Emoleum (Aust) Pty Ltd v Cecil Henry Bond - [2004] NSWCA 352

CITATION: EMOLEUM (AUST) PTY LTD v Cecil Henry BOND & Ors [2004] NSWCA 352

HEARING DATE(S): 15 and 16 March 2004

JUDGMENT DATE:
29 September 2004

JUDGMENT OF: Mason P at 1; Giles JA at 139; Santow JA at 144

DECISION: Appeal upheld in part.

CATCHWORDS: Negligence - safe system of work - whether breach of duty - apportionment of liability amongst tortfeasors - psychiatric illness - quantum of damages - Calderbank offer. (D)

PARTIES :
EMOLEUM (AUST) PTY LTD v Cecil Henry BOND & 3 Ors

FILE NUMBER(S): CA 40554/01

COUNSEL: Appellant: L King SC/ G R Graham
1st/2nd: Respondent: D E Baran
3rd Respondent: J Harris SC/ W Chipchase
4th Respondent: G R Travers

SOLICITORS: Appellant: Culter Hughes & Harris
1st/2nd Respondent: Carroll & O'Dea
3rd Respondent: Sparke Helmore
4th Respondent: Moray & Agnew

LOWER COURTJURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 8795/99; DC 8796/99

LOWER COURT
JUDICIAL OFFICER : Dent DCJ

CA 40554/2001
DC 8795/1999
DC 8796/1999

MASON P
GILES JA
SANTOW JA
Wednesday 29 September 2004

EMOLEUM (AUSTRALIA) PTY LTD v Cecil BOND & 3 Ors

BACKGROUND

Two proceedings were heard concurrently in the District Court, each being a claim for psychiatric injury stemming from the death of Martin Bond. The two plaintiffs were the deceased’s father and mother.

The deceased was employed by a labour hire company, Employment Labour Services Pty Ltd (In Liq) (ELS). His services as a traffic control officer were hired out to Emoleum (Australia) Pty Ltd which was conducting road resealing operations on the Hume Highway. On 14 February 1996 Bond was killed when an aggregate spreader truck, owned and driven by Mr Baker, reversed over him. At the time of the accident Baker had been given a specific instruction by Mr Edwards, an Emoleum employee, to reverse along the route which he was driving. There were no spotters on the back of the truck at the relevant time.

Dent DCJ found that Emoleum was in breach of its duty of care by reason of the system of work that it permitted and the instruction given by Edwards. His Honour found it to be just and equitable that each of ELS and Baker should be held 20% responsible for the damage.

The appeal and cross appeal address four issues arising from the accident:

1. Emoleum and ELS submitted that they had not been negligent as the sole cause of the accident was Baker’s casual act of negligence. They submitted that there was no failure to maintain a safe system of work at the site.

2. Emoleum and Baker each contended that the apportionment of liability against them was too high.

3. Emoleum submitted that the general damages awarded were too high and that the damages awarded for economic loss were unsustainable and/or too high. ELS and Baker adopted these submissions.

4. ELS appealed in relation to costs, submitting that the trial judge had failed to have proper regard to an unaccepted settlement offer.

HELD per Mason P (Giles and Santow JJA agreeing):

1. The attacks on the trial judge’s finding as to safe system fail.

· Emoleum was under a duty to prescribe and provide a safe system of work, similar to that falling upon an employer: Stevens v Brodribb Sawmilling Co Pty Litd (1986) 160 CLR 16.

· ELS’s duty was non-delegable and it stemmed form the employment relationship

· The relevant duty as to safe system is discharged by reasonable care, it is not equivalent to a duty of strict liability or vicarious liability.

· There was ample evidence that Emoleum permitted and encouraged Baker to reverse his truck over lengthy distances.

· The system necessary to be judged was that permitted and directed by Emoleum at the time of the accident when there were no “spotters” available.

2. Apportionment

· The trial judge erred in concluding that Emoleum’s acts were the principal cause of the tragedy. The danger was equally as obvious to both Baker and Edwards. As between Emoleum and Baker, liability should be shared 50:50.

· The 20% contribution awarded against ELS was within the limits of sound discretionary decision.

3. Quantum of damages

· The award of damages was not outside the appropriate range and is justified by the findings of primary fact as to the serious and lasting impact of the accident and its psychiatric sequelae upon the father.

· Merely because one victim might experience certain reactions without suffering psychiatric illness does not establish that they always represent non-compensable components of “ordinary” grief.

· As to economic loss it was well open for the trial judge to accept the accountant’s conclusions that there was a general trend of falling profitability in the plaintiffs’ business.

4. Costs

· ELS’s submissions as to costs are misconceived. The Calderbank offer has no effect on the proper contribution as between Emoleum and ELS.

Per Giles JA (Santow JA agreeing):

· Whether Emoleum failed to maintain a safe system of work on the site was a borderline question, however in the particular circumstances want of reasonable care for the workers on the site has been established.

· The decision on the facts on this case does not mean that all trucks on construction sites must at all times have spotters.

ORDERS

1. In the appeal by Emoleum against Baker:

(a) appeal upheld;

(b) set aside the order made on the second cross-claim;

(c) in lieu thereof, order that Baker contribute 40% in respect of the verdict and costs recovered by the plaintiffs in each action against Emoleum

(d) respondent to pay appellant’s costs and to have a certificate under the Suitors’ Find Act 1951 if qualified.

2. Remaining appeals and cross-appeals dismissed with costs.

CA 40554/2001
DC 8795/1999
DC 8796/1999

MASON P
GILES JA
SANTOW JA
Wednesday 29 September 2004

EMOLEUM (AUSTRALIA) PTY LTD v Cecil BOND & 3 Ors

JUDGMENT

1 MASON P: The appeal and cross appeal address four sets of issues arising out of a young man’s death at the workplace:

1. Whether there were breaches of admitted duties of care;

2. The apportionment ordered among three tortfeasors found responsible;

3. The quantum of damages awarded to the parents of the deceased in consequence of psychiatric illness stemming from the finding as to the appellant’s negligence; and

2 Two proceedings in the District Court were heard concurrently. Each was a claim for damages for psychiatric injury stemming from the death of Martin Bond (the deceased) who was killed instantly when a reversing truck collided with him. The truck was owned and driven by the fourth respondent Mr Baker (Baker).

3 The first and second respondents (the plaintiffs) are the father and mother of the deceased.

4 Since there is no substantial difference between each set of proceedings I confine myself to a description of issues pleaded in the father’s proceedings. Mr Cecil Bond sued Emoleum (Australia) Pty Ltd (Emoleum), the appellant in this Court. He pleaded that the deceased was employed by a labour hire company (eventually identified as Employment Labour Services Pty Ltd (in liq) (ELS)); that the deceased’s services were hired out to Emoleum; that the deceased was undertaking his duties as a traffic control officer at roadworks on the Hume Highway, Bookham when the accident happened on 14 February 1996; that the death was caused by the driving of Mr Baker; and that in consequence the plaintiff sustained nervous shock injuries and ongoing disabilities.

5 The particulars of the negligence pleaded against Emoleum related to its failure to devise or maintain a safe system of work. They were the sort of allegations normally made against an employer.

6 The allegations pleaded would have justified the plaintiff in joining Baker and ELS as defendants. Indeed, the plaintiffs’ decision to proceed against Emoleum alone has involved them assuming the burden of establishing matters additional to what would have been involved in simpler proceedings against a negligent driver involved in a motor accident and a negligent employer. There were advantages to the plaintiffs in framing their case outside the scope of the Motor Accidents Act 1988 or the Workers Compensation Act 1987. The outcome of this appeal will determine whether their apparently calculated risk was justified.

7 Emoleum filed a Defence effectively putting the plaintiff to proof. Emoleum also filed a Cross-Claim against ELS and Baker seeking indemnity and/or contribution pursuant to the Law Reform (Miscellaneous Provisions) Act 1946. (A contractually-based claim against ELS was not pressed.)

8 The proceedings were tried before his Honour Judge Dent QC.

9 In a reserved judgment given on 28 June 2001, verdicts were found for the plaintiffs. Mr Bond’s judgment was for $402,517. Mrs Bond’s judgment was for $191,725. Each cross defendant was ordered to contribute 20% to Emoleum’s liability to pay damages and costs to the plaintiffs.

