Ian Sutton v Erect Safe Scaffolding (Australia ) Pty Limited and Anor

[2006] NSWDC 118

CITATION:	Ian Sutton v Erect Safe Scaffolding (Australia ) Pty Limited and Anor [2006] NSWDC 118
HEARING DATE(S):	2-5 December 2006
JUDGMENT DATE:	14 December 2006
JURISDICTION:	Civil
JUDGMENT OF:	Goldring DCJ
DECISION:	Verdict for the plaintiff in the sum of $663 369.97.; Verdict for Cross-claimant on Cross-claim.
CATCHWORDS:	Negligence - Contributory Negligence - Indemnity
LEGISLATION CITED:	Workers Compensation Act 1987
PARTIES:	Ian Sutton (Plaintiff) Erect Safe Scaffolding (Australia ) Pty Limited (First Defendant/Cross-Defendant) Australand (Regency) Pty Limited (Second Defendant/Cross-Claimant)
FILE NUMBER(S):	4948 of 2004
COUNSEL:	P. Hennessy SC and M. Perry (Plaintiff) D. Cutler (First Defendant) J. Stewart (Second Defendant)
SOLICITORS:	Taylor & Scott (Plaintiff) McCulloch & Buggy (First Defendant) Ebsworth & Ebsworth (Second Defendant)

JUDGMENT

1 On 21 October 2002, the plaintiff, Ian Sutton, was working as a sub-foreman and leading hand for his employer, Dalma Formwork Services Pty Limited (henceforth “Dalma”), on the Nexus apartment building project site at St Leonards. The head contractor for the job was Australand (Regency) Pty Limited (henceforth “Australand”), the second defendant. The actual work on the site was done by a number of subcontractors, including Dalma and Erect Safe Scaffolding (Australia) Pty Limited (henceforth “Erect”), the first defendant.

2 Mr Sutton claims to have suffered injury to his neck in an accident on the site, as a result of which he has been permanently incapacitated for work. His claim is against Erect and Australand. Australand has cross-claimed against Erect for contribution, in respect of tortious liability, and for indemnity and breach of contract. Both defendants allege that the plaintiff was guilty of contributory negligence, and that under the Workers Compensation Act, s 151Z, damages should be apportioned, taking into account an alleged breach of duty by Dalma.

The incident of 21 October 2002

3 At about 2.30 p.m., the site foreman or supervisor employed by Australand, Mr Malcolm Harris, called on the plaintiff to move some formwork so that concrete could be poured for the external wall of level 9. Where an external wall is being poured, the formwork contractors first place the internal wall or shutter on the concrete floor of the particular level. Once that has been done, steel fixers, plumbers and electricians do their work. Reinforcing steel, pipes and electrical conduits must be placed in position between the internal and external formwork, if they are to run through an external wall, before the concrete for the wall is poured. These trades have access to the wall where the concrete is to be poured from a scaffold erected outside the building. The scaffold is attached to a lower level of the building by means of "ties". These ties are usually metal pipes placed through the concrete wall and attached to it, and also attached to the vertical members of the external scaffolding.

4 When the reinforcing steel pipes and conduits are in place, the external formwork, known as a “perishutter", is placed in position. This item is a steel sheet, weighing, in this case, approximately 30 tonnes, which rests on 3 steel brackets fixed to the concrete wall. When the perishutter is ready to be lifted, the formworkers first remove the steel bolts, which hold it to the concrete wall and the internal formwork. They do this by removing nuts from the ends of the steel bolts and withdrawing the steel bolts from the wall. The internal formwork has already been removed. A crane then lifts the perishutter to a level slightly above the next level. The formworkers then go to the level below, and remove the 3 steel brackets. They pass these manually to the level above, where they are attached to the wall. The perishutter is then lowered onto the brackets and fixed in place. The bolts are placed through both parts of the formwork and the concrete can then be poured.

