In a Queensland first, a metalifferous mine worker has been sentenced to eight months imprisonment for failure to comply with his safety obligations under mining occupational health and safety laws, which resulted in the death of a fellow employee.
Read more of the article by Matthew Smith, Partner of Sparke Helmore and reproduced with permission.
Brisbane Barrister – David Cormack
Comcare v Linfox Australia Pty Ltd (ACN 004 718 647) [2010] FCA 793
As we move towards a national OHS scheme it is useful to refresh the penalty principles used in hearings of breaches flowing from injuries to employees. In this instance, the employee sustained severe and extensive crush injuries to his left arm and both legs. The ultimate penalty imposed was a pecuniary penalty of $150,000.00, together with costs of $25,000.00.
MCKERRACHER J
40.
In Comcare v Commonwealth of Australia [2007] FCA 662; (2007) 163 FCR 207, Madgwick J considered (at [123]) that the following matters ‘provided useful and logical general guidance as to the approach to be taken in consideration of penalties under the OHS Act:
(i) the penalty must be such as to compel attention to occupational health and safety generally, to ensure that workers whilst at work will not be exposed to risks to their health and safety;
(ii) it is a significant aggravating factor that the risk of injury was foreseeable even if the precise cause or circumstances of exposure to the risk were not foreseeable;
(iii) the offence may be further aggravated if the risk of injury is not only foreseeable but actually foreseen and an adequate response to that risk is not taken by the employer;
(iv) the gravity of the consequences of an accident does not of itself dictate the seriousness of the offence or the amount of penalty. However the occurrence of death or serious injury may manifest the degree of the seriousness of the relevant detriment to safety;
(v) a systemic failure by an employer to appropriately address a known or foreseeable risk is likely to be viewed more seriously than a risk to which an employee was exposed because of a combination of inadvertence on the part of an employee and a momentary lapse of supervision;
(vi) general deterrence and specific deterrence are particularly relevant factors in light of the objects and terms of the Act;
(vii) employers are required to take all practicable precautions to ensure safety in the workplace. This implies constant vigilance. Employers must adopt an approach to safety which is proactive and not merely reactive. In view of the scope of those obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the employer in the future. This is particularly so where the employer conducts a large enterprise which involves inherent risks to safety;
(viii) regard should be had to the levels of maximum penalty set by the legislature as indicative of the seriousness of the breach under consideration;
(xi) the neglect of simple, well-known precautions to deal with an evident and great risk of injury, take a matter towards the worst case category;
(x) the objective seriousness of the offence, without more may call for the imposition of a very substantial penalty to vindicate the social and industrial policies of the legislation and its regime of penalties.
41.
The view taken by Madgwick J in that case (at [125]) was that the maximum penalty would be appropriate where there had been a ‘conscious decision to flout the law’. That approach was followed by North J in Comcare v Commonwealth [2009] FCA 700; (2009) 184 IR 441 (at [69]-[71]).
42.
Similarly in Comcare v John Holland Rail Pty Ltd [2009] FCA 771; (2009) 188 IR 415, Barker J said (at [135]-[136]) speaking of the OHS Act:
[135] Object (g) anticipates that where obligations are not met, effective remedies may be imposed through both the use of civil remedies and, in serious cases, criminal sanctions. To put the matter directly, the inclusion of Sch 2 in the OHS Act emphasises a legislative intention that contravention of the occupational, health and safety principles and duties created by the Act should be sanctioned, in appropriate cases, by civil or criminal orders.
[136] In the present case, the purpose of a civil pecuniary penalty, if imposed, is to deter the particular offender from offending again, as well as having the effect of generally deterring other employers from acting in a similar way. The imposition of a pecuniary penalty may be considered to have the advantage of reminding a particular employer of the importance of complying with the duties imposed on them by the OHS Act, as well as reminding other employers of the potential consequences should they fail to comply with the requirements of the Act. The imposition of an appropriate penalty is also calculated to give the community, and in particular relevant employees, confidence that the OHS Act is taken seriously.
43.
His Honour continued on the topic of assessing the quantity of a pecuniary penalty (at [137] and [141]-[143]) to say:
[137] When it comes to assessing what level of pecuniary penalty should be imposed, the courts have over a number of years, in a number of different regulatory settings, developed criteria that are considered relevant to the formulation of the quantum of a civil pecuniary penalty. Accordingly, in Comcare v Commonwealth [2007] FCA 662; (2007) 163 FCR 207, 162 IR 407, Madgwick J at [116] emphasised that the overriding principle in assessing penalty is that the amount of the penalty should reflect the Court’s view of the seriousness of the offending conduct in all the relevant circumstances.
…
[141] With respect, like North J, I agree with the observations of Magdwick J and consider these are all relevant criteria to the assessment of a civil pecuniary penalty under the OHS Act.
[142] However, I also concur with North J, in his emphasis of the overriding caution expressed by Flick J in Comcare v Post Logistics Australasia Pty Ltd [2008] FCA 1987; (2008) 178 IR 200, where His Honour said that care must be taken to ensure that any listing of potentially relevant considerations do not themselves become an impermissible substitute for considering the terms of the legislation in issue or an unnecessary constraint upon a discretion conferred in otherwise unconfined terms.
[143] I should also add that I consider it is relevant to the assessment of a pecuniary penalty to acknowledge, where it is the case, an admission of contravention and particularly an early admission by a respondent of its liability to the imposition of a remedy under the OHS Act. Where, for example, a respondent in a proceeding such as these early on acknowledges fault and willingness to accept a declaration of contravention, then the respondent will ordinarily be entitled to additional consideration in the assessment of the penalty. In some contexts this process is termed giving credit or “discount” on penalty. There is no statutory entitlements to such credit or a discount but it serves public policy in that it encourages a respondent to act responsibly, and may achieve a reduction in the public resources that would otherwise be required to prosecute the proceedings against the respondent.
44.
Finally, it is to be noted (as Barker J did) that Flick J observed in Post Logistics Australasia Pty Ltd (at [39]) that penalties are not imposed by reference to penalties in other cases being considered a benchmark. His Honour said:
[39] A final matter of principle should also be noted. It is inappropriate to fix a penalty simply by reference to the quantum of a penalty imposed in another case. It was thus understood to be common ground between the parties to the present proceeding that it was not appropriate to regard (in particular) the penalty of $198,000 in Comcare v Commonwealth as itself fixing a “benchmark” against which other penalties are to be determined in cases involving death. In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285, Burchett and Kiefel JJ observed (at 295):
A hallmark of justice is equality before the law, and, other things being equal, corporations guilty of similar contraventions should incur similar penalties: Trade Practices Commission v Axive Pty Ltd [(1994) ATPR 41-368] (at 42,795). There should not be such an inequality as would suggest that the treatment meted out has not been even-handed: cf the criminal law case Lowe v The Queen [1984] HCA 46; (1984) 154 CLR 606. However, other things are rarely equal where contraventions of the Trade Practices Act are concerned. In the present case, differing circumstances, size, market power and responsibility for the contraventions, as well as other factors, complicate any attempt to compare the penalties imposed on the appellant with those imposed on the other corporations.
Another form of comparison is not appropriate. The facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case. The point was well made by Spender J in Trade Practices Commission v Annand and Thompson Pty Ltd [(1987) ATPR 40-772] (at 48,394) when he said:
Each case must, of course, be viewed on its own facts and facts may be infinite in their variety.
It follows, as his Honour also said, that “[t]he quantum of penalties imposed in other cases can seldom be of very much direct assistance”.
A comparison of the facts in Comcare v Commonwealth and the facts in the present proceeding only serves to underline the point there being made by Burchett and Kiefell JJ (and by Spender J) — namely that the facts and circumstances of individual cases are infinitely diverse. The quantum of any penalty to be imposed must necessarily be fixed by reference to the peculiar facts arising in each case as and when they arise.
APPROPRIATENESS OF THE PENALTY
45.
