Miles v Zurich Australia Insurance Limited; Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Limited

[2008] NSWSC 1311

CITATION:	Miles v Zurich Australia Insurance Limited; Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Limited [2008] NSWSC 1311
HEARING DATE(S):	24.11.08; 25.11.08; 26.11.08; 27.11.08; 01.12.08; 02.12.08; 03.12.08
JUDGMENT DATE :	11 December 2008
JUDGMENT OF:	Hoeben J
CATCHWORDS:	Industrial accident - negligence - liability of contractor and employer - apportionment of liability between contractor and employer - contributory negligence.
LEGISLATION CITED:	Civil Liability Act 2002 Workers Compensation Act 1987
CATEGORY:	Principal judgment
CASES CITED:	Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 550-551 Commonwealth v Introvigne (1982) 150 CLR 258 Czatyrko v Edith Cowan University [2005] HCA 14; (2005) 79 ALJR 839 at [12] Dalton v Henry Angus & Co (1881) 6 App Cas 740 Elliott v Bickerstaff [1999] NSWCA 453; (1999) 48 NSWLR 214 Hughes v Percival (1883) 8 App Cas 443 at 446 J Blackwood & Son v Skilled Engineering [2008] NSWCA 142 at [94] Kondis v State Transport Authority (1984) 154 CLR 672 at 683 McLean v Tedman (1984) 155 CLR 306 at 315 McDermid v Nash Dredging Ltd [1987] AC 906 at 910 Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 Pickard v Smith (1861) 10 CB (NS) 470; 142 ER 535 Podrebersek v Australian Iron & Steel Pty Limited [1985] HCA 34; (1985) 59 ALJR 492 at 494
PARTIES:	Jason Stuart Miles - Plainitff Zurich Australia Insurance Limited - Defendant Ace-Semi Trailer Sales Pty Ltd - Cross Defendant Ace-Semi Trailer Sales Pty Ltd - Plaintiff Zurich Australia Insurance Ltd - Defendant
FILE NUMBER(S):	SC 20282/2006; 20214/2007
COUNSEL:	Mr M Cranitch SC/Mr D Hooke - Plaintiff Mr L King SC/Mr R Cavanagh - Zurich Australia Insurance Mr P Neil SC/Mr C Egan - Ace-Semi Trailer
SOLICITORS:	Beilby Poulden Costello - Plaintiff Wotton & Kearney - Defendant Edwards Michael Lawyers - Cross-Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HOEBEN J

Thursday, 11 December 2008

20282/2006 - Jason Stuart MILES v ZURICH AUSTRALIA INSURANCE LIMITED
20214/2007 - ACE-SEMI TRAILER SALES PTY LTD v ZURICH AUSTRALIA INSURANCE LTD

JUDGMENT

1 HIS HONOUR:

Nature of Proceedings
On 10 July 2002 the plaintiff was rendered a paraplegic when a trailer upon which he was working fell onto him. The plaintiff has brought proceedings against Zurich Australia Insurance Limited (Zurich), which is the public liability insurer of PJS Fabrications Pty Limited (PJS). The plaintiff alleges that when he was injured, he was working under the direction of Mr Paul Scott, an employee of PJS, and that these injuries were caused by his negligence. Zurich has cross-claimed against Ace-Semi Trailer Sales Pty Ltd (Ace) which was the plaintiff’s employer at the time of the accident.

2 In separate proceedings Ace has brought proceedings against Zurich, pursuant to s 151Z(1)(d) of the Workers Compensation Act 1987 for recovery of payments of compensation which it made to or on behalf of the plaintiff.

3 In the course of the proceedings, the parties agreed on the damages to which the plaintiff would be entitled against Zurich, under the Civil Liability Act 2002 (CLA), and the damages to which he would be entitled against Ace, under the Workers Compensation Act 1987 (WCA). Accordingly, the matter proceeded on the issue of liability only. The figures agreed are $3,400,000 under the CLA and $677,393 under the WCA.

Factual Background

4 The evidence on liability comprised oral evidence from the plaintiff and Mr Scott, statements from Mr Beeck, the principal of Ace, an expert liability report and photographs from WorkCover. Unless otherwise indicated, I find the facts to be as follows.

5 The plaintiff was born in New Zealand in October 1968. He came to Australia with his parents in 1982. At the end of 1984 he left school having completed year 10. He then spent four years working in the fruit markets. In 1989 he commenced employment with Formula Engineering, a fabrication company. During that employment he successfully completed a welding course at TAFE. In 1996 he commenced employment with Hearns Motor Bodies, which specialised in the building of truck bodies for rigid heavy vehicles.

