AF Textile Printers Pty Ltd v Thalut Nominees Pty Ltd
[2007] VSC 73
•26 March 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 5179 of 2003
| AF TEXTILE PRINTERS PTY LTD | Plaintiff |
| v | |
| THALUT NOMINEES PTY LTD | Defendant |
| MICHAEL PITCHER & KATHERINE STEELE | Third Parties |
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JUDGE: | Mandie J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26-28 February 2007, 2 March 2007, 5 March 2007 | |
DATE OF JUDGMENT: | 26 March 2007 | |
CASE MAY BE CITED AS: | AF Textile Printers Pty Ltd v Thalut Nominees Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 73 | First revision 27 March 2007 |
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LANDLORD AND TENANT – interruption to business as a result of high pressure cleaning of asbestos roof – whether lessor in breach of covenant for quiet enjoyment – whether lessor in breach of covenant to ensure that the roof is kept watertight at all times – mitigation of loss.
NEGLIGENCE – whether lessor authorised independent contractor to perform negligent act – whether lessor discharged any duty of care owed to lessee by retaining an ostensibly competent independent contractor – contributory negligence – mitigation of loss.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Derham QC Mr KG Howden | Lander & Rogers |
| For the Defendant | Mr SK Wilson QC Mr J Searle | Hunt & Hunt |
| For the Third Party | No appearance |
HIS HONOUR:
Introduction
The plaintiff company (“AF Textile”) claims damages against the defendant company (“Thalut”) on the basis of a number of causes of action – primarily arising from alleged breaches of covenants contained in a lease and negligence – as a result of events that occurred on Friday 2 and Saturday 3 August 2001. At all relevant times AF Textile was the lessee of factory premises owned by Thalut situate at 2 Teton Court, Highett (“the premises”). Thalut had retained Pitcher Perfect Roofing (a business conducted by the third parties – “Pitcher Perfect Roofing” or “the contractor”) to fix the roof of the premises and, as a result of what this contractor did, AF Textile suffered material and financial loss, which has been agreed in the sum of $674,248. This agreed quantum of loss is primarily constituted by loss of profits in the sum of $602,500 as a result of the interruption to the business of AF Textile in the circumstances to which I will now refer.
Facts
Thalut is and was a family trustee company, effectively controlled by Mr Boris Shapiro (“Shapiro”), and had a number of real property investments including the premises. Shapiro and his wife had owned the premises for many years but Thalut became the registered proprietor in 1992. Erected on the premises was a factory building, comprising two parts that were originally two buildings but had been joined together. The main part of the building had a pitched roof made of asbestos cement sheeting and about four and a half to five metres high at the ridge. One side of this pitched roof came down to a box gutter that joined the metal roof over the smaller part of the factory and that ran along the line of the wall dividing the two parts of the factory. Shapiro knew that the roof sheeting on the main part of the factory was composed of asbestos and Shapiro also knew that carrying out repairs to such a roof involved risks to health and safety.
At some time in 1996, probably after June 1996, AF Textile went into occupation of the premises and commenced to conduct its business of textile printing on the premises. At all relevant times the directors of AF Textile were Mr Gregory Phillipe Antas (“Greg Antas”) and his aunt, Mrs Ela Angela Figiel (“Mrs Figiel”). Greg Antas was also the general manager of AF Textile and his younger brother Adrian Darius Antas (known and hereafter referred to as Derek Antas) was employed by AF Textile as its warehouse manager, commencing in about 1992.
AF Textile procured an asbestos audit of the premises from Kilpatrick & Associates Pty Ltd (“Kilpatricks”), Occupational Hygiene and Ergonomics Consultants, whose report is dated 5 June 1996. This report was probably obtained before AF Textile took possession. The report referred to an audit conducted by Adrian Sullivan of Kilpatricks in accordance with the requirements of the Occupational Health and Safety (Asbestos) Regulations 1992 (Vic) (“the Asbestos Regulations”). In relation to the roof, the report stated that the roof of the eastern two-thirds of the building was lined with corrugated asbestos cement sheet and that the roof of the western storage area was metal decking. It was conceded by counsel for AF Textile that the company knew at all relevant times that the roof over the main part of the factory was made of asbestos. Given that concession, it is unnecessary to examine the evidence of the directors as to their state of knowledge concerning the asbestos. However I am satisfied that both directors knew that the roof over the main part of the factory was made of asbestos.
A lease was negotiated between Thalut and AF Textile and executed on 15 January 1997. The lease was for a term of five years commencing on 30 August 1996. It would seem that AF Textile had concerns about the condition of the roof because the lease contained an additional provision negotiated between the parties and dealing with the roof (Item 22 – hereinafter “the roof covenant”)[1].
[1]Clause 17 of the lease provided that any additional provisions set out in item 22 bound the parties and if inconsistent with any other provisions of the lease, overrode them.
The provisions of the lease of importance in the present proceeding are the roof covenant and the covenant for quiet enjoyment.
The roof covenant provided, so far as material:
“The Landlord shall ensure that the roof over the demised premises is kept watertight at all times and will maintain the roof structure in a satisfactory condition…”
The covenant for quiet enjoyment (cl.6.1) provided:
“The landlord must give the tenant quiet possession of the premises without any interruption by the landlord or anyone connected with the landlord as long as the tenant does what it must under this lease.”
Greg Antas and Derek Antas testified that the roof over the main part of the factory leaked at varying points whenever it rained.[2] Although the worst and most persistent areas for leaking were beneath the box gutter, there were leaks from time to time at many different points through the asbestos roof. They had to put buckets out to catch leaks and they also installed clear perspex canopies above the printers that helped keep the water off them. Greg Antas made a number of complaints to Shapiro about the leaking roof. Shapiro, who was a retired clothing retailer and who managed the property himself, generally responded to these complaints either by obtaining a plumber or by suggesting to Greg Antas that he should obtain a plumber at the cost of Thalut. According to Shapiro, the leaks were minor and seemed to predominantly occur either where the two factories were joined or near certain skylights in the roof. Plumbers that had been called in in the past “had put silicone around the skylights and small leaks and cleaned the gutters”.[3] Greg Antas’ evidence suggests, and I accept, that the leaks were a little more serious than Shapiro sought to convey in his evidence. In any event, various leaks continued to occur.
[2]See paras [20]-[25] of the witness statement of Greg Antas, exhibit “C” and para [4] of the witness statement of Derek Antas, exhibit “E”.
[3]See para [19] of Shapiro’s witness statement, exhibit “3”.
In about early July 2001, shortly before the term of the lease was to end, Shapiro testified that he decided that it was an appropriate time “to get the roof completely overhauled” and “to get a plumber in and get all repairs done to the roof”.[4] Greg Antas testified, and I accept, that at about the time when the lease was coming to an end he told Shapiro that he would not sign a new lease until Shapiro fixed the roof.
[4]See paras [10] and [12] of his witness statement.
Shapiro looked in the local newspaper (“Southern Cross”) and the Yellow Pages. In the Yellow Pages he saw two entries for Pitcher Perfect Roofing. In the alphabetical listing there was a reference to Pitcher Perfect Roofing being “MBAV Reg’d” and a larger advertisement gave details that included the following: “Specialised Roofing Solutions – Re-Roofing & Repairs – Tile – Slate – Metal – Membrane – Asbestos” and gave telephone numbers and an address in East St Kilda. A logo in the corner of the advertisement bore the words “Master Builder”. Another logo appears to bear the words “Master Plumber” although it is almost indecipherable.
