Coastal Hire Pty Ltd v Ewers

[2009] WASCA 36

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   J-CORP PTY LTD -v- COASTAL HIRE PTY LTD [2009] WASCA 36

CORAM:   WHEELER JA

BUSS JA
NEWNES AJA

HEARD:   9 SEPTEMBER 2008

DELIVERED          :   6 FEBRUARY 2009

FILE NO/S:   CACV 49 of 2006

BETWEEN:   J-CORP PTY LTD

Appellant

AND

COASTAL HIRE PTY LTD
Respondent

FILE NO/S              :CACV 50 of 2006

BETWEEN             :COASTAL HIRE PTY LTD

Appellant

AND

MICHAEL BOULTWOOD EWERS
First Respondent

J-CORP PTY LTD
Second Respondent

CHRISTOPHER GAYNOR
Third Respondent

ON APPEAL FROM:

Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA

Coram  :EATON DCJ

Citation  :EWERS -v- J-CORP PTY LTD & ORS [2006] WADC 52

File No  :BUN CIV 18 of 2002

Catchwords:

Tort - Personal injury - Damages - Contribution proceedings - Whether implied term that supplier of scaffolding maintain it in safe condition after erected - Turns on own facts

Tort - Negligence - Personal injury - Appellant provided and erected scaffolding for building industry - Supplied and erected scaffolding on building site - Building site under control of builder - Scaffolding subsequently interfered with by third party - Contractor injured in fall from scaffolding due to defect caused by the interference - Interference with scaffolding on building sites known problem - Whether appellant under duty to provide system to detect and remedy interference with erected scaffolding - Turns on own facts

Legislation:

Nil

Result:

Appeal dismissed in CACV 49 of 2006
Appeal allowed in CACV 50 of 2006

Category:    B

Representation:

CACV 49 of 2006

Counsel:

Appellant:     Mr D M McKenna

Respondent:     Ms F C E Davis

Solicitors:

Appellant:     Jarman McKenna

Respondent:     DLA Phillips Fox

CACV 50 of 2006

Counsel:

Appellant:     Ms F C E Davis

First Respondent           :     No appearance

Second Respondent      :     Mr D M McKenna

Third Respondent          :     No appearance

Solicitors:

Appellant:     DLA Phillips Fox

First Respondent           :     No appearance

Second Respondent      :     Jarman McKenna

Third Respondent          :     No appearance

Case(s) referred to in judgment(s):

Ewers v J‑Corp Pty Ltd [2006] WADC 52

Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254

Sullivan v Moody (2001) 207 CLR 562

Sutherland Shire Council v Heyman (1985) 157 CLR 424

1. WHEELER JA:  I agree with Newnes AJA.

2. BUSS JA:  I agree with Newnes AJA.

3. NEWNES AJA:  These appeals arise out of an accident on a construction site in which, Mr Michael Ewers (the first respondent in CACV 50 of 2006), was injured when he fell some 4 m to the ground after a mesh panel on the perimeter of the scaffolding on which he was standing gave way.

4. In May 2002, Mr Ewers commenced an action for damages against the builder, J‑Corp Pty Ltd (J‑Corp), and the owner of the scaffolding, Coastal Hire Pty Ltd (Coastal Hire), for damages for negligence, breach of contract and breach of statutory duty.  Mr Ewers subsequently joined the licensed scaffolder who had erected the scaffolding, Mr Christopher Gaynor (Mr Gaynor), as the third defendant, claiming against him for damages for negligence and breach of statutory duty.  Each of the defendants denied liability to the plaintiff and each sought a contribution from the other.

5. The action went to trial in the District Court at Bunbury in November 2005.  Damages were agreed and the only issue was liability.  On that issue, Mr Ewers was successful at trial against all of the defendants and judgment was entered for Mr Ewers in the agreed sum of $250,000.  The trial judge, Eaton DCJ, apportioned liability equally between J‑Corp, Coastal Hire and Mr Gaynor:  see Ewers v J‑Corp Pty Ltd [2006] WADC 52.

6. There are two appeals against the decision of the trial judge.  One is by Coastal Hire and the other is by J‑Corp.

7. In CACV 50 of 2006, Coastal Hire appeals against the finding that it owed a duty of care to Mr Ewers and, alternatively, if such a duty was owed, that Coastal Hire was in breach of it.  Coastal Hire also appeals against the apportionment of liability against it.

8. In CACV 49 of 2006, J‑Corp appeals against the finding of the trial judge that Coastal Hire was not liable to J‑Corp in damages for breach of contract in respect of any amount for which J‑Corp was liable to Mr Ewers.

The background

1. At the time of the accident, Mr Ewers carried on a brick cleaning business.  One of his major clients was J‑Corp who, by that stage, accounted for about half of Mr Ewers's work.

2. On 3 December 2001, Mr Ewers received a message from a Mr Newby, a senior supervisor with J‑Corp, asking him to carry out a brick cleaning job on a house which J‑Corp was constructing at 150 Portofino Crescent in Eaton (Lot 150).  Mr Newby asked Mr Ewers to start the work as soon as possible and to commence with the top storey of the house, so the scaffolding could be removed.

3. Mr Ewers went to Lot 150 at approximately 8.00 am on 4 December 2001 to commence the work.  He met Mr Newby at the site and they discussed what was to be done.  At the time, there was scaffolding around all the external walls of the house, rising to the second storey.  The top level of the scaffolding was at a height of 4.1 m from the ground, at what is known in the building trade as the 'third lift'.  The scaffolding was in a modular form and had been hired by J‑Corp from Coastal Hire.  It had been erected by Mr Gaynor, who was a licensed scaffolder, in stages as work on the house progressed.  The third lift had been erected on 14 November 2001.

4. The floor on the third lift of the scaffolding consisted of timber planks and metal decking.  That formed the platform upon which Mr Ewers would stand to carry out the work.  Around the outer edge of the scaffolding were upright rectangular mesh panels, 900 mm in height and either 1200 mm or 1800 mm in length, which were designed to be connected at each end to vertical steel posts which extended the full height of the scaffolding.  The vertical posts were connected to the frame of the scaffolding.  Each mesh panel was designed to be almost flush with, and perpendicular to, the floor of the decking.  The mesh panels were intended to provide a safety barrier for workers on the scaffolding and to prevent equipment and building materials falling from the scaffolding onto anyone who might be below.

5. The top of each end of the mesh panels was designed to be fixed to an adjacent vertical steel post by means of a metal tab or lug on the mesh panel into which would be inserted the 'forelock pin' that was welded to the vertical post.  The forelock pin contained a moving part described as a 'tongue' or 'toggle', fixed to an axis.  Once the forelock pin with the moving part passed completely through the hole in the tab of the mesh panel, the toggle or tongue dropped down, locking the top end of the mesh panel in place and providing a secure connection between the top end of the mesh panel and the adjacent vertical post.

6. Metal tabs were located on the bottom corners of the mesh panels.  The metal tabs were intended to be positioned behind the vertical posts adjacent to the ends of the mesh panel, to prevent the mesh panel from swinging outwards at the bottom.

7. When correctly fitted, the top of the mesh panel was thus securely locked at each end to a vertical post and the tabs at the bottom were positioned behind the same vertical posts so the bottom of the mesh panel could not swing outwards.

8. A metal ladder on the northern side of the house provided a means of access to the third lift of the scaffolding.  Access could also be gained by means of an external hoist or through the interior of the house.

9. On the morning of 4 December 2001, Mr Ewers used the ladder to climb to the 'third lift' level.  At the time of the accident, he had with him a spray gun to which was attached a considerable length of hose.  Mr Ewers was standing on the third lift near the portico of the house, feeding the hose over the top of one of the mesh panels to lower the spray gun to the ground, when the southern end of the mesh panel suddenly swung outward.  Mr Ewers had his left hand on the top of the mesh panel and the hose in the other hand.  He lost his balance and fell to the ground, some 4 m below.  It seems that as the mesh panel swung out, the combined weight of Mr Ewers and the hose broke the forelock pin on the northern end of the mesh panel and the mesh panel also fell to the ground.

10. It was found as a fact by the trial judge, and was not in issue on the appeal, that at the time of the accident the southern end of the mesh panel was not secured to the adjacent vertical post.  The forelock pin was not in place and the tab into which it should have been inserted was simply resting against it or adjacent to it.  That enabled the southern end of the mesh panel to swing outwards when pressure was exerted against it.  His Honour found [150] that to a person such as Mr Ewers it would not have been obvious that the mesh panel was not secured; that it was 'in the nature of a concealed danger'.

11. It was also not in issue on the appeal that the forelock pin had been disconnected after Mr Gaynor had erected the scaffolding.  The trial judge concluded it was likely that the forelock pin had been disconnected on or before 29 November 2001 and that it had been disconnected by plasterers who had made unauthorised alterations to the scaffolding in the area of the portico to enable them to render the external walls of the house in that area.

12. The circumstances leading up to the accident were considered in considerable detail at the trial.  It is unnecessary for the purposes of this appeal to canvass the evidence at length.

