Canny v Primepower Engineering Pty Ltd
[2015] WADC 81
•3 JULY 2015
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: CANNY -v- PRIMEPOWER ENGINEERING PTY LTD [2015] WADC 81
CORAM: STEWART DCJ
HEARD: 2 - 10 FEBRUARY 2015
DELIVERED : 3 JULY 2015
FILE NO/S: CIV 2186 of 2013
BETWEEN: MITCHELL JAMES CANNY
Plaintiff
AND
PRIMEPOWER ENGINEERING PTY LTD
DefendantALLIANZ AUSTRALIA INSURANCE LTD
Third Party
Catchwords:
Tort - Personal injury - Negligence - Employee injured at workplace - Work social function - Scope of duty of care of employer - Whether employer in breach of duty of care - Whether breach of statutory duty - Contributory negligence - Whole of person impairment - Insurance liability of third party
Legislation:
Occupational Safety and Health Act s 19
Occupier's Liability Act s 5
Result:
Defendant liable
Plaintiff's contributory negligence assessed at 15%
Defendant not entitled to indemnity from Third Party
Representation:
Counsel:
Plaintiff: Mr G Droppert
Defendant: Mr G Pynt
Third Party : Mr T Lampropoulos SC
Solicitors:
Plaintiff: Bradley Bayly Legal
Defendant: McKenzie & McKenzie
Third Party : Jarman McKenna
Case(s) referred to in judgment(s):
Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301
Brescia Furniture Pty Ltd v QBE Insurance (Australia) Ltd [2007] NSWSC 598
CGU Insurance Ltd v Graeme Robert Lawless [2008] VSCA 38
Driscoll v Scott (1975) 8 ALR 593
Fraser v BN Furman (Productions) Ltd [1967] 3 All ER 57
Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211CLR 540
Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18
Howells v Murray River North Pty Ltd [2004] WASCA 276
Legal & General Insurance Ltd v Eather (1986) 6 NSWLR 390
McLean v Tedman (1984) 155 CLR 306
Podrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492
Vairy v Wyong Shire Council (2005) 223 CLR 422
Wyong Shire Council v Shirt (1980) 146 CLR 40
STEWART DCJ:
Introduction
Mr Mitchell Canny, the plaintiff, an apprentice electrician, was seriously injured on 11 November 2011 at his place of employment, Primepower Engineering Pty Ltd, the defendant, in Kalgoorlie.
Work finished at around 11.00 am in celebration of Mr Peter Allan's birthday. Mr Allan is the managing director of Primepower. It was also Remembrance Day. The theme of the work social function was 'eleven'. There was a barbecue for staff including the apprentices and friends of the business. Eleven kegs of beer of three different sizes were purchased by Mr Allan for the celebration.
During the course of the afternoon apprentices of Primepower attempted to start and then 'seize' a disused 4‑stroke Caterpillar diesel 3306 engine. To seize an engine means to make it run faster in order to make it fail.
On two prior occasions in 2005 and 2006, Mr Allan and employees of Primepower attempted to seize a different engine, a disused 2‑stroke Detroit diesel engine. On both prior occasions, the attempt to seize the engine failed.
Around midday on 11 November 2011 the apprentices retrieved the Caterpillar engine and took it to the workshop where they removed the alternator and were able to get the engine to run. They then moved the engine from the workshop area to the wash bay area. The wash bay area was about 20 m away from the bar area where the social function was taking place.
The apprentices sought advice from other staff of Primepower about how to get the engine to run faster in order to make it fail. During the afternoon a number of different flammable substances including brake fluid and paint thinners were sprayed into the intake of the engine in an effort to get it to seize.
Guests at the social function could hear but not see the engine stop and start on a number of occasions from the bar area where the party was taking place.
Mr Canny took part in the activities to seize the engine in the later part of the afternoon and into the early evening.
A jerry can of petrol was brought into the workplace around 7.00 pm that evening by an unidentified person. At around the same time Mr Canny was near the engine. Another apprentice was also near the engine. An attempt was made to start the engine. A fireball came from the engine. Mr Canny was engulfed in flames. How it happened is one of the issues in these proceedings.
Mr Canny's injuries were very severe. He sustained extensive and serious burns to 60% of his body.
Mr Canny claims damages for his injuries.
Mr Canny issued proceedings against Primepower alleging negligence and breach of statutory duty.
Primepower denies liability and in the alternative pleads contributory negligence by Mr Canny.
Primepower issued third party proceedings against its insurer, Allianz, the third party, for an indemnity in relation to any liability it has to Mr Canny.
Allianz pleads there has been a breach of Primepower's indemnity policy. Allianz says Primepower showed a reckless disregard for the safety of the apprentices including Mr Canny. Allianz says it does not have to indemnify Primepower.
The parties have agreed that this action proceeds on liability only.
The pleadings
It is common ground on the pleadings that Primepower carried on the business of mechanical engineering and electrical installation and maintenance.
Primepower occupied, managed and controlled a workshop located at 53 Great Eastern Highway, Kalgoorlie, and was the occupier of premises as defined in the Occupiers' Liability Act 1985. Primepower owned a disused Caterpillar 3306 diesel engine located on the premises.
The parties agree that Mr Canny was employed by Primepower as an apprentice electrician. Mr Canny was 19 years of age on 11 November 2011. He was employed under a contract for service or a contract of apprenticeship. Mr Canny was in his second year of his electrical apprenticeship, having commenced his apprenticeship with another company on 18 January 2010.
The statement of claim pleads in par 5 that:
The accident and the plaintiff’s injuries were caused by the negligence of the defendant and its servants and agents and the defendant's breach of statutory duty.
Particulars of negligence
The defendant and its servants and agents were negligent in that they:
[1]failed to instruct employees not to attempt to start the engine when it was unsafe to do so;
[2]permitted employees to attempt to start the engine when it was unsafe to do so; and
[3]permitted employees to use flammable liquids in an attempt to start the engine when it was unsafe to do so.
Particulars of breach of statutory duty
The defendant hereby breached the duty of care imposed on it by section 5 of the Occupiers' Liability Act and section 19 of the Occupational Safety and Health Act.
Primepower denies negligence. Primepower raises contributory negligence.
In its defence Primepower pleads (par 9):
9.Primepower:
a)admits that at all material times on 11 November 2011, it knew its apprentices were:
(i)trying to start and then seize the Engine;
(ii)introducing flammable liquids into the Intake for the purpose of trying to start or seize the Engine;
b)admits it did not instruct its apprentices not to:
(i)try to start or seize the Engine;
(ii)introduce flammable liquids into the Intake for the purpose of trying to start or seize the Engine;
c)denies it was unsafe for its apprentices to try and start and seize the Engine;
d)otherwise denies each and every allegation contained in paragraph 5 of the Statement of claim.
At par 11, Primepower denies that it was foreseeable that Mr Canny would:
(a)introduce petrol into the Intake;
(b)pour, rather than spray, petrol into the Intake.
