Mt Owen Pty Ltd v Parkes

[2023] NSWCA 77

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Mt Owen Pty Ltd v Parkes [2023] NSWCA 77

Hearing dates:

3 March 2023

Date of orders:

26 April 2023

Decision date:

26 April 2023

Before:

Brereton JA at [1];
Kirk JA at [25];
Basten AJA at [26]

Decision:

(1)   In the appeal by Mt Owen Pty Ltd:

(a)   Dismiss the appeal from the judgment in the Common Law Division;

(b)   Order that the appellant pay the respondents’ costs of the appeal.

(2)   In the cross-appeal by Titan Technicians Enterprise Pty Ltd:

(a)   Allow the cross-appeal;

(b)   Set aside orders 2, 3, 4, 5, 6, 7 and 8 made in the Common Law Division on 15 July 2022;

(c)   Give judgment for Titan on Mr Parkes’ claim against it;

(d)   Dismiss Titan’s cross-claim against Mt Owen;

(e)   Order that Mt Owen pay the plaintiff’s and Titan’s costs in the Common Law Division; and

(f)   Order that Mt Owen pay Titan’s and Mr Parkes’ costs of the cross-appeal.

Catchwords:

NEGLIGENCE – workplace injury – negligence of fellow worker conceded – vicarious liability – employee of labour hire company – employee working at premises of third party – whether host employer exercised control over negligent employee and work carried out – whether host employer vicariously liable

DAMAGES – duty of care to worker – breach of duty – duty of employer – duty of third party on whose premises work carried out – whether legal employer negligent – apportionment of liability between legal employer and host employer – whether legal employer’s non-delegable duty required apportion-ment of part of responsibility for injury to it

Legislation Cited:

Workers Compensation Act 1987 (NSW), Pt 5, Div 5

Cases Cited:

Day v The Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335; [2013] NSWCA 250

Deutz Australia Pty Ltd v Skilled Engineering Ltd (2001) 162 FLR 173; [2001] VSC 194

DIB Group Pty Ltd t/as Hill & Co v Cole [2009] NSWCA 210; [2009] Aust Torts Rep 82-022

Estate of the Late M T Mutton v Howard Haulage Pty Ltd [2007] NSWCA 340

Hallmark Construction Pty Ltd v Brett Harford [2020] NSWCA 41

Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61

Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1; [2009] HCA 35

McDonald v The Commonwealth (1945) 46 SR (NSW) 129

Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd [1947] AC 1

O’Connor v Commissioner for Government Transport (1954) 100 CLR 225; [1954] HCA 11

Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626; [1986] HCA 34

State of New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4

TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47

Top Hut Banoon Pastoral Co Pty Ltd v Walker [2021] NSWCA 296

Zuijs v Wirth Brothers Pty Ltd (1955) 93 CLR 561; [1955] HCA 73

Category:

Principal judgment

Parties:

Mt Owen Pty Limited (Appellant)
Glen Matthew Parkes (First Respondent)
Titan Technicians Enterprise Pty Ltd (Second Respondent)

Representation:

Counsel:
MT McCulloch SC / D Talintyre (Appellant)
ID Roberts SC / RJM Foord (First Respondent)
L King SC / H Chiu (Second Respondent)

Solicitors:
Sparke Helmore Lawyers (Appellant)
Denniston & Day Lawyers (First Respondent)
Hickson Lawyers (Second Respondent)

File Number(s):

2022/00229896

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

[2022] NSWSC 909

Date of Decision:

7 July 2022

Before:

Campbell J

File Number(s):

2019/133481

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 29 July 2017, Mitchell Kemp, Glen Parkes and a third worker were undertaking maintenance on a Caterpillar D10 bulldozer at the Glendell coal mine, owned and operated by Mt Owen Pty Ltd (Mt Owen). All three men were employed by Titan Technicians Enterprise Pty Ltd (Titan), but working at the premises of Mt Owen. During the work Mr Parkes was injured when Mr Kemp dropped the blade of the bulldozer suddenly, causing the track on which Mr Parkes was standing to flick up and crush his right leg between the track and the edge of the access platform beside the cabin of the bulldozer.

