Australian Winch and Haulage Company Pty Ltd v Collins - [2013] NSWCA 327

Court of Appeal

New South Wales

Case Title: Australian Winch and Haulage Company Pty Ltd v Collins

Medium Neutral Citation: [2013] NSWCA 327

Hearing Date(s): 11, 12 July 2013

Decision Date: 09 October 2013

Before: Emmett JA [1];
Leeming JA [22];
Sackville AJA [23].

Decision:
1. Allow the appeal on the question of indemnity costs, but otherwise dismiss the appeal.

2. Extend the time for the cross-appellant ("Ports") to file a notice of cross-appeal in the form annexed to the affidavit of Kerry Anne Smith, sworn on 20 February 2013, until seven days from the date of this order, subject to Ports' undertaking to pay Mr Collins' costs of the cross-appeal, to the extent the Court thinks appropriate in view of the disposition of the cross-appeal.

3. Direct Ports within seven days to file both its notice of cross-appeal and an undertaking in the terms referred to in Order 2.

4. Subject to compliance with Order 3, allow the cross-appeal in part.

5. Set aside Orders 3, 4, 6 and 8 made by the primary Judge on 1 November 2012.

6. In lieu of Orders 3, 4, 6 and 8 referred to in Order 5, make the following Orders:

      3. There be no order as to costs between the Plaintiff ("Mr Collins") and Ports.

      4. Order the Second Defendant ("AWH") to pay Mr Collins' costs, as agreed or assessed, on the ordinary basis.

      6. Order that AWH pay Ports' costs of Ports' cross-claim against AWH.

      8. Order that Ports pay AWH's costs of AWH's cross-claim against Ports.

7. In accordance with Ports' undertaking referred to in Order 2, direct Ports to pay 75 per cent of Mr Collins' costs of the cross-appeal.

8. Order AWH to pay 90 per cent of Mr Collins' costs of the appeal.

9. As between Ports and AWH, there be no order as to costs on the appeal and cross-appeal, to the intent that each party bear its own costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords: EVIDENCE - faulty shackle responsible for failure of a gangway - plaintiff injured as a result - installer of shackle obtained it from a supplier - whether plaintiff or installer bears the burden of proving that the correct shackle was or was not ordered - whether plaintiff discharged the burden of proving that the installer had not ordered the correct shackle

NEGLIGENCE - causation - whether employer's failure to institute a system of inspection was a cause of the plaintiff's injuries - apportionment between defendants - whether primary Judge erred in apportioning responsibility between the installer of the shackle and the employer

WORK ACCIDENT - claim against employer - whether plaintiff precluded from claiming the cost of funds management because of a failure to include the claim in an amended pre-filing statement - s 318(2) of the Workplace Injury Management and Workers Compensation Act 1998 ("WIM Act") - whether plaintiff precluded by s 151M(4) of the Workers Compensation Act 1987 from claiming pre-judgment interest

COSTS - whether plaintiff was entitled to an order for costs against the employer - s 346(3) of the WIM Act

Legislation Cited: Civil Liability Act 2002, s 5B
Civil Procedure Act 2005, ss 56, 58, 100
Law Reform (Miscellaneous Provisions) Act 1946, s 5(2)
Workers Compensation Act 1987, ss 151G, 151M, 346
Workplace Injury Management and Workers Compensation Act 1998, ss 250, 311, 315, 318, 346

Construction Safety Regulations 1950, reg 73
Uniform Civil Procedure Rules, rr 14.14, 15.12, 20.26, 42.1, 51.17
Workers Compensation Regulation 2010, regs 104-109

Cases Cited: Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Ltd [2009] NSWCA 381
Australian Winch & Haulage Company Pty Ltd v Collins [2013] NSWCA 232
Blatch v Archer (1774) 1 Cowp 63; 98 ER 969
Corbett v Toll Stevedoring Pty Ltd [2007] NSWSC 749
Currie v Dempsey (1967) 69 SR (NSW) 116
Estate of the Late M T Mutton by its Executors trading as Mutton Bros v Howard Haulage Pty Ltd [2007] NSWCA 340
Gett v Tabet [2009] NSWCA 76; 254 ALR 504
James Hardie and Company Pty Ltd v Wyong Shire Council [2000] NSWCA 107; 48 NSWLR 679
Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; 59 ALR 529
Purkess v Crittenden (1965) 114 CLR 164
Whitney v Dream Developments Pty Ltd [2013] NSWCA 188

Texts Cited: Cross on Evidence (9th Aust Ed, 2013)

Category: Principal judgment

Parties: Australian Winch & Haulage Company Pty Ltd (Appellant)

Philip Archibald Collins (First Respondent)
Sydney Ports Corporation (Second Respondent)

Representation

- Counsel: Counsel:
Mr MT McCulloch SC with Mr SJ Maybury (Appellant)

Mr L King SC with Mr P Stockley (First Respondent)
Mr DJ Hooke SC with Mr NJ Broadbent (Second Respondent)

- Solicitors: Solicitors:
HWL Ebsworth Lawyers (Appellant)

Higgins Lawyers (First Respondent)
Hicksons Lawyers (Second Respondent)

File Number(s): 2012/358038

Decision Under Appeal

- Court / Tribunal: Supreme Court

- Before: Harrison J

- Citation: Collins v Sydney Ports Corporation [2012] NSWSC 115Collins v Sydney Ports Corporation [2012] NSWSC 1316

- Court File Number(s): 2009/296483

JUDGMENT

EMMETT JA: This appeal and application for extension of time to cross-appeal arise out of injuries suffered by Mr Philip Collins on 23 July 2001. Mr Collins was employed by Sydney Ports Corporation (Ports) as a port officer grade 2 (engineer). In the course of his employment, Mr Collins was required to board vessels moored at Port Botany. To do so, he was required to walk across an emergency response jetty gangway. On the day in question, Mr Collins was walking across the gangway when it rotated suddenly, violently propelling Mr Collins onto the wharf below. He suffered serious injury as a consequence.
Mr Collins commenced proceedings in the District Court against Ports and Australian Winch and Haulage Company Pty Limited (AWH). AWH supplied a stainless steel D-shackle to Ports (the shackle in question). The fracture and failure of the shackle in question, which was located under water, caused the sudden rotation of the gangway. The proceedings in the District Court were subsequently transferred to the Supreme Court. In the proceedings, Mr Collins alleged that his injury and subsequent loss and damage resulted from negligence or breach of contract on the part of Ports and negligence on the part of AWH.
The primary judge ordered judgment for Mr Collins against Ports in the sum of $1,141,238 and judgment against AWH in the sum of $1,368,304.70. His Honour directed judgment for Ports against AWH for contribution in the sum of $399,433.30 and judgment for AWH against Ports for contribution in the sum of $741,804.70. His Honour also made various orders for the costs of the proceedings and the cross-claims as between Ports and AWH.
AWH appealed from the orders made by the primary judge. Ports subsequently applied by notice of motion for an extension of time within which to file a cross-appeal.
In its notice of appeal, AWH sought to reverse the conclusion of the primary judge that it had been negligent in the supply of a defective shackle, such that there should be judgment in its favour as against Mr Collins and on the cross-claim brought by Ports.
In its proposed appeal, Ports seeks to reverse the primary judge's finding that any breach of a duty of care that it owed to Mr Collins was causative of the incident that caused his injuries. Ports also seeks to reverse the primary judge's finding that it was just and equitable to order that Ports was responsible for Mr Collins' injuries as to 65 per cent and AWH as to 35 per cent. It says that AWH's liability should have been found to be the greater. AWH's appeal and Ports' proposed appeal also raise ancillary questions concerning assessment of damages and costs.
An important question in the trial was the mechanism of the failure of the shackle in question. It is necessary to say something briefly about that matter.
When the gangway in question was not being used, it was stored in a raised, or vertical, position on the wharf. When the gangway was required for use it was lowered to a horizontal position, giving access between the wharf and a moored vessel. In the lowered position, the gangway was held in place by a metal chain, which descended from the gangway and was linked, by a stainless steel D-shackle beneath the water, to another metal chain attached to a 750 kg counterweight.
It was common ground that the shackle in question was made from a type of stainless steel unsuitable for use under water. Having been submerged in salt water for some time, it developed a form of corrosion and ultimately failed. The substantial question in the proceedings was whether AWH was negligent because it selected, supplied and installed the shackle in question, which was unsuitable since manufactured from CF-8M stainless steel. That steel is not solution annealed and is therefore not suitable for use under seawater. The shackle in question should have been manufactured from grade 316 stainless steel. AWH claimed that it had ordered the proper kind of shackle from a supplier but that, unbeknownst to it, the shackle in question that was supplied to it was manufactured from CF-8M steel.
Ports did not dispute that it had breached its statutory duty to Mr Collins in failing to provide safe means of access to every place at which Mr Collins was required to work, contrary to provisions of the Construction Safety Regulations 1950. Mr Collins also said that Ports owed him a non-delegable duty of care, which it breached as a result of AWH's failure to exercise reasonable care in supplying the proper shackle. The primary judge accepted that contention. His Honour also found that Ports, despite knowing that the gangway had failed in the past, did not implement any regular inspection or maintenance regime for the underwater stainless steel components of the gangway. Rather, it waited until something went wrong and then called AWH to fix the particular fault.
I have had the advantage of reading in draft form the proposed reasons of Sackville AJA. I agree with his Honour's conclusion that Mr Collins established, on the balance of probabilities, that AWH did not order the proper shackle, being a grade 316 stainless steel D-shackle that had been solution annealed so as to be suitable for use in seawater.
AWH did not dispute that if it were found to have breached its duty, that breach caused Mr Collins' injuries. That is to say, AWH accepted that the selection and supply of the proper shackle would have avoided the failure that resulted in Mr Collins' injuries. Ports, however, disputed the primary judge's finding that its failure to institute a system of inspection and maintenance of the gangway was also a material cause of Mr Collins' injuries. Ports complains that the primary judge made no finding that a system of periodic inspection would have revealed the corrosion that led to the failure of the shackle in question.
The evidence indicated that the proper shackle could have been expected to have a life of several years, even when fully immersed in seawater. It would have had good resistance to the type of corrosion that damaged the shackle in question, which occurred because it was the wrong shackle to use. The expert evidence indicated that close examination of the shackle in question would have revealed the corrosion.
Ports had no system of inspection and maintenance in place to guard against the risk of failure of the shackle in question supplied by AWH. That was so despite the gangway having repeatedly failed in the past. Indeed, an operation and maintenance manual produced by AWH before the failure of 23 July 2001 recommended that, having regard to an earlier failure in 1992, the D-shackle be inspected regularly as it may need to be periodically replaced. Ports did nothing to implement that recommendation.
The primary judge accepted that Mr Collins had to establish that a relevant breach of duty on the part of Ports was a cause of his injuries. His Honour found that failure of the D-shackle was predictable, if not inevitable, and in any event preventable. His Honour found that the absence of a fail-safe mechanism, which would have prevented the accident, strengthened the need for a thorough system of inspection and maintenance to detect potential equipment failure. However, his Honour made no express finding as to the regularity of the inspection regime that Ports should have introduced.
A period of approximately 15 months elapsed from the time when the shackle in question was probably installed, in March 2000, to the date of Mr Collins' accident on 23 July 2001. Insofar as the primary judge concluded that there was a causal connection between Ports' breach of duty in failing to put in place a system of inspection and maintenance and Mr Collins' injury, it must be implicit that his Honour found that the system of inspection and maintenance would have required inspections at intervals of less than 15 months. That suggests inspections on an annual, or more frequent, basis.
The evidence indicates that, on the balance of probabilities, had there been annual inspections the defect in the shackle in question would have been detected. Such inspection would have required retrieval of the shackle from the seawater. There was no suggestion that that would have posed a particular problem for Ports. The evidence indicated that a non-annealed shackle, such as the shackle in question that failed, which had been immersed in seawater, would be likely to show superficial corrosion within a relatively short time. A person with appropriate expertise examining it would have taken such superficial corrosion as an indicator of potentially more sinister corrosion, warranting closer examination.
The primary judge made no express finding that an appropriate system of inspection and maintenance would require inspection of the D-shackle at least annually. However, for the reasons indicated above, it is implicit in his Honour's conclusions that an appropriate system would have required inspection within a time that would have disclosed the corrosion before the shackle in question failed after 15 months.
While it would have been preferable for the primary judge to have made an express finding as to the frequency of the inspection that should have been undertaken by Ports, I consider that it is clear enough that his Honour found, implicitly, that an appropriate system would have required inspection within a time before the shackle in question failed. There was material before his Honour upon which such a conclusion could be based.
In all of the circumstances, I agree with the conclusion of Sackville AJA that the primary judge was justified in finding that, if Ports had implemented a proper system of inspection and maintenance at the time when the shackle in question was installed, its corrosion would probably have been detected and Mr Collins' injuries resulting from its failure would have been prevented. I agree with the conclusion of Sackville AJA that no basis has been shown for interfering with the apportionment of responsibility as between AWH, on the one hand, and Ports, on the other.
I also agree with the conclusions reached by Sackville AJA in relation to the other issues raised in the appeal by AWH and by Ports. I agree with the orders proposed by his Honour.
LEEMING JA: I agree with Sackville AJA.
SACKVILLE AJA: This appeal and application for an extension of time in which to cross-appeal arise out of serious work-related injuries sustained by the first respondent ("Mr Collins") as long ago as 23 July 2001. The injuries occurred in the course of Mr Collins' employment with the second respondent ("Ports") and were caused by the malfunction of a gangway on which Mr Collins was walking. There was ultimately no dispute that an unsuitable shackle had been supplied and installed by the appellant ("AWH"), an independent contractor engaged from time to time by Ports to undertake maintenance and repair work on its gangways. It was the failure of this shackle that caused the malfunction of the gangway.
The primary Judge (Harrison J) found in favour of Mr Collins on his claims against Ports, the first defendant, and AWH, the second defendant: Collins v Sydney Ports Corporation [2012] NSWSC 115 ("Principal Judgment"). His Honour delivered a supplementary judgment dealing with a series of additional matters that arose for determination following delivery of the Principal Judgment: Collins v Sydney Ports Corporation [2012] NSWSC 1316 ("Supplementary Judgment"). His Honour entered judgment for Mr Collins against AWH and Ports in different amounts, reflecting the different statutory regimes governing the assessment of damages against negligent employers and negligent third parties. Thus judgment was entered against Ports for $1,141,238.00 and against AWH for $1,368,304.70.
His Honour also gave judgment for:
·Ports on its cross-claim for contribution against AWH in the sum of $399,433.30; and
·AWH on its cross-claim for contribution against Ports in the sum of $741,804.70.
These orders reflected his Honour's finding in the Principal Judgment that responsibility for Mr Collins' damages should be apportioned 65 per cent to Ports and 35 per cent to AWH.
In the Principal Judgment, the primary Judge helpfully summarised the facts and issues as follows:
1. Mr Collins was employed by [Ports] as a Port Officer Grade 2 (Engineer). He performed some of his duties at Port Botany. From time to time in the course of his employment Mr Collins was required to board vessels moored at the port. In order to do this he had to walk across the emergency response jetty gangway. When the gangway was not being used it was stored in a raised or vertical position on the wharf. If the gangway was required for use, it was lowered to a horizontal position, thereby giving access between the wharf and the vessel. In this lowered position, the gangway was held in place by a metal chain descending from the gangway that was linked, by a stainless steel D-shackle located below the surface of the water, to another metal chain attached to a 750kg counterweight. On 23 July 2001 Mr Collins was walking across the gangway when the shackle fractured and failed and the counterweight was released. This caused the now unrestrained gangway to rotate suddenly and without warning to its vertical position. As this happened, Mr Collins was violently propelled from his location on the gangway onto the wharf below where he was seriously injured.
2. The cause of this event is uncontroversial. It is agreed that the shackle was made of a type of stainless steel that was unsuitable for sub-marine use. Having been submerged in salt water for some time, it developed a particular form of corrosion and ultimately failed. Instead, the controversy joined in this litigation revolves around who is responsible for the accident caused by this failure. Mr Collins alleges that his employer was negligent and in breach of certain statutory duties and is liable to compensate him for his loss and damage. He also alleges that [AWH] is liable because it selected, supplied and installed the shackle. [Ports] contends that even though it had a non-delegable duty of care to Mr Collins, it complied with its duty by retaining [AWH] to supply and install the shackle, upon whose expertise it relied in doing so. [AWH] contends that it is not liable to either Mr Collins or to [Ports] because it sourced the shackle from a third party by reference to a particular specification that was appropriate for use in seawater. To the extent that the shackle failed to comply with the specification and was therefore defective, [AWH] alleges that the defect was unknown to it and was not reasonably ascertainable upon intermediate inspection.
3. Any damages to which Mr Collins may become entitled from either defendant are to be calculated differently. As between Mr Collins and [Ports], the damages are to be assessed by reference to the provisions of the Workers Compensation Act 1987. With some relatively minor exceptions, the quantum of those damages has been agreed. As between Mr Collins and [AWH], the damages are to be assessed by reference to the provisions of the Civil Liability Act 2002. The quantum of those damages is completely agreed. There are also cross-claims between the defendants seeking contribution or indemnity as concurrent tortfeasors pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946. Depending upon the result in Mr Collins' claims against the defendants, it may also be necessary to adjust any damages that might become payable to Mr Collins in accordance with s 151Z of the Workers Compensation Act.

