Principal & contractor – Leighton Contractors Pty Ltd v Fox – considered

BlueScope Steel Ltd v Cartwright [2015] NSWCA 25

The employee driver in first instance was successful, but lost the appeal on the finding that the speed of the truck caused the load to become unstable. In determining whether the manufacturer of the product, which product moved in the truck had any liability by reference to guidelines/warnings they produced for transportation, Emmett JA, Beazley P and Ward JA agreeing, found they did not. [111]- [124].

HEADNOTE

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

On 29 August 2007, the first respondent, Mr Sydney Cartwright, was driving a prime mover from Port Kembla to Port Botany. Attached to the prime mover was a trailer, which was loaded with a container that held two 7.3 tonne steel coils and one 6.4 tonne steel coil. Mr Cartwright’s employer, Mannway Logistics Pty Ltd (Mannway), had agreed to transport the coils on behalf of the appellant (BlueScope), which manufactured them.

While Mr Cartwright was negotiating a left hand bend during the journey, the trailer capsized to the right, onto the wrong side of the roadway, pulling the prime mover with it. Mr Cartwright was seriously injured as a consequence.

BlueScope produced guidelines for the secure loading by Mannway of the coils for transportation. Shortly before Mr Cartwright’s accident, BlueScope began manufacturing coils with an extra timber runner underneath, without informing Mannway. The significance of that change was that the method of loading employed by Mannway no longer ensured that the coils would be as stable in the container during transport as they had previously been. Specifically, the wooden wedges that Mannway forced underneath the coils (as required by BlueScope’s guidelines), to stop them from moving, were no longer high enough to come into contact with the coils.

Mr Cartwright commenced proceedings against both BlueScope and the second respondent, the Workers Compensation Nominal Insurer (the Insurer), which represented Mannway, pursuant to leave granted under s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). A judge of the Common Law Division awarded Mr Cartwright over $926,000 in damages for the breaches by BlueScope and Mannway of the duties of care that they owed to him.

BlueScope appealed from the orders of the primary judge, and the Insurer and Mr Cartwright later filed cross-appeals.

The three questions on appeal were:

(1)   whether the primary judge erred in failing to make a finding as to the speed at which the prime mover was travelling at the time of the accident, and in failing to accept opinion evidence of the parties’ expert engineers that, even if the wedges were installed inadequately, the load of steel coils would not have shifted and toppled within the trailer if the prime mover was travelling at a speed below 75 km/hr;

(2)   whether BlueScope was in breach of any duty owed to it by Mr Cartwright, assuming that the inadequacy of the wedges was the cause of the accident; and

(3)   how responsibility should be apportioned as between BlueScope and Mannway, assuming that BlueScope was in breach of a relevant duty that it owed to Mr Cartwright.

The Court of Appeal (Emmett JA, Beazley P and Ward JA agreeing) held that:

(1)   the accident would not have occurred unless the prime mover was travelling at a speed in excess of the limit applicable at the relevant location; therefore, Mr Cartwright failed to establish, on the balance of probabilities, that the inadequacy of the wedges was the cause of the accident: [2]-[3], [5], [109]-[110]

(2)   BlueScope did not breach its duty of care to Mr Cartwright by its not warning Mannway of the inadequacy of the standard size wedges by reason of the additional runners under the pallets: [1], [5], [111]-[124]

Leighton Contractors Pty Ltd v Fox [2009] HCA 25; 240 CLR 1; Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16; Thompson v Woolworths (Qld) Pty Ltd [2005] HCA 9; 221 CLR 234, considered

(3)   in light of the conclusion as to causation, no question of apportionment between BlueScope and Mannway arises; instead, Mr Cartwright is entirely responsible for his injuries: [4], [5], [125]

 

Emmett JA, Beazley P and Ward JA agreeing

Scope of BlueScope’s duty to Mr Cartwright

111.