Mr Parkes claimed damages against Mt Owen and Titan. Neither party disputed that Mr Kemp’s act had been negligent. Mr Parkes claimed that Mt Owen (and not Titan) was vicariously responsible for Mr Kemp’s negligence and that Mt Owen breached its own duty of care to Mr Parkes. Mt Owen asserted that Titan (as Mr Kemp’s employer) was vicariously liable for his negligent act, and that Titan (as Mr Parkes’ employer) breached its duty of care to him and was at least partly responsible for any damages payable to Mr Parkes.

Campbell J found that at all material times Mr Kemp was the employee of Mt Owen pro hac vice and that it was therefore vicariously liable for Mr Kemp’s negligence. The judge also found that both Mt Owen and Titan breached their own duties of care to Mr Parkes. He apportioned liability as to 60% for Mr Kemp’s negligence (for which Mt Owen was responsible) and as to 40% to be shared equally by Mt Owen and Titan. A claim for contributory negligence was dismissed and not challenged on appeal.

Mt Owen appealed the findings that it was liable; Titan cross-appealed the attribution of liability ascribed to it.

The primary issues on appeal were whether the trial judge was correct to find that:

(i)    Mt Owen was vicariously liable for the negligence of Mr Kemp; and

1. Titan, as Mr Parkes’ legal employer, breached its duty of care to him.

The Court held, dismissing the appeal and (by majority) upholding the cross- appeal:

As to issue (i) – vicarious liability of host employer

By Basten AJA (Brereton and Kirk JJA agreeing):

The trial judge correctly accepted that there can be no dual vicarious liability in two principals for the acts of a negligent individual. The judge also correctly held that while an employer is vicariously liable for the negligent act of an employee undertaken within the scope of his or her employment, the employer may not be the legal employer of the worker: [32], [33].

Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626; [1986] HCA 34; State of New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4 applied.

Where a worker is undertaking work on the premises of, and under direction from another party, the transfer of control may lead to a shift of liability from the legal employer to the “host employer”. While such a transfer has been said to arise only under “exceptional circumstances”, modern labour hire arrangements and the statutory regulation of workplace safety may more readily lead to such a finding, depending on the nature and extent of control over a worker: [41], [48].

Mersey Docks [1947] AC 1 considered; Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61 applied.

Mt Owen’s authority to give directions and orders to workers provided by Titan conferred by cl 5.1 of the purchase orders issued for labour hire, the detailed safety requirements set out in Mt Owen’s “job safety analysis” (JSA), and evidence that Mr Kemp was subject to direction by Mt Owen’s supervisors, demonstrated a transfer of control to Mt Owen. Further, Titan required its employees to follow the workplace health and safety policies of the host employer where they were equal to or of a higher standard than Titan’s requirements: [56], [58] – [61].

As to issue (ii) – cross-appeal

By Brereton JA (Kirk JA agreeing):

The finding of negligence against Titan was based on the supposed inadequacy of Mt Owen’s JSA which was completed and signed off by Mr Wallace on behalf of Mt Owen before Mr Kemp and the crew commenced work on the bulldozer. Reasonable care did not require that the JSA specifically restate, for oil-testing, a requirement which was already adequately stated in a procedure applicable to the task, that there be no equipment movement while personnel were within the footprint: [17].

If the JSA were deficient in failing to stipulate that implement movement should occur only while the other tradesmen are beyond the footprint of the bulldozer, the deficiency was not causative. It was not proved that, but for the omission of further specification of the correct procedure for oil testing, the accident would not have occurred: [22].

By Basten AJA (dissenting):

The legal employer owed a non-delegable duty of care to the worker, the content of which is variable and dependent upon the circumstances in which it is engaged: [74]-[81].

Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1; [2009] HCA 35; TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47; DIB Group Pty Ltd t/as Hill & Co v Cole [2009] NSWCA 210 followed; Estate of the Late M T Mutton v Howard Haulage Pty Ltd [2007] NSWCA 340; Top Hut Banoon Pastoral Co Pty Ltd v Walker [2021] NSWCA 296 distinguished.

