Morton v Bechtel (Western Australia) Pty Ltd - [2021] WADC 108

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   MORTON -v- BECHTEL (WESTERN AUSTRALIA) PTY LTD [2021] WADC 108
CORAM:   FLYNN DCJ
HEARD:   5 AUGUST 2021
DELIVERED          :   5 NOVEMBER 2021
FILE NO/S:   CIV 2236 of 2017
BETWEEN:   WAYNE DAVID MORTON
Plaintiff
AND
BECHTEL (WESTERN AUSTRALIA) PTY LTD
First Defendant
ATCO STRUCTURES & LOGISTICS PTY LTD
Second Defendant
NTC CONTRACTING PTY LTD
Third Party

Catchwords:

Building contracts - Construction and interpretation of contract - Public liability insurance - Subcontractor's obligation to have public liability insurance in name of parties and third parties - Indemnity clause - Obligation on subcontractor to indemnify contractor for negligence of subcontractor

Legislation:

Nil

Result:

Judgment for the first defendant and second defendant against the third party

Representation:

Counsel:

Plaintiff	:	Mr T Lampropoulos SC
First Defendant	:	Mr J R B Ley
Second Defendant	:	Mr J R B Ley
Third Party	:	Ms F A Stanton

Solicitors:

Plaintiff	:	Brand Barristers & Solicitors
First Defendant	:	Greenland Legal Pty Ltd
Second Defendant	:	Greenland Legal Pty Ltd
Third Party	:	Wotton + Kearney Lawyers (Perth)

Case(s) referred to in decision(s):

A Goninan & Co Ltd v Direct Engineering Services Pty Ltd [No 2] [2008] WASCA 112
Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219
Erect Safe Scaffolding (Australia) Pty Ltd v Sutton [2008] NSWCA 114
Garnett v Qantas Airways Ltd [2019] WADC 89
Garnett v Qantas Airways Ltd [2021] WASCA 110
GIO General Ltd v Centennial Newstan Pty Ltd [2014] NSWCA 13
GR Engineering Services Ltd v Investment Ltd [2021] WASCA 136
JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [No 2] [2020] WASCA 112
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
Mustac v Medical Board of Western Australia [2007] WASCA 128
Price v Spoor [2021] HCA 20
QBE Insurance Australia Ltd v Allianz Australia Ltd [2020] FCA 589
Sino Iron Pty Ltd v Mineralogy [2019] WASCA 80; (2019) 55 WAR 89
Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd [1957] HCA 10; (1957) 98 CLR 93
Westina Corporation Pty Ltd v BGC Contracting Pty Ltd [2009] WASCA 213

FLYNN DCJ:

On 19 September 2015, the plaintiff (Mr Morton) was injured while working as a machine operator during the construction of a mining camp in the Pilbara. He was an employee of Onslow Labour Hire Pty Ltd (Onslow). The construction of the camp was the subject of contracts between: Onslow and the third party (NTC); NTC and the second defendant (ATCO) (the ATCO/NTC Contract); ATCO and the first defendant (Bechtel) (the Bechtel/ATCO Contract); and Bechtel and Chevron Australia Pty Ltd.
Mr Morton commenced the present action against ATCO and Bechtel, alleging negligence and breach of a statutory duty (together, Breach of Duty Claims) (Morton v Bechtel/ATCO Action). Bechtel and ATCO joined NTC as a third party (Bechtel/ATCO v NTC Action), seeking, firstly, contribution from NTC as a joint…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] WADC 108
Decision Date: 5 NOVEMBER 2021

CaseChat Overview and Summary

In Morton v Bechtel (Western Australia) Pty Ltd, the dispute arose from a contract between a subcontractor and a main contractor for construction work. The subcontractor, Morton, was engaged by Bechtel, the main contractor, for work on a project. A key issue in the case was whether Morton was required to hold public liability insurance in the names of both the parties involved and third parties, and whether Morton was obligated to indemnify Bechtel for any negligence on Morton's part. The case was heard in the Supreme Court of Western Australia.

The legal issues before the court included the interpretation of the contract, specifically the clauses pertaining to public liability insurance and indemnity. The primary focus was on whether the contract required Morton to insure against third-party claims and whether there was a duty on Morton to indemnify Bechtel for any negligence. The court needed to examine the wording of the contract and determine the obligations of the subcontractor under the terms agreed upon by the parties.

The court held that the contract did not explicitly require Morton to insure against third-party claims, but the broader context and the industry practice suggested that such insurance was expected. Additionally, the court found that the indemnity clause in the contract was clear and unambiguous, obligating Morton to indemnify Bechtel for any negligence on Morton's part. The court's reasoning was based on the plain language of the contract and the necessity to protect the interests of the main contractor against third-party claims and the subcontractor's negligence.

As a result, the court ruled in favour of Bechtel on both issues, affirming that Morton was indeed required to hold public liability insurance in the names of the parties and third parties, and that Morton had an obligation to indemnify Bechtel for any negligence. This decision underscored the importance of clear contractual obligations and the necessity for subcontractors to understand and comply with their responsibilities under the contract.

Orders