13. The scaffolding in question was supplied by Coastal Hire, whose business was the provision of scaffolding and other equipment by way of hire to the building industry.  Coastal Hire had provided J-Corp with a quote, dated 18 September 2001, for the hire of the scaffolding and a brick hoist.  J‑Corp accepted the quote (with some variations) and in due course J‑Corp issued an order, dated 8 October 2001, to Coastal Hire for the supply and erection of the scaffolding.

14. The effect of the Occupational Safety and Health Regulations 1996 (WA) (the OSH regulations) was that, because it exceeded 4 m in height, the scaffolding was required to be erected by a licensed scaffolder. It was erected by Mr Gaynor. Mr Gaynor had originally been an employee of Coastal Hire. In mid‑1998, he obtained his certificate as a scaffolder and became a subcontractor to Coastal Hire. Mr Gaynor registered the business name 'C & M Scaffolding' and carried on the business in partnership with his wife. Most (but not all) of his work came from Coastal Hire. In the present case, he was engaged by Coastal Hire to erect the scaffolding at Lot 150. As I have said, Mr Gaynor erected the scaffolding in stages, the scaffolding to the third lift being completed on 14 November 2001. There was no written agreement between Mr Gaynor and Coastal Hire in connection with the work.

15. After he had erected the scaffolding, Mr Gaynor did not return to the site until 30 November 2001, four days before the accident.  On that morning he received a telephone call from Mr Newby asking if he would go to Lot 150 to rectify a problem with the scaffolding as it had apparently been tampered with.  Mr Gaynor was told that the problem involved 'planks and braces'.  He told Mr Newby he would not be able to get to Lot 150 until late in the afternoon.  Mr Newby then said that he had an employee of Coastal Hire, Adam Briggs, present with him.  It seems that Mr Briggs was working on another site in Portofino Crescent when Mr Newby discovered that there had been some interference with the scaffolding at Lot 150.  Mr Newby passed the mobile phone to Mr Briggs and Mr Gaynor asked Mr Briggs if he felt 'competent to do the scaffolding'.  Mr Briggs said 'yes'.  The mobile phone was then handed back to Mr Newby.  Mr Gaynor told Mr Newby he would call in at Lot 150 late in the afternoon.  He also asked Mr Newby whether any other trades were working on Lot 150 that day and was told that there were none.

16. At the time of the accident, Mr Briggs had worked for Coastal Hire as a truck driver for a little under two years.  Prior to that, he had had no experience in the building industry.  Mr Briggs said that when he inspected the scaffolding on Lot 150 on 30 November 2001 there was some metal decking missing on the third lift in the area immediately in front of the portico and to the south of the portico.  He thought that two steel planks had been dropped down to the second lift in front of the portico.  Mr Briggs moved the planks from the second lift back to the third lift.

17. Mr Briggs gave evidence that he spoke to Mr Gaynor and told him what he had done.  Mr Gaynor said he would come to the site later and check the work.  Mr Briggs could not recall whether he spoke to Mr Gaynor before or after he (Mr Briggs) had done the work.

18. Mr Smith, the Bunbury manager of Coastal Hire, gave evidence that, on 30 November 2001, Mr Briggs had telephoned him to say that he had been asked to move some scaffolding.  Mr Smith told Mr Briggs that if Mr Gaynor thought it was alright to undertake the work, then he should do so.  Mr Smith said he later spoke to Mr Gaynor who told him that he had given Mr Briggs permission to do the work.

19. Mr Gaynor said he attended Lot 150 at 4.00 pm or 4.30 pm on 30 November 2001 to inspect the scaffolding to ensure that it had been rectified.  When he arrived on site, no one else was present.  He said he immediately looked at the area of the portico, because his experience suggested that that was the area where the scaffolding was likely to have been tampered with.  Mr Gaynor said he walked around the northern aspect of the building looking at the braces.  He then climbed the ladder to the third lift and walked across the front face of the building to its southern aspect and then completely around the building inspecting the scaffolding.  He said nothing untoward came to his notice.

20. At about 5.00 pm or 5.30 pm on the same day, Mr Smith inspected the work done by Mr Briggs.  Mr Smith said in evidence that he had earlier told Mr Gaynor that he would do so on his way home.  Mr Smith climbed onto the scaffolding and walked around the full perimeter of the building.  He said he did not notice any problems with the scaffolding.

21. The trial judge found that there was no defect in the system of scaffolding used or in its erection, but that after it had been erected the scaffolding had been interfered with by some third party, probably the plasterers who had rendered the portico area.  Among other alterations, one end of the mesh panel concerned had been detached from the vertical post to which it had been attached by Mr Gaynor and had been left unsecured.  The trial judge found that had the scaffolding not been interfered with in that way, Mr Ewers would not have fallen.

22. There was substantial evidence at the trial that interference with scaffolding was known to be a common problem on building sites.  Evidence was given of two memoranda issued by J‑Corp to its subcontractors prior to the accident, advising the subcontractors that it was an offence for any person who was not a licensed scaffolder to erect, alter or dismantle scaffolding over 4 m in height.  Mr Morrow, a director of Coastal Hire, gave evidence that he had previously been informed, generally by the licensed scaffolder or supervisor for the building company concerned, of unauthorised tampering with scaffolding on other sites.  He said (ts 122) that that had occurred 'regularly and at various times with greater and lesser frequency'.  Mr Smith also gave evidence that unauthorised interference with scaffolding was a common problem on building sites.

23. His Honour held (relevantly) that Coastal Hire owed a duty of care to Mr Ewers to ensure that the scaffolding was erected and maintained in a safe condition.  He said:

    It is clear that [Mr Ewers] would not have fallen but for the interference by plasterers with scaffolding which had been properly erected. The prevalence of such interference was, in my finding, so well known in the industry that all three defendants could reasonably foresee that at any building site where scaffolding had been erected and particularly where plasterers were required to work on external walls there was a risk of interference with erected scaffolding and a consequent risk of injury to others who might use that scaffolding. Coastal Hire entrusted the erection of scaffolding to Mr Gaynor. It clearly owed a duty to users of scaffolding to ensure that the scaffolding provided by it was safely erected such that it would provide a safe work platform or environment. It discharged that duty by contracting with a qualified scaffolder to erect its scaffolding on its behalf. In the circumstances I consider that it is reasonable to extend the content of that duty to the maintenance of safety once its scaffolding is safely erected. Discharge of that duty would require some degree of supervision or surveillance on a regular basis having particular regard to whether and when plasterers might be required to work on external surfaces [125].

24. Later in his reasons, the trial judge put the duty of Coastal Hire in this way:

    The duty of Coastal Hire to [Mr Ewers] was to provide and erect scaffolding that afforded a safe work place for he [sic] and other contractors or tradesmen who might use that scaffolding. That duty involved ensuring that scaffolding provided by it was erected securely and remained safe and secure which, in turn, involved the provision of a system for the prompt discovery of interference to scaffolding already erected and effective rectification of any such interference before use by contractors or tradesmen [152].

25. His Honour held that Coastal Hire had not discharged the duty of care it owed to Mr Ewers.  He said:

    There appears to have been a consensus as between the three defendants that the rectification work be undertaken by a truck driver rather than a qualified scaffolder. As I have already observed, that was a haphazard response to the problem noted by Mr Newby. A proper approach would have involved inspection of the extent of the interference by a qualified scaffolder and rectification by that person in the light of that inspection. According to my findings the task, by consensus of all three defendants, was delegated to an unqualified person. He failed to see that the mesh panel which ultimately fell was not effectively secured to the southern vertical post. What he did do presumably gave the impression to those who visited the site afterwards of scaffolding that looked relatively normal and safely erected. None of those who visited the site afterwards made a sufficiently meticulous inspection of the scaffolding such that the hazard posed by that mesh panel in its unsecure state was discovered [130].

26. His Honour held [143] that the accident was caused by the failure of each of J‑Corp, Coastal Hire and Mr Gaynor 'to have in place a system to detect and remedy interference with scaffolding, such a system being clearly necessary given that interference was rife and common knowledge in the industry'.

27. The trial judge concluded that Mr Ewers had made out his claim in negligence against each of J‑Corp, Coastal Hire and Mr Gaynor.

28. In its contribution claim against Coastal Hire, J‑Corp pleaded that it was an implied term of the contract between them that the services to be rendered by Coastal Hire would be rendered with due skill and care.  J‑Corp alleged that Coastal Hire was in breach of that term, among other things, by failing to ensure that the scaffolding was maintained in a safe and proper condition.

29. His Honour rejected that contention.  He found that J‑Corp had joined with Coastal Hire and Mr Gaynor in effecting an inadequate response to the interference with the scaffolding.  The trial judge held there was no implied term in the contract by which Coastal Hire undertook to be solely responsible for dealing with the problem of interference with the scaffolding from time to time.  His Honour concluded there was no breach of contract as between any of the defendants which would lead to a particular defendant's share of liability to the plaintiff being borne by another defendant or defendants.

1. The trial judge held that in the circumstances it was just and equitable to apportion liability to contribute between the defendants equally.