Judgments at First Instance

Principal Judgment

The primary Judge noted (at [32]) that at all times until the hearing the parties had proceeded on the basis that the shackle that failed was manufactured from grade 316 stainless steel. However, by the time the experts had concluded their evidence, it had become apparent that the correct description of the steel from which the shackle was manufactured was CF-8M stainless steel. The difference is that grade 316 stainless steel is solution annealed (and is therefore suitable for use under seawater), while CF-8M steel is not solution annealed (at [16]). The experts agreed and the primary Judge found (at [32]-[33]) that CF-8M stainless steel has essentially the same chemical composition as grade 316 stainless steel, but is not called 316 because it has been cast and not hot worked.
The primary Judge recorded (at [6], [100]-[101]) that Ports did not dispute that it had been in breach of its statutory duty, in that it had failed to provide safe means of access to every place at which Mr Collins was required to work, contrary to reg 73 of the Construction Safety Regulations 1950.
Mr Collins' case against Ports was also put on the basis that it owed him a non-delegable duty of care, which it breached as a result of AWH's failure to exercise reasonable care (at [104]). His Honour accepted this contention (at [107]). His Honour also found (at [106]) that Ports had breached its duty of care to Mr Collins in several ways:
It clearly failed to provide him with a safe place of work or a safe means of access to work. The gangway had previously failed and [Ports] were aware of what caused it to fail. Mr Collins gave uncontradicted evidence of how the gangway had violently catapulted a year before his accident when the counterweight detached. [Ports] was, or should have been, aware of the potentially serious consequences that someone in the position of Mr Collins might suffer if the events that befell him were to occur. Significant among the breaches alleged is the fact that [Ports] took no step to ensure that the gangway was covered or protected by a mechanism that anticipated the possibility of failure and which operated as a backup or failsafe in the event that the principal cause of failure eluded discovery upon proper inspection. Nor did [Ports] properly inspect or maintain the gangway system in any event. There is no evidence that the recommendations in the Operation and Maintenance Manual for regular inspection and periodic replacement were ever followed, except in response to periodic failures. This was clearly inadequate.
The primary Judge found (at [121]) that the duty of a contractor in the position of AWH was to exercise reasonable care, skill and diligence in the performance of the work it undertook. That work comprised the selection and installation of a shackle that was an improvement, in terms of corrosion resistance, on the previously installed galvanised shackle. AWH's duty included exercising reasonable care to select and install a grade of shackle that was reasonably fit for the intended purpose.
The primary Judge accepted (at [122]) that a buyer was entitled to assume that a grade 316 shackle had been solution annealed. His Honour also accepted that AWH owed a duty to do something about a latent defect only if it had reason to know of that defect. On this basis, AWH contended that it had discharged its duty of care to Mr Collins by ordering a grade 316 stainless steel shackle.
The primary Judge considered (at [123]) that AWH bore the onus of establishing that it had in fact ordered such a shackle from a supplier for installation at Ports' facility. His Honour was not prepared (at [127]) to find that AWH had established that it had ordered a grade 316 shackle from its supplier, A Noble & Son Ltd ("Noble"). Thus AWH was not entitled to rely upon a defence that the failure of the shackle on 23 July 2001 was due to a defect which AWH could not have ascertained on reasonable inspection (that is, that it had not been solution annealed during the manufacturing process). It followed (at [129]) that AWH had failed to discharge the duty of care it owed to Mr Collins because, contrary to its contention, it could not show that it had ordered a grade 316 stainless steel shackle. His Honour found (at [130]) that the failure to order a suitable shackle created a clearly foreseeable and not insignificant risk of very serious injury to a worker: Civil Liability Act 2002 ("CL Act"), s 5B.
The failure by AWH to specify a shackle suitable for its intended use in a load-bearing application in a highly corrosive submarine environment was a necessary condition of the shackle's failure (at [133]). Thus Mr Collins had established that the breaches of duty by Ports and AWH caused his injuries (at [136]). Accordingly, his Honour was satisfied that each of Ports and AWH was liable to Mr Collins for the loss and damage he had sustained (at [137]).
The primary Judge next addressed the cross-claims between Ports and AWH. His Honour found (at [140]) that Ports did not have any maintenance requirements specified by AWH for the underwater stainless steel components of the emergency response jetty gangway. Nonetheless, Ports knew that the gangway had repeatedly failed, yet it undertook no risk assessment and did not implement any regular inspection or maintenance regime. It simply waited until something went wrong and then called in AWH to remedy the particular fault. His Honour continued as follows:
141 Mr Hobday [Ports' General Manager, Marine Operations] admitted [in an interview with WorkCover] that the corrosion evident on the shackle at the time of the failure could have been detected upon inspection. The need for a regular and recorded inspection system was apparent to Mr Heath, the marine supervisor for [Ports] on the day of Mr Collins' accident, as recorded by him in the [Ports] incident/accident initial report relating to Mr Collins' accident. [Ports] implemented a system of inspection shortly following the incident. The clear inference is said to be that such a system was reasonably practicable before the accident and the potential for safety problems if the equipment was not regularly inspected and properly maintained was obvious.
142 It will be recalled that Mr Chalker [Ports' Property Maintenance Officer] said [in an interview with WorkCover] "that we had various problems with the gangway over the years and I personally did not like the design of the gangway and wanted to see if there was [a] better system we could use". Mr Hemsworth [a director of AWH] was concerned at the constant need to arrange for his employees to attend the site on short notice and recommended the hydraulic system that was never implemented. [Ports] pleaded the cost of that proposal as the only reason for not pursuing it. There was no evidence from [Ports] on this issue, despite the clear foreseeability of the risk of serious injury to employees if the gangway suddenly returned to the vertical position as it had done approximately one year prior to Mr Collins' accident. However, Mr Chalker told Mr Morgenthal [a WorkCover inspector] that the gangway was later redesigned to include a safety mechanism to prevent it flying up if the counterweight became disconnected. There was no evidence that this was not a reasonably practical alternative prior to the accident or that cost precluded it being implemented earlier: see Nelson v John Lysaght Pty Ltd [1975] HCA 9; (1975) 132 CLR 201 at 214.
In determining a just and equitable apportionment of Mr Collins' damages between Ports and AWH, as required by s 5(2) of the Law Reform (Miscellaneous Provisions) Act 1946 ("1946 Act"), the primary Judge took into account (at [154]) that the "respective roles of the two parties [were] adorned with stark differences". He summarised their respective roles as follows:
152 ... Ports essentially did nothing. It had no system of inspection or maintenance in place. It did not respond to [AWH's] suggestion to install an hydraulic system and there is no evidence that it investigated other failsafe measures such as the one that now operates. In all, it was submitted that Sydney Ports' failures were objectively very serious. [AWH] therefore submitted that in the circumstances I could comfortably find that [Ports'] relative culpability was considerably higher than its own and that [Ports] should bear the substantial burden of the legal responsibility for Mr Collins' injuries. It suggested an apportionment according to a ratio of 90:10 in its favour.
...
154 ... Ports was Mr Collins' employer, in effective control of the gangway that failed and responsible for it and for its upkeep and maintenance. The gangway had failed before, so that the degree of vigilance that one might have expected would be assigned to it would have been high. The fact that the gangway was not regularly inspected or methodically maintained by [Ports] is a clear fact that emerges from the evidence. It is hardly controversial that [Ports] took a reactive approach to the gangway and its maintenance, with bursts of energy and interest only regularly produced in response to a problem. That had the unfortunate and inevitable consequence that a failure sooner or later was predictable, if not inevitable, but was in any event preventable.
155 [AWH] was regularly involved in dealing with the problems with the gangway for [Ports]. Mr Hemsworth's evidence was eloquent testament to at least his impatience with constant and urgent calls from [Ports] for the provision of labour and resources to deal with problems as they arose. Whatever else can be said about that, however, the replacement of components that failed with an alternative component likely to improve the performance of the gangway and either reduce the incidence of failures, or extend the time between them, carried with it the certain obligation to specify the appropriate grade of stainless steel shackle that was intended to perform in this way .... I do not accept that the role of [AWH] in these circumstances amounted to no more than momentary inadvertence. The performance of the shackle was central to the performance of the gangway and could not lightly be minimised in importance.
As I have noted (at [25] above), in his Honour's view, a just and equitable apportionment between Ports and AWH was 65 per cent to the former and 35 per cent to the latter.
Finally, the primary Judge dealt with the contested issues bearing on the assessment of Mr Collins' damages. The only matter relevant in the appeal and cross-appeal concerns Mr Collins' claim for the cost of funds management. His Honour found (at [174]) that the neuropsychological evidence justified such an award. He also rejected (at [179]) Ports' argument that Mr Collins was prevented by s 151G of the Workers Compensation Act 1987 ("WC Act") from claiming the cost of funds management as a component of his damages, a conclusion that is no longer in dispute. The parties agreed on the sum of $100,000 as the damages to be awarded for the cost of funds management.

