Attorney General for New South Wales v Gatsby - [2018] NSWCA 54

Court of Appeal

Supreme Court

New South Wales

Summary available

Medium Neutral Citation: Strategic Formwork Pty Ltd v Hitchen [2018] NSWCA 54
Hearing dates: 1 and 2 March, 2018
Decision date: 23 March 2018
Before: Basten JA at [1];
Simpson JA at [126];
Sackville AJA at [137]
Decision:
(1)   Set aside order 1 made in the Common Law Division on 30 May 2017 giving judgment for the plaintiff against Strategic Formwork Pty Ltd in the sum of $1,299,773 and in its place give judgment for the plaintiff against Strategic Formwork Pty Ltd in the sum of $1,173,275.

(2)   Otherwise dismiss the appeal by Strategic Formwork Pty Ltd.

(3)   Dismiss the cross-appeal by Daniel Hitchen with no order as to costs.

(4)   Order that Strategic Formwork Pty Ltd pay –

(a)   Daniel Hitchen as to 90% of his costs of the appeal;
(b)   RTS Holdings Pty Ltd its costs of the appeal.
The Court NOTES that the order staying the judgment in favour of Daniel Hitchen pending the outcome of the appeal is now spent.
Catchwords:
NEGLIGENCE – duty of care – novel categories of duty – companies A and B run integrated business operation – A exercises control over operations at B’s premises – whether A owes duty of care to employee of B working at B’s premises regarding occupational health and safety – discussion of Caltex Refineries v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258

NEGLIGENCE - apportionment of responsibility – whether trial judge’s findings on apportionment should be modified

NEGLIGENCE – damages – award for non-economic loss – whether trial judge’s assessment should be modified – economic loss – loss of earning capacity – plaintiff resident in UK – reliance on level of earnings in UK – assessment of superannuation loss under UK law

COSTS – party/party – costs follow the event – application of the rule and discretion – costs where appeal allowed in part
COSTS – party/party – costs follow the event – multiple successful respondents – whether respondents in the same interest – whether multiple sets of costs should be awarded
Legislation Cited: Civil Liability Act 2002 (NSW).ss 13, 16
Civil Procedure Act 2005 (NSW), s 98
Civil Procedure Rules 2005 (NSW), Pt 42
Uniform Civil Procedure Rules 2005 (NSW), r 51.4
Workers Compensation Act 1987 (NSW), s 151Z
Workers Compensation Regulation 2010 (NSW), reg 104
Workers Compensation Regulation 2016 (NSW), reg 96, 98
Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 346
Cases Cited: Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258
Credit Lyonnais v Darling (1991) 5 ACSR 703
CSR Ltd v Wren (1997) 44 NSWLR 463
Harbin v Masterman [1896] 1 Ch 351
In Re Grayan Building Services Ltd [1995] Ch 241
In the Matter of B (a child) (FC) [2013] 1 WLR 1911; [2013] UKSC 33
Marlec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20
Milillo v Konnecke [2009] NSWCA 109; (2009) 2 ASTLR 235
Taylor v Owners – Strata Plan No 11564 (No 2) [2013] NSWCA 153
TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47
Toll Pty Ltd v Harradine (No 2) [2017] NSWCA 75
Category: Principal judgment
Parties: Strategic Formwork Pty Ltd (Appellant/First Cross-Respondent)
Daniel Hitchen (First Respondent/Cross-Appellant)
RTS Holdings Pty Ltd (Second Respondent/Second Cross-Respondent)
Representation:
Counsel:
Mr G M Watson SC/Mr J Callaway (Strategic Formwork Pty Ltd)
Mr B Walker SC/Mr K Andrews (Hitchen)
Mr G J Parker SC (RTS Holdings Pty Ltd)
Solicitors:
Colin Biggers & Paisley (Appellant)
Law Advice Compensation (First Respondent)
Moray & Agnew (Second Respondent)

File Number(s): 2017/78359
Decision under appeal

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law Division

Citation:

[2017] NSWSC 75

Date of Decision:

17 February 2017

Before:

Harrison AsJ

File Number(s):

2014/129961; 2015/267220

headnote

[This headnote is not part of the judgment]

On 2 May 2011 Daniel Hitchen (the plaintiff) was severely injured while unloading timber beams from a shipping container on the premises of his employer, RTS Holdings Pty Ltd (“RTS”), at Corrimal. The plaintiff sued his employer and a second company, Strategic Formwork Pty Ltd (“Strategic”), which he said exercised control over RTS. RTS admitted liability for the incident.

RTS had a close commercial relationship with Strategic. Strategic obtained contracts to do the formwork for the central core of high rise buildings, prepared plans for that formwork, and provided those plans to RTS. Yard labourers at the Corrimal site constructed the components in accordance with the plans and obtained the necessary equipment and materials for use at the building site. RTS arranged for the materials to be transported to the building site and stored, serviced and maintained the reusable equipment. Graham Van Der Merwe, the managing director of Strategic at the time of the incident, had been the general manager of RTS from when it commenced operations in 2009 until January 2011. His wife was the sole director and shareholder of RTS. RTS had been created to protect Strategic’s assets in the event of financial difficulties.

On 17 February 2017, the primary judge (Harrison AsJ) gave judgment for the plaintiff against both RTS and Strategic, apportioning liability at 40% and 60% respectively, and awarded damages of $740,000 payable by RTS and $1.7 million payable by Strategic.

Strategic appealed against the primary judge’s findings on liability, apportionment and damages. The plaintiff cross appealed on apportionment.

The issues on appeal were whether:

(i) Strategic owed Mr Hitchen a duty of care and, if so, whether that duty had been breached;

(ii) the apportionment of responsibility should be modified;

(iii) the assessment of damages should be modified.

The Court (Basten JA, Sackville AJA and Simpson JA) allowed the appeal on damages in part but otherwise dismissed the appeal; by majority the Court (Basten JA and Sackville AJA, Simpson JA dissenting) dismissed the cross-appeal.

The Court held:

In relation to (i):

(1) Neither the separate corporate structures of RTS and Strategic, nor the fact that the plaintiff was formally employed by RTS, precluded the possibility of Strategic owing Mr Hitchen a duty of care: [16].

(2) RTS and Strategic ran a single integrated business operation, directed by Strategic’s general manager: [57]-[58]. Strategic exercised control over the operations of RTS at Corrimal, and this control extended to supervision of occupational health and safety. It therefore owed Mr Hitchen a duty of care: [61]-[62].

Caltex Refineries v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 discussed; CSR Ltd v Wren (1997) 44 NSWLR 463 considered; TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47 cited.

(3) There was no reason to doubt the trial judge’s conclusion that Strategic breached this duty by failing to take precautions with respect to the stacking of the beams; by failing to ensure a proper inspection was carried out by an experienced person and by failing to instruct employees as to safe stacking practices: [67].

In relation to (ii):

(4) (Per Basten JA, Sackville AJA agreeing): The Court should not interfere with the trial judge’s conclusion on apportionment as it was within a reasonable range: [72]-[74].

Re Grayan Building Services Ltd [1995] Ch 241; In the Matter of B (a child) (FC) [2013] 1 WLR 1911; [2013] UKSC 33 cited.

(5) (Per Simpson JA, dissenting): The trial judge’s conclusion on apportionment did not reflect her earlier finding that culpability was overwhelmingly against Strategic: [134]. Apportionment should be modified to 75% for Strategic and 25% for RTS: [135]-[136].

In relation to (iii):

(6) No error of principle was identified in the trial judge’s reasoning regarding non-economic loss. In the absence of any specific error, the Court should not disturb her Honour’s finding that the plaintiff’s circumstances were 70% of a most extreme case for the purposes of Civil Liability Act 2002 (NSW), s 16: [80].

(7) The damages awarded for economic loss should be reduced on three bases. First, as Mr Hitchen worked and resided in the United Kingdom, damages for loss of superannuation should not have been calculated at the Australian superannuation rate: [83], [105], [107]. Secondly, damages awarded for future economic loss until age 50 needed to be reduced to make allowance for the significant possibility that the plaintiff would not suffer any loss of earning capacity in that period: [96]-[97]. Thirdly, a cushion for future unemployment and sick leave should not have been awarded in addition to the damages already awarded for future loss of earnings: [106]-[107].

Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20 applied.

In relation to costs:

(8) Apart from the reduction of its judgment by less than 10%, Strategic was unsuccessful on the appeal: [115]. It should therefore bear 90% of Mr Hitchen’s costs on the appeal: [116].

(9) Strategic should pay RTS’s costs: [124]. Strategic had not given advanced warning that it viewed separate representation as unnecessary: [123]. Although RTS and Mr Hitchens shared a forensic purpose in the proceedings, their legal interests were not identical: [124].

Harbin v Masterman [1896] 1 Ch 35; Milillo v Konnecke [2009] NSWCA 109; (2009) 2 ASTLR 235; Credit Lyonnais v Darling (1991) 5 ACSR 703; Taylor v Owners – Strata Plan No 11564 (No 2) [2013] NSWCA 153 cited.

Judgment

BASTEN JA: On 2 May 2011 Daniel Hitchen, a backpacker undertaking casual work, was at the premises of RTS Holdings Pty Ltd (“RTS”) at Corrimal, south of Sydney. He was required to move 3.6m timber beams from a stack in a shipping container a short distance where they were restacked. While manoeuvring a beam, the stack inside the container collapsed on him, causing severe injuries resulting in partial paraplegia.
Mr Hitchen (“the plaintiff”) sued his employer, RTS, in negligence. RTS admitted liability. Like many persons who suffer workplace injuries, the limited damages recoverable from his employer led the plaintiff to sue another company, Strategic Formwork Pty Ltd (“Strategic”) which, he alleged, controlled the operations of RTS at the Corrimal yard. Strategic denied liability; indeed it denied it owed the plaintiff a duty of care.
The claims were heard in the Common Law Division. The trial judge, Harrison AsJ, gave judgment for the plaintiff against both defendants and assessed damages at some $725,000 with respect to RTS and a little under $1.7 million with respect to Strategic. She apportioned liability as to 60% against Strategic and 40% with respect to RTS. [1] Following the application of s 151Z of the Workers Compensation Act 1987 (NSW), the judgment in favour of the plaintiff against Strategic was entered for $1.3 million, in round figures.
1. Hitchen v Strategic Formwork Pty [Ltd]; Hitchen v RTS Holdings Pty Ltd [2017] NSWSC 75 (“Hitchen”).
On the appeal, the issues raised at trial were sought to be reagitated. Thus,

Strategic denied liability, including the existence of any duty of care owed to the plaintiff;

Strategic and the plaintiff both challenged the apportionment of responsibility for the accident;

Strategic challenged the assessment of both non-economic and economic loss.

