Following three days of heavy rain, a dam on a farm overflowed causing water to pool on the adjacent Riverina Highway. After being notified by a local driver that there was water across the road, the Road Traffic Authority (RTA) erected two "Water Over Road' signs to warn drivers of the presence of water on the road, one on each side of the water. The sign on the southern side of the water was placed 924 metres before the water started.

Less than an hour after the signs were erected, there was a major accident on the highway. A sedan containing three people collided with a truck travelling in the opposite direction after the driver of the sedan hit the water, aquaplaned and lost control of his vehicle. The driver of the sedan and one of the passengers were killed. The truck driver and the other passenger in the sedan were seriously injured.

Various claims were brought against the compulsory third party insurer of the truck by those who were injured and by the widow of the deceased passenger. The insurer cross-claimed against the RTA. The widow of the deceased driver claimed directly against the RTA.

At trial it was found that the driver of the sedan was travelling at about 90km/h when he encountered the water on the road. Expert evidence established that the driver would have been able to see the water on the road from a distance of 125 to 150 metres. Eye-witnesses gave evidence that the sedan did not appear to slow down at all on approach to the water.

The argument against the RTA was that it placed the 'Water Over Road' sign too far from the hazard on the road such as to render the sign ineffective.

The insurer, the driver's widow appealed the decision. The Court of Appeal found it was reasonable for the RTA to place the sign 924 metres from the water. Accordingly, the Court of Appeal did not consider that the RTA had breached its duty of care to road-users. The Court of Appeal agreed that it was unlikely the driver would have taken notice of a sign placed closer to the water because he had failed to alter his driving when he encountered the sign where it had been placed.

Allianz Australia Insurance Ltd v Roads and Traffic Authority (NSW)

It is all well and good to satisfy the Court that a warning sign was required. It is another to satisfy the Court that the sign would have had the desired effect if there is evidence that suggests otherwise.