Supplementary Judgment

A number of the issues addressed in the Supplementary Judgment were the subject of argument on the appeal. The primary Judge's analysis of those issues is summarised below.

Cost of Funds Management

As has been noted, Mr Collins claimed as part of his damages the cost of funds management. In its supplementary submissions to the primary Judge, Ports contended that this claim was precluded because Mr Collins had not included it in his amended pre-filing statement of 17 November 2008, served in compliance with s 315 of the Workplace Injury Management and Workers Compensation Act 1998 ("WIM Act").
The relevant provisions of the WIM Act are as follows:
315 Requirement for pre-filing statement before commencing court proceedings
(1) Before a claimant can commence court proceedings for the recovery of work injury damages, the claimant must serve on the defendant a pre-filing statement setting out such particulars of the claim and the evidence that the claimant will rely on to establish or in support of the claim as the Rules may require.
...
318 Parties limited to pre-filing statement and defence
(1) For the purposes of court proceedings on a claim for work injury damages:
(a) the claimant is not entitled to file a statement of claim that is materially different from the proposed statement of claim that formed part of the pre-filing statement served by the claimant, except with leave of the court, and
...
(d) a party to the proceedings is not entitled to have any report or other evidence admitted in the proceedings on the party's behalf if the report or other evidence was not disclosed by the party in a pre-filing statement or defence served under this Division, except with leave of the court.
(2) The court is not to grant leave under this section unless satisfied that:
(a) the material concerned was not reasonably available to the party when the pre-filing statement or defence was served, and
(b) the failure to grant leave would substantially prejudice the party's case.
The primary Judge said (at [7]) that the fundamental question was whether the statement of claim ultimately relied on by Mr Collins was "materially different from the proposed statement of claim that formed part of the pre-filing statement served by [him]" within the meaning of s 318(1)(a). If so, the effect of s 318(1)(a) was that the statement of claim could not be filed without the leave of the Court. (As will be seen, it appears that Mr Collins' claim for the cost of funds management was introduced at the trial, not by an application for leave to file an amended statement of claim, but by an application for leave to file an amended statement of particulars (see Uniform Civil Procedure Rules ("UCPR"), r 15.12). No point was taken by the parties as to whether anything turns on the form of the proposed amendment.)
Ports relied on a Workers Compensation Commission Medical Assessment Certificate ("Certificate") prepared by a neurologist in February 2007, which pre-dated the amended pre-filing statement. The Certificate referred to cognitive difficulties from which Mr Collins then suffered, including difficulties with calculations concerning money. According to Ports, this information was sufficient to alert Mr Collins and his advisers, prior to service of the amended pre-filing statement in November 2008, to the need to claim damages for the cost of funds management.
Mr Collins submitted in response that it was not until he received a joint report in April 2011 from two clinical neuropsychologists that the need for assistance in funds management was identified. The joint report stated that Mr Collins had suffered reductions in his pre-injury levels of memory and problem solving, but that compensatory strategies enabled him to manage independently "with the exception of independent responsibility for managing large amounts of financial assets".
The primary Judge granted leave to Mr Collins to file the statement of claim. His Honour reasoned as follows:
14 That professional [joint] medical opinion is in my view a significant advance upon the mere reference to difficulties with calculating such things as the cost of items at the local shops to be found in either [the psychologist's] report or the medical assessment certificate. The joint report does indeed appear to be the first reference to anything approaching, or foreshadowing, the potential need for assistance with the management of any funds to which Mr Collins may have become entitled as a result of this litigation. It does not for that reason appear to have been reasonably available, or indeed available at all, at the time of filing his pre-filing statement.
...
17 I am satisfied that the medical material concerned was not reasonably available to Mr Collins when his pre-filing statement was served. I am also satisfied that a failure to grant leave to Mr Collins would substantially prejudice his case. The arithmetically agreed sum for the cost of funds management as between Mr Collins and [Ports] is $100,000. The inability to recover that sum in the circumstances of this case would in my view alone be a matter of substantial prejudice to Mr Collins. I consider that the leave sought by Mr Collins to claim the cost of funds management should be granted.

Pre-Judgment Interest

Ports disputed Mr Collins' entitlement to pre-judgment interest. An order for such interest is usually available to a successful plaintiff under s 100 of the Civil Procedure Act 2005, but is precluded by s 151M of the WC Act in claims against employers unless certain conditions are satisfied. Section 151M(4) relevantly provides as follows:
(a) Interest is not payable (and a court cannot order the payment of interest) on damages unless:
(i) information that would enable a proper assessment of the plaintiff's claim has been given to the defendant and the defendant has had a reasonable opportunity to make an offer of settlement (where it would be appropriate to do so) in respect of the plaintiff's full entitlement to all damages of any kind but has not made such an offer, or
(ii) the defendant has had a reasonable opportunity to make a revised offer of settlement (where it would be appropriate to do so) in the light of further information given by the plaintiff that would enable a proper assessment of the plaintiff's full entitlement to all damages of any kind but has not made such an offer, or
(iii) the defendant has made an offer of settlement, the amount of all damages of any kind awarded by the court (without the addition of any interest) is more than 20% higher than the highest amount offered by the defendant and the highest amount is unreasonable having regard to the information available to the defendant when the offer was made.
(b) The highest amount offered by the defendant is not unreasonable if, when the offer was made, the defendant was not able to make a reasonable assessment of the plaintiff's full entitlement to all damages of any kind.
Mr Collins relied on s 151M(4)(a)(i) and (ii) of the WC Act.
Ports made no offer to settle Mr Collins' claim against it, but contended that it had not been "appropriate" to do so because AWH was a co-defendant and there were unresolved contribution claims between the co-defendants. The primary Judge rejected this argument for the following reasons:
26 There does not appear to me to be any compelling reason to suggest that it was inappropriate in this case for [Ports] to make an offer of settlement at some stage of the proceedings. It is true to say that there were two defendants involved and that damages against each of them fell to be assessed by reference to different statutory regimes. That is not an uncommon occurrence in industrial litigation in this State and is not obviously a factor that derogates from the appropriateness of making an offer of settlement. The matter may be different if there was never any prospect that [Ports] could have made an offer to settle the proceedings that could have been understood or accepted. That is not the case here.
27 Moreover the liability of the defendants and the issues raised on the cross-claim do not appear to me to have been particularly contentious. Indeed, the liability of [Ports] to Mr Collins in the circumstances of this case would appear to me to be somewhat uncontroversial. The existence of claims for contribution between the defendants as tortfeasors liable to Mr Collins would also not appear to me to have made it inappropriate for [Ports] to offer to settle the proceedings at some stage.

Costs Between Ports and Mr Collins

The primary Judge noted that under reg 106 of the Workers Compensation Regulation 2010 ("WC Regulation"), the parties to proceedings for work injury damages were to bear their own costs, except as provided by Part 17, Div 3, Subdiv 2. In his Honour's view (at [37], [40]), reg 109 applied to make Subdiv 2 inapplicable and thus Mr Collins was entitled to an order for costs against Ports.

Costs Between Ports and AWH

The primary Judge considered (at [47]) that in view of the apportionment of responsibility between Ports and AWH, the "most obvious" result would be for AWH to recover 65 per cent of its costs on its cross-claim against Ports and for Ports to recover 35 per cent of its costs on its cross-claim against AWH.
The primary Judge made the following orders as to costs between Ports and AWH:
6 Order that [Ports] on its Cross Claim is entitled as against [AWH] to:
a. 35% of [Ports'] costs of defending [Mr Collins'] claim and bringing this Cross Claim, as agreed or assessed, on the ordinary basis; and
b. 35% of the costs [Ports] is liable to pay to [Mr Collins on his] action.
...
8. Order that [AWH], on its Cross Claim, is entitled as against [Ports] to:
a. 65% of [AWH's] costs of defending [Mr Collins'] claim and bringing this Cross Claim, as agreed or assessed, on the ordinary basis; and
b. 65% of the costs [AWH] is liable to pay to [Mr Collins on his] action.

Submissions and Issues

Submissions

AWH's Submissions

AWH's starting point was that Mr Collins had accepted at trial that if AWH had ordered a grade 316 shackle, Mr Collins' claim against it had to fail. AWH submitted that the primary Judge had erred in three respects in finding that AWH had not ordered a grade 316 shackle from Noble:
(i) his Honour had incorrectly held that AWH bore the legal burden of proving that it had ordered a suitable shackle;
(ii) in any event, there was no evidence to support the finding that AWH had not ordered a grade 316 shackle;
(iii) in the alternative to (ii), the finding that a grade 316 shackle had not been ordered was against the weight of the evidence.
If AWH's submissions concerning the ordering and installation were not accepted, it submitted that the primary Judge erred in apportioning to it 35 per cent of the responsibility for Mr Collins' damages.

Mr Collins' Submissions

Mr Collins, supported by Ports, submitted that the primary Judge had correctly placed the burden on AWH to prove that it had ordered a suitable shackle. If, contrary to that submission, Mr Collins bore the onus, the evidence justified the finding made by the primary Judge, namely that AWH had not ordered a grade 316 shackle from Noble.

Ports' Cross-Appeal

Ports sought leave to file a notice of cross-appeal out of time. Its written submissions were prepared on the basis that leave would be granted. In those written submissions, Ports accepted that it was liable to Mr Collins for breach of statutory duty and for breach of its non-delegable duty of care (making it liable to Mr Collins for injuries sustained by reason of AWH's negligence). However, Ports submitted that his Honour was in error in finding that the absence of a proper system of inspection and maintenance of the gangway caused Mr Collins' injuries. The evidence showed that the deterioration responsible for the failure of the shackle would not have been discoverable through a visual inspection, even if one had been carried out. The failure of the shackle was caused by intergranular corrosion initiated at crevices between the pin and the eye of the shackle. That corrosion, as distinct from surface corrosion, would not have been detectable on inspection. Had the correct finding on causation been made, his Honour could not have apportioned 65 per cent of the responsibility for Mr Collins' injuries to Ports.
Ports further submitted that even if its own negligence had contributed to Mr Collins' injuries, the primary Judge should have attributed a greater share of responsibility to AWH for Mr Collins' loss and damage. Ports contended that the shackle had been sourced, selected and installed entirely by AWH. AWH's conduct was central to the injuries sustained by Mr Collins and was far more significant than any act or omission by Ports. These submissions were supported by Mr Collins, whose interest, because of the statutory regime relating to damages, lay in maximising the degree of responsibility attributed to AWH.
Ports' cross-appeal also challenged the primary Judge's conclusions that Mr Collins was entitled to claim the cost of funds management as a head of damages and to receive interest on his award of damages.

Issues on the Appeal and Cross-Appeal

Matters Not in Dispute

At the hearing before this Court, Mr Hooke SC, who appeared with Mr Broadbent for Ports, sought leave to amend the proposed cross-appeal (which was itself the subject of an application to extend time for filing). The purpose of the proposed amendment was to enable Ports to challenge the primary Judge's finding that Ports was liable to Mr Collins for breach of statutory duty. This Court refused the application for leave to amend the proposed cross-appeal: Australian Winch & Haulage Company Pty Ltd v Collins [2013] NSWCA 232. In view of this ruling, the cross-appeal that is the subject of Ports' application for an extension of time excludes the proposed ground challenging the primary Judge's finding on breach of statutory duty. It follows that there is no challenge in this Court to that finding.
In its notice of appeal, AWH challenged an order made by the primary Judge in the Supplementary Judgment that AWH pay Mr Collins' costs of the proceedings on an indemnity basis from 27 April 2011. His Honour held that an offer of compromise served by Mr Collins under cover of a letter dated 14 April 2011 complied with UCPR, r 20.26. Since AWH did not accept the offer, his Honour held that Mr Collins was entitled to an indemnity costs order.
In supplementary written submissions filed on behalf of Mr Collins after the hearing of the appeal, he conceded that in the light of the decision of this Court in Whitney v Dream Developments Pty Ltd [2013] NSWCA 188, his offer of compromise could not ground an order for indemnity costs. AWH's appeal on the ground challenging the indemnity costs order therefore must succeed.

Contested Issues

The contested issues that arise on the appeal and cross-appeal are as follows:
(i) Should Ports be granted an extension of time in which to file its cross-appeal?
(ii) Did the primary Judge err in holding that AWH bore the legal burden of proving that it had ordered a grade 316 shackle from Noble?
(iii) Having regard to the correct burden of proof, did the primary Judge err in finding that AWH did not order a grade 316 shackle from Noble?
(iv) Did the failure of Ports to institute a system of inspection and maintenance of the gangway, including the shackle, cause Mr Collins to sustain his injuries so as to render Ports liable to him for breach of duty?
(v) Did the primary Judge err in his apportionment of responsibility between Ports and AWH?
If Ports is granted an extension of time in which to file its cross-appeal, the following additional issues arise:
(vi) Did the primary Judge err in granting leave to Mr Collins to file an amended statement of particulars claiming the cost of funds management as a head of damages?
(vii) Did the primary Judge err in awarding interest to Mr Collins against Ports?
(viii) Did the primary Judge err in awarding costs in favour of Mr Collins against Ports?
(ix) Did the primary Judge err in ordering Ports to pay 65 per cent of the costs AWH was ordered to pay to Mr Collins?

Cross-Appeal: Extension of Time

Ports requires an extension of time within which to file its notice of cross-appeal. The parties were not precise as to the date within which Ports should have filed the cross-appeal, but it appears that the time for doing so expired on 30 November 2012, being 14 days after AWH filed its notice of appeal: UCPR, r 51.17(2)(b)(i). Ports filed a motion on 20 February 2013, seeking an extension of time pursuant to r 51.17(2)(b)(ii) for the filing of its cross-appeal. The delay, allowing for the vacation, was therefore a little over two months.
Mr Hooke read an affidavit from Ports' solicitor providing an explanation for the relatively short delay. As Mr Hooke pointed out, there is no real dispute that Ports' cross-appeal raises some arguable issues. However, Mr King SC, who appeared with Mr Stockley for Mr Collins, pointed to a particular form of prejudice that Mr Collins would sustain if an extension of time was granted. The effect of s 346 of the WIM Act and regs 104-108 of the WC Regulation is arguably that Mr Collins, even if successful on the cross-appeal, would not be entitled to a costs order in his favour in respect of the cross-appeal. Mr King submitted that although the costs regime was imposed by the legislation and regulations, Mr Collins was entitled to assume that, once the time for filing a cross-appeal had expired, he would be spared the anxiety and potential expense of defending his judgment against Ports and that the appeal would proceed expeditiously.
Mr King's submissions receive some support from correspondence between the parties. On 30 November 2012, Ports' solicitors sought agreement from Mr Collins' solicitors to an extension of time in which to file a notice of cross-appeal. The letter said that Ports expected to be in a position to file the cross-appeal by mid-February 2013. Mr Collins' solicitors rejected the request. They pointed out that Mr Collins was anxious to bring the proceedings to an end and that Ports had had ample opportunity to consider its position in the eight months between the Principal Judgment and the Supplementary Judgment. The response also pointed out that the proposed delay of two months or so (allowing for the vacation) gave Mr Collins no confidence that the cross-appeal would be pursued expeditiously.
In the course of argument, Mr Hooke was asked whether Ports was prepared to consent to a condition being imposed on the grant of an extension of time requiring Ports to pay Mr Collins' costs of the cross-appeal, should the cross-appeal fail against him. Mr Hooke subsequently conveyed to the Court his instructions that Ports did not consent to such a condition, but if the Court was minded to impose the condition Ports would give an appropriate undertaking to pay Mr Collins' costs should the cross-appeal against him fail.
This has been hard-fought litigation in which Ports appears to have taken every point open to it, including at least one of very dubious merit (the belated attempt to amend its foreshadowed notice of cross-appeal). Ports' letter of 30 November 2012 indicated that it was at least contemplating filing a cross-appeal, although it proposed a leisurely timetable. However, Mr Collins was entitled to expect Ports to adhere strictly to the time limits imposed by the UCPR. Any delay in resolving the appeal prejudiced Mr Collins, since he had consented to a stay of the judgment against AWH pending determination of the appeal (AWH having appealed within time) and he would be denied the fruits of his victory until the appeal and any cross-appeal were disposed of. In these circumstances, it is in the interests of justice that the indulgence sought by Ports be conditional on its undertaking to pay Mr Collins' costs to the extent the Court thinks appropriate in view of the disposition of the cross-appeal.
Mr Hooke suggested at one point that the Court did not have power to impose such a condition. The power lies in UCPR, r 51.17(2)(b)(ii), read with ss 56(1), (2) and 58(1) of the Civil Procedure Act 2005. There is no inconsistency with the WC Regulation (the relevant provisions of which are set out at [166] below) because Ports has voluntarily accepted the obligation to pay costs as a condition of the grant of an extension of time to file a cross-appeal.

AWH's liability

Burden of Proof

On Whom did the Primary Judge Place the Burden?

There was a dispute as to whether the primary Judge had imposed on AWH the burden of establishing, on the balance of probabilities, that it had ordered a grade 316 stainless steel shackle from Noble. In my opinion, there is little doubt that his Honour did impose on AWH what is usually described as the "legal burden" of proving that fact: Cross on Evidence (9th Aust Ed, 2013), at [7010].
In the key paragraph of the judgment on this issue (at [127]), his Honour concluded that AWH had:
not ... established that it ordered or specifically purchased a grade 316 stainless steel shackle.
Soon after, his Honour stated (at [129]) that he was "not satisfied" that AWH had ordered a grade 316 stainless steel shackle.
This language goes beyond merely imposing on AWH the evidentiary burden of adducing evidence that it had ordered a grade 316 shackle. It also goes beyond simply expressing the principle that all evidence is to be weighed according to the proof which is in the power of one side to have produced and in the power of the other to have contradicted: Blatch v Archer (1774) 1 Cowp 63, at 65; 98 ER 969, at 970. I think that a fair reading of the language indicates that his Honour was imposing on AWH the onus of establishing on the balance of probabilities that it had ordered the correct grade of shackle.

On Whom Did the Burden Lie?

AWH submitted that because the nature of Mr Collins' case changed during the trial, the onus of proof was not determined by the pleadings, but by the issues truly in contest. Mr McCulloch SC, who appeared with Mr Maybury for AWH, pointed out that until the experts gave evidence, Mr Collins' case was that AWH had supplied and installed a grade 316 stainless steel shackle, but that the particular shackle installed to secure the gangway had been manufactured from steel unsuitable for the purpose. It was only after the metallurgical experts had prepared a joint report and given concurrent evidence that the parties accepted that the failed shackle was made from CF-8M grade stainless steel. Once the failed shackle had been correctly identified, Mr Collins' case was that AWH had installed a CF-8M grade shackle which was unsuitable for the purpose, given that it had not been heat treated and thus had a propensity to corrode when submerged in seawater.
Mr McCulloch submitted that once Mr Collins' case had changed, he bore the burden of proving all facts necessary to establish a breach of AWH's duty of care. An essential fact in issue, so Mr McCulloch argued, was whether AWH had ordered a grade 316 shackle. Thus the legal burden was on Mr Collins to prove this fact.
Mr Collins pleaded his claim against AWH in the Further Amended Statement of Claim ("FASC") as follows:
10 [Ports] contracted with [AWH] for it to inspect, maintain, and carry out necessary work from time to time, to the gangway system, including the shackle.
11 In or about 1998 [AWH] carried out work to the gangway system and shackle, part of which involved replacement of the shackle previously used, with a shackle made of stainless steel, grade 316.
12 On subsequent occasions in 1999, March 2000 and July 2000 [AWH] carried out further work on the gangway system and shackle, including replacement of the shackle that supported the counterweight. On these occasions the work included the reinstallation of the shackle, or the replacement of the shackle. On such occasions [AWH] either installed or reinstalled a shackle made of stainless steel grade 316.
13 As at 23 July 2001 the shackle supporting the counterweight was one made of stainless steel, grade 316.
14 Further and in the alternative the injury, loss and damage suffered by [Mr Collins] resulted from the negligence of [AWH].
Particulars of Negligence of [AWH]
...
(h) Causing the use of a shackle to support the counterweight, when the shackle was unsuitable for that purpose.
(i) Using a shackle to support the counterweight, which was made from a grade and type of stainless steel unsuitable for the purpose.
...
(m) Failing to ensure the shackle was suitable and safe to bear the load to which it was attached.
(n) Using a non-load rated stainless steel shackle in a load bearing application.
(o) Using a shackle in a particular application, which was unsuitable as it had not been heat treated.
AWH admitted in the Further Amended Defence ("FAD") the allegation in para 13 of FASC. It therefore admitted that the failed shackle was a grade 316 stainless steel shackle. On the fourth day of the trial, AWH was granted leave to add para 14A to the FAD as follows:
... [t]he failure of the shackle in place as at 23 July 2001 was due to the fact that the shackle was not annealed during the manufacturing process, which defect was not capable of being ascertained on reasonable inspection.
The belated recognition by the parties that the failed shackle was a grade CF-8M stainless steel shackle led Mr Collins, in his final written submissions at the trial, to seek leave to amend the FASC to delete the expression "grade 316" in paras 11, 12 and 13 and replace it with "grade CF-8M". It does not appear that the primary Judge formally granted leave to amend, but his Honour incorporated the amendment when reproducing the relevant portions of the FASC in the judgment (at [8]). No further amendment was made to the FAD.
The pleadings remained in this state for the remainder of the trial. In argument on the appeal, it was pointed out that the FASC did not plead the duty of care owed by AWH to Mr Collins and thus the pleading did not identify with precision the nature of the breach. In response to these criticisms, Mr King proposed that the following paragraphs be added to the FASC "to replead it in accordance with the evidence":
13A The said shackle of stainless steel grade CF-8M was unfit for its intended purpose of supporting the counterweight and was unsafe.
13B At all material times [AWH] owed a duty to take reasonable care for the safety of users of the gangway such as [Mr Collins], which duty required the use of a grade 316 stainless steel shackle.
13C By reason of the use of the stainless steel shackle grade CF-8M [AWH] breached its duty to [Mr Collins] whereby he suffered injury, loss and damage as pleaded [above].
This Court invited AWH to provide proposed amendments to the FAD, if so advised. In supplementary submissions, AWH indicated that it wished to amend the FAD by inserting the following paragraphs:
10A [AWH] admits paragraph 13A of the [FASC].
10B In answer to paragraph 13B of the [FASC], [AWH] admits that at all material times it owed a duty to take reasonable care for the safety of users of the gangway such as [Mr Collins], but otherwise does not admit that paragraph.
10C [AWH] denies paragraph 13C of the [FASC].
Leave should be granted for these amendments to be made to the FAD.
There was no dispute that the relevant principles governing the allocation of the burden of proof were as stated by Walsh JA in Currie v Dempsey (1967) 69 SR (NSW) 116, at 125:
But, if recourse is had to the rules of pleading, the fixing of the burden of proof is not always to be tested simply by asking which party is alleging the affirmative. In Purkess v Crittenden [(1965) 114 CLR 164, at 167-168] it was said that the proposition there quoted from Phipson on Evidence, 10th ed, par 92, has been frequently acknowledged. The proposition was that the expression "the burden of proof", as applied to judicial proceedings, "has two distinct and frequently confused meanings: (1) the burden of proof as a matter of law and pleading - the burden, as it has been called, of establishing a case, whether by preponderance of evidence, or beyond a reasonable doubt; and (2) the burden of proof in the sense of introducing evidence". The author went on to say, and this also was approved in the case last cited, that the burden of proof in the first sense is always stable, but the burden of proof in the second sense may shift constantly. In my opinion, the burden of proof in the first sense lies on a plaintiff if the fact alleged (whether affirmative or negative in form) is an essential element in his cause of action, eg if its existence is a condition precedent to his right to maintain the action. The onus is on the defendant, if the allegation is not a denial of an essential ingredient in the cause of action, but is one which, if established, will constitute a good defence, that is an "avoidance" of the claim which, prima facie, the plaintiff has.
Both AWH and Mr Collins framed their amendments to the pleadings in this Court with an eye to this statement of principle, which was cited to the primary Judge by Mr Collins in his submissions.

Contrary to AWH's submissions, it was not an essential ingredient of Mr Collins' cause of action for him to allege and prove that AWH ordered the wrong shackle from its supplier. Mr Collins had to establish that AWH breached the duty of care which (as is now admitted) it owed to Mr Collins. Mr Collins could make out a prima facie case of want of reasonable care by proving, as he did, that AWH supplied and installed a shackle that was not fit for the purpose of supporting a counterweight in seawater and that Mr Collins suffered an injury in consequence of the failure of the shackle. It was immaterial to Mr Collins' case, at least in the first instance, whether AWH's failure to install a suitable shackle came about because it ordered the wrong kind of shackle, mistakenly selected a CF-8M stainless steel shackle from its own stock, failed to ensure that the shackle had been annealed properly or for some other reason. AWH's precise error was not a material fact that Mr Collins was obliged to plead and prove in order to establish that AWH had breached its duty to take reasonable care to install a stainless steel shackle suitable for use in seawater.
Nonetheless, it was an essential element of Mr Collins' cause of action that AWH breached its duty to users of the gangway by failing to exercise reasonable care to install a shackle suitable for the intended purpose. If AWH did not adduce any evidence to show that the installation of an unsuitable shackle occurred despite the exercise of reasonable care on its part, Mr Collins would presumably succeed in establishing AWH's breach of duty. But the legal burden of proving that AWH had failed to exercise reasonable care always remained with Mr Collins. If, therefore, AWH adduced evidence that the installation of an unsuitable shackle was due to circumstances beyond its control, for example because it had ordered a suitable shackle but the manufacturer or distributor had supplied a defective shackle, Mr Collins would still bear the burden of proving that AWH had failed to exercise reasonable care. Accordingly, if AWH adduced evidence sufficient to raise the issue of whether it had ordered a grade 316 shackle, the burden of proving that it had not placed such an order would be on Mr Collins.
The present case is analogous to the decision of the High Court in Purkess v Crittenden, cited in Currie v Dempsey. There the High Court held (at 168) that where a plaintiff who seeks damages for personal injuries makes out a prima facie case that his or her incapacity has resulted from the defendant's negligence, the onus of adducing evidence that the plaintiff's incapacity is attributable to a pre-existing condition rests on the defendant. In the absence of such evidence, no issue as to the existence of a pre-existing condition would arise for determination. But if the defendant adduces evidence suggesting that the plaintiff's incapacity is due, in whole or in part, to a pre-existing condition, the factual issue does arise for determination by the court. Nonetheless, the legal burden of proving all elements of the plaintiff's cause of action does not change. Accordingly, the plaintiff bears the burden of proving, on the balance of probabilities, that his or her incapacity was caused by the defendant's negligence. Thus, in these circumstances the plaintiff must prove that the injuries were not attributable to his or her pre-existing condition.
It follows that the legal burden of proving that AWH failed to exercise reasonable care to select and install a shackle suitable for the purpose always remained with Mr Collins. Once AWH adduced plausible evidence that it had ordered a grade 316 stainless steel shackle and that it could not have detected the supplier's error in providing a different grade of shackle, Mr Collins bore the legal burden of proving that AWH had not in fact ordered a grade 316 shackle. The primary Judge was therefore in error in holding that AWH bore the burden of proving that it had ordered the correct shackle.
I add two further points. First, Mr Collins' submission to the primary Judge on the burden of proof was not entirely clear. However, it appears that his counsel was content to proceed on the basis that the burden of proof remained with him throughout the trial. Secondly, the conclusion that Mr Collins bore the burden of proving that AWH did not order a grade 316 shackle does not mean that AWH should not have affirmatively pleaded that, despite installing an unsuitable shackle, it had ordered the correct grade of shackle from the supplier and could not have been expected to detect that it had been supplied with an unsuitable shackle: see Uniform Civil Procedure Rules 2005, r 14.14(2)(a), (c).

What Shackle was Ordered?

The primary Judge made findings on the basis that AWH bore the burden of proving that it had ordered a grade 316 shackle. For the reasons that follow, I have concluded that if the evidence is assessed on the basis that Mr Collins bore the burden of proof throughout the trial, the primary Judge's findings nonetheless should be upheld.

The Primary Judge's Reasoning

The trial seems to have been conducted on the basis that the shackle AWH installed to secure the gangway had been purchased by it in March 2000. AWH admitted on the pleadings that it performed work on the gangway in March and July 2000. Although his Honour made no express finding to this effect, he seems to have accepted that the shackle which ultimately failed had been installed in either March or July 2000 by AWH. To the extent it matters, I think that the likelihood is that the defective shackle was installed in March 2000, shortly after it was purchased.
The primary Judge found (at [122]) that AWH was an intermediate supplier and that it had purchased the shackle from a respectable supplier, namely Noble. His Honour recorded (at [123]) that AWH relied primarily on the evidence of its employees to show that it had ordered a grade 316 stainless steel shackle from Noble.
His Honour considered (at [124]) that a statement made to WorkCover NSW by Mr D'Arth, AWH's Engineering Manager, did not assist AWH's case. That statement, which was admitted into evidence, merely recorded Mr D'Arth's "belief" that the stainless steel shackle installed by AWH was grade 316. Mr D'Arth had not nominated the source of his belief and:
had no idea what the heat treatment process was that the shackle should have undergone in order to be suitable for seawater application.
Similarly, Mr Walkden, a Leading Hand Fitter who carried out work for AWH on the gangway, said in his witness statement to Workcover that he thought the shackle was made of grade 316 stainless steel, but provided no source for his belief (at [125]).
Mr Hemsworth, a director of AWH, gave evidence in the proceedings. However, the primary Judge (at [126]) was:
unable to detect any part of Mr Hemsworth's evidence that could be treated as clear and reliable evidence that the shackle ordered by [AWH] was grade 316 ... His evidence "we've bought a grade 316 shackle [off] Ronstan [the supplier to Noble]" is unconvincing. There is no single piece of objective corroborating evidence to support his statement and no basis in his evidence for how it is that he feels able to express the opinion.
The primary Judge appears to have accepted Mr Collins' submission (recorded at [110]) that there was no evidence that AWH had specified a solution annealed shackle at the time of ordering, since the purchase order merely referred to a "KXS12 12mm S/S DEE SHACKLE". Neither the purchase order nor the corresponding invoice suggested that the shackle was made of grade 316 stainless steel, as distinct from some other grade of stainless steel.
His Honour was "not prepared" to find that AWH ordered a grade 316 shackle from Noble (at [127]). He restated his finding (at [129]) as follows:
[AWH] did no more than purchase a so-called marine grade shackle and cannot therefore assume to itself the benefit of a confident expectation or understanding that it had been solution annealed. The so-called latency of the "defect" is of no consequence, and therefore cannot avail the company, unless the correct item was ordered in the first place. It was not. Contrary to its contention, I find that [AWH] failed to discharge any duty of care that it owed to Mr Collins by ordering a grade 316 stainless steel shackle because I am not satisfied that it did so.

Analysis of the evidence

AWH submitted that the "vast majority" of the evidence tended to establish that it had ordered a grade 316 stainless steel shackle. Mr McCulloch relied on:
·the fact that a grade 316 shackle had been installed by AWH in 1998;
·the records of interview and statements of Mr D'Arth, Mr Walkden and Mr Hemsworth;
·a facsimile from Mr D'Arth to WorkCover dated 24 July 2002 (six days after his interview with the WorkCover inspector) asserting that the shackle was grade 316 stainless steel;
·AWH's recommendation to Ports on 19 July 2000 that a grade 316 shackle should be installed; and
·the absence of any challenge in cross-examination to the evidence of Mr Hemsworth in his witness statement that the "defective shackle was a marine grade stainless which is known to me as a Type 316 Stainless Steel".
In the ordinary course, the starting point for determining the grade of shackle ordered by AWH would be documentary evidence in the form of an order form or invoice. No order form from AWH to Noble was in evidence. However, Noble issued an invoice to AWH the date of which is not clear from the appeal book, but which records the order date as 17 March 2000 and the shipment date as 29 March 2000. The invoice is for a "KXS12 12mm S/S DEE SHACKLE". This corresponds with the terms of a purchase order dated 21 March 2000 from Noble to Ronstan 2000 Pty Ltd ("Ronstan"), a supplier located in Melbourne, ordering "1 x KXS12 12mm S/S DEE SHACKLE" for delivery to AWH. The price was recorded as $12.83. This evidence establishes that AWH ordered the shackle from Noble, which in turn procured the shackle from Ronstan.
There is nothing in either Noble's invoice or purchase order to indicate that AWH ordered or received a grade 316 stainless steel shackle, or a shackle that had been annealed so as to be suitable for use in seawater. In the absence of evidence from AWH or Noble elucidating the description of the shackle in the invoice and purchase order, and in the absence of any other evidence establishing the terms of the order placed by AWH, the inference is available, as a matter of probability, that AWH did not place an order for a grade 316 stainless steel shackle. Had such an order been placed, the invoice and purchase order could be expected to have recorded the fact.
Mr Collins called evidence at the trial from Mr Atkinson, who was the Sales Manager of Noble between 1998 and 2005. Mr Atkinson said that his inspection of the purchase order and invoice indicated that Noble did not have the stainless steel shackle in stock at the time, and so placed an order with Ronstan. Mr Atkinson confirmed that "KXS12" was an internal Noble number, unrelated to Ronstan's description of its product. However, as the primary Judge noted (at [116]), Mr Atkinson was not asked to state precisely the nature of the product described as "KXS12", nor to explain how AWH could place an order with Ronstan using Noble's part number as a description. The absence of questions on these topics may have reflected the common assumption at this stage of the proceedings that a grade 316 stainless steel shackle had been ordered and installed by AWH, an assumption that was only abandoned by the parties after the experts had given their evidence.
Mr Atkinson did say, however, that if he had been told in 2000 that a shackle was required to lift 700 kilograms, he would have wanted a "rated" shackle - that is, one rated for its load-bearing capacity. The shackle ordered from Ronstan was not rated. Mr Atkinson also gave this evidence:
Q. Do you sell as cast stainless steel, at 98/2000 did you sell as cast stainless steel?
A. I believe so.
Q. Did you sell annealed stainless steel?
A. I don't think so.
Mr Collins also called evidence from Mr Taylor, who was employed in 2000 in Ronstan's architectural services division. Mr Taylor's evidence does not suggest that Ronstan understood Noble's purchase order as relating to a grade 316 shackle. He said that in 2000 Ronstan did not manufacture grade 316 shackles, but that "around" 2000 it did a "rolling change" of its shackles from grade 304 (non-annealed) to grade 316. Later, the following exchange took place:
Q. Did Ronstan have a product which it would recommend for use in a lifting application immersed in seawater?
A. No. Ronstan did not have a shackle for [sic] that nature, no.
When asked directly whether in 2000 Ronstan bought and on-sold grade 316 shackles manufactured by someone else, he said that Ronstan supplied stainless steel shackles but he was unable to confirm their grade.
Mr Taylor also indicated that the shackles Ronstan obtained from other manufacturers were "commodity grade" products and included 12mm shackles. When shown a photograph of the failed shackle (accompanying one of the expert reports), he identified it as a commodity grade shackle, which could have been sourced from Ronstan itself or from a range of suppliers. It was not suggested to Mr Taylor that Ronstan might have received an order for a grade 316 shackle, yet had filled that order with an inferior commodity grade shackle.
In order to make a finding as to whether AWH ordered a grade 316 shackle, it is necessary to take account of all the evidence. It is convenient, however, to consider the position initially independently of the evidence adduced from AWH's employees. I do this bearing in mind that the burden of proof lay on Mr Collins.
An important undisputed fact is that the shackle actually installed by AWH was not a grade 316 stainless steel shackle. AWH made no submission that the shackle had come from any source other than Noble via Ronstan. The inference is clearly that AWH installed the shackle supplied by Noble pursuant to the order placed by AWH with Noble in March 2000.
On this basis, there are two obvious possibilities (no others were suggested). The first is that AWH did not specify a grade 316 stainless steel shackle and Noble supplied a different grade of stainless steel shackle in conformity with the order. The second is that Noble failed to supply a grade 316 stainless steel shackle as ordered by AWH, but instead supplied a non-annealed stainless steel shackle sourced from Ronstan.
Noble's invoice and purchase order give no indication that AWH ordered either a grade 316 stainless steel shackle or an annealed shackle suitable for use in seawater. The absence of any indication in the invoice or purchase order that AWH placed an order for a grade 316 shackle, or an annealed shackle, tends to suggest that the shackle supplied by Noble conformed with the order actually placed by AWH: that is, the CF-8M stainless steel shackle actually installed by AWH to secure the gangway.
This conclusion receives support from the evidence of Mr Atkinson of Noble and Mr Taylor of Ronstan. Mr Atkinson said that in 2000, Noble did not sell annealed stainless steel. If that was so and AWH had ordered such a product, Noble might have been expected to say that it could not fulfil the order or that it would have to specifically order the product from another supplier. It is difficult to see how the purchase order from Noble to Ronstan could have been intended or understood as an order for a grade 316 stainless steel shackle, since it used a known code number. Mr Taylor's evidence tends to suggest that Ronstan did not supply a grade 316 stainless steel shackle suitable for long term immersion in seawater.
The inference is readily available from this evidence that AWH did not order a grade 316 shackle from Noble. AWH relied on the statements made by its employees to WorkCover and on Mr Hemsworth's evidence to counter any such inference. In my opinion, the primary Judge was amply justified in concluding that the evidence adduced by AWH was of little or no probative value on this question.
Mr Hemsworth, the only employee or officer of AWH who gave oral evidence, asserted that AWH used grade 316 steel very commonly. He also gave this evidence:
Q. A 316, would that 316 be annealed or unannealed?
A. I can't answer that question.
Q. So you were, as it were, prepared to recommend to Sydney Ports that they use a grade 316 shackle?
A. Provided it's protected from a dissimilar metal, yes, and it was.
Q. Whether it was annealed or not?
...
WITNESS: My analogy would be that, you know, in buying a shackle off Ronstan, and they are used on many yachts with many high loads, and I was in no different a circumstance and in my every day where I am using much larger shackles and I know they are heat treated and I would be of the assumption - not that it's in the forefront of your mind - but it would have been heat treated and acceptable to take the load that it was sized for.
PARKER
Q. Have you -
A. I don't - if I'm buying an 80 tonne shackle I don't have to think that it's heat treated, I know it's heat treated. It's not as if I'm buying an 80 tonne shackle or buying a 12 millimetre shackle or, as it was in this case, I think.
Q. How do you know it's heat treated?
A. I assumed that all shackles were heat treated because all shackles take loads. There is no purpose of the shackle if it's not taking load.
Mr Hemsworth's evidence suggests that he did not appreciate that 12mm shackles (or shackles of a similar size) might or might not be annealed and thus might or might not be suitable for prolonged use in seawater to secure heavy loads. The employee of AWH who actually ordered the shackle (Mr Nicholl) did not give evidence, so there was nothing to indicate that the person who actually placed the order had any greater knowledge of the characteristics of shackles than Mr Hemsworth. If anything, Mr Hemsworth's evidence makes it more likely that AWH placed an order without specifying either that a grade 316 stainless steel shackle was required or that the shackle supplied should be annealed to ensure that it was suitable for use in seawater. And, as the primary Judge found, Mr Hemsworth demonstrated no real idea as to the quality of shackle that had been ordered by AWH or supplied by Noble. When Mr Hemsworth said in his witness statement that the "defective shackle was a marine grade stainless which is known to me as a Type 316 stainless steel", he was not saying and cannot be taken as saying that he had personal knowledge that the defective shackle was solution annealed or was a class of shackle that was solution annealed.
Mr D'Arth's statements to WorkCover are of little assistance to AWH. His statement of 18 July 2002 merely contained an unsupported statement of belief. Not only was the statement unsupported, but Mr D'Arth, when asked what heat treatment process the shackle should have undergone to be suitable for seawater application, said:
I have no idea. It was marine shackle [sic] we were buying.
Mr D'Arth's fax to Workcover on 24 July 2002 again asserted that the grade of shackle was 316 (as everyone wrongly believed until the hearing), but he gave no basis for the assertion, other than a reference to the invoice from Noble. Since the invoice contained only Noble's own product number, it is not apparent how Mr D'Arth could have deduced that AWH had ordered a grade 316 shackle.
As I have noted, no-one other than Mr Hemsworth gave evidence on behalf of AWH. So far as Mr Walkden's statement to WorkCover is concerned, it is enough to say that his Honour was fully justified in regarding the statement as unhelpful on the critical issue of whether AWH had placed an order for a grade 316 shackle or for an annealed shackle suitable for use in seawater.
Mr McCulloch sought to gain some comfort from the fact that Mr Collins' counsel did not elicit evidence from Mr Atkinson as to his understanding of the invoice and purchase order. In fact, Mr Atkinson was asked some questions about the item "KXS12 12mm S/S DEE SHACKLE", but he was not asked whether the item referred to a heat treated or an annealed product. It was open to counsel for AWH to ask Mr Atkinson further questions about the invoice and purchase order, but he did not do so. Having regard to the course of the trial and the fact that at the time Mr Atkinson gave evidence all parties assumed that AWH had installed a grade 316 shackle, I do not think that particular significance can be attached to the absence of questioning on this point. In any event, a failure to ask Mr Atkinson about the meaning of the product number cannot constitute positive evidence that the item ordered by AWH from Noble was a grade 316 shackle.