The whole of the evidence in this case was dealt with in two days. The apparent complexity of the lengthy trial judgment evaporates once the issues are identified and addressed by reference to the evidence relevant to the specific issues.
It is logical to deal first with the question of Strategic’s liability for the accident. Strategic had pleaded that it (a) owed no duty of care to the plaintiff, (b) if it did owe a duty, it did not breach that duty and, (c) any breach was not causative of the injury. On the appeal, the primary focus was upon the circumstances said to give rise to a duty of care; if duty were established, there was a muted (and unpersuasive) challenge to the finding of breach.

(1) Duty of care

(a) the pleaded case

Strategic drew attention to the manner in which the plaintiff had pleaded the allegations on which its duty was based. It is convenient to start with those pleadings. For reasons which are obscure, the plaintiff’s solicitors commenced separate proceedings against RTS and Strategic, although reliance was placed on the role of both companies in each pleading. So far as Strategic was concerned, the statement of claim alleged: [2]

“At all material times the defendant was under a duty to ensure that appropriate steps were taken to ensure that persons entering upon the said container were not liable to be injured by the LVLs [veneer lumber planks] falling as a result of the container not being level and/or as a result of the manner in which the container had been stacked with the LVLs.”
2. Amended statement of claim, 29 July 2016, par 10.

This was poor pleading; any relevant duty is one to take reasonable care, not “to ensure” precautions against foreseeable risks. Further, the source of the duty was not expressly identified. By implication, it arose from two earlier paragraphs in the following terms:

“2. At all material times the defendant had the care, control and management of premises situated at 2 Albert Street, Corrimal in the State of New South Wales.
3. At all material times the defendant carried out a business and/or occupation at the abovementioned premises which required the defendant to engage in the process of supplying, moving and/or preparing laminated veneer lumbar [sic] planks (LVLs) which were supplied to the plaintiff’s employer.”

Paragraph 3 was also poorly drafted. Although it was sought at various stages to suggest that Strategic was “in occupation of” the Corrimal premises, that was not alleged in terms. The allegation was that Strategic carried on a business or occupation, at those premises. Secondly, the nature of the business was obscure: were the planks supplied to Strategic, or to RTS (the plaintiff’s employer)? In any event, it was by no means clear what was meant by the proposition that Strategic was carrying on a business at the Corrimal premises on land which was leased by RTS from a third party, and on which RTS undertook operations through its own employees.
It does not appear that the trial judge made findings in the terms of par 3 of the amended statement of claim. [3] It follows that the duty of care which was upheld at trial must have been based on the allegation that Strategic exercised care, control and management of the operations undertaken by RTS at the Corrimal yard. The judge found that “Strategic Formwork had day to day control of the system of work, at the yard and of Mr Gales who was controlling the actual workflow on the day of the plaintiff’s accident.” [4] The judge also found that Strategic “assumed responsibility for the system of work”. [5]
3.    Hitchen at [128]-[131].
4.    Hitchen at [128](4).
5.    Hitchen at [128](7).

(b) nature of relationship – overview

The Court was referred to cases in which similar arrangements were said to have given rise to a duty of care. The plaintiff relied upon CSR Ltd v Wren. [6] In that case, the relevant work was undertaken not by the defendant (CSR Ltd) but on the premises of its wholly owned subsidiary, Asbestos Products Pty Ltd. Furthermore, as explained in the joint judgment of Beazley JA and Stein JA: [7]

“In the normal course of events the management staff is responsible for the day-to-day operational aspects of a business operation. There was nothing to suggest that it was otherwise here. Of course, the management staff in this case were all CSR staff. In our opinion that is sufficient to establish a relationship between Mr Wren and CSR so as to give rise to a duty of care by CSR to Mr Wren.”
6. (1997) 44 NSWLR 463 (Powell, Beazley and Stein JJA) (“CSR Ltd”).
7. CSR Ltd at 484C-D.

In the present case, the activities at the Corrimal yard were undertaken by employees of RTS under the supervision of a manager, Mr Gales, who was also employed by RTS. CSR Ltd provides little assistance in this case.
There are, of course, numerous cases dealing with employees of company A who work in the business of company B and to whom company B may therefore owe a duty of care. The usual circumstances are labour hire arrangements where the worker is hired out to work in the hirer’s business. [8] Often the work will be undertaken at the premises of the party hiring the worker, but that is not always so. These cases do not provide a close analogy with the present circumstances, where the worker was hired by RTS, ostensibly to undertake the business of RTS at RTS’ premises.
8. See, eg, TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47.
There was no doubt that RTS and Strategic had a close commercial relationship. The principal of Strategic, Graham Van Der Merwe, was a civil engineer who had incorporated Strategic in 2002. In 2011, he was the sole director and secretary of Strategic. He was also a majority shareholder, the other shareholder being his wife, Anna Van Der Merwe. RTS Holdings was registered in March 2007. It commenced operating in mid-2009. In 2011, Anna Van Der Merwe was the sole director and secretary of the company and the sole shareholder.
Mr Van Der Merwe said that he had been employed as general manager of RTS from May 2009 until January 2011, ceasing in that role some four months before the accident. Mr Van Der Merwe was the managing director of Strategic at all relevant times, including the first four months of 2011. Two months after the accident, in July 2011, he recommenced his role as part-time general manager of RTS. However, it was not in dispute that at the date of the accident his only employment was with Strategic.
The plaintiff sought to demonstrate that the companies were two arms of a single family business with no clear demarcation between their management structures. Even if that were so, it did not follow that Strategic had day-to-day control over the operations of RTS. On the other hand, Strategic contended that the management structures reflected the legal separation of functions and operations. However, even if that were so, it would not necessarily follow that Strategic did not owe a duty of care to the plaintiff. Neither the formal employment relationships, nor the separation of corporate structures, precludes the possibility that one entity may exercise a degree of control over activities carried on by another, such as to give rise to a duty of care to affected employees.

(c) Strategic Formwork – control of RTS

The trial judge was affirmatively satisfied that Strategic “exercised control over the day to day running of RTS Holdings.”[9] Strategic challenged that conclusion; to assess the challenge, it is necessary to review the evidence underlying the finding.
9. Hitchen at [85].
The plaintiff’s case at trial (and on appeal) relied upon the following factors as supporting the conclusion that Strategic controlled the operations of RTS:

the controlling mind of the whole business was Mr Van Der Merwe, who had set up the systems employed at the Corrimal yard for the storage of assets, as part of an integrated business, before he relinquished legal control of RTS in January 2011;

the functional separation between Strategic and RTS, which commenced in 2009, was solely for the purpose of protecting assets which might otherwise be lost if the business of Strategic failed;

Strategic continued to exercise administrative and financial control over RTS in January-May 2011, and

Strategic (through Mr Van Der Merwe) exercised control over RTS with respect to occupational health and safety at the Corrimal yard in January-May 2011.

It is convenient to consider each of these aspects in turn.

(i) establishment of systems

The business of Strategic was based upon the design of systems to allow for the construction of the central core of high rise buildings, such as lift wells. At least one of the mechanisms designed by Strategic was known as the “Coremaker” jumpform which involved “self climbing” structures that could operate without the use of cranes. The jumpforms were made from timber and steel. [10] There was also a mechanism which involved the initial use of a crane to insert the formwork, known as the “Wallmaker” jumpform. [11]
10. Affidavit, Graham Van Der Merwe, 21 November 2012, par 15.
11. Affidavit, par 18.

Mr Van Der Merwe explained the materials used in the following terms:

“16 All of the steel components are supplied and fabricated by third party suppliers. The timber, laminated veneer lumber (LVL) planks known as soldiers and walers, are supplied by a third party in stock lengths. RTS cuts these to length based on project specific specifications. The difference between soldiers and walers is that the soldiers have steel brackets bolted to them.
17 After TS commenced operation in 2009, RTS became responsible for the storage, servicing and maintaining of the Coremaker equipment. When the steel components are returned to the yard after use they need to be cleaned from concrete debris and repainted. Approximately 50% of the timber is destroyed or lost in the process. The timber which is returned is cleaned up, assessed for structural soundness and store for reuse.”

Mr Van Der Merwe gave evidence that RTS had commenced operations in June 2009 at premises in Helensburgh and, since September 2009 had operated from the leased site at Albert Street, Corrimal. At the time of the accident, the “Yard Manager” of the RTS business was Wayne Gales. [12]
12. Affidavit, par 25.
RTS did not supply equipment to building contractors, but to its own “clients” of which Mr Van Der Merwe said there were two at the time he swore his affidavit. However, the evidence did not disclose that the equipment was supplied to any party other than Strategic around the time of the accident.

(ii) purpose of separation

Mr Van Der Merwe gave evidence at the trial as to the circumstances in which RTS was created. He stated that in about 2006 Strategic’s largest client had gone into liquidation, creating a commercial risk that Strategic would also go into liquidation. He said that “we sought some advice as to how we could protect the assets of Strategic Formwork” in such a situation and was advised to split the company into two parts. [13] He explained the different functions in the following terms: [14]

“Strategic … secures a contract to supply a jump form to a high rise building. …jump forms are purposely built for each project. So Strategic would design the jump form to suit that particular shape and it would use many components. Those components are consumable products like plywood and timber, nails, nuts and bolts, it would use steel items that are fabricated specifically for the shape of that building which we call project specific items, and then they would use a bespoke reusable generic items which are like a hydraulic jacks and hydraulic pump. The generic reusable components are used from one job to another, it’s just that they’re put together in a different form. So that’s what was split, the components, the standard reusable components and the servicing of those components was pulled out and put into RTS Holdings.”
13. Tcpt, 31/08/16, p 124(50).
14. Tcpt, 31/08/16, p 125(10).

