green & Lloyd, supra, Barwick CJ, at CLR 444; ALR 110, cited Fawcett with approval and said:

‘... in this field one should not be seeking subtleties but rather applying broad and practical conceptions’.

More recently in State Government Insurance Commission v Stevens Bros Pty Ltd (1984) 154 CLR 552; 52 ALR 441, a majority of the High Court approved these statements.

The words used by their Honours and their application to a variety of state Acts providing for compulsory third party motor vehicle insurance make it clear that the broad approach of which they speak should be applied to the statutory policy under consideration here. Consistently with this approach there has been a liberal interpretation accorded to the phrase ‘the use of a motor vehicle’ so that it is, for instance, not limited to the movement of the vehicle or the operation of some part of its mechanism.”

38. NRMA was a case in which the plaintiff, with the assistance of another employee of the defendant, had taken a grain elevator by truck and trailer to its destination and was injured when the grain elevator toppled over whilst being unloaded. At 321 Clarke JA made reference to Government Insurance Office (NSW) v. R J Green & Lloyd Pty Ltd (1966) 114 CLR 437 in which Windeyer J at 446 observed in relation to the phrase “use of a motor vehicle” -

“[a]ny use that is not utterly foreign to its character as a motor vehicle is, I consider, covered by the words ...

I consider that the kind of use of a motor vehicle that is covered by the policy is driving it or doing something to it or with it that is incidental to its normal use as a motor vehicle ... The loading of a vehicle designed to be used, and ordinarily used, for the carriage of goods is a necessary element in its ordinary use. Loading it is incidental to the use of it in the normal way.”

At 322 his Honour pointed out that “There is no reason to distinguish ‘unloading’ from ‘loading’ ...”.

39. In Balfour Beatty Power Constructions (Australia) Pty Ltd v. Government Insurance Office of New South Wales (1996) 24 MVR 162, Meagher JA described RJ Green & Lloyd as “the locus classicus on this class of problem”.
40. Mercantile Mutual Insurance (Aust) Ltd v Moulding (1995) 22 MVR 325 (CA) was heard on the same day as NRMA Insurance Ltd (supra) by a court with the same composition. The plaintiff in that case was injured in the course of her employment by a bullet accidentally discharged from a rifle in the cabin of the defendant's utility whilst a lamb was being loaded into the cabin. It seems that the defendant was not in the vehicle at the time but was intending to drive the vehicle once the lamb had been loaded. Clarke JA, with whom the other members of the Court agreed, said at 327 -

“As I have indicated the plaintiff was loading the lamb into the cabin preparatory to the lamb being taken elsewhere in the utility and, in so far as the loading was an incidental part of the operation of carrying the lamb there was, relevantly, a use of the vehicle. In the context that the essential negligence of the defendant was in requiring that the incidental loading operation be carried out in dangerous circumstances I would conclude that not only was there a relevant use but that the negligence of the defendant was ‘in’ that use.”

The approach taken in NRMA Insurance (supra) is consistent with that taken in subsequent decisions such as AMP General Insurance v. Brett (1998) 27 MVR 492 and Mercantile Mutual Insurance (Australia) Ltd v. Hogan (C.A. (NSW) No.  40370 of 1994, 10 May 1996, unreported).

41. The bus was a school bus. As such, its ordinary use was for the carriage of school children. The picking up and putting down of children was an integral part of its ordinary use. At the time of the accident, the bus was at a bus stop on its normal route and its driver was engaged in the normal routine function of picking up a group of children from a bus stop. The failure of the first appellant bus driver, whilst sitting in the driver's seat of the bus and speaking to a child who was alighting from the bus, to give the warning necessitated by the circumstances earlier discussed, in my view, amounts to a fault of the driver in the use of the vehicle. The failure to warn was “incidental to the normal” or ordinary use of the bus. The fact that Kerryn alighted from the bus immediately before the accident does not alter the fact that the bus was in the process of picking up children and that the first appellant's fault occurred as part of that process. The bus was waiting for one of its passengers to return and comply with one of the second defendant's conditions of carriage - production of a school bus pass.
42. There is no substance in the submission that any “failure” by the first appellant was in the conduct of the second appellant's bus line business rather than in the use or operation of the bus. The bus and its driver were engaged in a business operation, but it does not follow that the driver's failure to warn should be categorised as a business activity and, in consequence, as not being capable of being regarded as in the use or operation of the bus. The fallacy of such reasoning was exposed in Curtain Bros (Qld) Pty Ltd v. FAI General Insurance Co Ltd [1995] 1 Qd R 142 at 146-7.

Conclusion

43. For the above reasons, I would dismiss each of the appeals of the first and second appellants with costs.
44. I would order that the third respondent pay to the other parties, including the third parties other than the third respondent their costs of and incidental to the notices of contention.