Shapiro testified that he was attracted to Pitcher Perfect Roofing because it was a “local company”, because the advertisement referred to asbestos and because of the reference to “Master Builder & accredited plumbers”[5].
[5]This last phrase is probably a reference to what appeared in Pitcher’s subsequent written quotation.
Shapiro telephoned Pitcher Perfect Roofing and spoke to Michael Pitcher (“Pitcher”). Shapiro told Pitcher about the factory, that there was asbestos in the roof and that he wanted the roof “all fixed up including the leaking skylights.” He told Pitcher to go and have a look and then to give him a price to repair the roof and bring it to tip-top shape. Pitcher said that he could also clean and paint the roof and Shapiro said “OK”.
Shapiro had not accompanied Pitcher to the factory for his inspection but they subsequently met at Shapiro’s home. Pitcher told Shapiro that he proposed to repair the roof, install a new box gutter and new skylights, high pressure clean the roof and paint it. Pitcher told Shapiro that he could do “this sort of work” and had done this type of job previously. Shapiro specifically mentioned the fact that there was asbestos in the roof and Pitcher said that that would not be a problem “as he had cleaned those types of roofs on about ten to twelve occasions previously and he was quite familiar with this type of work”[6]. Shapiro told Pitcher that he would have to liaise with the tenant to ensure that there was no interference with the tenant’s business activities. Shapiro asked that a written quotation be provided. At some point before the work commenced, Pitcher also told Shapiro that the high pressure cleaning involved the use of a water hose.[7]
[6]See para [18] of Shapiro’s witness statement.
[7]
Pitcher provided Shapiro with a written quotation[8] dated 9 July 2001, in the sum of $13,800 (inclusive of GST), that read, so far as relevant, as follows:
[8]Shapiro testified that he had phoned several plumbers but that Pitcher was the only one who would give him a written quote.
“Following our recent site inspection these works are required.
·To fully repair existing holes and leaks to fibrous roof.
·To apply fibre glass matting and membranes.
·To install new box gutter in BHP Zincalume, approx. 38 metres.
·To install square line gutter to rear of roof.
·To install ventilated skylights, to replace existing.
·To fully high pressure clean complete roof cover.
·To apply primer followed by sealer.
·To apply master sealer membrane coatings.
·Paint supplied by regent roof paint supplies.
·To install new rain sumps to box gutter and down pipes within building.
·To remove all rubbish and debris from site.
·To liase (sic) with tenants and inform work procedures, including JSA reports and all Occupational Health & Safety issues.
Public Liability Insured/ 10 yr workmanship guarantee.
…
Yours Sincerely
[signature]
Michael Pitcher
PITCHER PERFECT ROOFING
Master Builders/Plumbers Accredited”
It is appropriate to point out at once that the contractor’s proposal to “fully high pressure clean complete roof cover” contemplated work in direct breach of the Asbestos Regulations which provided in reg 15:
“A person must not use or cause to be used a brush, high pressure water jet, power tool or similar means to remove asbestos or asbestos containing materials or to clean a surface of asbestos containing materials except in areas completely enclosed and controlled for asbestos removal purposes.”
Pitcher visited Shapiro at the latter’s home and provided this written quotation which Shapiro accepted on the spot and paid a preliminary deposit. Pitcher visited Shapiro at his home on two further occasions when Shapiro paid to him the balance of the deposit and then an additional amount to enable the purchase of paint.
At some point Shapiro told Greg Antas that Pitcher had agreed to liaise with him (Antas) to coordinate his work so as not to cause any interruption to the factory operation. Greg Antas testified and I accept that Shapiro came to the factory with Pitcher and introduced Pitcher to him. Shapiro told Greg Antas that Pitcher was going to fix the roof and asked him “not to have any production during the coming weekend so that Pitcher could do the work then”. Greg Antas agreed. Although Greg Antas testified that there was a reference to “the coming weekend”, his evidence was that the visit occurred “during the week or two prior to 4 August 2001”.[9] Shapiro in his evidence said that he discussed with Greg Antas the work to be done, although he did not provide Greg Antas with a copy of the quotation. Greg Antas testified and I accept that neither Shapiro nor Pitcher told him (nor did he ask) precisely what work was going to be done and, in particular, that he was not told that the contractor was going to use a high pressure water cleaner on the roof.
[9]It is likely that Shapiro’s visit occurred prior to 23 July 2001 because on about that date Derek Antas received at the premises a delivery of materials including roof flashings, downpipes and paint for which Derek signed a delivery docket.
On the morning of Friday 3 August 2001, Derek Antas noticed that a contractor had come to work on the factory roof. He saw a ladder against the wall of the factory and a man (whom he subsequently knew to be Pitcher) walking around on the roof with two other people who were pulling the box guttering out. When they lifted the box guttering out, Derek Antas could see them from the factory floor. He testified that they did not appear to be taking any safety precautions or wearing any protective clothing. Greg Antas had no recollection of seeing the contractor on that morning although it would seem that he had given instructions for production to cease at 1pm (two hours earlier than normal) in order to allow the contractor to commence work. Greg Antas was not in the premises on Friday afternoon. Derek Antas was not in the premises on Friday afternoon either as he was making some deliveries for the business.
Water and debris began coming in on the sides of the walls and onto the machinery on Friday afternoon, as a result of the contractor’s activities. When Derek Antas returned to the premises at the end of the day, Pitcher and his workmen had left and Derek noticed that some plastic covers had been placed over some of the textile printing machinery and that there was water and debris on the floor, walls and machinery in the factory, principally in a corner of the factory at the other end from the box gutter. Derek Antas was informed by Mrs Figiel, who managed the office and accounting operations of the business, that during the afternoon Pitcher had started to clean the roof with a high pressure water cleaner and that when complaints were made to him about water leaking into the factory “he had said to cover the machinery with plastic“ and that he had also said that he would clean up afterwards.
On Saturday morning 4 August 2001 Greg Antas did not come to the factory as he was to play a round of golf, but Derek Antas arrived at about 7am. Pitcher arrived a little later and asked Derek Antas if he would clear the blackberries behind the factory so that he and his workmen could gain access to the roof in that area. Derek left the premises and hired a hedge trimmer for this purpose and, by the time he had returned, Pitcher and about three other workmen were on the roof using two high pressure water cleaners on the cement roofing over the main factory area.
Derek Antas proceeded to cut down the blackberries, assisted by his father who was also employed in the business. While they were doing that, they both became soaked by water running off the roof from the high pressure cleaning operation. Derek Antas testified that the water was “grey in colour, like very wet cement” or “sludge”. After completing the blackberry removal, Derek Antas changed his clothes and went into the factory in order to set up for the next week’s production. He immediately saw that there was water all over the factory. He deposed that it was “a thousandfold” compared with the previous day. He said that damage was being caused by the water which looked like wet, dirty cement. There was “sludge” on the printing lines.
