CUCULOSKI v BHP Billiton Iron Ore Pty Ltd
[2004] WADC 137
•2 July 2004
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: CUCULOSKI -v- BHP BILLITON IRON ORE PTY LTD [2004] WADC 137
CORAM: ACTING PRINCIPAL REGISTRAR KINGSLEY
HEARD: 29 APRIL 2004
DELIVERED : 2 JULY 2004
FILE NO/S: CIV 360 of 2002
BETWEEN: IVANCE CUCULOSKI
Plaintiff
AND
BHP BILLITON IRON ORE PTY LTD
Defendant
Catchwords:
Practice - Application for stay - Applications pursuant to O16 and O20 Rules of the Supreme Court of Western Australia - Workers' compensation - Deemed employer - Agency
Legislation:
Workers' Compensation and Rehabilitation Act 1981
Result:
Application dismissed
Representation:
Counsel:
Plaintiff: Mr S Melville
Defendant: Mr P Whyte
Solicitors:
Plaintiff: Chapmans
Defendant: Pynt & Partners
Case(s) referred to in judgment(s):
Gligorovski v Water Corporation [2003] WADC 290
Gran Gelato Ltd v Richcliff (Group) Ltd [1992] Ch 560
Case(s) also cited:
Nil
ACTING PRINCIPAL REGISTRAR KINGLSEY: This is the defendant's amended chamber summons dated 5 April 2004 seeking orders in the alternative that:-
(i)the plaintiff's action be stayed pursuant to the inherent jurisdiction of the Court and pursuant to s 93C, s 93E(3) and s 175 Workers' Compensation and Rehabilitation Act 1981 ("the Act") on the grounds that the plaintiff is the deemed employee of the defendant;
(ii)the plaintiff's action be stayed on the grounds that pursuant to s 93E(13) of the Act, as the plaintiff has redeemed this claim under s 67 of the Act, the plaintiff is not entitled to damages;
(iii)Paragraphs 15(d)(e)(g)(h)(i) and par 16(b) of the plaintiff's statement claim be struck out pursuant to O 20 r 19(1)(c) Rules of the Supreme Court;
(iv)the entire statement of claim be struck out pursuant to O 20 r 19(1)(c);
(v)the defendant have leave bring an application, and judgment be given, pursuant to O 16 Rules of the Supreme Court.
History
Plaintiff pleads he was employed by Barclay Mowlem Construction Ltd (BMC) and that BHP (the defendant) was the owner or occupier of BHP Nelson Point, particularly the FlashButt Welding Yard.
The plaintiff alleges he was injured through the negligence of the BHP and claims damages.
In its defence BHP admits it was the owner and/or occupier of the FlashButt Welding Yard Port Hedland. BHP then goes on to plead, in answer to the entire claim, that BHP is deemed to have been the plaintiff's employer at the material time. Particulars of this allegation are set out in par 9(a) of the BHP's defence. By virtue of the deemed employment, damages can only be awarded if it has been agreed or determined that the plaintiff's degree of disability, as assessed in accordance with s 93D(2) is not less than 30 per cent or, the plaintiff has a significant disability as defined in s 93E(4), being a degree of disability not less than 16 per cent and he elects to retain the right to seek damages. As the plaintiff has not obtained any determination or agreement as to the degree of disability pursuant to either s 93E(3) or s 93E(4) of the Act, then damages cannot be awarded.
In support of the original application by BHP, Graham Ernest Brentson swore an affidavit on 24 October 2003 where he annexed a copy of the contract between BHP and BCM. The contract is undated, unsigned and unstamped. A subsequent affidavit of Eugenio Fernando Alvarez sworn 2 February 2004 details the work process at the FlashButt Welding Yard to support BHP's case that the work done by BCM is directly a part or process of the trade or business of BHP.
The contract and s 175 of the Act
The contract document is entitled Contract Document for Contract number H7795 for Railroad Re-Sleepering and Re-Railing on The Companies Pilbara Railroad System between BHP Iron Ore Pty Ltd and Barclay Mowlem Construction Limited. The formal instrument of agreement is between BHP Iron Ore Pty Ltd (the defendant) described as "the Company" as manager and/or agent for and behalf for of the participants of the Mount Newman Joint Venture, Mt Goldsworthy Mining Associate Joint Venture, Yandi Joint Venture and BHP Iron Ore Jimblebar Pty Ltd. The four participants are collectively called "the Owners".
