Limro, Pty Ltd v McKenna, M

[1990] FCA 388

C A T C H W O R D S

Negligence - liability of employer to employee for negligent acts of independent contractor - "non-delegable" duty of care to employee.

Negligence - plaintiff nurse injured by tripping over cord connected to polishing machine operated by employee of cleaning contractor engaged by hospital - whether a failure to exercise reasonable care on part of cleaning contractor

- no new question of principle.

Contributory negligence - plaintiff nurse injured by tripping over cord connected to polishing machine operated by employee of cleaning contractor engaged by hospital - whether a failure to exercise reasonable care for own safety on part of plaintiff - no new question of principle.

Contribution between tort-feasors - term in contract requiring contractor to indemnify hospital for liability - Law Reform (Miscellaneous Provisions) Act 1955 (ACT), s.11

- whether contractor's right to contribution under Act

excluded by terms of contract.

Damages - personal injury - loss of earning capacity - no new question of principle.

Damaqes - personal injury - interest - whether interest to - be awarded on ~riffiths v. Kerkemeyer component when ~laintiff has not paid expenses prior to hearinq - ACT	-	-
:upreme Court Act 1933, s.53~.

Damages - personal injury - interest - whether interest to be awarded on Fox v. Wood component - ACT Supreme Court Act 1933, s.53A.

Kondis v. State Transport Authority (1984) 154 C.L.R. 672

PRINCIPAL

Wilsons & Clyde Coal Company Limited v. Enqlish [l9381

A.C. 57

Vial v. Housinq Commission of New South Wales and Another

[l9761 1 N.S.W.L.R. 388 at 396

Stevens v. Brodribb Sawmillins Company Pty. Ltd. (1986)

160 C.L.R. 16

Sunqravure Proprietary Limited v. Meani

C.L.R. 24

Cervellone v. Besselink Bros. Pty. Ltd. (1984)

RECEIVED

1 AUG1990
FEDERAL COURT OF

AUSTWU.lA

Glanville Williams in Joint Torts and Contributory

Neqliqence (1st ed., 2nd impression) 1953 at p.145

Canberra Formwork Pty Ltd. v. Civil & Civic Ltd. and

Another (1982) 41 A.C.T.R. 1

City of Kitchener v. Robe & Clothinq Co. Ltd. [l9251 1

D.L.R. 1165

Joze Malec v. J.C. Hutton Pty. Ltd. (1990) 92 A.L.R.	545
Griffiths v. Kerkemeyer (1977) 139 C.L.R. 161
Fox v. Wood (1981) 148 C.L.R. 438
Batchelor v. Burke (1981) 148 C.L.R. 448

Fire and All Risks Insurance Co. Ltd. v. Callinan (1978)

140 C.L.R. 427 at 432

ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL

TERRITORY

LIMRO PTY. LIMITED V. MARY MCKENNA and AUSTRALIAN CAPITAL

TERRITORY HEALTH AUTHORITY

No. ACT G40 of 1989

Neaves, Miles & Lee JJ.

26 July 1990

Canberra
IN THE FEDERAL COURT OF AUSTRALIA	)
1
AUSTRALIAN CAPITAL TERRITORY	i
) No. ACT G40 of 1989
DISTRICT REGISTRY	1
1
GENERAL DIVISION	j

ON APPEAL FROM THE SUPREME COURT
OF THE AUSTRALIAN CAPITAL

TERRITORY

BETWEEN: LIMRO PTY. LIMITED

Appellant

AND:  MARY McKENNA

First Respondent

AND:  AUSTRALIAN CAPITAL
TERRITORY HEALTH
AUTHORITY

Second Respondent

MINUTE OF ORDER

Coram :  Neaves, Miles & Lee 33.

Date 26 July 1990

Place : Canberra

THE COURT ORDERS THAT:

(1) The appeal of the appellant and the cross-appeal of the second respondent against the judgment in favour of the first respondent be dismissed.

(2)	The appeal by the appellant against the award of damages be allowed and the amount of
$250,126.86 for which judgment was directed
be set aside and there be substituted therefor the amount of $245,701.86.

(3) The appellant and the second respondent pay the costs of the first respondent.

(4) The appeal by the appellant against the order for indemnity be dismissed.

(5) The appellant pay the costs of the second

respondent occasioned by that aspect of the
appeal.

Note:  Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA	)
I
AUSTRALIAN CAPITAL TERRITORY	1
I No. ACT G40 of 1989
DISTRICT REGISTRY	j
1
GENERAL DIVISION	j

ON APPEAL FROM THE SUPREME COURT
OF THE AUSTRALIAN CAPITAL

TERRITORY

BETWEEN: LIMRO PTY. LIMITED

Appellant

AND :  MARY McKENNA

First Respondent

AND :  AUSTRALIAN CAPITAL
TERRITORY HEALTH
AUTHORITY

Second Respondent

Coram: Neaves, Miles & Lee JJ.