However, Ms Flanagan also reported that Mr Collins' general intellectual functioning was in the high average range, with "extraordinarily strong" verbal skills. His performance on non-verbal tasks was "abnormally poorer" than on verbal tasks, but still within the average range. Mr Collins' "basic planning and problem-solving was reasonable". Given the short time since Mr Collins had sustained his injuries, Ms Flanagan thought that further spontaneous recovery was likely to occur.
The Certificate was prepared by Dr Coffey, a neurologist. It included the following passages:
HISTORY RELATING TO THE INJURY
...
His wife has noted that he does not have the same ability now to plan and organise himself and he has difficulty with money management - he tends to make inappropriate purchases.
Mr Collins is aware now of problems with his short term memory. He has been told that he should keep lists and notebooks etc but he constantly mislays his notebooks. He get muddled about appointments and times etc. His wife said that she in fact has taken over making lists for him.
If he goes shopping on his own he will often return with only one of the items he was supposed to have purchased but will also have bought inappropriate items.
...
He has difficulty with calculations - particularly working out how much a certain item might cost. In order to avoid getting muddled now he said he simply passes over a ten or twenty dollar bill.
...
SUMMARY
...
His MRI Brain scan is suggestive that his head injury may have been more severe than first appreciated and his wife was able [to] give a detailed account of her observations of his functioning since the accident - Mrs Collins feels that her husband cannot plan and organise himself as he did before, that he tends to be impulsive and make inappropriate purchases and not manage his money as well, but he needs constant prompting to maintain his personal care and hygiene and that his memory is now unreliable. Mr Collins himself believes that he cannot think now as quickly and as efficiently as before, that he tends to get muddled, make mistakes in calculations, have difficulty following technical instructions when assembling a gadget etc. (something because of his radio communication expertise was usually very simple for him).
On the evidence available I have therefore concluded that even allowing for any effect of chronic pain and depression etc on Mr Collins cognitive abilities etc that he has nevertheless sustained some degree of organic brain damage.
The joint report of the two clinical neuropsychologists, dated 26 April 2011, went further. It included the following passages:
7. What is the clinical significance of any pattern which emerges?
The pattern of results is consistent with reported functional or day-to-day difficulties with more complex or cognitively demanding activities, such as remembering appointments or paying bills in a timely fashion, whereby Mr Collins will need to be assisted with the initial set up of strategies and systems to compensate for the reductions in cognitive function.
8. What is meant by the terms mild and severe cognitive impairment in relation to Mr Collins' ability to care for himself or to manage his own affairs?
Mr Collins is considered to have mild cognitive impairment when compared to the normal population, given that most of his test scores are within average ranges for age within the standardisation sample. However, when compared to his estimated pre-injury level of function, then the level of reduction would not be appropriately described as mild, given that there is evidence of very significant decline from pre-injury levels that were well above average.
With respect to his ability to care for himself and manage his own affairs, the neuropsychological test results suggest that he has the capacity to care for himself in most respects. He does not need care or supervision in order to perform activities of daily living. However, given reduced new learning and memory, he would need to write down appointments and arrangements in a diary in order to keep track of them and would need some initial input to set up an appropriate system, after which he would be capable of being independent with this. Similarly, in terms of managing day-to-day finances such as paying bills, he has the capacity to manage independently but needs initial input to set up an appropriate system such as keeping bills in the same place and ordering them by the due date for payment. Given the importance of problem solving and reasoning skills for decision making in relation to larger financial assets, it is considered that he should not be given independent responsibility for managing large financial assets.
9. Which, if any, test results are relevant to determining whether Mr Collins is capable of administering his own affairs?
The test results indicate that there are reductions from pre-injury levels in new learning and memory, working memory and adaptive (executive function) such as problem solving. These reductions require the adoption of compensatory strategies in day-to-day life as described above, and given that his skills are mostly within average ranges, with intact and well above average verbal skills, he is expected to be capable of taking on appropriate systems and thereby managing independently with the exception of independent responsibility for managing large amounts of financial assets. (Emphasis added.)
The heavily qualified assessment prepared by Ms Flanagan cannot be said to have provided a sound basis for claiming damages for the cost of funds management. It was prepared shortly after the accident and contemplated that the relatively moderate reductions in functioning would be ameliorated over time. Ms Flanagan's report can be put to one side.
The essential difference between the Certificate and the joint neuropsychological report is that the former, although finding "some degree of organic brain damage", did not assess or address Mr Collins' capacity to manage large amounts of money. The joint report, by contrast, specifically stated that although Mr Collins was generally capable of managing independently (including his day to day finances), he should not be entrusted with responsibility for managing large financial assets, no doubt including a large award of damages.
Given the basis on which the matter was approached at first instance, I do not think that the primary Judge can be said to have erred in concluding that the material available to Mr Collins at the time of service of the amended pre-filing statement was insufficient to have alerted Mr Collins or his advisers to the need to claim damages for the cost of funds management. The Certificate may have suggested that further inquiries would be desirable. But that is different from concluding that the content of the Certificate, of itself, should have caused Mr Collins to make a claim for the cost of funds management in November 2008. I do not think that the primary Judge has been shown to have erred in his finding of fact.
I should add two points. First, neither party paid close attention in submissions to the meaning of the expression "material concerned" in s 318(2)(a) of the WIM Act. The parties proceeded on the basis that the issue was whether the medical evidence available to Mr Collins and his advisers at the time the amended pre-filing statement was served should have caused him to claim damages for the cost of funds management at that time. I have proceeded on the same basis without considering other possible meanings of the statutory expression. Secondly, both parties assumed that the amended pre-filing statement of November 2008 was the relevant "pre-filing statement" for the purposes of s 318(1)(a) and (2) of the WIM Act. Neither took any point about that statement not expressly incorporating a proposed statement of claim.
Mr Hooke advanced a further argument, although he did not press it strongly. He contended that the primary Judge erred in finding that Mr Collins would suffer substantial prejudice if leave were not granted to file the amended particulars of damage. The criticism appeared to be that a plaintiff will always suffer prejudice if not permitted to pursue a claim and that s 318(2)(b) of the WIM Act cannot be satisfied simply by prejudice of this kind.
Section 318(2)(b) requires a claimant seeking leave to satisfy the court that the failure to grant leave "would substantially prejudice the party's case". Mr Collins' case incorporated his claim for damages against Ports. It was open to the primary Judge to find that Mr Collins' case would have been substantially prejudiced if leave were not granted, since he would be unable to claim a head of damages that (as the parties had agreed) could support an award of $100,000.00. It is true that Mr Collins may still have been able to claim damages against AWH for the cost of funds management, but at the time the application for leave was made it was not known whether that claim would be successful. Even at the time the application for leave was dealt with in the Supplementary Judgment, it could not be known whether the finding against AWH would survive any appeal.
For these reasons, Ports has not identified any error in the primary Judge's conclusion that Mr Collins' damages against it should include a component for the cost of funds management.

Interest

Ports challenges the primary Judge's ruling that Mr Collins was entitled to pre-judgment interest on two bases. The first, which does not appear to have been put at trial, is that as Mr Collins did not amend his particulars to seek the cost of funds management until near the end of the trial (see at [41] above), Ports never had a reasonable opportunity to make an offer in respect of Mr Collins' full entitlement to all damages. The second is that the different statutory regimes governing damages and the cross-claims between Ports and AWH made it inappropriate for Ports to make an offer of settlement.
Ports made no offer to settle the proceedings at any stage of the proceedings. I do not construe s 151M(4)(a)(i) of the WC Act (set out at [45] above) to mean that interest is unavailable to a plaintiff who amends his or her particulars of damage with the leave of the court, even if the amendment is made at a relatively late stage of the proceedings. The question posed by s 151M(4)(a)(i) is whether a defendant has been given information to enable a proper assessment of the plaintiff's claim and has had a reasonable opportunity to make an offer of settlement, where appropriate, in respect of the plaintiff's full entitlement to damages but has not done so. The words "in respect of the plaintiff's full entitlement to damages" refer, in my opinion, to the offer to be made by the defendant.
A plaintiff will be unable to rely on s 151M(4)(a)(i) to claim interest unless:
information that would enable a proper assessment of the plaintiff's claim has been given to the defendant;
the defendant has had a reasonable opportunity to make an offer of settlement (where appropriate to do so);
the opportunity is to make an offer in respect of the plaintiff's full entitlement to all damages; and
the defendant makes no such offer.
The information that s 151M(4)(a)(i) requires to be provided to a defendant is that which would enable the defendant to make a proper assessment of the plaintiff's damages claim as then formulated. The defendant can preclude the plaintiff from relying on s 151M(4)(a)(i) to claim interest by making an offer of settlement in respect of the plaintiff's full entitlement to damages in accordance with the claim advanced by the plaintiff at the time. If the defendant makes no such offer, the plaintiff can rely on s 151M(4)(a)(i) to exempt him or her from the prohibition in s 151M(4)(a) on the court awarding interest. This is consistent with the evident purpose of s 151M(4), namely to impose restrictions on the plaintiff's entitlement to interest as a mechanism to encourage the parties, especially defendants, to make reasonable offers of settlement.
Section 151M(4) of the WC Act itself contemplates that the nature and extent of the plaintiff's claim to damages might vary during the course of the proceedings. Section 151M(4)(b) states that an offer by a defendant is not unreasonable for the purposes of s 151M(4)(a)(iii) if at the time the offer was made the defendant was not able to make a reasonable assessment of the plaintiff's full entitlement to damages. One reason why a defendant might not have been able to make a reasonable assessment of the plaintiff's "full entitlement to damages" is that at the time the offer was made the plaintiff had not particularised a particular head of damages that he or she has subsequently claimed. For example, if Ports had made an offer to settle Mr Collins' damages claim at a time when he did not seek the cost of funds management, Ports' offer could not be regarded as unreasonable merely because it failed to take account of a head of damages that Mr Collins had not claimed. This supports a construction of s 151M(4)(a)(i) that relates the reasonable opportunity for a defendant to make an offer of settlement to the plaintiff's claim to damages as formulated at the time the opportunity is said to have been available to the defendant.
Ports had a reasonable opportunity to make an offer of settlement of the kind identified in s 151M(4)(a)(i), but it did not do so. Ports' first argument must be rejected.
I should add that Mr Collins also relied on s 151M(4)(a)(ii) to support his claim to interest. He contended that once he had amended his particulars to claim the cost of funds management, Ports had a reasonable opportunity to make a revised offer of settlement but had not done so. Ports maintained, without elaboration, that because of the late amendment, it did not have a reasonable opportunity to make a "revised offer" (assuming a party can make a revised offer where it has not previously made any offer at all). Having regard to my conclusion on s 151M(4)(a)(i), it is not necessary to determine whether Mr Collins' reliance on s 151M(4)(a)(ii) is well-founded.
Ports' second argument relied on the judgment of Studdert J in Corbett v Toll Stevedoring Pty Ltd [2007] NSWSC 749. However, as the primary Judge pointed out (Supplementary Judgment, at [24]-[25]), Corbett was a different case, involving multiple defendants and multiple cross-claims. Although Studdert J's reasons were brief, it appears that there were particular circumstances in Corbett that made it inappropriate for one of five defendants to make an offer to settle the plaintiff's claim when none of the other defendants had done so.
I agree with the primary Judge that Ports advanced no compelling reason why it was inappropriate for it to make an offer to settle Mr Collins' claim. An offer of settlement, if accepted, would not of itself have determined the question of contribution between Ports and AWH. However, a settlement would have resolved the dispute between Mr Collins and Ports and may well have made it more likely that a compromise would have been reached between Mr Collins and AWH. Ports did not explain why the different damages regimes applicable to each defendant prevented it from making an offer of settlement to Mr Collins while preserving its entitlement to seek contribution from AWH.
The logic of Ports' position is that it can never be "appropriate" for a defendant to make an offer of settlement where there are two defendants, each subject to a different damages regime and each of whom has a cross-claim against the other. This is a relatively common situation. If Ports' position is correct, it would go a considerable way towards undermining the objectives of the scheme constructed by s 151M(4) of the WC Act. Ports' second argument on the issue of interest must also be rejected.

Costs Between Mr Collins and Ports

Ports submitted that the primary Judge misconstrued the WC Regulation in awarding costs to Mr Collins. In particular, Mr Hooke contended that the primary Judge wrongly construed reg 109 as qualifying the general principle, stated in reg 106, that the parties to court proceedings for work injury damages are to bear their own costs.
It is necessary to commence with s 346 of the WIM Act. Section 346, which is in Part 8, Div 3A, provides as follows:
(1) This section applies to costs (including disbursements) payable by a party in or in relation to a claim for work injury damages, including court proceedings for work injury damages.
(2) The regulations may make provision for or with respect to the awarding of costs to which this section applies. The regulations may provide for the awarding of costs on a party and party basis, on a practitioner and client basis, or on any other basis.
(3) A party is not entitled to an award of costs to which this section applies, and a court may not award such costs, except as prescribed by the regulations under this Act or by the rules of the court concerned.
(4) In the event of any inconsistency between the provisions of the regulations under this section and rules of court, the provisions of the regulations prevail to the extent of the inconsistency.
There is no dispute that Mr Collins' claim for damages against Ports is a claim for "work injury damages": see the definition in s 250 of the WIM Act.
Part 17, Div 3, Subdiv 2 of the WC Regulations (regs 104-109) is headed "Restriction on awarding of costs". Regulations 104 and 105 deal with the cases where a claimant makes an offer in mediation and obtains a judgment which is no less favourable that his or her final offer (reg 104) or where an insurer makes an offer in mediation and the claimant obtains a judgment which is less favourable that the insurer's final offer (reg 105). Neither of these provisions applies in the present case.
Regulations 107-109 provide as follows:
107. Deemed offer where insurer denies liability and no mediation occurs or mediation fails
(1) If:
(a) the insurer wholly denies liability, and
(b) no mediation occurs, and
(c) the claimant obtains an order or judgment on the claim,
costs are to be awarded in accordance with this Subdivision as if:
(d) the insurer had made a final offer of settlement at mediation of $0, and
(e) the claimant had made a final offer of settlement at mediation of:
(i) ...
(ii) in any other case - the amount of damages specified in the pre-filing statement served under section 315 of the 1998 Act.
...
108. Subdivision does not apply to ancillary proceedings
This Subdivision does not apply to costs payable in or in relation to proceedings that are ancillary to proceedings on a claim for work injury damages, and a court is to award costs in such ancillary proceedings in accordance with the rules of the court.
109. Multiple parties
Where 2 or more defendants are alleged to be jointly or jointly and severally liable to the claimant and rights of contribution or indemnity appear to exist between the defendants, this Subdivision does not apply to an offer of settlement unless:
(a) in the case of an offer made by the claimant - the offer is made to all the defendants and is an offer to settle the claim against all of them, and
...
Ports submitted that the primary Judge had wrongly construed reg 109 as excluding the operation of Subdiv 2 in its entirety. Mr Hooke pointed out that reg 109 merely provides that Subdiv 2 does not apply to certain offers of settlement made by or to a claimant, where two or more defendants are alleged to be liable to the claimant. The clear meaning of regs 106 and 109 is that in cases involving multiple defendants the usual rule stated in reg 106 applies, unless an offer complying with reg 109 has been made. Thus if no offer complying with reg 109 was made, reg 106 applied to the proceedings and the primary Judge should not have ordered Ports to pay Mr Collins' costs.
In response, Mr King referred to s 311 of the WIM Act, which defines "defendant" as meaning the person against whom proceedings for the recovery of work injury damages are commenced. However, this definition only applies to Part 6 of the WIM Act and, in any event, does not appear to be relevant to Ports' argument.

The starting point is s 346(3) of the WIM Act, which denies Mr Collins an entitlement to costs except as provided by the regulations or rules of court. In the event of an inconsistency between the regulations and rules of court (such as UCPR, r 42.1 providing that in general costs follow the event), the regulations prevail: s 346(4).
Regulation 106 states that except as provided in Subdiv 2, the parties to the proceedings are to bear their own costs. Regulations 104 and 105 constitute exceptions to the general rule stated in reg 106. Their operation depends on the terms of the "final offer of settlement in mediation" made by the claimant or insurer (as the case may be) and on whether that offer was or was not more favourable than the order or judgment obtained by the claimant. Regulations 104 and 105 had no application in the present case.
Regulation 107(1) caters for the case where the insurer has denied liability and there has been no mediation. In that case, each party is deemed to have made an offer in the terms set out in reg 107(1).
Regulation 109(a) provides that Subdiv 2 does not apply to an offer of settlement made by a claimant where multiple defendants are parties unless the offer is made to all defendants. Regulation 109(a) qualifies the operation of reg 104 and denies a claimant the opportunity to obtain an award of costs against multiple defendants, unless the settlement offer is of the kind identified in reg 109(a). If, as in this case, a claimant has not made an offer of that kind where there are multiple defendants, reg 104 does not apply, but reg 106 still has effect. The offer deemed to be made by reg 107 is not an offer of the kind identified in reg 109(a). Thus no order for costs can be made in favour of the claimant.
It follows that the primary Judge erred in ordering Ports to pay Mr Collins' costs of the proceedings.

Costs Between Ports and AWH

Ports submitted that if (as I have held) it was not liable to pay Mr Collins' costs of the proceedings, the primary Judge should not have ordered Ports to contribute to the costs AWH was ordered to pay to Mr Collins.
Ordinarily, the right to contribution conferred by s 5 of the 1946 Act extends to the costs payable to the plaintiff in addition to damages: James Hardie and Company Pty Ltd v Wyong Shire Council [2000] NSWCA 107; 48 NSWLR 679, at [23], per Handley JA; at [36], [40], per Giles JA; at [46], per Heydon JA. However, where a provision such as reg 106 of the WC Regulation prevents a plaintiff from recovering costs against one of two defendants, the view has been expressed that s 5 does not permit the court to order that defendant to contribute to the costs payable by the other defendant to the plaintiff: Estate of the Late M T Mutton by its Executors trading as Mutton Bros v Howard Haulage Pty Ltd [2007] NSWCA 340, at [262]-[263], per Ipp JA (with whom Spigelman CJ and Hodgson JA relevantly agreed); Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Ltd [2009] NSWCA 381, at [29]-[33], per Hodgson JA; at [66]-[67], per Basten JA.
No good reason has been advanced why the view expressed in those cases should not be followed. In particular, no attempt has been made to persuade this Court that the decision in Ace-Semi v Zurich was plainly or clearly wrong in the sense identified in Gett v Tabet [2009] NSWCA 76; 254 ALR 504, at [294]-[295], per curiam. Accordingly, the primary Judge was in error in ordering Ports to pay 65 per cent of the costs AWH was required to pay to Mr Collins.
I agree with Ports' submission that since it and AWH each succeeded on the respective cross-claims the appropriate costs order is that each cross-defendant pay the cross-claimant's costs of the cross-claim.

ORDERS

Conclusions

The conclusions I have reached on the issues identified at [58]-[59] above are as follows:
(i) Ports should be granted an extension of time in which to file its cross-appeal, on the basis of its undertaking to pay Mr Collins' costs of the cross-appeal, to the extent that the Court orders in view of the disposition of the cross-appeal.
(ii) The primary Judge erred in holding that AWH bore the legal burden of proving that it had ordered a grade 316 shackle from Noble.
(iii) Nonetheless, the primary Judge's finding that AWH did not order a grade 316 shackle from Noble should be upheld.
(iv) Ports' failure to institute a system of maintenance and inspection of the gangway was a material cause of Mr Collins' injuries.
(v) The primary Judge did not err in his apportionment of responsibility between Ports and AWH, being 65 per cent to Ports and 35 per cent to AWH.
(vi) The primary Judge did not err in granting leave to Mr Collins to file an amended statement of particulars claiming the cost of funds management as a head of damages.
(vii) The primary Judge did not err in awarding interest to Mr Collins against Ports.
(viii) The primary Judge erred in ordering Ports to pay Mr Collins' costs.
(ix) The primary Judge erred in ordering Ports to pay 65 per cent of the costs AWH was ordered to pay to Mr Collins.

Proposed Orders

I propose the following orders:
1. Allow the appeal on the question of indemnity costs, but otherwise dismiss the appeal.
2. Extend the time for the cross-appellant ("Ports") to file a notice of cross-appeal in the form annexed to the affidavit of Kerry Anne Smith, sworn on 20 February 2013, until seven days from the date of this order, subject to Ports' undertaking to pay Mr Collins' costs of the cross-appeal, to the extent the Court thinks appropriate in view of the disposition of the cross-appeal.
3. Direct Ports within seven days to file both its notice of cross-appeal and an undertaking in the terms referred to in Order 2.
4. Subject to compliance with Order 3, allow the cross-appeal in part.
5. Set aside Orders 3, 4, 6 and 8 made by the primary Judge on 1 November 2012.
6. In lieu of Orders 3, 4, 6 and 8 referred to in Order 5, make the following Orders:
3. There be no order as to costs between the Plaintiff ("Mr Collins") and Ports.
4. Order the Second Defendant ("AWH") to pay Mr Collins' costs, as agreed or assessed, on the ordinary basis.
6. Order that AWH pay Ports' costs of Ports' cross-claim against AWH.
8. Order that Ports pay AWH's costs of AWH's cross-claim against Ports.
7. In accordance with Ports' undertaking referred to in Order 2, direct Ports to pay 75 per cent of Mr Collins' costs of the cross-appeal.
8. Order AWH to pay 90 per cent of Mr Collins' costs of the appeal.
9. As between Ports and AWH, there be no order as to costs on the appeal and cross-appeal, to the intent that each party bear its own costs.
The percentages in Orders 7 and 9 are intended to reflect the fact that Ports and AWH enjoyed very limited success on the cross-appeal and appeal, respectively.
I have proposed no changes to Orders 1, 2, 5 and 7 made by the primary Judge as I do not think that the conclusions I have reached require any changes. If any party thinks otherwise, it or he has liberty to file within 14 days proposed short minutes of order and brief written submissions in support.
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Case Title:	Australian Winch and Haulage Company Pty Ltd v Collins
Medium Neutral Citation:	[2013] NSWCA 327
Hearing Date(s):	11, 12 July 2013
Decision Date:	09 October 2013
Before:	Emmett JA [1]; Leeming JA [22]; Sackville AJA [23].
Decision:	1. Allow the appeal on the question of indemnity costs, but otherwise dismiss the appeal. 2. Extend the time for the cross-appellant ("Ports") to file a notice of cross-appeal in the form annexed to the affidavit of Kerry Anne Smith, sworn on 20 February 2013, until seven days from the date of this order, subject to Ports' undertaking to pay Mr Collins' costs of the cross-appeal, to the extent the Court thinks appropriate in view of the disposition of the cross-appeal. 3. Direct Ports within seven days to file both its notice of cross-appeal and an undertaking in the terms referred to in Order 2. 4. Subject to compliance with Order 3, allow the cross-appeal in part. 5. Set aside Orders 3, 4, 6 and 8 made by the primary Judge on 1 November 2012. 6. In lieu of Orders 3, 4, 6 and 8 referred to in Order 5, make the following Orders: 3. There be no order as to costs between the Plaintiff ("Mr Collins") and Ports. 4. Order the Second Defendant ("AWH") to pay Mr Collins' costs, as agreed or assessed, on the ordinary basis. 6. Order that AWH pay Ports' costs of Ports' cross-claim against AWH. 8. Order that Ports pay AWH's costs of AWH's cross-claim against Ports. 7. In accordance with Ports' undertaking referred to in Order 2, direct Ports to pay 75 per cent of Mr Collins' costs of the cross-appeal. 8. Order AWH to pay 90 per cent of Mr Collins' costs of the appeal. 9. As between Ports and AWH, there be no order as to costs on the appeal and cross-appeal, to the intent that each party bear its own costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	EVIDENCE - faulty shackle responsible for failure of a gangway - plaintiff injured as a result - installer of shackle obtained it from a supplier - whether plaintiff or installer bears the burden of proving that the correct shackle was or was not ordered - whether plaintiff discharged the burden of proving that the installer had not ordered the correct shackle NEGLIGENCE - causation - whether employer's failure to institute a system of inspection was a cause of the plaintiff's injuries - apportionment between defendants - whether primary Judge erred in apportioning responsibility between the installer of the shackle and the employer WORK ACCIDENT - claim against employer - whether plaintiff precluded from claiming the cost of funds management because of a failure to include the claim in an amended pre-filing statement - s 318(2) of the Workplace Injury Management and Workers Compensation Act 1998 ("WIM Act") - whether plaintiff precluded by s 151M(4) of the Workers Compensation Act 1987 from claiming pre-judgment interest COSTS - whether plaintiff was entitled to an order for costs against the employer - s 346(3) of the WIM Act
Legislation Cited:	Civil Liability Act 2002, s 5B Civil Procedure Act 2005, ss 56, 58, 100 Law Reform (Miscellaneous Provisions) Act 1946, s 5(2) Workers Compensation Act 1987, ss 151G, 151M, 346 Workplace Injury Management and Workers Compensation Act 1998, ss 250, 311, 315, 318, 346 Construction Safety Regulations 1950, reg 73 Uniform Civil Procedure Rules, rr 14.14, 15.12, 20.26, 42.1, 51.17 Workers Compensation Regulation 2010, regs 104-109
Cases Cited:	Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Ltd [2009] NSWCA 381 Australian Winch & Haulage Company Pty Ltd v Collins [2013] NSWCA 232 Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 Corbett v Toll Stevedoring Pty Ltd [2007] NSWSC 749 Currie v Dempsey (1967) 69 SR (NSW) 116 Estate of the Late M T Mutton by its Executors trading as Mutton Bros v Howard Haulage Pty Ltd [2007] NSWCA 340 Gett v Tabet [2009] NSWCA 76; 254 ALR 504 James Hardie and Company Pty Ltd v Wyong Shire Council [2000] NSWCA 107; 48 NSWLR 679 Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; 59 ALR 529 Purkess v Crittenden (1965) 114 CLR 164 Whitney v Dream Developments Pty Ltd [2013] NSWCA 188
Texts Cited:	Cross on Evidence (9th Aust Ed, 2013)
Category:	Principal judgment
Parties:	Australian Winch & Haulage Company Pty Ltd (Appellant) Philip Archibald Collins (First Respondent) Sydney Ports Corporation (Second Respondent)
Representation
- Counsel:	Counsel: Mr MT McCulloch SC with Mr SJ Maybury (Appellant) Mr L King SC with Mr P Stockley (First Respondent) Mr DJ Hooke SC with Mr NJ Broadbent (Second Respondent)
- Solicitors:	Solicitors: HWL Ebsworth Lawyers (Appellant) Higgins Lawyers (First Respondent) Hicksons Lawyers (Second Respondent)
File Number(s):	2012/358038
Decision Under Appeal
- Court / Tribunal:	Supreme Court
- Before:	Harrison J
- Citation:	Collins v Sydney Ports Corporation [2012] NSWSC 115Collins v Sydney Ports Corporation [2012] NSWSC 1316
- Court File Number(s):	2009/296483