By par 12 of its defence, Primepower contends that if it negligently caused or contributed to the injuries, Primepower says Mr Canny negligently contributed to the injuries as follows:
Particulars of contributory negligence
Mr Canny negligently contributed to the Injuries in that:
a)petrol is a highly flammable liquid and gives off a highly flammable vapour at low temperatures;
b)there is a risk of fire or explosion of petrol vapours is in the immediate vicinity of the source of ignition ('Risk');
c)Primepower has never normally kept jerry cans containing petrol at the premises;
d)shortly before 7.30 pm on 11 November 2011, a person unknown ('Unknown person') gave to Mr Canny at the premises a jerry can containing petrol that the Unknown person had brought from the back of the Unknown person's vehicle ('Jerry can');
e)the Unknown person was not a Primepower employee;
f)shortly before 7.30 pm on 11 November 2011, he poured petrol from:
(i)the Jerry can into a smaller container ('Container') while standing next to the Engine;
(ii)the Container into the Intake whilst the Engine's starter motor was being used to try to start the Engine.
g)At all material times on 11 November 2011, he knew or ought to have known:
(i)petrol is a highly flammable liquid and gives off a highly flammable vapour;
(ii)of the Risk;
(iii)the Engine's starter motor would provide a source of ignition when it was being used to try to start the Engine;
(iv)Primepower does not normally keep jerry cans containing petrol at the premises;
(v)the Unknown person was not a Primepower employee;
(vi)the Unknown person had brought the Jerry can from the back of the Unknown person's vehicle;
(vii)he was the first person that day to introduce petrol into the Intake;
(viii)he was the first person that day to introduce flammable liquid into the Intake by pouring it into the Intake rather than by spraying it or using a degreaser gun to introduce it into the Intake;
(ix)petrol is more dangerous than the other flammable liquids that were introduced into the Intake that day because it gives off petrol vapour at low temperatures;
h)he poured petrol from the Jerry can into the Container whilst standing next to the Engine when he knew or ought to have known:
(i)Primepower repeats paragraph 12 g) above;
(ii)petrol vapour given off by the petrol he was pouring into the Container was in the immediate vicinity of the Engine's starter motor which was about to be used to try to start the Engine;
i)he poured petrol from the Container into the Intake when he knew or ought to have known:
(i)Primepower repeats paragraph 12 h) above;
(ii)petrol vapour given off by the petrol he was pouring into the Intake was in the immediate vicinity of the Engine's starter motor which was being used to try to start the Engine;
(iii)there was a risk that petrol vapour given off by the petrol in the Jerry can, by the petrol he had poured from the Jerry can into the Container or by the petrol he was pouring from the Container into the Intake would be absorbed into his clothes.
By the third party notice issued by Primepower against Allianz, Primepower claims to be indemnified against Mr Canny's claim and the costs of defending the action on the grounds that by its employers' indemnity insurance contract made between Allianz and Primepower, Allianz agreed to indemnify Primepower against its common law liability to any of its employees who suffered a personal injury during the course of their employment.
Allianz pleads that there was an employers' indemnity insurance contract with Primepower and it says further that:
2.1Condition 7 of the insurance contract provided (in relation to the defendant) 'You must take all reasonable precautions to prevent Injury to Workers and must comply with all relevant laws, including the Occupational Safety and Health Act 1984 as amended and replaced, and Regulations'.
2.2The defendant breached Condition 7 of the insurance contract.
Particulars of Breach
2.2.1Copious amounts of free alcohol were available at the work function described in the plaintiff's Statement of Claim;
2.2.2Persons (including the plaintiff) had been consuming alcohol at the function from 11 am on 11 November 2011 and some were adversely affected by the alcohol;
2.2.3During the day, and into the evening, various persons (including apprentices and the plaintiff) were attempting to get the engine to blow up by over-revving the engine and pouring and spraying flammable liquids (including petrol) into and on the motor whilst it was connected to a battery and starter motor;
2.2.4There was a risk that the engine would break up and that pieces (including conrods) would become dangerous projectiles and injure persons in the vicinity of the engine;
2.2.5There was a risk that the flammable liquids, or the vapours they produced, would ignite and/or explode and burn persons in the vicinity of the engine, or ignite their clothes;
2.2.6The activity of attempting to blow up the engine was not necessary for the defendant's business, but rather it was deliberate and dangerous skylarking;
2.2.7With knowledge of the matters described in particulars 2.2.1 to 2.2.6 above, the defendant (through its managing director (Peter Allan) and other senior staff at the function), encouraged its apprentices (including the plaintiff) to engage in that dangerous activity during the day and into the evening, and as a result the accident occurred at about 7.30 pm;
2.2.8The actions of the defendant in encouraging participation in that activity, and in not bringing an end to it well before the accident, were deliberate and reckless;
2.2.9The defendant thereby failed to take all reasonable precautions to prevent injury to the plaintiff, and breached Condition 7;
2.2.10By its conduct, the defendant also recklessly and deliberately breached the Occupational Safety and Health Act 1984 and Regulations by not exercising reasonable care for the safety of the plaintiff, and thereby failed to comply with those laws, which was also a breach of Condition 7.
The Law
General principles relating to an employer's duty of care
As Murphy J stated in Driscoll v Scott(1975) 8 ALR 593, 599:
The classical statements of the duties of an employer have been subjected to innumerable refinements. The duties referred to by the appellant were to take reasonable care: (1) to provide a safe system of work and to ensure the system was carried out, and (2) to provide a safe place of work….
The duties referred to may be regarded as overlapping aspects of the one general duty of an employer to take reasonable care for the safety of his employee. It is unimportant whether the breach is characterized as a breach of one or both of the specific duties.
In order to establish that a system or a place is unsafe, it is not necessary to show that harm would probably result. The possibility of harm is enough, provided that the possibility is not too remote.
In Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18, 25 Dixon CJ and Kitto J stated:
The duty, to whomever it falls to discharge it, is that of a reasonably prudent employer and it is a duty to take reasonable care to avoid exposing the employees to unnecessary risks of injury. The degree of care and foresight required from an employer must naturally vary with the circumstances of each case …
It has been said that a reasonable and prudent employer is (i) bound to take into consideration the degree of injury likely to result; (ii) bound to take into consideration the degree of risk of an accident; (iii) entitled to take into consideration the degree of risk, if any, involved in taking precautionary measures.
In McLean v Tedman (1984) 155 CLR 306, 313 Mason, Wilson, Brennan and Dawson JJ said:
The employer's obligation is not merely to provide a safe system of work; it is an obligation to establish, maintain and enforce such a system. Accident prevention is unquestionably one of the modern responsibilities of an employer: see Fleming, Law of Torts, 6th ed. (1983), pp.480-481. And in deciding whether an employer has discharged his common law obligation to his employees the Court must take account of the power of the employer to prescribe, warn, command and enforce obedience to his commands.
Foreseeability of risk
Reasonable foreseeability will be determined by what the employer knew or ought to have known. If the injury is caused by, or arises out of an unsafe system of work, it must be an unsafe system of which the employer was aware or ought to have been aware: McLean v Tedman (311). The question of foreseeability is to be judged by asking what a reasonable person would have done to avoid what is now known to have occurred: Vairy v Wyong Shire Council (2005) 223 CLR 422 [126].
In Wyong Shire Council v Shirt (1980) 146 CLR 40, 47 ‑ 48 Mason J said as follows:
In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position.
The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable. But, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risk and its degree of probability remain to be considered with other relevant factors.
