Dennis Johnson v The Australian War Memorial, Burrus Pty Limited t/as Canberra Cut Concrete Drilling & Sawing Services, Kane Constructions Pty Limited and Tony Sergi t/as City First Plumbing
[2005] ACTSC 122
•2 December 2005
DENNIS JOHNSON v THE AUSTRALIAN WAR MEMORIAL, BURRUS PTY LIMITED t/as CANBERRA CUT CONCRETE DRILLING & SAWING SERVICES, KANE CONSTRUCTIONS PTY LIMITED and TONY SERGI t/as CITY FIRST PLUMBING
[2005] ACTSC 122 (2 December 2005)
NEGLIGENCE – personal injury – claims against employer and principal contractor – unsafe place and system of work – breaches of Scaffolding and Lifts Regulations – contribution between tortfeasors.
CONTRACT – building subcontract – purported incorporation of Standard Conditions – whether parties intended to be so bound – construction of indemnity clause.
DAMAGES – personal injury – ankle fracture – shoulder injury – low back injury – effect on earning capacity – no issue of principle.
Scaffolding and Lifts Regulations 1950
Cervellone v Besselink Bros Pty Ltd (1984) 55 ACTR 1
Steele v Twin City Rigging Pty Ltd (1992) 114 FLR 99
Lyons v Fondi Investments Pty Ltd (1999) 10 ANZ Insurance Cases 61-421
Celik v Commonwealth of Australia [2002] ACTSC 27
Darlington Futures Limited v Delco Australia Pty Limited (1986) 161 CLR 500
Roads and Traffic Authority of New South Wales v Palmer [2003] NSWCA 58
TNT Australia Pty Ltd v Christie [2003] NSWCA 47
No. SC 530 of 2001
Judge: Master Harper
Supreme Court of the ACT
Date: 2 December 2005
IN THE SUPREME COURT OF THE )
) No. SC 530 of 2001
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:DENNIS JOHNSON
Plaintiff
AND:THE AUSTRALIAN WAR MEMORIAL
First Defendant
AND:BURRUS PTY LIMITED t/as CANBERRA CUT CONCRETE DRILLING & SAWING SERVICES
Second Defendant
AND: KANE CONSTRUCTIONS PTY LIMITED
Third Defendant
AND:TONY SERGI t/as CITY FIRST PLUMBING
Third Party
ORDER
Judge: Master Harper
Date: 2 December 2005
Place: Canberra
THE COURT ORDERS THAT:
Judgment be entered for the plaintiff against the second and third defendants for $596,000.
On 19 June 2001, the plaintiff was injured in the course of his employment when he fell from the roof space above the Tobruk Diorama at the Australian War Memorial. The third defendant, Kane Constructions Pty Limited, was carrying out construction work pursuant to a tender contract with the first defendant, the Australian War Memorial. The plaintiff was employed by the second defendant, Canberra Cut Concrete Drilling & Sawing Services, as a labourer. The second defendant had been engaged by the third defendant as a subcontractor.
The plaintiff’s claim is against the second and third defendants. The claim against the first defendant has been discontinued, as has a third party claim brought by the third defendant against another sub-contractor. Neither of the remaining defendants seriously contests its liability to the plaintiff, but there is a significant issue between them as to contribution and indemnity.
The head contract between the first and third defendants was one of some substance. The contract documentation was based on the Australian Standard general conditions of contract, running to some sixty pages, with some additional special conditions, as well as drawings and specifications. Part of the contract is in evidence, but it does not reveal the contract price: I was informed by counsel during addresses that the price was in excess of $2 million. By contrast, the price of work done by the second defendant was less than $1000 – although it should be said that the second defendant had done other work on the project earlier, presumably under a separate subcontract. The plaintiff and a fellow employee of the second defendant had been at the site three or four weeks earlier, to drill holes through two walls.
The plaintiff’s fall
The plaintiff’s evidence was that on the Friday preceding his fall, 15 June 2001, he went with his immediate superior, Mr Graham Ashman, to the War Memorial with the intention of drilling a hole inside the roof space above the Tobruk Diorama. They climbed a ladder to get into the roof space, where it became apparent that there was no platform or walkway providing access to the position where they were expected to drill. Mr Ashman explained the problem to Mr Graeme Thornton, the site manager employed by the third defendant. Mr Thornton said that he would organise proper access.
The plaintiff and Mr Ashman returned on the next working day, which was Tuesday 19 June. They arrived a little before 7 am and were let into the building by Mr Thornton. It was necessary for them to carry drilling equipment, tools and buckets up the stairs into the roof space, where they saw that a sheet of plywood had been placed where they were to stand to do their drilling, with a walkway consisting of metal scaffolding planks leading from the top of the ladder to the platform. The walkway was two planks wide.
In a statement made by Mr Ashman a few months after the incident, he said that he saw that the metal planks were resting on the timber ceiling bearers, at an angle to the beams (that is, not at right angles). Mr Ashman said in the statement that the planks were not secured in any way and that they were simply resting on the roof beams. It is not entirely clear whether he intended to convey that he had seen and realised this before the fall, or whether he became aware of it subsequently: it seems to me that the latter is more likely. He said in his oral evidence that he did not make any assessment of whether the planks were secured or not. Mr Ashman and the plaintiff were able to carry their equipment to the platform without incident. They had a portable light as the working area did not have good lighting. There were no handrails or barriers of any kind around the walkway.
