Eire Contractors Pty Ltd v O'Brien - [2012] NSWCA 400

Court of Appeal

New South Wales

Case Title: Eire Contractors Pty Ltd v O'Brien

Medium Neutral Citation: [2012] NSWCA 400

Hearing Date(s): 6 August 2012

Decision Date: 11 December 2012

Before: McColl JA (at [1]); Barrett JA (at [2]); Preston CJ of LEC (at [188])

Decision:
1. Appeal dismissed.
2. Order that the appellant pay the costs of both the first respondent and the second respondent.
3. Direct that any application by the appellant for setting aside or variation of the costs order be made in accordance with the rules.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords: NEGLIGENCE - duty of care - breach of duty - workplace accident - whether facts found by judge adequate to support findings of negligence and decisions on apportionment between tortfeasors and absence of contributory negligence - NEGLIGENCE - damages - future economic loss - whether findings on likely time of return to work and quantification of lost earnings supportable - whether award for non-economic loss should be increased to reflect current prescribed damages - EVIDENCE - workplace accident report - no evidence of authorship - whether report admissible - whether admitted "only against" one defendant

Legislation Cited: Civil Liability Act 2002
Evidence Act 1995
Law Reform (Miscellaneous Provisions) Act 1946.

Cases Cited: Australian Securities and Investments Commission v Vines [2003] NSWSC 995; (2003) 48 ACSR 282
Clarence Valley Council v Macpherson [2011] NSWCA 442
House v R [1936] HCA 40; (1936) 55 CLR 499
Johnstone v State of New South Wales [2010] NSWCA 70; (2010) 202 A Crim R 422
Lithgow City Council v Jackson [2011] HCA 36; (2011) 244 CLR 352
Marsland v Andjelic (1993) 31 NSWLR 162
Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492
Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40

Category: Principal judgment

Parties: Eire Contractors Pty Limited - Appellant
Luke O'Brien - First Respondent
Reed Constructions Australia Pty Limited - Second Respondent

Representation

- Counsel: R S Sheldon SC - Appellant
P J Doherty SC/P Biggins/D C Morgan - First Respondent
J E Sexton SC/C A Mulvey - Second Respondent

- Solicitors: McCabe Terrill Lawyers - Appellant
Whitelaw McDonald - First Respondent
Kennedys Lawyers - Second Respondent

File Number(s): 2010/134538

Decision Under Appeal

- Before: Colin O'Connor DCJ

- Date of Decision: 07 October 2011

- Citation: No citation

- Court File Number(s): 2010/134538

JUDGMENT

McCOLL JA: I agree with Barrett JA's reasons and the orders his Honour proposes.
BARRETT JA: As at May 2007, the first respondent, Mr Luke O'Brien, was employed by a "labour hire" company ("Christies") which had made his services available to the second respondent, Reed Constructions Australia Pty Ltd, which, as head contractor, was engaged upon the construction of the Evans Head sewerage treatment plant. The appellant, Eire Contractors Australia Pty Ltd, was a subcontractor with responsibility for the installation and testing of pipes.
I shall refer to the first respondent as "the plaintiff"; to the appellant as "Eire"; and to the second respondent as "Reed".

The proceedings at first instance

In District Court proceedings brought by the plaintiff against Eire and Reed and determined on 7 October 2011, Colin O'Connor DCJ found both Eire and Reed liable in negligence for injury sustained by the plaintiff on 29 May 2007 at the Evans Head construction site. Damages were awarded to the plaintiff.
Eire's liability in negligence was found to arise from its failure to take reasonable care by checking that no one was within a "danger zone" at the time when newly laid pipes were subjected to pressure testing. Reed was also found to have breached a duty of care in negligence. Neither Eire nor Reed was the plaintiff's employer, so that the particular duty of care owed by an employer to an employee was not at work in this case.
There were cross claims by Reed and Eire against each other seeking contribution or indemnity under the Law Reform (Miscellaneous Provisions) Act 1946.
Liability was apportioned 60% to Eire and 40% to Reed. No contributory negligence of the plaintiff was found.
Damages were assessed at $822,701.78 from which $82,270.17 (being 10%) was ascribed to the employer, Christies, and deducted pursuant to s 151Z of the Workers Compensation Act1987, leaving a balance of $740,431.61 which was apportioned $444,258.96 (60%) to Eire and $296,172.65 (40%) to Reed.
A costs order was also made in the plaintiff's favour, with Eire and Reed to pay the costs in the same proportions (60% / 40%).

The appeal

Eire appeals on several grounds which may be summarised as errors in fact-finding causing the trial to miscarry. It will be necessary to return to the various aspects of this general challenge. Eire contends that there is a basis for intervention by this Court in relation to the finding of breach of duty by Eire or in relation to apportionment between Eire and Reed.
Eire further says that the damages awarded were, in any event, excessive.
Eire also challenges the finding of absence of contributory negligence by the plaintiff.
The plaintiff's case is that no error has been shown and that the decision of the primary judge should stand.
Reed, for its part, does not challenge the liability finding against it in favour of the plaintiff. It opposes the orders sought by Eire except in relation to contributory negligence and damages.

The work setting

The factual issues concern events of 29 May 2007. Certain matters are uncontroversial and it is convenient to deal with them first.
Two concrete pits had been set into the ground at the relevant part of the construction site. One pit (a supernatant pit) was circular, with a diameter of about 1.5 metres and a depth of about 4.2 metres. The other (a desludging pit) was square. Its dimensions do not appear clearly from the evidence but it seems from a diagram that it was about 1.5 to 2 metres across. Its depth was such that someone could work in it while standing on its bottom.
I shall refer to these pits as "the round pit" and "the square pit". They lay at a distance of about 11 or 12 metres from one another.
A pipe known as "Line 25" ran underground between the pits and opened through the concrete wall of each.
On the day in question, the Line 25 pipe was subjected to testing following its installation. The first step in the testing procedure was to insert into the end of the pipe, where it opened into the round pit about 1.3 metres from its top, an object of generally cylindrical shape (with a diameter of about 150 mm and a length of about 200 mm) made substantially of rubber and referred to in the evidence variously as a "bung", a "ball" and a "plug". Given its function, I shall refer to it as a "plug".
The next step was to inflate this plug by means of compressed air introduced into it through a valve from an air hose connected to a compressor outside the pit. The purpose of the inflation was to cause the plug to expand so that it became tightly wedged within the pipe opening and operated as a stopper would in a bottle.
After the plug had been installed in this way at the round pit end, a similar plug was inserted into the end of the pipe where it opened into the wall of the square pit. That plug was inflated in the same way so that it too was fast in the pipe.
Thereafter, compressed air was introduced into the pipe itself through a passage running through the plug at the square pit end. The air pressure thus created within the pipe was measured by means of three gauges at the point where the air was introduced. It was the ability of the pipe to withstand air pressure thus exerted upon it, with plugs tightly in place at both ends, that was tested by the procedure. The particular test was a "low pressure" test rather than a "high pressure" test.
When the pipe in question was subjected to this procedure, the testing miscarried. A sudden loss of pressure was observed on the gauges at the square pit end soon after air was introduced into the pipe. Upon investigation, this was found to be because the plug at the round pit end had become dislodged. It had been expelled from the end of the pipe when air pressure was applied.

The plaintiff's case

The plaintiff's case at trial was that he had been sent into the round pit for a purpose unconnected with the testing of the Line 25 pipe, that he was in the round pit when the plug was expelled, that it struck him forcefully between the shoulder blades and that, although he was able to climb a ladder unassisted to get out of the pit, he suffered a serious injury.
After leaving the round pit, the plaintiff was taken to the site office. He was later driven to hospital.
There was controversy before the primary judge about how it was that the plaintiff came to be in the round pit at the time (Eire originally maintained that he had not been there at all) and about various aspects of the surrounding circumstances.

The witnesses

Evidence concerning events at the workplace on the day in question was given by six witnesses.
The plaintiff himself gave evidence and was extensively cross-examined. Mr Kelly Jones also gave evidence in the plaintiff's case.
In Eire's case, the main witness was Mr Peter Hodson, Eire's site supervisor. Other witnesses were Mr Paul Fitzgerald, Mr Ronan Kelly and Mr Brent Kennett.
Other persons said to have played a part in relevant events were Mr Michael Peters and Mr John Enright. Both were employees of Reed. Neither gave evidence.
Witnesses in addition to those I have mentioned gave evidence but not on questions going to liability. Their evidence was relevant only to the plaintiff's condition and questions of damages. It is not necessary to refer to that evidence at this point.