In relation to the scope of duty of care, Gummow and Hayne JJ said in Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; (2002) 211CLR 540:
[A] duty of care that is formulated retrospectively as an obligation purely to avoid the particular act or omission said to have caused loss, or to avert the particular harm that in fact eventuated, is of its nature likely to obscure the proper inquiry as to breach. That inquiry involves identifying with some precision what a reasonable person in the position of the defendant would do by way of response to the reasonably foresseable risk. As Isaacs ACJ observed in 1924 ‘[N]o conclusion of negligence can be arrived at until, first, the mind conceives affirmatively what should have been done' [192].
Statutory Duties
Duty under Occupiers' Liability Act 1985
Section 4 of the Occupiers' Liability Act 1985 provides as follows:
4.Application of sections 5 to 7
(1)Sections 5 to 7 shall have effect, in place of the rules of the common law, for the purpose of determining the care which an occupier of premises is required, by reason of the occupation or control of the premises, to show towards a person entering on the premises in respect of dangers - - -
(a)to that person; or
(b)to any property brought on to the premises by, and remaining on the premises in the possession and control of, that person, whether it is owned by that person or by any other person, which are due to the state of the premises or to anything done or omitted to be done on the premises and for which the occupier of premises is by law responsible.
(2)Nothing in sections 5 to 7 shall be taken to alter the rules of the common law which determine the person on whom, in relation to any premises, a duty to show the care referred to in subsection (1) towards a person entering those premises is incumbent.
Section 5(1) and s 5(4) of the Occupiers' Liability Act provide as follows:
5.Duty of care of occupier
(1)Subject to subsections (2) and (3) the care which an occupier of premises is required by reason of the occupation or control of the premises to show towards a person entering on the premises in respect of dangers which are due to the state of the premises or do anything done or omitted to be done on the premises and for which the occupier is by law responsible, shall, except insofar as he is entitled to and does extend, restrict, modify or exclude by agreement or otherwise, his obligations towards that person, be such care as in all the circumstances of the case is reasonable to see that that person will not suffer injury or damage by reason of any such danger.
…
(4)Without restricting the generality of subsection (1), in determining whether an occupier of premises has discharged his duty of care, consideration shall be given to –
(a)the gravity and likelihood of the probable injuries;
(b)the circumstances of the entry onto the premises;
(c)the nature of the premises;
(d)the knowledge which the occupier of the premises has or ought to have of the likelihood of persons or property being on the premises;
(e)the age of the person entering the premises;
(f)the ability of the person entering the premises to appreciate the danger; and
(g)the burden on the occupier of eliminating the danger or protecting the person entering the premises from the danger as compared to the risk of the danger to the person.
Accordingly under s 5(1) of the Occupiers' Liability Act Primepower was required to exercise 'such care as in all the circumstances of the case is reasonable to see that that person will not suffer injury or damage by reason of any such danger'.
Without setting out an exclusive list s 5(4) sets out a number of factual matters to be regarded when considering whether an occupier has discharged his duty of care under s 5(1). These factors mirror in a material way considerations relevant to the duty of care at common law.
In Howells v Murray River North Pty Ltd [2004] WASCA 276 [27], [61] and [150] the court observed that the claim under s 5 of the Occupiers' Liability Act adds nothing to the claim in negligence. In this case I am of the same view.
Duty under Occupational Health Safety and Welfare Act 1984
Mr Canny alleges Primepower breached s 19(1) of the Occupational Safety and Health Act 1984 (OSH Act) on the same grounds contained in the particulars of negligence.
The duty of employers set out in s 19 of the OSH Act is expressed in general terms that:
(1)An employer shall, so far as practicable, provide and maintain a working environment in which the employees of the employer (the employees) are not exposed to hazards and in particular, but without limiting the generality of the foregoing, an employer shall –
(a)provide and maintain workplaces, plant, and systems of work such that, so far as is practicable, the employees are not exposed to hazards; and
(b)provide such information, instruction, and training to, and supervision of, the employees as is necessary to enable them to perform their work in such a manner that they are not exposed to hazards; and
…
Section 19(1)(c), s 19(1)(d) and s 19(1)(e) sets out the obligations of an employer to do a number of things primarily concerned with the occupational safety and health of employees performing their duties in the workplace.
Non‑compliance with s 19(1) creates liability for an offence. It is relevant to a claim for damages by an employee for breach of the employer's duty imposed by the section.
In written closing submissions counsel for Mr Canny said the allegation of breach of s 19 of the OSH Act amounts to an allegation of a failure to provide a safe system and a safe place of work.
I accept that the duty imposed by the OSH Act that an employer shall 'so far as practicable' provide and maintain a working environment in which its employees are not exposed to 'hazards' applies in the same way as the duty at common law of the employer in this case.
In this case a determination of whether s 19 of the OSH Act has been breached, involves similar considerations to those that are taken into account in determining whether there has been a breach of the employer's common law duty.
As in the decision of Howells v Murray River North Pty Ltd [29] and [67] the plea of a breach of the OSH Act really adds nothing to the claim in negligence.
In all the circumstances the plea under the Occupiers Liability Act and OSH Act does not lead to a different result from the common law claim.
Issues for determination
Based on the pleadings and the issues as they emerged during the trial of this matter, the court is required on the evidence adduced at the trial and according to law to make findings, if it can, on the following issues:
1.What happened at the premises of Primepower on 11 November 2011?
2.What was the scope of the duty of care owed by Primepower as the employer?
3.Has Primepower breached its duty of care?
4.Was Mr Canny contributorily negligent?
5.What is the degree of permanent whole of person impairment of Mr Canny?
6.What is the insurance liability between Primepower and Allianz?
7.Was there a breach of the reasonable precautions condition of the employer's indemnity insurance policy?
Witnesses
I set out the evidence of the witnesses as to the events.
The credibility of the witnesses was mostly not in dispute in this trial. The witnesses were honest and truthful in their evidence. The witnesses were generally reliable except for the matters upon which I make findings later in these reasons.
Mr Mitchell Canny
On 11 November 2011 Mr Canny was 19 years of age. He was in his second year of his electrical apprenticeship with the defendant, having commenced his apprenticeship with another company, Cummins, on 18 January 2010. He was working with the defendant from August or October 2010 until the incident in 2011.
In relation to his duties as an apprentice electrician he described that there was a lot of cleaning. He cleaned the bar, cleaned electrical equipment, and serviced and tested generators and electrical tooling equipment. All of his work was supervised by the supervisors or tradesmen who checked and certified everything was correct.
On 11 November 2011, Mr Canny rode his bicycle to work. He usually drove to work in his car but knew that he would be having a drink or two so did not want to be driving home under the influence. He believed employees would be knocking off around lunchtime for the celebration and having a few drinks and having something to eat.
In the afternoon some of the apprentices bought the Caterpillar engine to the wash bay area. Mr Canny was aware that the apprentices were trying to start the engine till it seized. He observed apprentices trying to start the engine. Someone connected a battery pack with electrical leads and they were cranking the engine to get it started.
During the course of the afternoon, Mr Canny went over to the engine. He saw and heard the engine start more than once. Mr Petersen and Mr Towns, both supervisors for the defendant, were giving advice to the apprentices on how to make the engine start and seize.
Mr Canny became involved in the activity.
He went between the workshop and the wash pad to get more tools and supplies. Before the petrol arrived, he and another apprentice were spraying propellant into the air intake of the turbo of the engine, which included CRC brake cleaner and Aerostart straight into the turbo intake.