Circumstances of the accident

10 The following facts were found or clearly established in the evidence.

11 The accident occurred at about noon on 14 February 1996. The weather was fine.

12 Emoleum was conducting road resealing operations on the Hume Highway, at a point known as Conroy’s Gap. Two of the three lanes of traffic were closed to enable them to be resealed. The third lane (to the west) was being shared between northbound and southbound traffic that alternated as directed by traffic controllers. The controllers were positioned at each end of the single lane and communicated with each other by two-way radio. The path to be followed by traffic as it entered, proceeded along and exited from the single lane was marked by “witches’ hats”.

13 The resealing work involved specialised vehicles spraying the existing sealed service with liquid bitumen, specialised heavy trucks spreading crushed aggregate and specialised road-rolling or compacting machines. There were approximately 18 people working on the site on the day of the accident. These included the drivers of three other trucks similar to Baker’s and the drivers of two or three “multi-rollers”.

14 There was a representative of the Road and Traffic Authority (RTA) whose function appears to have been to ensure that the work was done in the right location and generally according to RTA specifications.

15 The resealing work was supervised by Mr Edwards, Emoleum’s asphalt foreman. His duties were to supervise the employees and subcontractors involved in the resealing work at the particular site. He had worked for Emoleum for 17 years. Work commenced at about 8.30am with him assigning men to different tasks, starting with the marking out of the portions of roadway to be closed off with witches’ hats. It would appear that the specialised trucks were operated at the site by owner-drivers under sub-contract to Emoleum. It is however clear that they worked under Edwards’ general supervision (see eg Black 90, 116); and, in the case of Baker, under his direct supervision in so far as Edwards operated the spreader at the back of Baker’s truck.

16 Baker was a self-employed truck driver who owned and operated a spreader truck that laid aggregate. It was between six and seven metres long. The spreader box at the rear projected an extra six inches on either side beyond the tray. When aggregate was being spread, the truck followed another truck that sprayed liquid bitumen. Baker’s truck would be driven in reverse, laying a carpet of crushed aggregate over the sprayed surface. By proceeding in reverse it avoided disturbing the applied liquid bitumen with its tyres before the aggregate had been laid on it. The flow of aggregate onto the sprayed bitumen was controlled by two persons operating gates at the rear of the truck.

17 Those persons could communicate with Baker by an intercom system operating between the driver’s cabin and the rear of the truck. Any necessary instructions as to the speed and direction of the reversing truck could be conveyed through that intercom system. People on the back simply had to speak to be heard by Baker: Baker had to press a button in the cabin to speak to them (Black 111-112). Baker said that the intercom was used to let the driver know what was happening (Black 119) and “where there is trees or power lines as a safety issue” (Black 111). This intercom system had been installed by Emoleum and was maintained at Emoleum’s expense (Black 122).

18 On the day of the accident resealing work was being done over 800 metres of roadway. The two men operating the spreader box at the rear of Baker’s truck were Mr Edwards and Mr Winner, another employee of Emoleum.

19 There were three “flagmen”, Mr Michael Moy who was the senior man, his son Marcus and the deceased. The deceased was aged 22.

20 The flagmen had completed an RTA approved course and had a ticket in traffic control. They were employed by ELS, which was based in Gundagai and managed by Mr Chris Smith. Mr Smith had conducted the course, which took about 3-4 hours (Black 135).

21 At the beginning of the day, the flagmen laid out the witches’ hats that designated the open lane and the way that traffic tapered into it from the north and south. When resealing work commenced, a flagman was positioned at either end and there was one in the centre whose purpose was to slow down traffic. Mr Moy snr had been the southern end flagman until shortly before the accident. The flagmen were rotated in location throughout the day.

22 The flagman also worked at the site under the general supervision of Mr Edwards (Black 137, 154-155, Red 46). They received no safety briefings from Emoleum (Black 127, 135).

23 The accident occurred not long after Baker had finished spreading a run at the northern end of the works. The judge found that Edwards told Baker to reverse down to the start of the job at the southern end to get ready for another northern run (Red 42M). Baker reversed down the eastern laneway over work that had been resealed that day or the day before (Black 110). He stopped his truck at Edwards’ direction to enable Edwards to get out near his utility parked at the southern end of the roadworks close to the eastern laneway. Edwards and Winner got off the back of Baker’s truck.

24 Baker continued to reverse another 15-20 metres to where he hit the deceased.

25 The traffic was moving north in the available lane at the time of the accident. The collision occurred in the eastern lane, which meant that the deceased must have walked across from the western to the eastern lane (Black 121) after releasing the long line of northbound traffic (Black 153).

26 Although the police were promptly called to the site there was no evidence about its exact location vis a vis the place where the deceased would have been standing when directing traffic. The plan roughly-drawn by Baker in the witness box (Blue 145) was not to scale. Baker said that the accident was very nearly at the southern end of the area that the traffic controller had marked out on the day of the accident, and he agreed that it was where you would expect a traffic controller to be (Black 100-1). There was evidence from Mr Moy snr that suggested that the accident was considerably closer to the tapering of the line of witches’ hats than indicated in Baker’s sketch (Black 130).

27 Baker was called as a witness by the plaintiffs. He described the accident from his perspective, admitting that he could have done more to prevent it happening.

28 Baker’s evidence, accepted by the trial judge, was that Edwards asked Baker to drop him at his utility and turn around. He reversed down to the utility with Edwards and Winner at the back of the truck. Edwards advised or told him to “find a safe spot to turn around and get ready to start the next lane”. Winner got off at the same time as Edwards (Black 118). Baker testified that after he had reversed past Edwards’ utility there was no one around to signal him. He explained that he could not see out the back of his vehicle and could only avail himself of that degree of visibility that was provided by side mirrors on either side of the truck (Black 94).

29 Baker’s truck was capable of being driven forwards, and it was a matter of choice that he always drove it in reverse (Black 110). He said that the truck was always in reverse at the site (Black 94), giving the somewhat cryptic explanation that “the rollers were up the top, in front of me” (Black 91). The truck had reversing lights and a warning beeper/horn.

30 There was still half a load of aggregate on Baker’s truck when Edwards and Winner were dropped off near Edwards’ parked utility (Black 118). The direction to reverse down to a “safe spot” for turning was given because of the practice of not twisting the tyres on recently laid roadway, as this section was (Black 102, 118, 156-7). The particular spot was a parking bay that had been used before on the day of the accident (Black 112). On the previous occasions Edwards had stayed on the back of the truck as it reversed down, turned and came back up to the north (in reverse) (Black 112-113. See also 134). The apparent purpose of dropping Edwards off on the occasion immediately before the accident was to enable him to move his utility to a different spot near where the next spreading run was to take place, where he would get back onto the truck (Black 120, 124, 125).

31 Baker had observed the deceased when he started his last reversing movement. He knew that the deceased was somewhere behind him but that he had lost sight of him. He could not see through the back window of the cabin, but had to use the side windows and rear mirrors (Black 94). He agreed in cross-examination that he did not stop and check (although he could have), but watched behind him using both mirrors. He could have enquired as to his whereabouts using CB radio contact with the traffic controllers, but he didn’t do so. Unfortunately he did not see the deceased before the passenger side rear of the truck and passenger side wheels had passed over his body (Black 106-9). Baker’s mirrors only showed a person fully behind his vehicle “a long way behind” (Black 108). There was a significant blind spot, as indicated in a drawing he made when interviewed by the police shortly after the accident (Black 109, Blue 146).

32 The reversing lights and beeping horn were operating on Baker’s truck. This was, however, a generally noisy worksite. Mr Moy said that “it’s just beeping all day long and you just automatically shut them out” (Black 155. See also Black 133). How the deceased came to be struck remained a matter for inference or speculation. Indeed, there was no evidence clearly explaining why the deceased was at the point where the accident occurred.

33 Baker said that he had reversed in this particular fashion at the site before, and that he had never been told not to (Black 110). Moy’s evidence was to similar effect (Black 134). Baker’s conversation with Edwards at the point where Edwards was dropped off was in fact an implicit direction to continue reversing down to the “safe spot”, made in a context where Baker would (to Edwards’ knowledge) be doing so without the advantage of having someone standing at the back of the truck who could see clearly and communicate with him, if necessary.

34 Emoleum did not dispute that it owed a duty of care to the deceased arising from its position as the entrepreneur controlling the various activities at the site.

35 Dent DCJ found in effect that Emoleum was in breach of its duty of care by reason of the system of work that it permitted and the instruction given by Mr Edwards. His Honour reached this conclusion in a context where Edwards was not called as a witness, nor was his absence explained (cf Jones v Dunkel (1959) 101 CLR 298).