5 When Mr Harris told the plaintiff that the concrete was to be poured that afternoon, the plaintiff said that it was too late. His workers stopped work at 3.15 p.m., and the job of raising the perishutter would not be finished by then. Mr Harris insisted that the pour take place that afternoon and as a result, the plaintiff persuaded one of his formwork carpenters, Mr Mate Novokmet, to work back with him.

6 The plaintiff and Mr Novokmet began to prepare the perishutter to be raised from the eighth to the ninth level. Some of the nuts had been removed already. They removed the remaining nuts and the steel bolts. The crane was then attached to lugs on the perishutter by a dogman and the perishutter was raised to a level slightly above the concrete floor on level 9.

7 The plaintiff and Mr Novokmet then climbed down stairs on the external scaffold. Their purpose in doing so was to access the brackets that had previously supported the perishutter and remove them to the higher level. They walked along the planking on this scaffold until they reached a corner. At the corner the plaintiff said that he paid particular attention to the planking, because overlapping planking at the corner of scaffolding often creates an unevenness, which can be a trip hazard. He was therefore looking down. At the time the plaintiff and Mr Novokmet were, as required by safety regulations, wearing hard hats with visors. Because of this headgear, their ability to look up was limited.

8 I am satisfied that because of the requirement that workers wear hard hats with visors, and because it was clearly prudent to look at the planking at the corners of external scaffolding, it cannot be maintained that the plaintiff was not taking reasonable care for his own safety. He was doing all that was reasonable in the circumstances and could not reasonably have been expected, in those circumstances, to have seen the crosstie. The contributory negligence defence cannot be maintained.

9 About 60 cm to 1 metre around the corner, a crosstie bar supporting the scaffolding extended across the walkway at about head height. The plaintiff did not see the crosstie, and struck his head on it, forcing his head back. He fell backwards. Neither he nor Mr Novokmet can recall whether or not Mr Novokmet caught him. He felt acute pain immediately, but it this was not so debilitating as to prevent the plaintiff from working. He and Mr Novokmet resumed work, removed the brackets, each of which weighed about 20 kilograms, then manually moved them to the level above and fastened them to the floor. The crane then lowered the perishutter onto the brackets and the plaintiff and Mr Novokmet bolted it into position. The plaintiff finished work at about 6.00 p.m. and was able to drive home.

10 It is clear that Mr Harris was putting considerable pressure on the plaintiff to have the perishutter placed in position so that concrete could be poured that afternoon. There was a financial disadvantage to Australand if that did not happen.

11 It is not in issue that the task of constructing and maintaining the scaffolding was the responsibility of the scaffolding subcontractor, Erect.

12 The plaintiff took a photograph of the protruding tie on the day following the incident. Mr Woodward (and Mr Lane) were shown these photographs and agreed that, on the date Mr Sutton was injured, the protruding tie was as shown in the photograph.

Safety arrangements at the site

13 The parties agree that, in general, Australand had a good reputation as a builder that paid proper attention to safety matters. The evidence was that the main means of maintaining safety of the site was a system involving the operation of a safety committee. Mr Mark Woodward, who gave evidence, was the representative for Dalma on the safety committee. He was elected to that position by the Dalma employees on the site. He was also the union delegate. The safety committee included a representative of each subcontractor and some representatives of Australand. Mr Darrin Lane, the site manager, (employed by Australand), who also gave evidence, was the convenor of this committee and was responsible for keeping its records.

14 Some records are in evidence, and I would have to find, on the basis of the evidence before me, that they were not maintained with a high degree of accuracy or, indeed, in any systematic way. Mr Woodward gave evidence that he attended almost all of the weekly meetings after he came onto the site early in the history of the project, and that he represented Dalma at those meetings. The plaintiff confirmed this. The records produced in court do not record Mr Woodward as being present at several meetings; rather they indicate that Mr Rodney Sutton (incidentally, the son of the plaintiff) was the Dalma representative. Mr Rodney Sutton agreed that he was employed on the same site as his father by Dalma but denied that he had attended safety committee meetings, at least on a regular basis. The records produced on subpoena by Australand also indicate that Mr Woodward was a representative of Macphersons, who were the plumbing subcontractors, rather than of Dalma. Most importantly, the minutes of one crucial meeting are missing, if, indeed, the documents produced under subpoena can in any sense be regarded as an accurate record of the proceedings of the safety committee. What was produced was inaccurate, as I have indicated. None was signed by anyone. The plaintiff again called for appropriate records during the proceedings, but they were not produced. I infer that what should have been recorded was as described by Mr Woodward.

