Boulton v Hy-Line
[2012] VSC 547
•14 November 2012
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT BENDIGO
COMMON LAW DIVISION
No. SCI 04333 of 2011
| STANLEY ALEXANDER BOULTON | Plaintiff |
| v | |
| HY-LINE AUSTRALIA PTY LTD (ACN 057 022 732) | First Defendant |
| and | |
| ADEPT BUILDING & CONSTRUCTION PTY LTD (ACN 080 908 283) | Second Defendant |
| and | |
| C.V. ENGINEERING PTY LTD (ACN 112 097 293) | Third Party |
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JUDGE: | WILLIAMS J | |
WHERE HELD: | Bendigo | |
DATES OF HEARING: | 27 – 30 August and 3 September 2012 | |
DATE OF JUDGMENT: | 14 November 2012 | |
CASE MAY BE CITED AS: | Boulton v Hy-Line & Ors | |
MEDIUM NEUTRAL CITATION: | [2012] VSC 547 | |
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ACCIDENT COMPENSATION – Contribution – Worker injured in fire in chicken shed – Welding by independent contractor near shed – Vicarious liability of independent contractor as employer – Degree of departure from standard of conduct by employer and independent contractor – Relative causal potency of acts – Section 24(2) Wrongs Act 1958.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Mighell SC with Mr Michael Roche | Petersen Westbrook Cameron Pty Ltd |
| For the First Defendant | Mr J Rush QC with Mr R Kumar | Paul Wilcox |
| For the Second Defendant | Mr R Dyer | Norris Coates |
| For the Third Party | No appearance. |
HER HONOUR:
The plaintiff, Mr Boulton, was employed by the first defendant, ‘Hy-Line’, for some 22½ years at its Huntly chicken farm. He was injured on 9 April 2009, whilst working there inside a chicken shed which caught fire. In this proceeding, he claimed that he was injured as a result of negligence on the part of both Hy-Line and the second defendant, ‘Adept’, which was carrying out repair work involving welding on the shed.
After some days of evidence in a trial before a jury, Mr Boulton settled his claim against the defendants.
Now Hy-Line and Adept claim contribution from each other.
Issues
Adept first raises the issue as to whether it should be held vicariously liable for the negligence of Mr Alex McKinnon, a boilermaker, who was performing welding work on its behalf at the Huntly farm when Mr Boulton was injured. Mr McKinnon’s services were provided to Adept by the third party, ‘CV’. Adept maintains that Mr McKinnon (and therefore, CV) should be regarded as having been acting as an independent contractor when performing the work.
Whether or not Adept is vicariously liable for the acts of Mr McKinnon, it concedes that it is liable for the acts of its employee, Robin Winchcombe and that the two men were working as a team which could be held responsible for starting the fire. The second issue for the Court under s 24(2) of the Wrongs Act 1958 is as to the extent it is just and equitable to attribute responsibility for Mr Boulton’s injury, loss and damage to Hy-Line, Adept and, or CV.
Beach J identified the relevant considerations in Papadopoulos v MC Labour Hire Services Pty Ltd & Anor (No 4),[1] when he said:
The two principal factors are the degree to which each has departed from the standard of conduct required of them and the relative causal potency of each Defendant’s acts.
[1][2009] VSC 193, [76] (‘Papadopoulos’).
Facts
I am satisfied on the balance of probabilities as to the following facts.
There were some 25 sheds, housing some 200,000 chickens, at Hy-Line’s Huntly farm in 2009. Dr Greg Underwood was the general manager of the farm and Tin Phung was the manager of farm operations. Mr Boulton was the manager of the ‘genetic farm’ which comprised five sheds where chickens were bred for breeding purposes. He described Mr Phung as his ‘overseer’. Mr Boulton spent 90 per cent of his time in the genetic farm sheds with the chickens. The fire occurred whilst he was inside the ‘G2’ shed.
Adept was a building company of which Steven Osborn, a carpenter, was a director. Hy-Line, through Mr Phung, had engaged it to carry out construction and other works to the sheds at Huntly for about three years before 9 April 2009. Mr Osborn was also a director, along with his brother, of Ozweld Pty Ltd. Ozweld carried on a general steel fabrication business and made the metal stairs and platforms which were installed by Adept at Hy-Line’s farm. From at least 2004, Mr Osborn had performed work for Hy-Line through Ozweld. Mr Osborn and Mr Phung were in almost daily contact relating to the work at the Huntly farm between January and April 2009. Their normal means of communication was email.
Adept used Mr McKinnon to carry out some of the contracted work at Hy-Line. CV was Mr McKinnon’s company. It billed Adept for his services at hourly rates. Mr McKinnon worked 74.5 hours for Adept at Hy-Line between 1 and 9 April 2009. Adept supplied the welding equipment he used. At least some of those tools and that equipment were marked ‘Adept’. Adept supplied most of Mr McKinnon’s work which included work at Adept’s own premises. (Mr McKinnon did other work, building semitrailers, and he had his own equipment for that.) Mr Osborn told Mr McKinnon where to do the work and, in the case of the Hy-Line jobs, to take Robin Winchcombe, an Adept employee, as his assistant.
Mr Boulton had met Mr Boulton and Mr Winchcombe, five or six times a year over the previous approximately three year period when Adept was working at the farm. Adept workers had their own lunch room and toilet facilities at the Hy-Line farm. According to Mr Boulton, when Mr McKinnon and Mr Winchcombe were at the farm, they signed on as Adept workers.
On 26 November 2008, Mr Phung had emailed Mr Osborn asking him to attend to jobs at the genetic farm. They included installing new fans, cladding, assessing timber stairs and replacing them with metal ones and building new doors.
On 13 January 2009, Mr Osborn prepared a handwritten ‘Health and Safety Coordination Plan for the ‘Hyline Australia’ project’, naming him as the responsible person in relation to listed tasks which include making the plan available and consulting employees and subcontractors on occupational health and safety matters. According to Mr Osborn, the documents formed part of induction materials which new Hy-Line employees were to read and acknowledge having understood. The materials also included a ‘Hot Work permit’ with effect from the same day. Mr Osborn said that the ‘tick box’ style document may have been completed by his secretary at the time. It listed as ‘Mandatory Precautions’: a fire extinguisher being inspected and at hand at all times, ‘wet down equipment or placement of fire blankets around the area prior to commencing work’ and one person being required for fire watch when welding was done.
On 3 April 2009, Mr Phung emailed Mr Osborn a list of jobs for the following week. He subsequently rang Mr Osborn, asking that Adept attend to platforms for the genetic sheds before Easter because the effect of frost on the old timber staircases represented an occupational health and safety issue.
Adept had supplied safety equipment, a chemical fire extinguisher and two water extinguishers, as well as a fire blanket to be used by Mr McKinnon. Mr Osborn told Mr McKinnon to take Mr Winchcombe to act as a ‘spotter’ and help him with the work. Mr McKinnon had no employees himself. Mr Osborn would have expected that, while McKinnon was welding, Mr Winchcombe would have watched, to spot any stray sparks or slag from the welding. He knew that, otherwise, a fire would be much more likely. If Mr Osborn had attended the site, he would have directed Mr Winchcombe to do that.
Mr Osborn knew that fire was the chief risk involved in welding activity. There was potentially a high risk of fire in the absence of the precautions which could eliminate it. He knew that the G2 shed, which the men were working on, had been sprayed inside with highly inflammable two pack polyurethane and that precautions were absolutely necessary. Mr Osborn was not at the Hy-Line site whilst the work on the genetic sheds was taking place, although he was the named supervisor of that work. He did not instruct Mr McKinnon that he had health and safety responsibilities there either. He did, however, have almost daily contact with Mr Phung. Other ‘hot work’ was being done at Hy-Line and there was no complaint about it.
The fire
On 9 April 2009, the Thursday before the Easter break, Mr Boulton drove to the G2 shed on the genetic farm. Mr McKinnon and Mr Winchcombe were working on the stairs and platform leading to the shed’s entry doors. Mr McKinnon stopped welding on the right hand railing at the bottom of the stairs to let Mr Boulton walk up. There were two doors at the north-eastern corner of the building opening from the top landing, one was hinged and the other sliding.