I accept the joint submission of the parties that the agreed penalty of $150,000:
2.1 the fact that, at the time of the incident, a formal hazard identification and risk assessment specific to the task that Mr Jacobs was undertaking had not been conducted;
2.2 the risk of injury associated with operating a fork truck with a raised load was foreseeable and generally known. The risks associated with the operation of a fork truck, particularly when carrying a raised load, had been identified and were well documented within the industry prior to the incident;
2.3 the fact that the risk of injury due to congestion in the container yard was identified but an adequate response was not taken to the risk by Linfox until after the incident. It is agreed that the risk created by the congestion was not adequately identified, assessed or controlled by Linfox prior to the incident;
2.4 the fact that there were reasonably practicable steps that Linfox could have taken which, if taken, would have enabled the maintenance of a safe working environment, including plant and systems of work, that were safe for its employees and without risk to their health;
2.5 the lack of adequate supervision, including the absence of appropriately skilled and qualified supervisors; and
2.6 the lack of a pro-active approach to risk identification and assessment at the yard prior to the incident, particularly given the generally know risks associated with operating fork trucks contributed to the seriousness of the incident;
with mitigating circumstances, including:
2.7 the early acceptance by Linfox of its liability in this matter, and their preparedness to agree to the relief sought by Comcare;
2.8 the steps taken by Linfox since the incident to address the inadequacy at the Site of the incident to ensure the health and safety of its employees;
Finally, the parties have agreed that the figure of $25,000 represents a fair assessment of Comcare’s party and party costs of the proceedings including disbursements and I see no reason to disagree with this assessment.
Brisbane Barrister – David Cormack
Re: N (a solicitor) [2010] QSC 267
CATCHWORDS:
Profession and trades – Lawyers – Duties and liabilities – Duties to court – Generally – Duty to ensure matters are dealt with expeditiously – Criminal matter
Legal Profession Act 2007 (Qld), s 418
Ashmore v Corporation of Lloyd’s [1992] 1 WLR 446, cited
Fryberg J
In a professional conduct decision which flowed from a criminal sentence hearing where there was delay and a failure to take a statement, his Honour commented on the duty of practitioners in litigated matters to prepare for the hearing and furthermore, preparation is required despite the lack of funding from Legal Aid.
His Honour also concluded, “I am left with the uncomfortable feeling that the errors on the part of both N and counsel for T would not have occurred had the matter not been funded by legal aid.”
[25]
It cannot be doubted that one of the duties of a solicitor engaged in litigation, criminal or civil, is the timely preparation of cases for hearing. In Ashmore v Corporation of Lloyd’s, Lord Roskill said:
“[I]n any trial court it is the trial judge who has control of the proceedings. It is part of his duty to identify the crucial issues and to see they are tried as expeditiously and as inexpensively as possible. It is the duty of the advisers of the parties to assist the trial judge in carrying out his duty. Litigants are not entitled to the uncontrolled use of a trial judge’s time. Other litigants await their turn. Litigants are only entitled to so much of the trial judge’s time as is necessary for the proper determination of the relevant issues.”4
That was said in a civil case, but it applies with equal force in a criminal one. The duty is owed not only to the client; it is also owed to the court. On the criminal side, substantial public resources will be thrown away if a trial or hearing cannot proceed on its allocated date. If the accused is legally aided, it is not simply the resources of the prosecution and the court which will be wasted. In addition other litigants will be delayed in obtaining hearing dates. Any breach of duty is therefore not simply a matter between the solicitor and her client.
Referral
[31]
Nonetheless, I decided not to refer the matter to the Legal Services Commissioner. I did so because in the end I was not satisfied that the public interest would be served by such an investigation or by consequential proceedings against N. N was a young solicitor and had only 2½ years’ experience in criminal practice. I was satisfied that enough had already happened to her publicly to ensure that there would be no repetition of her conduct.
[32]
Second, I was conscious that the Commissioner’s resources are limited and did not want him to feel under any duty to investigate a matter in which any need for personal deterrence had already been overcome. The Commissioner has more important matters to deal with.
[33]
Third, counsel had been briefed in the matter for a month and a half and had at no time advised that a statement or affidavit might be required. It is true that he had not been instructed to advise on evidence, nor had he originally been briefed with
the statement of agreed facts made pursuant to the practice direction. However this was not a complex case. Counsel ought to have warned of the possibility that evidence might have to be called long before the day of hearing. He also ought to have informed N of the Crown’s attitude on commerciality on 17 December 2009. That does not mean that N was relieved of the obligation to consider that possibility for herself. It simply means that because decisions on calling evidence are ultimately the responsibility of counsel, she did not bear sole responsibility for the omission, particularly having briefed experienced counsel.
[34]
Finally, I felt that questions of general deterrence would adequately be served by my publishing my reasons for the course which I took. I have dealt with the matter at some length in the hope that these reasons may gain a wider audience among members of the profession.
[35]
I am left with the uncomfortable feeling that the errors on the part of both N and counsel for T would not have occurred had the matter not been funded by legal aid. It ought to have been abundantly clear that a statement would be needed once commerciality was denied by the client. On the evidence no additional funding was available for taking a statement. It is a natural enough human reaction in such circumstances to seek to defer incurring the cost; but that is a reaction which is apt to blur the sound exercise of professional judgment. Having accepted a retainer, a true professional does not let the quality of the work undertaken suffer because the available remuneration is inadequate. If lawyers are not prepared to bear the cost of all necessary steps in a legal aid matter, regardless of funding, they should not take on the work.
4 [1992] 1 WLR 446 at p 448 (emphasis added).
Brisbane Barrister – David Cormack
Holland v Kachel & QBE Insurance (Aust) Ltd [2010] QDC 287
CATCHWORDS:
DAMAGES – NEGLIGENCE – PERSONAL INJURY –
motor vehicle accident – application of s.146 of the Transport Operations (Road Use Management – Road Rules) Regulation – whether the collision occurred on a ‘road’ or a ‘road related area’ – application of s.74 of the Transport Operations (Road Use Management – Road Rules) Regulation – contributory negligence by plaintiff.
The plaintiff was involved in a motor vehicle accident after having dropped of rubbish into an industrial bin at truck stop area. The first defendant was the driver of the refuse truck and employed by the Gatton Shire Council to collect rubbish from the truck stops. The collision occurred when the first defendant entered the truck area from the right and was on the opposite side of the bins when the plaintiff’s vehicle came from a grassed area and collided with the right front.
In issue was whether the truck stop was a ‘road’ or a ‘road related area’. If it was a road the first defendant was under an obligation to keep left otherwise the plaintiff then had an obligation to give way.
Deardan DCJ held it was not a road, but rather a road related area. In which circumstance, the plaintiff had an obligation to give way to all traffic. The defendants relied upon the conviction of the plaintiff for driving without due care and attention previously in support. However, given the first defendant’s practice and knowledge of the area for the past 10-12 years an apportionment of 25% was made against the defendants.
Quantum
The plaintiff’s evidence as to previous injuries and the impact of the accident was not believed. This flowed from a failure to disclose on the Notice of Accident Claim Form, poor histories to the doctors and inconsistencies in evidence:
[30] There are further issues which raise serious concerns as to the plaintiff’s credibility.
In particular the plaintiff’s Notice of Accident Claim Form disclosed only the following:-
(a) Motor vehicle accident in 1994 in which the plaintiff sustained a whiplash injury;
(b) Two rib cartilage injuries sustained while playing football;
(c) An operation on his right knee in 2002;
(d) Two operations on his left knee in 1993 and 1994.41
In fact, the plaintiff had made a total of eight Workers’ Compensation claims (including in relation to these current proceedings). The following were in respect of back injuries:-
(a) On 12 January 1983 the plaintiff strained his back while bending over to remove a paint roller;
(b) On 1 July 1987 the plaintiff strained his thoracic spine while bending over to pick up sheet metal;
(c) On 29 September 1987 the plaintiff strained his back when he tripped over some steel lining on the ground; and
(d) On 23 January 1996 the plaintiff strained his lower back at work.
[31] The plaintiff accepted that he had not made full disclosure of all his prior injuries in the relevant Notice of Accident Claim Form.42 It is submitted on behalf of the defendants (and I accept) that the plaintiff’s attempts to explain this level of nondisclosure was “entirely unsatisfactory” and further the medical histories provided by the plaintiff to doctors Meibusch, Pentis and Morris were neither “candid nor accurate”. It is clear from the medical evidence that the applicant has a long and extensive history of medical problems involving his lumbar and thoracic spine. As a consequence, I consider that, in the absence of supporting evidence, the oral evidence of the plaintiff as to his symptoms arising from the collision on 19 March 2007 should be approached with a significant degree of caution.