15 Mr Woodward gave evidence that about a week or two before the plaintiff was injured, he became aware of the protruding tie on the scaffold. He said that he noticed it on one of the safety "walk-arounds" and raised it with the safety committee. There was a suggestion that Mr Novotmek had drawn this to Mr Woodward’s attention, but I find it more probable than not, that, as the safety committee walked around the site each week, Mr Woodward himself noticed it. Mr Novotmek did not give evidence about this.

16 Mr Woodward's evidence was that once a matter of safety had been raised in the safety committee, it was noted, the notes of the meeting were typed up by Australand, and a copy was given to each subcontractor, indicating which subcontractor was required to take action. The subcontractor would then remedy the matter, sign off on the minutes of the safety committee, and return the signed copy to Australand.

17 A number of witnesses gave evidence that Australand employed a safety officer, known only to them as Laurie, who was usually on site, and who was responsible for convening the safety committee and recording incidents on the site. The plaintiff says that after he injured himself, he told Mr Harris about his injury that day or the following day. He said that Mr Harris responded “Oh, so you found it.” The defendants conceded that Mr Harris could not recall the exact words, but did not deny that he had said what Mr Sutton attributed to him. If he did say those words, it is, of course, a significant admission by Australand. I find, in the circumstances, on the balance of probabilities, that Mr Harris did use those words, or words of similar effect. The plaintiff also tried on a number of occasions to report the matter to Laurie and to have Laurie record it in the proper register. He said that Laurie told him that he had lost the register and that he should come back later.

18 After consulting Mr Woodward, as the union representative, the plaintiff reported his accident to the site manager. The plaintiff's evidence was not challenged, and it was not suggested that he did not report the incident as he said in his evidence. Neither defendant called Laurie and no explanation was offered for his absence. I infer that any evidence that Laurie may have given would not have assisted the defendants.

19 The eyewitness to the accident, Mr Novokmet, gave evidence. This evidence appeared to be partly at variance with a statement he had given to a solicitor about twelve months ago. His evidence, so far as it related to the actual incident, appeared to me not to be inconsistent with the evidence given by the plaintiff. On other matters his evidence was less reliable and I place little weight upon it.

20 The plaintiff, Mr Woodward, Mr Rodney Sutton, and the plaintiff's predecessor, Mr Antonio Dedavic, all gave evidence, and I regard them as reliable. The evidence was consistent with that given by the plaintiff and the plaintiff was not at all shaken in cross-examination in relation to the injury. Mr Braithwaite, a sales representative employed by Erect, also gave evidence. Most of it was not relevant to any matter in issue, and in any event his memory appeared poor and I would not regard him as particularly reliable.

21 Mr Lane gave evidence that confirmed the nature of the safety system, including the operation of the safety committee. The plaintiff, in his counsel’s submission, agreed that in theory, this system was effective, and if it worked, would discharge any obligation of Australand.

22 I find, on the balance of probabilities, that the matter was reported in the way that Mr Woodward, in his unchallenged evidence, described.

Duty of care and breach

23 The system was that Erect, as the scaffolding subcontractor, should have been notified of the defect, and should have remedied it well before the time when the plaintiff struck his head on the protruding tie. Clearly Erect did no such thing. The expert evidence establishes, if expert evidence were necessary, that it was an unreasonable danger to persons working on the site to have a crosstie protruding across a walkway at head height, particularly near the corner of a walkway on external scaffolding. The danger was clear and foreseeable, and should have been foreseen by Erect. Erect had a responsibility to the plaintiff, and to others who might reasonably have been expected to use the walkway, to remove the hazard as soon as reasonably possible after it was informed. I am satisfied that, more probably than not, Erect was notified by the safety committee of the hazard, but failed to remove it.