The G2 shed was 50 metres long. The two doors provided its only entry or exit point because the floor had been raised, preventing use of a door at the far western end. There was no fire alarm inside or outside the shed. There was no sprinkler system, fire extinguisher or other fire-fighting equipment to deal with a fire inside the shed. There was no telephone in the shed or any other means of communication, apart from any mobile phone Mr Boulton might have been carrying. If there was a power fault, calls would be automatically generated to a number of telephones, including Mr Boulton’s mobile phone.
Once inside the shed, Mr Boulton entered through a door into one of two bird enclosures which ran the full length of the shed’s northern and southern faces, separated by a walkway. He was weighing birds when he noticed smoke. He went back up the enclosure in the direction of the entry doors and noticed a fire burning inside the shed. I am satisfied that the fire was started by Mr McKinnon’s welding activity at the shed and the failure of either Mr Winchcombe or Mr McKinnon to take adequate precautions to prevent it occurring, whether by use of a fire blanket or other equipment or by properly watching for sparks and dealing with any.
After one unsuccessful attempt, Mr McKinnon succeeded in opening the door to the bird enclosure, burning his hand in the process. The door opened out into a foyer like area, which was now in flames. At about this time, temperature sensors in the shed appear to have detected the heat from the fire and activated two large fans. A third large fan had been operating the whole time. The fans sucked the smoke and flames towards Mr Boulton, causing him breathing problems. He retreated as far as he could down the central walkway to the far wall on the western side of the building. Realising that he was trapped, he tried to retrace his steps to the doors at the north-eastern corner of the building but only managed to get about three quarters of the way before the thick black smoke and flames checked his advance.
By this stage, the power in the building had failed. The walls and ceiling were aflame. Mr Boulton retreated again to the western side of the building. He pulled away nesting boxes to gain entry into the bird enclosure on the northern side of the building. He pulled up a section of the floor, which was raised around 2.8 metres from the ground, and attempted to drop through the joists, but became stuck. He thought he was going to die, and had visions of his family. The next thing he remembers is being on the ground, beneath the raised floor, apparently having passed out and fallen through the joists. Parts of the shed were starting to collapse. He managed to kick loose a piece of tin forming a part of the wall and was able to get his head and chest outside. Mr McKinnon pulled him free shortly afterwards. He was treated on site before being taken to hospital.
The Country Fire Authority (‘CFA’) attended the scene. Mr John Cutting, an Operations Officer, arrived at about 3.00pm. He led the team that investigated the fire and reported the findings of the investigation. He reports that there was clear evidence that the staircase to the G2 shed had been recently welded. Several items of welding equipment, marked as the property of Adept, were in its vicinity. Mr Cutting concludes that the fire originated below the part of the stairwell landing where the welding works had been conducted.
Was Mr McKinnon Adept’s employee ?
Traditionally, control of work indicated an employment relationship. As Latham CJ explained in Humberstone v Northern Timber Mills:
If the work done by one person for another is done subject to the control and direction of the latter person as to the manner in which it is to be done the worker is [an employee] and not an independent contractor. If, however, the person doing the work agrees only to produce a given result but is not subject to control in the actual execution of the work he is an independent contractor.[2]
[2](1949) 79 CLR 389, 396.
In more complex times, whilst the degree of control able to be exercised by a principal over work performed remains an important consideration in the identification of employment for vicarious liability purposes, courts now look more broadly at the ‘totality of the relationship between the parties’.[3] Relevant factors may include the method of payment for the services or work, the permanency of the arrangement, the level of skill required, the wearing of identifying clothing, the supply of tools or equipment and the ability to provide services or work for others.[4]
[3]Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, 29 (Mason J).
[4]See enumerated factors in Hollis v Vabu Pty Ltd (2001) 207 CLR 21, [47]-[57] (Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ).
Conclusion
On balance, I am satisfied that, in all the circumstances, Adept should be regarded as Mr McKinnon’s employer and held vicariously liable for his acts. That is so, notwithstanding that CV invoiced Adept for his services, that his work as a boilermaker was specialised and that he did some other work requiring his own different tools and equipment. In reaching this conclusion, I have taken all my factual findings into account and, in particular, the following factors:
· much of Mr McKinnon’s work was for Adept;
· Mr McKinnon had no employees of his own to assist him with his work and to perform the requisite ‘spotting’ activity when he was welding;
· Adept had supplied the welding equipment he used since 2004;
· at least some of the tools and equipment he used were marked ‘Adept’;
· Adept also supplied him with fire safety equipment, including fire blankets and extinguishers;
· Mr Osborn directed Mr McKinnon how to perform his work: at least by directing him where it was to be performed and that he should take its employee, Mr Winchcombe, as his assistant and spotter;
· both Mr McKinnon and Mr Winchcombe ‘signed on’ at the genetic farm, using Hy-Line’s ‘Visitors and Contractors Sheet’ as working for Adept; and
· it was Mr McKinnon who rang Mr Osborn with the news of the fire.