During drilling, it is necessary for water to be run continuously over the drilling bit to cool it. Mr Ashman was concerned about possible water damage to the display areas below. He asked the plaintiff to check where the water was going. There is some difference of recollection between the plaintiff and Mr Ashman as to the precise sequence of events. The plaintiff’s recollection is that he went back along the walkway and down the ladder, and that he lost his footing on the return journey. Mr Ashman thought that the fall happened as the plaintiff turned and walked along the walkway, and before he reached the top of the ladder. This does not seem to me of much moment. It seems that the plaintiff must have stepped on the end of a plank which was protruding over a beam. The plank flipped up behind him and fell through the ceiling, breaking it, and he fell with it. Mr Ashman was looking at what he was doing and not watching the plaintiff. He heard a loud thud and a yell from the plaintiff. He turned and saw the plaintiff and the plank disappearing through the ceiling. He turned to assist and in doing so placed his foot on an insecure plank and lost his balance, and fell through the same hole. He estimated that the drop was about 6 metres. The plaintiff landed feet first and Mr Ashman fell on top of him.
Mr Ashman, fortunately, was not seriously injured. He was able to return to the work site at the War Memorial about a week later. He saw that the walkway had been completely changed. It was now six planks wide, with all of the planks securely tied in place at right angles to the beams.
In its contract with the War Memorial, the third defendant had undertaken “to provide all things and take all measures necessary to protect people and property”, including the provision of barricades, guards and fencing. The third defendant had possession of the part of the site where the plaintiff was working at the time of his fall. The contract incorporated a project safety manual which, under the heading of fall protection, included a provision that safety belts, static lines or inertia reels must be used where nets, scaffold or guard rails were not installed, and that lines must be securely fixed to adequate structural members or designed anchor points. It is clear on the evidence that at the time and place of the plaintiff’s fall, there was no adequate scaffolding, and no guard rails or nets, nor were there any safety belts, lines or reels provided. In the absence of any explanation from the third defendant, I can only assume that the job on which the plaintiff was engaged was seen as such a minor and short-term one that no consideration was given by the third defendant to its contractual obligations as to safety of workers. In the third defendant’s favour, it should be acknowledged that immediately after the accident, consulting engineers were engaged to advise on what should be done to make the workplace safe and their advice was immediately implemented.
10.There is no doubt that both the second and third defendants failed to comply with their obligations under the Scaffolding and Lifts Regulations 1950. Regulations 73 and 74 set out lengthy and detailed requirements as to access, scaffolding, fencing and other matters aimed at minimising the risk of accident and injury during building work. A cause of action is pleaded by the plaintiff against both of the defendants for breach of statutory duty under the Regulations, in addition to negligence at common law.
11.I am satisfied that both the second defendant and the third defendant owed a duty of care to the plaintiff to shield him from the risk of the kind of injury which he suffered, and that both defendants committed a breach of that duty. I am also satisfied that both defendants committed breaches of their duty under the Regulations. The plaintiff is entitled to succeed against both defendants on both counts.
12.Both defendants have pleaded that the plaintiff was guilty of contributory negligence. This was not pursued by counsel for either defendant in address. I am not satisfied that the plaintiff should be regarded, even to a minor degree, as having contributed to his own injuries by any failure to take reasonable care for his own safety.
The plaintiff’s injuries
13.When the plaintiff landed, he felt immediate pain in the left leg. After about thirty seconds, the leg became numb from the ankle to the knee and he could not feel anything. He could see that his ankle had been broken. An ambulance officer cut his boot off and straightened his foot. Although warned that this would be painful, fortunately the plaintiff did not feel it at all. He was extricated from the diorama and taken by ambulance to the Canberra Hospital. The orthopaedic surgeon on call, Dr Roberts, examined him and diagnosed a compound fracture of the left fibula. The plaintiff was taken to the operating theatre on the night of his fall, but his surgery had to be postponed because of an intervening emergency.
14.On the following day, Dr Roberts performed an open reduction of the fracture with internal fixation by a metal plate. He noted that the peroneal nerve was out of place and this was protected and dissected during the procedure. After a few days in hospital, the plaintiff was discharged and sent home in a heavy cast up to the hip. He was provided with a four-wheeled walking frame, and painkilling medication. He was unable to shower or dress himself, and was provided with assistance in this regard by his wife and sister. After about a week, the cast was removed and replaced with a lightweight cast up to the knee, covering the foot.
15.While the plaintiff was in hospital, his left shoulder became painful. He had been given an injection in the left arm and a nurse suggested that this might be the cause of the pain. The pain did not go away, and he reported it to Dr Rowe. Dr Rowe thought that he might have suffered some sort of muscle damage, and suggested that he raise it when he next saw Dr Roberts. This he did about a month after the fall. Dr Roberts noted that the left shoulder was quite painful on certain movements. Early in August 2001 he injected the subacromial space of the left shoulder with local anaesthetic and steroid.
16.A week later, Dr Roberts removed a screw from the ankle under general anaesthetic, and manipulated the ankle. The plaintiff developed pain and tenderness in the left calf. Dr Roberts suspected a deep vein thrombosis, which was confirmed radiologically. The plaintiff was sent to Dr Bill Burke, a general physician, for management of this condition. Dr Burke put the plaintiff on a regime of Warfarin, a blood thinner, administered twice a day by injection into the stomach. The plaintiff continued with this treatment for about ten days, after which Dr Burke changed the medication to Clexane, administered in the same fashion. This continued for six months. By February 2002, there was no longer any evidence of thrombosis in the left leg and the treatment was discontinued, with advice to the plaintiff that there remained some risk of recurrence and that he should wear stockings for long distance travel. The injections to the stomach were unpleasant. Initially they were administered by a nurse but after a time the plaintiff was able to inject himself. Dr Roberts postponed further surgery until the thrombosis had disappeared, though the plaintiff was able to continue with physiotherapy during this period.