The finding that the JSA failed to make sufficiently clear that the controls with respect to movement of the equipment extended to movement of the implements should be accepted. Titan accepted its responsibility to take steps to ensure a safe working environment for its employees and had extensive safety protocols which were to apply unless those of the host employer were of an equal or more demanding standard. To ensure that their standard was fulfilled, Titan should have been alert to errors and/or omissions in the JSA. Accordingly, there was no error on the part of the trial judge in finding Titan liable: [84].

Since both Titan and Mt Owen had the relevant legal authority to impose constraints on the activities of Titan’s workers there was no error in attributing equal responsibility to the host employer (Mt Owen) and the legal employer (Titan) for the injury to the plaintiff: [85].

JUDGMENT

1. BRERETON JA: I have had the benefit of reading in draft the judgment to be delivered by Basten AJA, which relieves me of the need to recite the relevant facts save to the extent that they are specifically mentioned below. I agree that Mt Owen’s appeal should be dismissed, for the reasons his Honour gives. However, I have reached a different view as to the outcome of Titan’s cross-appeal. For the reasons that follow, in my opinion, the cross-appeal should be allowed, and the judgment against Titan should be set aside.

2. The trial judge held that in addition to Mr Kemp’s negligence, for which Mt Owen was vicariously liable, Mt Owen and Titan were directly in breach of duties of care owed by them to Mr Parkes. His Honour apportioned liability 60% to Mr Kemp (and thus vicariously to Mt Owen), and the remaining 40% equally between Mt Owen and Titan, with the result that as between Mt Owen and Titan the former ultimately bore 80% and the latter 20%.

3. The finding of negligence against Titan was based on the supposed inadequacy of the Mt Owen Job Safety Analysis form (“JSA”) which was completed and signed off by Mr Wallace on behalf of Mt Owen before the crew (comprising Mr Kemp, Mr Colby and Mr Parkes) commenced the service of the bulldozer. The trial judge first found that Mt Owen was negligent in failing to have the JSA spell out a requirement that implement movement should occur only while the other tradesmen are beyond the footprint of the bulldozer:^[1]

“[71]   Having given the matter earnest consideration I am persuaded, notwithstanding the opinions of Mr Underwood and Professor Hebblewhite, that the JSA should have spelt out the procedure to be followed if it were necessary to operate the hydraulically driven implements to obtain a hydraulic SOS in an efficient manner in the course of the service. I appreciate that Mr Colby says controls can be adopted, as I have referred to above, for this to occur while the other tradesmen are actually on the machine collecting the samples. He had no difficulty whatsoever on the day. However, the opinion of Mr Wallace, not to mention the opinions of the experts, is implement movement should occur while the other tradesmen are beyond the footprint of the bulldozer. That should be spelt out in the JSA. One cannot assume that the documentation of systems of work or job safety analyses are mere matters of box ticking or compliance. They may have their modern origin in work, health and safety legislation, but the requirements of the law of negligence in the field should be sensible to this reality.

[72]    As the plurality pointed out in McLean v Tedman (at 313) accident prevention is undoubtedly one of the modern obligations of an employer. Questions of breach may be determined by reference to the employer’s power “to prescribe, warn, command and enforce an obedience to his commands.”

[73]    I appreciate that I have noted more than once that counsel were content to proceed on the basis that movement of the equipment extends to movement of the implements. However, I am persuaded, as apparently Mr Kemp was, for what it’s worth, that more needed to be said to bring home to Maintenance Crew B what had to be done.”

1. Primary judgment at [71].

4. His Honour then held that Titan was liable on the same basis:^[2]

“[76]    Titan, as the legal employer, is negligent on the same basis. As Mason P said (at [67]) of TNT and Christie, it would be contrary to principle to enable or encourage an employer that operates a labour hire business “to treat the normal incidents of the employment relationship as modified simply because its employees are sent off to work for a client”. His Honour observed that “the very fact” that employees are working under the de facto management of host employers “will, in some cases, have the practical effect of requiring the employer to adopt additional measures by way of warning or training in order to discharge its common law duty of care to its employees”.