[32] The evidence of Dr Meibusch43 indicates that the collision on 19 March 2007 “aggravated pre-existing degenerative changes in [the plaintiff’s] cervical spine” which did not require either a surgical procedure or other treatment other than pain relief. Dr Meibusch considered that the aggravation would require another couple of months to substantially subside.44 In a conference with counsel for the defendants (the file note becoming evidence in the proceedings), Dr Meibusch stressed that what had occurred was an exacerbation of the plaintiff’s pre-existing degenerative disease.45 Dr John Morris46 also considered the collision of 19 March
2007 had aggravated pre-existing symptoms of whiplash arising from a motor vehicle accident in 1994 which were asymptomatic at the time of the collision on 19 March 2007. Dr Morris took the view that the prognosis was “for continuation of mild symptoms but as occurred in the 1994 episode these [symptoms] are likely to improve and eventually resolve.”47
[33] Dr Pentis, however, considered that the plaintiff was left after the 19 March, 2007 collision, with a residual impairment which he assessed as 10% whole person impairment.48 Dr Pentis conceded in cross-examination that the fact that there were no rib fractures (as he had been incorrectly informed by the plaintiff) reduced his assessment of impairment to 5% of whole person. However, Dr Pentis maintained that the soft tissue injury from the collision on 19 March 2007 would have compounded the pre-existing degenerative process in the plaintiff’s spine and the effect would be an ongoing, rather than transient, aggravation.49
[34] It is then necessary to consider the plaintiff’s post collision work history. The plaintiff had his employment with Amalgamated Plastics Engineering terminated on his return to work on 1 August 2007 (the company had restructured its operations to provide plastics for just a single client during the plaintiff’s recovery process.)50
[35] The plaintiff then obtained a job in November, 2007 with the Truss Company, then he subsequently worked for Cardinal Seafoods, then for the Goodlife Gym, before he returned to work at Cardinal Seafoods as a dispatch driver. With the exception of the employment at the Goodlife Gym (which was an office job, in which the plaintiff could see no prospect of a progression to management)51 the plaintiff’s employment since the collision has all involved significant physical activity.
[36] I consider that the following findings therefore are warranted on the evidence namely:-
1. The plaintiff:
(a) Did not suffer any fractured ribs in the collision;
(b) Endured pain and suffering and loss of the amenities of life;
(c) Required medical, rehabilitative and pharmacological treatment;
(d) Was unable to undertake his employment as an “Assistant Manager”
at Amalgamated Plastics Engineering (a position which substantially required him to work as a sales person, and involved significant time driving a motor vehicle); and
(e) Incurred the cost of medical treatment and other out of pocket expenses.
2. The injury which the plaintiff suffered to his cervical or thoracic spine was an aggravation or exacerbation of pre-existing degenerative changes and, in a practical sense, had substantially resolved by 1 August 2007.
3. Any ongoing impairment of the plaintiff arises from pre-existing degenerative changes in the plaintiff’s cervical and thoracic spine as detailed in the CT scan on 26 April 2007.52
4. The plaintiff’s ongoing impairment, if any, is minor, does not require further medical treatment, and has not (and will not) impact on the plaintiff’s employability, and capacity for employment as a sales person or manager or capacity to study.
[37] I make the following findings as to damages.
1. General damages53 $4,000.00
2. Special damages $5,937.23
3. Interest on past special damages54 $661.00
4. Future special damages
I do not consider that the plaintiff has shown any basis on which to claim “future special damages” as asserted in respect of gym membership, medical expenses and pharmaceutical expenses. The plaintiff’s ongoing impairment, if any, I find is minor only.
Nil
5. Past economic loss (from 19 March 2007 – 2 November 2007).
In my view it was reasonable to allow the plaintiff three months to find a new job once he was considered fit to return to work. $16,359.85
6. Interest on past economic loss55 $530.41
7. Loss of superannuation contributions $1,472.39
8. Future Economic Loss
The plaintiff has approximately 18 years in the workforce before retirement at 65 years. None of the medico-legal or rehabilitation reports appear to preclude the plaintiff from working in either his existing employment (he currently works as a delivery driver for Cardinal Seafoods) nor has he been restricted in any of his subsequent employment since 2 November 2007 while employed by the Truss Company, Goodlife Health (Gym Membership Sales) and Cardinal Seafoods.
The plaintiff has undertaken further studies at Griffith University and intends to complete a Ph D. At best for the plaintiff, he has a “general stiffness and soreness” that he describes as “sort of being there all the time”.56 In my view therefore the appropriate assessment on a global basis for the plaintiff’s loss of earning capacity would be $15,000.00 with no component for loss of superannuation.
9. Fox v Wood component $1,837.00
TOTAL $45,797.88
Apportionment
[38] As I have found, the plaintiff, in my view, was 75% responsible for the collision.
Accordingly I order judgment for the plaintiff against the first and second defendants in the amount of $11,449.47.
42 T1-61.
43 Exhibit 10.
44 Exhibit 10 p.2.
45 Exhibit 10A.
46 Exhibit 11.
47 Exhibit 11 p.7.
48 Exhibit 12 p.5.
49 T1-78.
50 T2-53.
51 T1-27.
52 Exhibit 8 – report of Dr Yunus Solwa.
53 Assessed under item 89 (minor cervical spine injury) ISV range 0-4.
54 3% of $1,081.35 over 2.52 years
55 Calculated on $7,015.95 at 3% over 2.52 years (Workcover benefits totalled $9,343.90).
56 T1-27.
Brisbane Barrister – David Cormack
Shaw v Thomas [2010] NSWCA 169
The plaintiff was aged 10 when he jumped down from a bunk bed, whilst at a friend’s house for a sleepover and sustained severe head injuries. The learned primary judge found there had been a breach of duty of care relying heavily on the Australian Standard AS4220:1994 (guard rail and ladder) for bunk beds, establishing that the risk was significant, by reference to the Australian Standard and awarded $853,396 in damages.
The Court of Appeal found in favour of the appellant against the plaintiff on the basis of the content of the duty of care, in particular, s.5B of the Civil Liability Act 2002 (NSW) and the meaning of “not insignificant” risk, together with s.5.D (causation). The corresponding wording of sections 9 and 11 of Civil Liability Act 2003 (Qld), is the same.
MACFARLAN JA delivered the leading judgment with whom their Honours Tobias and Beazley JA concurred.
Duty of Care
34
The appellants did not deny that they owed a duty of care to Cameron. Nevertheless it is necessary to refer to the nature of the duty that the appellants owed Cameron to enable consideration of the issues of breach and causation raised by the appellants.
35
As Campbell JA pointed out in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd [2009] NSWCA 263; (2009) 53 MVR 502, s 5B of the Act “is not a self-contained statement of the circumstances in which a liability for negligence will arise. Rather, subsection 1 sets out three preconditions that must co-exist before a liability in negligence arises, when the type of negligence alleged is failure to take precautions against a risk of harm arising” (at [173]; see also [443] per Sackville AJA). Accordingly, before considering the requirements of s 5B (which are concerned with breach of duty: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; [2009] 239 CLR 420 at [13]), I turn to consider the nature of the duty of care that the appellants owed Cameron under the general law.
36
As the appellants were the occupiers of the premises at which Cameron was injured and as Cameron was a lawful entrant, the appellants owed to him a duty to take reasonable care to avoid a foreseeable risk of injury (Australian Safeway Stores Pty Ltd v Zaluzna [1987] HCA 7; (1986-1987) 162 CLR 479 at 488). The existence of such a duty was reinforced by the fact that Cameron was a child whom the appellants had invited to stay overnight at their home and in respect of whom the appellants were accordingly temporary custodians (The Commonwealth of Australia v Introvigne [1982] HCA 40; (1981-1982) 150 CLR 258; St Mark’s Orthodox Coptic College v Abraham [2007] NSWCA 185).
37
The extent of the obligation of an occupier is that of an occupier exercising reasonable care to prevent injury to an entrant “using reasonable care on his [the entrant’s] part for his own safety” (Roads and Traffic Authority of New South Wales v Dederer [2007] HCA 42; (2007) 234 CLR 330 at 345-346 quoting Indermaur v Dames (1866) LR 1 CP 274 at 288). As indicated in the plurality judgment in Thompson v Woolworths (Q’land) Pty Ltd [2005] HCA 19; (2005) 221 CLR 234, “the weight to be given to an expectation that the other [person to whom the duty is owed] will exercise reasonable care for his or her own safety is a matter of factual judgment. It may depend upon the circumstances of the case” (at [35]). In particular, “[t]he content of the occupier’s duty to exercise reasonable care for the safety of an invitee must, of course, vary with the circumstances including the degree of knowledge or skill which may reasonably be expected of the invitee and the purpose for which the invitee enters upon the premises” (ibid at [25] quoting Papatonakis v Australian Telecommunications Commission [1985] HCA 3; (1985) 156 CLR 7 at 20).