Just prior to the incident, Mr Canny was decanting petrol from a 5 litre tin, like a Milo tin with the top removed, into another container that is used as a spray bottle. He described it (ts 89):
I would have decanted from the jerry can into this large jar, large tin, and then into the smaller one.
That was all he could remember, decanting the petrol, then being on the ground.
At ts 89:
I was squatting down away from the engine, just pouring it probably two hands into the other one.
He indicated with a cross (exhibit 3B), the photograph, his recollection of where he was decanting the petrol in relation to the engine.
Mr Canny described the very significant burns, treatment and surgeries he has required.
He was cross‑examined about his safety training. He passed assessment in safe work practices for his Certificate 111 in Engineering. He agreed he attended apprentice and toolbox meetings and safety was raised as a topic at meetings.
All the staff usually kept up with personal protective equipment, that is, proper shirts and long trousers, boots, gloves, glasses, hearing protection. Glasses were always picked up on by the tradesmen but he said (ts 95):
I was pretty good. I got it reamed into me by my father.
He was asked if he knew why the substances like Aerostart, CRC, paint thinners were being sprayed into the intake of the engine and he replied (ts 100):
It was working towards the purpose of seizing the engine, to make it run fast enough to seize and stop working again.
He was asked why the substances were not poured into the intake and he replied (ts 101):
… Mainly because a combustion engine works on air so if you poured it in there, it would have been flooding the engine with too much liquid, not allowing enough air into the engine.
…
And in November 2011 did you know about any of the flammable properties of these materials being introduced into the turbo intake? ---- Sort of. I've never really worked with petrol or experienced anything- well, in hindsight I do now, but before that I'd never really been taught or learned. Like, we'd been told that, yes, its flammable and be safe, but ----Are you talking just about petrol now or are you talking about for instance the--- all flammable substances.
Yes, You didn't know much about them at all at that time? --- No.
He agreed petrol was not stored on the premises of Primepower.
He would not have been as close to the engine as the tin because (ts 103):
Just because of sparks or anything like that.
He was asked to explain that comment in cross‑examination by counsel for Allianz. He said (ts 113):
Anything creates heat. I didn't see any sparks, but all engines, anything that's hot - hot.
At (ts 115 – 116):
So did you have any work experience in working with flammable liquids? - - - We worked on one or two generators that were rare cases that I helped out with, but we never worked on the petrol side of them. We just turned them on to work on the electrical side.
Okay. JSAs, job safety analyses? --- Yes.
Were they used at the work site? --- No.
At all? --- I have never done one at Primepower.
And I take it from what you say that before this day in question there was no discussion at all about trying to start up a motor and trying to get it to over rev till it failed? --- No. I'd never heard about it before.
The first time you heard about it was on that day in the course of socialising in the afternoon? --- Yes.
And you'd never done anything like that before at any stage in your career; that is, trying to start up a motor in this - - - ? --- Once before - - -
- - - by this method? --- - - - at Primepower – at Cummins. I worked with another electrician and we used Aerostart at the air – air intake of an engine. That's – that's it.
That's it? All right. So apart from that you had no experience in doing what you were attempted – attempting to do on the day of the accident? --- No.
Can I take it your duties at that early stage in your apprenticeship was Primepower were fairly limited? --- Yes. They were fairly limited. Yep.
And they were closely supervised? --- We were at the stage where we started doing work on our own but they were still all checked because we were all electricians and they had to be.
At the time of the incident he was wearing his standard top, trousers and boots. He could not recall wearing his safety glasses but he must have been because he was not burnt around his eyes.
He was cross‑examined about how much he was drinking (ts 122 ‑ 123):
This accident, we're told, happened about 7.30 in the evening, so about eight hours after you're knocked out – you knocked off. How – how many drinks do you think you had in that time? - - - I would have had about three or four middies.
So, what, one middy every couple of hours? - - -Yeah.
It doesn't sound like a lot? - - - It's not.
That's why you rode your bike to have one middy every two hours? - - - Well, I don't like drink driving at all.
You weren't driving. You were riding your bike. Do you think you might have had more than that? - - - No.
No? What about the other apprentices? Did you observe them drinking? ‑ ‑ ‑ Most of the other apprentices were drinking.
And what sort of drinks were they consuming? - - - I'd assume they were drinking from the bar.
He was shown photograph 3E taken around the motor which showed a number of bottles and glasses including six bottles of premixed drinks, Jack Daniels and cola:
Did you see the persons consuming that alcohol whilst you were ... working on this motor? - - - I don't know who – which ones who were consuming what. Sorry.
But there was certainly people, I suggest to you, standing around the motor and working on the motor who were drinking alcohol whilst they were involved in that activity? - - - Yes.
Mr Canny could not recall receiving the Employee's Handbook (exhibit 5) or the Occupational Health and Safety Manual (exhibit 6) at his work.
He agreed he went and retrieved the CRC and the Aerostart from the workshop.
At (ts 126):
And the reason you were using these other items was because they're obviously more flammable than – than diesel? --- I'd assume so.
That's how you get the combustion going fast and the engine running faster, is that right? --- Yes, I guess so.
Now, in these proceedings it's suggested by Primepower that you knew or should have known that petrol is a highly flammable liquor and gives off a – a highly flammable vapour. Did you know that on the day? --- I knew petrol was a bit more dangerous than diesel. If I'd – I didn't stop to think about what could have happened.
You didn't - - -? --- In hindsight I realise how dangerous it is now.
Yes? --- But not so much before.
You didn't stop to think of the consequences, but if you had have stopped you would have thought this is a – a dangerous situation? --- Maybe.
And it's said against – by Primepower that you should have known that the engine's starter motor could provide a source of ignition when it was being – trying to – that's ignition of the – the petrol and the – and the vapours – when it was being used to try and start the engine. Did you know that? --- Only that it could.
It's also suggested that you're the first person that day to introduce flammable liquid into the intake by pouring it into the intake rather than by spraying it or using a degreaser gun to introduce it into the intake, is that correct? --- I don't recall ever pouring fuel into the intake.
Do you recall anyone trying to introduce flammable liquid into the intake by pouring it rather than spraying it? --- No, I don't.
It's also suggested that you knew or should have known that petrol is more dangerous than the other flammable liquids that were introduced into the intake? --- No, I didn't know that.
Colin Renton
Mr Renton is a trained diesel fitter and in November 2011 he was the fuel room supervisor for Primepower. He has worked for Primepower since 2005.
He was involved in the activity a few years before at Primepower's premises of trying to get a Detroit diesel engine running in an attempt to destroy the engine.
The object of the exercise was to get the engine working harder than it is designed to work so that it will stop running. To do that they added extra fuel through the intake of the engine and tried to give it extra air. That will give it a bigger combustion which will make it run harder. Amongst the substances used were brake cleaner, engine oil, and sausages and sauerkraut.
On 11 November 2011, Mr Renton finished work at 11.00 am. After the minute's silence he said (ts 153):
Straight after that we got into party mode and had a few beers.
He became aware of the apprentices trying to seize an old engine and saw them bring it into the workshop.
On the day of the incident in 2011, Mr Renton gave advice to the apprentices about how to hook up the fuel system to make the engine run, and was asked how to override the governor system to make the engine run faster.