6 In 1998 he commenced employment with Unique Truck Bodies, which also specialised in the building of truck bodies for rigid heavy vehicles. He was an employee for six months and then became a contractor. In 1999 he was given the position of foreman. Hearns Motor Bodies had a small workshop with only a few employees. Unique Truck Bodies was a much bigger organisation with a substantially larger workshop. The plaintiff estimated that the business of Unique Truck Bodies was about five times the size of that of Hearns Motor Bodies.

7 In about September 2001 a discussion took place between the plaintiff and Paul Scott concerning the employment of the plaintiff by Ace. It is not clear who initiated the discussion. It was the plaintiff’s understanding that there were good prospects of him obtaining employment with Ace, but that he would have to resign from Unique Truck Bodies first. The plaintiff’s motivation was that he wished to work shorter hours so that he could spend more time with his family and he wished to have the security associated with employment, such as the entitlement to holiday pay and sick leave.

8 The plaintiff resigned from his position with Unique Truck Bodies and commenced employment with Ace in early October 2001. At that time the plaintiff was married with three children, two daughters aged nine and ten and a son aged five. Following the accident in September 2004 the plaintiff’s wife left him.

9 Paul Scott was born in September 1971 and completed an apprenticeship as a vehicle body builder. It was while working for Krueger Transport Equipment as a body builder that he met Mr John Beeck and they became friends. In 1998 Mr Beeck commenced business as Ace and Mr Scott went to work with him. The business was conducted from premises at Tempe and involved the repair, refurbishment and sale of semi-trailers.

10 As originally set up, the structure of Ace was as follows: The managing director and owner was Mr Beeck. Mr Scott was taken on as a sub-contractor and was required to incorporate. His company was PJS. The function performed by Mr Scott was that of workshop manager.

11 Initially only Mr Beeck and Mr Scott performed work for Ace. As further employees were required, they were recruited by Mr Scott and were paid by PJS. PJS would invoice Ace in respect of their wages. That arrangement continued for 18 months after which the responsibility for employing labour was accepted by Ace. Mr Scott continued to work for Ace as workshop manager through his company PJS. PJS was somewhat irregular in rendering invoices but each week Ace deposited a fixed amount in the bank account of PJS as payment for Mr Scott’s services.

12 At some time thereafter, but before the plaintiff commenced employment with it, Ace moved from Tempe to Swaffham Road, Minto. The plaintiff described the workshop as small but approximately twice the size of that of Hearns Motor Bodies. The plaintiff observed that by comparison with the other places at which he had worked, the level of equipment available at the Minto premises was very limited. By way of illustration, he said that there were “no guillotines or benders or off saws, equipment like that” (T.41.31). The plaintiff’s accident occurred at the Minto premises.

13 The discussion as to terms of employment took place between the plaintiff and Mr Scott. On his first day at Ace, the plaintiff was shown around the workshop by Mr Scott and allocated a job. He was not given any induction or other training. At that time the plaintiff was experienced and competent in building truck bodies, but had less experience in relation to mechanical repairs. In this regard, if he needed assistance he would ask his fellow workers. He described his competence in relation to mechanical repairs as follows:

“Before that up to the accident I could change brakes, bearings, all that sort of stuff, but I was still learning a lot in respect of air valves and all that.
Q. You were well familiar with the sort of thing you were actually doing at the time of your accident?
A. The suspension bushes, yes.” (T.106.9)

14 During the time that the plaintiff worked for Ace the workforce comprised Mr Beeck, Mr Beeck’s wife, Mr Scott and five tradesmen, including the plaintiff. Mr Scott used to allocate the work on a daily basis, but did not give instructions as to how that work was to be carried out. This was left to the discretion of the tradesmen.

15 The plaintiff did not meet Mr Beeck until the second day of his employment. The plaintiff said that Mr Beeck did not attend the workshop every day and that when he did, he spent most of his time in his office. The plaintiff described his participation in the business as follows:

“A. He would turn up in the morning about 9, 10, whichever. He would come around and say hello to everyone, see how it was going, and into the office. Pretty well the last we would see of him every day.
Q. Did he give you directions as to what was to be done and how it was to be done?
A. No.
Q. Did he ever come into the factory during the course of the day? You saw him in the morning and then he would go into his office. Would he come back into the factory during the course of the day?
A. Yes.
Q. On what occasions would that occur?
A. Every now and then he would come out and see how things were running. He was selling trailers so there was trailers for sale and he would come with a customer and pass the workshop out into the yard.” (T.44.20)

16 Ace had four stands in its workshop. These were depicted in photograph No 8 on page 386 of exhibit B. They comprised a vertical metal support, which was positioned on a large round base. Apart from a forklift, these were the only devices in the workshop which could support a trailer. If its rear wheels were removed and the rear was supported by two stands, the front of a conventional trailer would be supported by its front standing legs. There were no trestles, A-frames or trolleys such as the plaintiff had observed at Hearns Motor Bodies and Unique Truck Bodies available in the Ace workshop. The plaintiff and other employees of Ace had a licence to drive the forklift.