36 The nub of the reasoning as to Emoleum’s negligence was as follows:

[Baker] was driving pursuant to an instruction [from Edwards] to reverse further down the hill to a point where he could safely turn the vehicle around and reverse it back up the hill. This was being done to Mr Edward’s knowledge without the benefit of anybody on or at the rear of his vehicle spotting for him.

It is trite knowledge conforming with the experience of mankind that driving a vehicle backwards, or driving with the driver’s vision obstructed, poses special dangers, and the awareness of those dangers is reflected in the Regulations for Traffic. Regulation 90(1)(b) decrees that a driver on a public street “shall not cause the vehicle to travel backwards for a greater distance or time that may be required for the safety or convenience of any person”. Schedule (f) to those Regulations, Clause 73, prescribed the ideals that rear vision mirrors are to meet up to. Regulation 119(a) deals specifically by way of prohibition that driving a vehicle on a public street that is so constructed, etc as to prevent the driver to have a sufficient view of traffic on either side of the vehicle, and all directions in front of the vehicle, to enable him to drive the vehicle with safety.

….

I am satisfied from the evidence of Mr Baker that driving in reverse without a spotter on the intercom system at the rear of the truck, or without a walking offsider, was a permitted practice at this work site, and in my judgment an essentially dangerous practice, and that what happened to the deceased in the circumstances of the subject accident was an accident waiting to happen.

….

The work performed by the deceased and by Mr Baker was work that could as readily be done by employees, given that heavy vehicles were moving about the work site at the same time as pedestrian employees were on it and about it. There was a risk of injury to the pedestrian employees, and there was a need for [Emoleum] to give instructions as to when and where the work was to be done and to co-ordinate the various activities. The permitting, and in this case requiring the driver of a heavy vehicle to drive in reverse with limited vision to his rear available form the side mirrors only of the vehicle, required the establishment of a system of either spotters advising the driver reversing his vehicle, and/or the effective communication to a person liable to be or in fact in the intended path of the reversing vehicle, of a warning to get out of its way. Such a system was not adopted and given the fact that all parties at the site were equipped with two-way radios, and that Mr Ian Thomas Edwards and another were potentially available to act as spotters for Mr Baker whilst proceeding in reverse, there existed a reasonably practicable alternative safer system for the system of work otherwise in place. This failure to act on the part of

was in my view a negligent omission on its part, and it caused the injury and death of the deceased, and was a breach of duty of care to the plaintiffs.

37 Later in his reasons the judge reaffirmed that:

… The death of the deceased was not the consequence of a casual act of negligence of an independent contractor to

, but rather caused by

failure to devise, institute and maintain a safe system for the performance of the work in which the deceased was expected to engage.

38 Emoleum’s cross-claims were then addressed with a view to seeing, in the first instance, whether ELS owed a tortious duty of care to the deceased.

39 Dent DCJ found that there was a contract for reward to ELS from Emoleum to supply ticketed traffic controllers to work at Emoleum’s site at Conroy’s Gap. It was clear that the deceased was in the general employ of ELS throughout. His Honour correctly observed that the obligations flowing from that contract were personal to ELS, non-delegable in the sense that the duty of discharging the obligation to take reasonable care for the employee in the course of his employment could not as between employer and employee be transferred to a third party (see generally Kondis v State Transport Authority (1984) 154 CLR 672, Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28 at [34]).

40 The primary judge also found that “the traffic controllers were under the de-facto direction of [Emoleum] whilst performing their duties of employment at [Emoleum’s] work site.

41 That Mr Baker was under a general duty of care was never in doubt. Dent DCJ concluded that he had been negligent (Red 53H). The reasons were not spelt out at that stage of the judgment, but they had been made crystal clear in the judge’s recounting of Mr Baker’s evidence generally (Red 42-45).

42 Having concluded that each of the cross defendants were tortfeasors who would, if sued, have been liable to the deceased, Judge Dent then addressed the issue of apportionment.

43 As to Emoleum, he said (Red 53-4):

I have found that this accident as between the deceased and the defendant was caused by the defendant’s failure to maintain a safe system of work at the site. I have found that the collision between the reversing truck and the deceased was caused by

foreman, not only permitting but directing its driver, Baker, to proceed in reverse and without assistance south down the work site, to a point where it could be safely turned around and reversed back up to the north to lay further aggregate. In a real sense those acts and omissions of

were the principal cause of this tragedy.

44 As to Baker, his Honour said that Baker:

… was a skilled truck driver contracted into performing duties under

direction at the work site. He was unquestionably aware of the risk that at a critical time he could be reversing his truck towards a person or object that had come into its intended path, unobserved by him, as he could not be watching both side mirrors at the same time and his attention was directed to driving that vehicle in a parallel course to the edge of the carriageway and spotting a safe point at which he could turn the vehicle, so as to reverse its direction. This danger did not arise from a want of skill on his part as a driver, but from the circumstances in which he was placed, in which his field of vision was restricted to that which was visible by the alternative viewing of mirrors on either side of the cabin of his truck, and the bulk of the rear of his truck, as shown in the Exhibits, further restricted the field of vision available from those mirrors. He had to know that a risk of collision existed unless he was aided by the observations of another person enjoying relatively panoramic vision in the direction of intended travel of his vehicle, or by some other means. We cannot know what would have been available to him had he asked for a spotter, but the fact is that he did not ask. The potential danger would have been as obvious to him as it was to Mr Edwards when he issued his direction to him, but he did not ask for the assistance appropriate in the circumstances.

45 Addressing ELS’s comparable responsibility, the judge said that:

… it was not Mr Smith’s

practice to go to an Emoleum site and check that a system existed to ensure that safe work practices were devised, instituted and maintained. There does not seem to be room for drawing an inference as to the nature of this accident, other than the opinion expressed by the witness, Moy, that the accident had nothing to do with traffic controlling; that it was a work site accident.

From

viewpoint, it would have to be said that it was hiring its workers into an operation conducted by a substantial road resurfacing entrepreneur which secured contracts with the RTA on behalf of the State of New South Wales to resurface the Queen’s highway, and it is known that an RTA representative was at the site to determine the area to be closed off and worked upon on a daily basis, and, it would seem, to keep an eye on the quality of the work being performed by Emoleum. In such circumstances it would seem to me that a general employer such as the first cross defendant takes a business risk that the entrepreneur or de-facto employer will perform the obligations that the general employer otherwise would be required to personally perform. The general employer is also taking the risk that the party to whom it hires its employees may be insolvent and without effective public liability insurance. Under the laws of the State the general employer is by statute required to maintain insurance cover against its liability to pay statutory compensation to its employees, and be covered for liability arising other than under the Workers’ Compensation Act. It is easy enough to mount a philosophical argument that the burden of the disaster should fall entirely on the employer, as between it and the entrepreneur for failure of the general employer to discharge its non-delegable obligations, but such an argument in my view does not pass through the testing process of what is just and reasonable in the circumstances. It may well be that the only way for the general employer to effectively protect itself from liability in the circumstances of hiring out its employees is to put in position a person whose task it is to observe and enquire, and make sure that safe working practices had been instituted and are being maintained in the working situation; that is to act in the role of a quasi shop steward and withdraw the services of the general employer’s staff when dissatisfied in that area of concern. Such action was not taken in this case, and I would be surprised that it is taken in other hirings, but one cannot overlook that the employer’s duty is personal, and the failure to discharge it personally can fairly be had regard to in the process of attribution of contribution to the damage sustained.

46 His Honour concluded that Emoleum bore the majority of responsibility for the damages sustained in the accident. He found it just and equitable that each of the cross defendants should be held 20% responsible for the damage. Each of Baker and ELS were accordingly ordered to contribute 20% to the liability of Emoleum to pay damages and costs to the plaintiffs.

47 Damages were then addressed. I shall return to the details when addressing the damages appeal issues. Costs were dealt with at a later hearing. Once again, I defer setting out the details.

Issues in the appeal and cross appeal

48 Emoleum has appealed, contending that it ought not to have been found negligent. It submitted that the sole cause of the accident was Baker’s casual act of negligence. Emoleum was supported by ELS on this issue.

49 Alternatively, Emoleum submitted that a much higher contribution should have been ordered as against ELS and Baker.

50 In his cross appeal, Baker contended that the apportionment against him was too high.

51 As to damages, Emoleum submitted that the general damages were too high and that the damages awarded for economic loss were unsustainable and/or too high. The respondents Baker and ELS adopted these submissions.