17.For the whole of this time, the plaintiff slept and spent much of his waking time in a recliner chair. It was about two years before he was able to get in and out of his own bed again. He gained some benefit from hydrotherapy, but he gained considerably in weight, presumably because of lack of activity by comparison with his pre-accident life.
18.Quite early in the piece the plaintiff changed from the walking frame to crutches. The lightweight cast was removed after about eight weeks. The plaintiff was on crutches in all for about two months. Using the crutches caused his shoulder to become more painful. Over time he became aware of pain in his low back, particularly when his body was being moved about during physiotherapy.
19.The left shoulder symptoms continued, having been little improved by the injection in August 2001. An MRI arthrogram was suggestive of adhesive capulitis in the left shoulder joint, which was greatly restricted in movement. In March 2002 Dr Roberts operated on the shoulder under general anaesthetic. He found generalised adhesive capulitis with some inflammatory changes in the synovium, which he debrided. He also debrided thickened bursal bands within the sub-acromial space. The plaintiff noted some improvement in pain levels and movement in the shoulder following this surgery, though some pain and restriction of movement remained. He was informed that the shoulder condition had reached a plateau, and he confirmed that his symptoms remained unchanged by the time of the hearing.
20.In April 2002, Dr Roberts performed further surgery under general anaesthetic, by way of debridement of the left ankle, and removal of the plate and remaining screws. This gave the plaintiff greatly increased movement in the ankle. He was sent back to physiotherapy three times a week. This included forceful and painful movement by the physiotherapist of the ankle joint. The plaintiff was back on crutches for about a month after the operation, and the physiotherapy continued for several months, three times a week for sessions of an hour each time.
21.By the middle of 2002, the plaintiff was exhibiting symptoms of irritability, angry outbursts and depression. At the instigation of his wife and family and other friends, he went to Dr Rowe for help about this. Dr Rowe diagnosed depression and prescribed anti-depressant medication, initially Lovan and subsequently Aurorix. He remained on Aurorix up to the hearing.
22.By June 2002 the plaintiff had developed problems with his left knee, which Dr Roberts thought were caused by altered weightbearing due to his other injuries. He was unable to squat and complained of tenderness and of pain on weightbearing. Dr Roberts arranged an MRI scan followed by arthroscopic surgery. This provided some relief and increase in movement in the knee, though it remained painful on weightbearing. After the surgery the plaintiff went back on to Clexane stomach injections for about three weeks, and physiotherapy. The knee symptoms continued to improve, reaching a plateau in late 2004, but some symptoms were still evident by the time of the hearing.
23.By that time, the plaintiff reported intermittent pain in the ankle joint after weightbearing for a couple of hours. The symptoms included swelling, aching and clicking. His symptoms were worse in cold weather, and were partially relieved by Panadeine Forte, which he needed to take about twice a week. The medication caused him to feel a bit dopey. He had difficulty operating the clutch of his manual car. He wore a knee brace from time to time, and said that his knee and ankle caused him to walk much more slowly up hills and stairs. He was unable to climb a ladder. He had sold his 750cc Kawasaki motorcycle, partly because he had lost confidence in his capacity to hold the bike upright when stationary, though also because the family needed the money. He complained of low back pain which was present regularly, sometimes brought on simply by sitting in the one position for a period of time, also worse in cold weather. His left shoulder remained painful all the time, with some restriction of movement.
24.By the time of the hearing, the plaintiff had still not got back to a normal sleeping pattern. He tended not to get to sleep until 2 am and to be awake and up at 5.30 am. He would try to make up for the interrupted sleep by having a nap in the afternoons. He was unable to achieve a comfortable sleeping position, mainly because of his shoulder. He was sleeping in a spare room at his house so as not to disturb his wife’s sleep.
25.His sexual activity had been severely curtailed. It seems that the Aurorix medication has had some effect in reducing his libido, which has also been reduced as one of the symptoms of his depression, consequent on his physical disabilities. At the time of the hearing he estimated that he and his wife had had intercourse about six times over the previous three years, and that on a number of those occasions he had been unable to achieve orgasm. His wife is thirteen years younger and the plaintiff is concerned that the marriage may not survive the sexual difficulties.
26.Until about ten years ago, the plaintiff had been a heavy drinker. Following an assault charge, he gave up alcohol and at the time of the hearing had not drunk for ten years, with the exception of the very occasional single beer on a special occasion.
The medico-legal evidence
27.The plaintiff has been seen by a number of specialists for medico-legal purposes. Dr WJ Coyle, orthopaedic surgeon, saw him in September 2001 at the request of the workers’ compensation insurer. Dr Coyle acknowledged that the plaintiff had suffered a severe injury to the left ankle and also damage to his left shoulder, and was at that time totally incapable of performing any work for which he had training and aptitude. He was taking medication and wearing compression stockings for deep vein thrombosis which was directly attributable to the accident. Dr Coyle recommended an MRI study of the left shoulder should symptoms persist, but subject to this expected full functional recovery in time, with a return to work in about three months. Unfortunately, Dr Coyle’s optimism proved unjustified.