38
Where the entrant is a child “the standard of safety … must be applied with due regard to the physical powers and mental faculties which the occupier knew or should have known the child to possess. Youngsters obviously cannot be judged by adult standards …” (John G Fleming, The Law of Torts, 9th ed (1998) LBC Information Services at 508).
39
The respondent submitted that the relevant duty in the present case was a duty of care owed by the appellant to the class of persons of whom Cameron was one, that is, a class constituted by the substantial number of children who from time to time visited and stayed at the appellants’ home. In support of this submission, the respondent cited the reference by Mason J in Wyong Shire Council v Shirt [1980] HCA 12; (1979 – 1980) 146 CLR 40 at 47 to the foreseeability to the defendant of his or her conduct involving the “risk of injury to the plaintiff or to a class of persons including the plaintiff” and referred to other authorities to similar effect.
40
I do not accept this submission. As the reference above to the statement in Wyong Shire Council v Shirt demonstrates, a relevant duty of care is owed to a plaintiff or to a class. The concept of a duty being owed to a class of persons is relevant where the identity of the plaintiff is unknown to the defendant. It is not in my view relevant where, as here, the plaintiff is well known to the defendant and a reasonable person in the defendant’s position would have foreseen a risk of injury to the particular plaintiff. In that case the extent of the defendant’s duty and the question of whether it has been breached must be judged by reference to the relationship between the plaintiff and the defendant, and the defendant’s knowledge of the circumstances and characteristics of the plaintiff.
41 Accordingly in this case the extent of the appellants’ duty is to be determined by reference to their relationship with and knowledge of Cameron. The matters to be considered do not include the capabilities or likely conduct of other children falling within the class referred to in the respondent’s submissions. Such other children may, for example, have been younger or less agile than Cameron.
Whether Risk “Not Insignificant”: s 5B(1)(b)
The point of divergence was that the accident occurred in a domestic environment and there was no evidence the owners/occupiers were aware of the Australian Standard or that reasonable persons in their position would have been aware of it. Accordingly, the reliance on the Australian Standard to overcome the “insignificant risk” was considered inappropriate.
43
Under the general law relating to the tort of negligence it is well established that it is unnecessary “for the plaintiff to show that the precise manner in which his injuries were sustained was reasonably foreseeable” (See Chapman v Hearse [1961] HCA 46; (1961) 106 CLR 112 at 120 – 121; Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434 at [64]). Nothing in the Act dictates any different approach when considering the requirement of s 5B(1)(b) that the risk be “not insignificant” (compare Doubleday v Kelly [2005] NSWCA 151 at [11]; Waverley Council v Ferreira [2005] NSWCA 418; (2005) Aust Torts Reports 81-818 at [42] – [43]).
44
In Wyong Shire Council v Shirt, Mason J referred to a risk “which is not far-fetched or fanciful” as being “real and therefore foreseeable” (at 48). The requirement in s 5B(1)(b) that the risk be “not insignificant” imposes a more demanding standard but in my view not by very much.
45
If, as I consider to be appropriate, the risk is defined as one of Cameron falling and injuring himself whilst descending from the top bunk of the bed in question, that risk must in my view be regarded as one that was “not insignificant”. There is always some risk of injury when children climb up to and down from elevated surfaces. Even though Cameron was 10 years of age, I do not consider that the risk of him suffering a mishap in doing so was “insignificant”. Whether the risk of him doing so was sufficiently significant to require precautions to be taken against it occurring is an entirely different question to which I will come.
46
It is clear from the structure of his judgment that the primary judge considered that the contents of the ACCC publication and the Australian Standard to which it referred were relevant to his assessment of the risk of injury occurring in the use of the bunk bed (see [26] above). In my view the judge erred in this respect. Whether the requirement contained in s 5B(1)(b) was satisfied was to be determined by reference to the circumstances of which reasonable people in the position of the appellants would have been aware. The appellants were owners and occupiers of domestic premises in which they lived with their children. There was no evidence that the appellants were aware of the Australian Standard (Judgment [100] quoted in [32] above) and it cannot be assumed that reasonable people in their position would have had knowledge of the terms of the Australian Standard or of the ACCC publication referring to it (compare Jones v Bartlett [2000] HCA 56; (2000) 205 CLR 166 at [187]). As a result it was not in my view appropriate to take into account the ACCC publication or the Australian Standard when considering whether the risk was “not insignificant”.
The Taking of Precautions: s 5B(1)(c)
48
First, a duty of care “imposes an obligation to exercise reasonable care; it does not impose a duty to prevent potentially harmful conduct” (RTA v Dederer at [18]). Accordingly, the fact that what was an undoubtedly tragic accident might, or even would, not have occurred if the bunk bed had had a ladder and guard-rail does not answer the question of whether there was a failure by the appellants to take reasonable care (see for example Derrick v Cheung [2001] HCA 48; (2001) 181 ALR 301 at [13]).
49
Secondly, in my view the “probability that harm would occur if care were not taken” here (see s 5B(2)(a)) was, as it was in RTA v Dederer, a very low one (at [61]). Cameron was a child of 10 years of age who appears to have been of at least normal strength and agility (see [23] above). Although he was a high spirited child, the evidence did not suggest he was other than in the range of normality in that respect (see [21], [23] above). Eight months after the accident he was measured by a doctor to be 1.436 metres in height. Even though he would have grown somewhat in the period between the accident and when he was measured, his height at the time of the accident would not have been much different to the height off the ground of the top of the mattress on the top bunk upon which he was sitting immediately before the accident occurred (see [11] above). As he was sitting on the edge of the bed with his legs dangling down and as the lower part of his legs can be assumed to have been at least 30 centimetres in length, his feet would only have had to drop little more than 1 metre for him to be standing safely upon the floor. The risk of a normal 10 year old child not being able safely to negotiate a descent from such a low height without using a guard-rail or ladder was in my view very small indeed.
50
Ordinarily one would expect a child of that age to descend simply by easing his or her backside off the bed and jumping the short distance to the floor. This was the way that Mrs Shaw saw the boys who used the top bunk get down from it (see [21] above). The bunk bed in question (and the other bed that the appellants owned) had been in use for more than six years without any apparent problem, despite, as Mrs Shaw said, there being many children frequently in the house (see [23] above).
51
Further, the risk of an accident occurring was considerably lessened by the ability of children to use the end of the bed to assist them to climb up on, or down from, the top bunk. Mrs Shaw said that the boys “always” used the end of the bed to climb up, although she later qualified this statement by saying that Joel “would just sort of lift himself up onto it” (see [22] above). Cameron said that on each occasion prior to the accident that he had been on the top bunk he had used the end of the bunk to get up and down (see [20] above). The horizontal rails and uprights at the end of the bed were an obvious and readily accessible aid to climbing up and down from the top bunk.
52
Reasonable people in the appellants’ position would in my view have considered that if, which they would have thought was unlikely, any normal 10 year old using the top bunk had any uncertainty about being unable safely to jump or ease him or herself down, that child would have used the bars at the end of the bed to guide his or her descent, as Cameron had done on previous occasions. The bars at the foot of the bed would have been no more than one to one and a half metres away from the reach of a child such as Cameron, even one who was sitting, as Cameron was, towards the head of the bed. The child would have to move only a short way sidewards from his or her position to enable him or her to grasp the bars.
53
Thirdly, the prospect of Cameron, in jumping down not much more than one metre, suffering as serious an injury as he did suffer, as distinct from an injury such as a sprained ankle or even broken leg or broken arm, would in my view have been seen by reasonable people in the appellants’ position as bordering on remote.
54
In these circumstances, I do not consider that reasonable persons in the position of the appellants would have responded to such risk as there was by installing a guard-rail on, and ladder to, the top bunk. The question of what precautions would have been appropriate to take to guard against any risk of harm if Cameron had been asked to sleep on the top bunk, if Cameron had been younger than 10 or if the top bunk had been higher does not arise in this case. Consideration of the magnitude of the risk and whether precautions would have been taken by reasonable people to deal with such risk must of necessity occur by reference to the particular circumstances of this case, including what the appellants knew of Cameron.
55
The respondent’s case is not assisted to any significant extent by the fact that the bunk bed, when acquired by the appellants, had a guard-rail and ladder that the appellants subsequently removed. Mrs Shaw gave explanations for their removal and non-repair or replacement (see [16] – [18] above) that I do not consider to be unreasonable in the context of the use of the bed by someone such as Cameron, at least where he was not asked to, and did not, sleep on the upper level.