The primary judge rejected BlueScope’s contention that it was not in breach of the duty owed to Mr Cartwright, having regard to the fact that the transport of coils of such dimensions and weight as the Relevant Coils was a highly dangerous activity, calling for extreme care on the part of all concerned. Her Honour had regard to the fact that BlueScope insisted on adherence to the Guidelines, including the specifications for wedges, that BlueScope delivered pallets that differed from those previously delivered, insofar as they had the additional runners attached to them, and that BlueScope omitted to notify anybody at Mannway of that difference. Her Honour considered that it was foreseeable that Mannway’s workers would not notice the additional runners on the pallets.

112.

The primary judge also considered that it was foreseeable that Mannway’s employees would not appreciate the significance of having wedges not being in contact with the pallet or with the coil where it protruded. However, in the light of her Honour’s earlier finding (at [42]) that it should have been obvious to Mannway’s employees that the purpose of the wedges was to restrain movement and that that purpose could not be achieved unless contact was made between the wedges and either the pallet or a protruding coil, it is difficult to see why Mannway workers would not appreciate the significance of such contact.

113.

The instruction in the Guidelines was that “wedges are forced under the side of each coil, this may be against the pallet or the coil when it protrudes beyond the pallet” (emphasis added). The primary judge considered that that provision of the Guidelines did not place particular emphasis on the need for physical contact. Her Honour had regard to the fact that the system designed by BlueScope was, to its knowledge, to be implemented by labour-level employees of Mannway. Her Honour considered that the Guidelines were insufficiently clear to draw the attention of employees to the purpose of the wedges and the importance of contact between the wedges and the pallet or coil. Her Honour concluded that it was foreseeable by BlueScope that those workers would not appreciate the full significance of the instruction in the Guidelines.

114.

The primary judge considered that the fact that Mannway also owed a duty to Mr Cartwright did not alter the fact that BlueScope itself, by its own acknowledgement, owed a duty directly to Mr Cartwright. Her Honour considered that, in maintaining control over the method of packing, BlueScope disentitled itself from relying upon the separate duty that Mannway owed to Mr Cartwright and was not relieved of that duty.

115.

The common law does not impose a duty of care on principals for the benefit of independent contractors engaged by them of the kind that they owe to their employees, although, in some circumstances, a principal will come under a duty to use reasonable care to ensure that a system of work for one or more independent contractors is safe (Leighton Contractors Pty Ltd v Fox [2009] HCA 25; 240 CLR 1 at [20]). If a principal fails to engage a competent contractor, it may not avoid liability for the negligent failure of the contractor to take reasonable care to adopt a safe system of work. However, provided that the principal retains a competent contractor, and the relevant activity is placed in the contractor’s hands, the principal is not subject to an ongoing general law obligation with respect to the safety of the work methods employed by the contractor or by those with whom the sub-contractor has subcontracted (Leighton Contractors v Fox at [59]).

116.

An entity that organises an activity involving a risk of injury to those engaged in the activity is under a duty to use reasonable care in organising the activity to avoid or minimise that risk. Such a duty is imposed whether or not the entity is under a further duty of care to servants employed by it to carry out that activity. The duty arises simply because the entity is creating the risk. However, the duty is more limited than the duty owed by the entity to an employee. The duty does not extend to retaining control of working systems, if it is reasonable to engage the services of independent contractors who are themselves competent to control the system of work without supervision by the principal entity. The circumstances may be such that the entity will be obliged to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors, if confusion about those areas gave rise to a risk of injury. However, once the activity has been organised, and its operation is in the hands of apparently competent independent contractors, any negligence of the independent contractors, within the area of their responsibility, is not the vicarious responsibility of the principal entity. If a principal entity takes reasonable care in the retainer of independent contractors who are competent to control their own systems of work, in retaining a supervisory power (where appropriate) and in defining the contractors’ respective areas of responsibility, the principal entity will not be liable for damage caused merely by negligent failure of an independent contractor to adopt or follow a safe system of work, either within the area of responsibility of the contractor or in an area of shared responsibility (see Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16 at 47-48).

117.

When a person is required to take reasonable care to avoid a risk of harm to another, the weight to be given to an expectation that the other 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. For example, a motorist may reasonably assume that other road users will be reasonably careful. On the other hand, it is sometimes reasonable to expect a motorist to allow for the possibility that some other road users will be inattentive or even negligent. The obviousness of a risk and the remoteness of the likelihood that other people will fail to observe and avoid it may be factors relevant to a judgment about what reasonableness requires as a response. In the case of some risks, reasonableness may require no response. The factual judgment involved in a decision about what is reasonably to be expected of a person who owes a duty of care to another involves an interplay of considerations. The weight to be given to any one of them is likely to vary according to circumstances. If the obviousness of a risk, and the reasonableness of an expectation that other people will take care for their own safety, were conclusive against liability in every case, then there would be little room for the doctrine of contributory negligence. On the other hand, if those considerations were irrelevant, community standards of reasonable behaviour would require radical alteration (Thompson v Woolworths (Qld) Pty Ltd[2005] HCA 9; 221 CLR 234, at [35]-[37]).

118.

The admission by Mannway of breach of the duty that it owed to Mr Cartwright incorporates an admission that Mannway knew or ought to have known that the wedges were not in contact with the Relevant Coils or the pallets on which they were mounted, with the consequence that Mannway knew or ought to have known that the lack of contact gave rise to a risk of injury to Mr Cartwright.

119.

The concession by Mannway, that it knew or ought to have known that the wedges were not the size required for the pallets in question, highlights that BlueScope’s duty did not extend to warning Mannway of the inadequacy of standard size wedges by reason of the additional runners under the pallets. It was physically possible for Mannway’s supervisors to do whatever their job required them to do, which included checking the wedges. Mannway had an obligation to pack the Relevant Coils in the Relevant Container and there was no confusion between Mannway and BlueScope as to who had that obligation. Mannway was an otherwise competent supervisor that did not need BlueScope looking over its shoulder.

120.

Mr Cartwright’s submissions, taken to their logical conclusion, would require BlueScope to have its own employees on site at Mannway’s depot to supervise Mannway in everything that it did. That would effectively equate BlueScope’s duty with that of an employer, which BlueScope clearly was not, in relation to Mr Cartwright.

121.

Even if Mr Cartwright were able to establish that there were eccentricities present, it is not possible to say whether such eccentricities arose because of the conduct of BlueScope or the conduct of Mannway. Even assuming that the conduct of either of them amounted to negligence, Mr Cartwright’s claim against BlueScope must fail unless he is able to establish, on the balance of probabilities, that BlueScope was negligent before BlueScope can be held liable for his injuries. It is not sufficient to say that one of two defendants must have been negligent and that either of them may have been negligent. A plaintiff must be able to point, on the balance of probabilities, to the particular defendant who was negligent (see Kilgannon v Sharpe Ross Pty Ltd (1986) 4 NSWLR 600 at 617E-G, 625B and 628C).

122.

There was no suggestion in the present case that the circumstances made it necessary for BlueScope to retain and exercise a supervisory power over the performance by Mannway of its obligations under its retainer from BlueScope to pack coils into containers and transport them to Port Botany. There was no suggestion that BlueScope failed to prescribe the areas of responsibility of Mannway such that there was confusion about areas of responsibility that might involve a risk of injury.

123.

Mr Cartwright says that there must have been a load shift of the Relevant Coils that would have been prevented by wedges if they had been in contact with the pallets on which the Relevant Coils were mounted. He says that the wedges would have been in place had BlueScope provided a warning that the pallets in the present case were different and that further steps needed to be taken either to remove the additional runners or to increase the size of the wedges.

124.

In all of the circumstances, I do not consider that the evidence supports a conclusion that BlueScope was in breach of its duty to Mr Cartwright. It specified in unequivocal terms in its Guidelines, which Mannway was bound by the Transport Contract to follow, that the wedges were required to be in contact with a coil or the pallet on which the coil is mounted. In particular, the use of the word “forced” in the instruction about the placement of the wedges renders it clear, contrary to the finding of the primary judge, that physical contact was to be made between the wedge and the pallet or coil. BlueScope was entitled to expect that its competent independent contractor would comply with those detailed instructions contained in the Guidelines. I consider that the primary judge erred in concluding to the contrary.

David Cormack – Brisbane Barrister & Mediator

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