28.Dr Nicholas Burke, occupational physician, saw the plaintiff at the request of the solicitors for the second defendant in July 2002. He agreed that the injuries to the left shoulder and left ankle were significant, and described an injury to the left knee as in the same category, noting that this had developed since the plaintiff had commenced weightbearing on the left ankle. The plaintiff had a positive attitude to rehabilitation and was well motivated to return to work, but Dr Burke thought that he would probably have residual impairment at least in the ankle and shoulder. All his incapacities were related to his fall. His condition had not reached a plateau and it was too early to express a view about permanent impairment.
29.Dr GG Griffith, consultant surgeon, saw the plaintiff in April 2003 at the request of his own solicitors. He noted that the capsulitis and frozen left shoulder had largely resolved. Instability of the left ankle remained. The deep vein thrombosis had resolved. The lumbar back pain of which the plaintiff complained was probably caused by his abnormal gait, and he had developed an adjustment disorder with elements of anxiety and depression. All of these were causally related to the fall. The low back had not been radiologically investigated and Dr Griffith reserved his opinion as to whether the low back may have been injured in the fall. He suggested some changes to the existing treatment for the plaintiff’s psychological problems. It was highly likely that the plaintiff would develop osteoarthritis in the ankle, though arthritis was unlikely in the shoulder as it was not a weightbearing joint. Osteoarthritis in the low back and left knee could also be expected as the plaintiff aged. He thought that the psychological prognosis was excellent with appropriate treatment, though I note that this is outside Dr Griffith’s specialist field. He expressed the view that the plaintiff should in time become fit to work as a driver provided that his work did not involve strenuous loading or unloading.
30.Dr R Brooder, consultant neurologist, saw the plaintiff, also at the request of his solicitors, on two occasions, in October 2003 and December 2004. He saw a significant long term risk of development of osteoarthritis in the left ankle, which would cause pain and reduced mobility. There was also a risk of degenerative changes in the left shoulder, with similar effects: and degenerative changes in the lumbar spine at L4-5, carrying a risk of intervertebral disc protrusion and nerve root entrapment. Dr Brooder thought it unlikely that the plaintiff would be able to work in the long term as a chef or driver on a full-time basis. For him to obtain any full-time employment it would be necessary for him to undergo a prolonged period of vocational rehabilitation and training in an alternative and lighter form of work. He was limited in his ability to stand or sit for prolonged periods. He would remain subject to persistent pain and functional disability to some degree indefinitely.
31.Dr PD Stevenson, consultant physician, saw the plaintiff in December 2003 at the request of the solicitors for the second defendant. He was much more optimistic about the plaintiff’s prognosis than his colleagues. Dr Stevenson formed the view that the comminuted fracture of the left fibula had healed following surgical correction, and that there was a very low probability that arthritis would develop in the ankle joint. He found no compelling pathological explanation for the plaintiff’s complaints of non-specific aches in the back, left shoulder and knee, and he thought that the plaintiff was capable of getting back to a normal occupation with moderate demands, for example as a truck driver. It would probably be imprudent for him to be on his feet for very long periods but he would have an excellent capacity for most work, even that of a chef.
32.The plaintiff’s solicitors referred him to Dr Tom Sutton, clinical psychologist, for a psychological assessment in September 2003, and a vocational assessment in April 2004. Dr Sutton diagnosed a major depressive disorder, with emotional lability, low frustration tolerance, poor anger control and trauma responses. Generally, he said, the plaintiff had not adapted well to his pain syndrome. He thought that he would benefit from a pain management program conducted by an experienced psychologist. He thought that the plaintiff might benefit from an increased dosage of his anti-depressant medication and suggested he see a psychiatrist about this.
33.When he saw the plaintiff for the second time he noted that the dosage had been doubled. He carried out psychometric assessment and deduced that the plaintiff was of average intelligence with strengths in non-verbal reasoning and hands-on problem-solving. He was capable of learning new skills, solving new problems and adapting to new tasks. His reading level was satisfactory but his spelling was marginal and his written arithmetic was very poor, probably due to almost dysfunctional levels of visuospatial organisation. From a psychological perspective he would be capable of working as a driver provided that he could pace himself, which Dr Sutton acknowledged was difficult having regard to real-life work expectations. He suggested that the plaintiff might benefit from obtaining voluntary work initially, perhaps with a zoo or a plant nursery. He should at the same time be helped with pain management by a psychologist attached to a pain clinic. Dr Sutton regarded the plaintiff as completely genuine and found no evidence of exaggeration.
34.The plaintiff’s solicitors arranged an assessment by Dr John Saboisky, consultant psychiatrist, who interviewed him on two occasions in June 2004. He confirmed Dr Sutton’s diagnosis of major depressive disorder. He noted that there had been considerable improvement in the plaintiff’s mental state following the doubling of his anti-depressant dosage. He did not present as clinically depressed although Dr Saboisky accepted that he remained more irritable and less sociable then before the accident, and that he tired more easily. His very limited sex drive and retarded ejaculation were probably due to the high dosage of Aurorix.
35.The plaintiff was referred by the solicitors for the second defendant to Dr D Samuell, psychiatrist, for opinion in June 2004. Dr Samuell noted that the plaintiff was continuing to take Aurorix. The plaintiff informed him that his psychological symptoms had largely subsided. It was difficult, Dr Samuell said, to diagnose retrospectively what might or might not have happened psychologically during the course of the plaintiff’s difficulties. The most likely explanation was that as a man who had always been strong and relied on his physical prowess, it had been frustrating to experience pain and physical limitation. This would have been exacerbated by being unable to work and seeing his wife working at three jobs to maintain the family. He was inclined to see the plaintiff’s difficulties within an existential framework rather than that of a mental illness. He concluded that the plaintiff had not been psychologically injured as a result of the accident, and that there were no current psychological restrictions to him working. He was fully fit to work in any capacity for which he was suitably qualified.
