Court finds Council not in breach of statutory duty Court finds Council not in breach of statutory duty

Court finds Council not in breach of statutory duty

13 October 2016 | Public & Product Liability

In Issue

  • Whether or not a local council breached its statutory duty to maintain and repair public roads under the Road Management Act 2004 (Vic). 

The Background

The plaintiff, Quality Roads, was a company in the business of providing road maintenance service. It entered into an agreement with the defendant, Baw Baw Shire Council (Council) to provide such services on local roads within the Baw Baw Shire Municipality. In its statement of claim, the plaintiff alleged, among other things, that by failing to maintain and repair public roads within the municipality in accordance with the standards specified in a road management plan, Council breached its statutory duty under s 40 of the Road Management Act 2004 (Vic) (RMA). In the alternative, the plaintiff alleged that Council had been negligent in performing its road management functions, namely the duty under s 40 RMA. In relation to these allegations, Council sought summary judgment as to the relevant paragraphs of the plaintiff’s statement of claim under sections 62 and 63 of the Civil Procedure Act 2010 (Vic) (CPA). 

The Decision at Trial

The key issue considered by the court was whether or not the plaintiff’s claim that Council breached the statutory duty under s 40 RMA, and thereby caused the plaintiff compensable loss and damage, had any real prospect of success. This required consideration of the harm which s 40 is designed to prevent, and the class of persons to which the section is therefore directed.

Taking into account the history, nature, scope and terms of s 40 RMA, the court considered that s 40 “is directed to harm caused to the road using public from road incidents arising from hazards of public roads and poor road maintenance practices by road authorities.” Accordingly, it was held that the provision was not directed to providing a supplementary cause of action for economic loss arising out of an alleged breach of contract to a private company providing road maintenance services to a road authority. The court held that in such circumstances, the company’s claims are confined to those arising under contract or general law, whereby a company such as the plaintiff may protect its interests through contract negotiations.

Ultimately, it was held that the plaintiff’s claim for breach of statutory duty had no real prospect of success and the relevant paragraphs of the statement of claim were struck out.

In relation to the plaintiff’s alternative claim in negligence, the court held that it was not in a position to determine the relevance of the pleading to the consideration of the imposition and content of a duty of care or its relevance to the question of breach. Council did not establish that the plaintiff did not have any real prospect of success on its pleading of negligence and therefore the relevant paragraph in the statement of claim was not struck out. 

Implications For You

This decision demonstrates that claims for breach of statutory duty will only be available to the class of persons the relevant provision was designed to benefit or protect, which in turn requires consideration of the history, nature, scope and terms of the legislation as a whole. 

Quality Roads Pty Ltd v Baw Baw Shire Council (Ruling No 1) [2016] VSC 477


Reena Dandan

Reena Dandan

Senior Associate