Ani Corporation Limited v Wylie

[2001] HCATrans 214

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B62 of 2000

B e t w e e n -

THE ANI CORPORATION LIMITED

Applicant

and

THOMAS JOHNSTONE WYLIE

Respondent

Application for special leave to appeal

McHUGH J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON WEDNESDAY, 27 JUNE 2001, AT 10.43 AM

Copyright in the High Court of Australia

MR P. KEANE, QC:   May it please the Court, I appear with my learned friend, MR R.C. MORTON, for the applicant.  (instructed by Bain Gasteen Lawyers)

MR D.B. FRASER, QC:   If it please the Court, I appear with my learned friend, MRS K. PHILIPSON, for the respondent.  (instructed by Poteri Woods Solicitors)

McHUGH J:   Yes, Mr Keane.

MR KEANE:   Your Honours, this case raises an issue that arises from this Court’s decision in Astley v Austrust and the question is whether that decision is the consequence that where an employee’s failure to exercise reasonable skill and diligence in the performance of his duties is the real cause of his injury, he is nevertheless entitled to recover full damages, he sues his employer in contract rather than tort, so long as the breach of the contract of employment by the employer has contributed to the occurrence of the injury.

In this case the learned primary judge found in terms – and his findings were not challenged by either side on appeal – that the respondent’s conduct was the real cause of his injury.

HAYNE J:   What do you mean by that, Mr Keane?  It trips off the tongue.  Does it mean anything more than that there are concurrent causes, of which one you seek to assign the epithet “real” as a good mouth‑filling forensic term?

MR KEANE:   Your Honour says it trips off the tongue.  It only trips off the tongue because we have taken it from the authorities which consistently use it as the test in contract cases.

HAYNE J:   Yes, and which there has been a deal of academic discussion suggesting that it may be of the character of voodoo language, obscuring rather than revealing.

MR KEANE:   We accept what your Honour says and we accept that identifying the real cause of an injury does involve a qualitative evaluation rather than some mere impressionistic reaction.  Taking up what your Honour puts to us, we would say this case does, indeed, raise a further question, which is the question whether the test for causation is the same in contract or tort, there being, in our respectful submission, the concession in March v Stramare that the introduction of the Law Reform Acts altered the test as between contract and tort by providing that in respect of tort the question was:  what are the causes?

If the employer’s negligence considered in tort is a cause, then one goes to the contribution statute.  That is different from the test that was always previously applied in contract, which was to look for something which one could evaluate as the real cause.  When one does this task of evaluation in a contractual context, particularly the contractual context of employer/employee and taking up the kind of analogy that your Honour Justice McHugh has put in cases about causation, Walker v Henville, that it is like taking a photograph – Professor Stapleton said this as well – you are taking a photograph, you are putting the focus by framing the subject matter within the frame and getting the focus.

In the perspective of a claim for damages for breach of contract, the extra elements that are not present in a tortious claim are, we submit, the employee’s obligation to exercise reasonable skill and diligence in the performance of his/her duties and, secondly, the entitlement of the employer, as one party to a contract, in common with all parties to contracts, to proceed in the performance of that party’s duties on the assumption that reasonable skill and diligence will be shown by the employee.

HAYNE J:   Now, in this case there was no system of work at all, was there, prescribed?

MR KEANE:   That was the basis on which his Honour held that the employer was liable.  What his Honour held was that the real cause of the plaintiff’s injury was that he was standing in a place of danger – this is at page 21 of the application book, line 11.  Your Honours will see at line 11:

In my opinion, the real cause of the plaintiff’s injury on the first occasion was that the plaintiff was in a place of danger, that is between the stack of four bolsters on the ground and the bolster hanging from the crane which he then moved towards himself.

If your Honours go down to line 34:

It seems extraordinary that the plaintiff put himself in such a position, the danger of which does not seem to have occurred to him until it was too late to move out of the way, but that must have been how the accident happened.

McHUGH J:   That statement does not seem to fit very well with his Honour’s apportionment of responsibility ‑ ‑ ‑

MR KEANE:   Can we take your Honour to the passage that leads up to that.  At page 27, line 10, his Honour says:

In the present case I think there was more than mere inadvertence or inattention.

Then down at about line 36, he says:

I think that the danger of standing where he was standing would have been obvious to a reasonable employee in his position, and such an employee taking reasonable care for his own safety would not have put the crane into operation to move the load towards him while he was standing in that position.  Indeed, given the behaviour of this crane I think it was an extremely foolish thing for the plaintiff to do, and an example of serious negligence on his part.  It is difficult to accept that he was unaware of the pile of bolsters behind him, but if this is true it is a serious failure to be aware of his surroundings, and what was in the path of the load he was moving.  It was really his negligence which was the cause of the accident, the employer being also liable only because it has a duty to institute a system of work to guard against such negligence by employees, and had not done so.

He then apportions liability equally.  Now, as a matter of tort ‑ ‑ ‑

HAYNE J:   Which seems to give some light to what his Honour means by “It was really his negligence which was the cause”, and yet you split it half/half.