17 There were also bottle jacks in the workshop. Bottle jacks were designed to life heavy pieces of equipment, such as a trailer. Once the end of a trailer had been raised to the desired height, two stands were placed underneath for support and the bottle jacks were removed.

18 When carrying out mechanical work on a trailer, it was necessary for the tradesman to get under the body of the trailer. There were no pits in the workshop so that a creeper board was used. Accordingly, it was necessary to raise a trailer being worked on to a sufficient height to enable underneath access to be gained.

19 On a date before the accident exhibit 2 came into existence. It comprised four pages. The first three pages set out safety instructions to be observed by employees and sub-contractors performing work for Ace. The fourth page made provision for a signature and the witnessing of that signature. The plaintiff read exhibit 2 and signed it in the presence of Mr Scott about one month before the accident.

20 Mr Scott explained the aetiology of exhibit 2. His father worked for a large commercial organisation in which an accident had occurred resulting in the intervention of WorkCover. Because of that experience, Mr Scott senior advised his son that he should prepare a document setting out safety instructions in case an accident occurred at Ace which might result in the intervention of WorkCover. Following that advice Mr Scott prepared exhibit 2, obtained the approval of Mr Beeck for it to be used and arranged for it to be read and signed by Ace’s employees.

21 During the ten months that the plaintiff worked for Ace before the accident, there were no safety meetings or discussions of safety matters except for the creation and signing of exhibit 2 by the employees. I am satisfied that exhibit 2 was brought into existence not because of any concern on the part of either Mr Scott or Mr Beeck that employees of Ace might suffer injury, but to protect themselves and Ace from criticism by WorkCover should an accident occur. I am satisfied that no attempt was made by either Mr Scott, Mr Beeck or anyone else in the Ace organisation to monitor or enforce the safety instructions set out in exhibit 2.

22 Mr Beeck was born in April 1949. He was a qualified fitter and turner and obtained a degree in mechanical engineering in 1976. Between 1976 and 1986 he served in the Royal Australian Electrical and Mechanical Engineers (RAEME) in the Army. As a result of Mr Beeck’s Army contacts, Ace performed repair and service work for the Department of Defence.

23 I have concluded that Mr Beeck was primarily concerned with obtaining business for the company and with sales. His attendances in the workshop enabled him to assess how work was progressing on projects which Ace had undertaken. He appears to have left the day to day running of the workshop to Mr Scott.

24 Mr Scott differentiated between the work done by him and that done by Mr Beeck as follows:

“A. I worked with the boys in the morning allocating work, going through any parts or any requirements that they might need to complete that work. If time permitted I would literally work on the tools with the men. In John’s absence I would answer the phone and with the phone came inquiries in regards to advertising that we would have for new vehicles. I would pick up parts that were required urgently, I would tour the workshop with prospective buyers, show them vehicles which were for sale. I would quote work that needed repairing and that was – there wasn’t a set time to do each and every one of those tasks and there were days when that didn’t occur so I could spend the whole day working on the tools with the men. There were days when John and his wife were there and they took care of the phone calls and I would spend all day in the workshop, then there were days there was nobody there in regards to John and Lorraine, and I would have to spend most of the day in the office.” (T.131.15)
“Q. To your observation when Mr Beeck was at the workshop on the days you say that he was there, what did he personally do in the business?
A. He did pretty much what I just explained in terms of phone calls. He organised a lot of advertising for the vehicles that we had. He would sometimes assist with the movement of vehicles within the premises. He would quite often unload some supplies that were coming in, bulky supplies.
Q. Did he do anything to monitor the progress of work in the workshop?
A. We had a lot of discussions over that, yeah. He would walk through the workshop and wonder why this particular vehicle was being worked on and not that one and so forth.” (T.131.48)

25 On 10 July 2002, the day of the accident, Mr Scott directed the plaintiff to perform service and repair work on a “Haulmark Tandem Axle Road Train Dolley”. This was a small trailer that was normally attached to the rear of a lead trailer as part of a road train. It was not a common piece of equipment because its use was not permitted in cities. This job was for the Department of Defence.

26 Because Mr Scott had allocated work on two other trailers to the other tradesmen, he assisted the plaintiff with the dolley trailer. A photograph of the dolley trailer is at p 386 of exhibit B. Neither the plaintiff nor Mr Scott had ever worked on such a trailer.