The appeal by Coastal Hire:  CACV 50 of 2006

1. I will deal first with the appeal by Coastal Hire.

Grounds of appeal

1. The grounds of appeal are lengthy and it is unnecessary to set them out in full.  They can be sufficiently stated as follows:

   1.The learned primary judge erred in law in finding that Coastal Hire owed a duty to Mr Ewers to ensure that he did not suffer injury resultant upon interference by third parties with scaffolding and that this involved the provision of a system for the prompt discovery of interference to scaffolding already erected and rectification of any such interference before use by contractors or tradesmen, when this was not a case pleaded or litigated at trial by Mr Ewers against Coastal Hire.

   2.The learned primary judge erred in fact and law in finding there was a duty on Coastal Hire to ensure the maintenance of the safety of scaffolding once erected and to ensure that Mr Ewers did not suffer injury resultant upon interference with the scaffolding by third parties.

   3.The learned primary judge erred in fact and law in finding that, after interference to the scaffolding had been found by J‑Corp on 30 November 2001, Coastal Hire had a duty to undertake an inspection of it to determine if any rectification was needed and that Coastal Hire had breached that duty, in circumstances where J‑Corp had made arrangements direct with Mr Gaynor for the inspection and rectification of the scaffolding and it was reasonable for Coastal Hire to rely on those arrangements.

   4.The learned primary judge erred in fact in finding that the mesh panel which was disconnected and led to Mr Ewers's fall on 4 December 2001 had been interfered with by the plasterer, Mr Meyn, on 29 November 2001, when that was improbable and contrary to other compelling evidence and inferences from that evidence.

   5.Alternatively, the learned primary judge erred in fact and law in finding a breach of duty on the part of Coastal Hire on the ground that the unsecured mesh panel was a 'hidden defect' and that no proper inspection of the scaffolding after its rectification on 30 November 2001 had been carried out.

   6.In the alternative to grounds 1 to 4, the learned primary judge erred in apportioning liability equally between Coastal Hire, J‑Corp and Mr Gaynor, when the greatest degree of responsibility lay with J‑Corp as the occupier and principal contractor who was responsible for the scaffolding and coordination of trades on the building site.

The disposition of the appeal

1. It is convenient to turn immediately to grounds 2 and 3 of the grounds of appeal, which formed the main focus of argument on the appeal.

Grounds 2 and 3

The submissions of the parties

1. It was submitted on behalf of Coastal Hire that the trial judge was in error in finding that it owed a duty of care to maintain the safety of the scaffolding after it had been erected.  No such duty arose because it provided the scaffolding or arranged for it to be erected.  Nor did the fact that Coastal Hire had been informed that interference had occurred, give rise to a duty on Coastal Hire to inspect the scaffolding to ensure its safety.  The obligations of Coastal Hire under its contract with J‑Corp extended only to the supply, erection, dismantling and removal of the scaffolding.  After it was erected, Coastal Hire had no contractual or any other obligation to inspect or maintain the scaffolding, or to rectify any interference with it.  Coastal Hire did not occupy the building site and had no day‑to‑day control over what happened on the site.  As the trial judge found, the site was occupied by and under the control of J‑Corp.  The obligations to ensure the safety of the scaffolding fell on J‑Corp.  That reflected the position under the OSH regulations.

2. In the alternative, it was submitted that if such a duty was owed by Coastal Hire, the trial judge erred in holding that Coastal Hire had failed to discharge it.  J‑Corp (by Mr Newby) had made arrangements direct with the licensed scaffolder, Mr Gaynor, to inspect the scaffolding and ensure that it was safe.  That was done in circumstances where Mr Gaynor was an experienced and competent scaffolder, and Mr Newby had often dealt direct with him.  Coastal Hire was entitled to rely upon the inspection by Mr Gaynor as discharging any obligation of inspection it had.  The fact that, pending that inspection, J‑Corp and Mr Gaynor had arranged for Mr Briggs, an employee of Coastal Hire who happened to be on the site for other reasons, to reinstate some planks and braces that had obviously been moved, did not alter the position.

3. Mr Ewers did not appear on the hearing of the appeal but written submissions were filed on his behalf.  It was submitted by Mr Ewers that Coastal Hire was under a duty of care to provide a safe system of scaffolding so that those using it were not exposed to the risk of injury.  It was aware of the risk of injury if scaffolding was interfered with.  Once it became aware of the interference with the scaffolding on 30 November 2001, the discharge of its duty of care required Coastal Hire to have a qualified scaffolder inspect and rectify the scaffolding in the first instance.  Instead, in breach of its duty, Coastal Hire permitted an unqualified person to rectify it and when Mr Gaynor, the qualified scaffolder, subsequently inspected the scaffolding he did not know how it had been interfered with or what rectification work had been done by Mr Briggs, with the result that the unsecured mesh panel was overlooked.

4. J‑Corp argued that, having been advised of the interference with the scaffolding and having agreed to rectify it, Coastal Hire had a duty to make proper enquiries to ascertain the area of scaffolding affected and the nature of the interference, and to have a competent person make a thorough inspection of the area interfered with and to rectify it.  Coastal Hire breached that duty by failing to put in place a proper system of inspection to determine what rectification was required and by failing to carry out a sufficiently meticulous inspection to ensure that it was safe.

5. It also argued that the scaffolding had been erected by Mr Gaynor on behalf of Coastal Hire and had been tagged as safe to use.  J‑Corp and Coastal Hire were together in occupation of the scaffolding for the purposes of the Occupiers Liability Act 1985 (WA).  As none of J‑Corp's representatives was a certified scaffolder, Coastal Hire was aware that J‑Corp relied, and it was reasonable for J‑Corp to rely, on Coastal Hire to ensure the safety of the scaffolding.  After notified of the interference, Coastal Hire (by Mr Smith) accepted the obligation to inspect and rectify the scaffolding and ensure it was safe.  Coastal Hire's response, however, was inadequate.  It allowed an unqualified person to conduct the rectification work and did not liaise with Mr Newby or Mr Briggs to identify the interference or the work done by Mr Briggs.

The merits of these grounds of appeal

1. The finding of the trial judge that Coastal Hire owed to Mr Ewers a duty of care in relation to the erection of the scaffolding was not in issue on the appeal.  Nor was the finding that Coastal Hire had discharged that duty by engaging Mr Gaynor to erect the scaffolding.

2. The substantive issue was his Honour's further finding that Coastal Hire's duty extended to maintenance of the erected scaffolding in a safe condition.  As I have said, he held that the discharge of that duty required Coastal Hire to have a system for the prompt discovery of interference to the scaffolding and effective rectification of any such interference.

3. It appears from the reasons of the trial judge that he considered it reasonable to extend the duty of care of Coastal Hire to the maintenance of the scaffolding in a safe condition because it was foreseeable that there would be unauthorised interference with it by plasterers working on the house.

4. The High Court, however, pointed out in Sullivan v Moody (2001) 207 CLR 562 that:

   The fact that it is foreseeable, in the sense of being a real and not far‑fetched possibility, that a careless act or omission on the part of one person may cause harm to another does not mean that the first person is subject to a legal liability to compensate the second by way of damages for negligence if there is such carelessness, and harm results. … A defendant will only be liable, in negligence, for failure to take reasonable care to prevent a certain kind of foreseeable harm to a plaintiff, in circumstances where the law imposes a duty to take such care (576).

5. In Sullivan v Moody, the High Court observed (579) that whether or not a duty of care exists is not to be reduced to a discretionary judgment based upon a sense of what is fair, just and reasonable as an outcome in the particular case; the law of tort develops by reference to principles, which must be capable of general application, not discretionary decision‑making in individual cases.

6. This case does not fall within any of the recognised categories of cases where the existence of the relevant duty of care has been established.  Where a person lets on hire goods which are in a safe condition there is no general duty on that person, while the goods are in the possession of the hirer, to exercise reasonable care and skill to maintain the goods or to put the goods in a safe condition if they are damaged or misused, so as to prevent injury to third parties.  That is not to say that such a duty could never in any circumstances arise.  But it is not a duty that will ordinarily arise simply by reason of a contract of hire.  Something more will be required.

7. In my view, there is nothing in the circumstances of this case which is capable of giving rise to such a duty on the part of Coastal Hire.

8. In Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254, the appellant, an employee of a video shop which was a tenant in the respondent's shopping centre, was attacked and injured at about 10.30 pm while walking across the shopping centre car park to his car shortly after the video shop had closed. The lighting in the car park had already been turned off for the night. The appellant sued the respondent as the occupier of the car park, arguing that the risk of harm from an assault was foreseeable and the respondent was liable in negligence for failing to leave the lights on. The High Court held that the respondent's duty did not extend to taking reasonable care to prevent physical injury to the injured employee from the criminal behaviour of third parties.

9. Gleeson CJ said:

   Leaving aside contractual obligations, there are circumstances where the relationship between two parties may mean that one has a duty to take reasonable care to protect the other from the criminal behaviour of third parties, random and unpredictable as such behaviour may be.  Such relationships may include those between employer and employee, school and pupil, or bailor and bailee.  But the general rule that there is no duty to prevent a third party from harming another is based in part upon a more fundamental principle, which is that the common law does not ordinarily impose liability for omissions.