Thus there is a contract entered into by the defendant on behalf of named principals. This contract is undated, unsigned and unstamped. The evidence of Brentson in his affidavit is that at all material times BHP and BMC operated under the terms of the contract. Contract H7795 has Special Conditions ("SC") and General Conditions ("GC"). Special Condition-26 is headed "Deletions from the General Conditions of Contract" and clause GC-4 headed "Liability to the Contractor" is deleted. GC-4 provides that the company and the owners (together with others) shall not be liable to the contractor under or in connection with the contract, in tort or for negligence, otherwise at law for any cost, loss expense or damage which is not expressly provided for in the contract. In my opinion by deleting GC-4 a liability by the Company and/or Owners can arise under the contract to BCM.
The importance of the contract lies in s 175 of the Act. Section 175 provides:
"1.Where a person (in the section referred to as the principal) contracts with a another person (in the section referred to as the contractor) for the execution of any work by or under the contract and in execution of the work a worker is employed by the contractor both the principal and contractor are for the purposes of this Act deemed to be the employers of the worker so employed … "
For the defendant to succeed on a deemed employers argument it is fundamental that it establish the plaintiff sustained his injury whilst working pursuant to a contract between the defendant as principal and BCM as contractor. In my opinion, the word principal used in s 175 is a word of description only. The term principal denotes a person who contracts with another person. I refer to s 175(6) where there is an acknowledgment that there can be a series of principals in relation to the same work being done. Further, a principal within s 175 is constituted only by the fact of a contract with another person for the execution of work.
In this matter BPH contracts as agent for a consortium of joint venturers. The contract in this action is not one contemplated by s 175(6) where there are a series of contracts. Contract H7795 is a contract by an agent for a disclosed principal.
The general rule is that if a person making a contract discloses both the existence and name of a principal on whose behalf they purport to contract, they are not, as a general rule, liable on the contract. Further as the agents central duties are to their principal, an agent has not, usually, been held to owe duties of care in tort to third parties. Principals are liable for the agents tortious acts committed within the course of the agency. Thus the imposition of a duty of care upon agent to third party is surplusage. (see Gran Gelato Ltd v Richcliff (Group) Ltd [1992] Ch 560 at 571). This is not to say that an agent owes no legal duties to third parties. There are duties to act honestly, not to misrepresent authority and the proscription of misleading and deceptive conduct.
In my opinion BHP has contracted as agent for disclosed principals. Section 175(6) has no application in that there are no successive contractual arrangements. There is only one contract between BHP as agent for the Owners and BCM. In my opinion the principal then are the Owners and the contractor is BCM. That being the case the deemed employer would be the Owners rather than BHP. Together with the admission that BHP, in its own right, is the owner and/or occupier of the FlashButt Welding Yard there is a good argument that s 175 does not apply.
An issue was raised as to the status of the contract between BHP and BMC. The contract is unsigned, undated and unstamped. There is evidence that both BHP and BMC were operating under the terms of the unsigned agreement. (Brentson affidavit, par 5) There is authority to say that there need not be formal documentation to evidence a contract. So long as there has been a course of conduct between the parties, as a matter of fact, a court is likely to conclude that the parties have irrevocably committed themselves and intended to create legal relations.
Section 93E(13) of the Act
The plaintiff has redeemed his workers' compensation entitlement pursuant to s 67 of the Act. Section 93E(13) of the Act provides that if liability for an incapacity resulting from a disability has been redeemed, damages are not to be awarded in respect of the disability. There is authority for the proposition in Gligorovski v Water Corporation [2003] WADC 290, where a plaintiff has redeemed his claim under s 67 of the Act the plaintiff has no prospect of success as against his employer, or deemed employer. In written submissions dated 20 April 2004 BHP's Counsel argues that Gligorovski is authority to say that once a claim has been redeemed under s 67 of the Act no claim can be brought by a plaintiff against any defendant. In my opinion Gligorovski does not go that far.
Stay of proceedings
In both written and oral submissions, Counsel for the defendant submits the action should be stayed. The argument for stay is predicated on the issue of deemed employment. Having regard to my reasons I see no basis for a stay of the proceedings.
Conclusion
In this matter there is a good argument that BHP is not the deemed employer and therefore s 93(E)(13) does not prohibit any award of damages.
As there are good arguable issues in relation to the question of agency and whether or not BHP is in fact a deemed employer summary judgment pursuant to O 16 Rules of the Supreme Court ought not be granted. It follows also that the proceedings out not to be stayed
I will hear counsel as to the form of orders, any further argument and on the issue of costs.
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