Apportionment of Liability
As Mr Boulton’s employer, Hy-Line owed him a special kind of duty. As the High Court said in Czatyrko v Edith Cowan University[5], there are ‘basic general principles’ that:
12. … An employer owes a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. If there is a real risk of an injury to an employee in the performance of a task in a workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards. The employer must take into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in a case of repetitive work.
…
16. An employer has another obligation. It is to provide employees with suitable plant and equipment to enable them to carry out their work safely.
[5](2005) 214 ALR 349, 353, [12] [16] (Gleeson CJ, McHugh, Hayne, Callinan and Heydon JJ).
In Leighton Contractors Pty Ltd v. Fox; Calliden Insurance Limited v. Fox,[6] the High Court described an employer’s duty to ensure that reasonable care be taken for the safety of an employee as a ‘special duty’[7] and ‘a more stringent obligation than the a duty (such as that owed by Adept to the plaintiff) to take reasonable care to avoid foreseeable risk of injury to a person to whom a duty is owed’.[8] Thus, Hy-Line might also be liable in respect of Adept’s negligent conduct, if it has breached its own duty to ensure that Adept took reasonable care in the circumstances.
[6](2009) 240 CLR 1.
[7]Ibid, 12 [21] (French CJ, Gummow, Hayne, Heydon and Bell JJ).
[8]Ibid.
Each of the parties failed to call witnesses who might have thrown light on the relevant issues. Hy-Line did not call either its general manager, Dr Underwood, or its farm operations manager, Mr Phung. Each might have been expected to give evidence about their interaction with Adept, their supervision of its work, any training or supervision of Mr Boulton and his system of work, relating to fire and the performance of ‘hot work’.
Adept failed to call either Mr McKinnon or Mr Winchcombe, who might have been expected to be able to testify about the day’s events and their own system of work and any safety measures they adopted.
I do conclude in each case that the evidence of the missing witnesses may not have assisted the party failing to call them.[9]
[9]See Jones v Dunkel (1959) 101 CLR 298; O’Donnell v Reichard [1975] VR 916.
Conclusion
Adopting the language of Beach J in Papadopolous, I am of the view that Hy-Line’s degree of departure from the standard of conduct required of it, as Mr Boulton’s employer, was greater than that of Adept as an independent contractor vicariously liable for the acts of its employees.
Further, I am not persuaded by Hy-Line’s contention that the ‘causal potency’ of Adept’s conduct must be taken to have been greater than that of its own. Adept’s employees physically caused the fire. Further, Mr McKinnon was carrying out skilled work on behalf of Adept and Hy-Line was entitled to rely upon Adept to a considerable extent to supervise the way in which it was done. Nevertheless, Hy-Line had overall control of the site and deficiencies in the design and fit-out of the shed and the Hy-Line system of work and equipment clearly contributed substantially to the eventual outcome.
Apart from the somewhat scanty documents produced by Adept, there was no evidence of any Hy-Line occupational health and safety measures relating to fire at the site generally or to ‘hot work’ and, in particular, such activity in the vicinity of the genetic sheds which contained flammable material. Hy-Line permitted the unsupervised ‘hot work’ to be done outside the only exit point from a shed containing highly flammable material, whilst Mr Boulton was working inside it. The shed contained no fire alarms, sprinklers or fire fighting equipment and there were heat triggered fans inside it which would be likely to encourage any fire.
Mr Boulton’s injuries resulted from him being inside the shed when the welding work was going on, his inability to escape the fire or to deal with it, because of the nature of the building in which he worked and the absence of adequate training or system of work or equipment.
In all the circumstances, I am satisfied that it is just and equitable to attribute 60 per cent of responsibility to Hy-Line and 40 per cent to Adept and I will so order.
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