The arrangement between Strategic and RTS as to use of the reusable equipment was apparently reflected in a “standard hire agreement” between RTS and Strategic. It seemed to be generic and envisaged that RTS would invoice Strategic with respect to charges whilst the material was out of the yard. The document in evidence was dated 19 June 2010. However, there were no other documents which reflected this arrangement.
A mass of email communications, to which further reference will be made below, demonstrated that Strategic directed RTS as to when equipment was to be made available, to whom and at what address. Aspects of the “standard hire agreement” were inconsistent with Mr Van Der Merwe’s evidence. For example, the agreement obliged Strategic to continue to pay charges to RTS on all equipment dispatched by RTS until it was returned and to pay the full cost of replacing any lost or damaged item. It is clear from the emails that RTS was expected to dispatch timber items including plywood sheets, which presumably fell within the category of which Mr Van Der Merwe said some 50% would be destroyed in the course of a project. Similarly, the agreement required Strategic to strip and thoroughly clean all items before being returned to RTS. Mr Van Der Merwe’s evidence was that RTS did the cleaning and testing for structural damage. Nevertheless, the purpose of the separation remained that of protecting Strategic’s assets.

(iii) administrative and financial control

Strategic argued that RTS was an independent entity exercising control over its part of the business. The manager of RTS from January 2011 until the date of the accident was Mr Gales.
In his first WorkCover statement, dated 11 July 2011, Mr Van Der Merwe gave answers which were capable of being understood as internally inconsistent. When asked what role or involvement Strategic had in RTS’ operations at the Corrimal yard prior to the incident, he said, “Zero.” [15] With respect to his wife’s involvement in the day-to-day operations of RTS’ business he responded: [16]

“Anna was the Director of RTS. In the day to day business little or minimal. It was left to Wayne Gales and myself.”
15. Graham Van Der Merwe, WorkCover statement, 11 July 2011, Q53.
16. Ibid, Q54.

When asked to explain the extent of his involvement with RTS after leaving its employ, he stated: [17]

“An informal point of contact between Wayne Gales and myself. … In effect Wayne became the Yard Manager when I went back to Strategic and because of our history and informal line of communication between Wayne & myself was always there.”
17. Ibid, Q56.

The following further statements were made:

“Q74   Prior to this incident and after you left the company, how did RTS keep director Anna Van Der Merwe informed and aware of the operational issues associated with RTS’s Corrimal facility?
A74.   Through me.
Q75   Was there any requirement for RTS’s yard at Corrimal to submit reports on the operational functioning at the Corrimal facility to the director or other senior management representative prior to this incident?
A75.   Written no, but verbally all the time.
Q76   What did these verbal reports consist of?
A76.   Any issues that needed to be addressed, Wayne would explain them to me, for example, if the Manitou [forklift] would need to be repaired, he would run it by men verbally that he has conducted that service. So Wayne would get it serviced for example, he would let me know & I would let Anna know.
…
Q79   Did these verbal reports incorporate any occupational health and safety considerations or issues?
A79.   Yes.
Q80   Can you explain exactly what OH&S issues were covered in these reports?
A80.   Short answer to that is all. An example would be that an electrical lead would be damaged and needed to be retagged repaired or replaced, PPE requirements were low and needed to be topped up, if new staff had been engaged the paperwork would be submitted to the office, methods of work, systems of work would be discussed, and task specific risk assessments would be discussed, all those matters were discussed and more.
Q81   Were any of these discussions documented?
A81.   Yes.
Q82   How would they be documented?
A82.   By email.
Q83   How was the content of the these reports managed after they were received by management?
A83.   I would discuss those with Anna, and actioned if necessary. I would let Anna know what they were and action if required such as get a new lead or services the Manitou for example. Often Anna would ask me if it had been actioned and I would confirm.
Q84   Was any of this correspondence or discussion between you & Anna documented?
A84.   No.”

Later in the interview, Mr Van Der Merwe was asked who was responsible for the management of OH&S at RTS and said, “Myself, Wayne and Anna.” [18]
18. Ibid, Q104.
Mr Gales had authority to spend no more than $300 or $500 (both figures were mentioned in evidence), beyond which he required authorisation from the director of RTS, Anna Van Der Merwe. When the WorkCover investigator asked Mr Van Der Merwe shortly after the accident how Mr Gales got such an authorisation, he replied “[t]hrough me.” [19] The investigator repeated the question, but expressly limited it to the period after he (that is Mr Van Der Merwe) left RTS; Mr Van Der Merwe replied, “[t]hrough me, no difference.” [20] In his cross-examination, he said that when answering the first question the period he had in mind was “while I was an employee of RTS.” [21] He did not suggest such an explanation in relation to the latter question. [22]
19.    Ibid, Q178.
20.    Ibid, Q179.
21.    Tcpt, p 166(40).
22.    Tcpt, p 170(5).
These answers, given to counsel for the plaintiff, were followed by further cross-examination by counsel for RTS. This focused in part on a further question and answer given to the WorkCover inspector on 11 July 2011:

“Q. Can you explain who exercised financial control over the business activities of RTS at the time of this incident?
A85. Anna and myself.”

The cross-examination ran as follows: [23]

23. Tcpt, p 182(17).

“Q. And the fact is that all the major purchases had to go through you, correct?
A. Myself or Anna, yes.
Q. The reality was that they all went through [you?] didn’t they?
A. To a certain limit, yes.
Q. You wouldn’t expect Mr [Gales] to buy a forklift, correct?
A. Correct.
Q. You wouldn’t expect him, and he wasn’t authorised, to undertake a major renovation or a repair of a forklift, correct?
A. If it wasn’t through a supplier that we had a credit application with, no.
Q. The situation is that, as you’ve told Mr Andrews, all the financial and administrative management of Strategic and RTS was undertaken by you and your wife, correct?
A. That’s correct.
Q. And there was no particular differentiation between Strategic and RTS until this accident, correct, in financial terms?
A. Yes.
Q. Besides bank do you agree with me?
A. Yes, I agree.
Q. The administrative and management functions of Strategic and RTS were essentially run out of your home as a combined operation, correct?
A. Yes.
Q. What I mean sometimes people will be writing an invoice for RTS, sometimes they’d be doing an invoice for Strategic, but it was all coming out of the same administrative system, correct?
A. Yes.
Q. And Jessica Davis ran the accounts for both companies, correct?
A. Yes.
Q. And did she also run the salaries for both companies?
A. Once she got the timecards from Wayne [Gales] she processed them, yes.”

The cross-examination continued: [24]
24. Tcpt, pp 184(39).

“Q. He [Mr Gales] wasn’t authorised to sign cheques, correct?
A. Correct, yes.
Q. And he reported to you did he not?
A. Yes.
Q. So if he wanted to buy something he’d have to tell you that he bought it, is that right?
A. Yes.
Q. That’s because you were supervising him, correct?
A. On the accounts matters, yes.
Q. On the financial matters, yes?
A. Yes.”

It is apparent from the evidence set out above that financial control extended into a range of administrative activities.
Mr Van Der Merwe gave some further evidence in cross-examination by Mr Andrews for the plaintiff: [25]
25. Tcpt, pp 139(12).

“Q. As far as the accounts department, they were responsible, or the accounts people, were responsible for paying invoices is that right?
A. Yes.
Q. And in relation to RTS, would they also prepare invoices for RTS?
A. Yes.
Q. The accounts section at Strategic would prepare payroll statements for RTS?
A. Yes.
Q. They would pay the wages of people working at RTS?
A. Correct.
Q. They would pay the invoices that were sent to RTS?
A. Yes.
Q. What would happen is, Strategic would send – sorry, RTS would send an invoice to Strategic and then Strategic would pay it, is that right?
A. Yes.
Q. And it all happened within the one office?
A. Yes.
…
Q. You see the business of RTS, that is the administrative side of it, was all run from Strategic’s office, wasn’t it?
A. At that time yes.
Q. Immediately prior to the accident?
A. I believe so, yes.”

Mr Gales also gave evidence as to the exercise of control over RTS by officers of Strategic. Although Mr Gales did not give evidence, due to illness, a statement made by him to a WorkCover inspector on 1 June 2011 was in evidence, together with his affidavit sworn on 24 September 2015. The documents were not entirely consistent. In his affidavit, Mr Gales accepted sole responsibility for the operation of the Corrimal yard. He stated that neither Mr Van Der Merwe nor anyone else from Strategic “worked at or was in anyway responsible for or in control of the Corrimal yard.” [26]
26. Affidavit, Wayne Gales, sworn 24 September 2015, par 24.
However, in his statement to the WorkCover inspector Mr Gales had said that, prior to the accident, he was answerable to Luke Day who, he agreed, was not an employee of RTS but of Strategic. [27] He was then asked to explain how it came about that he was answerable to Mr Day, a person from Strategic’s management, and said, “that’s how I was told by Graham.” [28] He described Mr Day as his “direct supervisor” for work performed for RTS. [29]
27.    Wayne Gales’ Supervisor’s WorkCover statement, 1 June 2011, Q48-Q50.
28.    Ibid, Q51.
29.    Ibid, Q52.
He was then asked:

“Q56   Can you explain why Luke Day assumed the role as senior representative for RTS’s employees when Inspector’s Cooper & Duncan’s visited the Corrimal facility on 11 May 2011?
A56.   Because he was improving our work site.
Q57   Who instructed Luke Day to represent RTS that day?
A57.    I don’t know.”

Mr Gales further agreed that he was answerable to Mr Van Der Merwe for work undertaken by RTS and that he was required to comply with instructions or directions given to him by Mr Van Der Merwe. [30] He then explained that his main point of contact was Luke Day but if Mr Day was away Mr Van Der Merwe would step in. He agreed that Mr Van Der Merwe had little involvement in the day-to-day operations of RTS at its Corrimal yard and would visit the yard “maybe once every 2 months.” [31] In substance, Mr Gales took instructions from Mr Day as to the construction of specific formwork components and reported on how the work was going, generally verbally or via email. [32]
30.    Ibid, Q79, Q80.
31.    Ibid, Q81-Q83.
32.    Ibid, Q85-Q95.

(iv) occupational health and safety at the Corrimal yard

Issues of occupational health and safety were addressed in Mr Van Der Merwe’s WorkCover statement of 11 July 2011 at Q79-Q84, set out at [29] above. Mr Van Der Merwe agreed that RTS did not have any documented management system in place at the time of the accident, but stated that the system then in place to manage occupational health and safety was “supervision, inspections, communication and on the job training.” [33] The questions and answers continued:
33. Van Der Merwe statement, Q106.