27 The plaintiff and Mr Scott started at the front of the trailer. This was supported by a forklift while the wheels were removed. Two stands were then placed under the front draw bar and the forklift was removed. When work finished at the front of the trailer, it was necessary to perform similar work at the rear. It is in relation to how this work was carried out that the evidence of the plaintiff and Mr Scott differs considerably. It was common ground that only one forklift was available.

28 The plaintiff says that Mr Scott ran a chain around the turntable at the rear of the trailer and used the tines of the forklift to raise and hold the rear of the trailer in position. This was done in such a way that the wheels were off the ground so that the tyres and hubs could be removed. The plaintiff and Mr Scott then worked on the brakes and cleaned and greased the bearings. When they were about to remove the bushes, someone asked Mr Scott for the use of the forklift.

29 According to the plaintiff Mr Scott gave permission for the forklift to be removed and said, “We will put some bottle jacks under the axle”. (T.51.26) It was the plaintiff who then put two bottle jacks in position supporting the rear axle. He used another bottle jack to support the suspension. Mr Scott used the forklift to raise the rear of the trailer to enable the plaintiff to place the bottle jacks in position.

30 The plaintiff said that when the bottle jacks were in position he gave them a good shake to ensure that they were secure. The forklift was then taken away. The plaintiff could not remember who removed the forklift.

31 The plaintiff said that both he and Mr Scott had difficulty removing the bushes. They used a sledge hammer and they also used an oxy torch. When they were still having difficulty, Mr Scott told the plaintiff that he would go and get a “jimmy bar”. At this time the plaintiff was working underneath the trailer, in a sitting position with his legs in front of him. He was using a considerable amount of force to try to free the bushes. Before Mr Scott returned, the plaintiff heard a creaking sound and the rear of the trailer collapsed onto him, forcing his head towards his feet.

32 Mr Scott agreed that initially he and the plaintiff worked on the dolley trailer. He agreed that they used stands to support the front of the trailer and when they were in position, the forklift was removed so that someone else could use it. He said that after he and the plaintiff had been working on the front of the trailer for two or three hours, it was necessary for him to leave the plaintiff and go to the office because there was no-one to attend the phones. Thereafter Mr Scott said that he worked primarily in the office but from time to time provided assistance to the plaintiff.

33 Mr Scott said that he played no part in lifting or supporting the rear of the trailer. He denied that he had suggested or directed that bottle jacks be used. He agreed that he had provided some assistance to the plaintiff while the plaintiff was working at the rear of the trailer by helping him remove a nut and by bringing the oxy torch to him. Mr Scott described these activities as follows:

“A. Well, if I was wandering through the workshop, like I was distributing parts and seeing customers myself, some customers, and one guy in particular was with me when Jason screamed out he needed some help with a bolt or a nut and I went over and held the nut while he got it undone. I returned to the customer. Things like if I was nearby and Jason required, wanted me to pass something, if there was anything I can do to assist for a moment, and he would say, you know, "I can't get this bush out, I need an oxy torch." To save him climbing out I would go and get the oxy torch, but I didn't have a lot of time on that afternoon.” (T.140.17)

34 Mr Scott said that he didn’t take particular notice of exactly what the plaintiff was doing but he observed that the plaintiff was getting the job done. Specifically he said that he did not notice at any time before the accident how the rear of the trailer was supported. He agreed that he had noticed that the rear tyres of the trailer had been removed. In relation to the work which he did on the back of the trailer, Mr Scott said:

“I don’t recall working on the back for any great length of time. I recall passing spanners, I recall passing implements to make Jason’s life a bit easier, but if I was on that trailer for any length of time I would recall it.” (T.157.49)

35 Under cross-examination Mr Scott denied that it was a two man job for the forklift to be used to raise one end of a trailer so that stands could be placed in position. He said that sometimes this was done by two persons and sometimes by one. He denied that it was easier for two persons to perform that task.

36 Under cross-examination he was asked what his intention was in relation to raising and supporting the rear of the dolley trailer when he and the plaintiff commenced working on it. Mr Scott said that he had not formulated any plan at that time. He said that he had not turned his mind to that question at the time when he stopped working on the trailer with the plaintiff.

37 I prefer the plaintiff’s evidence on this issue. It is clear from the fact that three trailers were being worked on at the same time that there was going to be a shortage of equipment. I find it difficult to accept that Mr Scott had not given any thought as to how the rear of the trailer was going to be supported when he started the job and at the very least when, on his version of events, he was called away from the job. I also find it difficult to accept that he made no observation of how the rear of the trailer was supported when he provided some assistance to the plaintiff, even though he did observe that the tyres had been removed.

38 I also find it difficult to accept that the positioning of stands could be done just as easily by one person as by two. Since the task involved getting on and off a forklift so as to adjust the height of the trailer so that the stands would be properly positioned, the job could clearly be more easily performed by two persons. It would be awkward and inefficient for one person to perform that task.