The plaintiff's evidence

The plaintiff worked as a labourer. He had been working at the Evans Head construction site for about six months.
On the day in question, the plaintiff was working with a co-worker he knew as "Kell", identified as Kelly Jones. Mr Jones was operating an excavator to install a large pipe beside a pit and the plaintiff was acting as dogman, giving directions for the positioning of the excavator.
A person from Reed the plaintiff knew as "Michael" was in the vicinity. This person was identified as Michael Peters, a Reed employee. The plaintiff saw a person he knew as "Brent" approach Mr Peters and speak to him. The plaintiff did not hear what was said.
In the course of the hearing, it emerged that the plaintiff may have been confused about the identity of the person who approached Mr Peters. The plaintiff said that he had spoken outside court to a person he understood to be "Brent". The person was in fact Peter Hodson, an Eire employee.
After the person the plaintiff said was "Brent" had spoken to him, Mr Peters approached the plaintiff and Mr Jones and asked which of them would give Eire "a hand" at the bottom of the round pit. The plaintiff had been in the round pit on the previous day. He had put a pump into the pit to remove accumulated water.
The plaintiff volunteered in response to Mr Peters' request. Mr Peters told him what was to be done.
The plaintiff followed an Eire employee known to him as "Fitzy" (Paul Fitzgerald) into the round pit which was only a few steps from the point at which he had had the conversation with Mr Peters. There was scaffolding around the top of the pit. There was no lid or cover on the pit. Anyone entering the pit had to climb through the scaffolding.
The plaintiff was shown photographs taken soon after the accident in which red and white striped warning tape is seen to be strung up between the uprights of the scaffolding. He said that this tape was not in place when he entered the round pit
Mr Fitzgerald went through the scaffolding first and entered the pit by means of a ladder already within it. The plaintiff then stepped over the bottom rung of the scaffolding, over the lip of the pit and on to the ladder, following Mr Fitzgerald.
When the plaintiff reached the bottom, he found water about ankle deep. Mr Fitzgerald confirmed to him what they were to do. They
"started to put a pipe going from the inside of the pit down into the outside".
It was necessary to join two pipes by knocking them together with a sledgehammer. The plaintiff described them as thick PVC pipes. One had to be fitted inside the other. It was a tight fit. Mr Fitzgerald had taken a sledgehammer into the pit.
The plaintiff worked with Mr Fitzgerald at the bottom of the pit for at least fifteen minutes. They could not join the pipes. One pipe kept moving, so Mr Fitzgerald left the pit to stabilise it from outside. Mr Fitzgerald held the pipe outside and they pushed the two pipes together.
The plaintiff later said that the pipe outside the pit (one of the two to be joined together) was being held up by a chain on an excavator operated by "Ghosty" (Ronan Kelly). The excavator, the pipe it was holding and Mr Kelly, the excavator operator, were all in position before the plaintiff entered the pit. Indeed, the plaintiff said that Mr Kelly had had charge of that machine when he and Mr Jones went to where they were supposed to be working with the excavator and that they could not use it because it was already being used by Mr Kelly.
Even with stabilisation from outside, it was not possible to join the pipes so Mr Fitzgerald, still outside the pit, went to get "some glue or silicone".
The plaintiff remained in the round pit. He waited at least ten minutes for Mr Fitzgerald to return. He tried to raise Mr Fitzgerald on a radio he had with him but could not make contact. He then began to climb the ladder to leave the pit.
About half way up the ladder, he was "hit in the back with an object" and heard "a hissing noise".
The plaintiff saw the plug in front of him "when it came down after hitting me". It might have ricocheted after hitting him in the back. It was below him when he saw it. It first went up above him and then down (after hitting him). He said:
"As it came out of the pipe it must have hit a wall, come back, hit me, gone up a little bit further, gone up a little bit higher than I was actually standing, and then come straight back down in front of me."
He was dazed, waited about five minutes and eventually climbed out of the pit by means of the ladder.
Mr Jones was on the surface when the plaintiff emerged. Mr Jones had called down to him asking if he was all right, to which he replied, "Not really". Mr Peters later spoke to him and drove him to hospital. He was in the pit fifteen to twenty minutes in all.
In the course of cross examination, the plaintiff said that he saw an air hose connected to a small compressor going down into the round pit. This observation seems to have been made before he went into the pit. He said nothing about any such line later being removed.

Mr Jones' evidence

Kelly Jones was employed by Reed (not the labour-hire company) as a labourer. His "basic role" was that of a machine operator.
On the day in question, he was working with the plaintiff. The plaintiff was down in the round pit. Mr Jones was on the surface near the pit. He heard the plaintiff call, "I'm hurt." He helped the plaintiff as he got out of the pit. The plaintiff had climbed the ladder unassisted.
Mr Jones does not know why the plaintiff was in the round pit. He saw the plaintiff before he entered the pit but did not see him go into it. He became aware that the plaintiff was in the pit only when he heard him call, "I'm hurt."
Mr Jones had no recollection of Mr Peters asking the plaintiff and himself which one of them would go into the round pit to give Eire a hand. When asked whether it was possible that Mr Peters had made such a request, Mr Jones accepted the possibility but said he could not recall it having happened. He also said that Mr Peters was one of three Reed employees who directed Reed personnel (including those obtained from Christies) to perform particular tasks during any given day.
Mr Jones completed and signed a Reed accident report in relation to the incident. Relevant particulars recorded in relation to the plaintiff were
"Type of injury: Head injury"
"Cause of injury: Pipe plug"
"Part of body injured: Head".
Mr Jones could remember little of the events of the particular day: "I don't recall much about the whole day, really, apart from Luke being injured."

Mr Hodson's evidence

Mr Hodson was Eire's site supervisor. He was in charge of the site for Eire, one of about ten subcontractors operating there at the time.
Part of Eire's function was to install pits and pipes. Pits were brought on to the site in prefabricated form and sunk into the soil. Day-to-day pipe laying was attended to by Ronan Kelly and Brent Kennett, assisted by a machine operator (Paul Fitzgerald) and labourers from the labour hire company.
Testing of pipes had been in progress for several days before the day in question. Testing was standard procedure after the installation of pipes. Early in the morning of that day (soon after the 7am start), Mr Hodson had told Mr Michael Peters or Mr John Enright of Reed that testing would continue on that day. It was necessary for a Reed representative to observe all testing (documents recording tests produced in evidence showed counter-signing by a Reed employee).
Ronan Kelly and Brent Kennett carried out the testing. It was they who placed plugs in position in the round pit and later the square pit and introduced air into the pipe between the two.
The pipe work in the supernatant pump station was already complete. No pipes remained to be installed. Mr Hodson did not ask anyone to help with the connecting of pipes in the round pit. Specifically, he did not ask either the plaintiff or Mr Fitzgerald to do so. Nor did he ask Mr Peters for any help in that regard.
Mr Hodson saw the plaintiff on the surface at the round pit after an incident about which someone had told him. Present there with the plaintiff were Ronan Kelly, Brent Kennett, John Enright, Mr Peters and the man he knew as "Kell" (Mr Jones).
After the plaintiff had gone to the site office, Mr Hodson took a camera to the round pit and took three or four photographs. These were taken between ten and twenty minutes after Mr Hodson became aware of the incident.
The photographs are those shown to the plaintiff in the witness box (see [39] above). They show the top of the round pit surrounded by steel scaffolding erected as a square or rectangle (the perspective does not allow a firm conclusion whether the scaffolding structure is rectangular or square but the fact that it is built around and close to a circle suggests that it is probably square).
The scaffolding supports a wooden platform positioned horizontally so as to be flush with the concrete top of the pit, forming a cover. The platform appears to consist of four separate pieces of timber. There are three planks. One is flush with one of the outer edges of the scaffolding structure, another is flush with the opposite outer edge and the third is against the second. There is a gap of perhaps 600 or 700 mm between the first plank and the third plank. A ladder protrudes from the pit through that gap, leaning against the concrete lip of the pit. The gap thus provides a means by which a person can enter the pit with the aid of the ladder despite the existence of the platform. The gap is in the nature of a manhole in the platform.

On top of the planks is a sheet of timber. Its width appears to be somewhat larger than the 1.5 metre diameter of the pit. The timber sheet extends from the edge of the scaffolding opposite the side at which the ladder is positioned to about midway along the planks and forms a cover, although leaving a space in the nature of a manhole through which a person can descend into the pit by means of the ladder.
Horizontal members of the scaffolding support the planks and the wooden sheet. Other horizontal members are placed above those supporting the timber. On three sides, two rows of cross-members are visible above the timber. Taking the interval between the rungs of a ladder as a guide, the lower of these appears to be about 500 mm above the wooden surface. The other is about the same distance above the first, so as to be about 1 metre above the surface. On the fourth side of the structure - the side opposite the ladder - there is only one cross-member, at the level of the higher row just mentioned. At that side, therefore, there is a larger opening about a metre high through which access can be gained.
The upright members on the side allowing such access have red and white striped tape strung between them on which the words "DANGER KEEP OUT" are printed in black at regular intervals.
Ignoring this warning tape, the overall configuration is such as to suggest that anyone wishing to enter the round pit by means of the ladder would mount the timber platform at the side opposite the ladder (where only one scaffolding cross-member is installed), step across the platform to the opposite side where the ladder protrudes from the manhole and step on to the ladder at that point. It would be inconvenient, to say the least, to step or climb on to the platform at any of its other three sides because of the lower horizontal rails. As I have said, the juxtaposition of the ladder and the horizontal rails, as shown in photographs, allows a conclusion that the rails are about 500 mm apart.
Mr Hodson's evidence was that he did not put up the warning tape and that the platform and scaffolding had been in place for some time. He did not know who had put up the tape or when it was installed. He agreed that it was necessary to cross the tape to get to the ladder.
Mr Hodson was the main source of the evidence about the testing procedure to which reference has already been made. He explained that after the two plugs had been inserted in the ends of the relevant pipe, the practice was to inspect the pit that is remote from the point at which pressure is to be introduced into the pipe (in this case, the round pit). This is to ensure that no one is in it. The person carrying out that inspection then returned to the test site (in this case, the square pit).
Mr Hodson accepted that a person could enter the remote pit in the interval between such a final inspection and the initiation of the test at the other point. He also accepted that it would be possible for someone to be stationed at the remote pit throughout so that a signal could be given when it was clear to test.