24 Prima facie, Australand also owed a duty to the plaintiff, and persons in his position, not to erect, or permit to be erected on its site, scaffolding in a way that people walking along planking laid on the scaffolding would strike their heads on protruding ties. If Erect did erect scaffolding in this way, it had a duty to remove the dangerous impediments as soon as it became aware of them. Australand, as the head contractor, with the primary responsibility for safety on site, had a duty to take reasonable steps to ensure that the site was safe. This duty was established both by common law and by statute. The evidence relating to the safety committee shows that Australand would have fulfilled this duty, if, in fact, the safety committee system had worked in practice, as it should, in theory, have done. The evidence leads me to the conclusion that there was a significant failure in respect of the protruding tie. It was reported to the safety committee, but the hazard was not removed or rectified within a reasonable time. As a result the plaintiff was injured. There is no evidence as to whether Erect was notified of the safety committee's concern about the protruding tie, and I must and do infer from the evidence given about the safety committee system that it was, but the fact remains that the hazard was not rectified. Erect was in breach of its duty of care to users of the scaffold to ensure reasonable safety, even without a notification from the safety committee. It was also a breach of duty for Erect to fail to act on a notification from the safety committee. If Australand either failed to notify Erect of the defect, or, having done so, failed to ensure that Erect rectified or removed the hazard, it was in breach of its duty to the plaintiff and persons in his position.

25 It follows, therefore, that both Erect and Australand were in breach of a duty owed to the plaintiff, and that breach of duty in each case led directly to the plaintiff's injury.

26 Both defendants argued that, as the plaintiff's employer, Dalma, had an overall, non-delegable duty to provide a safe system of work for the plaintiff, it also breached the duty and is liable, at least under the provision of the Workers Compensation Act, s 151Z. I reject these submissions. It was argued by Australand that, because Mr Woodward represented Dalma on the safety committee, he, and through him, Dalma and the plaintiff, either personally, or as the supervisor of all employees of Dalma, had knowledge of the protruding tie. When he went himself, or permitted Dalma employees to go, to the level where the tie was protruding, or when he failed to check that the hazard had been removed before sending workers to that level, Dalma was in breach of that duty.

27 For that argument to succeed, Australand would have to establish that it was the duty of each relevant subcontractor, on receipt of the safety committee document, to examine the whole of the site and to ensure that all safety concerns affecting its workers had been attended to. The evidence of Mr Woodward and Mr Lane was not to this effect. The system required that the subcontractor responsible for any potential hazard, on being notified of that hazard, had the obligation to rectify it. All other subcontractors were entitled to rely on the system, and so that once a hazard had been reported to the safety committee, the system would ensure that the subcontractor responsible for it would rectify it. Therefore trades and subcontractors, other than the trade or subcontractor responsible for the hazard, were not obliged take responsibility for removal or remedying of hazards outside their own area, where other subcontractors had created those hazards. In this case it was the responsibility of Erect, as scaffolding sub contractor, to rectify any hazard created by scaffolding work. It was not the responsibility of Dalma. Even if Dalma, or the plaintiff personally, had read the safety committee document and was aware that there was a scaffolding hazard on 7th level it or he was entitled to assume that the scaffolding subcontractor had remedied the hazard. In other words, Dalma performed its duty by participating in the safety committee system, which, as all parties conceded, was, in theory, a satisfactory system. The failure of the system was due to the fault of either Erect or Australand, or both, and not in any way to the fault of Dalma.

28 I find that the primary responsibility for creating the hazard, and in failing to remove it, lay with Erect. It is two thirds responsible for the plaintiff's injury. Australand, as principal contractor and supervisor of the site, was one third responsible.