Derek Antas immediately turned off the water that was supplying the two garden hoses being used by Pitcher and his workmen for the high pressure cleaning and a fire hydrant hose that was also being used by Pitcher. The hoses were attached to two heavy machines that Pitcher had had lifted onto the roof. Derek Antas then went up a ladder and told Pitcher to stop work as he was damaging the machines in the factory and to come down and look what he was doing. Pitcher replied that he should go and cover up the machines with plastic and that he (Pitcher) would clean up later. Derek Antas described Pitcher as “very aggressive” and as saying words to the effect of “I’ve got to get this finished. I’m already losing money on this job (expletives deleted).”
Derek Antas then telephoned Greg Antas on the latter’s mobile phone number and left a message for him to come to the factory as soon as possible. Derek Antas also telephoned Mrs Figiel and told her what was happening and asked her to call Shapiro and tell him to come to the factory. While Derek Antas was making these telephone calls, somebody had turned the water back on and Pitcher was proceeding with his high pressure cleaning operation.
Derek Antas then obtained as much plastic as he could and covered up more of the exposed machinery. Water continued to flow through holes in the roof and gaps in the incompletely installed new box gutter and in areas where capping had been removed from the roof. Derek Antas then went to his nearby home, collected a video camera and returned and filmed where the water was leaking and the consequences. Derek Antas also continued to make complaints to Pitcher but to no avail. The video tape is in evidence.[10] The video tape shows water dripping from or around the new box gutter and water coming in where Pitcher had removed the capping from the top of the pitched roof but had not covered over the resulting gap. The video tape also shows water coming through in between the asbestos sheets where they overlapped and through holes in the roof. Derek Antas was concerned that violence might erupt if he further interfered.
[10]Exhibit “F”.
The next thing that happened was that a member of the public (apparently a builder) came into the factory from the adjoining park. He said to Derek Antas that he was an idiot for cleaning the roof as it was made of asbestos and he was going to call the police. Derek Antas further testified and I accept that until this incident he had not been aware that the roof was made of asbestos. Derek Antas told the member of the public that they were just the tenant and that it was the landlord’s workers who were doing the cleaning and that he should tell the men on the roof. This person then climbed the ladder and yelled to Pitcher that what he was doing was against the law and he was going to call the EPA, WorkSafe and the police. According to Derek Antas, Pitcher became agitated as a result and immediately began to pack up his equipment. He left the premises at about 2pm, saying that he would return to clean up.
About half an hour after Pitcher had left, Greg Antas (who had by then spoken to Derek on the telephone) and Mrs Figiel both arrived at the premises. Greg Antas testified that there was water, greyish in colour, throughout much of the factory, that water was coming in through the rivet holes in the new box gutter and around its unsealed edges and that he could see water dripping from the roof framing and that it had run down inside the windows of the main factory and elsewhere.
Derek Antas testified that as a result of the high pressure cleaning of the roof, the plaintiff’s products were damaged with water and debris and, after drying out, there was a residue of grey dusty material over a wide range of surfaces within the factory building.
On Sunday 5 August 2001, Pitcher returned to the premises and attempted to clean up. Shapiro, who had been sick in bed when phoned the previous day, also attended the premises. On Monday 6 August 2001 Pitcher returned again to remove his equipment. On Monday there was still a grey/white haze on surfaces throughout the main section of the factory. The staff were in attendance as usual. Greg Antas obtained advice from his solicitor and as a result called WorkSafe. An inspector from WorkSafe arrived and suggested that Greg Antas send the staff home, which he did.
Greg Antas retained Kilpatricks and their Mr Mike Spruth attended on Tuesday 7 August 2001. On his inspection of the asbestos roof, Mr Spruth observed that one part of the asbestos roof was weathered and dark grey in colour and the other part of the asbestos roof was “stark white”. Mr Spruth testified that it was obvious that the white part had been washed down. Mr Spruth then inspected the factory and subsequently reported that the water jetting carried out by Pitcher Perfect Roofing had resulted in asbestos debris and residue being washed into the factory premises and along the perimeter of the building and that, although the majority of the asbestos containing debris and residue had been cleaned up by Pitcher Perfect Roofing, a visible asbestos residue remained in the cleaned areas and that asbestos had also been detected in samples of debris and residue present in areas not included in the cleanup works. Mr Spruth reported that it was “evident that further decontamination works are required both internally and externally to remove the visible asbestos containing debris/residue to ensure that there is no risk to unprotected personnel from airborne asbestos fibres”. He recommended that, due to the friability of the residue, the decontamination works be carried out by a class A asbestos removal contractor and that normal factory operations should not recommence until these works had been completed to a satisfactory standard.
On Wednesday 8 August 2001, two WorkSafe representatives came to the factory, having received a copy of Kilpatricks’ report. They issued a prohibition notice under s.44 of the Occupational Health and Safety Act 1995 (Vic) prohibiting all normal factory operations which could disturb asbestos containing debris/residue within the factory area.
Greg Antas testified that, on advice from his solicitor and from his insurance broker, he took steps to limit his losses and do what he could to get the factory open again. Greg Antas gave evidence as to the various steps that he took in this regard and a number of problems that arose over the ensuing months but, as there was no criticism of the plaintiff’s conduct (in this respect), it is unnecessary to detail these matters. The site was reported free of asbestos on 24 January 2002 and printing partially recommenced on 14 February 2002 and the factory was fully operational by 3 April 2002.
The Asbestos Regulations
Section 59(1) of the Occupational Health and Safety Act 1985 (Vic), then in force, empowered the Governor in Council to “make regulations for or with respect to the safety, health and welfare of persons at workplaces”. Pursuant to s.59, the Asbestos Regulations were made. The Regulations recite as their objective, inter alia:
“… to prevent asbestos-related disease among employees working in processes which use asbestos and among employees likely to be exposed to airborne asbestos in workplaces by –
(a)requiring employers, occupiers and self-employed people to identify, assess and control risks arising from asbestos in buildings …”
Regulation 11 in effect provided that asbestos affixed to any building must not be removed expect by an approved asbestos removalist. Regulation 15, set out earlier, in substance prohibited any person from using a high pressure water jet to remove or clean asbestos containing materials. Regulation 24 required an employer or occupier of a workplace to determine whether asbestos was present in the workplace and, if so, to assess the risk of exposure of employees. Regulation 25(1) provided that the occupier of a workplace must ensure that the risk of exposure of employees to asbestos be prevented, or where this was not practicable, controlled so as to minimise the risk to health and safety. Regulation 27 required an occupier of a workplace where demolition or refurbishment was about to take place to ensure that the demolition or refurbishment was conducted in a manner so as to be, as far as practicable, safe and without risk to the health of any employee or other person and reg 28 required that an occupier, before any demolition or refurbishment took place, must assess the risk to employees arising from the work. Regulation 32 required an employer to assess the risk to employees arising from exposure to asbestos in the workplace. In relation to the assessments required under regs 28 and 32, if those assessments indicated a risk to health and safety of any employee from exposure to asbestos, reg 33 required the employer to ensure that exposure was controlled through certain defined control measures.
Pleadings
By its amended statement of claim filed 27 February 2007, AF Textile claimed damages on the basis of a number of causes of action, of which the following were ultimately relied upon:
·Breach of the covenant for quiet enjoyment, in that Thalut interrupted and interfered with AF Textile’s occupation of the premises and its business conducted thereon;
·Breach of the roof covenant, in that Thalut failed to ensure that the roof was kept watertight at all times and failed to maintain the roof structure in a satisfactory condition;
·Negligence of and/or breach of statutory duty by Thalut, by authorising and permitting the plumber to use a high pressure water jet on the roof and by failing to comply with regs 11 and 15 of the Asbestos Regulations.