Mr Fitzgerald's evidence

Paul Fitzgerald was known as "Fitzy". He worked for Eire as an operator of backhoes and excavators. He was the main machine operator.
The people he understood to be responsible for laying pipes for Eire were Ronan Kelly, Brent Kennett and Peter Hodson.
His task at the time was adding and levelling soil to complete the groundwork around the round pit.
Mr Fitzgerald gave evidence that, on the day in question:
(a) he did not go into the round pit;
he did not see the plaintiff go into the round pit;
he did not see the plaintiff come out of the round pit;
Mr Peters did not ask him to go into the round pit;
he did not hear Mr Peters ask the plaintiff to go into the round pit;
he was not engaged in helping to join two pipes together;
(g) no one but him operated his excavator.
Mr Fitzgerald could not say if striped warning tape was in place at the round pit. Nor could he recall whether there was a cover on the round pit. He recalled that testing was happening at that time and knew that warning tape was usually installed during testing.
Mr Fitzgerald further gave evidence that Ronan Kelly sometimes operated the backhoe but never the excavator.

Mr Kelly's evidence

Ronan Kelly was known as "Ghosty". He was engaged in pipe laying and site work, working with Brent Kennett, Peter Hodson and Paul Fitzgerald. For pipe laying, he usually worked with Brent Kennett.
Mr Fitzgerald did not assist in pipe laying. He operated an excavator. Mr Kelly himself did not operate any machine.
All pipes associated with the round pit had been installed before the day in question. There was no installing of pipes in that pit on that day.
The plaintiff did not help Mr Kelly and Mr Fitzgerald join two pipes on that day. Mr Kelly did not hear Mr Peters ask the plaintiff to go into the round pit and hit a pipe with a sledgehammer. Nor did he himself ask the plaintiff to go into the pit.
Mr Kelly was engaged in pressure testing on that day. He worked with Brent Kennett. It was Mr Kelly who inserted the plug into the pipe opening in the round pit. He entered the pit through the manhole in the pit cover and climbed down the ladder. After he had put the plug into position, he was handed the air hose by Brent Kennett who was on the surface. Mr Kelly attached the hose to the plug which was then inflated. He took the hose off. Brent Kennett lifted the hose from the pit and Mr Kelly climbed the ladder. They left the pit area, taking the equipment with them.
Mr Kelly gave evidence that it was he who put the striped safety tape into position. He gave different accounts of timing. He first said that he installed the tape "before we started", explaining that he meant by this before the pressure testing started. He then said that he put up the tape before he went into the round pit. He next said that he put up the tape after exiting the round pit and before going to the square pit to prepare testing at that end. On all these accounts, the tape was put in place before Mr Kelly and Mr Kennett left the vicinity of the round pit after installing the plug there. And, of course, each of the second and third versions is quite consistent with the first: tape installed before entering the round pit to put the plug into position was put up before the pressure testing started, as was tape installed upon leaving the pit after placing the plug.
In cross-examination, however, Mr Kelly conceded the possibility that the warning tape had not been installed at the round pit until after test preparations had been completed at the square pit and that he then returned to the round pit to put the tape into position.
The test was initiated at the square pit end about ten minutes after departure from the round pit after installation of the plug there.
Mr Kelly conceded the possibility that someone could have entered the round pit after he left it. He did not go back to it to check before initiating the test at the square pit end. He accepted that it would have been possible to do this; also to station someone at the round pit to give a warning call when testing was to start.
Mr Kelly said that, at the time of putting up the warning tape at the round pit, he also put on the ground a sign saying, "Danger. Pressure Testing". He accepted that this was not shown in the photographs in evidence and explained where it was (beyond the photographed area), by reference to objects in the photographs. The sign formed part of the pressure testing equipment and was carried with it.
It was Mr Kelly's practice to remove the sign and the tape together after a test.
After the particular test failed, Mr Kelly went to the round pit. He saw the plaintiff there. The plaintiff looked white. Mr Kelly heard from someone (not the plaintiff) that the plaintiff had been in the round pit. Mr Kelly asked him if he was all right.
Mr Kelly also gave evidence that Michael Peters of Reed witnessed the particular testing.

Mr Kennett's evidence

Mr Kennett's job was to lay pipes and put pipes together. He worked mainly with Ronan Kelly. He worked also with Peter Hodson (his supervisor) and Paul Fitzgerald.
Mr Kennett was a backhoe operator. He knew Kelly Jones and the plaintiff. He never worked with the plaintiff. The plaintiff never assisted with the laying of pipes.
On the day in question, Mr Kennett was working with Mr Kelly testing pipes. He had been instructed by Mr Hodson to do so.
Mr Kennett did not ask the plaintiff, Mr Fitzgerald or anyone else to go into the round pit immediately before testing; nor did he ask anyone from Reed for assistance on the day in question. He did not know that the plaintiff was in there immediately before testing; nor did he know why the plaintiff was in the pit. He did not see either the plaintiff or Mr Fitzgerald enter the pit. He would not have tested had he known that someone was in the round pit.
After pressure was lost and the test failed, Mr Kennett went from the square pit to the round pit. He looked into the round pit and saw the plaintiff inside it. The plaintiff was holding the plug and said, "This just popped out". He also said that it had hit him on the back of the head.
Mr Kennett did not see the plaintiff leave the round pit.
Mr Kennett did not approach Mr Peters or any other Reed employee to ask for assistance in relation to the round pit. He did not help the plaintiff and Mr Fitzgerald try to join two pipes associated with the round pit.
Mr Kennett gave evidence that warning tape was present at the round pit at the time of testing and that Mr Kelly had put it up before the start of testing. He saw the tape when he went to the round pit after the failure of the test. He also saw a warning sign. It was on the side of a roadway between the two pits.

The plaintiff's claim form

The plaintiff completed a workers compensation claim form which is dated 26 June 2007.
Injury details are recorded as follows:
"was exiting a pit when: was ¾ way up the ladder a plug Blew out of a pipe hitting me in the neck".
In a section for additional information, the following appears:
"I was helping fitzy & Brent atatch [sic] two pipes together to make it easy Brent asked me to get in the pit and hit the pipe with a slege [sic] hammer. I finished the job and proceeded to exit the pit ¾ way up the ladder I heard a hissing noise then a bang and got thrown into the ladder I was dazzed [sic] and nearly slipped off. Took about 5 min to come too [sic] and proceeded to exit the pit. Still dazzed [sic] and shocked. There were no warnings about the pipe test or barriers around the pit. i was wearing all ppe and beeing [sic] carfull [sic]."

Exhibit B

One of the grounds of appeal concerns a document admitted as Exhibit B. It is a Reed internal document, which is undated and unsigned, headed "Accident/Incident Investigation Report". The document relates to the plaintiff's accident on 29 May 2007. Relevant parts read:

"Details of injuries:

Neck injury"

"What doing at time of accident/incident:

Adjusting the dewatering sump for the supernatant pump station"

"Description of accident/incident: (attach further sheets if required)
While trying to adjust the sump pipe for the dewatering, Eire excavator was position in the way restricting the area of works. Luke and Kell decided to help Eire with their works, without obtaining RCA management instruction. Luke entered the Supernatant pump station and help installed the 150mm supernatant return form the sludge dewatering area.

Upon completion of the works Luke commenced exiting the pump station and the plug that was been pumped for use for the pressure test of the 150mm incoming line from the Cash Balance Tanks desludging pit, blew out, struck the wall of the pump station and then ricochet or bounce back from the wall and struck Luke in the back of the neck."

"Witnesses to accident/incident: Yes/No
Name: Kelly Jones (RCA)
Name: Brett Kenett (Eire)

Note: attach copies of any statements obtained from witnesses"

"What factors contributed to incident: (attach further sheets if required)
1. No Knowledge that there was pressure testing commencing.
2. No signage restricting access.