39 As the plaintiff explained in his evidence, it was even more difficult to place bottle jacks into position than the stands. Not only would the forklift have to be used to raise the rear of the trailer but each bottle jack would have to be individually adjusted so as to provide support. If, as Mr Scott said in his evidence, the plaintiff called out from time to time for assistance, this would have been the very sort of task which did require two people for it to be done properly.

40 The plaintiff gave his evidence in a clear and undramatic way. His description of how the rear of the dolley trailer came to be raised and supported was logical and accorded with my impression of how Ace’s workshop operated, i.e. with the focus upon output rather than on safety issues.

41 The evidence of Mr Scott, on the other hand, was lacking in detail and on some issues appeared to be self-exculpatory. His recollection of the events of this day (perhaps understandably) was not particularly good. There were, as previously indicated, some aspects of the evidence which strained credulity. It is difficult to accept that on the occasions when he provided assistance for the plaintiff while the plaintiff was underneath the rear of the trailer, he failed to observe that three bottle jacks had been used to provide support.

42 I find that the suggestion to use bottle jacks to support the rear of the dolley trailer came from Mr Scott and that he participated in implementing that system by operating the forklift while the plaintiff placed the bottle jacks into position.

43 The only evidence as to the movements of Mr Beeck on the day of the accident comes from Mr Scott. The plaintiff did not see Mr Beeck before the accident occurred. That is, of course, consistent with him being positioned underneath the trailer for substantial periods of time and focusing on the work which he was performing. It is also consistent with the evidence of Mr Scott that Mr Beeck arrived at the workshop with a customer about an hour before the accident occurred. There was no evidence as to whether or not Mr Beeck went near the trailer where the plaintiff was working.

44 One of the reasons why I found the plaintiff to be a reliable and truthful witness was his willingness to give evidence against his interest. Under cross-examination the following evidence was given:

“Q. … You knew by the day of your accident, didn't you, that bottle jacks were not to be used to support things like trailers or this dolly whilst they were worked on?
A. It was always in the back of my mind not to get under the trailer with bottle jacks in case, you know, a hydraulic seal blows or something.

Q. You say it was in the back of your mind not to get under it and work under it whilst bottle jacks were being used. Can you go back and just deal with these questions of mine. By the day of your accident you knew that bottle jacks were intended for one purpose and trestles or stands were intended for another, didn't you?
A. Yes.

Q. And what you knew about bottle jacks was that they were intended to elevate what I will call the load, and once that had been done trestles or stands were put in to support it. That's right?
A. Yes.

Q. Bottle jacks were to be withdrawn?
A. Yes.

Q. And I think you might have mentioned a moment ago, don't you agree with me, Mr Miles, that that's because bottle jacks operate hydraulically?
A. Yes.

Q. And they can fail. The hydraulics can fail and they concertina under the load?
A. Yes. “ (T.114.17)

“Q. At all events, you were aware that bottle jacks were not to be used to support what I will call the load while you were working under it?
A. Shouldn't be used, yeah.

Q. Should not be?
A. Yeah.

Q. And should not be for reasons of safety?
A. Yes.

Q. That means this, doesn't it, Mr Miles, that when Mr Paul Scott said that in the absence of the stands bottle jacks would be used at the rear of this dolly, you knew that that was not the safe thing to do, didn't you?
A. Well, there was no stands there so we had to use the bottle jacks.

Q. I know, but you knew that what was being done was something which involved a lack of safety, didn't you?
A. Yes.

Q. You were on good terms with Mr Scott, you've told us?
A. Yes.

Q. And you had been a supervisor at Unique yourself?
A. Yes.

Q. You didn't protest to Mr Scott, did you, you didn't argue with him about it?
A. No. “ (T.115.3)

45 I am satisfied that when the plaintiff was told to support the rear of the trailer by using bottle jacks, he realised that this would produce a potentially dangerous situation, but said nothing about it.

Submissions and consideration

46 There was no issue between the parties that the system of work, which led to the plaintiff’s injury, was defective. The reports of Automotive Consulting of 30 December 2005 and 21 April 2006 make that clear. Even without the assistance of those reports, common sense would lead to the same conclusion.

47 A system of work which required a tradesman to be positioned under a trailer, which was supported somewhat precariously by three bottle jacks in circumstances where that tradesman was using a sledgehammer and jimmy, to vigorously strike nuts and bushes so as to loosen them, was always fraught with a risk of one of the bottle jacks being dislodged so as to cause the trailer to collapse. This is what happened. There was no defect found in either the trailer or the bottle jacks themselves. The cause of the collapse was the dislodgment of one of the bottle jacks, as a result of the strenuous forces being applied by the plaintiff when trying to release bushes at the rear of the trailer.