Mr Renton gave them advice about using a brake clean bottle and spraying fuel straight into the intake in an effort to get the engine to run faster.
During the course of the afternoon Mr Renton went back to the bar but could hear the engine.
He was cross‑examined about whether he was concerned for the safety of the apprentices (ts 157):
'I wasn't at all … cos we're done it before and we had no incidents, no problems'.
Under cross‑examination by counsel for Allianz, Mr Renton stated as follows (ts 169):
Did you tell them things that they shouldn't do? - - - No.
Tell them things they should do? - - - No.
…
Did you ask them, 'are you using brake fluid'? - - - No.
Did you ask them whether they were using petrol? - - - No.
Did you tell them, 'don't use petrol'? - - - No.
If you'd seen them using petrol, what would you have done? - - - I don't know at that stage. … I didn't see them so I can't answer that.
You were pretty well under the influence yourself at that stage of alcohol, weren't you? - - - Yes, I was.
Because you were drinking quite heavily throughout the day? - - - Yes, I was.
And is the case a number of people at the bar were drinking quite heavily? - - - There would have been, yes.
And there would have been a number of people obviously under the influence of alcohol? - - - Correct.
So obviously your judgment was affected? - - - I would have to say yes.
He agreed he was not attempting to supervise the apprentices in any way (ts 172):
But just left the apprentices to go about their business, some of them obviously, I'd suggest to you, under the influence of alcohol trying to destroy the engine? - - - Yes.
If this was the – the day before, Mr Renton, in the middle of the working day as part of your ordinary work, would you have permitted apprentices under the influence of alcohol to be working on an engine like this? - - - Probably not.
Why not? - - - Cos that would have been work time and we don't work under the influence of alcohol.
And that's for obvious safety reasons? - - - Yes.
At (ts 160):
Was there any policy at work about coming to work under the influence of alcohol or other substances? ‑ ‑ ‑ Yes. It's frowned upon.
Frowned upon? Was - was it more serious than that? When you say frowned upon, if somebody came to work still under the influence of alcohol from the night before, you'd frown upon it but you wouldn't do anything about it? ‑ ‑ ‑ It depends on the level of ‑ ‑ ‑
I see. So if they're a little bit drunk from the night before you'd let them go on, would you? ‑ ‑ ‑ That wasn't my decision to make.
Well, you, as a supervisor, when you're in charge of the mechanical workshop and a mechanical apprentice came to work, if he or she was under the - or appeared to be under the influence of alcohol or substances, what would you do? ‑ ‑ ‑ I would go to my supervisor.
Who would be? ‑ ‑ ‑ Andrew Towns.
Yes? ‑ ‑ ‑ And let him handle the situation.
So you wouldn't immediately tell that apprentice to stop what you're doing? ‑ ‑ ‑ I would stop him working and go and see my supervisor and then ‑ ‑ ‑
Yes. Did you ever encounter anyone who had come to work who appeared to be under the influence? ‑ ‑ ‑ No.
So you never came up - up against that situation? ‑ ‑ ‑ No.
But you say that you would have frowned upon it, you would have told him to stop working for the time being and gone and had a chat with Mr Towns. Is that right? ‑ ‑ ‑ Yes.
I take it you would have been at least concerned about the fact that someone is attempting to work whilst under the influence of alcohol or drugs?‑‑‑Correct.
Because they're not only a danger to themselves but they're a danger to others? ‑ ‑ ‑ Correct.
In re‑examination, he was asked about the electrical current running from the battery pack to the starter motor 'what happens inside the starter motor'. He described the process and at ts 176:
… is it possible that sparks can occur within the starter motor at that point? - - - The brushes do spark slightly yes,
And if they were exposed to flammable vapour, what might that result in? - - - That would catch fire.
Patrick Gray
Patrick Gray, an apprentice mobile plant mechanic, was a visitor to the premises of Primepower on the afternoon of 11 November 2011.
During the afternoon, he heard the engine starting and stopping. In the early evening, he was in the vicinity of the engine with a number of people including Mr Petersen, Mr Smith and Mr Canny. He described what happened (ts 181):
Did Mr Petersen say anything? - - - Yeah, he's stopped what … [the] boys were doing and said, 'You should stop and go get a fire extinguisher from the workshop … Bring that over.'
Who - and did anybody go and get a fire extinguisher? - - - Yeah, Robert did, yeah.
Right. Did he come back? - - - He did. He came back almost straight away.
Right. After he came back what happened? - - - After he came back they - Lachlan and Mitchell started to crank the engine again, and that point the fire came out of the engine and Mitchell got burnt.
In cross‑examination by counsel for Allianz, Mr Gray said (ts 188):
In any event, at some stage, Mr Petersen said stop what you're doing, I'm going to get a fire extinguisher --- Yep.
And that was how long before the accident roughly --- Ten – 10 minutes, five minutes, yeah, I think. It's hard to tell. I don't – I don't wear a watch, so I – yeah.
And was the engine stopped at that stage --- At that stage, yeah, it was.
So he went away --- Yep.
Came back with the fire extinguisher --- Yep.
And then he gave the go ahead for them to restart --- I wouldn't say the go ahead but he was like – and he came back and the fire extinguisher is there. There was no, yeah, give it a crack, boys, or anything. No, there was – yeah.
But he said wait till I go and get a fire extinguisher --- And I'll be back.
--- comes back with a fire extinguisher, then they go back to what they were doing --- Yeah, correct.
And he didn't say, 'Don't do this, stop it all together' --- Not that I ever head, but – yeah.
There was no attempt to stop what they were doing, was there – No, not that I – not that I recall, no.
He saw Mr Smith spraying a substance into the inlet at the time the engine was being started up. He described:
Mitchell was holding the - the container of fuel or what - what I thought was fuel and kind of reacted from the fire. Pulled back and he was covered in the liquid and - and the fire after that straight away.
As to his consumption of alcohol, Mr Gray said he consumed approximately three beers during the course of the day.
Peter Allan
Peter Allan is the managing director of Primepower. He described the work of Primepower as maintaining and looking after diesel generators and gas generators in the Goldfields. Of his workforce, half are diesel fitters to look after the engines and the other half are electricians to maintain the electrical side.
In November 2011 all of the employees reported to him. They included supervisors including Andrew Towns (workshop) and Colin Renton (fuel room). He employed 12 apprentices, five electrical and probably seven mechanical.
On 11 November they knocked off just before 11.00 am, had a minute's silence for Remembrance Day, and then started a party. As it was his birthday Mr Allan provided the food for a barbeque and beer.
Mr Allan described a previous attempt to seize a diesel engine in November 2005 on his 40th birthday. He described that the American Military Standard for a diesel engine is that it must be able to run under duress without oil or coolant for a period of time up to 47 minutes and he and other employees questioned whether it could be achieved. In 2005, they used a 471 Detroit turbocharged 2‑stroke diesel engine. They tried to run the engine over its rated speed to see if it would fail.
In 2005, the people involved in the activity were himself, Colin Renton, Robbie Petersen, and Andrew Towns. In relation to the preparations in 2005, Mr Allan said (ts 216 – 217):
- - - With that one the Detroit system, fuel system's different to any other diesel engine. So we removed the rack, what they call the rack on a Detroit, and we placed – took the rack out of place so that the governor wouldn't try and slow it up – stop it. We removed the air filter from the turbo so that we could introduce fluids and the guys put a shield or a guard down the side of the engine. It was already in a enclosure, it had a roof and panels over the side, over the alternator and so we just put a guard around the – the front side where the engine was.