29 I will return to the cross claim later.

Damages

30 There was little dispute between the parties as to the injury suffered by the plaintiff. He complained of immediate neck pain which increased in intensity and which continues, on his evidence, to increase to the present time. The plaintiff did not see his general practitioner, Dr Kek, until 5 weeks after he suffered the injury. Dr Kek initially diagnosed the injury as a "whiplash" injury to the cervical spine, and referred the plaintiff for physiotherapy. This had no effect.

31 The plaintiff reports pain radiating down his arms, particularly the left arm, and he reports loss of sensation, initially in a finger on the left hand. There was some controversy as to whether the finger was the little finger or the ring finger, but I do not regard this as material. He now reports increased loss of sensation in the palms of both hands. The plaintiff impresses me as an honest witness, and his evidence is remarkably consistent with the histories given to various doctors.

32 Despite the pain, the plaintiff continued to work until a date about twelve months after the injury was suffered. At that stage, he said, that he could not stand the pain any more, and that as the only work he knew was the work of a formwork carpenter in the construction industry, he decided that he could not find any suitable work, and has not worked since October 2003. He admitted freely that he did not ask his employer for light duties, because, he said, he believed that there were no light duties in their industry. As part of the treatment he received, provided by the employer's workers compensation insurer, he did see a rehabilitation consultant.

33 Australand argued that, as his predecessor as supervisor on the Nexus site, Mr Dedavic, had a position with Dalma but did not work with tools at the work face, a similar position would have been open to the plaintiff. Mr Dedavic’s evidence was that he was a rank above the plaintiff, and at that level there may not be many positions available. No evidence was called about what work was available, and although it is clear that the plaintiff did not make any effort to seek other employment after he left work in October 2003, his action, in the circumstances, I find to be reasonable. At that time he was 60 years old, and his entire working life of over 40 years had been spent as a formwork carpenter, with some supervisory work. He was, I find, entitled to assume that no suitable alternative work would be available for a person of his age.

34 The plaintiff has been examined and treated by a number of specialists, and saw a rehabilitation expert retained by the employer's workers compensation insurer. He had physiotherapy. He saw pain management specialists. He undertook acupuncture. None of this relieved his symptoms. A pain management specialist recommended and administered facet joint injections, which gave him temporary relief. Before these injections were administered, the plaintiff was required to have a general health check, which suggested some pathology in his heart. However, further examinations confirmed that his heart is perfectly normal, and not affected by any disease or deterioration.

35 About 2 years after the accident the plaintiff says that he developed pain in his left shoulder. This pain continues to trouble him. He attributes the shoulder pain to his posture. He habitually rests his head on his left arm to relieve the neck pain. Dr Watson, the treating neurologist, administered extensive neurophysiological tests and concluded that any shoulder pain is not related directly to the neck injury. It is certainly not a direct consequence of the injury at work.

36 After some reluctance on the part of the employer's workers compensation insurer to pay for an MRI scan, this was carried out, and showed that the plaintiff had suffered a disc prolapse at C2/3 level, with some impingement on the nerves. Dr Watson, the treating neurologist, formed the opinion that this pathology was less probably the cause of the plaintiff's symptoms than a musculo-skeletal injury at the C1/2 level. Other medical practitioners who examined the plaintiff attributed the pain to the pathology at C2/3, and have spoken to the plaintiff about the possibility of a fusion of the cervical spine. Dr Watson is currently of the view that this would be undesirable, although he admitted that on review in one or two years time, he would be prepared to reconsider the desirability of the plaintiff having such a procedure. The plaintiff is adamant that he does not want to have surgery, particularly because he is aware that its success cannot be guaranteed. His counsel has asked me, however, to consider that such a procedure must, realistically, be considered in the future.

37 Dr O'Neill, who examined the plaintiff for Erect and whose reports are in evidence, reached a similar conclusion to Dr Watson, particularly with respect to the shoulder injury.

38 The plaintiff's life has been affected significantly by his injury. All witnesses who had seen him at work said that he was a model worker. They confirmed his own evidence that he loved his work and believed in working hard. One witness said that he was always the first on site in the morning and the last to leave at night. The plaintiff said that he is extremely disappointed, and at times depressed, because he could no longer work in the trade where he had spent over 40 years.