36.None of the medical practitioners gave oral evidence. Ms Anne Davies, a treating physiotherapist, was cross-examined on her report, dated January 2005, in which she had expressed the view that all of the plaintiff’s injuries and disabilities were attributable to the accident; it was likely that the ankle and knee joints would deteriorate with time, developing arthritic changes involving further loss of range of movement and more pain; and that episodic low back pain was likely to continue: he would never be able to return to his former duties. During cross-examination she was informed that the plaintiff had had some treatment by his general practitioner for back pain before the accident, during 1998 and 1999. Her eventual position was that the plaintiff’s post-accident low back pain was probably caused by the fall, and more easily triggered because of this past history. The back pain was probably masked in the early stages by the pain in his shoulder and ankle, and the fact that he was confined to his recliner.
General damages
37.It is clear that the plaintiff had suffered from episodes of back pain following work incidents in the years prior to his fall. They were not of great severity and did not interfere to any major extent with the plaintiff’s work. I am satisfied that he had made a full recovery from these well before the fall.
38.I found the plaintiff a likeable and impressive witness. It was not suggested to him in cross-examination that he had exaggerated any of his evidence, and I accept that evidence without reservation. I generally accept the evidence contained in the medical reports, except that of Dr Stevenson whose opinion is out of kilter with the other specialists. I prefer the opinions of Dr Sutton and Dr Saboisky to that of Dr Samuell, who did not have the benefit of the results of Dr Sutton’s testing.
39.It follows that I accept that the plaintiff has been exposed by his injuries to the likely development of arthritis in the left ankle, with a lesser risk of arthritis in the left shoulder in the future. I accept that the plaintiff continues to have pain in the ankle, shoulder, low back and left knee, relieved but not entirely alleviated by medication. I am satisfied that his physical condition is permanent and will not improve: if anything, it is likely to deteriorate as he gets older.
40.I also accept that he suffers, as a result of his injuries, from an underlying depressive condition. This is generally well controlled by anti-depressant medication, but I think it is also likely to be permanent.
41.In the light of these findings it seems to me that an appropriate award for general damages for pain and suffering and loss of enjoyment of life is $90,000, of which I apportion $50,000 to the past. The past component is more heavily weighted to the period immediately after the accident and attracts interest which I assess at $5,000.
Loss of earning capacity
42.The plaintiff was born on 4 August 1958 in New Zealand. He was 42 at the date of the accident and is now 47. He left school in Auckland after the equivalent of Year 10, and had a number of jobs over the next few years as a welder, machine operator, general hand and toolsetter. He had the opportunity in 1980 to move to Sydney to work with a related company to his then employer in New Zealand, but after only about two months the company failed. The plaintiff found work as a driver delivering soft drinks for about a year. He then went to the Hunter Valley and worked as a labourer with a concrete company. He returned to Sydney in 1983 and worked for two or three years with a concrete cutting business. Whilst in Sydney, his first marriage broke up. His second wife had a cousin in Canberra who owned a pizza business at Belconnen, and was opening another shop at Erindale. The plaintiff was invited to manage it. He moved to Canberra and worked in the pizza business for about two years. He then left and in about 1986 took employment at the Tuggeranong Rugby Football Club as a kitchen hand. He progressed to cooking and by the time he left he was working as a chef. He moved on to the Southern Cross Club where he met his third and present wife. In 1992 he took a contract position with the Bureau of Mineral Resources for six months as a camp cook at sites in far north Queensland. After that he returned to the Southern Cross Club, until he was, as he put it, poached by the catering company for the Ainslie Football Club and the Gungahlin Lakes Golf Club.
43.After less than a year, he had a disagreement with the manager at Ainslie and left that employment. He said that for some time that he “just floated”. He took time off and “did a bit here and there”. He explained that he did not really feel that he needed to work at that time. When he needed to work, he took causal work as a chef.
44.He commenced work with the second defendant on 13 March 2001, three months before his fall. He was employed as a general labourer and offsider for the two permanent skilled staff, one of whom was Mr Ashman. He said that the owner of the company, Mr Kevin Gillman, originally told him that the position was permanent. After he had been working there about a week, Mr Gillman told him that there was not enough work for three permanent staff and asked whether he would mind working on a casual basis for a probationary period of three months. The plaintiff agreed to this. The arrangement was that he would be on call. In the early stages he would go work every morning but would sometimes be told that there was no work on that day and that he was not needed. The arrangement changed to one where he would be telephoned if he was needed. He would use his own vehicle and meet the other staff on site when required.
45.While the plaintiff was working at Gungahlin Lakes Golf Club, he injured his back in attempting to open a door at work with his foot. He went to his general practitioner on 29 October on 1998 and was given a certificate for time off work. His recollection was that he was off work for two weeks, although the doctor’s notes indicate two months. Dr Rowe was not called to clarify this and I prefer the plaintiff’s recollection to the unexplained note. He had a recurrence of low back pain in June 1999, but his evidence was that he had no further problems after that until his fall.