Yes. And what was the intention of putting the guard there?- - -Mainly just in case anything went wrong and it come out the side of the engine or that something – fan blades, fan belts, cos we were revving past its limited speed.
At (ts 218):
Okay. On the – on, again 11 November 2005, sticking with that, what was done to try and get to the point of seizing the generator of the diesel – the Detroit rather?- - -Originally they – they introduced other fluids into it; brake clean oil, CRC, those sort of things, more flammable units than diesel to try and get the engine to rev faster and they put compressed air into the blower cavity.
Yes. And how did they introduce flammable materials into- - -?- - -They used spray bottles and sprayed it into the inlet of the turbo.
Okay. And who was doing that?- - - … Robbie Petersen, Col Renton.
He described that it did not work in 2005 (ts 219 ‑ 221):
What do you mean the drama?- - -You could say we're introducing other fluids in to it. The diesel still needed the ‑ the injection of the injectors in to the combustion chamber to fire the chamber. Because the governor was trying to cut the diesel off and they were still supplying another source of fuel to it, it stopped putting the diesel in to the point where it's put the fire out. So the fluid they were putting in was too rich a mixture and there was enough diesel going in for the - for it to fire. So it wouldn't do what they were - we were hoping it would do.
…
And this time we removed the oil from the sump so that it would run out of oil.
…
Myself, Robbie, Colin, Andrew, a few mates that called in during the afternoon.
…
Same thing again. We'd replaced the injectors in it and we were introducing a fluid in to the intake to try and get it to over rev.
Yes. And what sort of fluid?- - -Brake Clean. Same again, Brake Clean, CRC, oil, engine oil and compressed air in to the blower box.
Yes. And in the same way?- - -Yes, same way.
Which is?- - -With the pump squirt bottle they call them. It's a plastic bottle, I think. By memory they're about two litres they hold. You fill it up with fluid, screw the lid back on, pump it up with oxygen, it has a self‑priming pump on it, and then you pull the trigger and it squirts the liquid out of the bottle.
On 11 November 2011, he became aware that the apprentices were trying to seize the caterpillar 3306 4‑stroke diesel engine at about 12.00 pm or 1.00 pm. He was asked (ts 223):
… what did you think that they were going to do in order to try and seize the engine? - - - I - I assumed you were going to do the same things as we'd tried previously, remove the intake, introduce an external fuel source and try and get the engine to rev. I was happy to sort of watch them do it, see if they could achieve - I - I didn't expect them to even get the engine to run because of the fact that the fuel pump needed work on it.
Yes. And what was your reaction to them doing - just generally, to them deciding to try and seize the engine? - - - I thought it was good because they were showing some initiative and go and try and do what we couldn't achieve ourselves. Like, what the fitters couldn't - weren't able to do, they were going to try and show us that they could do it, and because of what we'd done back in '05, '06, I knew they were - no help in hell of being able to achieve what they wanted to do, so - - - … I let them go.
…
And specifically, why - why did you think there was no hope in hell of them achieving what you failed at doing? ‑ ‑ ‑ Just the main ingredients that we didn't have, they didn't have, and that was load on the engine. There was no way that they could produce the engine, to get it to work at 70 or 80 per cent of its capability to put enough force in the engine to have it destroy itself, seize, damage.
As to his concern about the spraying of flammable products (ts 224):
I had none, mainly because, you know, the only fluids we had that they could use was brake thinners, CRC, diesel, the - and they've got a high flashpoint and, you know, they're - they're items that we use every day of our life. We - we continually clean items with brake clean. We lubricate with CRC and whatever that runs on engine oil. It was nothing that the guys don't - didn't handle every day of their life and it wasn't something that was highly flammable.
And what about the fact that there was alcohol being consumed? ‑ ‑ ‑ I can't fully remember the reason why but I wasn't drinking that much myself so I just kept an eye on them. I was watching who was coming over to the bar. The apprentices - on a normal, the apprentices wouldn't come to the bar. The older guys after work would go over to the bar and have a drink. Most of the apprentices wouldn't come and associate with the older guys. They just would knock off and go home. And on that day they were just together doing their thing on the engine. They weren't - it was over in the workshop. There was no alcohol over there; there never is, and yeah, they were just doing what they were doing.
Mr Allan was very surprised the apprentices got the engine to start. He said it showed some initiative. The apprentices then moved the engine to the wash bay for ease of cleaning. Mr Allan remained at the bar area and stayed away from the apprentices. He could hear the engine but could not see it.
During the course of the afternoon he walked around a couple of times to see what they were doing. It was mainly the mechanical apprentices, the electrical apprentices were taking a back step.
Later in the afternoon he observed a person walking into the premises from outside with a 20 litre jerry can. Mr Allan asked what was going on and was told it was petrol.
He said (ts 228):
Okay. And how did you react to that?‑ ‑ ‑I got up to go round and tell them to stop due to the fact that they had the petrol. Petrol's just too volatile. It's not something we keep on the premises. It's just something that you don't want to play with and so I got up to go round and tell them that it's time to call it quits and then they were walking back out the gate with the jerry can.
…
Okay?‑ ‑ ‑So I assumed wrongly that they'd given up themselves and they were just putting it back into the – putting the jerry can back into the car.
Mr Allan walked back to the bar when he heard the engine starting to crank. He turned around to tell them to call it quits with the engine and saw the plaintiff running towards him on fire.
He was cross‑examined and agreed that with the activities with the engine in 2005 and 2006 there was some planning and qualified tradespeople involved.
He agreed in 2011 there was no pre‑planning. He agreed it was the apprentices who tried to get the engine to run faster.
Critically, in cross‑examination he said (ts 231):
And to the extent there was supervision from tradespeople or yourself it was intermittent? ‑ ‑ ‑ Correct.
And as you say yourself, you pretty well left the apprentices to get on with their thing? ‑ ‑ ‑ Yes.
And you made a series of assumptions about the risks involved of any kind? ‑ ‑ ‑ Yes, I did.
Based in part on your previous experience with the Detroit engine? ‑ ‑ ‑ Yes, that and my knowledge of a diesel engine. Yes.
And you also made assumptions as to what flammable fluids would or would not be introduced into the air intake of the diesel engine? ‑ ‑ ‑ Yes, based on the chemicals that we kept on the – on the premises. Yes.
He agreed that a spark from the starter motor or a hot exhaust could be an ignition source for a flammable substance.
In relation to alcohol consumption Mr Allan's evidence was as follows:
And did you have any concern – do you say yourself you weren't drinking that much?‑ ‑ ‑Correct.
Did you consider yourself to be in a state of sufficient sobriety to know what was going on on the wash pad with the apprentices?‑ ‑ ‑Yes.
So your judgment wasn't impaired by alcohol?‑ ‑ ‑No.
Would it be fair to say that some of the older guys had had more to drink than you?‑ ‑ ‑Yes.
And would it be fair to say that it's entirely possible that their state of sobriety was significantly less than yours?‑ ‑ ‑Correct.
And nonetheless you knew that some of these older guys were the ones who were going over and telling the apprentices what to do?‑ ‑ ‑Yes, in the earlier part of the day. Yes.
