Action Engineering Pty Ltd v Press - [2006] SASC 207

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
ACTION ENGINEERING PTY LTD v PRESS & ANOR
[2006] SASC 207
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Duggan and The Honourable Justice Gray)
27 July 2006
TORTS - NEGLIGENCE - CONTRIBUTORY NEGLIGENCE - GENERALLY
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
Appellant appeals to the Supreme Court against a finding after a trial in the District Court that there was no contributory negligence on the part of the first respondent in respect of a workplace accident - appellant appeals to the Supreme Court against the interpretation by the District Court of certain indemnification clauses in a contract between the appellant and the second respondent Broken Hill Proprietary Company Limited (BHP) - respondent worker injured while performing maintenance on coking ovens on premises owned by BHP - respondent employed by Rexco Proprietary Limited which company had hired his services to Action Engineering Proprietary Limited which had contracted for maintenance work with BHP - consideration of the principles of contributory negligence in relation to the circumstances of the case - respondent's conduct can be characterised only as 'mere inadvertence' or 'inattention' - no error made out in respect of the finding of no contributory negligence - consideration of certain indemnification clauses in a contract between the appellant (Action Engineering Proprietary Limited) and (BHP) - no error made out in the interpretation of indemnification clauses - appeal dismissed.
Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301, applied.

ACTION ENGINEERING PTY LTD v PRESS & ANOR
[2006] SASC 207
Full Court: Doyle CJ, Duggan and Gray JJ

DOYLE CJ: After a trial in the District Court, Mr Press was awarded damages for injuries he suffered in an accident at his workplace.
The damages were awarded against Action Engineering Pty Ltd (“Action”) and against Broken Hill Proprietary Company Limited (“BHP”). Mr Press was working for Action when he suffered the injuries. Mr Press was employed by Rexco Pty Ltd (“Rexco”), a labour hire company. Rexco had hired Mr Press’s services to Action. Action had contracted to carry out maintenance work for BHP at BHP’s premises. Mr Press was engaged in that maintenance work when he was injured.
The Judge awarded damages on the basis that Action and BHP owed a duty of care to Mr Press, similar to that owed by an employer to an employee. The Judge found that each of them was in breach of that duty. There is now no challenge to that finding, nor to the award of damages.
The Judge found that there was no contributory negligence on the part of Mr Press. Action challenges that finding.
The Judge held that having regard to the terms of the contract between BHP and Action, Action was liable to indemnify BHP in respect of BHP’s liability to Mr Press. Action challenges that conclusion of law.
I consider that the appeal fails on both grounds. I agree generally with the reasons given by the trial Judge. That being so, I will express my conclusions relatively briefly.
The facts
Mr Press was carrying out maintenance work on a series of coke ovens that form a long rectangular structure rising about 15 metres above ground level. Mr Press was familiar with the ovens. He had worked on them over a period of about 12 months.
On the occasion in question, part of a fume extraction system was being checked in the course of a maintenance program. The system was one whereby fumes were extracted from the coke ovens into a large fixed duct which was adjacent to the top of the ovens. This was done when the ovens were being charged with coal. Put very simply, there was a door in the adjacent fixed duct that was opened mechanically, and when it was open a telescopic duct would extend from the charger across to the duct, making a seal at the door opening. As coal was discharged from the charger into the top of the oven, fumes would be extracted from the oven through the charger, through the telescopic duct and into the large fixed duct. For the purposes of this operation the charger moved on a railway track across the top of the ovens, pausing above each oven to charge it with coal and to extract fumes.
For the first time the checking of the seal between the telescopic duct and the doorway in the fixed duct was being checked by having a maintenance fitter stand on top of the battery charger, to observe the tightness of the seal. Standing in this position enabled the fitter to get a better view of the seal, compared with the previous method under which, I gather, the fitters would adjust the door from a platform, then move away while the battery charger was moved into place and the telescopic duct extended to the fixed duct. There was an element of “hit and miss” to that process, because the fitters were not in a position to observe the tightness of the seal from reasonably close up.
The new method involved the fitter standing on the charger alongside the telescopic duct, in the retracted position. The fitter would watch the telescopic duct extend across the space to the fixed duct. During the course of this operation a rod attached to the telescopic duct would push the door open, allowing the end of the telescopic duct to move towards and make contact with the opening behind the door.
For this purpose the fitter would be standing on a platform on the charger. The platform had a guardrail, but there was a gap in the guardrail through which the telescopic duct moved.
At the side of the telescopic duct, at about hip height of a person standing adjacent to the telescopic duct, was a fairly small projecting plate, which was part of a switch mechanism that would indicate to the operator of the telescopic duct that it was fully extended or fully retracted as the case may be. The control room in which the operator was, was so positioned that the operator could not see the telescopic duct.
When the telescopic duct extended, this projecting plate moved forward with it, because it was attached to a moving section of the telescopic duct. The effect of the evidence was that it was unusual for the “limit switch”, as it was called, to be attached to a moving part of the machinery. The Judge made a finding of fact that it was “an unusual feature” that “the limit switch moved with the telescopic duct”: [41]. The limit switch was not guarded. There was no warning sign or hazard paint or other device to indicate that it was a moving part, or a potential source of danger.
On the occasion in question the door in the fixed duct had not opened properly. Having observed this, Mr Press and his fellow worker decided that they would hold the door open, and have the telescopic duct extended to the opening so that they could, presumably by visual observation, check the extent of the necessary adjustment to the door. Mr Press was on one side of the telescopic duct, and his fellow worker was on the other side. Mr Press lent out across the gap between the charger and the extractor duct, and held the door up. I gather that Mr Lockwood did the same, from the other side of the telescopic duct.
To do this it was necessary for Mr Press to stand fairly close to the telescopic duct, and between it (in the retracted position) and the extractor duct, leaning across the gap between the platform on which he was standing and the extractor duct. He was standing in the gap in the guardrail, the end of the guardrail being adjacent to his left hip.
Acting on a radio signal from either Mr Press or his fellow worker, the operator caused the telescopic duct to move forward. As it did so, the switch plate came into contact with Mr Press’s right hip. The plate squeezed him against the part of the guardrail which was adjacent to his left hip. He suffered serious injuries.
There were certain key findings that the Judge made. First, that this was the first day on which fitters had worked on the doors from the platform of the battery charger: [23]. Second, that although Mr Press had already worked on the doors of three ovens, he had not observed that the limit switch moved when the telescopic duct moved: [29]. He had been working on the other side of the telescopic duct. Third, that Mr Press “had no reason to know that the limit switch plate would move forward with the duct as it extended”: [26]. Fourth, “that the switch plate was unusual in that the limit switch plate moved”: [31]. Fifth, that Mr Press was not given any warning about the limit switch plate by Action or by BHP: [31]. Sixth, that although Mr Press’s supervisor and a representative of BHP carried out an inspection to consider how the job was to be done and to assess the risks involved, they did not take into account the possibility of the switch plate being a hazard: [36].
The Judge found that the system of work was not safe because of the unusual feature, of which neither Mr Press nor his fellow worker could be expected to know, and because the switch plate was unguarded and had no indication on it that it would move or might be a hazard: [41].
The Judge made a finding that there was no contributory negligence by Mr Press. He found at [53]:
The particular danger which resulted in his injury was not one of which he could have been aware without specific warning from BHP. When he positioned himself in what was described as the ‘pinch point’ he did so on the basis that the duct and the striker plate only would move. As it happened, both the duct and the striker plate cleared him as he stood in that position. The injury was caused by his being struck by the limit switch plate only. There was no fault on his part.
Contributory negligence
The Judge’s finding as to contributory negligence is challenged on appeal.
The relevant principle is sufficiently stated by Mason, Wilson and Dawson JJ in their reasons in Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301 at 310 where their Honours said:
A worker will be guilty of contributory negligence if he ought reasonably to have foreseen that, if he did not act as a reasonable and prudent man, he would expose himself to risk of injury. But his conduct must be judged in the context of a finding that the employer had failed to use reasonable care to provide a safe system of work, thereby exposing him to unnecessary risks. The question will be whether, in the circumstances and under the conditions in which he was required to work, the conduct of the worker amounted to mere inadvertence, inattention or misjudgment, or to negligence rendering him responsible in part for the damage: see Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR 492.
It is true, as Mr Greenwell for Action submits, that Action had no reason to anticipate that workers engaged in this work would hold open the door of the extractor duct while the telescopic duct was extending. It is also true that to hold the door open Mr Press had to stand close to the telescopic duct, a piece of moving machinery. And there was an element of danger in standing at the edge of the platform on the charger, leaning across the gap between the charger and the extractor duct. However, what Mr Press did was a practical approach to determining how much adjustment to the door was required. He had already observed that the door was not opening properly. It was not a pointless or obviously foolish thing to do. Mr Press had no reason to anticipate that the switch plate would move. But for this unusual feature, there was no reason to anticipate any particular danger from standing as close to the moving duct as he did, even though it must be acknowledged that standing close to moving machinery carries an element of risk. The risk that was present, and the danger that eventuated, was one that, on the Judge’s findings, should have been identified by Action and should have been pointed out to the workers. In acting as he did Mr Press did not disobey any instruction given to him.
The Judge found that Action was in breach of its duty through failing to identify the very danger that ensued, and in failing to warn against it. That gave rise to the risk that, through inadvertence, a worker would not take appropriate precautions to avoid the moving switch plate. In the context of that finding of a failure by Action to use reasonable care to provide a safe system of work, exposing Mr Press to unnecessary risk, I am satisfied that Mr Press’s conduct is properly described as “mere inadvertence” or “inattention”. It is not a case in which Mr Press should have foreseen that he was exposing himself to the risk of injury.
It suffices to say that I am not persuaded that the Judge erred in his finding. As it happens, I agree with the Judge’s conclusion.
The indemnity claim
There is no substance in the criticism of the Judge’s approach to this aspect of the case.
There were two relevant clauses in the documents comprising the contract between BHP and Action. One was in what were called “Standard Conditions of Contract”. It is clause 4.12. It is a long and rather convoluted clause. It deals with a range of situations. I summarise it as follows. It requires Action to make good any damage to the works caused by Action, and to indemnify BHP against claims attributable to any act by Action or damage caused by Action, or arising out of the presence of Action on BHP’s property or arising out of the presence of equipment used by Action. The clause deals mainly with the liability of Action for things done by or attributable to Action. It requires Action both to remedy or make good damage done by it, and to indemnify BHP against liability attributable to the conduct of Action or arising out of Action’s presence on the property of BHP.
The other relevant clause is found in an appendix to the Standard Conditions of Contract, an appendix to conditions relating to insurance. The appendix imposes obligations on Action in relation to the obtaining of insurance cover. The relevant clause in the appendix is clause 13.2, and it provides as follows:
13.2The Contractor shall be solely liable for and shall indemnify and hold harmless the Company, its officers, employees and agents from and against all liability, damage, loss, expense, costs and proceedings of any nature whatsoever or however arising in or in connection with the Contract, and however or by whosoever caused whether as a result of or arising from negligence, breach of duty or breach of statute by the Company, its officers, employees or agents, or otherwise.
As can be seen at a glance, this clause requires Action to indemnify BHP against liability arising in connection with the performance of the contract, including a liability arising from negligence by BHP.
On its face, clause 13.2 applies to the present case, as the Judge found.
As I understand Mr Greenwell’s submission, it is that the two clauses referred to are inconsistent. Under clause 4.12 Action is liable for damage caused by Action and must indemnify BHP against any liability arising from any default by Action, or arising out of the presence of Action on the property of BHP. Under clause 13.2, Action must apparently indemnify BHP against a liability attributable to a default by BHP. Mr Greenwell appeared to suggest that there was some conflict or tension in this respect. He made the point that clause 4.12 might apply to the present case, because it might be said that the claim arose out of the presence of Action on BHP’s property.
I am not sure that I understood his argument. It appeared to be that because clause 4.12 might apply to the present case, and require Action to indemnify BHP against any liability attributable to a default by Action, there was some inconsistency in treating clause 13.2 as requiring Action to indemnify BHP against its own default in relation to the same incident.
There are a number of answers to this argument. It is not at all surprising that BHP should by contract protect itself against a liability attributable to a default by Action and against a liability attributable to its own default in connection with the performance of the contract. It is common to find contractual provisions that so provide. Moreover, clauses 4.12 and 13.2 are, in a sense, complementary. They are in no sense in conflict. One way of looking at things is to say that BHP has provided itself with successive layers of protection against liability.
So the premise in Mr Greenwell’s argument, that there is an inconsistency or tension between the clauses, is not made out.
Even if the present case falls within the scope of both clauses, as it might do, that is not a reason to read down either clause. There is no principle of construction that calls for clauses of a contract to be read so that there can be no overlap between them. If some form of reading down was to take place, in my opinion it would be in relation to clause 4.12 in so far as it might purport to apply to a liability attributable to a default by BHP, as distinct to a liability attributable to a default by Action. In my opinion there is no basis for reading down clause 13.2. Nor, in his submissions, did Mr Greenwell identify any form of reading down that would lead to the conclusion that the Judge’s finding was wrong.
I agree with the Judge’s conclusion on this aspect of the matter. BHP was entitled to be indemnified by Action.
Conclusion
For those reasons I would dismiss the appeal.
DUGGAN J: I would dismiss the appeal for the reasons given by the Chief Justice.
GRAY J: I would dismiss this appeal. I have nothing to add to the reasons of Doyle CJ.