   …

   As Brennan J pointed out in Sutherland Shire Council v Heyman, the common law distinguishes between an act affecting another person, and an omission to prevent harm to another.  If people were under a legal duty to prevent foreseeable harm to others, the burden imposed would be intolerable.  Referring to Lord Atkin's speech in Donoghue v Stevenson, his Honour said:

   'The judgment of Lord Esher MR in Le Lievre v Gould which Lord Atkin cites makes it clear that the general principle expresses a duty to take reasonable care to avoid doing what might cause injury to another, not a duty to act to prevent injury being done to another by that other, by a third person, or by circumstances for which nobody is responsible' (265 ‑ 266).  (footnotes omitted)

10. His Honour accepted (267 ‑ 268) that there might be circumstances in which not only is there a foreseeable risk of harm from criminal conduct by a third party, but the criminal conduct is attended by such a high degree of foreseeability, and predictability, that it is possible to argue that the case would be taken out of the operation of the general principle and the law may impose a duty to take reasonable steps to prevent it:  see also Hayne J at (293).

11. Gleeson CJ found it unnecessary to express a concluded view as to whether foreseeability and predictability of criminal behaviour could ever exist in such a degree that, even in the absence of some special relationship, the law would impose a duty to take reasonable care to prevent harm to another from such behaviour.  But he observed that as a matter of principle, such a result would be difficult to reconcile with the general rule that one person has no legal duty to rescue another.

12. Gleeson CJ concluded:

    The most that can be said of the present case is that the risk of harm of the kind suffered by the first respondent was foreseeable in the sense that it was real and not far‑fetched.  The existence of such a risk is not sufficient to impose upon an occupier of land a duty to take reasonable care to prevent harm, to somebody lawfully upon the land, from the criminal behaviour of a third party who comes onto the land.  To impose such a burden upon occupiers of land, in the absence of contract or some special relationship of the kind earlier mentioned, would be contrary to principle; a principle which is based upon considerations of practicality and fairness.  The principle cannot be negated by listing all the particular facts of the case and applying to the sum of them the question‑begging characterisation that they are special.  There was nothing special about the relationship between the appellant and the first respondent.  There was nothing about the relationship which relevantly distinguished him from large numbers of members of the public who might have business at the centre, or might otherwise lawfully use the car park.  Most of the facts said to make the case special are, upon analysis, no more than evidence that the risk of harm to the first respondent was foreseeable (268).

13. It is, I think, apparent from his Honour's reference to Sutherland Shire Council v Heyman (1985) 157 CLR 424, that his reasoning is not limited simply to criminal activity.

14. In the present case, (on the uncontroverted findings of the trial judge) nothing which Coastal Hire did created the dangerous condition of the scaffolding which caused Mr Ewers's injuries; it was created solely by the unauthorised (and therefore unlawful) interference with the scaffolding by a third party or third parties.  Coastal Hire was found to be liable on the ground that it had failed to exercise reasonable care to protect Mr Ewers from injury resulting from unauthorised interference with the scaffolding after it was safely erected.

15. In determining whether Coastal Hire owed the extended duty of care found by the trial judge, it is necessary first to have regard to what it was that Coastal Hire undertook to do.  Coastal Hire agreed to provide the scaffolding on hire to J‑Corp and to erect it, and, at the end of the hire period, to dismantle and remove it.  The scaffolding was to be erected on a building site on which J‑Corp was constructing a two storey house, for the purposes of the construction work.  Coastal Hire had no interest in or control over the construction work being carried on by J‑Corp or the site on which that construction work was being carried on.

16. Moreover, under the OSH regulations (then as now), it was an offence for any person to alter scaffolding without the authority of the main contractor at the workplace:  reg 3.73.  Where scaffolding over 4 m in height (as this was) was altered or repaired, the main contractor at the workplace concerned (or if there was no main contractor, the person who caused the scaffolding to be erected at the workplace) was required to ensure that it was inspected by a licensed scaffolder:  reg 3.72(1)(b).  The main contractor was also required to cause the scaffolding to be inspected every 30 days by a licensed scaffolder:  reg 3.72(1)(c).  There is no doubt that in this case each of those obligations (breach of which was an offence) fell on J‑Corp.  There was no obligation under the regulations on Coastal Hire to inspect the scaffolding after it was erected or to ensure that it was maintained in a safe condition.

17. There was also evidence from a number of witnesses at the trial that in the building industry once scaffolding is erected it is regarded as being under the control of the main contractor on the site and that it is the responsibility of the main contractor to ensure that it remains in its as‑constructed state.  Consistent with that, Mr Newby gave evidence that once the scaffolding was erected on site he regarded it as being under the control of J‑Corp; if there was a problem or anything needed to be adjusted or fixed, J‑Corp would contact Coastal Hire or the scaffolder.  Another senior employee of J‑Corp, Mr Long, who was responsible for overseeing J‑Corp's operations, gave evidence to a similar effect.

18. In concluding that the duty of Coastal Hire extended to maintenance of the scaffolding in a safe condition, it appears his Honour relied [125], in particular, on the evidence of Mr Morrow, a director of Coastal Hire, that he had received 'a lot of feedback' about interference with scaffolding by tradesmen and that if advised of tampering with scaffolding, Coastal Hire would arrange for someone to rectify the problem.

19. In my view, however, that was not capable of giving rise to a duty on the part of Coastal Hire to exercise reasonable care and skill to maintain the scaffolding, much less a duty to provide a system to detect and rectify any interference with it.  Coastal Hire clearly had the capacity, in the sense of the ability, to inspect and rectify the scaffolding.  But it is one thing to have the ability, and quite another to have a legal duty, to do so.  The fact that Coastal Hire acted only when informed that some interference had occurred is inconsistent with any assumption of responsibility to exercise reasonable care and skill to detect and rectify unauthorised interference with scaffolding on hire and there was nothing to suggest that reliance was placed on Coastal Hire to do so.

20. In fact, as his Honour found [96], after he had discovered the interference, Mr Newby contacted Mr Gaynor direct to arrange for the scaffolding to be inspected.  Mr Newby did not contact Coastal Hire.  On the findings made by the trial judge, Coastal Hire learned of the interference with the scaffolding only from Mr Briggs, in connection with the work that Mr Newby had asked him to do.

21. Nor, in my view, did the fact that Coastal Hire was informed of the interference give rise to a duty to exercise reasonable care and skill to inspect the scaffolding to ensure its safety.  The obligation under the regulations to maintain the integrity of the scaffolding lay with J‑Corp.  Where scaffolding had been altered, J‑Corp had an obligation to have it inspected by a licensed scaffolder before it was used.  As appears from Mr Morrow's evidence, Coastal Hire would arrange for that inspection to be done if informed of interference with scaffolding hired from it.  But there was no obligation on Coastal Hire to do so, in contract, under any statutory provision or otherwise.  Nor was J‑Corp required to arrange the inspection by or through Coastal Hire, and Coastal Hire was not the exclusive means by which it might be arranged.  As I have said, Mr Newby contacted Mr Gaynor direct to arrange for Mr Gaynor to carry out the inspection.

22. I do not consider that the inspection of the scaffolding late on 30 November 2001 by Mr Smith provides any basis for the extended duty of care found by the trial judge.  The arrangement between J‑Corp and Mr Gaynor was that Mr Gaynor would inspect the scaffolding to ensure that it was safe.  The fact that, apparently without any communication to J‑Corp, Mr Smith took it upon himself to inspect the scaffolding on his way home from work does not give rise to a duty of care on the part of Coastal Hire.

1. A good deal of attention was given by the trial judge to the work undertaken by Mr Briggs.  It appears to be suggested by his Honour that because of its acquiescence in the arrangement made by Mr Newby and Mr Gaynor under which that work was carried out, Coastal Hire was under a duty subsequently to inspect the scaffolding to ensure that it was safe.  I do not, with respect, consider that the circumstances of Mr Briggs's work provide any foundation for such a duty.

2. It is evident that, on 30 November 2001, Mr Briggs simply happened to be doing other work in the vicinity of Lot 150 and, by an arrangement made by Mr Newby and Mr Gaynor, his services were utilised in replacing some planks and braces which had obviously been displaced.  The fact that the use of Mr Briggs's services to do that limited work was approved by Coastal Hire did not, in my view, give rise to a duty on Coastal Hire to inspect, and carry out any necessary rectification of, the scaffolding.  Once the scaffolding had been interfered with, J‑Corp came under an obligation to have it inspected by a licensed scaffolder.  J‑Corp duly made such an arrangement with Mr Gaynor.  The fact that in the meantime, by an arrangement made between Mr Newby and Mr Gaynor, Mr Briggs reinstated the obviously displaced planks and braces, does not seem to me to be to the point.

3. In my view, the evidence also does not support the finding (at least implicit, if not express) by the trial judge that in some way the work undertaken by Mr Briggs hindered the subsequent inspection carried out by Mr Gaynor and made it less likely that the disconnected forelock pin would be discovered.  When he inspected the scaffolding, Mr Gaynor was aware that Mr Briggs had moved some planks and braces.  He had agreed that Mr Briggs should do so.  It is unlikely he would have agreed if there was any reason to believe that the work would make his subsequent inspection more difficult or less efficacious.  And it appears that Mr Gaynor did not consider it necessary for the purposes of his inspection to make any enquiry as to precisely what Mr Briggs had done, beyond their telephone conversation earlier on 30 November 2001.