[77]    As an employer of, inter alia, diesel mechanics within the mining industry, Titan would be aware of the matters relevant to my decision about foreseeability, significance of risk and available precautions that I have set out above dealing with the liability of Mt Owen. On the same basis I am of the view that Titan is negligent.”

2. Primary judgment at [76].

5. First, Titan challenged those conclusions. Ground 1 of Titan’s cross-appeal was that:

“The trial judge erred in finding (at J [71]) that discharge of the cross-appellant’s duty of care to the first cross-respondent required the JSA to ‘spell out’ that a movement of implements on a bulldozer should not occur while other tradesmen are within the footprint of the bulldozer.”

6. This challenge was repeated in Titan’s written submissions:^[3]

[7] By this cross-appeal, Titan challenges the trial judge’s findings that:

(a) Besides Mr Kemp’s negligence in causing the accident, both Mt Owen and Titan were directly in breach of duty for failing to have the JSA spell out “the procedure to be followed if it were necessary to operate the hydraulically driven implements to obtain a hydraulic SOS in an efficient manner in the course of the service”; …

3. Cross-appellant’s submissions at [7].

7. It was elaborated in the following paragraphs of Titan’s written submissions, in which Titan submitted, first, that the JSA was not defective, ^[4] and secondly, that any deficiency in the JSA was not causative of the accident and thus injury to Mr Parkes. ^[5]

   4. Cross-appellant’s submissions at [8] – [20].

   5. Cross-appellant’s submissions at [21] – [26].

8. Next, while accepting that, if Mt Owen was negligent in respect of the JSA, then, on the authority of TNT Australia Pty Ltd v Christie,^[6] and DIB Group Pty Ltd v Cole, ^[7] it necessarily followed that Titan was technically in breach of its non-delegable duty of care to Mr Parkes,^[8] Titan further submitted that it did not follow that some percentage of the liability for that negligence must be apportioned to it, referring to Top Hut Banoon Pastoral Co Pty Ltd v Walker, ^[9] in which the dismissal of a host employer’s cross-claim for contribution from the ‘legal’ employer – in effect an apportionment of 0% against the ‘legal’ employer and 100% to the host employer – was upheld, and in particular the statement of Gleeson JA (with whom Preston CJ of LEC and Stevenson J agreed) that:^[10]

“Where the employer is not in control of the premises or place at which the worker is injured, the scope of the employer’s duty, and what constitutes a failure to fulfill this duty, must depend on all the circumstances: Dib Group at [52].”

6. (2003) 65 NSWLR 1; [2003] NSWCA 47.

7. [2009] NSWCA 210 at [51]-[54].

8. Cross-appellant’s submissions at [32].

9. [2021] NSWCA 296.

10. [2021] NSWCA 296 at [30].

Was the JSA deficient?

9. The JSA stipulated, in respect of the step “Carry out Maintenance Live Testing task”, that the potential hazards included “unplanned movement” and “personnel and equipment interaction”. The relevant “controls” specified included:

Designated person in charge of live testing to manage all activities;

…

Establish Exclusion Zone Next to Operating Excavator or Dozer Tracks;

…

Person in charge of live testing is to confirm all persons are out of the machine footprint before any equipment movement is undertaken;

Positive communications;

…

10. Before work commenced, Mr Kemp took the crew through the JSA. Each member of the crew acknowledged these (and other) requirements by placing their initials on the relevant pages of the JSA, which was subsequently approved by Mr Wallace as supervisor on behalf of Mt Owen before the commencement of the work.