REASONS FOR JUDGMENT

THE COURT:

This appeal arises from an action for damages for personal injuries brought in the Supreme Court of the Australian Capital Territory by the first respondent (the plaintiff) against the second respondent, the first defendant (ACTHA) and against the appellant, the second defendant (Limro). The learned trial judge found in favour of the plaintiff against both ACTHA and Limro and awarded a total sum of damages and interest of $250,126.86 together with costs. His Honour also ordered that Limro indemnify ACTHA in respect of the amount of the judgment and costs.

The plaintiff was a nursing sister employed by ACTHA at the Woden Valley Hospital. Limro carried out cleaning services on the hospital premises pursuant to a contract with ACTHA. On 12 July 1985 the plaintiff suffered injury when she fell over a cord attached to an electric polishing machine operated by an employee of Limro and connected to a power point in a wall in a corridor.

Limro appeals against the findings of negligence made against it, against the finding that there was no contributory negligence on the part of the plaintiff, against the finding that it was obliged to indemnify ACTHA in respect of ACTHA's liability to the plaintiff and against the award of damages. ACTHA also appeals against the finding of negligence against it and against the finding that there was no contributory negligence.

Neqliqence on the Part of Limro

The major attack on the trial judge's findings of across the open doorway at a height above floor level. The	fact is against the finding that the cord was stretched
plaintiff herself did not see the cord before she fell. The operator of the polishing machine, Mrs. Peresan, gave evidence for Limro and said that immediately before the plaintiff fell, the cord was in contact with the floor. His Honour rejected the evidence of Mrs. Peresan. He came to the conclusion by inference from the rest of the evidence that the cord was above floor level at the critical time. It was submitted in the appeal that his Honour was not entitled to reject the evidence of Mrs. Peresan, or alternatively that it was not open to him to find on the rest of the evidence that the cord was above floor level when the plaintiff came into contact with it.
It is necessary to outline some of the evidence relating to the circumstances in which the plaintiff met with her injury and to the layout of the immediate vicinity. The,. plaintiff had been in a room known as the formula room and was intending to walk from there along an adjoining corridor to Ward 6A. For that purpose it was her intention to walk out of the open doorway between the formula room and the corridor and then turn right and walk along the corridor. Immediately to the left of the doorway of the formula room as one departed from it, there was on the wall of the corridor, about 45 crns from the doorway, and at about 60 to 90 crns above the level of the floor a power point. There were other power points in the corridor
Mrs. Peresan's practice to polish the floor of the corridor set in the walls at a similar height. It was
daily, working her way along from that end of the corridor which was on the left for someone leaving the formula room to that end of the corridor which was on the right of the doorway. Her practice was to connect the cord to a power point, then work along past the power point, allowing the machine to drag the cord along behlnd it until she reached a position at or near the next power point. At that stage when the cord was extended, but not fully extended, she would stop the polishing machine, disengage the plug from the power point into which it had been inserted, take it to the next power point, insert the plug and recommence the polishing process until she reached the vicinity of the next power point, and so on. It was her custom to reach the area where the plaintiff was injured by about 11 a.m. each day with a view to finishing there by 11.15 a.m. The cord of the poiishing machine was bright orange in colour. Its total usable length is unknown, but the length was more than the distance between the two power points in question. The cord was heavy and tended to drop vertically from the power point to the floor. The cord was not mechanically retractable into the machine.
On the day there was nothing unusual in Mrs. Peresan's routine up to and until the time of the plaintiff's injury. Mrs. Peresan had proceeded past the power point on the left of the doorway from the formula
machine so that the cord remained behind her and so that room and past the doorway itself. She was operating the
she faced away from the direction of the doorway. She reached a position near the next power point which was some distance along the corridor from the doorway. The plaintiff estimated the distance at 8$ metres or more. There is a conflict between the evidence of Mrs. Peresan and that of the plaintiff about what happened next.
The plaintiff said that at about 11.40 a.m. she was about to leave the formula room to go to Ward 6A, something she did several times a day. As she went through the door her feet "became entangled in a polishing cord" and she crashed heavily to her left knee and then down on to her buttocks. She said that she first became aware of the existence of the cord "when I fell or as I fell". Immediately after she fell she saw Mrs. Peresan polishing further along the corridor. She called out several times over the noise of the polishing machine until Mrs. Peresan turned the machine off and came running down to her. She asked Mrs. Peresan to get help. Mrs. Peresan went away to do so. The plaintiff agreed in cross-examination that she had signed a report which stated that she "tripped over polishing machine electric cord which was lying across doorway of formula room".
The evidence of Mrs. Peresan, on the other hand, was that she had worked her way towards the next power point, switched off the machine and was about to return or in the process of returning "to pick up the cord" from near
the formula room before the plaintiff emerged from that room. She said that she saw the plaintiff's foot on the cord and called out "Sister be careful", but the Sister was already on the floor. She said she went to help the plaintiff and said to her, "Sorry, Sister, it is my fault", to which the plaintiff replied, "No, Flavia, it is my fault . . . . . not looking where I was putting my feet". S he maintained that the cord was at all times on the floor.
In a written statement made the same day Mrs. Peresan described the incident in the following terms:

"I had been using the polishing machine in the corridor and had gone to unplug the cord. Sister McKenna came out of the formula room and slipped over the cord. I tried to catch her but was unable to do so."

There was obviously a sharp conflict between the plaintiff and Mrs. Peresan on these critical matters even allowing for the fact that the plaintiff conceded in her evidence that she had never seen the cord before she fell. The statement in writing by the plaintiff which described the cord as "lying" across the doorway did not, in our view, compel the trial judge to reject the evidence of the plaintiff that she did not see it, nor to a finding that it was a prior inconsistent statement to the effect that the cord was lying on the floor prior to her injury. On the other hand, the evidence of Mrs. Peresan, which was given

through an interpreter, was to some extent self-serving and	less clear than that of the plaintiff. The trial judge was
faced with the decision of choosing between the witnesses and was entitled to prefer the evidence of the plaintiff.

I

l I

Liability: Neqliqence on the Part of ACTHA

!

It was submitted on behalf of ACTHA that there was

l	*	no evidence on which it could be established that there was
I
!
any act or omission on the part of ACTHA or any of its employees which constituted a failure to take reasonable care for the safety of the plaintiff, alternatively that ACTHA could not be responsible in law for the negligence of Limro, because Limro was at all material times an independent contractor for whose acts or omissions ACTHA could not be vicariously responsible.
The argument for ACTHA runs thus. If ACTHA were liable then its liability was either personal or vicarious, that is, either because it was in breach of the personal duty pf care owed to its employees to provide a safe system of work and safe premises in which to work or, alternatively, because it was vicariously liable for the negligence of Limro or Limro's employee. According to the argument, his Honour did not find (and this Court should not find) that there was in fact a breach of the personal duty of care, what his Honour found was that the plaintiff's injury was caused by the negligent act of Limro's employee ACTHA cannot be responsible vicariously for that negligent act because Limro was an independent
contractor of ACTHA.
Until the decision of the High Court in Kondis v. State Transport Authority (1984) 154 C.L.R. 672, there was a line of authority, not all of it easily reconcilable, that a person owing a duty of care is not guilty of a breach of that duty when the act or omission relied upon is that of an independent contractor, or put another way, that a principal is not liable for the negligence of an independent contractor even though the principal is under a duty to take care, so long as the contractor is chosen with reasonable care. However, since Wilsons & Clyde Coal Company Limited v. Enqlish [l9381 A.C. 57, there has developed a principle that in some situations, including cases of employer's liability, the duty to take care is "non-delegable" so that the employer is generally liable for the negligence of an independent contractor and may escape such liability only where the negligence of the independent contractor is "collateral" or "casual". Until .. the decision in Kondis, the situation was as stated by Glass J.A. in Vial v. Housinq Commission of New South Wales and Another [l9761 1 N.S.W.L.R. 388 at 396 thus:

"In the field of employer-employee relations, the position appears to be settled. The failure to provide premises, plant or a system of work which are reasonablv safe involves the em~lover in personal liabiiity: Wilsons & Clyde coai C;. Ltd. v. Enqlish [l9381 A.C. 57 at pp.83, 88; Staveley Iron & Chemical Co. Ltd. v. Jones [l9561 A.C. 627 at ~ ~ . 6 3 9 , 646. If the default is that of an independent. contractor, no excuse appears : Paine v. Colne Valley Electricity Supply Co. Ltd. [l9381 4 All E.R. 803; Sumner v. William Henderson & Sons

Ltd. [l9641 1 Q.B. 450. The failure, however, to	conduct current operations with due care involves
the employer in vicarious liability. A liability of this kind cannot, generally speaking, be visited upon him by reason of the default of his independent contractor: Coccia v. Australian Iron
& Steel Pty. Ltd. (Court of Appeal, 12 June 1975,
unreported) . "

In Kondis it was made clear that the last
proposition in the passage quoted from the judgment of
Glass J.A. is no longer correct and that the true position

is that a failure by an independent contractor to perform an operation with due care is a failure for which the employer is liable, whether or not that liability is to be regarded as vicarious. In the judgment of Mason J., his Honour said at p.680:

"If the employer's common law duty of care to his employees is no higher than the general duty to take reasonable care and skill for their safety, it imposes on him an obligation to take reasonable steps to provide adequate plant and equipment, a safe place of work and a safe system of work. If the duty or obligation of the employer requires no more than the exercise of reasonable care, it will often be satisfied by engaging a competent person to perform some service or work, particularly if the service or work calls for some skill or experience which the employer does not possess and cannot reasonably be expected to possess and the employer has no opportunity or capacity to inspect or check what the contractor does. It has been a reluctance to accept this result that has prompted judges to speak of the employer's duty as "personal" or "non-delegable" and to conclude that it cannot be satisfied by the appointment of a competent person to carry out the necessary task."

His Honour referred to the liability of hospitals to patients, school authorities to pupils and invitors to invitees, where the relationship between the parties generate a special responsibility which goes beyond a duty to take reasonable care and imposes a duty to ensure that

care is taken and went on to say at pp.687-688:

"That such an element exists in the relationship of employment is beyond serious challenge. The employer has the exclusive responsibility for the safety of the appliances, the premises and the system of work to which he subjects his employee and the employee has no choice but to accept and rely on the employer's provision and judgment in relation to these matters. The consequence is that in these relevant respects the employee's safety is in the hands of the employer; it is his responsibility. The employee can reasonably expect therefore that reasonable care and skill will be taken. In the case of the employer there is no unfairness in imposing on him a non-delegable duty; it is reasonable that he should bear liability for the negligence of his independent contractors in devising a safe system of work. If he requires his employee to work according to an unsafe system he should bear the consequences. Indeed, there is a stronger case for concluding that the employer's duty is non-delegable than there is for reaching the same conclusion in the case of the invitor. It is not immediately obvious that it is appropriate to impose liability on the occupier of a house for injury caused to an invitee by the negligence of an independent contractor, for example, in making or repairing an electrical installation carelessly, when it is reasonable for the occupier to rely on the reputed competence of the contractor in a field in which the occupier has no expert knowledge. But this is by the way, for it is not an issue that needs to be decided in the present case.

.

In the result, the respondent's duty to provide a safe system of work was non-delegable and the respondent was liable for any negligence on the part of its independent contractor in failing to adopt a safe system of work. The risk of injury from a falling rod or pin to an employee positioned under the crane during the extension procedure was slight, but nevertheless obvious. Avoidance of the risk called for the adoption of a procedure, even an instruction forbidding any employee assisting Clissold from taking up a position under the jib of the crane during the extension operation. If control of this operation was in the hands of Clissold then is was for him to adopt a safe system of work. The respondent is liable for his neglect, not on a vicarious basis, but because Clissold's omission to adopt a safe system is a breach of the

respondent's duty. Although Clissold was guilty of casual negligence, as it is often called, in	failing to keep an adequate lookout and to give
warning, his omissions in these respects do not inhibit the conclusion that there was a breach of the respondent's duty to provide a safe system of work. "
In Stevens v. Brodribb Sawmillinq Company Pty.

-	Ltd. (1986) 160 C.L.R. 16, Mason J., referring back to
Kondis said at p.32:

' l . . . . the law sornctimes imposes on people a duty

higher than the usual common law duty to take reasonable care. This higher duty is a duty to ensure that reasonable care is taken and it is said to be non-delegable because a principal who engages another to perform work will be liable for the negligence o f the person SO engaged, notwithstanding that he exercised reasonable care in the selection of the contractor."

In the joint judgment of Wilson and Dawson JJ. (p.44) their Honours referred to the non-delegable duty which is not discharged or transferred simply by the employment of a competent contractor. Their Honours continued as follows:

"The most important example is probably the duty of care df an employer at common law to provide adequate plant and equipment, a safe place of work and a safe system of work for his employees. That is a duty which cannot be delegated to an independent contractor and the duty to take care becomes a duty to ensure that reasonable care is taken. Other examples are the duty of care owed by a hospital to its patients or by a school authority to its pupils. In such cases at least it would seem that liability for the acts or omissions by a contractor is personal rather than vicarious, but that aspect of the matter is not beyond debate."

