By Nikki Cassar, Partner and Lucas Oraha, Lawyer

The New South Wales Court of Appeal in Orange City Council v Willis [2026] NSWCA 51 (Willis) reaffirmed the limits of statutory protections available to roads authorities under the Civil Liability Act 2002 (NSW) (CLA).

The decision is a useful reminder that actual knowledge of a specific risk will defeat reliance on s 45, and that not all failures to address hazards as a roads authority will engage s 43A and its “special statutory power” protections.

Factual Background

The respondent, Mr Willis, sustained injury after tripping on a concealed hole in a grass verge and falling forward onto his arm, injuring his right shoulder. Mr Willis brought proceedings against Orange City Council on 4 July 2023 (Willis v Orange City Council [2025] NSWDC 208).

The hole had been created following the removal of a Council installed parking sign, with grass subsequently growing over the area and obscuring the hazard. Evidence at the primary Hearing established the sign had come loose and was lying on the ground for a short period before being removed.

The evidence was that Mr Penhall, resident and business owner, reported the issue to Council. By the time of the hearing, Mr Penhall had passed away.  Evidence of Mr Penhall’s report to Council was given by Mr Ostini, business partner of Mr Penhall.  His evidence was that Mr Penhall had told him he made the report to Council and Mr Penhall was “not a person to let Council issues go through to the keeper”. Although there was no evidence of this report being made in Council’s records, the primary judge accepted the matter had been reported by Mr Penhall and the fallen sign was removed within a short period of time after Mr Penhall made his complaint to Council about the sign.

The primary judge found Council was negligent and awarded damages of $133,751.00. Council appealed on seven grounds relating to challenging findings of fact, negligence, and the application of ss 43A and 45 CLA.

Decision

The Court of Appeal dismissed the appeal, upholding the primary judge’s findings. The seven grounds of appeal can be categorised in three broad categories.

Factual Findings and Actual Knowledge (s 45 CLA)

Council challenged the primary judge’s findings, submitting:

• There was insufficient evidence to establish any complaint made to Council conveyed the existence of a hole; and
• At its highest, the evidence only demonstrated knowledge of a fallen sign, not a concealed hazard; and
• On that basis, Council lacked actual knowledge of the particular risk and was therefore entitled to rely on the s 45 CLA.

The Court rejected these submissions and upheld the primary judge’s findings. It held:

• No error has been shown in the conclusion of the primary judge that the very short time between the making of the complaint to Council by Mr Penhall and the collection of the sign made it sufficiently likely it was collected by Council as a result of Mr Penhall’s complaint; and
• It was open to infer a report of a dislodged sign necessarily conveyed the existence of a hole left in the verge.

As Council had actual knowledge of the particular risk, it could not succeed under s 45 CLA.

The Court emphasised actual knowledge may be established by inference and does not need to depend on documentary records.

Section 43A – “Special Statutory Power”

Council contended its functions arose from the exercise (or failure to exercise) a “special statutory power”, namely, decisions concerning inspection, maintenance, and repair of public land. It argued these functions engaged s 43A CLA, such that liability could only arise if the conduct was so unreasonable that no authority could properly consider it a reasonable exercise of power.

The Court rejected this characterisation. It held:

• The alleged negligence consisted of failing to take simple, practical steps (filling the hole, covering it, or providing a warning); and
• Those steps did not involve the exercise of a power uniquely conferred by statute.

The Court reaffirmed s 43A has a confined operation and does not extend to routine maintenance or risk mitigation.

Key Takeaways

None of the seven grounds advanced on appeal were found to be appealable errors. The appeal was ultimately dismissed, and the judgment in favour of the respondent, Mr Willis, was affirmed.

Willis illustrates practical implications for Councils.

The decision confirms councils will lose the protection of s 45 where they are found to have actual knowledge of a specific risk, even if knowledge is not formally documented and is drawn by inference. In this case, the Court was prepared to infer knowledge from a report about a fallen sign, on the basis it necessarily indicated the existence of a hole left in the verge. This highlights courts will look beyond the form of a traditional complaint and focus on its substance and what it conveys about risk.

The Court in its findings, placed significant emphasis on the fact the risk, being, a concealed hole in a pedestrian area, could have been addressed by simple, low-cost measures, such as filling the hole, covering it, or erecting a warning sign, all things which do not involve the use of a special statutory power, pursuant to s 43A of the CLA. Where the burden of taking precautions is minimal and the risk of harm is obvious, a failure to act is likely to constitute a breach of duty.