11. In their joint report, both experts, Mr Underwood and Professor Hebblewhite, accepted that the Live Testing Procedure in the JSA specified that standing on the tracks of the dozer was not permitted during movement of the dozer or of the dozer parts. Professor Hebblewhite said:

“My response is there was no need to prevent standing on the tracks of the dozer during live testing, provided that no movement of the dozer or dozer parts was taking place. This was spelt out in the Live Testing Procedure …”

12. Mr Underwood said:

“… in the case of Mt Owen they did so instruct fitters to ensure that no-one stood on the tracks when any functions of the machine were being operated within the live testing program.”

13. Both agreed that the requirement in the JSA that the person in charge of live testing confirm that all persons are out of the machine footprint and clear of any hazard before any equipment movement is undertaken was appropriate. In response to the question whether Mt Owen should have prepared and enforced a JSA specific to the task of oil sampling while live testing was being undertaken, Professor Hebblewhite said:

“I believe it would have been advantageous to have such a document, however, provided that the overall Live Testing JSA and Procedure had been complied with, the incident would not have occurred, regardless of the absence of a specific oil testing JSA.”

14. Mr Underwood responded:

“I agree with Prof Hebblewhite. Having a JSA for oil sampling could have outlined alternative methods that were to be adopted if a sample could not be readily obtained from the sample point. As an example, the precautions for warming the oil by operating any part of the hydraulic system should then have restated that personnel (other than the operator) must be clear of the machine footprint while any machine function (such as the ripper, the blade, or the machine drive) was likely to be engaged.”

15. The high point of this evidence is that a specific oil-testing procedure might have “restated” the requirement that personnel other than the operator must be clear of the machine footprint while any machine function was likely to be engaged – in other words, the same prohibition that already appeared in the extant JSA.

16. The JSA plainly stipulates that the “Person in charge of live testing is to confirm all persons are out of the machine footprint before any equipment movement is undertaken”. As his Honour noted, the experts were of the view that the JSA sufficiently made clear that “equipment movement” in the JSA included movement or operation of the implements attached to the dozer. As his Honour also noted, more than once, counsel were also content to proceed on the basis that “equipment movement” included movement or operation of the implements. No member of the crew suggested that they did not so understand it, and in the context in which it appears that is how a reasonable worker would understand it, all the more so bearing in mind that the context is one of experienced workers, such that it may be reasonable to leave the safe performance of the work to the personnel to whom it is entrusted. ^[11] In my opinion, contrary to the trial judge’s conclusion, no more was required to bring home to Maintenance Crew B what had to be done, than the clear requirement stipulated in the JSA, which none suggested they did not understand.

    11. O’Connor v Commissioner for Government Transport (1954) 100 CLR 225; [1954] HCA 11.

15. In that context, in my opinion, reasonable care did not require that the JSA specifically restate, specifically for oil-testing, a requirement which was already adequately stated in a procedure applicable to the task, that there be no equipment movement while personnel were within the footprint. Notably, Mt Owen did not develop any submission in defence of the trial judge’s conclusion in this respect. Nor for that matter did Mr Parkes, who adopted Titan’s submissions. ^[12] In my opinion, the JSA was not deficient; it sufficiently covered the situation.

    12. First cross-respondent’s submissions at [1].

Was any deficiency in the JSA causative?

18. Having found that the JSA was deficient, the trial judge did not expressly address the question of causation.

19. As has been noted, the crew members, including Mr Wallace, were taken through the JSA by Mr Kemp, before work commenced. ^[13] They must all be taken to have been aware of its requirements. No-one suggested that they were not. According to his Honour’s findings, each member of the crew was an experienced tradesman and knew the correct procedure. ^[14] Moreover, in accordance with those procedures, Mr Kemp gave hand signals to Mr Colby to indicate that the implements were about to be moved, which Mr Colby acknowledged with a “thumbs up” once he had moved clear of the track. ^[15] For some unknown reason, Mr Kemp failed to do so in respect of Mr Parkes.