The finding of the learned trial judge was that the
plaintiff was injured by the act of Limro's employee in the

course of doing what Limro was engaged to do, and we would

agree with that conclusion. The special duty owed by an	employer subsisted throughout in that the employee had no
option but to rely on the system provided. ACTHA was under a duty in the circumstances to ensure that reasonable care was taken to see that the plaintiff was not exposed to a real risk of injury from the cleaning operations being carried out by Limro, and ACTHA failed to so ensure. ACTHA required its employee, the plaintiff, to work according to an unsafe system and no error is displayed in his Honour's finding that ACTHA was liable in negligence as a result.
Contributory Negliqence
Both ACTHA and Limro appeal against the trial judge's finding that there was no contributory negligence on the part of the plaintiff. Although the particulars furnished on behalf of both defendants were couched in very general terms, the contention on the appeal is that the plaintiff failed to take reasonable care for her own safety - by failing to hear the polishing machine and failing to see the cord before falling over it. However, the evidence was that Mrs. Peresan had used the polisher for at least eleven years without causing injury and there was no evidence of the extent to which the sound of the polisher was or would have been audible within the formula room. The plaintiff did not blindly charge from the formula room into the corridor and there was no evidence that she was proceeding to the ward with undue haste. The likelihood that the cord
would be in a position constituting a danger for her was, to a person in the position of the plaintiff, not so great
as to require particular alertness either for the purpose of listening for the sound of a polishing machine in the corridor or for the purpose of looking out for a cord across the doorway. The standard of care required of the plaintiff for her own safety was not that required of Mrs. Peresan, who had the potential to create a situation of danger for anyone who might happen to walk out of the formula room whilst the cord was stretched across the doorway, the more so when it was stretched above floor level. The plaintiff's lack of attention was, as his Honour found, no more than "inattention bred of familiarity which would excuse her". (See Sungravure Proprietary Limited v. Meani [1963-641 110 C.L.R. 24, expecially at p.37, per Windeyer 3 . ) .
Cross-claims for Contribution and Indemnity Between ACTHA and Limro
Tender documents dated 31 July 1984 submitted by Limro and accepted by ACTHA contained the following provisions:

"3.15(a) The contractor shall take effective
measures for the protection of persons who
are upon using or entering into or
departing from the Association premises or
land while performing services and shall
not cause any loss, injury or damage
(whether to person or property) in
performing or maintaining the services,
and shall indemnify the Association, its

officers, servants and agents from and

against all actions, proceedings, claims and demands whatsoever which may be made by any person or persons in respect of loss, injury or damage (whether to person or property) caused or alleged to have been caused by the contractor or arising or alleged to have arisen as a result of the contractors failure to take effective protective measures either during the performance of the service or during the period of maintenance of the service by the contractor.

(b)

In the event of any claim being made against the Association by reason of any matter referred to and in respect of which the contractor is liable under this clause, the contractor shall be promptly notified thereof and may at his own expense conduct all negotiations for the settlement of the same and any litigation that may arise therefrom. The Association shall not unless and until the contractor shall have failed to take over the conduct of the negotiations or litigation make any admission which might be prejudicial thereto. The conduct by the contractor of such negotiations or litigation shall be conditional upon the contractor having first given to the Association such reasonable security as shall from time to time be required by the Association to cover the amount ascertained or agreed, or estimated as the case may be, of any compensation, damages, expenses and costs for which the Association may become liable. The Association shall, at the request of the contractor afford all available assistance for any such purpose and shall be repaid any out of pocket expenses incurred in so doing.

(c)

Except in respect of personal injury or damage to property, conferring on a person other than the Association a good cause of action against the contractor, the liability of the contractor to the Association for any one act or default shall not exceed the sum named on the contract, or if no such sum is named, the contract price."

" 6 .

Public Risk Insurance

The Contractor will be required to indemnify the Commission against claims for loss and/or damage sustained by third parties in the course of performance of the Contract. The successful tenderer will be required to obtain Public Risk Insurance cover to a minimum of $1,000,000 or such greater amount as the Commission considers necessary. The Public Risk cover must include all risks associated with external window cleaning and the insured shall require the insurer to note such policy, cover note, or other advice to that effect. The Commission may, without prior notice, require the Public Risk Insurance cover to be increased during the currency of the Contract."

His Honour found that the terms of these clauses were sufficient to provide ACTHA with complete indemnity in respect of the damages and costs which it might be required to pay as a result of the injury suffered by the plaintiff and he referred to Cervellone v. Besselink Bros. Pty Ltd. (1984) 55 A.C.T.R. 1.