48 The issue between the parties was who was responsible for the accident and if liability was to be borne by more than one entity, what was the apportionment?

49 It was the plaintiff’s submission, supported by Ace, that Mr Scott and through him PJS was solely responsible for the accident. The argument was articulated in this way. PJS through its employee Mr Scott was the workshop manager and therefore in charge of the workshop. In that capacity PJS owed a duty of care to the plaintiff. That duty was breached when PJS set up an unsafe system of work which caused the accident. They submitted that the evidence established the following breaches of duty on the part of PJS:

(a) Mr Scott gave no specific or special instructions to the plaintiff concerning the unusual job which he had to undertake.

(b) There was no supervision of the work being performed by the plaintiff.

(c) Mr Scott implemented an unsafe system of work and required the plaintiff to participate in it.

50 It was further submitted that the breach of duty on the part of Mr Scott, and therefore PJS, in setting up the unsafe system of work was so egregious as to release Ace from any responsibility for the actions of PJS. While being prepared to accept that Ace as the plaintiff’s employer could not delegate the duty which it owed to the plaintiff to PJS, the plaintiff submitted that Ace should be entirely exculpated from any blame because it could not have anticipated such a gross breach of the duty of care which it owed to the plaintiff on the part of PJS.

51 The reason why the plaintiff supported Ace in its submissions was to minimise the draconian effects of s 151Z(2)(c) of the WCA.

52 I accept (and it was not truly in issue) that PJS through its servant Mr Scott owed the plaintiff a duty of care which it breached. The remainder of the argument misunderstands the nature and content of the duty of care owed by an employer to an employee. This was recently restated in Czatyrko v Edith Cowan University [2005] HCA 14; (2005) 79 ALJR 839 at [12]:

“An employer owes a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. If there is a real risk of injury to an employee in the performance of a task in the workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards.”

53 What is clear from the facts of this case is that Ace, although the employer of the plaintiff, had entrusted the conduct of the workshop to PJS and through it to Mr Scott. Ace, through its principal Mr Beeck, appears to have had little interest in how the workshop operated. It relied upon Mr Scott not only to produce a satisfactory output but to observe and discharge its obligation to take reasonable care to avoid exposing its employees to unnecessary risk of injury in that workshop.

54 It is difficult to imagine a clearer example of an attempt by an employer to delegate its obligations for the safety of its employees. The concept of “non delegable duty” has real force on the facts of this case.

55 The analysis by Giles JA of what constitutes a non delegable duty of care and how it operates in Elliott v Bickerstaff [1999] NSWCA 453; (1999) 48 NSWLR 214 is instructive:

“[74] The question of a non-delegable duty of care has arisen where a person owing a duty of care has delegated performance to another person. A person owing a duty of care may generally fulfil it by exercising reasonable care in
entrusting performance to a competent third party. But in some circumstances the person owing the duty of care can not fulfil it in that way, and is liable if the third party does not exercise due care. In such circumstances, it is said that the duty of care is non-delegable.

[75] The language can mislead. In both situations the duty of care is owed by the first person, and the duty of care is not delegated. The performance can be and is delegated. The effect of a non-delegable duty of care is that the person owing the duty of care is under a more stringent duty of care, a duty of care which cannot be fulfilled by exercising reasonable care in entrusting performance to a competent third party. The duty of care requires that the person ensure that the third party exercises reasonable care, in the sense that the person is liable if the third party does not exercise reasonable care.

[76] So in Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313, Brennan CJ said (at 330-331):
“However, if the defendant is under a personal duty of care owed to the plaintiff and engages an independent contractor to discharge it, a negligent failure by the independent contractor to discharge the duty leaves the defendant liable for its breach. The defendant's liability is not a vicarious liability for the independent contractor's negligence but liability for the defendant's failure to discharge his own duty [cf Voli v Inglewood Shire Council (1963) 110 CLR 74 at 95]. The duty in such a case is often called a ‘non-delegable duty’.
In principle, no duty owed by A to B can be delegated to C. If it were otherwise, the mere delegation would discharge A's duty to B. The difference between a duty and its discharge appears clearly in the speech of Lord Blackburn in Hughes v Percival (1883) 8 App Cas 443 at 446 where, in reference to the duty owed by the defendant to his neighbour in making use of the party-wall between them, his Lordship said:
‘But I think the law cast upon the defendant, when exercising this right, a duty towards the plaintiff. I do not think that duty went so far as to require him absolutely to provide that no damage should come
to the plaintiff's wall from the use he thus made of it, but I think that the duty went as far as to require him to see that reasonable skill and care were exercised in those operations which involved a use of the party-wall, exposing it to this risk. If such a duty was cast upon the defendant he could not get rid of responsibility by delegating the performance of it to a third person. He was at liberty to employ such a third person to fulfil the duty which the law cast on himself, and, if they so agreed together, to take an indemnity to himself in case mischief came from that person not fulfilling the duty which the law cast upon the defendant; but the defendant still remained subject to that duty, and liable for the consequences if it was not fulfilled.’
In Kondis v State Transport Authority (1984) 154 CLR 672 at 683, in the course of reviewing earlier cases, Mason J observed:

‘On the hypothesis that the duty is personal or incapable of delegation, the employer is liable for its negligent performance, whether the performance be that of an employee or that of an independent contractor.’