52 ELS has advanced a cross appeal in relation to one aspect of costs as between it and Emoleum.

Did Emoleum and ELS breach their duties of care?

53 Emoleum does not dispute that its entrepreneurial role at the site imposed upon it a duty of care similar to that discussed in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 31. This was a duty to prescribe and provide a safe system of work similar to that falling upon an employer (see per Mason J at 31). Arguably, a similar duty derived from Emoleum’s relationship with the deceased, which was akin to that of a “special employer” (cf TNT Australia Pty Ltd v Christie & Ors [2003] NSWCA 47, Rockdale Beef Pty Ltd v Carey [2003] NSWCA 132). It is unnecessary to pursue this, given the proper concession as to the former duty.

54 ELS’s duty was non-delegable and it stemmed from the employment relationship.

55 The relevant duty as to safe system extends to the provision of safe equipment, but it remains a duty that is discharged by reasonable care. It is not a duty of strict liability, nor is it equivalent to a vicarious liability.

56 Emoleum and ELS submit that the sole operative cause of the deceased’s death was the casual act of negligence of Mr Baker, something for which they bear no legal responsibility unless there was also a failure to provide and maintain a safe system of work. The appellant cited Pro-Krane Pty Ltd v Nobbs NSWCA unreported, 15 November 1996. ELS also submitted that it was not responsible for Mr Edwards’ “casual act of negligence” (CA Tr p81).

57 Emoleum further submitted that the primary judge erred in defining the standard of care which was required of it in the circumstances.

58 Upon analysis, these submissions challenged the conclusion that there was a failure to maintain a safe system of work at the site. This conclusion was based upon primary findings as to Baker being permitted to drive in reverse without a spotter on the intercom system at the rear of the truck, or without a walking offsider. It was submitted that, in the absence of evidence as to a previous similar accident, it was not unreasonable to entrust reversing to Baker, who was a competent and experienced driver operating a truck that emitted warning noises and flashing lights when reversing. Furthermore, Baker had the capacity to communicate with the deceased himself using the CB radio in the vehicle that enabled contact with the traffic controllers.

59 In my view, the attacks on the trial judge’s findings as to safe system fail.

60 The deceased was an inexperienced traffic controller who was under the control of Emoleum at the site, but who received no safety instruction from this source.

61 There was ample evidence that Emoleum permitted and encouraged Baker to reverse his truck over lengthy distances. This was not confined to the situation where aggregate was being spread. Working under the direct supervision of Edwards, Baker had reversed for hundreds of metres down to where Edward’s utility was parked. Indeed Baker had been instructed by Edwards himself to continue reversing as far as the “safe spot” before turning in order to reverse back up to the north to where further spreading would take place.

62 There was probably nothing unreasonable about such practice as long as Baker had persons on the back of the truck who could keep an eye open and communicate readily with him using the intercom installed by Emoleum itself.

63 But the “system” necessary to be judged was that permitted and directed by Emoleum at the time of the accident, when there were no “spotters” on the back of the truck. There was evidence from Mr Moy snr that backing without spotters was commonplace (Black 134). More to the point, it was the very “system” directed by Edwards after he and Winner had got off the truck.

64 Edwards was an Emoleum employee, but this does not mean that his conduct can be ignored by ELS simply characterising it as a “casual act of negligence”. To do so would be to ignore the non-delegable nature of ELS’s duty of care as well as the realities of a situation where ELS put its employees under the general supervision of Edwards (cf TNT Australia Pty Ltd v Christie at [45]-[70]).

65 Baker was unable to see through the window at the back of the cabin. The wing-mirrors provided restricted coverage of the space behind the truck. This in turn was unsafe equipment for any system that involved prolonged reversing without spotters in a noisy and distracting environment.

66 The possibility of pedestrians being about was acknowledged by Baker both generally and specifically, in so far as he saw the deceased through the rear mirrors before losing sight of him as he continued to reverse.

67 Emoleum points to that part of the system that included the flashing light and beeping horn on the truck as it reversed. But more was required in the circumstances, in my view. There was an obvious risk of casual inattention on Baker’s part and of the attention of pedestrians (such as the deceased) being distracted in a perpetually noisy work site. The very fact that Baker’s truck would have been reversing more often than not as it moved up and down this section of road ran the risk that pedestrians, especially workers engaged in their own or their employers’ affairs, might not hear or observe the approaching truck in time to get out of the way.

68 The primary judge’s conclusion that there was “an essentially dangerous practice, and that what happened to the deceased in the circumstances of the subject accident was an accident waiting to happen” was one with which I agree.

The challenges as to apportionment

69 Emoleum next challenged the apportionment awarded in its favour against Baker and ELS. In the Notice of Appeal these challenges were framed as errors of law, but the submissions made it plain that this part of Emoleum’s appeal involved the factual issues discussed above. There was also a compendious attack on the percentages awarded (20% against each of Baker and ELS) on the basis that they were manifestly inadequate.

70 As regards the contribution sought against Baker, Emoleum contended that Baker’s conduct in continuing to reverse when he had lost sight of the deceased, without contacting him through the two-way radio system was the sole effective cause of the death. I do not accept this submission, but I do agree with Emoleum’s alternative submission that the order requiring Baker to contribute only 20% cannot be justified. In particular, I disagree with the primary judge’s conclusion that (in the context of apportionment as between Emoleum and Baker) Emoleum’s acts were the “principal cause of this tragedy” (par 43 above). In his Honour’s words, “the potential danger would have been as obvious to [Baker] as it was to Edwards” (par 44 above).

71 If, as I hold below, the 20% contribution ordered against ELS should stand, then a fair apportionment as between Emoleum and Baker would be 50:50. In the circumstances this translates into an order that Baker should contribute 40% towards Emoleum’s liability to the plaintiffs as regards damages, interest and costs.

72 As regards ELS, Emoleum contended that the employer (ELS) should have done more than providing a short video to train its workers before sending them out into the field. ELS’s manager was Mr Smith who operated from his home at Gundagai and provided very little guidance or supervision on site. Mr Moy snr had the most experience of the three ELS workers assigned to this particular project and it was also suggested that he should have done more to alert the deceased about the relevant dangers.

73 Emoleum’s appeal against ELS was matched with a cross appeal from ELS that contended that 20% was too high. The nub of ELS’s submission was that further training would not have prevented this particular accident and that a “body hire” company (if that was a fair description of ELS) is entitled to look to the employer/supervisor on site to provide and ensure a safe system. The trial judge did not find any independent breach of duty on the part of ELS. ELS’s liability to the plaintiffs was based upon Emoleum’s fault and stemmed from the non-delegable nature of its duty of care as the deceased’s employer.

74 Earlier in his reasons, Judge Dent QC stated that he found “illuminating” the decision of James J in White v Malco [1999] NSWSC 1055. That was a case involving a “body hire company” (Skilled Engineering Pty Ltd), described in the judgment as the “general employer”. The plaintiff sued what was described as the “entrepreneur, his de-facto employer”, being the entity which controlled the work site where the plaintiff was injured (cf Emoleum). James J found it just and equitable that Malco should be 80% responsible and Skilled Engineering 20% responsible for the plaintiff’s damage. Malco had effectively full control of the place of work, the devising of the system of work to which the plaintiff would be subjected and the provision of the equipment with which the plaintiff was to work. The reason why the judge held that Skilled Engineering should not be completely indemnified by Malco was that “Skilled assumed the position of an employer and then did nothing for the safety of its employees” (at [532]).

75 Both Emoleum and ELS complained about the trial judge’s reasoning and the analogy he drew between the present case and that discussed in White v Malco.

76 Senior counsel for Emoleum, Mr L King SC, correctly submitted that each apportionment decision must be based upon its own facts and context. Seeking a greater contribution from ELS than the 20% awarded, he submitted that TNT Australia Pty Ltd v Christie “is not a darg” (CA Tr p27).

77 Conversely, senior counsel for ELS, Mr Harris SC, argued that it was unjust that his client was required to contribute at all given that the actual fault lay solely with Emoleum. It was further submitted that ELS was not a “body hire company” and that it had done all that was reasonable to train its employees and to ensure that the work environment into which they were placed was a safe one.

78 In my view the apportionment awarded as between Emoleum and ELS lay within the limits of a sound discretionary decision.