The amended defence of Thalut filed 27 February 2007 contained admissions of non-contentious matters and otherwise denied the allegations made by AF Textile but in addition positively alleged that:
·The Asbestos Regulations had no application to the relationship of landlord and tenant and raised no relevant duty of the defendant to the plaintiff;
·The defendant engaged the services of a tradesperson who held himself out to be relevantly expertly experienced and competent to conduct the required works upon the roof whereby the defendant reasonably relied on the third party to conduct the works in a proper manner whereby the defendant was not liable in negligence;
·If there was any loss sustained by the plaintiff then such loss arose from the performance by the third party of its work task and in particular by applying high pressure water to asbestos sheeting in breach of reg 15 of the Asbestos Regulations and none of this constituted a breach by the defendant of the terms of the lease, or constituted negligence or breach of statutory duty on the part of the defendant;
·If there was any loss sustained by the plaintiff then it was caused by the plaintiff’s failure as an employer and occupier of the premises to ensure that the work to be performed by the third party would be conducted in such a manner as to be, so far as practicable, safe and without risk to health of any employee or any other person as required by the Asbestos Regulations;
·If the plaintiff had suffered any loss then the events giving rise to the same were caused or contributed to by the plaintiff and the plaintiff’s damages ought to be reduced by such amount as the court deem just having regard to its share of fault for the same;
·The plaintiff failed to take any reasonable steps to mitigate the loss and damage suffered by it.
The defendant provided the following particulars of the plaintiff’s alleged contributory negligence:
(a)Failing to inform the roofing contractor that his operations were causing water leakage and the dropping of dirt and substances on the plaintiff’s stock and equipment.
(b)Allowing or permitting the roofing contractor to continue with his work without informing him of the detrimental effects thereof to the interior of the factory.
(c)Failing to bring the detrimental consequences of the roofing contractor’s work to the attention of the defendant within a reasonable time.
(d)Failing to turn off the water source for the roofing contractor’s pressure hose or directing him to turn it off.
(e)Failing to follow the roofing contractor’s instructions to inform the contractor if water was leaking into the premises.
(f)As an employer and as an occupier of the premises failing to take any or any adequate steps so as to ensure that the work to be undertaken would be conducted in such a manner so as to be so far as practicable safe and without risk to health of any employer or any other person as required by the Asbestos Regulations.
Breach of the covenant for quiet enjoyment
In order to constitute a breach of a covenant for quiet enjoyment in a lease, it is sufficient that the lessee’s ordinary and lawful enjoyment of the demise of the land be substantially interfered with by the acts of the lessor or those lawfully claiming under him, although neither the title to the land nor the possession of the land may be otherwise affected.[11] This proposition was not disputed by the defendant.
[11]See Sanderson v Mayor of Berwick on Tweed (1884) 13 QBD 547, 551; Owen v Gadd [1956] 2 QB 99; Southwark London Borough Council v Tanner (2001) 1 AC 1; Volley Investments Pty Ltd v Coles Myer Ltd [2005] WASCA 52.
The plaintiff submitted that its ordinary and lawful enjoyment of the demise of the land had been substantially interfered with by the acts of Thalut or, more particularly, by the acts of the contractor who was, in the words of cl. 6.1 of the lease, a person “connected with the landlord”. The plaintiff submitted that the defendant could not escape liability by relying upon the facts that it had retained a competent contractor and that it had no control over the contractor’s works on the roof. For the reasons that follow, I think that the plaintiff’s submissions are correct.
The defendant submitted that a covenant for quiet enjoyment (in the absence of express words to the contrary) should be interpreted in such a way that an interruption in breach of the covenant had to be caused either by a direct act of interruption by the lessor or by some other act by the lessor, the relevant consequence of which was foreseeable, or ought, if reasonable care had been exercised, to have been foreseeable. The covenant was intended to cover the natural result, not an extraordinary result that no person could have reasonably foreseen. It was submitted that it would be unreasonable to hold that the covenant amounted to a warranty that nothing would happen that would interfere with the lessee’s quiet enjoyment simply because such event could be traced to an act of the lessor or anyone claiming under him. For these propositions, the defendant cited Harrison, Ainslie & Co v Lord Muncaster[12] (Muncaster’s case). Further the defendant submitted that, in cases where the lessor had not been directly involved in the events that caused the interference with quiet enjoyment, for there to be a breach of covenant there had to be present all the ingredients of a cause of action in tort for negligence, citing Martins Camera Corner Pty Ltd v Hotel Mayfield Ltd.[13]
[12][1891] 2 QB 680.
[13][1976] 2 NSWLR 15.
The defendant submitted that in the present case neither the lessor nor the lessee could have reasonably foreseen that an expert independent contractor would perform the works both illegally and negligently in the way that the contractor had done. I note here that the defendant accepted that Pitcher Perfect Roofing acted both illegally and negligently. More particularly, the defendant submitted that it was the flushing of the asbestos broken off the roof by the high pressure hose (an illegal act), by the contractor, in circumstances where the contractor had not sealed the roof (and in fact had removed capping and failed to finish the box guttering) that led to the influx of asbestos into the premises which ultimately caused the interruption and loss of quiet enjoyment in the premises by the plaintiff.
The defendant further submitted that the covenant for quiet enjoyment extended only to “lawful” acts and that what the contractor did in the present case was unlawful.
In Muncaster’s case,[14] the defendant had leased a mine to the Parkside Mining Company and an adjoining mine to the plaintiffs. The lease to the plaintiffs contained a covenant for quiet enjoyment of the mine “without any interruption or eviction by the lessor, his heirs or assigns or any other person or persons claiming or to claim by, from or under him.” The Parkside Company struck a “feeder” with the result that an unsuspected body of underground water flooded their mine and found its way to the plaintiffs’ mine causing damage. The Court of Appeal held that the defendant was not in breach of the covenant. Lord Esher MR said that the covenant was restricted to acts done by the defendant or by a person claiming to do those acts under him, but that the covenant could only be operative with regard to a thing which was contemplated by both parties at the time it was entered into, that is, all circumstances which they then contemplated or ought to have contemplated:[15]
“If something has happened, which it is obvious that no person of intelligence could have contemplated, it must be held that they did not contemplate it. We come therefore to this proposition, that the interruption of the quiet enjoyment in such a case as the present must mean an interruption caused by a direct act of interruption by the defendant himself, or by some act the consequence of which it either was foreseen, or ought, if reasonable care had been exercised, to have been foreseen, would be an interruption. Now, can anybody have supposed, in this case, that this pecking would have caused an eruption of water and the way in which this water came in … it is so extraordinary a result that no man could have foreseen it … the result is not within the terms of the covenant.”
[14][1891] 2 QB 680.
[15][1891] 2 QB 680, 686.