MR KEANE:   Your Honour, at this stage his Honour is performing a conventional tortious analysis.  He has characterised what has happened as being really the plaintiff’s fault, but he apportions liability 50:50 on the footing that applying the Podrebersek calculus, if you like, and bearing in mind, no doubt, that the employer has the opportunity and the leisure and the money and the time to lay down systems, that in terms of comparative fault, on the one hand, and measuring causal potency, on the other, it balances out at 50:50.

A contractual analysis would be different, in our respectful submission.  We have set out in our outline.  We have set out in our outline in reply what we submit are the competing analyses.  At page 101 subparagraph (d), your Honours, we set out the steps in the tortious analysis:  duty of care owed; foreseeable injury; failure to afford instruction necessary to ensure a safe system of work; what the respondent did was unreasonably risky, but that was something we should have foreseen because in tort one is obliged to foresee inadvertence or negligence or foolish conduct; as a result of the unreasonably risky mode of proceeding the respondent was injured, hence we are liable.

On the contractual analysis, the applicant owed the respondent a contractual obligation to take reasonable care to instruct him in the safe performance of his duties.  He, on the other hand, owed a contractual obligation to exercise reasonable skill and diligence in and about the performance of his duties; not be, it is said, his inadequate best.

If employers are to be sued in contract, that the parties are, as social atoms, bound by nothing other than their bargain, then in common with all other contractual cases, the other party to the contract is entitled to perform its contract on the footing that the other party keeps its bargain too.  If that bargain involves reasonable skill and diligence, then that is the additional element added to the contractual analysis.  In discharging its duty the applicant was entitled to assume that the employee would not do foolish things.  Now, that is the not the case in the tortious analysis, as Bus v Sydney City Council and many other authorities tell us.

The applicant breached its contract in failing to properly instruct the respondent.  That gave rise to the occasion on which the respondent might act in an unreasonably risky way, but it did not cause him to do so and he was obliged not to act unreasonably, as a matter of contract, and we say that the occurrence of the injury was caused – that, as his Honour said, the real cause was this act of folly.

HAYNE J:   Now, if you leave aside questions of legal responsibility and look purely as a question of history, do you accept that there were concurrent causes for what happened, namely, his fault and your client’s fault?

MR KEANE:   Yes, your Honour, and because we accept ‑ ‑ ‑

HAYNE J:   Does it follow then that the debate is about legal responsibility assigned in circumstances where the history of the matter is well known and now relevantly undisputed and that what you seek to do with the attribution of the term “real” is to assign legal responsibility wholly to one party?

MR KEANE:   Yes, it is, your Honour.  Your Honour asked us do we accept that there are concurrent causes.  We answered yes, frankly, we hope.  What we did not concede is that they are equal contributing causes and ‑ ‑ ‑

HAYNE J:   The question of equality at the moment simply concurrent.

MR KEANE:   ‑ ‑ ‑ it is commonplace with the cases about contractual analysis, such as James’ Case and Harper v Ashton’s Circus, which were approved by this Court in Astley v Austrust ‑ ‑ ‑

McHUGH J:   Not on this point, they were not.  Not on the point you are seeking to make.  In your written submissions you make that point, but I do not think Astley approved the point you are talking about.

MR KEANE:   Your Honour, they referred to and, in our submission, did approve the analysis in James’ Case and Harper’s Case, which was to the effect that in cases of contract contributory negligence is not a defence but it may shed light on the real question – there I go again – which is:  what is the real cause of the loss in the context of breach of contract?

McHUGH J:   But it is the latter point that I do not think Astley approves.

MR KEANE:   Your Honour, can we say this though, that in so far as there were a plethora of cases lining up on either side of the line about whether contributory negligence is a defence in contract, the cases that were approved, James and Harper v Ashton’s Circus, fall on the line that was approved and the analysis contained in those cases is the analysis which requires one to search for the real cause.  It is only where one can say that looking at all the circumstances, including the parties’ obligations to act reasonably in their own interest and, indeed, further, in this case, the plaintiff’s obligation to exercise reasonable skill and diligence in and about the performance of his duties, looking at it in the light of that obligation, is it correct to say that the real cause of his injury was the failure to prescribe a safe system?

McHUGH J:   Your argument comes to this, does it not?  Before 1945 this plaintiff would have failed both in tort and contract.  That seems a remarkable result, that there is no system of work devised, he is left to his own devices and he is seriously injured and your client is not liable.

MR KEANE:   Your Honour, not a remarkable result, an unjust one.  To overcome that injustice, the Law Reform statutes were passed.  We would say, with respect, in response to your Honour that it is a remarkable state of affairs that in the 50 or so years since the passage of the Law Reform statutes, which abolished contributory negligence as a complete defence and allowed for apportionment, that there have been thousands of cases where employees have sued employers and have had apportionments made against them and the suggestion that all that occurred per incuriam is, in our respectful submission, something that cannot be right.

HAYNE J:   Your point stems, does it not, from a complaint in part that the employee was in breach of an obligation he owed under the contract?

MR KEANE:   Quite.

HAYNE J:   And that was a point which it was sought to raise by late amendment.