79 ELS complained that it had suffered the same apportionment as the significantly careless driver, Mr Baker. This was not just and equitable, even if his negligence was not (as Emoleum had submitted) the sole operative cause of the deceased’s death. The orders I propose as against Baker changes this matrix, but does not invalidate the apportionment awarded against ELS. The gravamen of ELS’s complaint is that a site inspection by the deceased’s supervisor in Gundagai (Mr Smith) would not have disclosed the likelihood of a departure from usual practice by Mr Edwards directing Mr Baker to back his truck without the visual assistance of the spotters usually placed on it.

80 I consider it is unproductive to debate the extent to which ELS qualified for the label of “body hire company”. It is difficult to envisage any such entity that provides no information or training for its employees. It is true that the deceased was sent to the site with two other ELS employees, one of whom (Mr Moy snr) appears to have had some limited oversight. But the reality of the situation was that the three controllers turned up at the site and put themselves under the control of Emoleum, the entity that was co-ordinating the activities at the site. The unfortunate accident was not the product of some misapplication of a traffic controller’s skills within his core duties.

81 These observations do not in my view preclude apportionment against ELS, at least to the level awarded by the primary judge. As I pointed out in TNT Australia Pty Ltd v Christie (at [67]):

In my view, it would be contrary to principle to enable or even to encourage an employer that operates a labour hire business to treat the normal incidents of the employment relationship as modified simply because its employees are sent off to work for a client. Indeed, the very fact that the employees are dispatched to external venues and placed under the de facto management of outsiders will, in some cases, have the practical effect of requiring the employer to adopt additional measures by way of warning or training in order to discharge its continuing common law duty of care to its employees.

82 It was open to ELS to have done more to ensure the safety of its employee. The unsafe workpractices of the “special employer” (Emoleum) was patent. The submission that there was no causal link between the minimal “training” provided by Mr Smith and the accident is rejected.

Emoleum’s damages appeal

83 Damages were awarded as follows:

MR BOND MRS BOND

Pain and suffering $140,000 $100,000
Interest at 2% for 5 years
and 4.5 months on 30% $ 5,017 $ 3,225
Financial loss to date $ 90,000 $ 30,000
Interest at 5% for 3 years $ 13,500 $ 4,500
Future impaired earnings $150,000 $ 50,000
Future medical intervention $ 4,000 $ 4,000
TOTALS $402,517 $191,725

84 Emoleum appeals against the awards for non-economic and economic loss. ELS adopted its submissions on these matters.

85 Before addressing the submissions, it is appropriate to record the substratum of unchallenged findings of primary fact as to the impact of the accident upon the deceased’s parents.

86 Mr and Mrs Bond had a daughter and two sons, one being the deceased. Mr Bond was born in 1945, Mrs Bond in 1950. They were long-term residents of Gundagai. Before the accident, they had secure and happy family and business lives.

87 Mr Bond was a motor mechanic/auto electrician who had followed his father’s footsteps. There were deep roots in the Gundagai community. In 1993 Mr and Mrs Bond commenced business in partnership. They incorporated that business as Bond Motors Pty Ltd in 1994. They were equal shareholders and drew equal earnings, partly as wages, partly as directors’ fees. Each worked in the business. Mrs Bond’s duties were clerical, but far from nominal, including taking phone calls, reception, doing accounts, receiving payments and the like.

88 Before the accident Mr Bond was, in his Honour’s words, “a well-adjusted happy person with … a sound business base”. He was a tournament golfer and enjoyed fishing, hunting, camping and the like. The deceased was his special companion. Mr Bond was captain of the local State Emergency Service.

89 The deceased lived at home. He enjoyed a close and loving relationship with his parents. His covered body was at the scene when his father arrived after a drive of some 75 kms. Mr Bond was not allowed to identify his son, nor was Mrs Bond permitted to see the body. Apparently the injuries were thought to be too horrific.

90 The learned primary judge held that Mr Bond’s “emotional responses to the tragedy were a combination of shock, horror, sadness, anger and confusion”. In the longer term the impact was lasting and profound. Dent DCJ said (Red 59W-61X):

A typical country man, he sought to bear his grief burden on his own shoulders, and sought no professional help. Regrettably he was unequal to that task and his continuing and unalleviated grief profoundly changed him as a person. Internalisation of his problem was so profound that he could not even discuss the accident or his late son with his wife. Mr Bond’s grief plagued him by night and by day. In the course of the day, things and incidents would remind him of his late son and he would break down and cry. Through the nights his sleep was disturbed by flashbacks or nightmares in which he saw his son being crushed by a truck. His appetite became indifferent. His work concentration and motivations were badly affected. He largely withdrew from the society of his fellow man outside of his business, even to the extent of enjoying their company after work at the pub or playing golf. He became a person who was in his words cranky and given to saying things he did not mean. The changes in the man were obvious to his local general practitioner, Dr Mark Spalding, who reported on 26th November 1998, inter alia: “He has the wide-eyed ‘startled look’ of vigilance when he talks to people, an expression that was not present before the accident”. As a witness he presented with a flat effect, given to quite genuine tears at times, as he was forced by the hearing to recount his time of sorrow. He was unable to perform as captain of the State Emergency Service in Gundagai after the accident; a role that he had performed for many many years, and he has now relegated himself to the position of a safety officer. A non drinker, he used his bus driver’s licence to drive his fellow golfers, but his loss of confidence in himself is such that he decided not to renew that licence. He personally does not feel safe enough as a bus driver to renew it.

On the whole of the evidence I interpret that the profound effect that the accident had upon the plaintiff was compounded by the wall of silence he met as to its cause, and by what seemed to him to be an unsatisfactory police investigation of the accident, and coroner’s finding. The wall of silence was doubtless erected on the direction of those concerned by the potential for legal claims.

…

He, throughout, has struggled on at his business looking after customers that have been loyal to him, but in my finding, working far less efficiently, plagued by a loss of self confidence and memory to the point where he by way of exemplification in evidence explained that he had to go to a customer’s home in the middle of the night to check that he had tightened up the bearings of a vehicle that he had returned to the customer, as he could not remember whether or not he had done so. He has since the tragedy visited his son’s grave in Gundagai several times a week, and for relaxation has taken to fishing on his own. He has lost interest in the sexual side of his marriage, but remains his wife’s friend. It was not until some twelve months after the accident that medication intervention was prescribed by Dr Spalding, his general practitioner, and medication was thereafter progressively increased to maximum dosage to permit the plaintiff to sleep without nightmares.

91 These findings were well open to his Honour, based upon his observation of the witness and the medical evidence summarised at Red 62-3. The judge concluded (Red 63):

He is a genuinely and obviously distressed, depressed, sick person, and given the length of time he has been affected, I do not think it would be reasonable on the entirety of the evidence and medical evidence to conclude other than that his present condition probably represents a stabilisation of his problems, and that no significant improvement is going to occur in the future.

The sense of injustice from which he has suffered may or may not be relieved by my findings in his case, but I think it unrealistic to find that his deep seated grief and sadness will ever be relieved, and it is more probably than not that his loss of efficiency as a functioning human being is a permanent one.

92 As well as contending that the award of general damages was appealably excessive, Emoleum submits that the judge erred in failing to exclude the impact of non-compensable factors referred to in Mr Bond’s evidence. Mr Bond agreed that he was unhappy that the Coroner did not apportion any blame to the driver; he was angry that no one had said they were sorry; he had a continuing heightened sense of anger. These factors affected the way in which he was coping with the overall circumstances (Black 50). Emoleum invokes the principle that “ordinary” grief and anguish flowing from the death of a loved one are not compensable, even for victims of “nervous shock” (Masri v Marinko [1998] NSWSC 467, Marinko v Masri [1999] NSWCA 364 (2000) ATR ¶81-501).

93 This evidence about Mr Bond’s feelings does not reveal that the assessment exercise miscarried or that the damages awarded were appealably excessive. It is far from clear whether the judge was asked to isolate and exclude these matters as non-compensable. Indeed, it is very debatable whether Emoleum and ELS can show that it would have been wrong to have treated these matters as symptoms of the psychiatric disturbance. Merely because one victim might experience these reactions without suffering psychiatric illness does not establish that they always represent non-compensable components of “ordinary” grief.

94 No evidence was led or submissions advanced at trial about segregating out the components now relied upon as non-compensable. It follows, the plaintiffs submit, that the Court should not infer that these matters were erroneously taken into account by the primary judge. Furthermore, the evidence of Dr Phillips, a psychiatrist called by Emoleum, was to the effect that “psychological symptoms” manifested themselves from the earliest time (Blue 59). Indeed, they stemmed in part from the way that the plaintiffs were shielded from the reality of their son’s horrific injuries from the earliest time.

95 The plaintiffs also point to a passage in the reasons (Red 69-70) indicating that his Honour recorded and accepted a submission that the anxiety and depression of the surviving children, triggered by the tragedy, was not compensable in Mrs Bond’s case even though these factors created an added burden for her.

96 I would accept these submissions of the plaintiffs. The particular challenges to the award of general damages are rejected.

97 Mrs Bond learnt of the fatal accident in stages, as friends tried to shield her from the enormity of the horrific event. Dent DCJ found (Red 65-67):

Since his death all those years ago she has visited the cemetery five days a week on her way to work. She cuts the grass around his grave with scissors, and is relieved a little by this experience. She went back to work in the garage three to four days after the tragedy, because she could not be at home. Her state was such that she could not do her written clerical duties. She used to shake too much. In that immediate period other people were visiting the business, and offering comfort and condolences. She started seeing general practitioners in about May, and she still does, and she feels that she needs to talk approximately every two months. She does this when she feels she is not coping, and she receives reassurance from the talking. She has been medicated since seeking medical help and she is still medicated, but she still suffers problems despite that medication. She continues to suffer from disturbed sleep, has to get up in the night and watch television for two hours. She suffers from what she described as “silly” dreams, and she has to wake up and walk around. Her concentration has been impaired since her son’s death. Her social life with her husband has been affected. She is not enthusiastic about going out because she encounters happy people with entire families. Her visits to her general practitioners are on days when she can no longer “handle it”. She cries and feels frightened, and she goes to friends or to the cemetery.

Prior to the tragedy she had worked longer hours than nine to five in the family business, and she enjoyed working there together with her husband. Since the tragedy, whilst she is there every day, there are weeks in which for days she simply does nothing. If she tries to perform her full pre-tragedy load of work, she walks away from it. Her marriage has suffered. The sexual relationship between her husband and herself ceased at the tragedy. From the medical reports it would seem that a mutual loss of interest has occurred. The marriage nearly ended at one point because her husband was so cranky and angry, and on her pointing out that it must break up, she described her husband as having “picked up a bit”. She observes that since the tragedy, her husband who was previously an enthusiastic long hours worker in his business, has become a person that she has to push to go to work on occasions. She testifies that the husband could do a lot more work than he does, but he is “abstracted like he is a thousand miles away”. She found attendance at the coroner’s inquest a stressful occasion, and wishes that she had not gone.

Her present emotional state is not good, although her other two children are a help to her, having moved closer to home to assist her. She is satisfied that she presently could not cope without her medication. She still cries and can’t stop crying, has to get out of the house, see a friend have a cup of tea, or go to the Doctor to talk. She suffered, I am satisfied, no serious health problems prior to the accident other than high blood pressure which she suffered from for many years. She describes her other son and daughter as “still hurting”, and the fact that her husband never talks to her about the accident is something that she finds very difficult, and feels it would help her if he talked. She has suffered physical problems since the tragedy, such as intermittent bouts of constipation and blurred vision which comes on only when she is really stressed. Family occasions which used to be happy from her point of view, are not, because they bring back unhappy memories. She instances a family wedding in 1997. She believes that she has been eating more since the tragedy, and has found that formal counselling does not help her, but rather stirs her up for weeks. She is still blocking the tragedy out and has done so since the accident. Her being able to go to work is of assistance to her, as customers and friends drop in for a chat. When she has the shakes and cannot write her daughter prepares the company’s accounts for her. She pushes herself and her husband to go out to the local RSL club. On some days the experience is a good one, other days not. She believes that she can ventilate her feeling better than her husband, and she finds that attending church each Sunday is of assistance, although she does not talk to her priest about her problems. She believes her son’s death will affect her until she dies, and accepts that the litigation has been a source of concern to her.

98 The supporting medical evidence is recorded at Red 67-9. In light of it the finding was well open that Mrs Bond had suffered a recognisable psychiatric injury with ongoing symptoms.

99 Emoleum submits that the trial judge erred in refusing to reduce Mrs Bond’s damages for pain and suffering because of her husband’s failure to discuss the tragedy. Once again it was contended that this breached the principles discussed in Masri. Judge Dent said that the husband’s difficulty was:

because he is a fellow victim of the tort feasors. The submission is logically unappealing and is rejected.

100 I would reject this submission. The matter was not raised in the examination of the medical experts. The passage just quoted deals with the factors contributing to the extent and duration of Mrs Bond’s psychiatric illness. That one such factor would be the tort-induced reaction of her husband does not break any chain of causation relating to Mrs Bond’s separate illness or otherwise relieve the tortfeasors from the obligation to compensate Mrs Bond for the psychiatric components of her reaction to her son’s death.

101 Emoleum also submits that Mrs Bond’s award of $100,000 for general damages was appealably excessive. She has had little medical treatment. She has continued to attend work in the family business daily, although her interest and efficiency were reduced. There were indications that, by the date of trial, she and her husband had begun going back to the RSL Club once a week.

102 In my view these factors do not establish that the award was outside the appropriate range. It is justified by the findings of primary fact as to the serious and lasting impact of this accident and its psychiatric sequelae upon this plaintiff. Contrary to Emoleum’s submission, Mrs Bond required and received extensive psychiatric treatment between May 1996 and 2000 (Blue 67-8). Regrettably, the long term prognosis remains gloomy (Blue 76-77).

103 The claims for economic loss were presented through the written and oral testimony of Mr Rossetto of Furzer Crestani Services, chartered accountants. It was formulated on the basis of loss of earnings that would have accrued through the family business on the basis that it would have continued for the balance of Mr Bond’s working life. The plaintiffs’ only source of income was the family business from which all net profits were drawn out equally, partly as wages and partly as directors’ fees.

104 Dent DCJ effectively translated the primary findings about the impact of the death upon the parents into findings that the business had suffered, and with it the plaintiffs’ earnings. This was in consequence of the plaintiffs’ inability to devote themselves constantly or with enthusiasm to a business that obviously required application, self-confidence and cheerfulness to maintain and develop essential goodwill. As regards Mr Bond the judge held (at Red 71) that:

On the evidence I am satisfied that the psychiatric ill health suffered by the plaintiff had a variety of negative effects on his earning capacity. They are:

1) A loss of drive and motivation.

2) A loss of self confidence in and away from the workplace.

3) A withdrawal from the natural goodwill generating activities of competitive golfing and captaincy of the SES and the society of his fellow humans generally.

4) A change in personality presentation to that of a sad person given to irrational angry outbursts and prolonged periods of distraction, as particularly described by his wife.

The above factors alone are sure to strain the loyalty of his customer base. It can be fairly found on the evidence that his personal work output reduced, and he slowed down in performance. The work manuals for modern vehicles have long set the hours in which specific tasks are expected to be done, thus establishing fairly standard prices for overall jobs. A slowed down mechanic taking longer than the standard time is thus losing money, and there are only 24 hours in a day. The plaintiff until late 1999 had the benefit of the services of an employee mechanic who is a nephew. That assistance is now lost. Mr Rosetto’s analysis, Exhibit A, and his oral evidence confirms the above state of affairs.

105 As regards Mrs Bond, Judge Dent accepted that her share in what he described as “her husband’s bounty” had reduced in the same fashion as his. Her present actual earnings were held to be roughly representative of what she might achieve in other employment if uninjured. Since however those earnings were below what she would have derived (uninjured) through Bond Motors Pty Ltd and since it was found that Mrs Bond’s “present deficiencies” were contributing in some measure to the downturn in fortune of that company, an entitlement for damages for economic loss was established (Red 75).

106 These findings were but the prelude to difficult assessments of the dollar value of past and future lost earning capacity. At trial, the defendants’ representatives cross-examined the plaintiffs seeking to establish that declining profitability was caused by demographic factors rather than (exclusively) the tortiously-induced disabilities. In this Court Emoleum and ELS submitted that the trial judge failed to give due regard to this factor.

107 I would reject this submission. The trial judge accepted that Gundagai had declined over the years as a country commercial and trading centre. It had been by-passed by the highway. Its Ford dealership, Gundagai Motors, had closed and moved to Tumut. These and other matters capable of explaining declining profitability of the business (at least in part) were taken into account in the evaluative exercise (see Red 70T-71B, 72J-K). His Honour nevertheless concluded that customer loyalty in a country setting, the unique mix of Mr Bond’s “basket of skills” and his determination to cope with pre-existing orthopaedic limitations meant that it was open to conclude that the post-accident decline in sales and profits was the product of the psychiatric disabilities. These conclusions were well open on the primary facts. Mr Bond’s evidence supported these conclusions (see Black 47-8).

108 No evidence was led by the defendants as to the level of economic impact of the Highway by-passing Gundagai. The point was merely put to Mr Bond in cross-examination. His answers provided material on which the judge was entitled to rely indicating that the family business would have continued to earn profits at the 1996 level had it not been for the impact of the accident upon the plaintiffs’ capacities to work in that business.

109 Mr Rosetto’s methodology and calculations are set out in a report dated 8 February 2001 (Blue 114). Slightly revised calculations were tendered during his oral evidence (Black 160). His primary sources of information were the personal tax returns of the plaintiffs and the partnership and company profit and loss statements for the years ended 30 June 1994-2000 together with a schedule of monthly sales of the company for the period 1 July to 30 June 2000. At the end of the day the primary figures were not in dispute (CA Tr p32). The challenge in this Court focussed upon the conclusions extrapolated by Mr Rosetto.

110 The primary judge accepted Mr Rosetto’s evidence, with one qualification. In light of Husher v Husher (1999) 197 CLR 138, the judge concluded that the equal division of net profits of the business between husband and wife did not truly reflect their respective earning capacities pre-accident (Red 75-6). There were also findings to the effect that Mr Bond’s depressive illness was more profound and lasting, with greater impact on earning capacity than that of Mrs Bond.

111 These conclusions are reflected in the 3:1 ratio adopted in the awards for past and future economic loss (above). This apportionment as between husband and wife is not challenged in the appeal. The attack was directed at Mr Rosetto’s conclusions as to the total loss, past and future, incurred by the business in consequence of the disability suffered by its two principals. The submission in a nutshell was that economic loss was not proved (CA Tr pp38, 42).

112 Mr Rosetto applied various factors as to labour charges and mark-up on the cost of materials. He concluded that:

(a) gross sales per annum declined each year from 30 June 1996 to 30 June 2000;

(b) the actual growth profit ratio had fluctuated each year by between 44% and 52%; and

113 Past and future economic loss was then calculated by reference to estimated sales and gross profit ratio on two alternative scenarios:

Scenario 1: The average of the years ended 30 June 1998 - 2000

114 I had difficulty in understanding all of the grounds upon which senior counsel for Emoleum pressed the challenge to the awards for economic loss. The Court was referred to blocks of evidence, sometimes without enunciation of the principles contended for. At one stage there was a clear indication that no challenge was pressed as regards the primary figures that Mr Rosetto received from the plaintiffs or their accountants and which were used as the basis of his calculations (see CA Tr p32). In the main, the attack was directed at Mr Rosetto’s methodology, although this was said to suffer from being inextricably linked with the assumptions he made (cf CA Tr 36). This latter submission contained a hint of a challenge to the assumptions themselves. Since however the trial was conducted on the basis that the information in the tax returns and profit and loss accounts was accepted, it would be unjust to permit these assumptions now to be departed from.

115 It seems to me that it is no answer for Emoleum to point to the plaintiffs’ evidence acknowledging that they had “no idea” (Black 37, 79) why there appeared to be marked fluctuations in the monthly receipts for the business from time to time. The plaintiffs’ difficulties in this regard did not relieve the trial judge of the duty to wrestle with the objective material. His Honour drew conclusions based upon trends identified by Mr Rosetto and the primary findings as to the psychiatric impact of the accident upon the plaintiffs’ capacity to function.

116 The main attack appears to be grounded upon the expert’s inability to explain monthly departures from a general trend of falling sales revenue otherwise demonstrable in the raw figures. However, Mr Rosetto relied on the annual figures (Black 186-7).

117 Another point was that there was no dropping off of sales in the four months immediately following the death of the deceased when one would have expected the earning capacity of the parents, Mr Bond in particular, to have been most affected. However, that could have reflected payments received for work earlier done, and Mr Rosetto’s figures claimed no loss before 1 July 1996. It was therefore a matter for the judge, not the accountant, to assess whether the favourable pattern of sales during this short period somehow destroyed the calculations for the later period based as they were upon Mr Rosetto’s contestable methodology and the trial judge’s acceptance of the evidence of the plaintiffs about the impact of their illnesses upon their ability to work.

118 One particular submission related to the role of the plaintiffs’ nephew who was working in the family business at the time of the accident and who did not leave until late 1999. Emoleum submits that his presence as a remunerated employee tends to negate the plaintiffs’ case that Mr Bond was pushing work away because he was unable to cope. In this Court at least, comment was made about the plaintiffs’ failure to call their nephew as a witness.

119 Mr Rossetto had also assumed that the nephew left his employment in the family business because work declined. Mr Bond said that he left the employment because “I was too cranky and he just left for a better job I presume” (Black 12). Mr Bond’s answer was said to be contrary to the expert’s assumption, but this is far from clear.

120 The role of the nephew and the reasons why he left his employment in 1999 seem not to have received any real attention when the plaintiffs gave their evidence. It surfaced in the cross-examination of Mr Rossetto, as part of a challenge asserting that he relied upon what he was told by the plaintiffs to infer falling profits.

121 In this Court Emoleum points particularly to the following evidence by Mr Rossetto:

Q. It would be a matter of absolutely fundamental evidence to know whether they were working at full capacity before this unfortunate accident because if Mr Bond dropped off his hours a little afterwards, the other employee may well have taken them up, that’s the position isn’t it?

A. That’s possible but you’ve got to take into consideration when you do that assessment that the work is still coming in and not being pushed away as a result of Mr Bond’s condition.

Q. You may accept it that there’s been no evidence given that Mr Bond has knocked back work. He has said that he works less hours. Now if you’re going to try and draw any conclusions from these hourly figures, before you can even begin you have to know the relevant working relationship between Mr Bond and what hours the employees do mustn’t you?

A. Well that’s true but my analysis was done also on the basis that Mr Bond was pushing work away.

Q. Well put that to one side. If you put that to one side that’s obviously a very relevant matter isn’t it?

A. Absolutely yes.

Q. And indeed if one had an employee to whom you were paying wages it would be a peculiar thing indeed to be pushing work away if he was available to do it? I mean that’s obvious commonsense isn’t it?

A. Well that would be a factor coming into account yes.

Q. Well you can accept as you did when you prepared your report that Mr Bond had a nephew working for him up until September 1999 but then he left and obtained a better job, now that’s what you assumed isn’t it?

A. Yes except I don’t go through as to whether he was there for the full year for the year ended 30 June 1996.

Q. Well if you’re doing these hourly figures, why on earth didn’t you ask that question?

A. Because I was looking at it as a business as a whole rather than as individual people.

Q. But if you know that there’s two mechanics, be it full time or part time working there, one of whom is Mr Bond, then if you’re going to say that a drop in turnover is due to Mr Bond’s inability to work you’ve got to know how much the other man was doing, how much slack he took up, surely?

A. Yes but you must remember that I prepared this on the basis, and also assumption, that Mr Bond was also pushing work away.

Q. Well if you take that assumption out that obviously has a major effect doesn’t it?

A. It would have an effect yes.

(Black 180)

122 These passages form portions of a general attack on the expert. Some of it related to the period ending 30 June 1996 for which no economic loss damages are claimed. Some related to the later period, in which Mr Rossetto pointed to declining turnover which he attributed to decreasing working hours by the psychiatrically-injured principals.

123 Mr Rossetto agreed that no trend could be detected from the monthly figures, but he stuck to his guns that the annual figures demonstrated this hypothesis. The correctness of his mathematics turned on the raw figures, which included the payroll deductions for the nephew’s wages. The expert’s views were not undermined by a possibly mistaken assumption as to the reasons why the nephew ultimately left his employment.

124 As regards economic loss, the plaintiffs submit that there was ample evidence that the accident affected Mr Bond’s attitude to work. He did lesser hours and started to “pick and choose [his] jobs” (Black 11).