In the same case, Bowen LJ said:[16]
“… it was the flow of the water into the mine which alone constituted the interruption; and unless that flow of water can be made out to be an interruption by the defendant, or by persons claiming under him, the defendant must succeed. Was then the flow of water which is interruption to the enjoyment of the plaintiff’s mine caused by the Parkside Mine within the meaning of the covenant? In one sense I quite agree that it is caused by the Parkside Mine, because it is caused by the act which the Parkside Mine did, but is it caused by it in the sense that this covenant intends to be affixed to the term? It is necessary to draw a distinction between the act and its consequences; the defendant did not authorise the consequences, he authorised the act; and, unless, as I said, the flow of water, which was the consequence, can be shown to amount to interruption by the Parkside Mine, the defendant must escape.
…
… it seems to me that we must confine this covenant within reasonable limits. I think that an interruption under such a covenant is not caused by the lessor or by those claiming under him, unless it is either a direct act of interruption, or unless it is some act by which it was either foreseen or ought by reasonable care to have been foreseen that the consequences in the particular case would be an interruption.”
[16][1891] 2 QB 680, 688-9.
Likewise in the same case, Kay LJ said that he would assume that the acts complained of had been done by the lessor himself – what then took place was a most extraordinary event, “an occurrence which was not foreseen, could not have been foreseen and was not in any sense a necessary or probable consequence of the working of the Parkside Mine”[17]. He concluded that the covenant did not provide against such a consequence.
[17][1891] 2 QB 680, 692.
Accepting the above approach to construction of a covenant for quiet enjoyment as being applicable to cl. 6.1 of the present lease, in my view the facts of the present case do not fall within the principles enunciated in Muncaster’s case. The consequences in this case were not ones that the parties could not, or ought not to, have contemplated as resulting from the cleaning of the roof by high pressure hoses. The contention that the illegal act of cleaning the roof by high pressure hoses could not have been foreseen by the parties to the lease involves a misconception of the principle applied in Muncaster’s case. Muncaster’s case was concerned with the unforeseeable and extraordinary consequences that flowed from the act of a person claiming under the lessor – the case is not concerned with the unforeseeable acts of a person claiming under a lessor, but only with the consequences of such acts. In any event, in the present case, Thalut contracted with Pitcher Perfect Roofing, inter alia, “to fully high pressure clean complete roof cover” and thus the act of the person “claiming under” the lessor, far from being unforeseeable, was directly authorised by the lessor. The high pressure cleaning was the act the consequences of which caused the interruption to the lessee’s use and enjoyment of the premises. Those consequences were in the circumstances foreseeable, or ought, with reasonable care, to have been foreseeable. The relevant circumstances include the fact that both lessor and lessee knew that the main roof was made of asbestos and that the roof leaked.[18]
[18]I refer to other relevant circumstances when I come to deal with the question of negligence.
It may be the law, as the defendant contended, that in cases where the lessor had not been directly involved in the events that caused the interference with quiet enjoyment, for there to be a breach of covenant there has to be present all the ingredients of a cause of action in tort for negligence. Although, in the case cited by the defendant, Martins Camera Store Pty Ltd v Hotel Mayfield Ltd,[19] Yeldham J said, after referring to certain English authorities:[20]
“Although it is not clear that, for there to be a breach of this covenant in circumstances such as exist in the present case, there must be present all the ingredients of a cause of action in tort for negligence (i.e. duty of care and breach) – and, indeed, if this is required, such a covenant would in most cases be redundant – nonetheless, I am prepared to assume, for present purposes, that these must be shown to exist.”
[19][1976] 2 NSWLR 15.
[20][1976] 2 NSWLR 15, 24.
However it would appear that the cases deciding that negligence is required were cases in which, as the defendant’s contention itself suggested, the lessor had not been directly involved in the events. That is not this case. In this case, Thalut expressly retained a contractor to high pressure clean the roof and, if negligence were required in those circumstances, the covenant would indeed be substantially redundant. I should add that, as will be seen later below, I consider that Thalut was negligent in any event.
Finally, as to the defendant’s submission that the covenant for quiet enjoyment extended only to “lawful” acts and that what the contractor did in the present case was unlawful, I consider that this too is misconceived. The reference to “lawful” acts in this context is a reference to acts of a third party authorised by the lessor as opposed to acts not so authorised[21].
[21]See Harrison, Ainslie & Co v Lord Muncaster [1891] 2 QB 680, 685, 689; O’Keefe v Williams (1910) 11 CLR 171, 192 per Griffiths CJ; JC Berndt Pty Ltd v Walsh [1969] SASR 34, 38; Volley Investments Pty Ltd v Coles Myer Ltd [2005] WASCA 52 at [11].
I conclude that the plaintiff’s cause of action for breach of the covenant for quiet enjoyment is made out and that the defendant is accordingly liable for damages in the agreed amount.[22]
[22]Subject to the question of mitigation of loss.
In deference to the submissions made by the parties and in case I am incorrect in the foregoing conclusion, I propose now to consider each of the further causes of action relied upon.
Breach of the roof covenant
The plaintiff submitted that the roof covenant by use of the word “ensure” gave rise to an absolute obligation by the defendant to keep the roof watertight at all times. The roof was not kept watertight and as a result water and asbestos fibres entered the premises during the course of the contractor’s work. The closure of the factory ensued. This was a natural and probable consequence of the failure to keep the roof watertight.
The defendant submitted that the word “ensure” did not impose an absolute obligation but only one to take reasonable care, citing Reliance Permanent Building Society v Harwood-Stamper[23] and Gration v C. Gillan Investments Pty Ltd.[24]
[23][1944] Ch 362, 373 per Vaisey J.
[24](2005) 2 Qd R 267 (Qld CA) at 271 per Williams JA.
However the first case cited depended upon the particular terminology of a mortgage (and the other case involved a statutory provision). Where any written instrument is involved, the case will turn upon the proper construction of the document in question in all the circumstances. In the present case, AF Textile with knowledge of the leaking roof obtained a special provision in the lease that the landlord “shall ensure that the roof over the demised premises is kept watertight at all times and will maintain the roof structure in a satisfactory condition” and, in my opinion, that amounted to an absolute contractual obligation,[25] at least in the absence of some extraordinary event, that continued to be applicable even during such time as the landlord had retained an independent contractor to “fix the roof”.
[25]Compare Taylor Woodrow Property Co of Australia Pty Ltd v Coles Myer Ltd (1999) NSW ConvR 55-912 at [31] and [34] per Giles JA.
The precipitating cause of damage to AF Textile was in fact the high pressure cleaning of the roof but the retention of the contractor to clean the roof in this fashion necessarily amounted to the causing of a direct breach of the roof covenant. Accordingly, in my opinion, Thalut is also liable in damages for breach of the roof covenant.
Negligence
The defendant conceded that the contractor had been negligent in carrying out the works on the roof and that that negligence had caused the damage sustained by the plaintiff. As I understood the defendant’s position, the negligence of the contractor consisted in part in not completing or rendering watertight the new box gutter before high pressure cleaning the roof and also in not replacing the capping on the roof before conducting that cleaning process. However, as I understood it, the defendant accepted that the contractor’s negligence included the very act of high pressure cleaning the asbestos roof. As Mr Wilson QC, who appeared with Mr Searle of counsel for the defendant, said:[26]
“… in this case the negligence is a gross negligence to the point of conducting the work illegally.”
[26]Transcript p 308.