MR KEANE:   Because the pursuit of the claim as one in contract was itself raised after Astley had been published.

HAYNE J:   But is not the core of the complaint you now make a complaint that is bound up inextricably with the suggestion that there was a cross‑claim for breach of the same contract on which the plaintiff relied?

MR KEANE:   No, your Honour, in our respectful submission, not.  Our contention does not ‑ ‑ ‑

McHUGH J:   It does not depend on that.

MR KEANE:   It does not depend on that.  It does not pursue some sort of difficult notion about apportioning damages by reference to the damage that we have suffered because we are liable to him.  That is a matter which their Honours in the Court of Appeal noted we did not argue.

HAYNE J:   Just so, but your argument about real cause is one which seeks to put to one side the other breach of contract that is floating around in this firmament, is it not?

MR KEANE:   No, your Honour.  We have to accept that on our part we owed an obligation to prescribe a safe system.  What we do is we say that his Honour, not with any slip of the tongue, has in his evaluation of the plaintiff’s conduct identified that as the real cause of the injury.  It is not a slip of the tongue.  His Honour has analysed it at great length and said it several times.  As we say, these findings of fact were not challenged or disputed by either side on appeal.

McHUGH J:   Justice Ambrose did not take the same view as the trial judge, did he?

MR KEANE:   No, he actually inverted the position, your Honour, in a way which his Honour was not invited to do, we do not think, by anyone and, in our respectful submission, which was not open to him.  In the judgment at present, if we can take your Honours briefly to this – your Honours will appreciate we may have gone beyond this.  In the judgment of the President, if we can take your Honours to her Honour’s reasons, the steps in her Honour’s conclusion at page 60 of the record, paragraph [30].  We invite your Honours to look at the five steps in her Honour’s conclusion and your Honours will see there that the judge’s finding on the real cause is not mentioned at all.  The judge’s finding as to the plaintiff’s failure to exercise reasonable skill and diligence in and about his duties is not mentioned at all.  In the judgment of Justice Thomas, his Honour deals with the matter at paragraph ‑ ‑ ‑

McHUGH J:   What about what the President said at page 60, line 20?

MR KEANE:   Your Honour, her Honour is there picking up a test – her Honour is there picking up some dicta to the effect that if there are equal co‑operating causes then the plaintiff wins in contract.  We submit that that gloss is not appropriate here for two reasons:  firstly, his Honour’s actual finding and, secondly, the point that her Honour’s analysis does not recognise that in the calculus, in determining whether there are equal causes, one must take into account in contract the fact of the plaintiff’s breach of an obligation which, on our side, we were entitled to assume performance.

McHUGH J:   Does your argument depend heavily on the existence of that implied term on the part of the employee?  Supposing in the particular contract that promise had been negative, so that the employee did not give that promise.  It really would not make any difference to your argument, would it?

MR KEANE:   It would, your Honour, if the contract was the remarkable one that reserved to the employee the right to behave foolishly, but if it did, then these parties, bound as they are, social atoms bound by nothing other than their bargain, your Honour might be right.  But in terms of implied promises, there is no doubt, in our respectful submission, that the implied obligation, absent an exclusion in every contract is implied as a part of the employee’s obligation.  We are looking at the statement by Lord Somervell in Lister v Romford Ice – it is on our list – at page 508 where his Lordship said in common with every other member of the House ‑ ‑ ‑

McHUGH J:   Well, I said the same thing in X v The Commonwealth, that case about discrimination about the HIV soldier.  I made these points in my judgment in X v The Commonwealth and I treated Lister as good law in that ‑ ‑ ‑

MR KEANE:   Your Honours, it is our submission that, yes, it is a critical part of our argument, but it is a part of the argument that seems, with the greatest respect, not to have been taken up in these analyses, particularly in the judgment of Justice Thomas – I see the time has gone away.  At paragraphs [49] and [50] his Honour says the employee’s obligation does not cut down the employer’s obligation.  We submit that is a distinct error of law if one is applying a contractual analysis.

Finally, your Honours, in our submissions in relation to the importance of this point, can we invite your Honours to note the comments

made by the President at page 61 in paragraph [31] and by Justice Thomas in paragraphs [47] and [48], particularly in paragraphs [47] and [48] of Justice Thomas’ judgment, where his Honour makes the point that while lessening the test of causation in tort – it was after the passage of the Law Reform statutes – may be appropriate, it does not follow at all that it is appropriate in contract, but at the level of the Queensland Court of Appeal or, indeed, any intermediate court of appeal, those courts lack the authority to provide the solution.  Only this Court does.  In our submission, this is a real problem.  It is an important doctrinal problem and, with the greatest respect, this is the only court that can solve it.  Those are our submissions.

McHUGH J:   Thank you.  Yes, we need not hear you, Mr Fraser.

Upon the facts of this case there is no reason to doubt the correctness of the decision in the courts below.  Special leave is refused.

Do you make an application, Mr Fraser?

MR FRASER:  Yes, your Honour.

McHUGH J:   Yes, special leave is refused with costs.

AT 11.04 AM THE MATTER WAS CONCLUDED