56
It is a regrettable but inevitable fact of life that dangers still exist in homes, and other places, despite reasonable care having been taken by those in control of such places. The decision in Jones v Bartlett is an illustration of this. In that case an adult son of tenants of a house sustained injuries when he accidentally walked into an internal glass door. Despite the fact that the occupiers could have installed stronger glass that would not have shattered, the majority of the High Court held that the defendant occupiers had not been negligent in relation to the condition of the premises. One of the members of the majority, Gleeson CJ, at [24] quoted with approval the following oft-cited observations of Mahoney JA in Phillis v Daly (1988) 15 NSWLR 65:
“There are dangers on any premises. A room may have a desk or a table. There is a danger that, if I fall, I will hit my head on it and my skull will be fractured. If the desk or table were not there, I would suffer little or no harm. And the danger is obvious: people do slip and fall. And the injury may be serious. But the obvious foreseeability of such an injury and its seriousness does not involve that, if a person falls and hits his head on a table, there must have been a breach of duty by the occupier of the room. And this notwithstanding that people may live without tables and that tables may be easily removed” (at 74).
57
To similar effect were the observations of Gleeson CJ in Neindorf v Junkovic [2005] HCA 75; (2005) 80 ALJR 341 at [7] – [8] and Bryson JA in Doubleday v Kelly at [17].
58
As with the issue of whether there was a “not insignificant” risk (see [46] above), I respectfully disagree with the primary judge’s reliance upon the Australian Standard (see Judgment [88] quoted in [30] above). As there is no basis for expecting reasonable persons in the appellants’ position to have been aware of the contents of the Standard or of the ACCC publication that referred to it, I do not consider that those matters can be taken into account in assessing how reasonable persons would have responded to such risk as was foreseeable. The use that Gleeson CJ made in Jones v Bartlett of relevant Standards was different. In that case the glass door complied with the applicable Standards (namely those that were in force at the time the house was constructed). That fact was referred to by Gleeson CJ as supportive of the view that the occupiers did not act unreasonably in not ensuring that the glass was stronger (at [22] – [23]): This did not involve (as it would here) requiring defendants to comply with rules or guidelines of which they had no reason to be aware (compare at [187] per Gummow and Hayne JJ). Rather, it was the use of the documents as a means of confirming the reasonableness of the occupiers’ conduct.
Brisbane Barrister – David Cormack
Fair Work Ombudsman v Berges [2010] FMCA 526 (17 June 2010)
It is interesting to contrast this decision with Fair Work Ombudsman v Sanada Investments Pty Ltd [2010] FMCA 401 (9 June 2010).
I refer to my earlier posting in relation the Sanada (“Sushi Train”) decision. The aggregate unpaid wages etc amounted to $119,760.92, however, the total penalty ordered was $33,600.00.
In the instance of Berges the respondent intentionally did not appear and was uncooperative with the investigation.
Sentencing principles
38.
Factors relevant to the penalty: it is submitted that the assessment of penalties requires consideration of various factors. Those factors have been well-rehearsed previously and are commonly acknowledged as being set out in the decision of (supra). In that decision, a number of considerations were articulated although the list is not exclusive.
39.
They include the nature and extend of the conduct; the circumstances in which the conduct took place; the nature and extent of any loss or damage similar to previous conduct; whether the breaches were properly distinct or arose out of one course of conduct; the size of the company; the deliberateness of the breach; the involvement of senior management; the respondent’s contrition, corrective action and co-operation with the enforcement authorities; ensuring compliance with the minimum standards, by providing effective means for investigation and enforcement of employee entitlements; and deterrence. As was noted in Mason, in adopting the observations of Burchett J in Trade Practices Commission v TNT Australia Propriety Limited[4]:
40.
It is, in a sense, a matter of judicial art rather than science, which informs the penalty imposition process. In doing so, one should not overlook the principle object set out in section 3 of the Act, which particularly includes the need to provide and economically sustainable safety net of minimum wages and conditions for those whose employment is regulated by the Act, and to ensure compliance with minimum standards by providing effective means for investigation and enforcement of employee entitlements. As was noted by Mowbray FM in Pangaea, these provisions:
41.
This is further reflected in the magnitude of other penalties which have been fixed for breaches. In the case of a body corporate, this is set at a maximum of 300 penalty units, or $33,000 for each breach, and for an individual, 60 penalty units or $6,600 for each breach. Looking into the nature and extent of the circumstances in which this conduct took place, the matter of compliance with the APCS and the provisions of the NAPSA is important and should not be ignored by employers.
42.
The conduct of the employer and the respondent in this instance was significant, because it related to two employees and occurred over a significant period of time. In relation to Mr Nielson, the conduct spanned 11 months, and in relation to Mr Vukavic, it spanned four months. There is nothing to indicate that the contraventions would not have continued had the employees not ceased their employment.
43.
Matters were exacerbated, because Mr Nielson was paid sporadically and Mr Vukavic was, in fact, on one occasion not paid for one week. The amounts in question are significant; for Mr Nielson, the underpayment totals approximately $11,000, and for Mr Vukavic about $4,000. This is for employees who are at the bottom end of the employment scale and who are without, I think, argument, extremely vulnerable to loss of cash flow for living purposes.
44.
Unquestionably in my view, the evidence demonstrates that these employees were disadvantaged by the respondent’s behaviour. One aspect of the complaint which I particularly note concerns Mr Nielson. I note that Mr Nielson seems to have had a particular vulnerability. It was noted in an admission made by the respondent to Mr Bloom, by way of amelioration, that Mr Nielson was clearly disabled and had problems.
45.
The manner in which that fact was conceded or noted by the respondent to Mr Bloom was in an attempt to ameliorate his behaviour, by creating the impression that his employment constituted some form of charity. In fact, the fact that Mr Nielson was so patently disabled and suffering from difficulties as for it to be apparent to the employer, to my mind ought to have highlighted his general vulnerability and, indeed, should have called for the exercise of some degree of care in the part of the respondent, to avoid any risk of exploitation.
46.
Dealing with the nature and extent of any losses: as I have noted, the underpayments total approximately $15,000. They are not insignificant. There is no evidence put before the court concerning the profitability of the enterprise involved, and so it is difficult to measure the overall significance of the underpayments against the commercial background of the enterprise involved. However, as I have earlier noted I consider these payments to be significant in the context of the employees, who suffered loss at the hand of the respondent.
47.
There is no evidence of any previous contraventions on the part of the respondent or any entities associated with him. So far as a course of conduct is concerned, the applicant submits that each of the five contraventions constitutes a breach of five distinct applicable provisions; as such, five penalties ought to be imposed. I agree with the applicant’s submission in this regard. There is clearly no element of commonality in each of these instances and each breach ought to be treated discreetly.
48.
So far as the size of the business is concerned, there was no evidence provided by the respondent to assist with an estimate of that matter. The applicant submits, and I accept, that the employer in this instance was a relatively small entity. But irrespective of that fact, it does not absolve it of its legal responsibility to comply with the law in relation to the employment of its employees. As was noted by Tracey J in Kelly v Fitzpatrick:
49.
Further, in another decision made in this court Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 at 27, it was stated:
50.
As I have noted, the size of the business is no excuse for non-compliance, and the penalty that I will impose takes authorities I have outlined above into consideration.
51.
In terms of deliberateness, it was noted by Driver FM in Cotis v MacPherson at [17] that:
52.
It is submitted on behalf of the respondent that the contraventions in this instance are, like Cotis, evidence of at least recklessness for the employer’s statutory obligations. That matter is amplified by the evidence of the poor wage records maintained by the employer and by the wage rate, particularly in relation to Mr Nielson itself, which was well below that which would be regarded as acceptable, having regard to the minimum award, or what is generally accepted as the minimum award.
53.
I am mindful in this instance that the respondent contends, at least in his statements to Mr Bloom, that he was in effect affording Mr Nielson some charity, but that, of course, that does not sit comfortably with the fact that the evidence shows Mr Nielson was employed on a very regular basis between five and six nights a week. On balance, one could readily infer that, indeed, this was more exploitive than it was charitable, but in any event, those matters do, in my view, bear to some extent on the issue of deliberateness. I do not think that this is a case where the respondent was necessarily reckless, but I do think that the respondent had some general appreciation that, in this instance, what he was doing was outside the bounds of reasonableness.
54.
So far as involvement of senior management is concerned, the respondent managed the day-to-day business of the employer, including the recruitment of employees. At the time he engaged Mr Nielson, he was aware of what he was being paid. And it was certainly the case that Mr Vukavic understood the respondent to be his manager. As the company secretary and sole shareholder of the employer, the respondent’s involvement in the contraventions equates to that of senior management.