46.After the accident, the plaintiff did not attempt to return to any form of employment for about eighteen months. In November 2002 he underwent a rehabilitation program which included upgrading his truck licence to permit him to drive articulated vehicles. In February 2003, at the plaintiff’s request, his father-in-law and brother-in-law took him on country trips in their truck and trailer, in the course of their business as beekeepers. They had a large fifty-tonne truck and trailer to enable them to manage some 2000 beehives throughout much of southern NSW. The plaintiff said that he wanted to get some work experience. He drove the truck a few times but his father-in-law was not happy about this. After an hour or so the plaintiff would ask whether they could stop so that he could get out and walk around and stretch. He had considerable difficulty using his left foot on the clutch to change gears. After about twelve months the arrangement came to an end. The plaintiff said that his father-in-law and brother-in-law simply do not ask him to go out with them anymore.
47.From early 2003, with guidance from rehabilitation providers, the plaintiff made more than a hundred written applications for work as a truck driver in response to newspaper advertisements. None of these were successful.
48.The plaintiff agreed in cross-examination that he had not applied for any job which involved an automatic as opposed to a manual vehicle. He agreed that he had a forklift licence and had driven a forklift since the accident, and that use of the left leg was not required for a forklift.
49.He also agreed that if he had adequate capital to establish or purchase a business, he could probably manage, at a supervisory level, a catering or similar business.
50.The plaintiff’s taxable income as shown in his tax returns for the years leading up to the accident was as follows:
1994-95 $28,673
1995-96 $43,527
1996-97 $44,130
1997-98 $43,615
1998-99 $47,336
1999-00 $9,189
2000-01 $5,341
51.It is readily apparent that the income for the last two years was very much less than for the earlier years. The plaintiff gave evidence that he had understated his income in his tax returns for those two years by deliberately omitting income from casual chef work. He later lodged amended returns. He added $17,250 to the income for 1999-00, increasing the taxable income to $26,439 after allowing for a net loss on a rental property of $1,686; and $9,000 for 2000-01, increasing the taxable income to $14,358 after a loss of $2,112.
52.He was cross-examined about the amended returns. He agreed that the previously omitted income had been disclosed on the advice of his solicitors, and that the amounts were estimates, not based on written records. He did not agree that he had adopted this course for the purpose of inflating his claim for loss of earning capacity.
53.Whilst I have some suspicion that part of the motivation for the disclosure was to protect the plaintiff against a finding that he had barely exercised his earning capacity at all during the years in question, nevertheless it seems to me that the estimates are unlikely to be excessive and if anything may be lower than the plaintiff’s actual cash earnings during the periods in question. The taxable income figures for the earlier years probably reflect more accurately the plaintiff’s earning capacity. The allowance in this action for diminution of earning capacity must take account of the fact that before the accident, the plaintiff had not always chosen to exercise that capacity to the full.
54.The plaintiff had worked with the second defendant for fourteen weeks. He had earned an average of $526 before tax or $416 after tax per week during that time. At those rates, he would have earned $27,337 gross for a full year. This is still considerably less than his earnings of a few years earlier, and perhaps reflects a conscious decision on his part not to exercise his earning capacity at that time to its full extent.
55.It seems to me that the plaintiff had, at the time of his fall, a capacity to earn $40,000 to $45,000 before tax. It seems to me reasonable to attribute to him the capacity to earn $600 per week after tax. However, I think it likely that the plaintiff would have chosen to exercise that capacity so as to earn on average only 75% to 80% of that amount from the date of the accident to date. I allow $100,000 to represent the net amount I think he would have earned from the date of the accident to the date of judgment had it not been for his fall.
56.He has received workers’ compensation payments to cover a large proportion of that loss. I make a general award of $10,000 to cover interest at commercial rates on the plaintiff’s actual loss of past earnings.
57.For the future, I note that the present value of a continuing loss of $600 per week to a man aged 47 to age 65 is about $420,000. This must be very considerably discounted to reflect the fact that the plaintiff would probably not have chosen to exercise his earning capacity to its full extent; the fact that he might have chosen, as many people, as a matter of common knowledge, choose to do, to cease work at 60 rather than 65; the possibility that the plaintiff might have the opportunity to work for reward in the future; and the ordinary vicissitudes of life. For loss of earning capacity for the future I allow $250,000.
Damages – other components
58.It was agreed between counsel that it was appropriate to compensate the plaintiff for loss of superannuation benefits by allowing 9% of the amounts allowed for loss of earning capacity. I round the figures to allow $10,000 for the past and $25,000 for the future.
59.The plaintiff’s out-of-pocket expenses have been met by the workers’ compensation insurer. The figure in evidence was $55,523.86 up to February 2005. There will have been some increase since then. I allow $57,000 for past expenses. As the plaintiff has not personally paid any of this amount, I make no allowance for interest on it.
60.In the future, the plaintiff will have a continuing need for consultations with his general practitioner for prescription medication. He is likely to require physiotherapy from time to time. He will be on anti-depressants for at least another year and, I suspect, much longer, perhaps indefinitely. He faces the possibility of the development of arthritis in his ankle and other joints. If this happens he will be put to additional expense, although probably not for many years. I make a general allowance for $10,000 for future treatment.
61.The Fox v Wood component in respect of tax on workers’ compensation was agreed at the time of trial at $7,200. This will have increased since, and I allow $9,000.
62.I come to the Griffiths v Kerkemeyer component. In the first six to eight months after the accident the plaintiff required a very high level of care. As time has gone by, he has generally been able to manage his own requirements but there remain some domestic activities which he can no longer perform. I allow $15,000 for the past Griffiths v Kerkemeyer component, inclusive of interest. I allow a further $15,000 for the future.