And did you ever see them go over and supervise what the apprentices were doing later on when it was on the wash pad? I'm not saying you could see it, because there's a sea container in the middle, but did you know they were going off to do that?‑ ‑ ‑Yes, I did.
Right. And they'd come back and tell you what they'd seen?‑ ‑ ‑That's correct.
And as the afternoon went on can we safely assume that the more alcohol the older gentlemen drank the less sober they became?‑ ‑ ‑That would be a pretty good assumption.
And notwithstanding that, you didn't take control of the supervision of the apprentices working directly on the engine, did you?‑ ‑ ‑I didn't walk over and oversee everything they were doing, no.
No. You were relying on your less-than-sober senior employees who appeared to be exercising some degree of supervision?‑ ‑ ‑No, I was relying on the apprentices that were there.
He described that in layman's terms, his view was that electrical apprentices did not require supervision to work on the mechanical side of diesel engines. He agreed that the apprentices were supervising themselves on 11 November. He described the buddy system in place at Primepower's workplace when a first and second year apprentice is allocated a third and fourth year as a buddy. He described that 'it's hard for an 18‑year‑old kid to come and talk to me, but he'll go and talk to a 20‑year‑old kid that's three years into his apprenticeship'.
Mr Allan purchased 11 kegs of beer for the celebration in three different sizes, 9 litres, 18 litres and 50 litres. Under cross‑examination he agreed he paid close to $3000 for the kegs of beer. He agreed that three kegs were drunk. He did not see anyone bring their own alcohol to the party.
He agreed paint thinners were available on the premises but was not aware whether it was being used on the engine (ts 240):
And was that one of the substances that was being sprayed into the intake to your knowledge? ‑ ‑ ‑ I couldn't tell you what they were spraying in there.
What, you didn't take an interest in what they were spraying? ‑ ‑ ‑ Not particularly, or - each one, no.
Weren't concerned to know what they were spraying into the intake? ‑ ‑ ‑ No, just going on what we had in the premises.
Yes. Well, paint thinners for example? - - - Yes.
He was not aware of the flashpoint of paint thinners, nor methanol. At (ts 233):
Did you have an apprentice … on loan---Correct.
…
‑ ‑ ‑ in November 2011?- - -Yes.
… And you know that he went home and got methanol and brake cleaner to pour into the engine, didn't you?---No, not until well after the event.
…. I only knew methanol. We had brake cleaner.
All right?---I don't understand why he'd go and get that.
He agreed petrol was a highly dangerous substance, because it ignites very easily.
In cross‑examination he agreed he would be horrified that anyone would be spraying petrol into the intake. At (ts 243):
But you took no steps to ensure that that didn't occur, that nobody came back, went away and came back with petrol or methanol or any other substance for that matter? ‑ ‑ ‑ Correct. I wasn't aware that they were doing that.
…
Yes. But you made no attempt to make yourself aware of what - exactly what they were using? ‑ ‑ ‑ No, cos I was unaware that someone had brought something in from outside.
He agreed Mr Canny and Mr Smith were second year electrical apprentices.
In relation to the jerry can of petrol that was observed brought onto the premises he said (ts 247):
Yes. How many times did you ask the question, 'What's going on?'? ‑ ‑ ‑ By memory, I – no, I couldn't tell you.
Once, wasn't it? ‑ ‑ ‑ Probably.
And you got an immediate response, 'That's petrol from my ute'? ‑ ‑ ‑ Yeah, it could have been, yep.
Yes. So you should have immediately taken off to stop what was going on? ‑ ‑ ‑ Yep.
And if you'd taken off immediately, you would have gotten to them before they even got to the wash pad? ‑ ‑ ‑ No, I had to go round the sea container.
Sorry? ‑ ‑ ‑ I had to go round the sea container and the machinery that was in there.
So did they? ‑ ‑ ‑ No, they come through the gate.
Yes, but they had to go around the sea container to get to the wash pad? ‑ ‑ ‑ Yep.
So you would have caught up with them pretty quick? ‑ ‑ ‑ If you say so, yep.
Well, not if I say so. If you'd reacted immediately, you would have caught up with them before they got to the wash pad? ‑ ‑ ‑ Yes.
But you didn't react immediately, is that right? From what you're saying, they had time to go to the wash pad area, apparently discharge some of the petrol from the jerry can and then walk back with the jerry can past you before you'd even reacted? ‑ ‑ ‑ No, they weren't coming past me. They – I met them coming back.
Yes, so they were on their way back before you'd even commenced or before you'd gotten to the wash pad area? ‑ ‑ ‑ Yes.
He mentioned he was keeping an eye on what the apprentices were doing. In relation to the alcohol he said (ts 249 – 250):
All right. And why were you keeping an eye on how much they had to drink? ‑ ‑ ‑ Cos they were playing with the engine.
And why was that a concern? ‑ ‑ ‑ Cos I didn't want them to be drunk while they were doing it.
You didn't want their judgment affected by alcohol? ‑ ‑ ‑ Correct.
Well, why didn't you say to them, 'If you've had a drink, you're not going to work on that engine'? ‑ ‑ ‑ Why? Cos there wasn't a real cause for that.
I see. Did you have a policy about working under the influence of alcohol? ‑ ‑ ‑ Yes.
And what was that? ‑ ‑ ‑ In what ‑ ‑ ‑
What was the policy? If you ‑ ‑ ‑? ‑ ‑ ‑ Not allowed. Can't do it.
And what were the consequences if someone did? ‑ ‑ ‑ Depending on the situation, the sack, reprimand, different levels.
I mean, that was viewed very seriously, wasn't it, alcohol in the workplace? ‑ ‑ ‑ In the workplace?
Yes? ‑ ‑ ‑ Yes.
A sackable offence? ‑ ‑ ‑ Depending on the situation, yes.
You're sacked immediately for – depending on the situation, is that right? ‑ ‑ ‑ Depending on the situation, yes.
And if someone had been drinking or was under the influence of alcohol, you wouldn't allow them to work, would you? ‑ ‑ ‑ Depending on the level.
I see. So if this was 10 November let's say 2 o'clock in the afternoon part of their ordinary work, what level of alcohol would be acceptable from your point of view? ‑ ‑ ‑ For working?
Yes? ‑ ‑ ‑ I'd say if they're under the limit that they can drive a car under .05 then they'd be able to operate a machine, they'd be able to operate a – (indistinct) work on a car, on equipment but ‑ ‑ ‑
So from your point of view, if someone is under what, .05, they're okay to work in your workshop? ‑ ‑ ‑ Depending on the situation, what they were doing, how they were doing it, what they were up to, yeah.
I suggest to you, Mr Allan, that's extraordinary? ‑ ‑ ‑ Okay.
I mean, surely you had a zero alcohol policy, isn't that the case? ‑ ‑ ‑ Well, it's never been a situation we've had to worry about. It's never been something that we've done. All the mines we work on are all zero tolerance. The guys all know that. It's (indistinct) into us all every day. It's not something that happens.
Yes, because it is zero tolerance? ‑ ‑ ‑ Right.
Isn't it? ‑ ‑ ‑ I – I – yes.
So if someone even if they're under .05, you wouldn't tolerate any level of alcohol or being under the influence of alcohol in the workplace, would you? ‑ ‑ ‑ No.
I see force in Primepower's submission on the principles of the allocation of the burden of proof. However, like Hammersclag J and Kirby P in Legal & General Insurance Ltd v Eather (1986) 6 NSWLR 390 the onus of proof does not have a significant role in the present proceedings.
It is not in issue in this case that the knowledge that must be examined is the knowledge of Mr Allan. He is the managing director of Primepower.
It is not in issue in this case that the reasonable precautions condition would not be breached by negligence on the part of Primepower.
As to the operation of reasonable precautions conditions Diplock LJ said in Fraser v BN Furman (Productions) Ltd [1967] 3 All ER 57, 60:
'Reasonable' does not mean reasonable as between the insured and the insurer having regard to the commercial purpose of the contract, which is inter alia to indemnify the insured against liability for his (the insured's) personal negligence … Obviously the condition cannot mean that the insured must take measures to avert dangers which he does not himself foresee, although the hypothetical reasonably careful employer would have foreseen them. That would be repugnant to the commercial purpose of the contract, for failure to foresee dangers is one of the commonest grounds of liability in negligence. What in my view is 'reasonable' as between the insured and the insurer, without being repugnant to the commercial object of the contract, is that the insured should not deliberately court a danger, the existence of which he recognised, by refraining from taking any measures to avert it. Equally the condition cannot mean that, where the insured recognises that there is a danger, the measures which he takes to avert it must be such as the hypothetical reasonable employer, exercising due care and observing all the relevant provisions of the Factories Act 1961, would have taken. That, too, would be repugnant to the commercial purpose of the contract, for failure to take such measures is another ground of liability in negligence for breach of statutory duty.
What in my judgment is reasonable as between the insured and the insurer, without being repugnant to the commercial purpose of the contract, is that the insured, where he does recognise a danger, should not deliberately court it by taking measures which he himself knows are inadequate to avert it. In other words, it is not enough that the employer's omission to take any particular precautions to avoid accidents should be negligent; it must be at least reckless, i.e., made with actual recognition by the insured himself that a danger exists, not caring whether or not it is averted.
That approach has been followed in a number of authorities in Australia. In CGU Insurance Ltd v Graeme Robert Lawless [2008] VSCA 38 Redlich J said:
17The test is wholly subjective. A failure to take reasonable precautions will occur only where there is a deliberate course of action or inaction which the insured realises exposes him to the risk of someone being injured by the danger which has been recognised. Hence the phrase 'a deliberate decision to court the danger' The insured might establish compliance with the condition by showing one or more of the following things:
(1)There was no recognition of the danger or the extent of the danger of bodily injury;
(2)Particular precautions would not have been reasonable in the circumstances;
(3)No particular precaution was considered or it was not regarded as reasonable or practicable in the circumstances'
(4)The failure to take the precautions was not due to a lack of desire and concern to prevent bodily injury.
Did Mr Allan court the risk?
I must examine Mr Allan's knowledge and conduct and consider any inferences to be drawn from the evidence to determine whether Mr Allan recognized a danger and deliberately courted it by intentional and considered action or inaction.
Counsel for Mr Allan submitted that because of what happened on the two prior attempts to seize the engine Mr Allan did not appreciate the dangers associated with the activity in 2011. He also submitted that the evidence of Mr Allan was that starting an engine with a flammable substance was a daily occurrence.
Mr Allan testified that he did not believe the apprentices would be able to get the engine to seize based on past experience. That view does not mean he was not aware of the risks involved in the activity. Mr Allan was aware that flammable substances were being used. Mr Allan was aware of the risk of ignition with the starter motor of an engine. That Mr Allan did not know what flammable substances were being used is no answer. Mr Allan did not make any enquiry as to what flammable substances were being used by the apprentices. He could have supervised the activity. He could have ascertained what flammable substances were being used. He chose not to ascertain the flammable substances being used.
In his evidence he said he did not understand why an apprentice would bring methanol onto the premises. However, during the course of that day he allowed the unsupervised apprentices to do whatever they wanted on the engine.
This was not a normal working day. The activity to seize the engine was not a normal activity at the workplace. The apprentices were undertaking unfamiliar work.
When the petrol was brought onto the work premises and he was aware of it Mr Allan did not act immediately to prevent the petrol being brought to the wash pad. He was horrified at the thought of petrol being used. Under cross‑examination he conceded he could have intercepted the person with the jerry can before he got to the wash pad. He did not act immediately and when the person walked past him with the jerry can he returned to the bar area. In all the circumstances Mr Allan was indifferent to what substances were being used by the apprentices in the activity to seize the engine. This activity of trying to seize the engine with flammable substances was going on for 4 – 5 hours. Even when the petrol was brought onto the premises his inaction was a critical factor in the subsequent events.
Moreover, what occurred in 2011 was different from what occurred in 2005 and 2006. In 2005 the work on the engine occurred in the workshop, an area isolated from the bar area. In 2005 the activity was planned. In 2005 trained employees of Primepower were involved in the activity. In 2006 the work on the engine occurred one day after work. In 2006 the activity was planned. In 2006 trained employees of Primepower were involved in the activity.
In 2011 the activity was not planned. In 2011 no trained employees were involved in the activity. In 2011 only unsupervised apprentices were involved in the activity.
Furthermore, in my view Mr Allan's attitude to the consumption of alcohol in the workplace was relaxed. He testified that so long as someone was under the legal blood alcohol limit for driving, .05%, the person could 'depending on the situation' work in the workplace. Under cross‑examination it was suggested his view was 'extraordinary'. He then distanced himself from that statement.
In his evidence he said he recognised the dangers of alcohol in the workplace. He said he followed the Alcohol and Drug Policy in the Employee's Handbook (exhibit 5). He would not allow alcohol to be consumed on a work day.
Despite his knowledge of the risks of injury when under the influence of alcohol, Mr Allan encouraged unsupervised apprentices who consumed alcohol to work on the engine. He allowed the activity to go on for 4 – 5 hours at the wash pad only some 20 m from where the celebration was occurring. He allowed intoxicated supervisors to give advice to the apprentices in the activity to seize the engine. Mr Allan knew the apprentices were drinking.
I repeat this was not one beer consumed after work but a celebration involving free flowing alcohol over a long period of time. In those circumstances the potential danger was increased so greater steps were required to protect employees.
In November 2011 Mr Allan took no steps to protect the apprentices who were working on the engine. Mr Allan's actions were not inadvertent. He deliberately allowed the consumption of alcohol by apprentices over a long period of time with no limits. He gave no instructions to the apprentices not to work on the engine if they consumed alcohol. He let them do what they wanted. The set purpose of the day was a celebration of his birthday. He provided free flowing alcohol to all present including the apprentices working on the engine. Mr Allan's conduct was serious. It was more than negligence.
In my view Mr Allan's conduct does amount to deliberate flouting of the policy.
His conduct also constitutes a breach of s 19(1) of the OSH Act in that Primepower did not maintain a working environment in which its employees were not exposed to hazards.
In all the circumstances the conclusion must be that Mr Allan courted the danger.
Conclusion with respect to insurance policy
In all the circumstances, I conclude that Primepower did not comply with the reasonable precautions clause of the Employers' Indemnity Policy. Primepower failed to comply with both parts of Condition 7 of the policy. Accordingly, it is not entitled to indemnity from Allianz.
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