55.
So far as contrition, corrective action and co-operation with the enforcement authorities are concerned, the applicant submits the respondent has not co-operated with the inspector and the inspectorate during the course of the investigation. I think that submission is well made. The evidence demonstrates the respondent has not complied with notices to produce, until ultimately threatened with the prospect of the matter being referred to the Director of Prosecutions.
56.
There were difficulties with the employer’s change of solicitor, which occasioned difficulties in the investigation. Ultimately, the records that were turned out have proven to be quite unsatisfactory, in terms of dealing with all the factors that might otherwise have been determined in this claim. To some extent, the respondent receives the benefit of the difficulties that he has in part been responsible for, in terms of the employer’s co-operation with the enforcement authorities.
57.
In terms of ensuring compliance with minimum standards, one of the principal objects of the Act emphasis the importance of an effective safety net of minimum terms and conditions of employment, together with effective enforcement of those minimum standards. The provisions concerning compliance at Part 14 of the Act provide one of the ways in which the Act seeks to give effect to that principal object.
58.
The importance of that safety net factor, is reflected not only in the magnitude of the maximum penalties available in respect of breaches, but also in terms of the legislature’s increase of those maximum penalties in August 2004. I have been referred to quite a number of authorities in the submissions prepared on behalf of the applicant which deal with penalties that have been imposed in respect of these types of contraventions. I take those matters into account.
59.
So far as specific and general deterrence is concerned, it is again well established that deterrence is a relevant factor in the imposition of penalty. There is in this instance, in my view, a need for both a specific and general deterrence. So far as specific deterrence is needed, it is required in order to deter the respondent from engaging in any further conduct of this kind in any future dealings with further employees.
60.
There is, of course, no evidence to indicate whether or not he will engage in further conduct of this kind, but one can work on the premise that in any event, there ought be factored into any penalty a sum which would serve to effect that specific deterrent element. As was noted by Lander J in Ponzio v B & P Caelli Construction Pty Ltd[5]:
61.
Likewise, Finkelstein J in CPSU v Telstra Corporation[6], made these observations:
62.
The applicant, in this instance, submits the court should have regard to the message that ought be sent to all employers in the community generally in respect of the underpayment of wages. It submits that the message should indicate clearly that underpayment of wages will not be tolerated, particularly in relation to vulnerable employees. I accept that submission and think that it is well founded.
63.
Having regard then to the matters that I have been directed to, I have come to the preliminary view that the following penalties reflect appropriate penalties in the circumstances.
64.
In respect of the breach of section 182 of the Workplace Relations Act, by failing to pay the correct periodic rate of pay under the APCS scale, to both Mr Nielson and Mr Vukavic, there ought be imposed a penalty of 45 penalty units. In respect of the breach of section 185(2) of the Workplace Relations Act by failing to pay casual loading pursuant to the APCS to Mr Nielson and Mr Vukavic, there ought be an imposition of a penalty of 45 penalty units. In respect of a breach of section 7.6 of the NAPSA, by failing to pay the public holiday penalty rates to Mr Nielson, there ought be an imposition of 20 penalty units, and in respect of a breach of clause 5.4 of the NAPSA, by failing to pay late work allowances to Mr Nielson, an imposition of 35 penalty units. In respect of a breach of clause 6.4 of the NAPSA, by failure to pay overtime to Mr Vukavic, there ought be an imposition of 35 penalty units: in total 180 penalty units, or $19,800.
65.
That brings me then to consider the totality principle. The applicant submits that in assessing the penalty, the appropriate course for the court is to assess the appropriate penalty for each separate contravention and then review the aggregate penalty and consider whether the aggregate penalty against the respondent is just and appropriate in all the circumstances. This is clearly the appropriate approach; that is, the approach endorsed, for instance, by Tracey J in (supra), where his Honour noted:
66.
It follows then, having regard to the determination which I have earlier expressed, on a preliminary basis in respect of each penalty, when one looks then at the totality of the conduct, I do not consider that an overall penalty of $19,800, would be oppressive or crushing in those circumstances, and it follows that the penalty in that quantum ought stand.
67.
Having regard then to those findings; would you please draft up a minute of order dealing with the declarations in terms of paragraphs 48, 49, and the penalties in paragraph 50.
68.
I will make an order, under section 841A of the Act that the penalty be paid to the following persons and to the Commonwealth Consolidated Revenue Fund in the following amounts: $10,792.13 to Mr Paul Neilson; $4073.18 to Mr Dallas Vukavic, and the balance to the Commonwealth Consolidated Revenue Fund.
Brisbane Barrister – David Cormack
Meshlawn P/L & Anor v State of Qld & Anor [2010] QCA 181
Catchwords
STATUTES – ACTS OF PARLIAMENT – STATUTORY POWERS AND DUTIES – EXERCISE – LIABILITY – NEGLIGENCE – PARTICULAR CASES – where appellants owned and operated nightclubs at Surfers Paradise – where appellants had consistently been granted ‘extended hours permits’ under the Liquor Act 1992 (Qld) to operate their nightclubs until 5.00 am – where, in March 2004, the chief executive refused each appellant’s application to renew the permits – where appellants successfully appealed to the Commercial and Consumer Tribunal – where appellants commenced proceedings against the chief executive and the second respondent for damages for pure economic loss – where trial judge dismissed the claims – whether the relationship between the appellants and the chief executive was such as to give rise to a duty of care – whether the statutory right of appeal is consistent with the existence of a duty of care – whether the nature of the statutory power under s 121A is consistent with the existence of a duty of care – whether the chief executive breached the alleged duty – whether the trial judge erred in discounting his assessment of damages by 20 per cent
McMurdo P, Chesterman JA and Fryberg J
Their Honours were agreed there was no breach of the duty of care by the Chief Executive under the Liquor Act 1992 (Qld). The President and Fryberg JA found a limited duty of care was owed by Chief Executive, Chesterman JA however, found there was no duty of care owed. The question of the duty of care arose in circumstances of a claim for ‘pure economic’ loss for refusing a permit to sell alcohol between 3am – 5am.
The judgment of Chesterman JA is a touchstone resource for consideration of the decisions of:
Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; [2002] HCA 54, applied Jones v Department of Employment [1989] QB 1, considered Perre v Apand Pty Ltd (1999) 198 CLR 180; [1999] HCA 36, applied Pyrenees Shire Council v Day (1998) 192 CLR 330; [1998] HCA 3, distinguished Rowling v Takaro Properties Ltd [1988] AC 473; [1987] UKPC 2, considered Stuart v Kirkland-Veenstra (2009) 237 CLR 215; [2009] HCA 15, applied Sutherland Shire Council v Heyman (1985) 157 CLR 424; [1985] HCA 41, cited
Otherwise, the appeal was dismissed on the remaining ground of the discount of 20% by their Honours.
Brisbane Barrister – David Cormack
Boulter v Crouch & Anor [2010] QSC 258
It was admitted that the plaintiff would have been successful against her former solicitor for having failed to commence proceedings for her personal injuries.
Quantum was in dispute. The accident pre-dated the Civil Liability Act 2003 (Qld), but nevertheless quantum was assessed at only $11,757.22.
Her Honour Atkinson J held at paragraphs 128 and 129 that the assessment was less than the costs of taking the matter to court and no judgment would be entered in the Supreme Court as it was a matter, which was and had always been a matter within the jurisdiction of the Magistrates’ Court.
Brisbane Barrister – David Cormack
Allens Arthur Robinson
In this issue: we look at whether a dismissal is a redundancy when the work is still being performed by others; where Fair Work Australia may still approve an agreement without good faith bargaining; Fair Work Australia having clarified the scope of flexibility terms; enterprise agreements should not cover positions an employer has yet to fill; notification of enterprise agreements in the digital age; and Fair Work Australia upholds the termination of an employee for refusing to work as directed.
Read more of the article by Allens Arthur Robinson.
Reproduced with permission of Allens Arthur Robinson and in accordance with their terms of use
Kovacevic v Holland Park Holdings Pty Ltd [2010] QDC 279
Catchwords
NEGLIGENCE – Dangerous premises – occupier’s liability – gymnasium used for exercise classes – whether floor unsafe – whether way classes conducted unsafe.
CONTRACT – Implied terms – Trade Practices Act – whether exclusion clauses effective – whether breach of implied warranties.
TRADE PRACTICES – Consumer protection – contract for services – whether implied warranties excluded – whether recreational services – whether breach of warranties.