“Q107   How did RTS monitor the effectiveness of those systems to ensure their OH&S responsibilities were being met?
A107   I would inspect the yard and I would communicate with Wayne on a regular basis.
Q108   What did your inspection of the yard involve?
A108.   Wayne Gales and myself would walk around the yard and visually inspect work that had been carried out and was being carried out ….
Q109   Did this happen after you left RTS?
A109.   Yes, however less frequently.
Q110   Did Wayne assume that responsibility directly after you left RTS?
A110.   He did.
Q111   Was Wayne Gales aware this was part of his responsibilities?
A111.   Yes.
Q112   Was this documented anywhere?
A112.   It may have, I am not sure.”

Mr Gales agreed that he reported to Mr Van Der Merwe with respect to occupational health and safety issues. [34] Mr Gales said that RTS did not have any occupational health and safety documentation in relation to the Corrimal site at the time of the accident, but that the system was what he had been told by Mr Van Der Merwe as to how particular work tasks should be undertaken and the associated risks or hazards. [35] He said he had been given directions and information as to how to remove or manage those hazards or risks. [36]
34.    Supervisor’s Statement, Q96-Q101.
35.    Supervisor’s Statement, Q115-Q123.
36.    Supervisor’s Statement, Q124-Q129.
This evidence was non-specific as to when the instruction was given, but it may properly be inferred that it occurred whilst Mr Van Der Merwe was managing director of both Strategic and RTS. However, it is clear that Mr Van Der Merwe’s role in that respect did not change when he ceased to be formally involved in the management of RTS. This is apparent from evidence given by Mr Van Der Merwe in an affidavit prepared for a WorkCover prosecution of RTS but tendered at the trial. He said that there were two contributing factors which led to the accident, namely that “timber soldiers” were not “stacked using gluts” and, secondly, the container not being level. [37] (The term “glut” in this content meant a wood or metal block or wedge.) His affidavit continued:

“28   I had identified a number of years prior to the incident that the stability of stacked LVLs is significantly increased through the use of gluts. By this I mean the insertion of timber spacers perpendicular to the length of the LVL. … This was the system that was in use at the site and had been used for a number of years. …
29   As a result of enquiries I made after the incident, I am aware that LVLs were put in that position without the use of gluts approximately 4 weeks prior to the incident by one of our longer term employees. Wayne Gales, our then Yard Manager, was aware of this but took no immediate action to correct it. I am unable to say categorically whether I was aware of this issue or not, although it is my belief that I was not aware as it would have been in my nature to take corrective action immediately. I had previously spoken with Wayne about the need to stack LVLs with gluts and provide him with a photograph [of] what I expected.
30   I was confident, as a result of previous discussions with Wayne, that this system would be followed and corrective action would be taken if necessary. My discussions had included times where I carried out yard inspections with him.
31   After I stepped back from my role as General Manager of RTS, I carried out several yard inspections. At my last yard inspection, whilst I did not observe any incorrectly stacked LVLs, I did observe that the yard needed housekeeping. I asked Wayne to get some extra labourers in to attend to this issue. Daniel, George and Christian were specifically employed to come in and deal with the housekeeping issue.
32   When I first arrived at the site after the incident, and was taken to the container where the incident occurred, I was angry and disappointed when I observed that the LVLs that had fallen had not been stacked with gluts as I knew that the whole incident could have been avoided if the system had been followed.”
37.    Affidavit, 21 November 2012, par 27.

Mr Van Der Merwe also stated: [38]

“After I left RTS, I had regular discussions with Wayne and performed site inspections of the Yard once every 6 to 8 weeks.”
38. Affidavit, 21 November 2012, par 41.

The inspection referred to in par 31 of the affidavit resulted in the employment of the plaintiff. It is probable that that inspection occurred in the first week of April 2011. The manager of the youth hostel at which the plaintiff was staying, Mr Keogh, told a WorkCover inspector that on 8 April 2011 “Graham from Strategic Formwork rang me in the afternoon and told me they needed two guys for two or three weeks, the guys needed to have a car or transport to get to the site.” [39] He said that the request was not answered because no one had transport.
39. Michael Keogh, WorkCover statement, 8 April 2011, Q29.
On 27 April Mr Keogh received a call “from Wayne about work for Strategic.” “Wayne”, who was Mr Gales, told Mr Keogh that he had “casual jobs in the yard for up to four guys for three weeks with a pick up available from Gymea train station”. It was this request to which the plaintiff and three other young men staying at the youth hostel responded. Both the dates and the content of the conversations were confirmed by pages from Mr Keogh’s diary, which were tendered with his WorkCover statement.

(d) other evidence

There was a range of objective material linking Strategic’s management with the RTS premises at Corrimal. This included signs and instructions over the name Strategic Formwork, the use of hi-vis shirts branded Strategic Formwork, the commonly used description of the yard as the “Strategic yard”, and the email address of the yard as “[email protected]”. All these were treated by the appellant as administrative arrangements which had survived the split into two companies, with no legal significance. [40] That may be so, but the fact that they continued for two years after RTS commenced business allows an inference that those involved in running the companies saw them as irrelevant. And, on the probabilities, that must be because they still accurately reflected the integrated nature of the business.
40. Van der Merwe, evidence in chief, Tcpt, 31/08/16, p 128(25)-(34).
Importantly, Strategic produced some 250 pages of emails dated between 8 March 2011 and 31 May 2011, most being instructions from Luke Day, who worked in Strategic’s office in Sutherland, to Mr Gales at Corrimal. Each was addressed to “Strategic – Yard” and involved a subject matter which was, in almost all cases, a reference for a particular contract with a building contractor. Various emails implied that Strategic was playing an active role in the operation at Corrimal. In his written submissions on the appeal, the plaintiff drew attention to the following emails, among others.
On 18 March 2011 Mr Day asked Mr Gales to take a tarp “to hide the gear in Nathan’s ute”. The utility was going to be parked at Jannali station. Nathan was identified as Nathan McDonald, described as “on-site manager for Strategic Formwork guys”. [41]
41. Supervisor’s WorkCover statement, Q58.
On 23 March 2011 Mr Gales emailed Mr Day saying that 39 striking pins were needed for a particular job and he only had 35. Mr Day responded that “[t]here should be 28 returning from Westfield – you will have to organise someone to go through the boxes.”
On Monday 4 April 2011 there was an email exchange commencing with Mr Day asking, “[a]re we able to load the truck tomorrow afternoon or Wednesday morning?” Mr Gales responded saying that he would be unable to get a particular piece of equipment done until Wednesday afternoon so that he could only load the truck on Thursday morning. Mr Day responded telling him that a particular employee would be at Corrimal on Tuesday and Wednesday, to which Mr Gales, “thank you”. As the name of the employee did not appear on a list of RTS employees identified in Mr Van Der Merwe’s affidavit as employed by RTS at the date of the accident, and as the employee was being provided by Mr Day, it can be inferred that he worked for Strategic.
On 7 April 2011 Mr Day emailed Mr Gales noting that:

“Mark will be back in the yard from Monday – however Sean is likely to be in Canberra for a little longer.
Could we try and get 2 extra backpackers so we can keep going with the stripping of the shutters?”

It is not entirely clear who Sean and Mark were, but at the time of the accident, or three weeks later, RTS had six permanent fulltime yard labourers, including a Shane and a Mark. Further, Mr Gales said that, at the time of the accident, there were RTS employees working on building sites where Strategic was providing formwork. [42] If Sean and Mark were not RTS employees, they must have been Strategic employees who were expected to be “back in the yard” at Corrimal. Mr Day’s suggestion that two backpackers be employed was made the day before Mr Van Der Merwe rang the youth hostel.
42. Supervisor’s WorkCover statement, Q389.
On 21 April 2011 Mr Day emailed Mr Gales asking, “Can you please stocktake this afternoon please??”
It is clear from this material that Mr Day not only gave regular instructions as to what equipment was required for what jobs and at what times, but also gave directions with respect to the operation of the Corrimal yard. It is also clear that Strategic employees worked at the yard from time-to-time and that RTS employees worked at Strategic’s building sites.
Further, on 16 March 2011 Mr Van Der Merwe sent an email to Mr Day at Strategic and to Mr Gales at Corrimal. The email attached a photograph of timber beams at a building site in a stack, apparently without gluts. In the course of cross-examination, Mr Van Der Merwe gave evidence that he had seen a truck from the RTS yard arrive at a site in Canberra where Strategic was working. He said that he “spoke to Luke Day to inform all the Strategic site guys that this is a hazard and I also spoke to Wayne about that; we don’t want timbers arriving to site without gluts.” [43]
43. Tcpt, 31/08/16, p 148(25).
The inference sought to be drawn by the appellant from this evidence was that Mr Van Der Merwe’s concern was focused on safety at a site where Strategic employees were working. However, as noted above, RTS employees also worked at Strategic sites; further, as the truck was loaded from the RTS site, it is an available inference that Mr Day was contacted because Mr Van Der Merwe understood his role in giving directions to Mr Gales. It is not necessary to resolve the conflicting inferences, which were not explored in cross-examination and not resolved by the trial judge.

(e) inferences as to control of Corrimal yard

The evidence established that, putting to one side the corporate structure, there was a single integrated business operation, which involved a number of elements, broadly characterised as follows:

Strategic would obtain a contract to do the formwork for service cores in high rise buildings;

Strategic employed draftsmen to design plans for the formwork;

the plans were transmitted to RTS at Corrimal for preparation of the necessary components;

yard labourers at Corrimal undertook the construction of the components in accordance with the designs and obtained the necessary materials and equipment for use on the building site;

RTS arranged for the materials and equipment to be transported to the building site;

employees from Strategic and RTS were involved in the onsite construction of the formwork;

after the concrete had been poured and the formwork removed, the reusable elements were transported back to the Corrimal yard.