63.The sum of the individual components is as follows:
General damages: $90,000 Interest thereon $5,000 Economic loss: Past $100,000 Interest thereon $10,000 Future $250,000 Loss of superannuation: Past $10,000 Future $25,000 Treatment and related expenses: Past $57,000 Future $10,000 Fox v Wood: $9,000 Griffiths v Kerkemeyer: Past $15,000 Interest thereon $15,000 $596,000
64.That total seems to me to represent a proper reflection of the effects of the plaintiff’s injuries upon him. The plaintiff is entitled to judgment for that amount against both of the defendants.
The third defendant’s claim for indemnity
65.The third defendant argues that it is entitled to be indemnified by the second defendant by reason of an express written contractual term. The document which contains the term has been described as a purchase order. It consists of two pages, the first being a printed form completed in handwriting, and the second being what are described as a set of standard conditions. The first page was completed by Alex Yim as project administrator for the third defendant. The form is addressed to Canberra Cut Concrete (Drilling and Sawing), to the attention of Mr Kevin Gillam. It is dated 21 May 2001 and was sent by fax on that date. The operative part of the form reads as follows:
Job: Australian War Memorial Stage 2
Subject: Purchase order 768-71507Kevin,
Further to our conversation, we confirm our order for you to provide concrete / sandstone drilling and sawing works as per rates provided in Stage 1.[the sandstone and reinforced concrete rates are then set out]
Note: Please provide your saw cutting rates as it is required [illegible]
Note: Add special core bits required for sandstone
Note: Our standard PO conditions enclosed
Note: All works to proceed as per necessary OH&S and AS requirements.
66.The form included two narrow columns at the right margin, respectively headed “time” and “refer notes”. These columns were not used, the handwriting running across the page and into them. Printed at the foot of the form were ten numbered statements which, I take it, were related to the “refer notes” column and were thus irrelevant to the contractual arrangements.
67.The second page was headed as follows:
ALL PURCHASE ORDERS ISSUED BY KANE CONSTRUCTIONS PTY LTD ARE SUBJECT TO THE FOLLOWING “STANDARD CONDITIONS FOR THE SUPPLY OF MATERIALS AND / OR MERCHANDISE”.
68.There followed twenty numbered conditions. The condition relied upon as an agreement to indemnify is condition 16. It is not necessary for me to set all the conditions out but I shall quote some which seem to me of assistance in construing the document and determining the intention of the parties as expressed in it. The conditions I see as relevant are:
(1)In these conditions the term “Purchaser” means Kane Constructions Pty Ltd and the term “Supplier” means the person, firm or company (incorporated or not) from whom the materials or merchandise described on the Purchase Order are ordered.
(2)The Purchase Order when properly signed by the Purchaser is the only form which will be recognised by the Purchaser as authority to the Supplier to manufacture and/or supply and deliver the said materials or merchandise and to charge the price thereof to the Purchaser’s account.
…………
(6) The following conditions shall apply to any goods supplied pursuant to the Purchase Order in addition to all conditions and warranties implied by law: –
a.that the materials and/or merchandise shall be the best of their respective kinds;
b.that the materials and/or merchandise shall be of merchantable quality;
c.that the materials and/or merchandise shall be fit for the respective purpose for which they are required;
d. that the materials and/or merchandise shall be equal to or superior in quality to any sample provided by the Supplier to the Purchaser;
e.that the materials and/or merchandise will correspond with the description of them given on the face of the Purchase Order; and
f.that the Supplier has a right to sell the goods and the goods are free from any encumbrances whatsoever.
…………
(13) In the event that the materials and/or merchandise are to be delivered to a building site of which the Purchaser is in possession then the materials and/or merchandise are to be placed on the site in a location specified by the Site Foreman or other representative of the Purchaser and the Supplier shall be liable for any cost incurred by the Purchaser as a result of the Supplier’s failure to comply with this condition.
…………
(16) The Supplier undertakes forthwith to insure all persons employed by him under the Workers’ Compensation Act 1958 and to further indemnify and keep indemnified the Purchaser against and in respect of any claim, demand or action arising from any injury or sickness incurred or sustained during the course of the manufacture, supply and delivery of the materials and/or merchandise.
………….
(19) It is declared that the Purchase Order has been made in the State of Victoria and shall be read and construed according to the Laws of that State and any Arbitration or any other legal proceedings under it shall take place in Melbourne and the Purchase and Supplier shall submit to the jurisdiction of any competent court in the State of Victoria.
69.The job was a relatively small one, expected to be completed within a day or so. It is clear that Mr Yim directed his mind to the incorporation of the standard conditions in the agreement between the defendants. The standard conditions, were, however, quite inappropriate to an agreement for the supply of concrete and sandstone drilling and sawing services, as opposed to an agreement for the supply of goods. The second defendant was not asked to, and did not agree to, supply any goods, even as ancillary in some minor way to the provision of the services it was asked to provide. Nothing in any of the standard conditions is applicable in its terms to an agreement to provide services.
70.Although neither Mr Gillam nor Mr Yim gave evidence, I can readily infer that neither of them read or directed their minds to the precise wording of the “Standard Conditions”. Had either of them done so, it would have been immediately apparent that they were the wrong conditions for a contract for the provision of services.
71.Clause 19, which purports to subject the agreement to the Laws of Victoria, seems to me to emphasise the point: Mr Yim was based in Sydney and Mr Gillam in Canberra, and the agreement related to work to be carried out in the Australian Capital Territory. By no stretch of the imagination did it have any connection with the State of Victoria. It is scarcely conceivable that the parties intended clause 19 to apply.