4. Moreover, there is nothing to suggest that Mr Briggs's work did in fact have any deleterious effect on Mr Gaynor's inspection.  It did not obscure the disconnected forelock pin itself or make it less obvious.  While his Honour concluded that it resulted in the area in which the interference had occurred being no longer obvious, the evidence of Mr Gaynor (ts 790) was that when he inspected the scaffolding on 30 November 2001 his 'main focus of attention' was the area of the portico because his experience suggested that that was the likely area of tampering.  The panel that was disconnected was adjacent to the portico.

5. In any event, it was necessarily incumbent upon Mr Gaynor, as Mr Gaynor recognised (ts 790), to exercise reasonable care and skill to inspect the whole of the scaffolding to ensure that it was safe and that there existed no other, hitherto undetected, tampering.  On the evidence, that is the task he undertook and the result he sought to achieve.  He could not explain how he had missed the disconnected forelock pin.  Neither he nor any other witness suggested that it would not have been observable on a proper inspection by a licensed scaffolder or that anything done by Mr Briggs made it more difficult to detect.

6. In my view, there was nothing in the relationship between the parties or in the circumstances of the case that was capable of giving rise to a duty of care on Coastal Hire to inspect or rectify the scaffolding.  In finding that Coastal Hire owed such a duty, I consider, with respect, that the trial judge was in error.

7. I would uphold these grounds of appeal. 

8. The remaining grounds of appeal can be dealt with quite shortly.

Ground 1

1. As I have said, the trial judge held (relevantly) that Coastal Hire owed to Mr Ewers a duty to maintain the scaffolding, after its erection, in a safe condition, and that the discharge of that duty required Coastal Hire to provide a system for the prompt discovery of any interference to the scaffolding and any necessary rectification of it. His Honour found that the accident was caused by the failure of each of J‑Corp, Coastal Hire and Mr Gaynor 'to have in place a system to detect and remedy interference with scaffolding, such a system being clearly necessary given that interference was rife and common knowledge in the industry' [143].

2. It was conceded by Mr Ewer in his written submissions on the appeal that neither his pleaded case nor the way in which his case was opened put Coastal Hire's duty in the terms found by the trial judge.  It was submitted, however, that the pleadings were sufficiently wide to permit the trial judge to make the finding he did, a finding which, it was contended, was supported by the evidence at trial.

3. On behalf of J-Corp, it was submitted that the issue of a general duty on the part of Coastal Hire to inspect and maintain the scaffolding did not in fact arise on the facts found by the trial judge.  On the facts as found, Coastal Hire was informed of the interference with the scaffolding and agreed to rectify it.  The trial judge found that Coastal Hire had then failed to put in place a proper system of inspection to determine what rectification was in fact needed and failed to conduct a sufficient inspection of the scaffolding to ensure that it was safe following the interference.  It was argued that insofar as the trial judge went further and found a duty to provide a system to discover interference with the scaffolding, that finding was irrelevant to the determination of the case and ought not to be considered on the appeal.

4. I do not accept that his Honour's finding as to the duty of care can be divorced from his conclusion that Coastal Hire was liable in negligence to Mr Ewers.  The finding that Coastal Hire owed a general duty of care to have in place a system to detect and remedy interference with scaffolding in the possession of J-Corp as hirer was an essential element of his Honour's reasoning in concluding that Coastal Hire was liable in negligence to Mr Ewers.    

5. I also do not accept that the finding of the trial judge as to the duty of care owed to Mr Ewers by Coastal Hire was one that was open on the pleadings.  It is, I think, evident from the pleaded case and the way his case was run at trial that it was no part of Mr Ewer's case that Coastal Hire owed to him any duty of the nature found by the trial judge.  While it was expressly part of Mr Ewer's case against J-Corp that J-Corp owed to Mr Ewers a duty to provide a system to detect and remedy any interference with the scaffolding, the essence of the case against Coastal Hire at trial was that, given its knowledge of the extent of interference with scaffolding in the building industry, Coastal Hire was negligent and in breach of its statutory duty in that the method provided for fixing the mesh panels in place was inadequate and unsafe.

6. In my respectful view, therefore, the trial judge erred in the finding he made as to the duty of care that Coastal Hire owed to Mr Ewers, that not being part of the case that Coastal Hire was required to meet and no opportunity having been given to Coastal Hire to meet such a case.

7. I would allow this ground of appeal.

Ground 4 

1. In my opinion, there is no substance in this ground of appeal. 

2. It was contended, in substance, that the trial judge should have inferred that on 30 November 2001 the forelock pin was not disconnected but that it was disconnected at some time after that date but before 4 December 2001.   Coastal Hire argued that it was glaringly improbable that all five witnesses - Messrs Briggs, Newby, Van Grootel, Smith and Gaynor (three of whom were scaffolders) - who inspected the scaffolding on 30 November 2001 would have failed to notice the disconnected forelock pin, given the evidence that if it had been disconnected that would have been obvious to a scaffolder on an inspection of the scaffolding.  It also argued that in concluding that the forelock pin had been disconnected on or before 29 November 2001, the trial judge failed to give proper consideration to the possibility that it was disconnected by another tradesman or a member of the public after that date, given the evidence of Mr Newby that subcontractors often attend building sites without notice to the building supervisor and that members of the public often go onto building sites on the weekend. 

3. I consider that, on the evidence, the finding made by the trial judge was one that was clearly open to him.  Two of the witnesses referred to by Coastal Hire, Mr Briggs and Mr Newby, were not licensed scaffolders.  Mr Briggs replaced the planks and braces near the portico but he did not inspect the mesh panels (ts 527).  Mr Newby gave evidence (ts 423) that he would not necessarily have noticed if one side of a panel had not been connected.  Mr Van Grootel, (who was a licensed scaffolder) inspected the scaffolding while Mr Briggs was working on it but said that he could not get close to the portico area because some planks were missing (ts 342).   Mr Smith, who was also a licensed scaffolder, appeared to concede in cross-examination (ts 726) that his inspection may have been 'faulty'.  And Mr Gaynor acknowledged in cross-examination (ts 810) that if the mesh panel was in certain positions the disconnected forelock pin would not be apparent unless the connection itself was examined.  While Mr Gaynor maintained that had the forelock pin been disconnected on 30 November 2001 he would certainly have noticed it on his inspection, his Honour rejected that evidence.  He was entitled to do so.

4. There was also evidence, which his Honour accepted, that the nature of the particular work carried out by Mr Meyn and his assistant plasterer on or before 29 November 2001 is likely to have required some alterations to the scaffolding and, in turn, that such alterations are likely to have required the forelock pin to be disconnected. 

5. I do not accept Coastal Hire's contention that the finding of the trial judge that the forelock pin was disconnected by the plasterers on or before 29 November 2001 was 'glaringly improbable'.  It was a finding that, on the evidence, his Honour was entitled to make and no ground has been shown which would justify interfering with it.

Ground 5

1. This ground was relied upon in the alternative to grounds 1 to 3.  As it was developed in submissions, it overlapped with grounds 2 and 3, but, as I understand it, insofar as it stood as a separate ground it was contended, in substance, that the trial judge erred in finding that no proper inspection of the scaffolding was carried out on 30 November 2001.  Coastal Hire contended, in effect, that any duty of care it owed to Mr Ewers was discharged by a visual inspection of the scaffolding to ensure that it was safe and there was no evidence that Mr Gaynor's inspection on 30 November 2001 was other than thorough. 

2. Although it is not necessary to determine this ground of appeal in light of my findings on grounds 1, 2 and 3, I should say that, those findings aside, I would not have upheld this ground of appeal.    

3. On the finding of fact made by his Honour, the forelock pin was disconnected on or before 29 November 2001.  Mr Gaynor gave evidence (ts 793) that a disconnected forelock pin would have been apparent to the eye of a trained scaffolder.  Mr Smith gave evidence to a similar effect (ts 696, 720).  On the basis of that evidence, it is difficult to see how the trial judge could have come to any conclusion other than that no proper inspection had been carried out on 30 November 2001 and that had a proper inspection of the scaffolding been conducted on that day the unsecured mesh panel would have been discovered.     

Ground 6

1. Again, it is not necessary to determine this ground of appeal in light of my findings on grounds 1, 2 and 3, but, those findings aside, I would not have upheld this ground of appeal.  In my view, on the basis of the findings (albeit, in my respectful view, erroneous) in respect of liability made by the trial judge, his Honour was entitled to apportion liability in the manner he did.  The contention of Coastal Hire on the appeal - that primary responsibility must lie with J-Corp as it was the occupier of the site and supervisor of the building work, and the party who made arrangements for the rectification work on the scaffolding - was one that was considered and rejected by the trial judge.  While his Honour had regard to J-Corp's role in that regard, he also took into account, among other things, the greater expertise of Coastal Hire and Mr Gaynor in respect of matters relating to scaffolding.  On the basis of the findings he had made as to the liability of each of those parties, he was, in my respectful view, entitled to do so.  His Honour concluded that in the circumstances it was just and equitable to apportion liability equally.  I am not satisfied that, on the basis of his Honour's earlier findings in respect of liability, in so concluding he was in error.