It is also clear that the whole of the operation was directed by Mr Day, who was general manager of Strategic at the time of the accident. Although Mr Gales was the on-site manager of RTS at Corrimal, his responsibilities and the working arrangements at Corrimal, including safety matters, had been established by Mr Van Der Merwe, before he “stepped back” from his employment by RTS. On his own evidence, and on that of Mr Gales, Mr Van Der Merwe remained the person ultimately responsible for the operation at Corrimal. As he volunteered in his affidavit, if he had noticed that the LVL planks in the container had not been separated by gluts, he would have immediately taken steps to remedy the situation, which he had no doubt was the cause of the accident.
There remained, in theory, two possible inferences to be drawn in relation to Mr Van Der Merwe’s continuing responsibilities at RTS. One was that he was a shadow managing director of RTS, in his personal capacity; the alternative was that his responsibilities at RTS were undertaken for the purposes of the business operated by Strategic and therefore in his capacity as managing director of Strategic.
Such alternative possibilities do not exist in relation to Mr Day. There can be no doubt that, so far as his work involved control of operations at RTS, it was undertaken as general manager of Strategic. Further, from the perspective of Mr Gales at RTS, Mr Day was giving him instructions. When asked the basis of that understanding, he said that it was Mr Van Der Merwe who told him he was answerable to Luke Day. However, Mr Van Der Merwe could only have given such a direction in his capacity as managing director of Strategic. As explained above, there was a single integrated business operation of which Mr Van Der Merwe and his wife were the principals. There was no capacity in which Mr Van Der Merwe was involved in the business operations in May 2011, other than as managing Director of Strategic.
It follows that the conclusion of the trial judge that Strategic exercised control over the operations of RTS was correct. The remaining question is whether this exercise of control extended to the supervision of occupational health and safety. On the basis of the material set out at [30] and [40]-[43] above, there was express evidence to support the conclusion that it extended to such matters. As Mr Van Der Merwe conceded, his control extended to matters of occupational health and safety. It follows that both Strategic and RTS owed a duty of care to employees of either company working at the Corrimal yard, and probably elsewhere.
Although the conclusion conforms to that reached by the trial judge, the reasoning does not. In a critical passage in the reasoning of the trial judge, the “salient features” analysis set out by Allsop P in Caltex Refineries (Qld) Pty Ltd v Stavar [44] was adopted. However, the risk, highlighted in Stavar itself, [45] of treating the 17 listed salient features as a shopping list is illustrated in the present case. The trial judge rather mechanically applied them, starting with findings that it was foreseeable that an untrained casual employee would be injured by collapse of the beams, through to findings that there was no indeterminacy of liability, nor conflict with the structure and fabric of the common law, if a duty were imposed. Whether or not Strategic owed a duty of care to the plaintiff depended entirely upon its relationship with RTS; most of the salient features were entirely irrelevant to the relationship between RTS and Strategic. Only two “features” were directly material, namely a finding that Strategic had day-to-day control of the system of work at the yard and that Strategic assumed responsibility for the system of work. [46] The Stavar salient features were not directed to establishing the relationship between two legal entities, neither of which was the plaintiff to whom the alleged duty was owed.
44. (2009) 75 NSWLR 649; [2009] NSWCA 258 at [102]-[103].
45. Stavar at [172] and [241].
46. Hitchen at [128](4) and (7).

(2) Breach and apportionment

Although there was a specific ground of appeal challenging the finding that, assuming a duty of care, Strategic had been in breach of it, in both written and oral submissions the appellant dealt with this issue somewhat obliquely. In oral submissions, the nature of the alleged breach was said to inform submissions that there was no duty of care and as to the limited content of any duty. If duty were established, the nature of the alleged breach was also relied on as to the appropriate apportionment of liability.

(a) breach

The thrust of the appellant’s submissions in relation to breach was that this was not a system of work case, but one involving a casual act of negligence by an employee of RTS, namely the failure to use gluts when stacking the beams inside the container. Strategic submitted that (a) it did not know of that negligent conduct, (b) did not know what the plaintiff was going to do on May 2 and, therefore, (c) did not know of the specific risks which he faced in carrying out his tasks. [47] This submission cannot be accepted. One cannot start with the presumption that negligence falls into one of two categories, namely inadequate systems of work and casual acts of negligence. On the contrary, occupational health and safety depends upon establishing a system which will remove or reduce the likelihood or consequences of careless acts on the part of employees. Mr Van Der Merwe had no doubt that the cause of the collapse of the beams on the plaintiff was the failure to use gluts in stacking and that the use of gluts was a necessary safety precaution. (No expert evidence was called in this case, presumably because RTS admitted liability, but in any event Mr Van Der Merwe had relevant expertise in this respect.) Accordingly, a safe system of work would have required three basic elements, namely (a) strict instructions not to stack beams without the use of gluts, (b) arrangements for a responsible supervisor to inspect any stacks which were to be moved, prior to their removal, and (c) a system for ensuring that the necessary instructions were conveyed to the casual workforce.
47. CA Tcpt, 01/03/18, pp 43-44; see also appellant’s written submissions, 8 September 2017, pars 30-32.
When he “stepped back” from his employment with RTS, Mr Van Der Merwe left Mr Gales in charge of the yard. Mr Gales had experience as a panel beater and a bobcat driver; he had no qualifications in occupational health and safety. Mr Van Der Merwe knew that. [48] Mr Gales’ evidence in that regard appeared from his statement to the WorkCover investigator:
48. Tcpt, 31/08/16, pp 153-154.

“Q115   Did RTS have established an OH&S management system from the time they commenced operations in Corrimal?
A115.   No.
Q116   Prior to this incident who was responsible for managing Occupational Health & Safety for RTS at the Corrimal yard?
A116.   I was.
Q117   During your employment with the company did they provide you with any specific training in OH&S for that responsibility?
A117.   No.
Q118   Did you have any previous experience in undertaking OH&S responsibilities similar to those you had at RTS?
A118.   No.
Q119   Are you aware why the company’s did not have a documented OH&S management system for its Corrimal facility?
A119.   No.
Q120   Do you know if RTS had any documented OH&S Management system in place at the company prior to this incident?
A120.   No.
Q121   Was there any person in the company prior to this incident that had an overall responsibility for OH&S for RTS?
A121.   I don’t know.
Q122   Did Strategic Formwork as a company have an OH&S management system in place prior to this incident?
A122.   I don’t know.
Q123   Did Strategic Formwork have any person with overall responsibility for OH&S for the company prior to this incident?
A123.   I don’t know.
Q124   What OH&S documentation did RTS have established for the Corrimal site at the time of the incident?
A124.   None.
Q125   Did RTS have any other system or method of managing their OH&S at the Corrimal yard?
A125.   Verbally yes.
Q126   Can you explain what this verbal system was?
A126.   Graham at the beginning would tell me what work had to be done and how he expected it to be done in a safe way.
Q127   During his instructions did Graham identify the particular work tasks and explain the associated risks or hazards that might be present whilst performing that task?
A127.   Yes.
Q128   Did Graham give any direction or information on how to remove or manage those hazards or risks?
A128.   Yes.
Q129   How was that information provided to you by Graham conveyed to the employees performing the work?
A129.   Verbally.
Q130   Can you explain what this would involve?
A130.   We would just make sure how the job was done, that it was done correctly and safely.

In his affidavit in the District Court proceedings, Mr Van Der Merwe stated: [49]

“Based on the discussions with Wayne, and observations of him, I believed he fully understood the safe work practices for all tasks undertaken at the Yard and had full confidence in his abilities to train, instruct, direct and supervise employees of RTS to adhere to these safe work practices.”

He accepted that the plaintiff’s injuries “were sustained as a result of a breakdown in our systems of work”, and that, “had the gluts been used to stack the LVLs, and the container been level, that risk would not have occurred.” [50]

49. Affidavit, 21 November 2012, par 43.

50. Affidavit, par 79.

The trial judge concluded with respect to breach:[51]

“It is my view that a reasonable person, in the circumstances outlined above would have taken precautions. They were firstly, to ensure that the beams were on a level base; secondly, gluts had to be used to stabilise the beams; and finally, a proper inspection should have been carried out by an experienced person (not the inexperienced Mr Palmer and/or the plaintiff) to ensure these precautions had been complied with. Putting a worker in the position of the plaintiff where he was unloading unstable beams in an enclosed shipping container where those precautions were not taken posed a significant risk that was likely to result in serious harm. There was no additional burden placed on Strategic Formwork because, as Mr Van Der Merwe acknowledged, these steps were always meant to have taken place. I should add that there is no social utility in the activity of unloading beams from a shipping container that creates the risk of harm. In my view s 5B(2) of the Act is satisfied. Strategic Formwork owed the plaintiff a duty of care and that duty of care was breached. Section 5B of the Act is satisfied.”

There is no reason to doubt the correctness of this reasoning.

51. Hitchen at [142].

(b) apportionment

So far as apportionment was concerned, the trial judge was faced with wildly disparate submissions. Strategic argued that “its liability [was] a minor proportion compared to the liability of RTS Holdings.”[52] RTS submitted that Strategic Formwork should bear 75% of the responsibility, and the plaintiff submitted Strategic Formwork should bear 80%. [53]
52. Hitchen at [157].
53. Hitchen at [162] and [163].
The trial judge reasoned as follows:

“[167]   While Strategic Formwork has sought to place almost total burden upon RTS Holdings, it is my view that Strategic Formwork had the capacity to control what took place at the yard. Strategic Formwork maintained financial and occupational health and safety controls over the yard and gave directions in relation to the hiring of staff. Mr Day, as an employee of Strategic Formwork, gave daily directions to Mr Gale[s] in relation to the manner in which his work was performed to the extent that he was capable of giving directions to Mr Gale[s] which did not necessarily have any benefit to RTS Holdings. If Mr Day was not present, Mr Van Der Merwe gave these directions.
[168]   Mr Van Der Merwe, as an experienced manager and well qualified in the construction industry, knew or ought to have known that such inexperienced people required close supervision, training and instruction. Mr Gales, as yard manager, would not have necessarily appreciated this requirement.
…
[172]   However, so far as Strategic Formwork is concerned, Mr Gales was trained by Mr Van Der Merwe. It was a system created by Mr Van Der Merwe and he expected it to remain in place. Mr Van Der Merwe is an educated man who knew what needed to be done. He did not document a safe work method statement or system which he should have documented and made available to Mr Gales. Mr Van Der Merwe established the practice that he expected to be carried on when Mrs Van Der Merwe, the director of RTS Holdings, took over employing inexperienced backpackers. Further, Mr Van Der Merwe was aware that RTS Holdings in March 2011 had permitted beams to be transported from the yard without being stabilised by gluts.”

