Bristile Operations Pty Ltd v Dowthwaite Holdings Pty Ltd & Anor

[2006] HCATrans 468

[2006] HCATrans 468

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P11 of 2006

B e t w e e n -

BRISTILE OPERATIONS PTY LTD

Applicant

and

DOWTHWAITE HOLDINGS PTY LTD

First Respondent

CARMEL CHARLES SALIBA

Second Respondent

Application for special leave to appeal

GUMMOW J
KIRBY J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 1 SEPTEMBER 2006, AT 11.42 AM

Copyright in the High Court of Australia

MR M.H. ZILKO, SC:   May it please your Honours, I appear on behalf of the applicant.  (instructed by Lavan Legal)

MR P.E. JARMAN:   May it please the Court, I appear on behalf of the first respondent.  (instructed by Jarman McKenna)

GUMMOW J:   There is a submitting appearance on behalf of the second respondent, Mr Saliba.

MR ZILKO:   That is correct.

GUMMOW J:   The second respondent was the owner ‑ ‑ ‑

MR ZILKO:   Of the property.

GUMMOW J:   That is right.  Your client was the head contractor?

MR ZILKO:   In respect of one aspect of the building work only, the tiles.

GUMMOW J:   The first respondent was engaged by your client.

MR ZILKO:   That is correct, your Honour.  Your Honours, in Bryan v Maloney this Court recognised the importance of a contractual relationship when determining the scope of a relevant duty of care and it is submitted that in the present case the majority in the Court of Appeal failed to have regard to that contractual relationship which existed between Bristile and Dowthwaite and thereby fell into error in respect of the scope of the duty of care owed by Bristile to Dowthwaite’s employees.  The trial judge, Judge French, referred to the subcontract between Bristile and Dowthwaite and, indeed, the claim against ‑ ‑ ‑

GUMMOW J:   The injured plaintiff was the employee of Dowthwaite?

MR ZILKO:   That is correct, your Honour.  Her Honour referred to the subcontract.  Indeed, there were before her claims both in negligence and in contract.  She dismissed the claim in contract.  She spent some considerable time dealing with the contractual provisions and had regard to what duties they imposed on Dowthwaite in respect of its overall safety for its employees on the site.  Of that, there can be no doubt.

I can take your Honours, of course, to the relevant clauses which you have probably seen in the application book.  Perhaps I should, at this stage, just refer you to those.  At page 123 of the application book, your Honours will see there the final clause of the contract between Bristile and Dowthwaite and that provision, clause 16 on page 123, we would submit, illustrates how comprehensive the assignment of safety issues was to Dowthwaite.  Dowthwaite agreed that it would:

(a)Establish and maintain safe working conditions which comply within the Occupational Health, Safety and Welfare Act and Regulations

(b)Ensure that all equipment is in a safe working condition

(c)Ensure that proper safety guards are installed and maintained on any equipment as per any manufacturers specifications

(d)Ensure all electrical cords are maintained in proper conditions

(e)Ensure all warning signs are displayed in a prominent position

That agreement, your Honours, had been in place for some time before this unfortunate accident and that contract has to be then seen in the context of the case that was before the trial judge and before the Court of Appeal.  It was a case in which the uncontradicted evidence was that one to five per cent of houses required internal access by tilers to go to the roof; the other 95 to 99 per cent of houses were accessed externally.  That was the evidence that was before the trial judge.  There was no argument about it.  It was evidence she accepted and it was evidence that was before the Court of Appeal as incontrovertible evidence in respect of those particular statistics and, indeed ‑ ‑ ‑

KIRBY J:   Yes, but look at where we end up in paragraph 107 of Justice McLure’s reasons on page 80 of the application book.  We end up with a series of different views on factual questions by different judges.  You throw the primary judge in and you have still further different views.  There is no important point of legal principle in the case.  This is simply a matter of working out where the facts fall.  That is not the proper function of the High Court of Australia.

MR ZILKO:   No, I accept that, your Honour.

KIRBY J:   Just look at that list of differences between Justice Pullin, Justice Murray and Justice McLure.  You get it up in this Court and you can multiply those by X – I will not say what X is. 