3. Entering the restricted area without authorisation."

Ground of appeal and decision on Exhibit B

Exhibit B was tendered by the plaintiff. Eire complains that Exhibit B was deployed against it in an impermissible way. Its contention is that Exhibit B was tendered by the plaintiff against Reed only, that it objected to it being tendered against it and that the judge admitted it against Reed only, with the result that it was not open to the judge to draw upon Exhibit B in finding liability on the part of Eire.
The plaintiff accepted on appeal that the judge was in error in stating at [47] that Exhibit B was admissible against Eire. The plaintiff maintains, however, (as does Reed) that the court made no use of Exhibit B in reaching the conclusion adverse to Eire, with the result that any error did not contribute to the result of the proceedings.
There are two preliminary points to be made about Exhibit B. First, the concept of a document being tendered "only against" one of two defendants so as to be admitted "against" that defendant to the exclusion of the other, although commonly encountered, is questionable as to its foundation. It is pertinent to refer to what was said by Austin J in Australian Securities and Investments Commission v Vines [2003] NSWSC 995; (2003) 48 ACSR 282. He began (at [21]) by referring to s 56 of the Evidence Act 1995 which, subject to other provisions of that Act, makes "admissible in the proceeding" evidence that is "relevant in a proceeding" and excludes from admissibility evidence that is "not relevant in the proceeding". Austin J continued (at [22]):
"It is notable that both s 55 and s 56 address the question whether evidence is admissible in a proceeding. Where a plaintiff seeks to make out separate cases against several defendants in a single proceeding, the question to which the Evidence Act provides an answer is whether evidence is admissible in the proceeding, not whether evidence is admissible to prove the plaintiff's case against a particular defendant. The answer it gives is that if the evidence is relevant, it is admissible. Once it is admitted, it is evidence in the proceeding, and therefore available to be used for any purpose, unless one of the exclusionary rules of the Act or any surviving general law exclusionary rule applies, or the Court makes use of its statutory discretions to exclude admissible evidence or limit its use." [original emphasis]
That passage was approved by this Court in Johnstone v State of New South Wales [2010] NSWCA 70; (2010) 202 A Crim R 422 at [102] where the point was made that the court is given by s 136 of the Evidence Act a discretion to limit the use to which evidence may be put if there is a danger that a particular use of it might be unfairly prejudicial to a party, or be misleading or confusing; but that such a limitation can only arise from an order actually made by the court.
The present case was one of a "single proceeding" with the plaintiff suing both Eire and Reed. Evidence admissible and admitted "in" that proceeding was therefore available for use generally in the proceeding subject to any order under s 136 limiting the use to which it could be put. The judge did not make expressly any order under s 136. Nor is there any basis on which it could be said that he did so by necessary implication.
The second thing to be said about this aspect is that the representations in the Exhibit B document could have been admissible only if the document itself satisfied the conditions for admissibility of "business records" in s 69 of the Evidence Act (the judge in fact referred to it as a business record). One of those conditions (s 69(2)) is that the representation in the document was made either by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact (s 62(2)(a)) or on the basis of information directly or indirectly supplied by such a person (s 69(2)(b)).
Exhibit B does not, on its face, identify the origin of its content in such a way as to show that the representations within it were made by a person within the s 69(2) description; nor was there any evidence going to that matter. Nowhere is there anything identifying the person or persons who, directly or indirectly, provided the information recorded in the document. The identification of Mr Jones and Mr Kennett in the document itself as "Witnesses to accident/incident" says nothing about the source of the content (including the part of the content referring to them as "witnesses"). Mr Jones said in evidence that he had written an "incident report" which "went for about five or six lines if not longer"; but when Exhibit B was shown to him, he said that that was not the incident report to which he was referring.
The circumstances were thus relevantly the same as in Lithgow City Council v Jackson [2011] HCA 36; (2011) 244 CLR 352. The question there was as to the admissibility under s 69 of a report signed by two ambulance officers and containing statements about the alleged circumstances in which their patient had been injured in a fall. The report included information said to have been provided by "bystanders" who had found the patient. In relation to the s 69(2) criteria, French CJ, Heydon and Bell JJ said (at [17]);
"What is the 'asserted fact'? If the 'asserted fact' is 'the respondent fell 1.5 metres onto concrete', at once a difficulty arises which was not debated by the parties. Section 69(2)(a) cannot apply, because the makers of the representation, the ambulance officers, did not have personal knowledge of a fall of 1.5 metres onto concrete, and could not reasonably be supposed to have had it, since the fall had happened some time before they arrived. And s 69(2)(b) cannot apply, because even if it were the case that the ambulance officers were told by bystanders that the respondent fell in that fashion, the bystanders did not have personal knowledge of the fall, and could not reasonably be supposed to have had it: again, the fall took place before the bystanders arrived."
Because there is no apparent explanation of the basis on which the s 69(2) condition was considered to be satisfied, it is not possible to understand the judge's reasons for admitting Exhibit B. The decision that it should be admitted is unexplained. Because no circumstance beyond those already noticed could have been relevant to the question of admissibility, the conclusion must be that the hearsay content was inadmissible and that the decision to admit it was in error.
It is clear nonetheless that the judge treated the content of Exhibit B as evidence and made use of that content (although, as will be seen, the use was not extensive). I shall return to precisely what was done in that regard.
Even if Exhibit B had been properly admitted under s 69, there is an obvious question as to the weight that should have been afforded to its hearsay content. Because it is not known who prepared the document or how that person obtained the information recorded in it, there is no way of judging the accuracy or reliability of the information. There is also the point that the document was a Reed document created by Reed for its own purposes after an episode that obviously gave rise to questions of potential liability of not only Reed itself but also Eire. Reed had an obvious interest in implicating Eire rather than itself. Thus, had Exhibit B been properly admitted, it would have been entitled to negligible weight.

The alleged defects in fact finding

I turn now to the substantial complaint of Eire, that is, that the judge came to factual conclusions adverse to it by accepting the evidence of the plaintiff in circumstances where that evidence was inconsistent with the evidence of other witnesses; that there was no sufficient foundation for such conclusions; and that the reasons for rejecting, either expressly or by necessary implication, the evidence of those other witnesses was neither exposed nor explained.

The factual conclusions in question are concerned with two main matters: how it was that the plaintiff came to be in the round pit at the time the plug was expelled, demonstrating failure of the pressure test; and whether the warning tape was in place at the entrance to the round pit at the time the plaintiff entered the round pit. There was ultimately no dispute that he was in the pit when the plug was expelled.
In conjunction with the question about the warning tape, there is a question about the presence of the cover or lid over the mouth of the round pit. That does not go directly to the questions of risk and precautions relevant to liability but is of relevance to assessment of the plaintiff's credibility.

Evidence and findings - the plaintiff in the pit

There can be no doubt that the plaintiff was in the round pit on the day in question. The plaintiff said that he was in the pit. Mr Kennett saw the plaintiff in the pit when he went to it to investigate after the pressure test failed. Mr Jones saw the plaintiff emerge from the pit after calling, "I'm hurt". The plaintiff says that he called in response to an inquiry from Mr Jones as to whether he was all right.
It may also be accepted that the plug was ejected while the plaintiff was in the pit. The pressure test failed because the plug at the round pit end of the pipe did not remain fast. It must follow that the plug was ejected by air pressure, although it is not possible to say with what degree of force it was expelled (Mr Hodson expressed an opinion that there would have been not much force because the testing was low pressure testing rather than high pressure testing, but the evidence permits no finding on the issue). When Mr Kennett saw him in the round pit after the failure of the test, the plaintiff was holding the plug and said that it had "just popped out" and hit him on the back of the head.
No witness saw the plaintiff enter the round pit. Mr Fitzgerald who, according to the plaintiff's account, preceded him into the pit and worked with him there, gave evidence that he did not go into the pit on that day and did not see the plaintiff do so; also that Mr Peters had not asked the plaintiff to go into the pit. Mr Kelly who, according to the plaintiff, was operating an excavator supporting on a chain one of the pipes on which the plaintiff and Mr Fitzgerald were working, gave evidence that his duties on the day related to pressure testing of pipes already installed. Those duties would not have included the activity involving an excavator and chain and a pipe in the course of being installed. Mr Jones who, according to the plaintiff, was a co-recipient of Mr Peters' request that someone go into the pit to give Eire "a hand", had no recollection of any such request but accepted the possibility that it had been made. Mr Jones also said that he was on the surface while the plaintiff was in the pit. According to Mr Hodson, who was in charge of Eire's operations on the site, no pipework remained to be done in the round pit. Mr Hodson did not ask anyone (including, in particular, the plaintiff and Mr Fitzgerald) to go into the round pit; nor did he ask Mr Peters for any help in that regard.
The judge accepted the plaintiff's account of how it was that he came to be in the round pit:
"[30] The Plaintiff was challenged in a number of respects in relation to his account. First it was suggested to him that the size of the pipes he described as being worked on were in fact not available to be worked on at that time. Secondly that a sledgehammer would not be used to assist in joining the pipes and at most a crowbar may have been used. Thirdly that Fitzy at no stage went into the pit to assist the Plaintiff nor did any other Eire employee.
[31] Whilst some uncertainty was expressed concerning the diameter of the pipes by the plaintiff he adhered to the remainder of his account.
[32] Evidence was given by Peter Hodson in Eire's case, that he had made no such request to Michael Peters for assistance. Mr Fitzgerald gave evidence in Eire's case, that he did not assist the Plaintiff in the pit as described or at all."
At a later point, the judge expressly accepted the plaintiff's evidence that "he was directed by Michael Peters to assist in relation to the pipe work in the pit". The judge then said, "He was doing his job as instructed." His Honour continued (at [40]):
"[40] I draw comfort in coming to that conclusion as Michael Peters was not called to dispute that evidence. Mr Mulvey, of counsel, who appeared for Reed pointed out in his written submissions that he did not challenge the Plaintiff's evidence that he was directed by Mr Peters to work in the pit."
What was actually said in the written submissions of counsel for Reed was this:
"The plaintiff alleges that he was directed by Mr Peters, the Reed employee, to assist employees of Eire with work in the supernatant pit at the site. Reed did not challenge this evidence, however, Ronan Kelly and Paul Fitzgerald both deny that they heard Mr Peters give the plaintiff any direction to assist Eire. They also deny that any request was made by Eire to Mr Peters or that they needed any assistance."
And later:
"Considering that each of the Eire witnesses deny the plaintiff's allegations that pipe work had to be completed and that Mr Fitzgerald denies getting onto the pit with plaintiff, serious concern must be had by the court with regard to the plaintiff's credit as to why he was in the pit."
It thus clear that, although Reed did not challenge, by means of evidence of its own, the plaintiff's evidence of direction by Mr Peters, it did expressly rely for its own benefit on the aspects of the Eire witnesses' evidence calling this into question; and that Reed took the position that there must be "serious concern" regarding "the plaintiff's credit as to why he was in the pit."
At [46], the judge stated two conclusions regarding the content of Exhibit B: first, that it corroborated the plaintiff's evidence that there was no warning signage present; and, second, that, "insofar as the document asserts that there was no [Reed] management instruction, for the reasons earlier referred to, I accept the plaintiff's evidence in this regard that such authorisation was obtained from Michael Peters".
At [49], the judge accepted that there was a second person in the pit with the plaintiff. He said that the other person was either Mr Fitzgerald or Mr Jones. The plaintiff's claim form identified two other persons as being with him at the time, Mr Fitzgerald and Mr Kennett ("Brent" - although, given what is said at [35] above, this may have been Mr Hodson and the plaintiff suggested in his evidence that he intended to refer to Mr Kelly). Yet each of those persons gave evidence that he was not in the pit with the plaintiff.