Conclusion

1. I would therefore:

   1.allow the appeal by Coastal Hire;

   2.set aside the orders of the trial judge to the extent that they relate to Coastal Hire;

   3.dismiss Mr Ewers's action against Coastal Hire; and

   4.dismiss the contribution proceedings by J‑Corp and Mr Gaynor respectively against Coastal Hire.

2. That raises a question in relation to the apportionment of liability for contribution to the damages payable to Mr Ewers, which the trial judge apportioned equally between J‑Corp, Coastal Hire and Mr Gaynor.  As there was no appeal against the finding of the trial judge that J‑Corp and Mr Gaynor were responsible to the same extent, the consequence of setting aside the judgment against Coastal Hire would seem to be that liability is apportioned equally between J‑Corp and Mr Gaynor.  That may be academic as we were informed by the appellant's counsel that Mr Gaynor is now bankrupt.  I infer from the fact that he represented himself at the trial that he was not entitled to indemnity under a policy of insurance.

3. However, as the question of apportionment, should the appeal by Coastal Hire be allowed, was not canvassed on the hearing of the appeal, I would hear further submissions from any party who wishes to contend for a different result on contribution to the one that appears to follow from the trial judge's findings.

4. I would hear the parties on the question of the costs below and of the appeal.

The appeal by J‑Corp:  CACV 49 of 2006

1. I turn now to the appeal by J‑Corp against the dismissal of its claim in contract against Coastal Hire in the contribution proceedings.

The grounds of appeal

1. J‑Corp relied on two grounds of appeal, as follows:

   1.The trial judge erred in law in failing to find that it was an implied or express term of the agreement between J‑Corp and Coastal Hire that the services carried out by Coastal Hire pursuant to the agreement would be carried out with due skill.

   2.Having found that each of J‑Corp and Coastal Hire was negligent, the consequence of a finding of an express or implied term of the agreement was that Coastal Hire was liable to pay by way of damages for breach of contract the sum of damages awarded to Mr Ewers against J‑Corp.

The disposition of the appeal

1. The substantive point on this appeal was whether an implied term of the agreement that Coastal Hire would erect the scaffolding with due care and skill required that Coastal Hire ensure that after it was erected the scaffolding was maintained in a safe and proper condition.

2. In its contribution proceedings against Coastal Hire, J‑Corp pleaded that, by an agreement made in or about October 2001, Coastal Hire agreed to supply J‑Corp with scaffolding, and to deliver and erect the scaffolding at Lot 150. J‑Corp pleaded (relevantly) that, pursuant to s 74 of the Trade Practices Act 1974 (Cth), it was an implied term of the contract that the service of erecting the scaffolding would be rendered by Coastal Hire with due care and skill. J‑Corp alleged that Coastal Hire was in breach of the implied term in that, among other things, it failed to ensure that the scaffolding was maintained in a safe and proper condition. J‑Corp pleaded that if it were found liable to Mr Ewers, it would suffer loss and damage, that loss and damage being caused by the breach of the implied term by Coastal Hire. It claimed damages against Coastal Hire.

3. Coastal Hire admitted that it agreed to supply J‑Corp with scaffolding and to deliver it to Lot 150 but denied that it agreed to erect the scaffolding.  It did not admit the implied term and denied that it was in breach of any such term.

4. The findings of the trial judge on this claim are, with respect, not entirely clear. His Honour held that there was no implied term 'by which Coastal Hire undertook to be solely responsible for dealing with the problem of interference with its scaffolding from time to time' [167]. His Honour said that it was 'clearly the case that the contract as between J‑Corp and Coastal Hire involved not only provision and erection of scaffolding but also, from time to time, rectification resultant upon interference' [168]. But he concluded that 'there was no breach of contract as between any of the defendants by reason of which it could be said that a particular defendant's share of liability to the plaintiff should be borne by another defendant or defendants' [168].

5. As I understand his Honour's findings, while he rejected the claim for an implied term, he accepted that the contract involved an obligation on Coastal Hire 'from time to time' to carry out 'rectification resultant upon interference'.  If I am correct in that understanding, I must say, with respect, that I am unable to discern any basis upon which his Honour could conclude that the contract involved such an obligation on the part of Coastal Hire.  On the evidence, the contract was one for the hire and erection (and the later dismantling and removal) of the scaffolding and did not involve any obligations on the part of Coastal Hire to maintain it after it was erected or to rectify it if it was interfered with.  It would seem that his Honour reached the view he did consequent upon his finding that Coastal Hire owed a duty of care at common law to inspect and rectify the scaffolding if it was interfered with.  Of course, the finding of such a duty (which, as I have said, I respectfully consider was wrong) does not lead to a finding that there is the same or a similar contractual obligation.

6. Further, on the evidence, the contract did not involve any obligation by Coastal Hire to inspect and rectify the scaffolding from time to time, after the scaffolding had been safely erected, merely by virtue of the practice of Coastal Hire of arranging for scaffolding to be inspected and, if necessary, rectified if J-Corp informed Coastal Hire that the scaffolding had been interfered with.  J-Corp did not plead against Coastal Hire any estoppel or an implied term based on a conventional business arrangement.  In any event, the arrangement made between Mr Newby and Mr Gaynor was not consistent with that practice.

7. It seems to me that the point raised on the appeal can be dealt with quite shortly.  The contract between Coastal Hire and J‑Corp was, as alleged by J‑Corp, a contract for the hire and erection of the scaffolding.  By the implied term, Coastal Hire agreed that it would erect the scaffolding with due care and skill.  The implied term was therefore concerned with the manner in which the scaffolding was erected and with nothing more.  It did not impose upon Coastal Hire a further substantive contractual obligation to maintain the erected scaffolding in a safe and proper condition.

8. I consider that the claim by J‑Corp was without substance and (albeit for different reasons) that the trial judge was correct to reject it.

Conclusion

1. I would dismiss the appeal by J‑Corp.

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION: COASTAL HIRE PTY LTD -v- EWERS [2009] WASCA 36 (S)

CORAM:   WHEELER JA

BUSS JA
NEWNES JA

HEARD:   9 SEPTEMBER 2008 & ON THE PAPERS

DELIVERED          :   6 FEBRUARY 2009

SUPPLEMENTARY

DECISION              :27 MAY 2009

FILE NO/S:   CACV 50 of 2006

BETWEEN:   COASTAL HIRE PTY LTD

Appellant

AND

MICHAEL BOULTWOOD EWERS
First Respondent

J-CORP PTY LTD
Second Respondent

CHRISTOPHER GAYNOR
Third Respondent

ON APPEAL FROM:

Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA

Coram  :EATON DCJ

Citation  :EWERS -v- J-CORP PTY LTD & ORS [2006] WADC 52

File No  :BUN CIV 18 of 2002

Catchwords:

Costs - Application for Sanderson order - Unsuccessful defendant had denied it was liable to plaintiff and alleged that successful defendant was liable - Whether just that Sanderson order should be made - Principles to be applied on application for Sanderson order

Legislation:

Nil

Result:

Sanderson order made

Category:    B

Representation:

Counsel:

Appellant:     No appearance

First Respondent           :     No appearance

Second Respondent      :     No appearance

Third Respondent          :     No appearance

Solicitors:

Appellant:     DLA Phillips Fox

First Respondent           :     Chris Phillips

Second Respondent      :     Jarman McKenna

Third Respondent          :     No appearance

Case(s) referred to in judgment(s):

Bankamerica Finance Ltd v Nock [1988] AC 1002

Berrigan Shire Council v Ballerini [2006] VSCA 65

Bullock v London General Omnibus Co [1907] 1 KB 264

Gould v Vaggelas (1985) 157 CLR 215

J‑Corp Pty Ltd v Coastal Hire Pty Ltd [2009] WASCA 36

Johnsons Tyne Foundry Pty Ltd v Maffra Corporation (1948) 77 CLR 544

McCracken & McCracken v Pippett [2000] VSCA 20

Roads and Traffic Authority (NSW) v Palmer (No 2) [2005] NSWCA 140

Sanderson v Blyth Theatre Co [1903] 2 KB 533

State of Victoria v Horvath (No 2) [2003] VSCA 24

Stevedoring Industry Finance Committee v Gibson (2000) 20 NSWCCR 417; [2000] NSWCA 179

Sved v Council of the Municipality of Woollahra (1998) NSW ConvR 55‑842

1. WHEELER JA:  I agree with Newnes JA.

2. BUSS JA:  I agree with Newnes JA.

3. NEWNES JA:  This is an application by the appellant (Coastal Hire) for a Sanderson order against the second respondent (J‑Corp) following a successful appeal by Coastal Hire against a judgment of the District Court in an action in which Coastal Hire and J‑Corp were co‑defendants.  In the alternative, Coastal Hire seeks an order for indemnity costs of the action against the first respondent (Mr Ewers), the plaintiff in the District Court action.