    13. Primary judgment at [5].

    14. Primary judgment at [34].

    15. Primary judgment at [43].

20. As has been noted, Professor Hebblewhite and Mr Underwood agreed that had the extant JSA been complied with, the accident would not have occurred. Given that Mr Kemp was required by the extant JSA to ensure that others were clear of the footprint before moving the implements, and was aware of the correct process, but for some reason overlooked the requirement in the case of Mr Parkes (though not in the case of Mr Colby) – perhaps, as Titan’s submissions posit, because he did not see where Mr Parkes was, and incorrectly assumed he was kneeling on the step rather than standing on the tracks – it is not apparent how a further statement of the procedure in a specific “oil testing” JSA would have made any difference. Indeed, as Mt Owen submitted, “[t]he practical reality is that Kemp did just as he pleased in the execution of that work at the time, without reference to the requirements of either Mt Owen or Titan”. ^[16]

    16. Second cross-respondent’s submissions at [9].

21. Again, neither Mt Owen (let alone Mr Parkes, who adopted Titan’s submissions) developed any submission in defence of the trial judge’s conclusion in this respect. ^[17]

    17. First cross-respondent’s submissions at [1].

22. In my opinion, if (contrary to my opinion) the JSA was deficient in failing to stipulate that implement movement should occur only while the other tradesmen are beyond the footprint of the bulldozer, any such deficiency was not causative; such a stipulation would not have prevented the performance of a “blade drop” with Mr Parkes in the danger zone, in circumstances where Mr Kemp knew he should not do it but for some reason did not advert to Mr Parkes’ presence. In my opinion, it was not proved that but for the omission of further specification of the correct procedure for oil testing, the accident would not have occurred.

Apportionment

23. As in my opinion Titan did not incur liability to Mr Parkes, it is unnecessary to consider the question of apportionment and somewhat artificial to do so, save to observe that on the hypothesis that the JSA was deficient and that deficiency was causative, it seems to me that while the initial apportionment of 60/40 was within the generous ambit of the trial judge’s discretion, the subsequent apportionment of the 40% equally between Mt Owen and Titan miscarried, by failure to have regard to the circumstances that the JSA was Mt Owen’s document, prepared for a procedure required to be performed by Mt Owen on Mt Owen’s site and equipment and under Mt Owen’s ultimate direction and control. I do not see how in those circumstances Titan’s ultimate share should be more than a distinctly minority share of the 40%, and in circumstances where Mr Parkes’ employment had, like Mr Kemp’s, been transferred to Mt Owen, there is much to be said for the argument that, as in Top Hut Banoon, it should be assessed at nil.

Conclusion

24. In my opinion, the appeal should be dismissed and the cross-appeal should be allowed. The judgment against Titan should be set aside, and in lieu thereof, there should be judgment for Titan on the claim against it. The declaration that Mt Owen is entitled to contribution from Titan should likewise be set aside. The order that Mt Owen and Titan pay Mr Parkes’ costs of the proceedings should be varied by omitting the reference to Titan. In circumstances where, if Mr Parkes were required to pay Titan’s costs of his claim against it at first instance, there should be a Bullock order against Mt Owen, and in any event Mt Owen would be required to pay Titan’s costs of its cross-claim, the preferable course is simply to order that Mt Owen pay Titan’s costs of the proceedings at first instance. Mt Owen must pay Titan’s and Mr Parkes’ costs of the appeal and the cross-appeal.

25. KIRK JA: I agree with Basten AJA that the appeal should be dismissed for the reasons his Honour gives. As for the cross-appeal, Mt Owen sought to support Titan’s liability on the basis that “it was not Mt Owen’s breach of duty that rendered Titan liable to Parkes but Titan’s own failure to ensure its employees (including Kemp and Parkes) were warned and trained to avoid the relevant risk of injury”. For the reasons given by Brereton JA, I agree that no direct breach of duty by Titan itself was made out, nor was causation established. I do not express a view as to what apportionment would have been appropriate if Titan had been liable to Mr Parkes. I agree with the orders proposed by Brereton JA.

26. BASTEN AJA: In July 2017, the appellant, Mt Owen Pty Ltd owned and operated Glendell, an opencut coal mine in the upper Hunter Valley, New South Wales. Amongst the equipment used to operate the mine was a Caterpillar D10 bulldozer. The appellant employed a team to maintain its fleet of heavy machinery, but also contracted with the second respondent, Titan Technicians Enterprise Pty Ltd (“Titan”) for the supply of qualified mechanics to work on heavy machinery.