Evidence and findings - warning tape and "cover" or "lid"

The matter of the presence or absence of the round pit's "cover" or "lid" and the striped warning tape require attention because of its relevance to the primary judge's acceptance of the plaintiff's evidence that, at the time the plaintiff entered the round pit, there was no warning tape in place and the cover or lid was not on the pit. The judge made positive findings to that effect.
The part of the judgment dealing with the warning tape and the cover or lid is at [33] to [38] as follows:
"[33] The Plaintiff was further challenged on the basis that he entered the pit contrary to the danger tape and bunting placed around the pit warning workers to keep out. Further that the lid depicted in the photographs earlier referred to was in place to prevent access.
[34] It was the Plaintiff's evidence that at the time he entered the pit there was no such tape in place. He also said the lid was not in place as if it was he would not be able to see what he was doing in the pit. This I interpolate has a logical appeal and I accept his evidence in that regard.
[35] Mr Hodson gave evidence that he took the photographs in exhibits 2/2D & 3/2D about 20 min after the accident.
[36] Ronan Kelly (Ghostie) was called in Eire's case. He said that he was the person that inserted the plug into the pipe at the pit end. He said that he put the warning tape around the pit before he started the pressure testing and before he went down into the pit. Later in his evidence he said that Brent had pulled the hose out which was used to inflate the plug. He then exited the pit and put the bunting up.
[37] I accept the Plaintiff's evidence that at the time he descended into the pit there was no warning tape in place. His observation in evidence that the tape depicted in the photographs appeared to have been hastily attached is credible. Further it would be unlikely that the lid was in place whilst the Plaintiff was in the pit depriving him of natural light making it more likely that the lid was put in place after the accident, as was the tape.
[38] The evidence of Ronan Kelly in that regard has to be assessed upon the basis that the first time he was asked to recollect any of those matters was some six months before he gave evidence. There was no accident investigation carried out by Eire so there were no contemporaneous statements obtained from any of their employees."
The scaffolding and platform at the top of the round pit have already been described by reference to the photographs taken by Mr Hodson. Those photographs were taken between ten and twenty minutes after Mr Hodson's becoming aware of the incident following the plaintiff's emergence from the pit. Mr Hodson's account of the taking of the photographs, including timing, is not challenged.
Reference has already been made to the evidence about the installation of the warning tape. Mr Kelly gave evidence that he put the warning tape in place on the scaffolding at the entrance to the round pit; and that he did so before he entered that pit to install the plug, or upon leaving the pit after installing the plug, or upon returning to the round pit after installation of the plug there and subsequent completion of testing preparations at the square pit. On each of the first two accounts, the tape was in place before Mr Kelly left the round pit to walk to the square pit to continue testing preparations there. On the third account (by way of concession in cross examination), there was a period between installation of the plug in the round pit and placing of the tape at its entrance during which Mr Kelly was busy at the square pit and had no occasion to concern himself with what was happening at the round pit.
Mr Kennett's evidence was that he saw the tape in place when he went to the round pit after the failure of the test. It was at that point that he saw the plaintiff in the pit. This was somewhere between ten and twenty minutes before Mr Hodson took the photographs.
In relation to the cover or lid, Mr Kelly's evidence was that, when he entered the round pit to install the plug, he did so through the manhole in the pit cover and climbed down the ladder. The judge thus had evidence that the cover was in place at that time. Mr Kelly did not say that the cover was not in place when he left. Had that been the case, he would doubtless have mentioned it since exit from the pit would then have involved the somewhat precarious exercise of stepping from the ladder on to the concrete lip or edge of the pit, then through the scaffolding and on to the ground. In addition, someone who had walked across the cover to the ladder to get into the pit and was still inside could not but have noticed anyone seeking to remove the cover. The natural reaction in that eventuality would have been to ask that the cover be left in place as the person inside needed it in order to get out.
The plaintiff, by contrast, said that no "lid" was in place when he entered the pit.

Reliability of key findings

Conclusions of the primary judge that are consistent with the evidence and cannot be questioned are:
(a) that the plaintiff was working on the site on the day;
that the plaintiff entered the round pit;
(c) that the plaintiff was struck by the plug when it was expelled upon failure of pressure testing while he was in the pit;
(d) that the testing was carried out by Eire in the presence of one or more representatives of Reed and that Reed was aware that pressure testing of the particular pipe was to be undertaken.
Conclusions which are challenged and may require further examination are:
(a) those concerning the reason why the plaintiff entered the round pit and the circumstances of his doing so;
(b) those concerning any instruction or request that the plaintiff enter the round pit;
(c) those concerning the plaintiff being accompanied by another person;
(d) those concerning the presence of the striped warning tape and the wooden platform at the entrance to the round pit.
The need for any such further examination will arise, however, only in relation to findings that were material to the basis of the judge's decision on one or more of the four key issues: the liability of Eire, the liability of Reed, the relative degrees of responsibility of Eire and Reed and the absence of contributory negligence.
It is therefore necessary to say more about the factors that shaped the judge's decision on those matters of liability and responsibility.