Although the duty is personal to the defendant, the term ‘non-delegable’ does not mean that the defendant cannot get another to discharge the duty. As Lord Hailsham of St Marylebone said in McDermid v Nash Dredging Ltd [1987] AC 906 at 910 in reference to an employer's duty to his employee, ‘non-delegable’ means ‘only that the employer cannot escape liability if the duty has been delegated and then not properly performed’.”

[77] Where the person owing the duty of care must ensure that the third party exercises reasonable care, and is liable if the third party does not do so, it can be seen why the non-delegable duty of care has been described as a disguised
form of vicarious liability (J G Fleming, The Law of Torts, 9th ed (1998) Sydney, LBC at 434) and even as a logical fraud (G Williams, “Liability for Independent Contractors” (1956) Cam LJ 180 at 193). The person who owes the non-delegable duty of care may be liable without fault, whether personal or of a servant or agent. Although conceptually the breach of duty will be a breach of that person's duty of care, the so-called duty of care in truth is not a duty to take care but a mechanism for responsibility for someone else's failure to take care. The concept of a non-delegable duty of care has nonetheless been recognised for over a century (see Pickard v Smith (1861) 10 CB (NS) 470; 142 ER 535; Dalton v Henry Angus & Co (1881) 6 App Cas 740), and is thoroughly established in the law including in the decisions of the High Court. Indeed, it extends to liability for the failure to take care of third parties who are not independent contractors in the traditional sense: eg, Commonwealth v Introvigne (1982) 150 CLR 258.

…

[79] This was taken up in the joint judgment of Mason CJ and Deane J, Dawson J, Toohey J and Gaudron J in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 550-551. Their Honours said:
“It has long been recognized that there are certain categories of case in which a duty to take reasonable care to avoid a foreseeable risk of injury to another will not be discharged merely by the employment of a qualified and ostensibly competent independent contractor. In those categories of case, the nature of the relationship of proximity gives rise to a duty of are
of a special and ‘more stringent’ kind, namely a ‘duty to ensure that reasonable care is taken’ [see (1984) 154 CLR 672 at 686]. Put differently, the requirement of reasonable care in those categories of case extends to seeing that care is taken. One of the classic statements of the scope of such a duty of care remains that of Lord Blackburn in Hughes v Percival (1883) 8 App Cas 443 at 446:

‘… that duty went as far as to require [the defendant] to see that reasonable skill and care were exercised in those operations. … If such a duty was cast upon the defendant he could not get rid of responsibility by delegating the performance of it to a third person. He was at liberty to employ such a third person to fulfil the duty which the law cast on himself … but the defendant still remained subject to that duty, and liable for the consequences if it was not fulfilled.’”

56 What is clear from the analysis of Giles JA is that because of the non-delegable nature of the duty of care owed by Ace to the plaintiff, the negligence of PJS to which Ace had entrusted the performance of that duty, became the negligence of Ace. Ace cannot escape its responsibility for the safety of the plaintiff by saying that it had entrusted this matter to PJS and that it was all the fault of PJS.

57 The submission that the breach of duty by PJS through its servant Mr Scott was so egregious as to in some way break the relationship between Ace and the plaintiff fails. No authority is cited to support it and it runs contrary to the concepts which are fundamental to the operation of the non-delegable duty of care in an employer/employee relationship.

58 In any event, although the system of work set up by Mr Scott was a clearly defective and dangerous one, the cases in this area reveal, somewhat regrettably, that breaches of this kind and seriousness are not unusual. Certainly there is nothing in the circumstances of this unsafe system of work which would operate to suspend or modify the duty of care which Ace owed to the plaintiff.

59 I am of the opinion that liability has been established against both Ace and PJS. The real issue is the question of apportionment of liability between them.