McGill DCJ
The plaintiff slipped when participating in a class of “Body Attack” at the gym owned by the first defendant and operated by the second defendant. The instructor was an independent contractor of the second defendant and not joined. The plaintiff broke her left ankle and required internal fixation. Liability and quantum were in issue.
His Honour was required to consider general negligence together with the interaction of the Trade Practices Act 1974 (Cth.) and contractual terms, in particular, the waiver of liability in the membership contract and the meaning of “recreational” services.
Whilst the wooden floor and its co-efficient friction was a factor, it was not the determining factor in concluding liability.
Liability
[20] It is therefore not a question of whether it was negligent simply to have coated timber floors for an exercise class. I accept that there are advantages in the use of floors of that nature rather than, for example, carpeted floors. It also seems to me that the use of a wooden floor is not likely to be a problem in circumstances where a situation such as the present is unlikely to arise. The plaintiff’s injury in the present case was caused by the particular combination of circumstances, the wooden floor, the presence of moisture in the form of perspiration, and a form of exercise which generated high lateral forces at the point of contact between the participant’s shoe and the wooden floor. Perspiration is, I suspect, inevitably associated with strenuous exercise, but no doubt precautions can be taken to prevent difficulties arising from the contamination of the floor in that way. One obvious method is to avoid methods of exercise which give rise to substantial lateral forces of that kind in circumstances where there is a risk of perspiration on the floor; another is to take precautions to remove any perspiration which may be present, by checking the floor and wiping it if necessary, prior to the time when such an exercise routine is performed.
[21] I am not persuaded that having a wooden floor is in itself negligent, but it seems to me that, because of the risk of slipping and the consequent risk of injury, it was negligent to cause or permit an exercise class to be conducted which involved a method of exercise involving such strong lateral forces without taking precautions to prevent contamination of the floor from perspiration prior to the commencement of that particular form of exercise. It does not seem to me that any of the practical competing considerations adverted to by the defendant’s witnesses in relation to the use of wooden floors provided any justification for that combination of circumstances, or provided any practical reason why such a combination of circumstances could not be prevented in a way which was still consistent with the reasonable operation of exercise classes at the gymnasium. In those circumstances I consider that there was a failure in this case to take reasonable care for the safety of the participants in the exercise class, including the plaintiff, by permitting that combination of circumstances to exist.
[32] It was then alleged in paragraph 10F that it was an implied term of the contract that the second defendant would exercise due care and skill in rendering the services. The plaintiff relied on s 74 of the Trade Practices Act, as well as by operation of law. In the latter respect, the implied term suffers the same difficulty as that sought to be implied in paragraph 10E. As to s 74 of the Trade Practices Act, it was also submitted that the contract excluded the application of that section. In response to the plaintiff’s reliance on s 68 of the Trade Practices Act, the defendants relied on the proposition that the contract was a contract for the supply by a corporation of recreational services, so that pursuant to s 68B of the Act the terms of the contract referred to earlier were not void pursuant to s 68 of the Act. In response, the plaintiff relied on the proposition that those terms do not limit the exclusion, restriction or modification to liability for death or personal injury and were therefore not excluded from the operation of s 68 by s 68B.
[33] Section 68B of the Trade Practices Act 1974 provides relevantly:
“(1) A term of a contract for the supply by a corporation of recreational services is not void under s 68 by reason only that the term excludes, restricts or modifies or has the effect of excluding, restricting or modifying:
(a) the application of s 74 to the supply of the recreational services under the contract; or
(b) the exercise of a right conferred by s 74 in relation to the supply of the recreational services under the contract; or
(c) any liability of the corporation for a breach of a warranty implied by s 74 in relation to the supply of the recreational services under the contract;
so long as:
(d) the exclusion, restriction or modification is limited to liability for death or personal injury; and
(e) the contract was entered into after the commencement of this section.
(2) In this section …
‘Recreational services’ means services that consist of participation in:
(a) a sporting activity or a similar leisure time pursuit; or
(b) any other activity that:
(i) involves a significant degree of physical exertion or physical risk; and
(ii) is undertaken for the purposes of recreation, enjoyment or leisure.”
[34] The first issue which arises is whether this was a contract for the supply of recreational services. The contractual documents in Exhibit 4 do not identify, certainly not with any degree of precision, what it is that the plaintiff received for her membership fee, although it contained an acknowledgment that she understood what was included with her membership. Neither party led any evidence as to just what that was. The statement of claim alleged that the contract was for the provision of services including the use of the facilities at the fitness centre and participation in fitness classes, and that was admitted by the defendants. There was little evidence as to what facilities there were at the fitness centre for the plaintiff to use, and so far as the evidence goes all that has been established is that the contract was for the provision of services which extended to participation in exercise classes. If there was any other aspect of the services provided under the contract which could have amounted to recreational services as defined in s 68B, evidence of it was not led.
[35] As to participation in exercise classes, in my opinion this does not amount to “recreational services” of the purposes of s 68. I do not regard such classes as a sporting activity or similar leisure time pursuit. Sporting activities can cover a wide range of activities, not all of them particularly physical, but the dominant characteristic of sport is that it is competitive; the participants compete against each other, on either an individual or team basis. So far as the evidence before me reveals, the exercise classes were not in any way competitive. Nor does it strike me as something similar to a sporting activity. I am not sure what would be covered by the expression “similar leisure time pursuit”, but although a fitness class could be described as a leisure time pursuit I would not regard it as one which was similar to a sporting activity, except perhaps to the extent that sporting activities commonly involve physical exertion. That cannot be the test for similarity, otherwise paragraph (a) would cover the field, and indeed be wider than paragraph (b).
[36] As to paragraph (b), this was an activity which involved a significant degree of physical exertion but it was not in my opinion undertaken for the purpose of recreation, enjoyment or leisure. It was essentially undertaken for the purpose of physical fitness, that is to say for the purpose of promoting the health and well-being of the participant. That I regard as something distinct from matters of recreation, enjoyment or leisure. In my view, this was simply not the sort of activity which that paragraph was intended to cover; I expect that the legislature had in mind something such as mountaineering. The short answer to this plea is that the contract in the present case, at least so far as the evidence before me reveals, was not a contract for the supply by the second defendant of recreational services.
[37] There is the further consideration that paragraph (d) would not have been satisfied in this case because the exclusion, restriction or modification was not limited to liability for death or personal injury. The waiver in the document headed “Member and Guest Etiquette” extended expressly to all claims for articles lost, stolen or broken at the centre, or for loss or damage to any other property including automobiles and contents. The form headed “Application for Membership” included a waiver which included an acknowledgment that “my property and my person shall be at my own risk” and referred to both loss of property and personal injury. It follows that it was not limited to liability for death or personal injury and the requirement of paragraph (d) was not satisfied. On this ground also the defendants cannot rely on s 68B.
[38] If the exclusion of s 68 is not effective, that section renders the two waiver clauses void, because on their face they would purport to exclude, restrict or modify the terms implied into the contract by s 74 of the Act. It follows that by s 74(1) there was a term implied into the contract that the services would be rendered with due care and skill, and that any materials supplied in connection with those services would be reasonably fit for the purpose for which they were supplied.
[39] As for s 74(2), I have already found that the plaintiff by implication made known to the second defendant the purpose for which the services were required, namely the purpose of the plaintiff’s undertaking exercise in a supervised, safe and healthy manner, and it follows that there was an implied warranty that the services supplied and any materials supplied in connection with those services would be reasonably fit for that purpose. I consider that in the circumstances prevailing here it was reasonable for someone in the position of the plaintiff to have relied on the skill or judgment of the second defendant in relation to that matter.
[40] As the analysis in Gharibian (supra) shows, a breach of an implied term of the contract can occur without any negligence on the part of the defendant.[34] The obligation is not absolute; the statutory warranty implied is that the services will be reasonably fit for that purpose. It is not an answer for the defendants to say that the services were under the control of an independent contractor. The question is whether there was a breach of that warranty; in the light of the analysis that I have given earlier, I consider that the services in the form of the conduct of the exercise class on this occasion, where a class on this wooden floor involving vigorous exercise including exercise routines which involved foot movements where there were likely to be substantial lateral forces involved, and where participants were likely to be perspiring, and where no precautions were taken against the presence of perspiration on the floor, did mean that on this occasion the services as they were supplied were not reasonably fit for that purpose. There was therefore a breach of the implied contractual warranty on the part of the second defendant.