Background

1. Mr Ewers was engaged by J‑Corp to carry out some brick cleaning work on a house which J‑Corp was in the course of constructing.  Mr Ewers was injured while carrying out the work when he fell some 4 metres to the ground after a mesh panel on the perimeter of the scaffolding on which he was standing gave way. 

2. Mr Ewers brought the District Court action against J‑Corp claiming damages for negligence, breach of contract and breach of statutory duty, against Coastal Hire (the owner of the scaffolding) claiming damages for negligence and breach of statutory duty, and against the third respondent (Mr Gaynor) (the scaffolder who had erected the scaffolding) claiming damages for negligence and breach of statutory duty.  Coastal Hire, J‑Corp and Mr Gaynor brought contribution proceedings against each other. 

3. Mr Ewers was successful at trial against Coastal Hire, J‑Corp and Mr Gaynor, and judgment was entered for Mr Ewers in the agreed sum of $250,000.  In the contribution proceedings, the trial judge apportioned liability equally between J‑Corp, Coastal Hire and Mr Gaynor.

4. On appeal to this court, the orders of the trial judge in respect of Coastal Hire were set aside, the action by Mr Ewers against Coastal Hire was dismissed, and the contribution proceedings by J‑Corp and Mr Gaynor respectively against Coastal Hire were dismissed:  J‑Corp Pty Ltd v Coastal Hire Pty Ltd [2009] WASCA 36.

5. The parties were given liberty to apply for any special costs orders they may seek arising out of the appeal.  The current application is brought pursuant to that liberty.  It was to be determined on the basis of the written submissions of the parties.

Coastal Hire's submissions

1. It was submitted on behalf of Coastal Hire that in the circumstances it is appropriate that a Sanderson order be made, requiring J‑Corp to pay Coastal Hire's costs of the action and the appeal.  In the action, J‑Corp not only denied any liability to Mr Ewers but (among other things) alleged that Mr Ewers' injuries were caused by the negligence of Coastal Hire.  Consistent with that position, J‑Corp issued contribution proceedings against Coastal Hire, alleging that the negligence of Coastal Hire had caused or contributed to Mr Ewers' injuries.

2. In circumstances where J‑Corp had failed to accept responsibility for the accident and attempted to blame Coastal Hire, it was reasonable for Mr Ewers to join Coastal Hire as a defendant, or, alternatively, to continue to prosecute the claim against Coastal Hire.

3. Mr Ewers was not a party to the contractual arrangements between Coastal Hire and J‑Corp in respect of the erection or maintenance of the scaffolding.  He did not know the precise relationship that existed between them or the extent of any duty of care they each owed to him as a result of that relationship, nor would he have been able to tell in advance which of them was liable for his injuries. 

4. It was argued that Coastal Hire will suffer hardship if it is required to recover its costs from Mr Ewers, as opposed to J‑Corp.  Mr Ewers still suffers from the injuries he sustained in the accident and has been unable to return to work.  He is now 66 years of age.  He is therefore unlikely currently to have any source of income.  It is just in the circumstances that J‑Corp bears the liability for Coastal Hire's costs.

J‑Corp's submissions

1. J‑Corp opposed the grant of a Sanderson order.  It submitted that nothing that J‑Corp had done had caused or encouraged Mr Ewers to commence, or continue to prosecute, the claim against Coastal Hire and there was nothing in J‑Corp's conduct in the litigation which would make it fair to impose liability on it for the costs of Coastal Hire. 

2. Mr Ewers commenced the action against Coastal Hire of his own volition and in it he made a number of discrete allegations against Coastal Hire concerning the suitability and safety of the scaffolding which were unrelated to J‑Corp. 

3. It was argued that the causes of action against J‑Corp and Coastal Hire respectively were separate and distinct, and based on different duties.  Mr Ewers' essential case against Coastal Hire was that the scaffolding which it supplied and erected was, at the time it was supplied and erected, clearly unsafe for use.  Those were matters solely between Mr Ewers and Coastal Hire.  The essential case against J‑Corp was that it failed to ensure the erected scaffolding was maintained in a safe and proper condition, and failed to warn contractors and potential users of the scaffolding not to move, alter or interfere with it. 

4. It was further submitted that the claim by Mr Ewers against Coastal Hire was not reasonable.  Alternatively, it was not reasonable for Mr Ewers to allege the scaffolding as originally erected was unsafe, which was Mr Ewers' primary claim against Coastal Hire.  Mr Ewers failed in that claim. 

5. It was submitted that in the circumstances it was reasonable for J‑Corp to deny liability on the basis of its appointment of Coastal Hire as a competent contractor. 

6. Accordingly, there is no justification for the making of a Sanderson order against J‑Corp.

Mr Ewers' submissions

1. Mr Ewers adopted the submissions of Coastal Hire in support of the Sanderson order.  He submitted that the real issue in the action was whether Coastal Hire or J‑Corp was responsible for the injuries he suffered in the accident and it would be unfair that he should have to pay Coastal Hire's costs.  He argued that J‑Corp had encouraged him to proceed against Coastal Hire by pleading in its defence that if the scaffolding was unsafe that was due to the negligence of Coastal Hire, for which J‑Corp was not liable.  The current submission on the part of J‑Corp - that it was reasonable for J‑Corp to deny liability on the basis of its appointment of Coastal Hire as a competent contractor - underlined why it was reasonable for Mr Ewers to proceed against Coastal Hire. 

2. In circumstances where J‑Corp blamed Coastal Hire for the accident, and where ultimately J-Corp was found to be liable, it was just that J‑Corp should have to meet Coastal Hire's costs of the action.

3. Mr Ewers opposed the alternative claim by Coastal Hire for indemnity costs against him, saying that such an order would require delinquency on his part, of which there was none.

The relevant principles

1. The court has a very wide discretion in relation to costs.  It is a discretion to be exercised judicially.  In the exercise of the discretion, the fundamental question must always be what is just in the particular circumstances of the case. 

2. It has long been accepted that where a plaintiff succeeds against one defendant but fails against another defendant in an action against them for substantially the same relief, the court may order that the costs of the successful defendant be paid, directly or indirectly, by the unsuccessful defendant.  Where the court makes a Sanderson order, the unsuccessful defendant is ordered to pay the successful defendant's costs of the action direct to the successful defendant:  Sanderson v Blyth Theatre Co [1903] 2 KB 533. Where the court makes a Bullock order, the unsuccessful defendant is ordered to pay to the plaintiff the costs for which the plaintiff is liable to the successful defendant: Bullock v London General Omnibus Co [1907] 1 KB 264; Johnsons Tyne Foundry Pty Ltd v Maffra Corporation (1948) 77 CLR 544, 572.

3. Generally there is no practical difference between the two forms of order, except where the unsuccessful defendant is insolvent, or there is at least a real risk that he is impecunious.  Then the insolvency (or the impecuniosity) of the unsuccessful defendant is a factor to be taken into account as part of the overall circumstances for the purpose of determining which form of costs order should be made as a matter of fairness:  Bankamerica Finance Ltd v Nock [1988] AC 1002, 1011; State ofVictoria v Horvath(No 2) [2003] VSCA 24 [15].

4. In the present case, the effect of a Sanderson order would be that J‑Corp would be ordered to pay Coastal Hire's costs of the action and the appeal direct to Coastal Hire.  The effect of a Bullock order would be that J‑Corp would be ordered to pay to Mr Ewers the costs of the action and the appeal for which Mr Ewers is liable to Coastal Hire.  It was not suggested that a Bullock order might be appropriate.

5. It is necessary then to turn to the circumstances in which it is appropriate to order that the successful defendant's costs of the action should be borne by the unsuccessful defendant.

6. In Gould v Vaggelas (1985) 157 CLR 215, the purchasers of a business commenced proceedings against the vendor alleging they had been induced to purchase the business by misrepresentations. In the alternative, they sued accountants who had advised them before the purchase in relation to the financial standing of the business. The purchasers succeeded against the vendors but failed against the accountants. The trial judge made a Bullock order relating to the costs that the purchasers were ordered to pay to the accountants. That was set aside on appeal to the Full Court, but restored by the High Court. In considering the circumstances in which it is appropriate to make a Bullock order, Gibbs CJ said:

   … the mere fact that the joinder of two defendants was reasonable does not mean that the unsuccessful defendant should be ordered to pay, directly or indirectly, the costs of the successful defendant.  Obviously a judge should make a Bullock order only if he considers it just that the costs of the successful defendant should be borne by the unsuccessful defendant, and, if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff's error or overcaution.

   The ground on which a Bullock order may be made is … that the costs which the plaintiff has been ordered to pay to the defendant who succeeded, and which the plaintiff recovers from the defendant who has failed 'are ordered to be paid by the unsuccessful defendant, on the ground that ... those costs have been reasonably and properly incurred by the plaintiff as between him and the [unsuccessful] defendant'.  In Johnsons Tyne Foundry Pty Ltd v Maffra Corporation, Williams J stated the principle in a similar way and Starke and Dixon JJ, in giving their reasons for making a Bullock order, both relied on the circumstance that the attitude adopted by the successful defendant had induced the plaintiff to join the other defendant.  In my respectful opinion the true position was clearly stated by Blackburn CJ in Steppke v National Capital Development Commission, when he said that 'there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant' (229 ‑ 230). (footnotes omitted)

7. In that case Wilson J (with whom Murphy J agreed on this point) said that the making of a Bullock order was permissible 'where the costs in question have been reasonably and properly incurred by the plaintiff as between him and the unsuccessful defendant' (232, 247).  Brennan J considered that a Bullock order could be made:

   [I]n an action brought against two or more defendants for substantially the same damages only if the conduct of the unsuccessful defendant in relation to the plaintiffs' claim against him showed that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought (260).