27. On 29 July 2017, a team of three mechanics were carrying out routine maintenance on a bulldozer in the course of which Glen Parkes (the plaintiff below and first respondent) was injured. The injury occurred when another member of the team, Mitchell Kemp, dropped the blade of the bulldozer suddenly causing the track on which Mr Parkes was standing to flick up and crush his right leg between the track and the edge of the access platform beside the cabin of the bulldozer.

28. There was no dispute that the action taken by Mr Kemp was negligent and that it caused the injury to Mr Parkes. The issue on the appeal was whether the appellant was vicariously liable for Mr Kemp’s negligence. The appellant contended that only one party could be vicariously liable and that that party was Mr Kemp’s employer, Titan.

29. The trial judge, Campbell J, found that the appellant was vicariously liable and awarded damages against it in an amount of $2,050,953. ^[18] The judge also found Titan liable, and dismissed a claim of contributory negligence on the part of Mr Parkes. The last finding was not challenged on the appeal, but Titan challenged the finding as to its liability by way of a cross-appeal. The notice of appeal filed on 7 October 2022 identified 19 grounds, but all were in substance directed to the single question as to whether the judge erred in finding that the appellant was vicariously liable for the negligence of Mr Kemp. The other grounds (in particular, grounds 2-4, 6, 9-11, 16 and 17) identified passages in the judge’s reasoning which, the appellant asserted, gave too much (or too little) weight to particular aspects of the relationship between the parties.

    18. Parkes v Mt Owen Pty Ltd [2022] NSWSC 909 (Parkes).

30. The issue raised by this case is not novel. As noted by Jordan CJ in McDonald v The Commonwealth:^[19]

“When an employer agrees with a third party to make the services of one of his employees available to the third party, and the employee, after commencing to perform the stipulated services, injures someone by negligence, the question arises whether the employer, the third party, or only the employee himself is liable to the injured person.”

In 1945, Jordan CJ was able to say that “[a]uthorities on the point are legion”.

19. (1945) 46 SR (NSW) 129 at 131.

31. As the present case illustrated, the answer to the question will often turn upon fine factual distinctions, rather than issues of legal principle. Further, language used in past cases, sometimes relied upon as expressing a legal principle, may amount to no more than an attempt by courts to provide some element of predictability and certainty to the resolution of similar cases. Nevertheless, as Jordan CJ also observed in McDonald, “neat phrases like these, though they may serve as convenient reminders of the nature of the problem, afford little or no help to its solution”. ^[20] However, the appellant challenged (grounds 5, 8 and 12-14) the principles applied by the trial judge. It is necessary, therefore, to commence by addressing the appropriate legal framework for considering the facts.

    20. McDonald at 132.

Legal principles - appeal

32. Underlying the correct approach to the appeal were two legal principles, with suggestions as to a third. The first principle is that there can be no dual vicarious liability in two principals for the act of a negligent individual. As explained by Leeming JA in Day v The Ocean Beach Hotel Shellharbour Pty Ltd,^[21] that proposition derives from the reasoning of the majority of the High Court in Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd. ^[22] The result in Oceanic Crest was that a statute imposing liability for the negligence of a pilot on the master or owner of a ship under pilotage, effectively removed vicariously liability from the pilot’s employer. That did not mean that the employer might not be liable for loss resulting from its own negligence, as was found with respect to Titan in the present case.

    21. (2013) 85 NSWLR 335; [2013] NSWCA 250 at [23]-[33] (Meagher and Emmett JJA agreeing).

    22. (1986) 160 CLR 626; [1986] HCA 34.