In my opinion, by high pressure cleaning the asbestos roof the contractor acted negligently irrespective of whether or not the contractor otherwise acted with reasonable care.
I am satisfied that the contractor, as a reasonable plumber or roofing contractor, ought to have known that high pressure cleaning an asbestos roof was a breach of the Asbestos Regulations.[27] It seems to me that in the circumstances the breach by the contractor of reg 15 of the Asbestos Regulations was negligent in itself. Those circumstances include the facts, known to the contractor, that the roof contained asbestos and that the roof leaked.
[27]Compare Tucker v McCann [1948] VLR 222, 225 per Herring CJ – a case concerned with the Road Traffic Regulations.
Further, I consider that the contractor ought to have known that high pressure cleaning an asbestos roof was hazardous and dangerous. I consider, even in the absence of expert evidence to this effect, that a reasonable plumber or roofing contractor ought to have known that asbestos roofs are fragile and ought to have been aware that high pressure cleaning an asbestos roof would give rise to a serious risk of damage to persons and property by the dislodging of asbestos fibres and ought to have foreseen that the discharge of asbestos fibres into the premises might, because of the hazard to employees and others, cause a substantial interruption to the lessee’s business.
However, the defendant submitted that it was not liable for any such negligence of an independent contractor. While accepting that a person who employs an independent contractor is not liable, without more, for the torts of such independent contractor, I think that in the present case Thalut is directly liable in the tort of negligence in respect of the conduct of the contractor for the following reasons.
I consider that Thalut is directly liable for the negligence of the contractor, insofar as that negligence was constituted by the high pressure cleaning of the roof, because, by accepting the contractor’s quotation, Thalut expressly contracted with Pitcher Perfect Roofing to, inter alia, “fully high pressure clean complete roof cover” and thereby “authorised” the act that constituted the tort of negligence:
“A person is liable not only for torts committed by himself: he is liable for those torts he has authorised or subsequently ratified. Authorising a tort involves instigating or procuring another to commit a tort. Ratification involves, in effect, subsequent authorisation. The act of authorisation or ratification renders the tort the act of the authoriser or ratifier.”[28]
[28]Clerk & Lindsell on Torts (17th ed, 1995) 163.
In Ellis v Sheffield Gas Consumers Company[29] the defendant employed a contractor to open trenches in certain streets for the purpose of laying gas pipes. The contractor’s servants carelessly left a heap of stones and earth on the footpath and the plaintiff fell over it and broke her arm. It was accepted that the breaking open of the street was unlawful and therefore a public nuisance. The defendant said that the cause of the accident was the negligence of the contractor’s employees for which the defendant was not responsible. A verdict for the plaintiff was upheld by the Kings Bench division (Lord Campbell CJ, Coleridge, Wightman and Earle JJ). The Chief Justice said:[30]
“Mr Jones argues for a proposition absolutely untenable, namely, that in no case can a man be responsible for the act of a person with whom he has made a contract. I am clearly of opinion that, if the contractor does the thing which he is employed to do, the employer is responsible for that thing as if he did it himself. I perfectly approve of the cases which have been cited. In those cases the contractor was employed to do a thing perfectly lawful: the relation of master and servant did not subsist between the employer and those actually doing the work: and therefore the employer was not liable for their negligence. He was not answerable for anything beyond what he employed the contractor to do, and, that being lawful, he was not liable at all. But in the present case the defendants had no right to break up the streets at all; they employed [the contractor] to break up the streets, and in so doing to heap up earth and stone so as to be a public nuisance: and it was in consequence of this being done by their orders that the plaintiff sustained damage. It would be monstrous if the party causing another to do a thing were exempted from liability for that act, merely because there was a contract between him and the person immediately causing the act to be done.”
[29](1853) 2 El & Bl 767, 118 ER 955.
[30](1853) 2 El & Bl 767, 769-770; 118 ER 955, 956.
In the same case, Wightman J said that although if the workmen had been careful there may have been no injury to the plaintiff, the nuisance which the defendant employed the contractors to commit was the primary cause of the accident.[31] Earle J agreed and added that:[32]
“[A]s I understand the facts, the cause of the accident was the very thing done in pursuance of the specific directions of the defendants contained in their contract; and that in my opinion makes the distinction between the present case, and those cited, in which the cause of the accident is the negligence of those doing the thing, not the thing itself.”
[31](1853) 2 El & Bl 767, 770; 118 ER 955, 956.
[32](1853) 2 El & Bl 767, 770-771; 118 ER 955, 956.
As Dixon J said in Colonial Mutual Life Assurance Society Ltd v Producers & Citizens Co-operative Assurance Company of Australia Ltd:[33]
“In most cases in which a tort is committed in the course of the performance of work for the benefit of another person, he cannot be vicariously responsible if the actual tortfeasor is not his servant and he has not directly authorised the doing of the act which amounts to a tort. The work, although done at his request and for his benefit, is considered as the independent function of the person who undertakes it … The independent contractor carries out his work, not as a representative but as a principal.”
(Emphasis added)
[33](1931) 46 CLR 41, 48.
In Stevens v Brodribb Sawmilling Company Pty Ltd, Wilson and Dawson JJ said:[34]
“Where an independent contractor is employed to do the very thing which, if done by the employer himself, would constitute a breach of duty on his part, then the employer will nevertheless by liable for any consequent loss or damage.”
[34](1986) 160 CLR 16, 43
The above statement by Dixon J in Colonial Mutual Life Assurance Society Ltd v Producers & Citizens Co-operative Assurance Company of Australia was cited with approval by Brennan J in Burnie Port Authority v General Jones Pty Ltd[35] (“Burnie”) who went on to say:[36]
“There are two exceptions, or apparent exceptions, to the general rule that an employer is not liable for a tort committed by his independent contractor: the first, when the employer directly authorises “the doing of the act which amounts to a tort”; the second, when the employer engages the independent contractor to perform a duty resting on the employer and the independent contractor fails to perform it …
In some cases where an employer is held liable for the tort of an independent contractor, the ground of liability can be seen clearly to be either authorisation of a negligent act or non-performance of an employer’s personal duty, but the two grounds coalesce where the doing by an independent contractor of an act authorised by the employer gives rise to a duty resting on the employer personally. In such a case, the relevant principle is that stated by Mason J in Stoneman v Lyons [(1975) 133 CLR 550, 574]:
‘Although the general rule is that a person is not liable for the negligence of his independent contractor, it is accepted that a person who has a duty to a third party cannot avoid responsibility for discharging that responsibility by delegating performance of it to an independent contractor.’”
[35](1994) 179 CLR 520, 574.
[36](1994) 179 CLR 520, 575. Brennan J dissented in Burnie, but that does not affect the correctness of his statement of general principles – see too Torrette House Pty Ltd v Berkman (1940) 62 CLR 637, 647 per Latham CJ. See also Stoneman v Lyons (1975) 133 CLR 550, in which the contractor was not contractually authorised to carry out the tortious act, and see esp per Stephen J at 562 and Mason J at 572-573.
I am satisfied that the negligence of the contractor in high pressure cleaning the roof, so authorised by Thalut, caused the damage sustained by AF Textile. It is true that the quantity of asbestos tainted water that flowed into the premises must have been increased as a result of the failure to complete the capping and the box gutter but it is clear from the evidence, including the videotape, that the high pressure cleaning caused water to flow between the asbestos sheets and generally through the roof of the premises and it was not suggested that the ultimate duration of the interruption to the plaintiff’s business would have been any different had the capping and box gutter been completed before cleaning commenced.
