Kuhl v Zurich Financial Services Australia Ltd & Anor

[2010] HCATrans 193

[2010] HCATrans 193

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P14 of 2010

B e t w e e n -

GEOFFREY LAWRENCE KUHL

Applicant

and

ZURICH FINANCIAL SERVICES AUSTRALIA LTD

First Respondent

QBE INSURANCE SERVICES AUSTRALIA LTD

Second Respondent

Application for special leave to appeal

CRENNAN J
BELL J

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE BY VIDEO LINK TO PERTH

ON FRIDAY, 30 JULY 2010, AT 1.19 PM

Copyright in the High Court of Australia

MR B.L. NUGAWELA:   May it please the Court, I appear for the applicant.  (instructed by Taylor Smart)

MR J.R. CRIDDLE:   May it please the Court, I appear for the respondents.  (instructed by SRB Legal)

CRENNAN J:   Mr Criddle, we would be assisted by hearing from you first, if we might.

MR CRIDDLE:   If it please your Honours.  Your Honours, this case basically was a system of work case.  The injured plaintiff, who is the applicant for special leave, was injured in the course of his employment with Transfield.  It is the respondent’s view that this is not an appropriate vehicle to determine issues that relate to Nelson v Lysaght because those things that were done in relation to the system equally speak of the obligation of Transfield rather than the obligation of WOMA to carry out what was done following the accident, so we say that on that basis it is an inappropriate vehicle to revisit Nelson v Lysaght.     Similarly, given that there has been legislation under the Civil Liability Acts in most of the States of Australia the only States where the common law continues to apply is Western Australia and South Australia, so it is not a vehicle that would have effect for most of Australia.

BELL J:   Accepting those matters, Mr Criddle, what about the interests of the administration of justice in this case?  Justice Wheeler took up this question of the trial judge’s approach to the circumstance that the plaintiff before the trial judge was unable to give a particularly detailed account of how it was in the course of using this equipment his arm ended up in the hose.  Now, on the face of it that is a rather odd approach to take, is it not?

MR CRIDDLE:   Your Honour, the trial judge was constrained by the manner in which the evidence was given at trial.  The applicant simply said that he was passed the hose by Mr Kelleher.

BELL J:   He suffered the injury in consequence.

MR CRIDDLE:   After the hose was passed.

BELL J:   Yes.

MR CRIDDLE:   Well, it was after the hose was passed, but it is relevant that the manner in which the hose was passed was demonstrated in the course of evidence.  The applicant did not suggest that there was anything negligent in the manner of its passing, so there were no pleadings that suggested that Mr Kelleher was negligent in the manner in which the hose was passed.  It was simply the fact of the passing of a hose that was under pressure which was said to constitute the negligence.

BELL J:   Were there not pleadings relating to the failing to fit a protective mesh, to instruct employees not to pass the vacuum unit to co‑workers and so forth?  They are set out at application book 18 in the judgment of Justice Wheeler.

MR CRIDDLE:   Certainly, your Honour, but they went to the system of work by which the applicant was required to use the hose, and that system was Transfield’s system, and not WOMA’s system.  WOMA were there to provide the suction power and the hose.  They were not there to direct ‑ ‑ ‑

BELL J:   I understand that.  I am at the moment just looking at an extract in relation to the appellant’s pleadings in respect of the WOMA case as I understood it.  Maybe I am wrong, but it is at paragraph 5 of the judgment of Justice Wheeler under the heading, “Relevant pleadings,” and it is on page 18.  I thought this was the respects in which the appellant’s case was pleaded against WOMA.

MR CRIDDLE:   That is correct.  Yes, that was the pleading against WOMA.

BELL J:   Now, bearing in mind the concession that was made by you, Mr Criddle, and it is set out at application book 58, and Justice Wheeler’s reasoning with respect to foreseeability and causation ‑ ‑ ‑

MR CRIDDLE:   Yes.  Your Honour, that concession was made on the basis that clearly if there was no suction in the hose then the accident would not have occurred, so there is a foreseeable risk, but the person responsible for controlling that risk was Transfield, who were the applicant’s employer.  They are the ones who said, “You are required as part of your job to manually handle a hose that is under vacuum pressure”.  What this appeal seeks to do is to have a contractor audit the applicability of the system of work that an employer has in place.  WOMA was there to provide the suction power and the hose.  It was not there to provide a system to prevent contact between the applicant and the hose outlet, and that is really what this appeal seeks to do.