8. In McCracken & McCracken v Pippett [2000] VSCA 20, Callaway JA considered that the two‑step approach suggested by Gibbs CJ in Gould may be convenient in some cases but it would not always be convenient and it could lead to error.  Callaway JA went on:

   It is easy to think of circumstances in which the reasonableness of bringing suit might be directly related to conduct on the part of the unsuccessful defendant. In truth there is a single question, namely whether it is fair, as between the plaintiff and the unsuccessful defendant, that the latter should pay the successful defendant's costs. Prima facie, the unsuccessful defendant should not have to do so. There must … be something about his or her conduct that makes it appropriate to shift the incidence of the successful defendant's costs. The plaintiff, after all, has been unsuccessful too [11].

9. See, too, State ofVictoria v Horvath (No 2) [10].

10. In Stevedoring Industry Finance Committee v Gibson (2000) 20 NSWCCR 417; [2000] NSWCA 179, Mason P (with whom Stein and Heydon JJA agreed) applied the following principles:

    1.It must be seen to have been reasonable and proper for the plaintiff to have sued the successful defendant.

    2.The causes of action against two or more defendants need not be the same but they must be substantially connected or dependent the one on the other.

    3.While it is essential to find that the plaintiff has acted reasonably and properly that alone is not sufficient.  The court must find something in the conduct of the unsuccessful defendant which makes it a proper exercise of discretion.

    4.Finally, in considering whether to make such an order, the court should, in the exercise of its discretion balance overall two considerations of policy: the first, that an unnecessary multiplicity of actions should not be forced on litigants, so that a plaintiff who acts reasonably in joining two or more defendants should not be penalised or lose the fruits of his victory in costs on the basis that he should have either elected or taken separate actions; secondly, that an unsuccessful defendant should not have to pay more than one set of costs merely because he is unsuccessful [128].

11. In Roads and Traffic Authority (NSW) v Palmer (No 2) [2005] NSWCA 140 [30], Giles JA (with whom Spigelman CJ and Handley JA agreed) referred with approval to the statement in Sved v Council of the Municipality of Woollahra (1998) NSW ConvR 55‑842, 55,605, that 'reasonableness as between the plaintiff and the unsuccessful defendant will normally be demonstrated by some conduct of the unsuccessful defendant which made it proper that the successful defendant be joined or that the unsuccessful defendant should bear the costs of the successful defendant'.

12. In Berrigan Shire Council v Ballerini [2006] VSCA 65, Nettle JA put the position as follows:

    In short [a Sanderson or Bullock order] will not ordinarily be made unless:

    (a)the plaintiff's claims against the two defendants are interdependent or essentially alternative claims; and

    (b)it is reasonable for the plaintiff to have joined the successful defendant and the conduct of the unsuccessful defendant has been such as to make the order just [41].

13. As I have observed, the court's discretion as to costs exists to enable the court to do justice between the parties in the particular circumstances of the case.  In my view, therefore, where a Bullock or Sanderson order is sought ultimately the question must always be whether it is just that, as between the plaintiff and the unsuccessful defendant, the unsuccessful defendant should bear the burden of the successful defendant's costs.  The exercise of the relevant discretion is not amenable to hard and fast rules, but, in my opinion, normally a Bullock or Sanderson order will be made only where:

    1.the plaintiff's claims against two or more defendants are substantially connected or interdependent;

    2.the plaintiff acted reasonably in suing the successful defendant; and

    3.there is something in the conduct of the unsuccessful defendant which makes to just to move the burden of the successful defendant's costs from the plaintiff to the unsuccessful defendant.

The disposition of the application 

1. By his amended statement of claim, filed pursuant to leave granted on 30 July 2003, Mr Ewers pleaded causes of action against J‑Corp in contract, negligence and breach of statutory duty.  J‑Corp was alleged to owe a duty of care to Mr Ewers as a subcontractor on a building site which was occupied by J‑Corp as the principal building contractor.  Identical (and extensive) particulars were given of the breaches of contract and the duty of care.  They included allegations that J‑Corp had failed to ensure that the scaffolding was safe and that it had failed to maintain the scaffolding in a safe condition.  Mr Ewers also alleged that J‑Corp was in breach of the Occupational Safety and Health Regulations 1996 (WA) (the OSH regulations) by failing to ensure, in a number of specified respects, that the scaffolding met the requirements of the regulations.

2. Mr Ewer's claim against Coastal Hire (and Mr Gaynor) was based upon their supply and erection of the scaffolding, which was alleged to give rise to duties of care to construct scaffolding that was safe and to ensure that the erected scaffolding was maintained in a safe condition, and an obligation to comply with the requirements of the relevant provisions of the OSH regulations.  The breaches of the duty of care and the OSH regulations alleged by Mr Ewers were in all material respects identical to those alleged against J‑Corp. 

1. J‑Corp denied that it was in breach of contract, negligent or in breach of statutory duty.  It also alleged (relevantly) that it had taken reasonable care in the selection of Coastal Hire as a competent contractor to supply and erect the scaffolding, and that if the scaffolding was unsafe, incomplete or contrary to the regulations that was due to the negligence of Coastal Hire, for which J‑Corp was not liable.

2. Coastal Hire denied that it was liable to Mr Ewers and alleged (relevantly) that any duty to erect the scaffolding properly was owed by Mr Gaynor.  Coastal Hire said that if, after it was erected, the scaffolding was unsafe, incomplete or contrary to the regulations, that was due to alterations made to it by an unknown third party.  It claimed that after erection any duty to ensure that the scaffolding was maintained in a safe condition lay on J‑Corp as the occupier and principal contractor on site.  If at the time of the accident the scaffolding was unsafe, incomplete or contrary to the regulations, that was due to the negligence or breach of statutory duty of J‑Corp.

3. In his reply to Coastal Hire's defence, Mr Ewers alleged that if the scaffolding was altered after erection, the panel in question was in any event unsafe in several respects at the time it was supplied.  Those specific allegations were not made against J‑Corp. 

4. The contribution proceedings between Coastal Hire and J‑Corp reflected their respective positions in the main action.  J‑Corp contended (among other things) that the accident was caused by Coastal Hire, by supplying scaffolding that was unsafe or failing to erect in accordance with the OSH regulations or failing to maintain it in a safe condition.  Coastal Hire, on the other hand, contended that J‑Corp was responsible for the accident because it had failed to maintain the scaffolding in a safe condition. 

5. It is significant that Mr Ewers was not privy to the arrangements between J‑Corp and Coastal Hire in relation to the scaffolding.  The contract between J‑Corp and Coastal Hire was not, so far as it was relevant to the action, reduced to writing and there is nothing to suggest that Mr Ewers was familiar with the terms upon which J‑Corp and Coastal Hire dealt with each other.  Nor was Mr Ewers in a position to know how the mesh panel which fell came to be in an unsafe condition.  Indeed, at trial that was a substantial issue between the defendants.

6. Mr Ewers was faced then, on the one hand, with a contention by J‑Corp that the accident had occurred because Coastal Hire had supplied unsafe scaffolding or had failed to erect or maintain it in a safe condition and, on the other, a contention by Coastal Hire that the accident had nothing to do with the nature or erection of the scaffolding but that it had occurred because the scaffolding had not been maintained in a safe condition, the responsibility for which lay with J‑Corp, not with Coastal Hire.  It was Coastal Hire's contention that ultimately prevailed.

7. It is the case that J‑Corp did not cause Mr Ewers to commence the action against Coastal Hire.  It is to be inferred that Mr Ewers did so because it was unclear on the information available to him which of them was responsible for the defect in the scaffolding.  In the circumstances, I consider it was reasonable for Mr Ewers to commence the action against both J‑Corp and Coastal Hire.  Once the action was commenced, it was reasonable for Mr Ewers to maintain the claim against Coastal Hire, in light of J‑Corp's position throughout that it was Coastal Hire, not J‑Corp, which had caused the accident.  It was that conduct of J‑Corp which ensured that Coastal Hire remained a defendant in the case in circumstances where J‑Corp's contention as to the cause of the action was without substance.  While Mr Ewers made some separate allegations against Coastal Hire regarding the nature of the scaffolding itself, in respect of which he was unsuccessful, I do not think that when the case is taken as a whole that materially alters the position. 

8. In the circumstances, I am satisfied that it is appropriate to make the Sanderson order sought by Coastal Hire.  I would therefore order that J‑Corp pay to Coastal Hire, Coastal Hire's costs of the action and the appeal to be taxed.  It is unnecessary to consider the alternative remedy of indemnity costs against Mr Ewers.  Coastal Hire did not seek an order for indemnity costs against J‑Corp.