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Deutz Australia Pty Ltd v Skilled Engineering Ltd

Deutz Australia Pty Ltd v Skilled Engineering Ltd

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Case Copied 25 June 2001 58 min read

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IN THE SUPREME COURT OF VICTORIA
COMMON LAW DIVISION	Not Restricted

No. 5316 of 1999

DEUTZ AUSTRALIA PTY LTD	Plaintiff
v
SKILLED ENGINEERING LIMITED	Defendants
ERIC SUTTON

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JUDGE:	Ashley J
WHERE HELD:	Melbourne
DATE OF HEARING:	19, 23 and 24 October 2000
DATE OF JUDGMENT:	25 June 2001
CASE MAY BE CITED AS:	Deutz Australia Pty Ltd v Skilled Engineering Ltd and Anor
MEDIUM NEUTRAL CITATION:	[2001] VSC 194

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Tort – labour hire company – employee hired out to a third party – negligent conduct of employee causing damage to property of third party – whether labour hire company vicariously liable to third party for tortious conduct of employee – whether employee the servant pro hac vice of the third party – principles – whether employee entitled to claim protection of s. 66, Insurance Contracts Act 1984 (Cth).

Contract – labour hire company – whether contract was to provide a man to third party, or was a contract to provide services of a particular kind – implication of terms into contract – whether warranty imposed by operation of s. 74(1) Trade Practice Act 1974 (Cth) – whether breach of contract.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A.G. Uren, QC with Mr A. McH Ramsey	Hall & Wilcox
For the Defendants	Mr P.F. O'Dwyer	Ligeti Partners

HIS HONOUR:

The Incident

On 28 January 1997, at about 10.30 am, the second defendant, Eric Sutton, was reversing a forklift along a main aisle at the Braeside warehouse premises of the plaintiff, Deutz Australia Pty Ltd (“Deutz”). The mast of the forklift was in an elevated position. On either side of the aisle were racks of shelving which were used for the storage of diesel motors of various sizes. At a point not far from the intersection of the main aisle with a cross aisle a bridge spanned the shelving at its topmost point. The bridge was constituted by two parallel orange painted beams, set not far apart and attached to the shelving on either side. The bridge was used as a shelf, but only for storage of light items. At the pertinent time a box containing some light material was sitting upon it.

In the event, the mast of the reversing forklift struck the first beam in its path. In a catastrophic chain reaction much shelving was caused to collapse and many valuable motors were damaged. The amount of the damage which admittedly resulted from the incident was $369,000.

Mr Sutton had been supplied to Deutz by the first defendant, Skilled Engineering Pty Ltd (“Skilled”). In different ways the plaintiff contends that Skilled is responsible in this proceeding for what is alleged to have been Mr Sutton’s want of care.

The statement of claim and the defences, despite the simplicity of the incident in which the plaintiff’s property was damaged, are not simple. It is desirable that I consider the pleadings before going on to examine the circumstances of the incident in greater detail.

The Plaintiff’s claim against Skilled:…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2001] VSC 194
Decision Date: 25 June 2001

CaseChat Overview and Summary

In the case of Deutz Australia Pty Ltd v Skilled Engineering Ltd, the dispute involved a labour hire company, Deutz Australia, which had hired out an employee to a third party, Skilled Engineering. The employee's negligent conduct resulted in damage to property belonging to Skilled Engineering. The central issue before the court was whether Deutz Australia was vicariously liable for the tortious conduct of its employee and whether the employee could be considered the servant of Skilled Engineering for the purposes of vicarious liability. The court also needed to determine whether the employee was entitled to claim protection under section 66 of the Insurance Contracts Act 1984 (Cth).

The court examined the principles governing vicarious liability in the context of labour hire arrangements. It considered whether the employee was sufficiently under the control of Skilled Engineering to be regarded as their servant for the specific task. The court also explored the nature of the contract between Deutz Australia and Skilled Engineering, determining whether it was a contract to provide a man or a contract to provide services of a particular kind. This distinction was crucial in assessing whether terms could be implied into the contract and whether there was a breach of contract.

The court concluded that Deutz Australia was not vicariously liable for the employee's conduct as the employee was not sufficiently under the control of Skilled Engineering to be considered their servant for the purposes of vicarious liability. The court also found that the contract between Deutz Australia and Skilled Engineering was a contract to provide services of a particular kind, not to provide a man, and therefore, certain terms were not implied into the contract. The court determined that there was no breach of contract under section 74(1) of the Trade Practices Act 1974 (Cth).

The final orders of the court were that Deutz Australia was not liable for the damages caused by the employee's conduct and that there was no breach of the implied terms in the contract. The court provided a detailed analysis of the contractual and tortious issues, clarifying the responsibilities of labour hire companies and their employees in such scenarios.

Orders