The basis for the decision on liability - Eire

I have referred briefly at [5] above to the basis on which the primary judge found that Eire was guilty of negligence. His Honour recorded that it was common ground that there is a danger zone at both ends of a pipe being tested, having regard to the known risk of a plug being ejected under pressure. This was not disputed on appeal.
The judge then referred to an Eire document entitled "Safe Work Method Statement" tendered by Reed which, he noted, "explicitly deals with the safety hazards during testing of low pressure pipelines". That document identified several potential hazards, including "Test plug may be over-inflated" and "Test plug may come out". Among suggested controls are "check test plug pressure inflate slowly and stay out of danger zone" and "Make sure no one is in danger zones when test is on".
Reference was then made to the "ten commandments of safe pipe plug operation" set out in the document, including, as the first commandment, "always stay out of danger zone". Other references to the same admonition were also referred to. The following passages were quoted:
"The danger zone exists in front of the plugged pipe opening in an area which expands outwardly in a cone shape."
"The danger zone shown applies to normal usage conditions. If other structures such as pipes, walls or other objects are treated in the danger zone, ricochet effects can increase the foreseeable zone of danger."
"Never enter into the foreseeable danger zone when a pneumatic plug is inflated even if no backpressure exists in the pipe."
The judge referred to evidence of Mr Hodson, Eire's site supervisor, clearly acknowledging this "danger zone" and that "he instructs employees at the compressor end to move out of the danger zone"; also that he had, in the past, had a restraining device (in the nature of a cage) attached at the compressor end during testing to prevent an ejected plug coming into contact with a worker. There was then further reference to Mr Hodson's evidence:
"[66] He discounted the need for such a device in the pit essentially on the basis that one would not expect anyone to be within the pit at the time testing is being carried out and also on the basis that the risk is reduced as the testing was low pressure rather than high pressure testing. Further that the safety issues of inserting such a device in the pit would expose employees to an unnecessary risk of injury. He conceded, however, that such a device could be attached in a safe manner that is not exposing employees to unnecessary risk if given the time to do so."
The judge continued:
"[67] It is plain that there is a significant risk of injury if a worker is in the pit at the time of testing for the reasons referred to in the documentation and indeed on the concessions made by Mr Hodgson. It is, as I understand the evidence, for that reason the pit should be closed off and warning signs exhibited to prevent people entering to avoid being struck by a dislodged plug.
[68] A simple precaution to prevent injury was available which was disclosed when Mr Hodson was being cross-examined by Mr Mulvey on the (SWMS) and the accompanying safety booklet.
[69] The following exchange took place:
"Q. Halfway down the page where it says 'bring line up to test pressure' one of the management or safety controls is to make sure that no one is in the danger zone when testing is on?
A. That's correct.
Q. That was Eire's responsibility wasn't it?
A. That's correct.
Q. Because Eire had control of the testing and knew when the various pipes were being tested. Is that correct?
A. They do have control of the testing, yes.
Q. Certainly, you would agree that the way in which, to ensure that nobody is in the pit in the danger zone was to make a visual inspection for the top and give a signal to the person testing to say the pit is clear.
A. That's correct.
Q. That was never done was it?
A. I can't say that. I wasn't present at the time of testing.
Q. Was it Eire's usual practice to undertake such a procedure to ensure that no one was in the danger zone?
A. That's correct. That is standard practice when testing.
Q. To have someone standing, for example at the top of the pit looking in to make sure that there was no one in it?
A. No. it would - you'd do an inspection before you put on pressure to make sure no one is in it so you could leave the area then go over to the test pressure where your testing the -
Q. Certainly in the time that you left the area to go and operate the machinery to do the testing, it is possible that someone may enter the danger zone, isn't it?
A. That's possible yes.
Q. I'm just asking you - I'm posing a hypothetical, that if someone had entered the danger zone in the time that the person had left the danger zone to start the testing, they could be injured as a result of being in that area.
A. Yes that's correct.
Q. And a simple way to prevent that occurring would be to have someone standing at the pit to give a signal to the person who is operating machinery to start testing, to say 'danger zone clear, there is no one in it?
A. Yes that's correct.
Q. To your knowledge that was not done in this incident was it?
A. No it's not."
Then came the central findings concerning liability of Eire:
"[71] If an inspection of the pit had been carried out prior to the last test commencing it is obvious the plaintiff would have been detected and directed to leave the pit and the danger zone.
[72] I am of the opinion that the failure to check whether there was any one within that danger zone at the time of testing amounts to a breach of the duty of care owed to the Plaintiff.
[73] If such a system had been implemented and maintained there was no real need for a restraining device to be attached at the pit end of the pipe. Human nature being what it is, however, there are often lapses in systems with workers failing to follow instructions. It is to that end that a restraining device has its real benefit in that it ensures that a worker will not be injured if for whatever reason he finds himself ih the danger zone.
[74] The evidence of Mr Hodson does not suggest that such a device would be unduly expensive and he conceded that it could be installed safely if given the time. There is no suggestion that such time would be unduly disruptive or involve inappropriate expenditure. The documentation referred to recommends such a device in enclosed areas having regard, inter alia, to the risk of ricocheting."
The crucial factor in the finding of liability on the part of Eire was thus Eire's failure to carry out a physical inspection of the round pit immediately before the application of pressure to ensure that no one was within the "danger zone" acknowledged by Eire's own statement of safe work methods. The judge's finding of the absence of the warning tape played a part in this finding.

The basis for the finding on liability - Reed

The decision concerning liability of Reed was, in substance, contained in the following paragraphs of the judgment:
"[88] Further I am of the opinion that Reed ought have been aware that testing was about to take place. In this regard I accept the evidence of Mr Kelly that Michael Peters witnessed the testing, the same person who had directed the Plaintif to enter the pit not long before the accident.
[89] In those circumstances in my opinion there was a corresponding duty upon Reed, in particular Michael Peters, to make sure that the Plaintiff was out of the pit bearing in mind that it was at his direction he was in there. The direction to enter the pit effectively placed him in the danger zone.
[90] Although it was the responsibility of Eire to carry out the testing of the pipes Reed was the head contractor with overall responsibility for safety on the worksite. It ought have been plain to Reed of the risk of injury when testing pipes by the method adopted.
. . .
[93] The burden upon Reed simply to ensure that no one is within the pit at the time of testing is not unduly burdensome particularly having regard to the fact that Mr Peters was the person who had directed him to work in the pit."
Two particular factual matters were thus seen by the judge as pivotal to the finding of negligence by Reed. The first is that, according to the judge's findings, Michael Peters of Reed had made a direction or request that the plaintiff enter the round pit. The second is that Reed was aware that pressure testing was being carried out at the relevant time, that the testing program had commenced on 21 May 2007 at Reed's direction, that it was a requirement that a Reed employee witness this testing and that Mr Peters of Reed, on the unchallenged evidence of Mr Kelly, in fact witnessed the particular testing in question.
It may be said at once that the findings on the second matter regarding the presence of one or more Reed representatives when the testing occurred and Reed's awareness that testing was being conducted were soundly based. In addition, there were clear and solid grounds for an inference that Reed, through its observers, was aware of precisely what the testing entailed and the dangers it presented. That, coupled with the on-the-spot participation by Reed personnel and the role of Reed as head contractor with overall responsibility for the site, was sufficient to give rise to a well-based expectation that Reed would concern itself with observance and implementation of proper safety precautions. The judge found that, for these reasons, Reed was subject to a duty corresponding with that of Eire, being a duty "to make sure the plaintiff was out of the pit" - or, somewhat more accurately, to make sure that no-one was in the pit when pressure was applied. His Honour also said (at [90]):
"Although it was the responsibility of Eire to carry out the testing of the pipes Reed was the head contractor with overall responsibility for safety on the worksite. It ought have been plain to Reed of [sic] the risk of injury when testing pipes by the method adopted."

The basis for apportionment between Eire and Reed

This matter was dealt with in the judgment as follows:
"[120] Mr Spartalis submitted that liability be apportioned 50% to the Plaintiff and 5% to Eire and inferentially 45% to Reed. He relied upon the following factors:
The Plaintiff was not carrying out any work on behalf of Eire;
The Plaintiff was under the direct control and supervision of Reed;
That it was open to Reed to have a second person on the top to ensure no one was accessing or in the pit at the time testing was carried out;
That Reed employees were aware of the pipe testing and witnessed the pipe testing;
That Reed was responsible for the overall safety of the site;
That Reed was negligent by directing the Plaintiff to enter the pit.
I am of the opinion that Eire should bear the major responsibility for the accident it being the company which had responsibility of testing the pipes and implementation of a safe system for pipe testing to be performed. Its own documentation contains ample and repeated warnings concerning the danger zone and precautions that ought be taken. The precautions referred to in Mr Mulvey's submission were practical which if implemented would have avoided the accident.
[121] Reed also bears a significant proportion of responsibility upon the basis of it having overall responsibility for the safety of the site, being aware that testing was to take place and in those circumstances directing the Plaintiff to enter the pit."
Part of the "safe system of pipe testing" for which Eire was thus found to be responsible was no doubt the installation of warning tape. And the direction or request that the judge found to have been made by Mr Peters of Reed was a significant factor in the assessment of the degree of responsibility to be attributed to Reed.

The basis for the finding of no contributory negligence

The decision on contributory negligence was stated by the judge as follows:
"[123] I am of the opinion that the Defendants have not established that the Plaintiff was guilty of contributory negligence. In that regard he was merely doing what he was instructed to do by Mr Peters on behalf of Reed. Further I am not satisfied that the warning tape was in place at the time the Plaintiff descended into the pit. Accordingly there will be no deduction from the Plaintiff's verdict on account of contributory negligence."
The absence of warning tape and the direction or request made by Mr Peters were significant factors in the assessment reflected by this part of the judgment.

The crucial matters

In the light of the primary judge's analysis and reasoning regarding liability of both Eire and Reed, their respective degrees of responsibility and the absence of contributory negligence, only two of the findings referred to at [137] above require attention: first, the finding that the warning tape was not in place when the plaintiff entered the round pit; and, second, the finding that the plaintiff was directed or requested by Mr Peters of Reed to enter the round pit.
None of the other matters at [137] above was material to the reasoning on liability issues. Such error, if any, as may have attended fact-finding on those other matters was therefore not operative error in relation to the liability conclusions.