I thus consider that Thalut falls within the first exception mentioned by Brennan J, but I further consider that it also falls within the second exception stated by him, namely, where the employer engages an independent contractor to perform a duty resting on the employer.
In Meyers v Easton[37] the plaintiff was a tenant to the defendants of a certain house. The plaintiff requested the defendants to put a new roof on it, which they agreed to do and the defendants employed a contractor to do the work. While the great part of the roof was stripped, heavy rainfall took place and damaged the plaintiff’s furniture. The defendant landlords were held liable in negligence. Stawell CJ said:[38]
“A stranger seeking to make another answerable for the acts of a third person, in the performance of any work, can only succeed by showing that such third person was the agent or servant of the defendant. Where the defendant has not appointed an agent, but has handed the work to an independent contractor, the latter is not his agent. The contractor stands in the position of a principal, as to the execution of the work; the defendant is not liable for his acts. On the other hand, a defendant would incur liability if he employed workmen at wages. It is solely a question of agency. In the present case, the defendants have assumed, and entered upon the discharge of, a duty to the plaintiff. Where one person becomes liable to perform, or undertakes the performance of, a duty to another, it is quite immaterial (as between him and that other) whether he performs the duty himself or employs an agent, or an independent contractor to perform it. The liability (whatever it may be) for the proper performance of the duty, adheres to the person who undertook it; he cannot get rid of it. … The defendants, in undertaking, though at the solicitation of the plaintiff, to renew the roof, necessarily undertook to exercise reasonable care to prevent injury to the house and its contents.”
[37](1878) 4 VLR 283 (Supreme Court of Victoria, Full Court). See too Pickard v Smith (1861) 10 CB(NS) 470, 142 ER 535 and Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16, 44 per Wilson and Dawson JJ.
[38](1878) 4 VLR 283, 284-5.
And as Mason J said in Kondis v State Transport Authority,[39] in an often cited passage:[40]
“The element in the relationship between the parties which generates a special responsibility or duty to see that care is taken may be found in one or more of several circumstances… (Mason J then referred to the situation of hospitals, school authorities and invitors)… [I]n Meyers v Easton the undertaking of the landlord to renew the roof of the house was seen as impliedly carrying with it an undertaking to exercise reasonable care to prevent damage to the tenant’s property. In these situations a special duty arises because the person on whom it is imposed has undertaken the care, supervision or control of the person or property of another or is so placed in relation to that person and his property as to assume a particular responsibility for his or its safety, in circumstances where the person affected might reasonably expect that due care will be exercised.”
[39](1984) 154 CLR 672, 687.
[40]For example it was quoted by Gleeson CJ in State of NSW v Lepore (2003) 212 CLR 511, 533-4, and also referred to by Gummow and Hayne JJ in the same case at 598-9.
In the present case, Thalut not only had a contractual duty to AF Textile under the roof covenant in the lease but also assumed responsibility, at the request of AF Textile and in order to obtain acceptance of a renewal of the lease, to “fix the roof”. By assuming that responsibility, as in Meyers v Easton, it became liable for its proper performance irrespective of whether it chose to retain an independent contractor to carry out the work. Thalut “necessarily undertook to exercise reasonable care to prevent injury”[41] to the property and business of AF Textile. Thalut’s duty may perhaps be referred to as “non-delegable”, however, given the conceptual difficulties associated with this concept,[42] I prefer to categorise it simply as a duty assumed by Thalut as a result of its obligations under the lease and by its subsequent conduct.
[41](1878) 4 VLR 283, 285.
[42]For a recent discussion, see Leichhardt Municipal Council v Montgomery [2007] HCA 6.
Although this need not be decided, it is also strongly arguable that by assuming control, through the contractor, of the asbestos roof, Thalut put itself in the same position as the building owner in Burnie,[43] namely, a position in which, having regard to the dangerous or hazardous activity to be undertaken and the risks involved, the duty to take reasonable care to avoid the foreseeable risk of injury to another could not be discharged merely by the employment of an ostensibly competent independent contractor.
[43](1994) 179 CLR 520.
Before leaving this topic, reference should be made to Northern Sandblasting Pty Ltd v Harris.[44]In that case a landlord employed an electrical contractor to repair a stove. The contractor did so negligently and as a result (because of a defect in the electrical system of the house) the tenants’ child was electrocuted. The landlord conceded that it owed a duty of care if on the ordinary principles of the law of negligence a duty of care existed. The High Court by majority (Brennan CJ, Toohey, Gaudron and McHugh JJ, Dawson, Gummow and Kirby JJ dissenting) held that the landlord was liable for a breach of its duty of care. Brennan CJ emphasised the existence of a defect in the premises, at the time when the tenants were let into possession, that would have been manifest on a simple inspection. Toohey J emphasised the element of control in the landlord and the special dependence and vulnerability on the part of the child giving rise to a non-delegable duty of care. Gaudron J said there was a breach of duty arising at the commencement of the tenancy to remove or rectify defects which gave rise to a foreseeable risk of injury even if the defects might have been discovered on inspection only by persons with special skill. McHugh J said that on undertaking to have the stove repaired the landlord owed the members of the tenants’ household a personal non-delegable duty of care of which the contractor’s negligence had caused it to be in breach. Dawson, Gummow and Kirby JJ (in dissent) considered that the landlord had discharged its duty of care by engaging a qualified contractor whose competence it had no reason to doubt. Brennan CJ and Gaudron J agreed with them on this point, while finding against the landlord on other grounds. The other members of the majority, Toohey and McHugh JJ disagreed on this point.
[44](1997) 188 CLR 313.
The relevance of Northern Sandblasting Pty Ltd v Harris for present purposes is that a majority of the High Court considered that the duty of care in relation to the repair of the stove itself had been discharged by engaging a qualified contractor. However, an exception was noted in each of the judgments forming a majority on this point:
·Brennan CJ said that the duty of care might be discharged by engaging a competent independent contractor “when a task to be performed does not carry an inherent risk of damage to the person or property of another”[45];
·Dawson J said that “[i]f hazardous activities were carried out on the premises, the situation would be different. If the hazardous activities were introduced onto the premises by the landlord, he would, in introducing them, have control, and upon the ordinary principles of the law of negligence a non-delegable duty of care in relation to those activities would be imposed upon him”[46] (citing Burnie);
·Gaudron J said that different considerations would apply in the case in which a landlord engaged a contractor to carry out work on premises on which there were dangerous or potentially dangerous activities or substances:
“Depending on the nature of those activities or substances, the carrying out of … work may, in the circumstances constitute a special damage such that there is a special relationship of proximity, characterised by a central element of control, on the one hand, and special dependence or vulnerability on the other”[47] (citing Burnie);
·Gummow J agreed with Dawson J[48].
[45](1997) 188 CLR 313, 333.
[46](1997) 188 CLR 313, 347.
[47](1997) 188 CLR 313, 362-3.
[48]And also with Kirby J.