39 The plaintiff also said that before he was injured, he enjoyed playing golf, beach fishing, swimming, playing with his grandchildren, and gardening. He is no longer able to do those things. His wife was also a keen and proud gardener. Since the plaintiff was injured his wife has been unwell, due to a heart condition, and can no longer work so hard in the garden. The plaintiff's gardening activity is now confined to mowing the lawn with a self-propelled lawnmower, and even this causes him pain. He claims the cost of a gardener/handyman as part of the compensation for his injury.

40 The plaintiff and his wife have several children, and all the evidence is that before the plaintiff's injury his relationship with his wife was extremely good. He reports that in recent years, while he is able to have an erection, the pain in his neck causes him to lose the erection, so that his sex life is significantly impeded. As a result his overall relationship with his wife has suffered.

41 The plaintiff said that it was his intention to work up to the age of 68. The particulars filed in court by his solicitor speak of him working to the age of 66, but his solicitor said that this figure was included in the court documents without proper instructions. The plaintiff was challenged about his intention to work to 68, because of the physical nature of his work as a formwork carpenter and his age. The evidence seems to be that until he was injured, despite one or two minor incidents at work, he was extremely fit for his age and I accept that, more probably than not, he would have worked up to his 68th birthday.

42 The plaintiff clearly has suffered significant non-economic loss and is far less able to enjoy life and his counsel suggested that this non-economic loss is such that he should be regarded as 45% of a most extreme case, but I find that this assessment is high. I would assess the seriousness of his non-economic loss at 38% of a most extreme case. He is therefore entitled to damages for non-economic loss of $162 500

43 The parties have agreed that the plaintiff's past economic loss is $194 103.60.

44 The superannuation in relation to this amount (9%) is $17 469.32.

45 The plaintiff's loss of future earning capacity is now limited to 4 years of work. The plaintiff's counsel has submitted that I should not make any deduction for vicissitudes of life because of his otherwise robust nature. I reject this submission. “Vicissitudes” is an expression that covers contingencies that can happen to anyone, and it is a rare case where there should be no discount. I am not convinced that this is such a rare case. On the other hand, the defendants suggested that the discount for such vicissitudes should be greater than the normal 15%, because of what they say are questions about his health. Apart from his injuries that are the subject of this claim, there is no evidence to convince me on the balance of probabilities that any condition from which he suffers, independently of that injury, would lead him to leave work before 68. I do not accept any of the defendants’ arguments and there is no reason why I should not make the customary deduction of 15% for the ordinary vicissitudes of life. Although there was some suggestion that if he had continued to work, he may not have been a sub-foreman, I find it more probable than not that he would have continued to earn the same remuneration. This is agreed at $1227.35 nett per week. The damages for loss of earning capacity will therefore be 1227.35 X 189.96 (multiplier for 4 years) less 15% - $198 175.29. Superannuation is allowed at 9% of this figure - $17 835.78.

46 Dr Wallace suggests that the plaintiff will need monthly visits to a general practitioner and quarterly visits to a pain management specialist. On the records of Dr Kek, it is clear that the plaintiff did and does not need to visit his general practitioner as frequently as Dr Wallace suggests, and it appears that most of his visits to Dr Kek have been to obtain certificates for the workers compensation insurer. I am prepared to allow the quarterly visits to a pain management specialist ($150 X 4/52 X 685.6 = $7910.77) and 6 visits per year to the general practitioner ($50 X 6/52 X 685.6 = $3955.38). I am also prepared to allow a sum of $4500 against the possibility that the plaintiff may require surgery. This figure is based on a 20% chance of his incurring a cost of $25 000, deferred 2 years (multiplier 0.907).