60 On that issue, I am attracted to the approach followed by Campbell JA in J Blackwood & Son v Skilled Engineering [2008] NSWCA 142 at [94] where his Honour said:

“Identifying the respects in which they have each failed in their respective duties to the Worker is necessary to be able to form a view about the causal contribution that each of those failures has made to the injury that the Worker has suffered, and the culpability of those failures. Any apportionment of responsibility between the Appellant and the Respondent requires such an assessment of the causal significance of any breach of duty of each of them, and of their culpability concerning any such breach of duty. Those factors of causal significance and culpability were identified by the High Court in Podrebersek v Australian Iron & Steel Pty Limited [1985] HCA 34; (1985) 59 ALJR 492 at 494 as ones relevant to apportionment of responsibility between a defendant and plaintiff who has been guilty of contributory negligence. When the wording of the statutory test by reference to which apportionment for contributory negligence is made is the same as the statutory test by reference to which apportionment of contribution between tortfeasors is made, those factors are equally relevant to apportionment of contribution between tortfeasors.”

61 Applying that approach to the facts of this case it seems to me that the causal potency of the actions of Ace and PJS is the same. This is because Ace has to accept, as a matter of law, responsibility for the actions of PJS through its servant Mr Scott.

62 The position in relation to relative culpability, however, is different. Mr Scott was present in the workshop. He was directly involved in the job which led to the plaintiff’s injury. He devised the unsafe system of work and participated in its implementation. He had the opportunity to see it in operation and had he turned his mind to it, to anticipate the risks which it created for the plaintiff. Right up until the occurrence of the accident, Mr Scott had it within his power to prevent it.

63 The position of Mr Beeck is somewhat different. He appears to have had no direct knowledge of the system of work and the actual danger to which the plaintiff was exposed. This does not, of course, release him from culpability because as indicated, his uncritical entrusting of the plaintiff’s safety to PJS without any personal supervision on his part, of itself involved culpability of a serious kind.

64 Nevertheless, because of his position of advantage and the fact that he did devise and implement the system of work, greater culpability should be attributed to Mr Scott and therefore to PJS for the plaintiff’s injuries. I would apportion liability as to sixty five percent against PJS and thirty five percent against Ace.

65 There remains the question of contributory negligence. The plaintiff conceded that although he thought the system of work which Mr Scott directed was potentially unsafe, he made no protest. In the circumstances of this case does that knowledge and compliance with the directions of Mr Scott without protest, amount to contributory negligence?

66 In McLean v Tedman (1984) 155 CLR 306 at 315 the High Court posed the question in the context of an unsafe system of work as follows:

“The issue of contributory negligence is now to be approached on the footing that Brambles failed to discharge its obligation to provide a safe system, that is, to take appropriate precautions against the risk of injury arising from the motorist’s negligence and the employee’s failure to observe an oncoming vehicle as he carried out his allotted task. The question is whether that failure should be characterised as mere inattention or inadvertence or whether it amounts to negligence, there being a well recognised distinction between the two. It is accepted that in considering whether there was contributory negligence by an employee in a case in which the employer has failed to provide a safe system of work, the circumstances and conditions in which he had to do his work must be taken into account. And the issue of contributory negligence is essentially a question of fact.”

67 Relevant circumstances in this matter were that the plaintiff had been employed by Ace for somewhere between nine and ten months. Whilst he was an experienced body builder, he was less experienced in carrying out mechanical repairs. The system of work which he was attempting to implement had been devised by the workshop manager and he had been directed to participate in it.

68 I am not persuaded that contributory negligence has been made out. This is not one of those cases where a worker has been injured by an act of carelessness for his own safety that was incidental to the performance of his duties. He was injured through the performance of his duties in the precise way in which he had been instructed to perform them. Any assessment of what reasonable care for a plaintiff’s own safety requires that plaintiff to do, must take into account the practical opportunities for choice that the plaintiff has concerning his or her own safety.

69 In the present case, the only practical choice that the plaintiff had, short of resigning, was to complain to someone in authority about the inadequacy of the system and seek to have it fixed. In this workshop the person in charge was the very person who had devised the system of work. The only other person to whom he could complain was Mr Beeck. Up until that point in time, Mr Beeck had shown no interest or inclination to intervene in how the workshop operated, particularly on the basis of safety concerns. It is also not without significance that at the time when the system of work was being implemented, Mr Beeck had not yet come into the workshop.

70 In those circumstances, I do not regard the plaintiff’s failure to complain or to refuse to participate in the system of work as amounting to contributory negligence.

71 Contributory negligence has not been made out against the plaintiff.

Findings and orders

72 For the reasons set out above, I find that the plaintiff’s injuries were caused by negligence on the part of PJS and Ace. I have apportioned responsibility for those injuries as to 65% against PJS and 35% against Ace. I find that there was no contributory negligence on the part of the plaintiff.

73 In the course of the hearing the parties advised the Court that once the above findings had been made, the parties would be in a position to calculate the amounts for which judgment should be entered. Accordingly, I direct the parties to prepare Short Minutes of Order in accordance with these reasons so that judgment can be entered on Friday, 19 December 2008.

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