The judge apportioned 60% responsibility to Strategic.
All parties maintained their submissions in this Court, with Strategic submitting that its contribution “could not rise above 10%.” [54]
54. Appeal Tcpt, 1/03/18, p 44.
The exercise of apportionment is undertaken by reference to the entirely imprecise standard of what is just and equitable in the circumstances. There were two primary considerations in the present case. The first was that the plaintiff was injured whilst working for his employer, on his employer’s premises, as a result of conditions created by the employer. Normally that would require a high degree of culpability to be apportioned to the employer. On the other hand, ultimate control of the conditions of work, on the findings set out above, lay with Strategic. In particular, it was the managing director of Strategic who had set up the system of work and allowed it to continue, while still exercising control, after he ceased to be an employee of RTS. As the trial judge noted, he had the knowledge, experience and authority to establish safe working practices. He, in May 2011, as managing director of Strategic, allowed RTS to operate with no established system of safe practices. On that view, Strategic could not have a minimal share of culpability and, as the other parties contended, could properly be burdened with primary responsibility.

In In Re Grayan Building Services Ltd, [55] Hoffmann LJ said that:

“…the standards applied by the law in different contexts vary a great deal in precision and generally speaking, the vaguer the standard and the greater the number of factors which the court has to weigh up in deciding whether or not the standards have been met, the more reluctant an appellate court will be to interfere with the trial judge’s decision.”

That proposition fairly describes the present case.

55. [1995] Ch 241 at 254; quoted with approval by Lord Clarke in In the Matter of B (a child) (FC) [2013] 1 WLR 1911 at [137]; [2013] UKSC 33.

In these circumstances, the trial judge was entitled to apportion more than half the responsibilities to Strategic Formwork; the apportionment of 60% was within a reasonable range; it is not a finding with which this Court should interfere.

(3) Damages

In the event that it retained a level of liability, Strategic challenged the calculation of the award of damages in three respects, namely the assessments of non-economic loss, past economic loss and future economic loss.
The exercise of assessing damages in this case was not without difficulty. The plaintiff was a fit and healthy young man prior to the accident, with an aptitude for soccer and with tertiary qualifications. However, he was still seeing the world and had not settled into a clear career path at the time of the accident.
Furthermore, although he suffered an horrific accident, being crushed beneath falling beams, each weighing 17kg, with a resultant lengthy period in hospital, he has made a remarkable recovery which is a tribute to his resilience. What was first expected to be a case of incomplete paraplegia now no longer seems, in colloquial terms, to be properly so described. He is able to walk, but not undertake activities involving kneeling or squatting; he can (and is required to) exercise regularly at the gym, but he can no longer play football or other contact sports; he tires quickly playing golf. His left leg is at risk of atrophy and his left knee is liable to lock. Although he has completed further tertiary qualifications, his career opportunities are more limited than they were and there is an expectation that he may be required to abandon fulltime work and possibly eventually part-time work from the age of 50.

(a) non-economic loss

As with apportionment, the criteria relevant in assessing damages for non-economic loss are imprecise and multifactorial. In the present case, an extremely serious initial injury, involving very serious immediate pain and suffering, stabilised after some months as a moderately serious disability. That the plaintiff could still undertake activities, including a full range of intellectual activities and some, albeit greatly reduced, physical activity limited the overall severity of the injury. On the other hand, there are undoubtedly ongoing disabilities of a significant kind, together with an expectation of increasing disabilities in later years. His working life will be cut short.
The trial judge assessed his circumstances as 70% of a most extreme case, for the purposes of s 16 of the Civil Liability Act 2002 (NSW).
Given his recovery and obvious determination to make the best of his reduced circumstances, it might be thought that the figure adopted by the trial judge was high. However, no error of principle has been identified in the reasoning by which that conclusion was reached, nor is it suggested that material circumstances were disregarded. It is not possible to say the figure was so disproportionate to the underlying circumstances as to reveal error. It is not appropriate for this Court to form a view as to what figure it might have adopted; it is sufficient to say that in the absence of any specific error, the figure adopted by the trial judge was open to her. This challenge must be rejected.

(b) past economic-loss

There was undoubtedly economic loss from the date of the accident (2 May 2011) to the date of judgment in February 2017, a period of approximately 5.5 years. The judge divided that time into a number of separate periods, having regard to the circumstances of the plaintiff during each period. The total amount allowed was $120,223.62. [56]
56. The figure given by the trial judge at [308] was arithmetically incorrect.
To that figure, the judge added an amount of $34,000 by way of compensation for tax on the worker’s compensation payments, although the judgment made no reference to the basis of that calculation, no doubt because it was agreed. Where the payments were made or taxed is not known; the allowance was not challenged.
She also included an amount of $13,244.60 for superannuation on past earnings. The basis for that payment appears to have been the fallacy raised by Strategic in relation to the calculation of future economic loss, namely that, although the plaintiff had no relevant intention to work in Australia after his backpacking holiday, the calculations were made as if he were an Australian worker. The evidence did not support the proposition that the UK government paid a superannuation component at the rate of 11% of net earnings. Rather the evidence indicated that the UK government made a payment equivalent to the Australian Superannuation Guarantee payment at the rate of 0.8%. Accordingly, the allowance for past superannuation should have been, in round terms, $1,000.
The amount for past economic loss also included a lump sum of $15,000 for payment for football matches over a period which appears to have included in part a date in the future. No point was taken in that respect.
The total amount allowed by the trial judge was $182,468.22. Reduced by $12,244, the balance is, as a round figure, $170,224.

(c) future economic loss

The judge divided the calculation of future economic loss into two periods. The first period ran from the present day (the plaintiff being 30 years of age) until he turned 50, being a period of 20 years. She did so on the basis that, “[w]hile he is still able to work he is limited in the physical work he can do while he is still able to work on a fulltime basis until 50 years.”[57]
57. Hitchen at [320].
Pursuant to s 13(1) of the Civil Liability Act, the judge was required to articulate her assumptions based on the plaintiff’s “most likely future circumstances but for the injury.” (This is the understood meaning of s 13(1), the syntax of which renders it obscure.) The relevant assumptions were explained in the following passage:[58]

“I make the assumptions that due to the injuries he suffered as a result of the accident he is restricted in what he can do. The neurologists agree that the plaintiff should not work with little children where he is required to squat, [kneel] and sit on low chairs. He should not work with children with behavioural disorders nor should he undertake any active physical education such as demonstrating exercises. The neurologists agree that he would be able to work in sports psychology or administration and he would need to choose work which was consistent with his disability. The plaintiff should not participate in physically demanding activities which include running and it is agreed that he would need to be more selective in his job choice. However, he will not be able to work very long days and will need to probably stick to an average 40 hour week.”
58. Hitchen at [321].

The appellant did not take issue with those assumptions, but submitted that the actual calculation of loss was undertaken on the basis of a 50% loss of earning capacity.

(i) present to age 50

At the time of the trial, the plaintiff was working part-time (30 hours per week) for the National Health Service, earning £245, which, at a conversion rate of $1.72 to the pound, the trial judge assessed at $421 per week. [59] Although the arithmetic is not made explicit, this amount appears to have been translated into the figure of £327 for a 40 hour week, or $562.
59. Hitchen at [306].
In making her calculations of loss, the trial judge first fixed the plaintiff’s earning capacity, but for the injury:[60]

“The best way I can assess the plaintiff’s loss of income is by taking the average wage in Australia of $1,000 net per week as what he would have earned but for his accident as a starting point. Within a few years the plaintiff would be earning at least $1,200 net per week.”
60. Hitchen at [323].

The appellant submitted that there was no justification for this calculation. However, the basis may be found in the submissions at trial. The plaintiff relied on evidence showing that in 2016 the “mean” annual income in the UK was £37,123, which was approximately $1,228 gross per week. [61] That figure, it was submitted, was roughly equal to average weekly net earnings of $1,000 in Australia. The plaintiff did not make any submission in favour of a 20% premium being added to the average net weekly wage, but the trial judge was not limited to an average wage.
61. Plaintiff’s written submissions, 2 September 2016, par 67.
Starting with the net weekly wage of $1,200, the trial judge then subtracted the wage earned by the plaintiff as a casual labourer with RTS, which was $692 net per week as his residual capacity. It is difficult to see what relevance that would have had to residual capacity post-injury. In fact it appears to have been adopted by mistake, the judge stating:[62]

“… it is my view as an average the plaintiff would have earned $1,200 net per week less what he would be earning at NHS on a full time basis, namely $692 net until the plaintiff reaches 50 years of age.”
62. Hitchen at [323].

It is apparent that the judge intended to allow a residual capacity calculated by reference to the NHS salary, which was $562. [63] However, the plaintiff noted that his income with the Impellam Group in the UK, for which he worked in 2014, was equivalent to a net weekly income of $675, being almost 20% higher than his income with the NHS. If that figure were adopted, the loss was $1200 – $675 = $525; that figure is higher than the $508 used by the trial judge. Applying that figure would result in an award of $297,381.
63. See at [89] above.
The plaintiff also submitted that his qualifications, pre-accident, might have allowed him to obtain employment as a secondary school teacher or as a physiotherapist. The evidence indicated the range for a secondary school teacher to be £26,476–£46,264 gross per annum. Taking a figure roughly in the middle of that range might give a gross weekly figure of $1308 and a net weekly figure in Australian currency of about $1,050, depending on the tax rate applied. However, the Masters in Sports and Exercise Psychology, in fact obtained post-accident, should enable him to obtain a job as a sports psychologist. A range for a sports psychologist, on the evidence, was between £45,000 and £53,000. On that basis, and adopting a similar calculation, the plaintiff might be expected to earn approximately $1,300 net per week. That approach suggests no loss of earning capacity.
At trial, the plaintiff did not condescend to any calculation as to the basis on which economic loss should be assessed, merely suggesting a lump sum benefit of between $400,000 and $500,000. Strategic said that no loss had been demonstrated. RTS submitted, though for no clear reason, that an amount of $300 per week should be allowed until the plaintiff turned 55. If that allowance were made until the plaintiff turned 50, the result would be an award of approximately $170,000.
Some allowance should be made for reduced earnings in the first 20 years, on account of the plaintiff’s disability, but the extent of the future loss is highly speculative. An appropriate approach when assessing the future effects of an injury or likely degenerative changes was identified in Malec v JC Hutton Pty Ltd:[64]

“The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high … or very low …. But unless the chance is so low as to be regarded as speculative … the court will take that chance into account in assessing the damages. … The adjustment may increase or decrease the amount of damages otherwise to be awarded.”
64. (1990) 169 CLR 638 at 643 (Deane, Gaudron and McHugh JJ); [1990] HCA 20.