47 I am also prepared on the evidence to allow 1.5 hours per week (averaged over the whole year) at the rate of $30 dollars per hour for assistance in the garden ($30 852). The plaintiff's damages will therefore be as shown in the following table

Head of damages	Amount in dollars
Non-economic loss	162 500.00
Past earnings lost	194 103.60
Past superannuation lost	17 469.32
Loss of future earning capacity	198 175.29
Loss of future superannuation	17 835.78
Past out of pocket expenses	17 783.23
Future out of pocket expenses	47 218.15
GP - 3955.38
Pain specialist - 7910.77
Chance of surgery - 4500.00
Handyman/gardener - 30 852.00
Fox v Wood	8284.60
Total	663 369.97

48 There will be a verdict for the plaintiff in the sum of $663 369.97.

The cross-claim

49 Australand claims contribution against Erect as a joint tortfeasor. I have already indicated what I considered to be the proportionate responsibility of the parties for the plaintiff's injury. However, Australand also bases its cross-claim on some provisions of the contract between it and Erect. It is not in issue that the document before the court embodied the terms and conditions of the contract under which Erect agreed to supply and erect scaffolding on the Nexus site. The relevant provisions of the contract are referred to below.

50 Under clause 11 Erect agrees to indemnify Australand against any liability:

The Subcontractor must indemnify Australand Constructions against all damage, expense (including lawyers' fees and expenses on a solicitor/client basis), loss (including financial loss) or liability of any nature suffered by Australand Constructions arising out of the performance of the Subcontract Works and its other obligations under the Subcontract.

51 The damages payable by Australand to the plaintiff appear to me to fall squarely within the wording of clause 11. They are damage suffered by Australand arising “out of the performance of the Subcontract Works”. Australand is therefore entitled to a verdict against Erect on the cross-claim in respect of any damages it is liable to pay to the plaintiff.

52 Under clause 12 Erect agrees to obtain and keep current a policy of public liability insurance. When Australand called for such a policy in court it was not produced and I am informed that it was not previously produced in response to Notices to Produce or subpoenas. When he was asked about this, Mr Lou Zivanovic, a director, and apparently the principal guiding force of Erect, indicated that he was not aware of the existence or effect of clause 12, and I infer that no such policy exists or ever has existed. This is a breach of the contract, and pursuant to it, Australand is entitled to claim any damages flowing naturally from the breach. In view of my findings as to the effect of clause 11, it is not necessary for me to make a finding as to what, exactly, the damages are, and there is no reason that to think that such damages would not include any amount which Australand is obliged to pay to the plaintiff.

53 Mr Zivanovic also denied any knowledge of clause 2.5 of the contract between Erect and Australand, which prevents the subcontractor from assigning the whole or any part of the subcontract without the prior written approval of Australand. It appears that, at least prima facie, Erect broke these conditions because, according to both Mr Braithwaite and Mr Zivanovic, Erect's understanding was that it was simply to supply the scaffolding, and that the job of erecting the scaffolding was subcontracted to another company, Viper Constructions (NSW) Pty Limited, which is now in liquidation. The plaintiff advised that it had decided not to join this company as a defendant, and no cross-claim was brought against it. In the course of the proceedings, counsel for Erect asked questions which tended to show that Erect itself was not responsible for any breach of an obligation, but rather that Viper Constructions (NSW) Pty Limited actually had done the work of erecting the scaffolding. I ruled that pursuant to Rule 14.14 of the Uniform Rules of Civil Procedure, any such allegation on the part of Erect was something that required a pleading, and in the absence of any such pleading, Erect was not permitted to raise such allegations. Notwithstanding that, the evidence given by the director and the employee of Erect seems to indicate that there was a breach of this provision of the contract. It is, however, not necessary for me to consider the matter further, in view of the other conclusions that I have reached.

54 Therefore there will be a verdict and judgment for Australand (cross-claimant) against Erect (cross defendant) on the cross claim. The verdict will be for the amount of damages which Australand pays to the plaintiff, and Erect must also indemnify Australand against costs which Australand is liable to pay to the plaintiff. Rather than entering a verdict for a figure, I make the statement above and give the parties liberty to apply on 24 hours written notice.

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