The claim by ACTHA against Limro is set out in a document filed in the proceedings and entitled "Notice by Firstnamed Defendant Claiming Contribution or Indemnity Against Secondnamed Defendant" and purports to claim "contribution or indemnity in respect of the plaintiff's claim". The claim by ACTHA is made pursuant to the contract comprised in the tender documents of 31 July 1984 and is not based in any way on the statutory provisions relating to contribution among joint tort-feasors. The tender documents make no mention of contribution and, in our view, do not give rise to any right to contribution at

Limro or entitled to nothing.	all. ACTHA accordingly was entitled to indemnity from
In contrast, the claim by Limro against ACTHA does not rely upon or purport to be based upon the tender documents at all. It simply recites the plaintiff's claim against both defendants, repeats paragraphs 1 to 4 of the

i	plaintiff's statement of claim (the plaintiff's allegations
I
I	against ACTHA) and asserts that Limro "is entitled to contribution or indemnity for any damages which may be awarded to the plaintiff" against Limro. The claim by Limro against ACTHA is necessarily limited to a claim for contribution by a joint tort-feasor under the Law Reform (Miscellaneous Provisions) Act 1955 (ACT). Sub-s.ll(4) of that Act provides as follows:

"(4) A tort-feasor liable in respect of the damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, but no person is entitled to recover contribution under this section from a person entitled to be indemnified by him in respect of the liability in respect of which the

contribution is sought." ,.

The final limb to sub-s.ll(4) is fatal to Limro's claim against ACTHA once it is established that ACTHA is entitled to indemnity against Limro. However, it was submitted on behalf of Limro that the indemnity clause in the contract did not apply where ACTHA sought to be indemnified against the consequences of its own negligence. There is some authority for the proposition that an indemnity clause like this will be read down so as not to permit a tort-feasor to pass on the consequences of

Glanville Williams in Joint Torts and Contributory	its own breach of duty to the party seeking indemnity.
Neqliqence (1st ed., 2nd impression) 1953 at p.145 says:

I,

.... the court will be slow to construe an

indemnity clause as applying to the consequences or an act of negligent misfeasance by the party claiming indemnity."

The author observes:

"Once it is accepted that the situation is governed in a particular case by the express contract between the parties, the cases turn on the construction of the contract and not on general principles of law."

In Canberra Formwork Pty. Ltd. v. Civil & Civic Ltd. and Another (1982) 41 A.C.T.R. 1, Blackburn C.J. construed an indemnity clause to the effect that it indemnified the employer against liability for breach of the non-delegable duty owed to an employee occasioned by the negligence of a contractor but not against liability arising from the fault of the employer itself. Similarly, in Citv of Xitchener v. Robe & Clothing Co. Ltd. [l9251 1 D.L.R. 1165, the Supreme Court of Canada held that where the contractor had committed an act of misfeasance and where the liability of the employer rested merely on vicarious liability for non-feasance by failing to remove a known source of danger, the employer was entitled to rely on the indemnity clause.

It is necessary to consider then the nature of the
successful claim against the two defendants. The plaintiff

succeeds against Limro because of the negligence of Limro's

employer for failure to ensure that reasonable care was

employee, and the plaintiff succeeds against ACTHA as her

taken by Limro. Whether the liability of ACTHA is vicarious or based on a non-delegable duty does not matter for the purposes of the plaintiff's claim, nor on the facts does it matter for the purposes of the indemnity clause. Fault on the part of ACTHA has not been established apart from its failure to cnsure that the plaintiff was not exposed to the risk of injury from the operations of the cleaning contractor. His Honour found that the negligent acts of the contractor constituted the elements of ACTHA's breach of its duty of care. Therefore, ACTHA is entitled to rely on the indemnity provided by the contract, and this in turn disentitles the contractor to contribution under s.11 of the Law Reform (Miscellaneous Provisions) Act.

Damages

The appeal against the award of damages is confined to the award for loss of earning capacity. His Honour arrived at this sum by assessing the value of past economic loss at $82,290 and adding to it a sum representing future loss until 31 December 1991 of $50,560, a total of $132,850. From that total he deducted for contingencies a figure of $7,850 leaving a round sum for loss of earning capacity both past and future of $125,000. His Honour did not distinguish between what was deducted for past contingencies and what was deducted for future

-

contingencies.

The plaintiff was born on 23 March 1928. She commenced her career in the nursing profession in 1944 at the age of 16 years and spent the rest of her working life as a nursing sister after she finished her training at the age of 20 years. She began working in the Woden Valley Hospital in 1974 as a Grade 1 nursing sister and continued in that capacity until the time of her injury. She suffered a comminuted fracture of the left patella, and a patellectomy was performed on the day of injury. She developed bilateral sciatic pain and laminectomies were carried out in 1985 and 1986. Further operative procedures were carried out with very little success. The plaintiff's major disability is pain and restriction of movement in the left hip and leg. She has a pronounced limp and is unfit for work requiring long standing or sitting or lifting and is quite unfit for work as a nursing sister. His Honour accepted her complaints as genuine and found that she was - unfit for work at the time of the hearing and had been unfit since the injury on 12 July 1985.