MR ZILKO:   Your Honour, those matters that are referred to there refer to all of the issues that were before the trial judge and the Court of Appeal.  We are only appealing on the one point, that is, the Dowthwaite/Bristile contractual relationship.  We are not dealing with contributory negligence, we are not dealing with the apportionment of liability arising between the parties, none of that is before you.  It is not surprising that she would have preferred to ‑ ‑ ‑

KIRBY J:   Would that not come up in a cross‑appeal or a notice of contention?

MR ZILKO:   No, because the only issue is whether – and it is an issue on which the trial judge and Justice Pullin were at one, that is, that Bristile owed no duty of care, and Justice McLure and Justice Murray were on the other side of the fence.  They said that Bristile did owe a duty of care, so it is two and two.  There are no other issues that are before the Court, no contributory negligence, no apportionment of liability ‑ ‑ ‑

KIRBY J:   But there is no point of legal principle?

MR ZILKO:   We would respectfully suggest there is because ‑ ‑ ‑

GUMMOW J:   What is it?

MR ZILKO:   The contract that existed between Bristile and Dowthwaite was not properly considered at all in respect of Dowthwaite’s obligations.  Justice Murray did not refer to it at all ‑ ‑ ‑

GUMMOW J:   And if it is properly considered, what result follows?

MR ZILKO:   If it is properly considered, it would have, we say, led to the conclusion that Bristile could not possibly in the exercise of reasonable care owe the duty that was imposed on it by the majority.  Your Honours, the majority decision requires Bristile to be ‑ ‑ ‑

GUMMOW J:   This is clause 16 on page 123, is it?

MR ZILKO:   Yes.  The majority decision, your Honours, requires Bristile to exercise liability in respect of safety issues for the whole site.  We say that that contract, and in particular clause 16, could not have led to that conclusion if it was properly regarded by the majority and it was not.  As I say, Justice Murray did not even refer to the contract.

GUMMOW J:   And what did Judge French say?

MR ZILKO:   Judge French referred to the contract and had considerable regard for it in reaching her decision.

GUMMOW J:   Where do we see that?

MR ZILKO:   She commences her comment about it at page 30, your Honours – in fact at page 29 under the heading of “Bristile”.  She talks about the contractual responsibilities that were imposed on both Dowthwaite and the owner of the house.  She refers specifically in paragraph 65 to the provision that I have just – well, no, she refers there to Mr Saliba’s obligations, and then over the page at page 30 she then deals with the obligations imposed on Dowthwaite.

GUMMOW J:   Does she refer to clause 18?

MR ZILKO:   Clause 16, your Honour.  At paragraph 69 she specifically refers to it.  Now, that clause, as important as it was, was never referred to again by the Court of Appeal despite the fact that ‑ ‑ ‑

GUMMOW J:   Just forget about the Court of Appeal for a minute.  What use did Judge French then make in the balance of her reasoning of the point she makes at paragraph 69?

MR ZILKO:   She concludes as a result of that ‑ ‑ ‑

GUMMOW J:   Because ultimately you want to restore her decision, do you not?

MR ZILKO:   Yes, we do, and at paragraph 72 she refers to the fact that:

Bristile had no control over the care and management of the premises –

recognising, of course, that this was the contractual obligation imposed on Dowthwaite ‑ ‑ ‑

KIRBY J:   That is why it is not quite correct to say that the Full Court did not have regard to this, and at page 81 Justice Pullin specifically quotes paragraphs 72 and 73 of the primary judge’s reasons, which pick up the point that she is dealing with.

MR ZILKO:   Yes, and he was on our side.  He was the dissenting judge, your Honour.  We would respectfully ask you to recognise the correctness of Justice Pullin’s decision.  He was the only judge in the Court of Appeal who ‑ ‑ ‑

KIRBY J:   So you say the error of the majority – Justice McLure and Justice Murray – on this point was that they did not pay proper attention to the clause of the contract.

MR ZILKO:   Justice McLure paid little attention to it, Justice Murray did not even refer to it, and yet it was at the heart of the trial judge’s decision in respect of her finding that ‑ ‑ ‑

KIRBY J:   Can I repeat again, working out what a particular clause in a particular contract means in the factual circumstances of a case is not the normal fare of this Court.

MR ZILKO:   As I heard your Honour say to one of the earlier parties, you are bound very much by the facts as found by the trial judge.  The trial judge here found that these particular clauses had certain results insofar as the scope of the duty of care was concerned.