It is necessary to make some allowance for the significant possibility that the plaintiff will suffer no economic loss at all with respect to earning capacity over the next 20 years. It is quite possible that he will find equally remunerative employment, but employment which will provide less job satisfaction. However, that element is catered for by the award of non-economic loss. The figure proposed by RTS, giving an amount of $170,000 to age 50 should be accepted.

(ii) age 50 to retirement age

From the age of 50, there were varying approaches suggested. As already noted, the plaintiff did not seek to divide the periods of future loss on any particular basis or make any particular calculation. The judge’s finding that he was likely to retire at around 55 years of age was based on the unchallenged medical evidence, assessed on the balance of probabilities. (That assessment of future events was not strictly correct.) The trial judge adopted a retirement age, but for the accident, of 67 years, which is in keeping with UK practice.
The judge assessed a loss of earning capacity from 50 years of age at $212,622.84. That calculation was based on the proposition that the plaintiff would work half time from 50 to 55 years of age and would retire at 55, thereby requiring an allowance of the full net weekly wage ($1,200) for the 12 years from 55 to 67. The deferred payment calculations appear to have been undertaken by the parties.
There was, understandably, considerable uncertainty in the medical evidence as to what might happen in the future. The orthopaedic physicians considered that the plaintiff “should be able to continue in employment until the normally expected age of retirement.” [65] The rehabilitation physicians had a more pessimistic view, expecting him to diminish his activities beyond 55 (Professor Jones) or retire at the age 50 (Dr Buckley). [66] The neurologists were agreed that the plaintiff would need to retire early. They anticipated accelerated spinal degenerative changes over the years so that he would need to retire from fulltime work “between five and 15 years earlier than the normal retiring age of 65.” [67] They also said:

“We agreed that it will be likely Mr Hitchen will find it necessary to decrease his hours of work from the age of 50 years onward either full retirement or part time work. This would, of course, depend upon his job. If he was in a vocation which required some physical activity, even earlier retirement may be necessary.”
65.    Orthopaedic physicians’, joint conclave report, par 24.
66.    Rehabilitation physicians’, joint conclave report, par 24.
67.    Neurology, neurosurgery, spinal cord injury conclave report, par 24.

The Civil Liability Act, s 13, is prescriptive about how future economic loss should be calculated. It requires the court to make assumptions as to the plaintiff’s “most likely future circumstances but for the injury”, and then to adjust the award of damages calculated on the basis of the assumptions “by reference to the percentage possibility that the events might have occurred but for the injury.” That calculation was undertaken by an adjustment of 15%, the conventional figure for vicissitudes.
In the instructions for the conclave reports, the doctors were invited to speculate as to likely future incapacity “on the balance of probabilities”. No doubt they did so, although their answers were not expressed in those terms.
To assess damages according to a sliding scale of possibilities is not an easy exercise. However, the judge assumed that on attaining age 50 the plaintiff immediately would fall to half-time employment before retiring at age 55. There was a sound case for allowing for the chance of a different outcome, for example, that he may be able to keep working full-time after turning 50, or might have to cease work entirely either before or after 55. However, no party complained about this aspect of the calculations or suggested an alternative approach.
There was ample evidence to support the approach adopted by the trial judge as to loss of income from 50 years of age; there is no cause to interfere with the figure of $212,623 (after rounding), as a base line. Whether some adjustment should be made against the possibilities of earlier or later retirement was not the subject of submissions and the possibilities may well cancel each other out.
On the same basis as that noted at [83] above, there was a problem with the allowance for future superannuation, assessed at $66,373. The figure constituted 13.5% of the total of the two amounts of future economic loss. The error was, again, to apply an Australian calculation to British earnings. As already noted, the plaintiff did not specifically seek such a sum in his submissions at trial. The appellant submitted at trial that there was “no evidence that the plaintiff would receive the benefit of employer contributions to superannuation in the UK and accordingly no allowance should be made”, [68] although in its schedule of damages it calculated an amount at 3%, presumably on the basis that there was evidence that the UK scheme would provide for such a benefit in the future.
68. Strategic’s written submissions, 1/01/16, par 31.
Finally, after setting out the basis for her calculations from the age of 50, the judge stated that “[a] future allowance of $50,000 should be made for periods of unemployment and additional sick leave.”[69] It must have been intended that that amount should be included in the calculation of future economic loss for the period whilst the plaintiff was working full-time. However, no such amount was included in the schedules of damages prepared by the parties.
69. Hitchen at [328].
Accepting the approach proposed by the trial judge at [328], and omitting the $50,000 cushion and the amount of future superannuation, the appellant identified the appropriate sum as $196,601. Adding an additional amount on account of future superannuation, calculated at 3%, as proposed by Strategic in its schedule at trial, it is appropriate to treat this as, in round terms, $200,000.
Accordingly, the figure for future economic loss is $370,000.

(d) conclusions as to damages

Apart from past and future economic loss, the damages awarded by the trial judge against Strategic total $932,133. Allowing past economic loss in an amount of $170,000 and future economic loss in an amount of $370,000, the amount allowed for economic loss (past and future) is $540,000. Taking that figure with the other amounts awarded at trial gives a total of $1,472,133. That involves a reduction of almost exactly $200,000 from the calculation undertaken by the trial judge.

(e) worker’s compensation adjustment

There remains a calculation under s 151Z of the Workers Compensation Act. It will be recalled that the judgment against RTS, based on an allowance for economic loss alone, was $724,989. RTS did not appeal from that judgment. Accordingly, the s 151Z calculation will not achieve the result which would have been required if economic loss had been assessed on the same basis with respect to both defendants.
The outcome appears anomalous but is a result of the forensic decisions made by the parties in the course of the litigation. Perhaps ironically, the result disfavours both Strategic and RTS. RTS remains liable to pay the plaintiff some $725,000 for economic loss. For Strategic, the difference between the 40% of its total liability (which it would, absent the statutory scheme, have been entitled to recover from RTS) and the 40% of RTS’ liability (which it is able to recover under the statutory scheme) is less than it would have been had RTS appealed. Because the difference will come off the total amount payable by Strategic to the plaintiff, that reduction will be less than it might otherwise have been.

Carrying out that calculation, 40% of the reduced liability of the appellant is $588,853; 40% of the liability of RTS is $289,995. The difference, to be deducted under s 151Z from the appellant’s liability, is $298,858. The effect of the deduction is to leave the plaintiff with a judgment against Strategic in the amount of $1,173,275.
The result, from the point of view of the plaintiff, is that, although he has lost an amount of $200,000 of the damages assessed by the trial judge, his judgment against Strategic is reduced by only $126,444, or a little under 10% of the original judgment. That consequence will be relevant when considering appropriate costs orders.

Costs

It is not in dispute that, as between Strategic and the plaintiff, the costs of the appeal and cross-appeal must be determined in accordance with s 98 of the Civil Procedure Act 2005 (NSW) and Pt 42 of the Civil Procedure Rules 2005 (NSW). Costs should follow the event.
Strategic sought to escape liability to the plaintiff. It has failed in that regard. It also sought to challenge three aspects of the award of damages. It has succeeded in respect of two items, but not the third. The reduction in damages payable to the plaintiff is less than 10% of the judgment. The plaintiff’s cross-appeal also challenged the apportionment of culpability. He failed, but it cannot be said that the cross-appeal increased the costs of the proceedings: the same issue arose on the appeal.
In any event, the plaintiff cannot recover his costs solely relating to the cross-appeal. As between Strategic and the plaintiff, Strategic should pay 90% of the plaintiff’s costs of the appeal.
RTS sought costs against Strategic in the event that Strategic’s appeal failed. RTS was joined as a respondent because, if Strategic succeeded in avoiding liability, the judgment against it on RTS’ cross-claim in the sum of $200,472 would be set aside. It did not succeed in avoiding liability. Nor did Strategic seek an order varying the amount, and hence the judgment on the cross-claim must stand.
As to costs between Strategic and RTS, there is a question as to whether those costs are governed by general principles, or by the Workers Compensation Regulation 2016 (NSW). The operation of the Regulation derives from s 346 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (“Workplace Injury Act”), pursuant to which regulations may be made “in or in relation to a claim for work injury damages”. To the extent that the regulations prescribe a basis for awarding costs which is inconsistent with the rules of court, the regulations prevail. [70] The primary rule, now contained in reg 96, [71] is that the parties to court proceedings “for” work injury damages are to bear their own costs. That rule does not apply to costs payable in relation to proceedings that are “ancillary to” proceedings on a claim for work injury damages. [72] It is not in doubt that the rule applies in respect of an appeal from a judgment for work injury damages, but does not apply to costs with respect to a claim not covered by the Workers Compensation Act. [73]
70. Workplace Injury Act, s 346(4).
71. Whether the 2016 Regulation or its predecessor is applicable in relation to proceedings commenced before the commencement of the Regulation is of no practical consequence as reg 104 of the Workers Compensation Regulation 2010 (NSW) was in identical terms to the present reg 96: Toll Pty Ltd v Harradine (No 2) [2017] NSWCA 75 at [9]. In any event, the proceeding in this Court was commenced after 1 September 2016 and it would seem that the 2016 Regulation is the relevant Regulation.
72. Reg 98.
73. Toll at [15]-[19], although the reasoning appeared to turn on the language of s 346(1), rather than the language of reg 96.
The proceedings in the present case were not “for” work injury damages. That claim had been determined by the trial judge and there was no appeal in relation to that aspect of her judgment. There was a claim for contribution as between RTS and Strategic, but that was not a claim “for” work injury damages, within the terms of reg 96. Whether it was a claim for costs payable “in relation to” a claim for work injury damages, within s 346(1), is not a relevant question; the regulation has a more limited operation.
The question of apportionment between Strategic and RTS was in issue in the present proceedings, but only because it affected the payment to be made by Strategic. As with contribution, the relevant apportionment could not affect the judgment as between the plaintiff and RTS. Accordingly, the Regulation has no operation.
The only basis on which Strategic could resist a costs order in favour of RTS was if RTS and the plaintiff were appearing with separate representation, when in the same interest. In the exercise of the discretion to award costs against an unsuccessful appellant, the court will seek to avoid an order which is unnecessarily oppressive. Oppression may arise where there are multiple respondents who, although having the same interest in the proceedings, employ separate representation and therefore seek separate costs orders against the unsuccessful appellant. On the other hand, where multiple respondents have been joined by the appellant, because it seeks separate orders against each, it may be oppressive to the respondents to require them to share a single order for costs.
There are two circumstances in which the court has not uncommonly declined to order more than one set of costs against an appellant. One is where there is a challenge to a will which is resisted by the executors. A beneficiary will often need to establish a realistic separate interest, possibly in conflict with the executors, to obtain the costs of separate representation. [74] A second situation is where a respondent has been given notice by the appellant (or by the court [75] ) that, in the view of the appellant, separate representation is unnecessary and any application for more than one set of costs would be resisted. [76]
74. See, eg, Harbin v Masterman [1896] 1 Ch 351 at 364 (Lindley LJ, AL Smith and Rigby LJJ agreeing), cited in Milillo v Konnecke [2009] NSWCA 109; (2009) 2 ASTLR 235 at [116] (Ipp JA, Macfarlan JA and Sackville AJA agreeing).
75. Milillo at [110]-[114].
76. Uniform Civil Procedure Rules 2005 (NSW), r 51.4(5)-(7); Credit Lyonnais Australia Ltd v Darling (1991) 5 ACSR 703 at 710 (Kirby P); Taylor v Owners – Strata Plan No 11564 (No 2) [2013] NSWCA 153 at [8], [10], [14].
This was not a case in which the interests of RTS were derivative from those of the plaintiff; nor was it a case in which, on the evidence, any notice had been given to the respondents that objection would be taken to payment of more than one set of costs in the event that Strategic was unsuccessful.
So far as RTS was concerned, its only interest was in maintaining the liability of Strategic, absent which its judgment for contribution from Strategic would be set aside. Although its forensic purpose in the proceedings was identical to that of the plaintiff, its legal interest was not identical. Strategic joined RTS in the proceedings because it was challenging an order in favour of RTS. It should pay RTS’ costs in this Court.
The Court should make the following orders:

Set aside order 1 made in the Common Law Division on 30 May 2017 giving judgment for the plaintiff against Strategic Formwork Pty Ltd in the sum of $1,299,773 and in its place give judgment for the plaintiff against Strategic Formwork Pty Ltd in the sum of $1,173,275.

Otherwise dismiss the appeal by Strategic Formwork Pty Ltd.

Dismiss the cross-appeal by Daniel Hitchen with no order as to costs.

Order that Strategic Formwork Pty Ltd pay –

Daniel Hitchen as to 90% of his costs of the appeal;

RTS Holdings Pty Ltd its costs of the appeal.

The Court NOTES that the order staying the judgment in favour of Daniel Hitchen pending the outcome of the appeal is now spent.

SIMPSON JA: I have had the advantage of reading in draft the judgment of Basten JA. What follows assumes a familiarity with that judgment. I will adopt the terminology used by his Honour.
I agree with Basten JA’s conclusions with respect to the duty of care owed by Strategic to the plaintiff, breach of that duty and the quantification of damages. The sole area in which I depart from his Honour concerns the apportionment of liability between Strategic and RTS.
In his notice of cross-appeal the plaintiff asserted error in the apportionment of 60 per cent liability to Strategic and 40 per cent to RTS. The apportionment should, he asserted, have weighed more substantially in favour of RTS. By way of contention, he referred to email communications between Strategic and RTS in which Strategic consistently directed and instructed RTS with respect to the operation of its business.
He referred also to evidence that the sole director of RTS, Ms Van Der Merwe, played no active role in the administration of RTS’s business, and deferred to her husband in matters associated with the business.
In my opinion, the evidence, outlined in detail in the judgment of Basten JA, does establish that it was Mr Van Der Merwe who effectively controlled both Strategic and RTS in all these aspects. It is not to the point that he did so through employees, such as Mr Gales, the Manager of RTS. Mr Gales was answerable, not only to Mr Van Der Merwe, but also to Mr Luke Day, the General Manager of Strategic. Mr Gales appears to have had little decision making authority, even with respect to financial expenditure. It was Strategic, through Mr Van Der Merwe and Mr Day, who maintained tight control of RTS and its operation.
Once it is accepted that the involvement of Mr Van Der Merwe in the administration of RTS was undertaken, not in his personal capacity, but that of Director of Strategic, it becomes plain that it was Strategic which was in virtually total control of the activities of RTS (although it, of course, delegated some duties to employees such as Mr Day and Mr Gales). For the reasons given by Basten JA in [59] and [60] of his judgment, I accept that it was in his capacity as Director of Strategic that Mr Van Der Merwe undertook those functions. The creation of RTS was no more than a device to protect Strategic against potential financial disaster resulting from the failure of other businesses.
In reality, it was Strategic who had all the decision making power, and who determined, for example, who was to be employed by RTS, and had responsibility for occupational health and safety issues.
In her discussion on apportionment, the primary judge described the relative culpabilities of Strategic and RTS as:

“… overwhelmingly against Strategic Formwork because it designed the system, it controlled the operatives in the system and it inspected the yard where the system was deployed but failed to detect or act upon the risk of harm to which the plaintiff was exposed.” ([158])

That is, in my view, an accurate summation of the evidence. The difficulty, to my mind, is that the apportionment of 60 per cent of liability to Strategic and 40 per cent to RTS does not reflect the finding that the culpability was “overwhelmingly against Strategic”.
At trial, RTS contended that the apportionment should be 75 per cent to Strategic and 25 per cent to RTS. The plaintiff contended for an 80 per cent/20 per cent division. On appeal, in written submissions, the plaintiff reduced his contention to 75 per cent/25 per cent. In my opinion that appropriately recognises the relative roles of the two companies in the management of occupational health and safety matters at RTS. In those matters, Mr Gales should properly be seen as acting on the instructions of Strategic.
I would therefore set aside the primary judge’s apportionment of 60 per cent to Strategic and 40 per cent to RTS, and substitute an apportionment of 75 per cent to Strategic and 25 per cent to RTS. The consequence is that I would uphold the cross-appeal to that extent. Were my view to prevail, it would be necessary for the parties to undertake the necessary calculations. However, since this is minority opinion, that exercise is unnecessary.
SACKVILLE AJA: I agree with Basten JA.

**********

Endnotes

Decision last updated: 23 March 2018

Medium Neutral Citation:	Strategic Formwork Pty Ltd v Hitchen [2018] NSWCA 54
Hearing dates:	1 and 2 March, 2018
Decision date:	23 March 2018
Before:	Basten JA at [1]; Simpson JA at [126]; Sackville AJA at [137]
Decision:	(1) Set aside order 1 made in the Common Law Division on 30 May 2017 giving judgment for the plaintiff against Strategic Formwork Pty Ltd in the sum of $1,299,773 and in its place give judgment for the plaintiff against Strategic Formwork Pty Ltd in the sum of $1,173,275. (2) Otherwise dismiss the appeal by Strategic Formwork Pty Ltd. (3) Dismiss the cross-appeal by Daniel Hitchen with no order as to costs. (4) Order that Strategic Formwork Pty Ltd pay – (a) Daniel Hitchen as to 90% of his costs of the appeal; (b) RTS Holdings Pty Ltd its costs of the appeal. The Court NOTES that the order staying the judgment in favour of Daniel Hitchen pending the outcome of the appeal is now spent.
Catchwords:	NEGLIGENCE – duty of care – novel categories of duty – companies A and B run integrated business operation – A exercises control over operations at B’s premises – whether A owes duty of care to employee of B working at B’s premises regarding occupational health and safety – discussion of Caltex Refineries v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 NEGLIGENCE - apportionment of responsibility – whether trial judge’s findings on apportionment should be modified NEGLIGENCE – damages – award for non-economic loss – whether trial judge’s assessment should be modified – economic loss – loss of earning capacity – plaintiff resident in UK – reliance on level of earnings in UK – assessment of superannuation loss under UK law COSTS – party/party – costs follow the event – application of the rule and discretion – costs where appeal allowed in part COSTS – party/party – costs follow the event – multiple successful respondents – whether respondents in the same interest – whether multiple sets of costs should be awarded
Legislation Cited:	Civil Liability Act 2002 (NSW).ss 13, 16 Civil Procedure Act 2005 (NSW), s 98 Civil Procedure Rules 2005 (NSW), Pt 42 Uniform Civil Procedure Rules 2005 (NSW), r 51.4 Workers Compensation Act 1987 (NSW), s 151Z Workers Compensation Regulation 2010 (NSW), reg 104 Workers Compensation Regulation 2016 (NSW), reg 96, 98 Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 346
Cases Cited:	Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 Credit Lyonnais v Darling (1991) 5 ACSR 703 CSR Ltd v Wren (1997) 44 NSWLR 463 Harbin v Masterman [1896] 1 Ch 351 In Re Grayan Building Services Ltd [1995] Ch 241 In the Matter of B (a child) (FC) [2013] 1 WLR 1911; [2013] UKSC 33 Marlec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20 Milillo v Konnecke [2009] NSWCA 109; (2009) 2 ASTLR 235 Taylor v Owners – Strata Plan No 11564 (No 2) [2013] NSWCA 153 TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47 Toll Pty Ltd v Harradine (No 2) [2017] NSWCA 75
Category:	Principal judgment
Parties:	Strategic Formwork Pty Ltd (Appellant/First Cross-Respondent) Daniel Hitchen (First Respondent/Cross-Appellant) RTS Holdings Pty Ltd (Second Respondent/Second Cross-Respondent)
Representation:	Counsel: Mr G M Watson SC/Mr J Callaway (Strategic Formwork Pty Ltd) Mr B Walker SC/Mr K Andrews (Hitchen) Mr G J Parker SC (RTS Holdings Pty Ltd) Solicitors: Colin Biggers & Paisley (Appellant) Law Advice Compensation (First Respondent) Moray & Agnew (Second Respondent)
File Number(s):	2017/78359
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Common Law Division Citation: [2017] NSWSC 75 Date of Decision: 17 February 2017 Before: Harrison AsJ File Number(s): 2014/129961; 2015/267220