CRENNAN J:   Well, given your point in relation to the suction, can I direct your attention to page 21 of the application book and Justice Wheeler’s findings at paragraph 13:

It was plainly foreseeable that an arm could be drawn into the hose, given the force of the suction, and the fact that the aperture contained no physical obstacle -

a point to which Justice Bell has directed attention, and her Honour goes on to note that the trial judge had noted that those risks were obvious.

MR CRIDDLE:   Yes, your Honour, that is correct, and they were obvious, and the applicant in his evidence said, “I was aware that it was a danger to have any part of my body in close proximity to the open end of the hose”, but it was not WOMA who directed that the applicant come in close contact with the hose.  It was his employer.  What WOMA did was provide the hose.

BELL J:   Appreciating that Transfield owed a duty to the appellant, just turning back again to the content of the conceded duty, which is set out in the applicant’s reply at page 58 of the application book, I am not sure that I understand your submission, Mr Criddle.  I think the question that had been raised on the hearing of the appeal concerned passing the vacuum under a load, creating a foreseeable risk of injury.

MR CRIDDLE:   Yes.  Your Honour, that issue arose because of the obligation of WOMA to supervise the activities of Kelleher, so that is how that arose.  It did not arise out of a determination of where the duty lay to implement a safe system of work.  It was responsive to that proposition that there was a duty to supervise Kelleher, if that answers your Honour’s question.

BELL J:   Well, yes, I had not read it as a concession in relation to WOMA owing as it were a general duty for the provision of a safe system of work for this appellant, but WOMA provided the equipment and Kelleher was who?

MR CRIDDLE:   Kelleher was an employee of another company whose services were lent to WOMA, and as the ‑ ‑ ‑

BELL J:   Yes.  So WOMA has provided the equipment, Kelleher is under WOMA’s direction and control, and ‑ ‑ ‑

MR CRIDDLE:   Not quite, your Honour, because there was an issue as to whether Kelleher became a deemed employee of WOMA, and that issue was decided in WOMA’s favour that he never did.  So the only issue that was relevant was the supervision of Kelleher and whether adequate supervision had been provided.

BELL J:   I see, and that was through the person, Atkinson?

MR CRIDDLE:   That is correct, yes.

BELL J:   Yes, I see.

MR CRIDDLE:   Atkinson was the supervisor of WOMA and it was part of his duties to supervise Kelleher in the performance of his duties which related to the provision of the truck and the maintenance of the truck to provide vacuum power.  The overall system, and as I have said previously, the interaction between the hose and the applicant were always that of Transfield and never that of WOMA, and that issue was fought and won by WOMA at trial and at the appeal stage, and that is why we say this is an inappropriate vehicle.

BELL J:   Well, there could be no doubt that Transfield owed obligations to its employee with respect to the provision of a safe system of work.  I am not quite sure what you are saying was fought and won at trial in relation to that.

MR CRIDDLE:   Well, your Honour, the suggestion was that WOMA was the party that should have trained the applicant in the use of the system.

BELL J:   I understand.

MR CRIDDLE:   It was virtually suggested that WOMA had control of the vacuuming process and that is an issue that was the subject of grounds of appeal which were unsuccessful and are not sought to be agitated in the appeal to the High Court.

BELL J:   Yes.

MR CRIDDLE:   I do not know if I can be of any further assistance to your Honours.  We simply say it is a fact case and this is an inappropriate vehicle for the matter to go forward, and that the majority in the Court of Appeal correctly adopted the principle set out in Nelson v John Lysaght.  Thank you, your Honours.

CRENNAN J:   Thank you.  Yes, we will hear from you, if we may please, Mr Nugawela.

