Lessons from recent chain of responsibility cases

Two recent New South Wales Supreme Court decisions provide important lessons for road transport operators and consignors on their liability under chain of responsibility laws.

Kemp v Doble, Kemp v Doble Express Transport Pty Ltd [2014] NSWSC 785

Kemp v Air Liquide Australia Ltd [2014] NSWSC 1200

Air Liquide (the consignor) engaged Doble Express (the operator) to collect a full gas cylinder from Air Liquide and deliver it to Oakley Winery, and to then collect empty gas cylinders from Oakley Winery. Doble Express, using a Volvo rigid truck and a single axle pig trailer, first collected the five empty gas cylinders, weighing approximately 3.5 tonnes. Its driver restrained the cylinders using a single 2,500 kg synthetic ratchet strap. No anti-slip material or dunnage was placed between the base of each cylinder and the deck of the trailer.

As the driver negotiated a left hand bend in the road at approximately 90 km per hour, the cylinders moved across the bed of the trailer to the right hand side, causing the trailer to dip towards the right. The trailer ultimately flipped into the path of oncoming traffic. A portion of the trailer and at least one cylinder collided with a car, killing its driver.

Proceedings against the operator

Proceedings were commenced against Doble Express and its director, Mr Doble, under the chain of responsibility provisions in the Road Transport (General) Act 2005 (NSW) (RTG Act). The RTG Act has now been replaced by the Heavy Vehicle National Law. Because the load restraint breach involved an appreciable risk to public safety, Doble Express was found guilty of a severe breach of section 56, which deals with overloading. Mr Doble was also found guilty under section 178, which makes directors liable for offences committed by the company.

In determining the appropriate penalties, the Court was not satisfied that the event was an isolated one, or that there was no prospect of Doble Express reoffending. The Court found that Doble Express’ approach to securing loads adequately at distant locations had not changed appreciably since the accident: under the direction of Mr Doble, Doble Express ‘continued to operate its freight transport business in a way which presented ongoing and largely uncontrolled and unaddressed risks to public safety’.

Mr Doble’s argument that he had no involvement with the load in question, and that he left loading issues to his appropriately qualified depot manager, did not persuade the Court that the appropriate penalty should be reduced. The Court observed that ‘it is quite insufficient for a director of a company in the heavy transport industry to simply leave these matters in the hands of subordinates without ensuring adequate training, adequate supervision, adequate checking and on-going management of the safety requirements imposed by the heavy vehicles legislation’.

The maximum fine under the RTG Act was $27,500 for a company and $5,500 for a director. The Court imposed a fine of $24,750 on Doble Express and $4,400 on Mr Doble.

Proceedings against the consignor

In a separate case, Air Liquide, as the consignor, was also prosecuted under the chain of responsibility provisions of the RTG Act.

After proceedings were commenced, Air Liquide implemented a number of safety and risk management processes, including:

• providing online induction training for third party carriers and customers
• engaging third party carriers through a contractual mechanism that obliged them to comply with Air Liquide’s guidelines and procedures
• requiring third party carriers to implement industry approved load restraint guidelines.

The Court noted that many of the steps that Air Liquide took after the incident were steps that it should have already put in place. Nonetheless, the Court found that these measures were likely to prevent similar offences occurring in the future. Air Liquide’s record of no previous convictions under the legislation was also considered. The Court found that Air Liquide’s culpability could properly be characterised as at the lower end of seriousness and therefore imposed a fine of $5,500, representing 20 per cent of the maximum penalty.

Lessons to be learned

The two cases demonstrate the willingness of courts to impose penalties close to the maximum where operators do not have proper systems and practices of load restraint. Directors will not escape liability simply by delegating safety and compliance to suitably qualified staff. Transport operators and others in the supply chain should be aware that the maximum penalty that a court can impose on a company for a breach of load restraint provisions under the new HVNL is $50,000: much higher than under previous state legislation.