[41] In relation to the question of whether the services were provided with due care and skill, again in the light of the analysis earlier it seems to me that there was a failure to recognise and make proper allowance for the hazards associated with slipping when exercising on a wooden floor in this particular way and as vigorously as was required by this particular exercise programme, and hence a breach of this warranty.
[42] In my opinion there was also negligence on the part of the second defendant. Although the instructor was an independent contractor, she was allowed relatively little independent judgment in what she did and how she did it. She was required to use the particular exercise package selected by the second defendant at a particular time and in the aerobics room with the wooden floor.[35] I am prepared to infer that the defendant knew or ought to have known that she was not taking any precautions against the presence of perspiration on the floor during the exercise class. In those circumstances, I consider that there was a failure on the part of the second defendant to take reasonable care for the plaintiff’s safety, so the second defendant is liable in tort also.
[43] An argument was advanced by the defendants that the plaintiff was volenti in relation to this matter, but it seems to me that as it was advanced the argument was based on the waivers in the application for membership, and, having found that the waivers are void under s 68 of the Trade Practices Act, it follows that I need not consider this argument further. Apart from those waivers, it seems to me clear that the test for accepting the risk as discussed by the Court of Appeal in Leyden v Caboolture Shire Council [2007] QCA 134 would not be satisfied here.
[44] An allegation of contributory negligence was pleaded in paragraph 16 of the defence. It seemed to me that that was abandoned on behalf of the defendants, or at least not pressed in argument; in any event, I am not persuaded that any failure on the part of the plaintiff to take reasonable care for her own safety has been made out on the evidence.
[45] With regard to the first defendant the position appears to be that it was responsible for the design and construction of the centre, but was not occupying it and was not conducting the exercise classes in it at the time of the plaintiff’s accident. There was no contract with the first defendant, though had the exclusion clauses in the contract with the second defendant not been rendered void by s 68, it may be that they could have protected the first defendant from any liability. It is not necessary to decide this question, or indeed to examine closely the true interpretation of the actual clauses, in view of my conclusion in relation to the effect of s 68 of the Trade Practices Act, nor is it necessary to consider whether what was actually said in the contract had the effect alleged in paragraph 6A of the defence, or whether the effect of paragraph 7(a) of the reply is that that issue is not open.
[46] In my opinion the situation here is that any liability of the first defendant depends on the plaintiff’s being able to show that there was something wrong with the design or construction of the building itself. For practical purposes, that depends on whether having a wooden floor, in the absence of some particular treatment to increase the coefficient of friction if it was wet, was negligent. I am not persuaded that the use of a wooden floor, finished in the way that this floor was, was negligence in itself; views may differ as to the desirability of a wooden floor for the purposes of exercise classes, but I am not persuaded on the evidence that I have heard that the plaintiff has shown that it was unreasonable to install a wooden floor in a room for use for exercise classes, even if there was no special treatment applied to the floor to improve its coefficient of friction if there happened to be droplets of perspiration on the floor.
[47] I acknowledge that there are features of a wooden floor which are particularly attractive from a point of view of an exercise centre, in terms of aesthetics and in terms of the ability to keep the floor clean. There is also the consideration that it is not every use of such a floor for exercise classes which is going to pose a particular risk of injury to the participants. The problem here was a combination of a wooden floor which became slippery when wet with a vigorous exercise class which included manoeuvres imposing substantial lateral forces when feet hit the floor, and an absence of precautions against contamination of the floor with droplets of perspiration. Accordingly, I do not consider that there was any negligence on the part of the first defendant, and the action against it is dismissed. There will, however, be judgment for the plaintiff against the second defendant.
Quantum
[51] The plaintiff was seen by an orthopaedic surgeon, Dr Gillett, on 28 August 2006 for the purposes of a report: Exhibit 7. At that stage he noted that the plates were tender to touch and hurt her if they were bumped, as well as the symptoms referred to earlier. She limped if walking for about half an hour, and the ankle would swell. Sleep was affected at times. She could not run properly and avoided high-heeled shoes. She was no longer able to exercise in the way she did before the incident. On examination there was some swelling in the left ankle, and global weakness of some movements, which were said to be one grade on the MRC scale. There was diminished hopping ability on the left side. There was a mild loss of motion in dorsi-flexion but other movements were within normal range. X-rays revealed a spiral fraction involving the distal tibia with a posterior malleolar fracture and a fracture of the lateral malleolar. A more recent x-ray showed the fractures had united after treatment and there was no evidence of osteoarthritis.
[52] Dr Gillett thought that her condition had received maximum medical improvement, though she required removal of the internal fixation devices which would cost approximately $3,000 and a convalescent period of two weeks. He expected the symptoms to continue apart from those specifically associated with the plate and screws but he did not expect degenerative arthritis. She would be able to remain working in sedentary work. He assessed her as having a Class 1 impairment from scarring measured at 2% of whole person function and a 7% impairment of lower limb function, which equated to a 3% loss of whole person function in accordance with the AMA scale. She also had a 1% impairment of whole person for residual pain. The practical effect of Dr Gillett’s opinion is that apart from some improvement in the symptoms associated specifically with the plate and screws which would be effected by their removal, the plaintiff’s symptoms are likely to be permanent, but are unlikely to worsen significantly.
[53] It was agreed between the parties that general damages would be assessed at $11,000 on the basis of an ISV of 10. Special damages in the form of refunds are agreed at $10,297.12, and special damages in the form of out of pocket expenses are agreed at $2,687.08. An interest rate of 3% is agreed on the out of pocket expenses for the period from the day of the accident, which is now five years. There is no past economic loss. It was submitted that the plaintiff should be awarded future economic loss on the basis that her ability to work has been limited as a result of being left with a painful ankle, the sort of work that she could do for the Commonwealth Bank has been restricted to some extent, and she will be at risk in the labour market.
[53] It was agreed between the parties that general damages would be assessed at $11,000 on the basis of an ISV of 10. Special damages in the form of refunds are agreed at $10,297.12, and special damages in the form of out of pocket expenses are agreed at $2,687.08. An interest rate of 3% is agreed on the out of pocket expenses for the period from the day of the accident, which is now five years. There is no past economic loss. It was submitted that the plaintiff should be awarded future economic loss on the basis that her ability to work has been limited as a result of being left with a painful ankle, the sort of work that she could do for the Commonwealth Bank has been restricted to some extent, and she will be at risk in the labour market.
[56] It may be a matter of waiting until a suitable position comes up, or it may be a matter of trying to find alternative employment elsewhere, at least until her family is old enough so that she is interested in full-time work again. She gave no evidence about when that might occur, and I would not expect someone in her position to know. On the other hand, it is commonplace that women do return to full-time work sooner or later when they find family responsibilities less pressing, so it is likely that that will occur for her at some stage. It is certainly not possible to calculate any future economic loss, but I am satisfied on the balance of probabilities that she will suffer such loss, as a result of the persistence of the symptoms in her ankle. Assessment of the loss needs to be made taking into account the various possibilities, both favourable and unfavourable.
[57] At one extreme, she may find that she is able to return to work at the bank when she wants to do so in a position which is within her capacity, and in time be able to move into full-time employment which would be much the same as she would have been doing anyway. At the other extreme, she may be unable to obtain suitable part-time employment with the bank, and may have difficulty in obtaining it elsewhere, and may have lost her contacts with the bank by the time she is interested in returning to full-time employment. If that were to occur, her future economic loss would be quite substantial. On the whole, however, I do not think that there is a large risk of things turning out as bad as that, and although that possibility should not be disregarded it is likely that things will be better for her than that, and there is a reasonable possibility that there will be much less or no future economic loss. Doing the best I can with the various possibilities, I will allow a global sum of $50,000.[38] In addition, an allowance of $4,500 should be made for the loss of future superannuation contributions.
[58] An allowance should also be made for the cost of future medical expenses in the form of surgery to remove the plate and screws, and future medication. In respect of these matters, the plaintiff accepted the correctness of the defendants’ calculations of $3,300, so I will award that figure.
[59] Accordingly, the assessment of damages may be summarised as follows:
| (a) | General damages | $11,000.00 |
| (b) | Special damages – refunds | $10,297.12 |
| (c) | Special damages – out of pocket | $2,687.08 |
| (d) | Interest on out of pocket special damages | $553.06 |
| (e) | Future economic loss | $50,000.00 |
| (f) | Future superannuation contributions | $4,500.00 |
| (g) | Future expenses | $3,300.00 |
| TOTAL | $82,337.26 | |
[60] There will therefore be judgment that the second defendant pay the plaintiff $82,337.26. I will hear submissions as to costs when these reasons are published.
Brisbane Barrister – David Cormack