GUMMOW J:   Now, where does she say that?

MR ZILKO:   At paragraph 72 she says:

Bristile had no control over the care and management of the premises although its system involved a liaison between the builder and sub‑contractors in relation to ongoing safety issues which could include safety issues inside the premises if access was required.

GUMMOW J:   …..the last two sentences, “It is difficult to see ‑ ‑ ‑

MR ZILKO:  

how Bristile could sustain an ongoing duty of care in relation to a broad range of safety issues in the premises when the inspection could have been some days prior to the arrival of the tilers.

She recognised, your Honours, that the inspection that Bristile carried out could happen days or even weeks before the tiling was actually carried out on the roof.

HAYNE J:   Yes, and the imposition of a duty of care may have the consequence that there has to be a later inspection.  What is the consequence to be attached to the factual observation that time elapsed?

MR ZILKO:   Only this, that when you take account of the fact that the parties had some years prior thereto, your Honour, formulated a contractual arrangement which imposed those very duties on Dowthwaite for its employees ‑ ‑ ‑

HAYNE J:   But is the unstated premise for your argument that clause 16 means that the subcontractor agrees that it and it alone will do certain things?

MR ZILKO:   Well, in terms of its own employees, the maintenance of safe conditions of work would suggest just that, when you take account of this very important aspect which the trial judge found, and there is no argument about this, that one to five per cent of houses required internal inspection.  What the majority is saying ‑ ‑ ‑

HAYNE J:   But the contract is of significance if, but only if, because of it and its terms it somehow cuts out Bristile from having a responsibility.  Now, why does it do that?

MR ZILKO:   Because as her Honour the trial judge found, there was no clause in the contract which reposed in Bristile the sorts of obligations which were being suggested by Dowthwaite at the trial and again in the Court of Appeal.  That was an important factor.  You cannot ignore, we say, the contractual arrangements.  If you do ignore those arrangements, then you unnaturally and unreasonably extend the scope of duty that should otherwise prevail.

My learned opponent, Mr Jarman, has quoted from the Canadian case that the High Court referred to with approval in Bryan v Maloney and I note that the judge there, Le Dain J – and this is at page 622 of Bryan v Maloney, page 14 of the book of authorities – his Honour said, and the High Court agreed, that:

A concurrent or alternative liability in tort will not be admitted if its effect would be to permit the plaintiff –

the plaintiff in this case, your Honours, is Dowthwaite –

to circumvent or escape a contractual exclusion or limitation of liability for the act or omission that would constitute the tort.

GUMMOW J:   Yes, to circumvent or escape a limitation, is that not what they said?

MR ZILKO:   Yes, “to circumvent or escape a contractual exclusion or limitation”.

GUMMOW J:   Given the question Justice Hayne asked you, how do you match this case?

MR ZILKO:   Well, the evidence here, your Honours – and it is not in dispute – was that 95 to 99 per cent of houses were accessed externally.  The Court of Appeal’s decision imposes on my client an obligation henceforth to inspect those 95 to 99 per cent of houses internally, notwithstanding the uncontradicted evidence about the way in which the tilers went about their business.

The only time tilers were required to go into a house was when it was on what was called a postage stamp block or some other impediment existed to external access.  That had been the longstanding arrangement between the parties.  That was their means of implementing the contractual arrangements I referred to.  Their Honours in the majority have turned it upside down and said henceforth, Bristile - despite it being, you might say, a bit player in the construction of a house – all it is involved in is the tiles on the roof – is now responsible for the interior safety of premises on sites.

HAYNE J:   That is really pushing the point far too far.  Bristile as an experienced supplier of tiles may be expected to have within its reasonable knowledge whether internal or external access is possible or desirable.  Once it makes that judgment, it may make its own assessment about what it has to inspect, whether that is the inside and the outside, or the outside only, so that the floodgates that you would seek to have open for Bristile are not letting more than a faint dribble at the moment, Mr Zilko.

MR ZILKO:   No, I do not suggest, Justice Hayne, that there is a floodgate problem here and I appreciate that would not be perceived well.  What I am suggesting is that the contractual arrangements, which existed prior to this accident and continued to exist thereafter, imposed the very duties that are suggested to be Bristile’s on Dowthwaite and the Court of Appeal had no regard to those duties and when they failed to have regard to them they failed to take proper account of the true scope of the duty of care.  When you have a contract between parties you cannot ignore, we would suggest, in terms of determining the scope and extent of the duty of care and once that occurred then instead of Bristile being a secondary player Bristile became a relatively major player in the eyes of the Court of Appeal.