The warning tape - assessment

The tape was in place at the entrance to the round pit when Mr Hodson took photographs ten or twenty minutes after the plaintiff emerged from the pit. In addition, Mr Kennett's evidence warrants a conclusion that the tape was in place when, immediately after the test failed, he went to the round pit and saw the plaintiff there.
For the reasons I have stated, the statement in Exhibit B that there was "[n]o signage restricting access" must be ignored. The question of precisely when it was, before the plaintiff's emergence from the pit, that the tape was installed thus fell to be decided on the evidence of the plaintiff and Mr Kelly.
Even when Exhibit B is ignored, the judge was, in my view, fully entitled to find that the tape was not in place when the plaintiff entered the pit. The plaintiff's evidence to that effect is not contradicted by Mr Kelly's evidence which is equivocal as to timing. Mr Kelly gave three different versions of when he installed the tape. According to one of them, the tape was not put up until after the testing equipment had been installed in the square pit, that is, after the plug had placed in the round pit and Mr Kelly had left that pit with his equipment, walked to the square pit, made preparations there and returned to the round pit to put up the tape. There is no reason why that version is inherently less plausible than either of the others. According to that version, there was a period while Mr Kelly was absent from the round pit after installing the plug and before installing the tape during which the plaintiff could have entered that pit.
The co-existence of the three possibilities put forward by Mr Kelly, the fact that none of those is inherently more or less likely than either of the others, the consistency of one of the versions given by Mr Kelly with the possibility that the plug was installed in the round pit some time before he put up the tape, the possibility that the plaintiff entered the pit between the installation of the plug and the installation of the tape and the plaintiff's own evidence that there was no tape in place when he entered the pit, taken together, are sufficient to justify the finding that the judge made on this matter.
To this there is one possible qualification that must now be addressed. The finding concerning the placing of the tape was closely allied with the finding that, as the plaintiff testified, no "lid" was in place when he went into the pit. It is therefore necessary to consider the reliability of that related finding.
Mr Kelly's evidence on the matter and the implications of what he said are set out at [134] above. Mr Kelly spoke of a "cover". The plaintiff spoke of a "lid". I am prepared to think that the various references to a "cover", "platform" and "lid" meant different things to different people. The photographs show a cover or platform with a manhole through which a person could enter the pit by way of a ladder. It is quite consistent to speak of a "cover" or "platform" being in place and, at the same time, to say that there is no "lid", in the sense of something on top of the manhole. Statements that someone in the pit could not see if a cover or platform or lid were in place suggest reference to an object covering the whole of the opening into the pit so as to block all light. There was no suggestion by any witness that any such object was in place. Mr Kelly's evidence that the "cover" was in place is consistent with the presence of the timber platform through which the open manhole provided access to the pit and allowed light to enter. The plaintiff's evidence of the absence of a "lid" is consistent with precisely the same state of affairs.
I am accordingly of the opinion that the conclusion at [159] above is not detracted from by the judge's findings about the closely related matter of the cover or lid.
The conclusion is that the judge's finding regarding absence of the warning tape when the plaintiff entered the round pit was supported by the evidence and properly reached by the primary judge.

Direction or request by Mr Peters - assessment

According to the plaintiff, Mr Peters of Reed, after a conversation with a person the plaintiff understood to be "Brent" (perhaps Mr Kennett but possibly Mr Hodson: see [35] above), asked him and Mr Jones which of them would give Eire "a hand" at the bottom of the round pit; the plaintiff volunteered in response to this request; and the plaintiff then followed Mr Fitzgerald (an Eire employee) into the pit.
Mr Kennett's evidence was that he did not ask the plaintiff to go into the pit; nor did he ask anyone from Reed for assistance on the day in question. Mr Hodson's evidence was that he did not ask the plaintiff to go into the pit or request Mr Peters for any help in that regard. Mr Jones had no recollection of Mr Peters asking the plaintiff which one of them would go into the round pit to give Eire a hand. Mr Peters was not called to give evidence.
It was an assumption of the plaintiff - it can have been no more - that "Brent" (whether Mr Kennett or Mr Hodson - or, for that matter, someone else) asked Mr Peters to make a direction or request in response to which the plaintiff entered the pit. The plaintiff did not say in his evidence that he heard what passed between "Brent" and Mr Peters in the conversation he observed just before Mr Peters' direction or request to him. The fact that each of Mr Kennett and Mr Hodson, on his own account, made no request for assistance really says nothing about whether Mr Peters made a direction or request to the plaintiff. Mr Peters was a Reed employee. The plaintiff's services were contracted to Reed. Mr Peters could give instructions to the plaintiff without any need for preliminary conversation with anyone.
Mr Jones' lack of recollection of Mr Peters' having asked which of him and the plaintiff would give Eire "a hand" was accompanied by acceptance of the possibility that the question had been asked. He identified Mr Peters as one of three persons who assigned tasks to labourers such as the plaintiff and himself. Mr Jones' evidence is therefore not inconsistent with Mr Peters' having spoken in the way the plaintiff said he spoke.
If, as the plaintiff maintained, the parties to the relevant conversation were Mr Jones, Mr Peters and himself and there is no suggestion that anyone else heard what was said, those three are the only witnesses from whom useful evidence may be elicited. The evidence of the plaintiff and of Mr Jones has been noted. There was no evidence from Mr Peters.
As I have said, Mr Peters was, at the relevant time, an employee of Reed. There was nothing before the judge to indicate whether he continued to be an employee of Reed at the time of the trial. But counsel for Reed, at trial, did not challenge the plaintiff's evidence that he was instructed by Mr Peters to work in the round pit.
It was therefore unexceptionable for the judge to use the absence of evidence from Mr Peters as a source of "comfort" in accepting the plaintiff's evidence that he received a direction or request from Mr Peters. His Honour was implicitly saying that he drew an inference that the evidence of Mr Peters would not have helped Reed. In view of the position taken by counsel for Reed, that inference was available.
The finding that Mr Peters directed or requested the plaintiff to enter the round pit was supported by the evidence and properly reached by the primary judge.
It is true that the judge made reference to Exhibit B in connection with that finding when, for the reasons stated, Exhibit B should have been ignored. But, as has been noted (and the judgment made clear), the judge had reached his conclusion on the matter independently of Exhibit B - added to which, the indication in Exhibit B was a contrary indication, not a confirmatory indication. The judge said (at [46]):
"Insofar as the document [ie, Exhibit B] asserts that there was no RCA [ie, Reed] management instruction, for the reasons earlier referred to, I accept the plaintiff's evidence in this regard that such authorisation was obtained from Michael Peters." [emphasis added]

Conclusions on liability issues

Because the judge's findings on the absence of warning tape and the making of a direction or request by Mr Peters were properly made, important elements of the conclusions on the liability of Reed, the respective degrees of responsibility of Eire and Reed and the absence of contributory negligence are seen to have a firm foundation.
Grounds of challenge in those areas on appeal are not made out. This is particularly so in relation to apportionment between Eire and Reed and absence of contributory negligence when it is remembered that, in each such context, the decision is a quasi-discretionary one so that error of the kind referred to in House v R [1936] HCA 40; (1936) 55 CLR 499 at 504-5 must be found in order to warrant appellate intervention: Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492.
In relation to the question of Eire's liability, the judge relied very heavily - almost exclusively - on the failure to make an inspection of the pit immediately before the application of pressure and, in that and allied respects, to follow safety procedures that Eire itself had clearly articulated. That approach involved no error. The question of Mr Peters' direction or request was not material to the finding of liability of Eire. The question of the presence or absence of the warning tape was of some relevance and the conclusion on appeal in that respect serves to underscore the correctness of the judge's decision on Eire's liability.
In summary, no basis is shown for appellate interference with the judge's decision on Eire's liability, Reed's liability, the question of contribution between Eire and Reed or the question of contributory negligence.

Damages

Eire alleges two errors in the assessment of damages. Both relate to future economic loss. I approach this aspect on the footing that appellate review of an assessment of damages is not warranted unless it is shown that the judge acted on a wrong principle of law or misapprehended the facts or the award is so inordinately high as to be wholly erroneous: Clarence Valley Council v Macpherson [2011] NSWCA 442 at [50], [51].
The first alleged error concerns the finding that it would be ten years before the plaintiff returned to remunerative employment. Eire says that that finding was not supported by any reasoning process and was inconsistent with the evidence. Eire then refers to evidence of Dr Mellor referring to a possible return to work after twelve months after a pain management course.
I am of the opinion that no error is shown. The judge made specific reference to the opinion of Dr Pacey, which he accepted. He was entitled to do so on what was a question of prediction according to informed medical opinion, where the views of medical practitioners may differ. The finding of ten years likely absence from employment was clearly open, based on Dr Pacey's evidence.
The second matter concerns quantification of lost earnings and the selection of $300 per week as the basis for calculation of deferred loss of earning capacity. There is, in this connection, no challenge to the selection of $600 per week or the basis for calculation of total incapacity over the first ten years. What is challenged is the proposition that, even with rehabilitation, the plaintiff will earn only $300 per week, having suffered 70% loss of capacity for the 25 years remainder of his life after the initial ten years.
Eire's contention is that such an approach is "out of proportion to the loss" and that an alternative that Eire prefers should be substituted. As was correctly submitted on behalf of the plaintiff, however, no basis for rejection of the judge's approach and substitution of the result Eire prefers has been articulated and no evidentiary basis for any such alternative has been suggested.
There is one final matter concerning damages. The plaintiff says that if the appeal is dismissed, the trial judge's award for non-economic loss ($190,000 for 38% of a most extreme case) should be increased to $197,500 to reflect the current prescribed damages pursuant to s 16 of the Civil Liability Act 2002.
In Marsland v Andjelic (1993) 31 NSWLR 162, a case involving assessment of damages for non-economic loss under analogous provisions of the Motor Accidents Act 1988, Kirby P and Meagher JA pointed out (at 168) that the maximum amount to be applied for the purposes of the Act increases periodically by virtue of the indexation the legislation directs and that the maximum applicable to a particular case is that in force at the time of judgment. They then said:
"Thus, if this Court were to uphold the appeal and were required to re-assess the appellant's damages the maximum amount to be applied, on re-assessment, would be $211,000."
In that case, however, it was the victim of the accident who appealed. Upholding of the appeal would therefore have entailed substitution of a new judgment for that appealed against. In the present case, by contrast, the victim in whose favour an award of damages has been made is the principal respondent to the appeal and the result of dismissal of the appeal will be that the original judgment remains intact.
In those circumstances, there is no occasion for any re-assessment in relation to non-economic loss of the kind the plaintiff seeks.

Disposition

The appeal by Eire should be dismissed. Eire should be ordered to pay the costs of both the plaintiff and Reed, but with provision for Eire to seek some other order with respect to costs if minded to do so.

The orders I propose are:
1. Appeal dismissed.
2. Order that the appellant pay the costs of both the first respondent and the second respondent.
3. Direct that any application by the appellant for setting aside or variation of the costs order be made in accordance with the rules.
PRESTON CJ of LEC: I agree with the reasons and orders of Barrett JA. However, I wish to add some comments. I will use the same abbreviations as Barrett JA has used.
Neither Eire nor Reed challenged the trial judge's holding that each owed a duty of care to the plaintiff. Eire did, but Reed did not, challenge the trial judge's finding that each breached its respective duty of care. Eire did, but Reed did not, challenge the trial judge's finding of apportionment of 60% to Eire and 40% to Reed. However, both Eire and Reed challenged the trial judge's finding of absence of contributory negligence and the trial judge's assessment of damages.
Eire's challenge to the trial judge's finding of breach of duty was essentially twofold: first, that the trial judge erred in the fact finding process concerning the circumstances in which the plaintiff entered the pit, the presence or absence of danger tape or bunting and the timber pit lid, and the use of Exhibit B and, secondly, if the facts concerning these matters were properly found, they did not support a finding that Eire breached its duty of care having regard to s 5B of the Civil Liability Act 2002 (paras 19, 21, 83 of Eire's written submissions).
As to the fact finding process concerning the plaintiff being in the pit, the presence or absence of the danger tape and the lid, and the use of Exhibit B, I agree with Barrett JA's reasons on these issues and have nothing to add.
As to the finding of breach of duty, I also agree with Barrett JA that, on the facts properly found, Eire was in breach of its duty of care. Furthermore, I do not accept Eire's submission that the trial judge's conclusion of breach of duty of care did not properly address the framework imposed by s 5B of the Civil Liability Act 2002 or that, on the facts properly found, Eire was not in breach of its duty of care having regard to s 5B.
The determination that Eire breached its duty of care has to be made having regard to the terms of s 5B of the Civil Liability Act. This requires, firstly, identification of the risk of harm. The trial judge found, and Eire did not challenge, that the risk of harm was that a worker, who might be in the pit at the time of testing of the pipe, might be struck and injured by a test plug ejected under pressure from the pipe, unless reasonable precautions were taken to prevent that harm (para 67 of judgment).
Next, s 5B(1)(a) requires the determination as to whether the risk is foreseeable. The test of foreseeability of a risk is that stated in Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40 at 47. The evidence established that there was a foreseeable risk of harm to a worker in the pit at the time of testing of being struck and injured by a test plug ejected under pressure from the pipe. Eire's own 'Safe Work Method Statement', referred to by the trial judge (such as at paras 55-63), clearly identified the hazard of the test plug coming out and injuring a worker in the danger zone. Eire did not challenge this finding that there was such a foreseeable risk of harm.
Further, this risk was 'not insignificant' (s 5B(1)(b) of the Civil Liability Act). The trial judge found that there was a 'significant risk of injury' by a dislodged plug if a worker was in the pit at the time of testing (para 67) and that the risk of being struck by the plug was 'not insignificant particularly having regard to the documentation' of Eire (para 75). As the trial judge noted, this significant risk of injury was a reason for Eire's safety documentation stating that precautions needed to be taken, including keeping persons outside of the danger zone when a plug is inflated and using a backup system to safely stop a dislodged plug. Again, Eire did not challenge the trial judge's finding that the risk of harm was not insignificant.
The next question was: what precautions would a reasonable person take against such a foreseeable risk of harm? The trial judge found that a reasonable person in Eire's position would have taken two precautions against this not insignificant, foreseeable risk of harm: first, inspecting the pit prior to the test commencing to detect whether any person was present in the pit and, if so, directing them to leave the pit and the danger zone (paras 71 and 75) and, secondly, attaching a restraining or retention device to the end of the pipe to restrain any dislodged plug and protect any persons who may be within the danger zone (paras 73 and 75).
The question of whether, in the circumstances, a reasonable person would take these precautions against the risk of harm (s 5B(1)(c)) is to be answered considering the factors of relevance in s 5B(2) of the Civil Liability Act. These include the probability that the harm would occur if care were not taken, the likely seriousness of the harm, and the burden of taking precautions to avoid the risk of harm (s 5B(2)(a)-(c)). The trial judge considered each of these factors (para 76). Eire challenged the trial judge's findings as to the first and third factors.
As to the first factor, Eire's submission was that because Eire had already taken reasonable care, by erecting danger tape so that entry to the pit involved crossing the tape (paras 86 and 94 of Eire's written submissions), it was not reasonable to take, in addition, the two precautions found by the trial judge of placing someone at the pit site to be sure no one was in it before starting testing and attaching the restraining device (paras 92, 95, 96 of Eire's written submissions).
As Barrett JA has explained, however, the trial judge's finding that the warning tape was not in place when the plaintiff entered the pit was open on the evidence and was properly reached. This conclusion removes the foundation of Eire's submission that it was sufficient, in order for Eire to take care, to erect the warning tape only.
As to the third factor, Eire submitted that Mr Hodson's evidence was that it was not standard practice to have someone looking into the pit to make sure no one was in it and it was not usual to use a cage or other restraining device (para 92 of Eire's written submissions).
However, the trial judge addressed this evidence of Mr Hodson and concluded that it would not be a burden, in terms of being unduly disruptive or involving inappropriate expenditure, for Eire to take the two precautions that he had found were reasonable, and that Eire's safety documentation had recommended be taken, of placing a person at the pit to ensure no one was in it before testing starting and of attaching a restraining device at the pit end of the pipe (paras 55-77 of the trial judge's judgment). The trial judge's findings in these respects were supported by the evidence and were properly made.
In these circumstances, Eire's challenge to the trial judge's finding that Eire breached its duty of care has not been made out.
Eire's challenge to the trial judge's apportionment of responsibility was dependent largely on Eire's argument that the trial judge erred in the fact finding process regarding breach of duty of care, succeeding (see, for example, paras 20 and 99 of Eire's written submissions). For the reasons given by Barrett JA, Eire's challenge to the fact finding process regarding the finding of breach of duty of care has not been successful. This undermines the foundation of Eire's challenge to the trial judge's apportionment of responsibility. I agree otherwise with Barrett JA's reasoning and conclusions concerning apportionment of responsibility between Eire and Reed and the absence of contributory negligence by the plaintiff.
In relation to both Eire's and Reed's challenge to the assessment of damages, I agree with Barrett JA that no basis is shown for appellate interference.
I agree with the orders proposed by Barrett JA.
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Case Title:	Eire Contractors Pty Ltd v O'Brien
Medium Neutral Citation:	[2012] NSWCA 400
Hearing Date(s):	6 August 2012
Decision Date:	11 December 2012
Before:	McColl JA (at [1]); Barrett JA (at [2]); Preston CJ of LEC (at [188])
Decision:	1. Appeal dismissed. 2. Order that the appellant pay the costs of both the first respondent and the second respondent. 3. Direct that any application by the appellant for setting aside or variation of the costs order be made in accordance with the rules. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	NEGLIGENCE - duty of care - breach of duty - workplace accident - whether facts found by judge adequate to support findings of negligence and decisions on apportionment between tortfeasors and absence of contributory negligence - NEGLIGENCE - damages - future economic loss - whether findings on likely time of return to work and quantification of lost earnings supportable - whether award for non-economic loss should be increased to reflect current prescribed damages - EVIDENCE - workplace accident report - no evidence of authorship - whether report admissible - whether admitted "only against" one defendant
Legislation Cited:	Civil Liability Act 2002 Evidence Act 1995 Law Reform (Miscellaneous Provisions) Act 1946.
Cases Cited:	Australian Securities and Investments Commission v Vines [2003] NSWSC 995; (2003) 48 ACSR 282 Clarence Valley Council v Macpherson [2011] NSWCA 442 House v R [1936] HCA 40; (1936) 55 CLR 499 Johnstone v State of New South Wales [2010] NSWCA 70; (2010) 202 A Crim R 422 Lithgow City Council v Jackson [2011] HCA 36; (2011) 244 CLR 352 Marsland v Andjelic (1993) 31 NSWLR 162 Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492 Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40
Category:	Principal judgment
Parties:	Eire Contractors Pty Limited - Appellant Luke O'Brien - First Respondent Reed Constructions Australia Pty Limited - Second Respondent
Representation
- Counsel:	R S Sheldon SC - Appellant P J Doherty SC/P Biggins/D C Morgan - First Respondent J E Sexton SC/C A Mulvey - Second Respondent
- Solicitors:	McCabe Terrill Lawyers - Appellant Whitelaw McDonald - First Respondent Kennedys Lawyers - Second Respondent
File Number(s):	2010/134538
Decision Under Appeal
- Before:	Colin O'Connor DCJ
- Date of Decision:	07 October 2011
- Citation:	No citation
- Court File Number(s):	2010/134538