His Honour also found that the plaintiff at the time of her injury was or had been suffering from a degenerative disease of the spine which was likely to become symptomatic at any time. He further found that although he accepted the plaintiff's statement of intention to work to the age of 65 years, there was a real possibility that she might have retired early because of

account some evidence of a system of redeployment of the degenerative spinal condition. His Honour took into

incapacitated nurses within the ACT hospital system. His Honour found that it was probable that the plaintiff would have been disabled for all practical purposes from carrying on her duties as a nursing sister by reason of her pre-existing degenerative condition by a date not later than her 62nd birthday. His Honour also found that it was likely that if she had been so incapacitated she would have been deployed to clerical duties within her capacity which she would have continued to carry out until her 65th birthday at a salary no greater than that which she would have earned as a nursing sister. On that basis his Honour treated the plaintiff's working life as one which would have ended on 31 December 1991, that is to an age of just over 63 years.

It was submitted on behalf of Limro and ACTHA that the trial judg? should not have come to a conclusion that the plaintiff was likely, but for her degenerative spinal condition, to have worked to the age of 65 years, and that it would be more realistic to fix the age of 60 years as her likely retiring age. This, however, is a question which we think was entirely a matter for the trial judge who had the advantage of assessing the plaintiff as a witness and as a person and who was obviously impressed by her. The notional reduction of her date of retirement making allowance for the degenerative condition as it might

matter largely of conjecture and one which is appropriately have progressed without the injury in question, is again a

a matter for the trial judge. It is impossible to conclude that his Honour was in error in taking the end of the year 1991 as the likely termination of the plaintiff's working life but for the injury.

t.: I ' ! .

l
1.

It was also submitted that the reduction of the initial calculation of the value 'of loss of earning	!
/. .
capacity by $7,850 was an insufficient allowance for
I::
contingencies and that it was more likely that his Honour had fallen into error in this regard because he did not apportion it as between past and future loss. As a matter of arithmetic the reduction for contingencies amounted to about 5 percent of the total sum calculated for past and
future loss of earning capacity.	It amounted to about 15

percent of the sum calculated for future loss of earning capacity. If -regarded as a deduction against future loss of earning capacity, 15 percent is the sum conventionally awarded for the ordinary contingencies, and there is nothing extraordinary in the present case once it is accepted that his Honour had already reduced the figure for future loss by fixing the notional retiring date at the end of 1991. As far as reduction for contingencies in the past is concerned, a reduction for such contingencies is usually small. His Honour found, as he was entitled to find, that the pre-existing degenerative condition had not overtaken

the plaintiff by the time of the hearing. We would also	add, in the light of the recent High Court decision in
Joze Malec v. J.C. Hutton Pty. Ltd. (1990) 92 A.L.R. 545, that his Honour did not allow in favour of the plaintiff a sum to compensate her for the possibility that by the end of 1991 the pre-existing degenerative condition might not have led to any incapacity.
Finally, it is clear by the way in which is Honour approached the question of loss of earning capacity overall and by fixing a round figure of $125,000 for both past and future loss, he was making no pretence at mathematical accuracy and was taking, as he was entitled to take, a broad approach. In our view, $125,000 is not a manifestly excessive award for the plaintiff's loss of earning capacity in the circumstances of the case and we would not interfere with it.
It was further submitted on behalf of ACTHA and Limro that his-Honour was in error in allowing interest on the Griffiths v. Kerkemeyer (1977) 139 C.L.R. 161 and the Fox v. Wood (1981) 148 C.L.R. 438 components of the damages awarded.
The evidence relating to the Griffiths v. Kerkemeyer component was meagre. The plaintiff had spent about six months in bed in 1986 and her sister had nursed her for a couple of years until about April 1987. She claimed that during the period of about two years after injury she required domestic and nursing assistance at the
hours a week, a requirement which she said was continuing. rate of ten hours a week and thereafter at the rate of five
On this his Honour allowed for assistance at the rate of ten hours per week during the time the plaintiff was confined to bed and thereafter for assistance at the rate of five hours per week until the end of April 1987. Any expense incurred for domestic assistance thereafter was incorporated by his Honour in thc award of general damages. His Honour accordingly allowed $5,000 in respect of the claim for domestic assistance. No challenge is made to that assessment, but it is submitted that his Honour was in error in allowing interest to be awarded.
An award of interest in the Australian Capital Territory is governed by s.53A of the Australian Capital Territory Supreme Court Act 1933 which provides in the following terms:

"Interest up to judgment

53A.(1) In any proceedings for the recovery of any money lincluding any debt or damages or the value of any goods) the Supreme Court or the Judge shall, upon application, unless good cause is shown to the contrary, either -

(a)	order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which the judgment is entered; or
(b)	without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any
such interest.

(2) Sub-section (1) does not -

(a)	authorize the giving of interest upon interest or of a sum in lieu of such interest;
(b)	apply in relation to any debt upon which interest is payable as of right whether by virtue of an agreement or otherwise; or
(c)	affect the damages recoverable for the dishonour of a bill of exchange.