Your Honours, we suggest that the decision moves Bristile from a relatively insignificant role, that is the provider of one only piece of material in the construction of the house, into the forefront of liability.  It simply requires Bristile to inspect the interior of houses when it has nothing to do with the interior of houses, what goes on in them, and what occurs in terms of the other work involved in building a house because its only involvement is the roof of the house.  This was something which we say that the Court of Appeal failed to acknowledge in terms of its assessment of the facts as her Honour the trial judge had found them.

KIRBY J:   Just remind me what Justice Pullin said.  What was the basis of his dissent?

MR ZILKO:   Justice Pullin gave a relatively short decision in which he said he could see no error in the trial judge’s decision.  He said that there was simply no evidence before the court that Bristile had ever assumed responsibility or should assume responsibility for the interior of the house.  He corrected Justice McLure in respect of her quoting of some of the evidence and said what she has quoted has been taken out of context and if you take the whole of that evidence the evidence was that two or three houses a year need to be accessed internally.  This is a roof tiler that roofs thousands of houses a year so one of the witnesses put it down to as low as two to three times a year.  The general evidence was 95 to 99 per cent of houses were done externally.

KIRBY J:   Well, once again that sounds very much like a factual determination.

MR ZILKO:   No, because those facts were not in issue, your Honour.  It is not a factual issue here.  All the facts were uncontradicted at the Court of Appeal hearing.  The fact that the one to five per cent was the number for internal access was accepted by Justice McLure.  She actually referred to that figure in her own judgment and it is at page 67, in paragraph 66.  The “1-5 per cent of all jobs” was accepted by her as the true figure in terms of entry into the house.

Just returning to your question, Justice Kirby, Justice Pullin said on page 88, at paragraph 125, in the very last sentence – in fact if I read the whole of that:

In the circumstances, I agree with her Honour’s conclusion and the reasons she gave for concluding that there was no duty owed by Bristile to Mr Barley or Dowthwaite to inspect the interior of the premises to ensure that it was safe.  Bristile did not ever undertake to inspect the whole site and in this case Mr Barley knew there had been no inspection.

Now, we would suggest that his Honour was right.  We would suggest that her Honour the trial judge was right to refer to the contract and not to pay no heed to it as occurred with the majority.  If your Honours – and it is not a floodgate proposition, Justice Hayne – see the majority’s decision as correct, then we would respectfully suggest that it was actually putting Bristile into a position where it had an overarching responsibility for both the legal duties of the occupier, that was Mr Saliba; the legal duties of the builder who has possession of the site - this was an owner/occupier but generally the legal duties of a builder – and most importantly it puts us, for all practical purposes, in the position where we accept the non-delegable duty owed by Dowthwaite to its employees.  That, in the face of the contract, we would respectfully suggest, cannot be the result.

If reasonableness is the touchstone of the duty, as Justice McLure said, and if it informs all other elements of the tort, then we have been placed in an unreasonable, rather than a reasonable, position.  If your Honours please.

GUMMOW J:   Thank you.  Yes, Mr Jarman.

MR JARMAN:   May it please your Honours.  My learned friend, Mr Zilko, has made much of the point that it was uncontradicted that only on one to five per cent of occasions were tilers required to access the internal premises and that was in relation to fixing the tiles, but there was a myriad of evidence as to why tilers might access the internal premises for reasons other than fixing the tiles and if I could refer your Honours to page 21 of the application book.

At line 55 Judge French refers to the evidence of Mr Rawlings.  Now, Mr Rawlings was one of Bristile’s inspectors, one of their supervisors, and he agreed that everyone in the building trade tends to access the interior of building sites.  Again, at page 23, line 20, Paul Clarke was a former subcontractor to Bristile and had been operating a tiling business with Bristile for 15 years.  His evidence was that:

tilers access the interior of the premises to clean up any fallen debris that was at the end of the day –

There was a host of other reasons in the evidence as to why tilers might access the internal aspects of the premises:  for a smoko, to take shelter from the rain, from the sun, to go to the toilet, to fix up tools that had been dropped or bits of tiles.  The one to five per cent of cases was only for the purpose of actually laying the tiles.

The duty of care, your Honours, is established by the system.  It is not established by the contract.  The contract makes no reference to the system of work which was actually established by Bristile and that was that Bristile would attend the premises, see that they were ready, and make sure that they were safe.  Bristile had actually taken control of safety on this site and there was an instance referred to in the evidence where Dowthwaite’s employees had actually refused to work on particular scaffolding.  This was when they were tiling the upper section of the roof.

GUMMOW J:   Where do we see that?  Is that in the judgment anywhere?

MR JARMAN:   Yes, it is, if your Honours would bear with me.  Perhaps I could provide you with the reference in a minute, but on that occasion, your Honours, the Dowthwaite employees refused to access the scaffolding.  What happened in that situation was that Dowthwaite’s manager, Cleggett, advised the Bristile supervisor of the position, that the scaffolding was unsafe.  The Bristile supervisor came out, declared the scaffolding to be safe and they went back to work.  Bristile had assumed actual control for safety.  There is nothing in relation to the contract, it is just what happened.

GUMMOW J:   That is a significant point you make, I suppose, actually.  What the contract said might be one thing.  What actually went on might be that plus something else.

MR JARMAN:   The trial judge recognised that, your Honour.  The trial judge indicated when she was talking about the contractual arrangements she was applying those in relation to the contract only, but she then goes on to say what established the tortious duty of care was the system that Bristile imposed.  That appears at page 30 of the application book at line 55.  My learned friend referred you to pages 29 and 30 where the trial judge dealt with the contract and at paragraph 69 of her reasons where she dealt with clause 16 which provides for the safety obligations, but what she does there is say, so from a contractual point of view there is no breach of contract.  In the final lines on page 30 she says:

The establishment and implementation of this system creates a duty of care owed by Bristile to sub‑contractors and their employees to exercise reasonable care in implementing the system it had put in place.

In fact, that is what created the tortious duty of care and that is where Bristile fell down.  Its inspector, Mr Stone, was in fact at the premises on the morning of the accident.  In fact, he was the only person at the premises on the morning of the accident who, prior to the accident, did not go up the stairs.

GUMMOW J:   You have read what her Honour said at the bottom of page 30.  Then she picks up at the top of 31:

the systems of inspection does not extend –

Then paragraph 71 she says:

The extent and nature of Bristile’s duty of care within those parameters is not clear.

That seems to reduce the case to a factual matter.

MR JARMAN:   It is indeed a factual matter, your Honour.  What Justice McLure said about the trial judge’s observations there was that

Bristile was setting its own limits in relation to the duty of care, that it was in relation to the internal and not the external aspects.

GUMMOW J:   Yes, we do not need to hear you any more.  Thank you, Mr Jarman.

MR JARMAN:   May it please your Honours.

GUMMOW J:   Yes, Mr Zilko, anything in reply?

MR ZILKO:   Just briefly, the suggestion that Bristile are taking control of the site was not the evidence.  The evidence was in fact quite to the contrary as I indicated earlier and as set out in my written submissions.  The scaffolding in question was external scaffolding and it simply illustrated the point that I was making, that is, that Bristile only ever assumed responsibility for external matters and, your Honour Justice Gummow did pick up at the top of page 31 what her Honour said and that was that “the system” that she referred to did not extend to the interior of premises except on rare occasions when access to the roof through the house was necessary.

We maintain our submission, your Honour, that the contractual arrangements had to be recognised and were not recognised and that distorted the result.  May it please your Honours.

GUMMOW J:   Thank you. 

After extensive litigation in these proceedings only a limited issue remains on the application for special leave to this Court.  That issue concerns the significance to be attached to clause 16 in a written contract between the applicant and the first respondent.  The applicant contends that the primary judge and Justice Pullin who dissented in the Court of Appeal of Western Australia gave proper weight and meaning to that clause but that the majority of the Court of Appeal failed to do so. 

We are not convinced that the arguments advanced to us by the applicant which are founded on that provision would result in this Court reversing the judgment of the Court of Appeal.  The issue urged on us is essentially a question of limited application.  We are not convinced that intervention of this Court is required to remedy any injustice that has occurred.  Special leave is refused with costs.

AT 12.09 PM THE MATTER WAS CONCLUDED