72.For these reasons, my primary conclusion is that the parties should not be taken to have formed an intention to be bound by the “Standard Conditions” at all. If I am correct about this, clause 16 does not form part of the agreement between the defendants and the third defendant’s claim for indemnity under that clause must fail.
73.In case I am found to have erred in coming to that conclusion, I shall proceed to consider the terms of clause 16, and whether it has the effect for which the third defendant contends. The Workers’ Compensation Act 1958, is, it is conceded by counsel, an Act of the State of Victoria. In the circumstances of this case, this is a further reason for deciding that the parties would not have intended clause 16 to apply.
74.The proper approach to the construction of a clause of this character was identified by the High Court in Darlington Futures Limited v Delco Australia Pty Limited (1986) 161 CLR 500 at 510 as follows:
… the interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity.
75.The indemnity portion of the clause relates to claims for injury “sustained during the course of the manufacture, supply and delivery of the materials and/or merchandise”. As I have already pointed out, the services provided by the second defendant did not include any element of manufacture, supply or delivery of materials or merchandise. In circumstances where the conditions were contained in a document of the third defendant, had patently been drafted by a lawyer, were in small font on a densely printed page, and where the supplier was not legally represented, it seems to me that a clause purporting to provide for indemnity should be strictly construed against the party seeking its benefit. To hold it applicable in the circumstances of this case would require a stretching of the language which would operate unfairly against the second defendant. Thus even if I had found that the standard conditions had generally been intended by the parties to form part of the agreement, I would find that clause 16 did not entitle the third defendant to an indemnity by the second defendant against the plaintiff’s claim.
76.I was referred by counsel to a number of decisions where subcontracts between defendants had included an indemnity clause. Decisions of this Court were Cervellone v Besselink Bros Pty Ltd (1984) 55 ACTR 1, where Kelly J found that the principal contractor was entitled to a complete indemnity by a subcontractor; Steele v Twin City Rigging Pty Ltd (1992) 114 FLR 99, in which Higgins J found the indemnity clause inapplicable; Lyons v Fondi Investments Pty Ltd (1999) 10 ANZ Insurance Cases 61-421, in which Crispin J gave an indemnity clause a limited effect; and Celik v Commonwealth of Australia [2002] ACTSC 27 in which Master Connolly dismissed a claim for indemnity. The indemnity clauses in each case were in different terms, and none of the decisions is precisely on point. However, one can distil from them a general proposition that an indemnity clause will not generally be interpreted to permit a complete indemnity in favour of a principal contractor where the principal contractor has itself been guilty of negligence grounding a direct liability to the plaintiff, in the absence of express words.
77.This proposition has been approved more recently by the New South Wales Court of Appeal: Roads and Traffic Authority of New South Wales v Palmer [2003] NSWCA 58 per Spigelman CJ, Handley and Gyles JJA.
78.In this case, I have already found that both the second defendant and third defendant were negligent and individually liable to the plaintiff. In these circumstances I would not in any event have construed the indemnity clause as entitling the third defendant to indemnity as claimed.
Contribution between defendants
79.Counsel for the third defendant submitted that, should I not find in its favour on the indemnity issue, I should apportion liability equally between the two defendants. Counsel for the second defendant submitted that the third defendant was far more to blame for the accident then the second defendant, and that I should find the latter as employer liable to the extent of only 20% to 25%.
80.I think that there is considerable force in the latter submission. The third defendant was in possession of the site and in the course of a major construction project. The second defendant was brought in to undertake a relatively minor task. Mr Ashman pointed out to Mr Thornton, the site supervisor, on the Friday before the accident, that there was no walkway or platform, and Mr Thornton said that he would put this right in time for the next working day. Thus the third defendant took on the responsibility, as it should have, to provide an adequate and secure platform and walkway. Both the Scaffolding and Lifts Regulations and the contract required very much more by way of safety then was there: fences, barricades, secure scaffolding and if necessary safety nets or safety belts and lines. Far from providing any of these things, the third defendant failed even to secure the perfunctory walkway which it had put in place. The breach of its duty of care to the plaintiff was of a high order.
81.Notwithstanding this, the second defendant was the plaintiff’s employer and owed him a non-delegable duty to take proper care for his safety. The Scaffolding and Lifts Regulations applied with equal force to the second defendant. Even where an employer does no more then operate a labour hire business, it retains that duty of care to its employees. In TNT Australia Pty Ltd v Christie [2003] NSWCA 47, the NSW Court of Appeal (Mason P, Foster and Davies AJJA) dismissed an appeal from an apportionment of 25% of liability against the employer, which was purely a labour hire company and had no knowledge of or influence over the workplace, in circumstances where one of its employers had been injured while operating a pallet jack at a brewery.
82.It seems to me that in the circumstances of the present case, the third defendant should bear 70% of the responsibility and the second defendant 30%.
Orders
83.There will be judgment for the plaintiff against the second and third defendants in the sum of $596,000. The effect of my findings as to contribution is that this will be payable by the second defendant as to $178, 800 and by the third defendant as to $417,200. I shall hear the parties as to costs and as to the form of any orders for contribution between defendants which may be thought necessary.
I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.
Associate:
Date: 2 December 2005
Counsel for the Plaintiff: RL Crowe SC
Solicitor for the Plaintiff: Baker Deane & Nutt
Counsel for the Second Defendant: GA Stretton
Solicitor for the Second Defendant: Mallesons Stephen Jaques
Counsel for the Third Defendant: FMG Parker
Solicitor for the Third Defendant: Minter Ellison
Date of hearing: 21, 22, 23 and 24 February 2005
Date of judgment: 2 December 2005
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