(3) Where the sum for which judgment is given (in this sub-section referred to as the 'relevant sum') includes, or where the Court or the Judge in its or his absolute discretion determines that the relevant sum includes, any amount for -

(a)	compensation in respect of liabilities incurred which do not carry interest as against the person claiming interest or claiming a sum in lieu of interest;
(b)	compensation for loss or damage to be incurred or suffered after the date on which judgment is given; or
(c)	exemplary or punitive damages,

interest, or a sum in lieu of interest, shall not be given under sub-section (1) in respect of any such amount or in respect of so much of the relevan-t sum as in the opinion of the Court or the Judge represents any such amount."

In the present case the plaintiff had not paid out any sum of money for domestic assistance and there was no evidence whether she intended to pay her sister in due course for the assistance that the sister had provided. We think that the position is covered by the principles enunciated by the High Court in Batchelor v. Burke (1981) 148 C.L.R. 448, a case concerned with whether interest should be allowed on an award of damages for past loss of

compensation equivalent to the amount awarded for the earning capacity where the plaintiff has received worker's

i	loss. Gibbs C.J. with whom the other Judges of the Court
I	I	agreed, referred to the earlier decision of the High Court
I	in Fire and All Risks Insurance Co. Ltd. v. Callinan
I
(1978) 140 C.L.R. 427 at 432 in which it was said that in
i	the case of loss of earning capacity interest should be
I
1	allowed "only on that part of the damages awarded under
I
that head which represents compensation for those detriments the practical impact of which, in terms of economic loss actually incurred, has already, at the date of judgment, been experienced by the plaintiff."

His Honour went on to say at p.455 that:

,v . . . . when the plaintiff who has lost earnings has

received compensation instead, he has not been out of pocket by reason of the failure to pay him damages, even though the compensation is repayable when the damages have been received."
His Honour concluded:

"It would not be consistent with that principle to award interest simply to discourage defendants from delayiqg the settlement of claims. The interest is awarded to compensate the plaintiff for the detriment that he has suffered by being kept out of his money, and not to punish the defendant for having been dilatory in settling the plaintiff's

claim. "

It is consistent with the principle enunciated that where the plaintiff has not suffered an actual financial detriment by payment to the person rendering voluntary services then it is inappropriate for interest to be awarded on the value which the Court puts on those services. Accordingly, we think that his Honour was in

error in "awarding the sum of $2,534 for interest in respect	of the Griffiths v. Kerkemeyer component.
For similar reasons we think that interest should not have been awarded on the Fox v. Wood component of the damages.
In Fox v. Wood it was established that where an injured worker successful in an action for damages against an employer is obliged under worker's compensation law to refund the total sum of worker's compensation received in respect of the injury and incapacity for which damages are awarded, then the damages should include a sum which represents tax paid on the worker's compensation received. When periodic payments of compensation have been received, the worker has not received the gross amounts of compensation but the net amounts after income tax has been deducted. Yet under the common provisions of worker's compensation law (in the ACT it is the Workmen's Compensation Act 1951), the worker who is successful in an action for damages - against the employer is obliged to refund, or allow the employer defendant a credit for the gross amount of compensation received. Unless some allowance is made in the worker's favour in the damages for the tax paid out of the gross amount, the worker refunds or the employer gets credit for an amount which the worker has not received.
We are unable to see what detriment the plaintiff in this situation may suffer by the refund of worker's compensation, or by the crediting to the defendant of
worker's compensation after judgment, until the worker's compensation is in fact refunded or credited. But that
potential detriment is avoided by the award in the damages of the Fox v. Wood component which represents income tax previously deducted. Hence, as in Batchelor v. Burke and as in the case of damages for unpaid voluntary services, the plaintiff will not suffer any financial detriment from a practical point of view upon which it is appropriate to award interest. We conclude therefore that his Honour was in error in awarding $1,891 for interest on the Fox v. Wood component of the damages.
Although these amounts o f interest are comparatively small in relation to the total damages awarded, we are of the opinion that they were awarded in error and should not have been included in the damages.
Conclusions

The ap~eal of the appellant and the cross-appeal of

the second respondent against the judgment in favour of the first respondent are dismissed. The appeal by the appellant against the award of damages is allowed and the amount of $250,126.86 for which judgment was directed is set aside and there is substituted therefor the amount of

$245,701.86. The appellant and the second respondent are

to pay the costs of the first respondent. The appeal by the appellant against the order for indemnity is dismissed. The appellant is to pay the costs of the second

respondent occasioned by that aspect of the appeal.	I certify that this and the preceding twenty- six (26) pages are a true copy of the Reasons for Judcment herein of
the COU- -
Dated: