Leighton v Fox not a “carte blanche” defence

Central Darling Shire Council v Greeney [2015] NSWCA 51

Before: Macfarlan JA

Sackville AJA

Beech-Jones J

Decision: Appeal dismissed with costs
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TORTS – negligence – duty of care – the respondent was employed by a road maintenance and repair subcontractor of the appellant – the respondent was injured as a result of a direction given by an employee of the appellant – whether the primary judge erred in finding that the appellant owed a duty of care to the respondent – whether the primary judge erred in finding that the appellant was negligent TORTS – negligence – causation – whether the primary judge erred in finding that the appellant’s negligence was a cause of the respondent’s injury TORTS – negligence – whether the primary judge erred in the apportionment of responsibility between the principal/appellant and the subcontractor employer

 

Initially the council, as principal contractor, was found to be liable to the injured employee of the sub-contractor.  The decision was appealed on the basis it was not responsible for the negligent system of work of an independent contractor.

HEADNOTE

[This headnote is not to be read as part of the judgment]

1.      On 21 September 2008 the respondent, Mr Roger Greeney, injured his back whilst working as a roller driver at a remote location in outback New South Wales maintaining and repairing roads. Mr Greeney was employed by Greg Wilkins Industries Pty Ltd (“GWI”) which was engaged by the appellant, Central Darling Shire Council (“Council”), to perform roadwork in that location. Mr Greeney was injured while attempting to couple a fuel tanker to the rear of a caravan after uncoupling it from the rear of a four-wheel drive vehicle. GWI owned all three vehicles, and the roller. Mr Bob Hocking was the only Council employee present at the time. No other employee of GWI was there, although Mr Hocking had been employed by GWI in the past.

2.      Mr Greeney commenced proceedings against the Council in the District Court, claiming that he was entitled to damages by reason of the Council’s negligence in connection with the incident. By judgment of 26 February 2014 Charteris DCJ found in Mr Greeney’s favour and assessed damages at $726,106. His Honour apportioned responsibility for Mr Greeney’s injury as 60% to the Council and 40% to his employer, GWI, with the result that after application of s 151Z of the Workers Compensation Act 1987 (NSW) Mr Greeney’s damages were reduced to the sum of $435,664.

3.      On appeal, the Council challenged the primary judge’s findings on duty of care, breach of duty, causation, and damages.

Held, dismissing the appeal (per Macfarlan JA; Sackville AJA and Beech-Jones agreeing):

The primary judge did not err in finding that the Council owed a duty of care to Mr Greeney.

Leighton Contractors v Fox (2009) 240 CLR 1 and other authorities considered.

The primary judge did not err in finding that the Council had breached its duty to Mr Greeney, his Honour having found that there were steps that the Council could have taken to eliminate or minimise the foreseeable risk of injury, that the burden of taking them was not great and that a reasonable person in the Council’s position would have taken the steps.

The primary judge did not err in finding that causation had been established. Correct approach to causation discussed.

Rosenberg v Percival (2001) 205 CLR 434 and other authorities referred to.

The primary judge’s apportionment of damages was not so unreasonable that it warranted appellant intervention.

The primary judge did not err in his assessment of damages.

Macfarlan JA with whom Sackville AJA and Beech-Jones J concurred:

27.  The law does not however impose a duty of that type upon a principal in favour of independent contractors, or employees of independent contractors such as Mr Greeney. In Leighton Contractors Pty Ltd v Fox [2009] HCA 35; 240 CLR 1 at [20], the High Court approved the following observations of Brennan J in Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16 (at 47-48) as to a circumstance that may impose a duty of care on the principal, albeit a more limited one than that owed by an employer to its employee:

“ … An entrepreneur who organizes an activity involving a risk of injury to those engaged in it is under a duty to use reasonable care in organizing the activity to avoid or minimize that risk, and that duty is imposed whether or not the entrepreneur is under a further duty of care to servants employed by him to carry out that activity. The entrepreneur’s duty arises simply because he is creating the risk (Sutherland Shire Council v. Heyman … and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organizing an activity does not import a duty to avoid any risk of injury; it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimize other risks of injury” (citation omitted).

28. In Stevens v Brodbribb a sawmiller engaged contractors to fell and transport trees. Whilst the sawmiller’s employee had general supervision over the operations, he exercised no control over the manner in which the contractors carried out their tasks. Nevertheless, the contractors’ tasks were interdependent and required coordination and the sawmiller therefore owed them a duty of care to prescribe a safe work system. That is not the present case but there is no reason to read Stevens v Brodbribb as exhaustively stating the circumstances in which a duty of care more limited than that owed by an employer to an employee may arise.

29. The circumstances in Thompson v Woolworths (Q’LAND) Pty Ltd [2005] HCA 19; 221 CLR 234 were also distinguishable. In that case the defendant was the occupier of the land on which the plaintiff was injured and had established and maintained a system for delivering goods to its business which the plaintiff followed. In these circumstances, the defendant’s duty as occupier to exercise reasonable care for the safety of people who came onto its premises “extended to exercising reasonable care that its system did not expose people who made deliveries to unreasonable risk of physical injury” (at [27]).

30. In Leighton Contractors v Fox, an independent contractor was injured as a result of another contractor’s negligence. The principal was held not to have owed a duty of care to the injured contractor in relation to the safety of the work methods of the other contractor where it had not been shown that the other contractor was not competent and where the relevant work activity had been placed in that contractor’s hands (at [59]). The Court held that there was nothing unreasonable about subcontracting relevant work which was “a self-contained operation that did not require co-ordination with other activities on the site” (at [62]).

31. In Sydney Water Corporation v Abramovic [2007] NSWCA 248; 5 DDCR 570 at [98], Basten JA (with the concurrence of Mason P) identified the following factors as potentially relevant to the determination of whether a principal owed a relevant duty of care to an employee of a subcontractor:

“(a) the principal directs the manner of performance of the work;

(b) the work requires the coordination of the activities of different contractors;

(c) the principal has or ought to have knowledge of the risk and the employer does not and cannot reasonably be expected to have such knowledge;

(d) the principal has the means to alleviate the risk and the employer cannot reasonably be expected to do so;

(e) although the employer has or should have the relevant knowledge and can be expected reasonably to take steps to alleviate the risk, it does not, to the knowledge of the principal, do so.”

32. In Wooby v Australian Postal Corporation [2013] NSWCA 183; 233 IR 471 at [27], Basten JA emphasised the non-exhaustive nature of this list. So far as the principal’s control of the work was concerned, his Honour observed that what had been important in Sydney Water Corporation v Abramovic was the “degree of control in fact exercised by the principal”, as distinct from the mere existence of a right to exercise a degree of control (at [25]). This reflected the approach taken in Plexvon Pty Ltd (in liq) v Brophy [2006] NSWCA 304; 158 IR 221 at [13] in reliance upon R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurance Ltd [1952] HCA 10; 85 CLR 138 at 151.

33. Basten JA’s observations are consistent with the “multifactorial” approach of Allsop P (with Basten JA and Simpson J concurring) in Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649. Whilst this case did not concern the relationship of principals to subcontractors or their employees, Allsop P stated principles of general application to the identification of duties of care. In particular, his Honour identified many features of potential relevance, of which only the following need be mentioned here:

“(a) the foreseeability of harm;

(b) the nature of the harm alleged;

(c) the degree and nature of control able to be exercised by the defendant to avoid harm;

(d) the degree of vulnerability of the plaintiff to harm from the defendant’s conduct, including the capacity and reasonable expectation of a plaintiff to take steps to protect itself;

(e) the degree of reliance by the plaintiff upon the defendant;

(f) any assumption of responsibility by the defendant …” (at [103]).

46. My conclusion in relation to the duty of care issue indicated that the primary judge was justified in concluding that it was, or should have been, foreseeable to Mr Hocking (on behalf of the Council) that his direction to move camp when the jockey wheel was absent involved a not insignificant risk of Mr Greeney suffering serious injury. The primary judge was conscious of the terms of s 5B(2) of the Civil Liability Act and therefore of the evaluative balancing exercise that it required. Having further found that precautions could have been taken to eliminate or minimise the risk of injury, that the burden of taking them was not great and that a reasonable person in the Council’s position would have taken the precautions (Judgment [27]), there was no error in his Honour’s conclusion that the Council had breached its duty to Mr Greeney.

51. In my view, this is the way in which the issue of causation should be approached in this case. That is, because the breach was the taking of a positive step (Mr Hocking’s direction to move camp), the relevant question is whether Mr Greeney would have suffered injury if the act had not occurred. The present case is different from the warning cases (such as Chappel v Hart [1998] HCA 55; 195 CLR 232; Rosenberg v Percival and Wallace v Kam). Those cases involved positive conduct of the defendants in conducting medical procedures but it was the plaintiffs that permitted those procedures to occur. The causation question there was whether the plaintiffs would have made the same decision if advised of particular risks. Here, Mr Greeney had no choice but to comply with Mr Hocking’s direction, otherwise he would have lost his job (see [14] above). The Council’s negligence was therefore in the giving of the direction, not in the failure to give a warning.

54. To establish causation where negligence is constituted by an omission, it is necessary for the plaintiff to prove, on the balance of probabilities, that had the omission not occurred the plaintiff’s injury would have been avoided or lessened (Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361 at [45] and [104]; Strong v Woolworths Ltd [2012] HCA 5; 246 CLR 182 at [32]; Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; 239 CLR 420 at [53]). In applying this principle, the enquiry is concerned with probabilities, whereas in considering breach it is not. In relation to breach, the magnitude of the foreseeable risk must be weighed in the balance but a conclusion that a breach has occurred does not require a finding that the defendant’s conduct was, on the balance of probabilities, likely to cause the risk to come to pass. No such finding was made (or was necessary) in the present case. Indeed, it is difficult to see how the evidence would have justified it, considering Mr Greeney had undertaken the manoeuvre in question many times in the past without difficulty. There was thus a risk, but not a probability, of injury. As long as the risk of injury was not far-fetched, it was appropriate to weigh it in the balance when determining whether there had been a breach.

APPORTIONMENT OF RESPONSIBILITY BETWEEN THE COUNCIL AND GWI

58.  In considering apportionment, the primary judge referred to significant features of the case bearing upon the respective responsibilities of GWI and the Council. On the one hand, GWI had had ample notice of the defect and chose, likely for financial reasons, not to remedy it, thereby breaching its non-delegable duty to Mr Greeney. On the other hand, the Council, unlike GWI, was represented on site and had day to day control and supervision of Mr Greeney through its representative Mr Hocking. Moreover it gave the direction in question.

59.  The Council contended on appeal that the primary judge had misdirected himself in this context by assuming that the Council had a right under its contract with GWI to require it to render the fuel tanker safe by supplying the missing wheel. For reasons given above (see [22]), I reject this argument.

60.  The Council further submitted that the primary judge erred in describing the Council as having “day-to-day control of, and supervision of, [Mr Greeney]” (Respondent’s Amended Written Submissions [26]). It asserted that the Council had no such control at the campsite. However, all that is material in this context is that Mr Hocking had control of the location of the campsite and was in a position to, and did, give the direction for movement to Mr Greeney (at a time when Mr Hocking should have appreciated that compliance would involve a not insignificant risk of injury to Mr Greeney).

61.  Having referred to the availability (presumably to both the Council and GWI) of “ready alternatives” to obviate the risk, his Honour concluded that responsibility should be apportioned 60% to the Council and 40% to GWI (Judgment p 35).

62.  The applicable principles were stated by the High Court in Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; 59 ALJR 492 at 494 as follows:

“The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man … and of the relative importance of the acts of the parties in causing the damage … It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination” (citations omitted).

63.  Although these observations were made in relation to the division of responsibility between a plaintiff and a defendant, they are equally applicable to apportionment of responsibility between other parties (Parkview Constructions Pty Ltd v Abrahim [2013] NSWCA 460 at [113]).

64.  Restraint in appellate intervention is appropriate in this context because an apportionment decision relates to a ‘question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds …’ (Podrebersek v Australian Iron & Steel at 494 quoting British Fame (Owners) v Macgregor (Owners) [1943] AC 197 at 201).

65.  The following comments of Kirby P, made in an unreported decision of this Court and adopted by the plurality in Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 212, may be applied by analogy to an evaluative decision such as that presently under consideration:

“Unless appellate courts show restraint in disturbing the evaluative determinations of primary decision-makers they will inevitably invite appeals to a different evaluation which, objectively speaking, may be no better than the first. Second opinions in such cases would be bought at the cost of diminishing the finality of litigation in a troublesome area and, sometimes at least, with a burden of costs upon the estate which should not be encouraged.”

66.  Apportionment findings are thus not lightly reviewed and the principles in House v The King [1936] HCA 40; 55 CLR 499 at 505 are applicable (Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Co Ltd [2001] NSWCA 461; 53 NSWLR 626 at [60]-[63] which was unaffected in this respect by the High Court appeal reported as Amaca Pty Ltd v State of New South Wales [2003] HCA 44; 77 ALJR 1509; see also Mikaera v Newman Transport Pty Ltd [2013] NSWCA 464; 65 MVR 578 at [35]). Thus if no error of principle is demonstrated, appellate intervention is only warranted if the apportionment is unreasonable or plainly unjust.

67.  The primary judge did not refer in terms to Podrebersek v Australian Iron & Steel but his reasons do not suggest to me that he took any different approach than described in that case, or otherwise made any error of principle. The immediacy of the Council’s involvement appears to have been the decisive factor which led him to apportion greater responsibility to the Council than GWI: in particular, that the Council’s representative, Mr Hocking, was on site and gave the direction which he should have foreseen would create a dangerous situation.

68.  It is of the nature of apportionment decisions that minds may differ as to the appropriate division of responsibility. Although a quite different apportionment could reasonably have been made, I do not consider that the primary judge’s finding was so unreasonable as to warrant appellate interference with it.

David Cormack – Brisbane Barrister & Mediator

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