In my opinion, therefore, Thalut owed a duty of care to AF Textiles which was not discharged by employing Pitcher Perfect Roofing. Nor was the duty discharged by retaining the contractor to liaise with the tenants and “inform work procedures including JSA reports and all Occupational Health & Safety issues”. Thalut was in breach of that duty of care in all and each of the respects in which the contractor was negligent and that negligence caused AF Textile’s loss.
Contributory negligence
Under Part V of the Wrongs Act 1958 (Vic), a plea of contributory negligence is available if a person (the claimant) suffers damage as a result partly of the claimant’s failure to take reasonable care (contributory negligence) and partly of the “wrong” of any other person or persons.[49] “Wrong” is defined by s.25 of the Wrongs Act as an act or omission that (for present purposes) gives rise to a liability in negligence, or an act or omission that “(b) amounts to a breach of a contractual duty of care that is concurrent and co-extensive with a duty of care in tort”. I have concluded that Thalut’s obligations under the covenant for quiet enjoyment and the roof covenant are more stringent than merely a duty to take reasonable care and hence neither covenant gives rise to “a contractual duty of care that is concurrent and co-extensive with a duty of care in tort”. Accordingly, Thalut is not able to rely upon contributory negligence in relation to its breaches of covenant. As I have concluded that the plaintiff has good causes of action for breach of the said covenants in the lease, contributory negligence is therefore not an issue. However, in case I am wrong in relation to the existence of breaches of covenant or their nature, I will consider the defendant’s submissions concerning contributory negligence.
[49]Section 26(1) of the Wrongs Act 1958 (Vic).
Contributory negligence relates solely to the steps which a plaintiff might have taken prior to the defendant’s wrongful act,[50] although it seems to me that it may also relate to the steps which a plaintiff might have taken concurrently with the continuing commission of a tort by the defendant.
[50]Balkin and Davis, Law of Torts (3rd ed, 2004) [27.21].
The defendant submitted that AF Textile had contributed to its own loss by failing to take reasonable care of its property and business. AF Textile knew that there was asbestos in the roof and that there was a contractor coming to fix the roof, but failed to ascertain the extent of the work or what work the contractor was going to do. The defendant further submitted that, once it became apparent that the contractor was spray cleaning the roof on the Friday afternoon and that some damage was occurring, AF Textile took no steps to either stop the work at that stage or to ensure that what was going to continue on the Saturday was not going to exacerbate the situation as it was on the Friday. On the Saturday, the plaintiff’s directors were not present and the person in charge, Derek Antas, failed to prevent the contractor from continuing the work. The defendant submitted that AF Textile had responsibility for the site under the Asbestos Regulations but failed to do anything or anything adequate to stop the damage from occurring. The plaintiff responded by submitting that it had no control over the contractor and once aware of the damage occurring strenuously attempted, but unsuccessfully, to stop the work from continuing.
In my opinion, before the work commenced, AF Textile showed a culpable lack of interest in the extent and nature of the work to be performed and failed to take reasonable care at that time to protect its property and business. As lessee of premises with an asbestos roof and as an employer of persons working therein, AF Textile ought reasonably to have been aware of the provisions of the Asbestos Regulations. In my opinion, had AF Textile exercised reasonable care to protect its own property and business, it would have ascertained that the contractor proposed to high pressure clean the asbestos roof in breach of those Regulations. As it was, AF Textile did not ascertain that the contractor proposed to high pressure clean the roof until some time on the Friday afternoon. By that stage, it is far from clear, on the evidence, that the damage already done was insufficient to cause the interruption to the business which subsequently occurred, rather, I think that it is probable that there still would have been a substantial interruption. Further, it is difficult to speculate as to what would have been achieved by action of AF Textile to stop the work, late on Friday or early on Saturday. On the Saturday, Derek Antas endeavoured to stop the work but it was already too late.
On the other hand, the work was Thalut’s contractual responsibility and under its actual control by virtue of its assumption of the obligation to “fix the roof” and its retention of the contractor to do so.
Doing the best I can and particularly having regard to AF Textile’s inaction before the work commenced, I would have considered it to be just and equitable, having regard to AF Textile’s share in the responsibility for the damage, to reduce the damages recoverable by it by 50%, insofar as Thalut was liable only in tort.
Mitigation of loss
A plaintiff is under a duty to mitigate the losses resulting from a defendant’s tort,[51] or breach of contract. Mitigation of losses or damage in this context refers to some action which a plaintiff might have undertaken, but failed to take, after the commission by a defendant of the wrong, which would have reduced the measure of the loss suffered by a plaintiff.[52] It is concerned with the conduct of a plaintiff after the commission of the wrong by a defendant and is thus to be distinguished from contributory negligence.[53] However, it seems to me that, in the case of the continuing commission of a tort or a continuing breach of contract, such as, in the present case, the high pressure cleaning of the roof and associated collateral acts and defaults, it is appropriate to consider what action the plaintiff might have taken to minimise the damage during the period in which the wrong was being committed.
[51]See generally Clerk & Lindsell on Torts (17th ed, 1995) [27-06].
[52]Balkin & Davis, Law of Torts (3rd ed, 2004) [27.19].
[53]Balkin & Davis, Law of Torts (3rd ed, 2004) [27.21].
The defendant submitted that AF Textile had failed to take all reasonable steps to minimise or mitigate the damages sustained by it. The defendant contended that, as the party in control of the premises, AF Textile failed to take any reasonable steps to minimise the damages resulting from the events that were apparent by the Friday night. Alternatively, the defendant contended that, even if the Friday afternoon events were not sufficient to put the plaintiff on notice as to what was happening and what would continue to happen, Derek Antas’ failure to take any steps to shut down the operation on the Saturday was sufficient to support a finding that AF Textile had failed to minimise or mitigate its loss.
AF Textile was aware by the end of the Friday that the contractor was using a high pressure water system to clean the roof but the contractor was not under its control, and I am not satisfied on the balance of probabilities that the contractor could have been stopped at that stage. Further, I am not satisfied that any action taken by AF Textile at that stage would have reduced the period of interruption of the business subsequently sustained or would have decreased the losses suffered as a result.
As far as concerns what happened the next day, I am satisfied that Derek Antas, once he saw what was happening, acted as forcefully and promptly as he could to prevent further loss. At any rate, I am not satisfied that he failed to act reasonably or that any action that he might reasonably have taken would by that stage have made any difference to the damages ultimately suffered.
For those reasons, I consider that Thalut has not demonstrated that AF Textile failed to take any reasonable steps to mitigate its loss and damage suffered as a result either of the breaches of covenant by Thalut or as a result of Thalut’s negligence.
Breach of statutory duty
It may well be the case that the Asbestos Regulations created a civil right of action in damages for breach thereof against employers and occupiers of relevant premises in favour of employees who suffered personal injury as a result of exposure to asbestos. However, the Asbestos Regulations cast no relevant duty on a mere owner or lessor of premises nor were they designed to protect lessees from property damage or economic loss. I conclude that the plaintiff has no cause of action for breach of statutory duty.
Conclusion
For the foregoing reasons, there will be judgment for the plaintiff against the defendant for damages in the sum of $674,248. I will hear submissions in relation to interest and costs and in relation to the third party proceedings.
See Shapiro’s affidavit sworn 23 December 2004 in answer to the plaintiff’s interrogatories, exhibit
”J”.
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