MR NUGAWELA:   May it please your Honours.  There are just five points by way of reply, if I may.  My friend made the submission that this is a system of work case.  Now, that is incorrect.  This application raises an important question as to the content and scope of the duty of care of the supplier of unsafe machinery and equipment and, your Honours, it is a question of significance as in contemporary industrial practice more and more principals subcontract or delegate specialised functions to subcontractors in the marketplace, as this Court recently recognised expressly in Leighton v Fox as recently as September 2009.  So that is the first point by way of reply.

The second point is this.  My friend made the submission that this is not a suitable vehicle for the correct enunciation of this Court’s authority in Nelson v John Lysaght and he said because of the coexistent obligations on the employer at Transfield and also because of the introduction of this legislation.  Can I answer this in two ways?  We have made the point in our written submissions that coexistent duties but not coextensive duties on the part of an employer to prescribe a safe system of work does not derogate from the duty of care upon a supplier of dangerous equipment.  The equipment was awkward, the equipment was operating at a very high suction, it was difficult to handle.  Those primary findings of fact have not been overturned on appeal.

CRENNAN J:   What do you say about the concession?

MR NUGAWELA:   I will come immediately to the fifth point by way of reply which is in relation to the concession; two things in response, your Honour.  The duty to supervise Kelleher who was not a WOMA employee was conceded by my learned friend.  That much is clear, but it raises the rhetorical question, why is there not such a duty to an employee of Transfield who is another non‑WOMA employee?  It must be remembered that Kelleher was the one who actually unblocked and passed the hose under vacuum pressure to the applicant.  My friend says it is a question of training, but I think that, with respect, oversimplifies the position.  It is also a question of safe equipment as her Honour Justice Wheeler noted, the absence of a breaker box, et cetera.

I was addressing your Honour in relation to the new legislation, the Civil Liability Acts, as it pertains to the Nelson v John Lysaght point.  I have drawn to your Honours’ attention a recent decision of the Court of Appeal in Telstra Corporation v Bisley - I think that might have come by email to your Honours yesterday - where the Court of Appeal juxtaposed the provisions of section 5C of the Civil Liability Act (NSW) which my learned friend drew to the Court’s attention, yet went on to apply Nelson v John Lysaght.  That is the only authority across the States that have analogous statutory provision.

Can I say also this?  The High Court is still the High Court of Western Australia and the High Court of South Australia and these remain very important points of principle.  If regard be had to the content of the various statutes it is clear that they simply restate the common law position that Nelson stands for.

There are just two further points by way of reply; the interest of justice point that your Honour Justice Bell put to my learned friend in relation to what we at the time least impolitely in our summary could call the straw man argument.  I do not need to take that further.  Of course, there is another important administration of justice point, and that is the Court of Appeal, mero motu, found that there was no duty of care and overturned the trial judge’s finding of the existence of a duty without any notice of contention.

Finally, your Honour, her Honour Justice Wheeler at paragraph 13, which is at appeal book 21, as your Honour was taking my learned friend through that passage the last sentence struck me:

It is equally clear that, if the suction had been turned off or substantially reduced, the risk would not have materialised.

It is here that Nelson v John Lysaght reappears because post‑accident the instruction was given to ensure that when passing the hose the pressure was turned off.  I am not sure that I can assist further by way of reply.  May it please, your Honours.

CRENNAN J:   Thank you.  There will be a grant of special leave in this matter.  May I inquire of counsel about the estimate of time in respect of the ‑ ‑ ‑

MR NUGAWELA:   Half a day ‑ ‑ ‑

CRENNAN J:   Half a day?

MR NUGAWELA:   ‑ ‑ ‑ would be generous.

CRENNAN J:   Is that agreed, Mr Criddle?

MR CRIDDLE:   Yes, your Honours.

CRENNAN J:   Very well.  There will be a grant of special leave to appeal in this matter, and it is noted that the matter should take half a day.

MR NUGAWELA:   If it please, your Honours.

CRENNAN J:   Did you want to say anything further?

MR NUGAWELA:   Not at all, your Honours.

CRENNAN J:   All right.  Adjourn the Court until 10.15 on Tuesday, 3 August.

AT 1.58 PM THE MATTER WAS CONCLUDED