125 In my view, the findings that the death of the deceased had a significant impact upon the earning capacity of the plaintiffs, Mr Bond in particular, have not been undermined. But this is not the end of the matter because the focus shifts to the question whether that diminished earning capacity translated into economic loss to the level found by the trial judge. This challenge also fails, in my opinion. The judge considered and rejected the submissions that demographic factors and competition from other businesses in Gundagai accounted for at least some of the falling business and falling profitability. As indicated, these conclusions were open on the evidence and have not been shown to be erroneous. Mr Rosetto’s analysis established a general downwards trend in the business after 1 July 1996.

126 As the plaintiffs point out, the expert adopted the conservative approach of assuming that that profitability would have remained constant had it not been for the accident.

127 At the end of the day there is no serious issue as to the mathematics of the Rosetto report. Not surprisingly, the graph rises and falls at different points. It was nevertheless well open for the trial judge to accept Mr Rosetto’s conclusions that there was a general trend of falling profitability. The critical issue became that of attributing its cause. As the case was fought, this turned upon the challenge to the evidence of the plaintiffs (supported as it was by the medical experts) as to the negative impact of the accident upon their capacity to sustain a business that depended in part upon diligent application and cheerfulness as key elements in sustaining goodwill. The trial judge was satisfied that the plaintiffs had established that their psychiatric condition had affected the profitability of their business. I am unpersuaded that his Honour erred.

ELS’s cross appeal on costs

128 When the trial judge came to costs as between Emoleum and the two cross-defendants he addressed two unaccepted settlement offers relevant to the exercise of the costs discretion.

129 First, he dealt with an offer made by Mr Baker on 16 November 2000. Mr Baker’s written submissions in this Court express some dissatisfaction with the orders made and foreshadowed an application for leave to cross-appeal. But no summons was filed and no such order was sought at the hearing in this Court.

130 ELS also made a Calderbank offer which Judge Dent addressed in the following terms:

Mr Chipchase, for the first cross-defendant, playing a very careful hand, was able to point out that a Calderbank offer was made late on the afternoon of 4 June 2001 offering to contribute in the amount of twenty [one] percent this being once again one percent more than was found against his client in my final judgment. Mr Graham for the cross-claimant argued that

it was given at that point in time it was an unreasonable imposition upon the cross-claimant to try and consider the merits of it and that it ought to be disregarded in accordance with authority cited for the purpose of examining where the burden of costs should fall. The authority cited referred to a situation where the offer was made inclusive of costs, thus forcing a party considering it into all sorts of calculation as to what the offer really meant. That was not the offer made here. It was an offer to contribute twenty-one percent by Calderbank letter which remained opened until the end of evidence and was not accepted.

The orders that I make there are that the cross-claimant pay the first cross-defendant’s costs from 5 June 2001 and that the first cross-defendant pay the cross-claimant’s costs until 4 June 2001.

131 ELS’s ground of appeal is expressed as follows (Red 90):

On the costs issue he failed to give any or any proper consideration of when and to what extent the Cross Appellant commutated

its offer of compromise to the Appellant (Defendant) prior to the close of evidence and address.

132 I do not understand the thrust of the complaint embodied in this ground.

133 According to ELS’s written submissions, its offer to Emoleum to contribute 21% towards the damages, costs and interest recoverable by the plaintiffs against Emoleum was made on 28 May 2001, the first day of the eight day trial. ELS submitted that the costs discretion miscarried, with the explanation

His Honour erred in ordering that the third respondent contribute 20% of the plaintiff’s costs against the appellant as defendant when the judgment delivered by his Honour was less favourable to the appellant than the offer of 20% made on 28 May, 2001. Had the appellant accepted the third respondent’s offer, the third respondent would not have been a party at trial and no order for the plaintiff’s costs would have been made against it. His Honour’s costs Order failed to pay proper regard to the principle established by

Calderbank v Calderbank

134 Senior counsel for ELS told this Court that he relied on his submissions (CA Tr p89).

135 The terms of ELS’s Calderbank offer have not been put before us. If the trial judge is correct, the offer was made seven days later than the date stated in ELS’s submissions.

136 However, that is not the real problem. It will be seen that the submission was directed to the order for costs as between Emoleum and ELS. That order seems to have given effect to the Calderbank offer, because Emoleum had to pay ELS’s costs from 5 June 2001. Rather, the submission was directed to the substantive order whereby ELS was ordered to contribute 20% “to the liability of the defendant to pay damages and costs to the plaintiffs”: that is, to pay to Emoleum 20% of the costs Emoleum had to pay to the plaintiffs.

137 The submission is misconceived. The Calderbank offer had no effect on the proper contribution as between Emoleum and ELS. The misconception is underlined by considering what would have happened if Emoleum had accepted ELS’s offer. ELS would have had to pay to Emoleum 21% of the costs Emoleum had to pay to the plaintiffs.

138 Accordingly, the following orders shall be made:

(a) appeal upheld;

(b) set aside the order made on the second cross-claim;

(c) in lieu thereof, order that the second cross-defendant (Baker) contribute 40% in respect of the verdict and costs recovered by the plaintiffs in each action against the cross-claimant (Emoleum);

Suitors’ Fund Act 1951

139 GILES JA: The circumstances of this tragic accident are described in the reasons of Mason P, which I have had the advantage of reading in draft. With the following additional observations, I agree with his Honour and with the orders proposed.

140 Whether Emoleum failed to maintain a safe system of work at the site was in my view a borderline question.

141 The men on the backs of the spreader trucks were there to operate the mechanism for depositing aggregate and to watch out for power lines and trees as the trucks were tipping. The trucks commonly reversed down the roadway after a spreading run, without anyone on the backs acting as “spotters”. Mr Edwards and Mr Winner seemed to have remained on Mr Baker’s truck on this occasion in order to get back to Mr Edwards’ utility, not as spotters. Whether Emoleum should have ensured that there was a spotter on the back of each truck, or otherwise accompanying it, as it reversed down the roadway depended on the risk to others on the site.

142 The spreading operations were at the northern end of the site, not currently on the length of roadway traversed by the trucks as they reversed. While there were a number of men at the site, there was no specific evidence that they were occupied on the length of the roadway traversed by the trucks when reversing, as distinct from where the spreading operations were being carried out. The deceased’s duties called for him to be on the western laneway, and no one could explain why he moved to where he was struck down. There was scanty evidence of risk to others on the site in Mr Baker’s reversing.

143 I have nonetheless concluded that, in the particular circumstances, want of reasonable care for the workers on the site was established. The generalised evidence of men at the site left it that they could be occupied on, or travelling over, the length of the roadway traversed by the trucks – the positioning of Mr Edwards’ utility gives some support for this. The turning area to which Mr Baker’s truck was heading was close to the southern traffic control area, where a worker would certainly be. There was evidence that the noise of traffic meant that a trucks’ reversing beeper was not particularly noticeable. This meant that, a driver in Mr Baker’s position having imperfect rear vision, he should have been directed not to go unaccompanied to the turning area with its proximity to the traffic controller and perhaps others, directed to communicate with the traffic controller to ensure that his way was clear, or provided with a spotter for such part of the reversing and turning as brought him into proximity with the traffic controller. The decision on the facts of this case does not mean that all trucks on construction sites must at all times have spotters.

144 SANTOW JA: I agree with Mason P and the additional observations of Giles JA.

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Last Modified: 09/29/2004

CITATION:	EMOLEUM (AUST) PTY LTD v Cecil Henry BOND & Ors [2004] NSWCA 352
HEARING DATE(S):	15 and 16 March 2004
JUDGMENT DATE:	29 September 2004
JUDGMENT OF:	Mason P at 1; Giles JA at 139; Santow JA at 144
DECISION:	Appeal upheld in part.
CATCHWORDS:	Negligence - safe system of work - whether breach of duty - apportionment of liability amongst tortfeasors - psychiatric illness - quantum of damages - Calderbank offer. (D)
PARTIES :	EMOLEUM (AUST) PTY LTD v Cecil Henry BOND & 3 Ors
FILE NUMBER(S):	CA 40554/01
COUNSEL:	Appellant: L King SC/ G R Graham 1st/2nd: Respondent: D E Baran 3rd Respondent: J Harris SC/ W Chipchase 4th Respondent: G R Travers
SOLICITORS:	Appellant: Culter Hughes & Harris 1st/2nd Respondent: Carroll & O'Dea 3rd Respondent: Sparke Helmore 4th Respondent: Moray & Agnew

LOWER COURTJURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 8795/99; DC 8796/99
LOWER COURT JUDICIAL OFFICER :	Dent DCJ