33. The second principle of the general law is that an employer is vicariously liable for the negligent act of an employee undertaken within the scope of his or her employment. ^[23] The employer is not vicariously liable for the acts of independent contractors. The operation of the second principle leaves open the question as to who is the employer. It has long been recognised that the contract of employment may not be determinative in circumstances where the services of an employee have been transferred to a third party so that, while the first principle precludes both a third party and the employer being vicariously liable for the acts of an employee, the third party, sometimes referred to as the “host employer” or the “employer pro hac vice” may be held vicariously liable in place of the “general employer”. The central issue in the present case was when such a transfer is effective to render the host vicariously liable for the negligence of the transferred worker.

    23. State of New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4 at [40] (Gleeson CJ); [106] (Gaudron J); [196] (Gummow and Hayne JJ); [307]-[308] (Kirby J).

34. The third principle, which arose only incidentally, is, supposedly, that an employer may not be liable for the acts of an employee who is executing an independent duty requiring the exercise of discretion and responsibility and therefore not subject to the control of the employer. Because the issue of “control” is central to the question of a transfer of employment, some weight was placed by the appellant on the fact that Titan’s workers were required to exercise their own independent skills and judgment in carrying out the specialised maintenance work on the heavy machinery.

35. In Deutz Australia Pty Ltd v Skilled Engineering Ltd ^[24] Ashley J identified a number of relevant principles, the second of which stated that “transfer will less readily be inferred where the general employer provides man and machine; probably also where the general employer provides a skilled worker”. ^[25] The first limb of that proposition is not presently relevant; the second limb derives from the proposition that a skilled worker is unlikely to be controlled in relation to the manner of performance of particular tasks.

    24. (2001) 162 FLR 173; [2001] VSC 194.

    25. Deutz at [110] (footnotes omitted).

36. As was noted in Day, factors relevant to whether a worker is an employee or an independent contractor, and the circumstances in which an employee is to be treated as an employee of a third party, involve common elements. The decision in Zuijs v Wirth Brothers Pty Ltd ^[26] concerned a trapeze artist who was injured whilst working for Wirth Brothers’ circus. The question was whether he was entitled to workers compensation. As explained in the joint reasons of Dixon CJ, Williams, Webb and Taylor JJ: ^[27]

“The duties to be performed may depend so much on special skill or knowledge or they may be so clearly identified or the necessity of the employee acting on his own responsibility may be so evident, that little room for direction or command in detail may exist. But that is not the point. What matters is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in incidental or collateral matters.”

26. (1955) 93 CLR 561; [1955] HCA 73.

27. Zuijs at 571.

37. The trial judge applied that statement to discredit the submission that, as a skilled tradesperson, Mr Kemp was not subject to control by the appellant. If his skill did not prevent him being an employee, it did not prevent him being an employee pro hac vice of the appellant.

38. As the trial judge further held, correctly, the test of legal authority to control was sufficient without requiring actual exercise of that authority. In support of that proposition, the trial judge observed that Lord Uthwatt had stated in Mersey Docks and Harbour Board v Coggins and Griffith (Liverpool) Ltd:^[28]

“The proper test is whether or not the hirer had authority to control the manner of execution of the act in question. Given the existence of that authority its exercise or non-exercise on the occasion of the doing of the act is irrelevant. The hirer is liable for the wrongful act of the workman, whether he gave any specific order or not.”^[29]

28. [1947] AC 1 at 23.

29. Parkes at [84].

39. That principle must be correct, otherwise the third party could, negligently, avoid vicarious liability by not giving a direction which it should have given. (Whether it would incur personal liability is immaterial.) In any event control was exercised over the manner of carrying out the work in the present case.

Transfer of employment

40. The concept of transfer was dealt with, perhaps incidentally, in Oceanic Crest, where Gibbs CJ observed: ^[30]

“Where the services of the servant of one employer are temporarily used by another, both employers will not be liable; prima facie the liability will usually remain with the general employer who may, however ‘show, if he can, that he has for a particular purpose or on a particular occasion temporarily transferred the services of one of his general servants to another party so as to constitute him pro hac vice the servant of that other party with consequent liability for his negligent acts’ ^[31] .”

30. Oceanic Crest at 641.

31. Mersey Docks at 13.

41. As Wilson J noted in Oceanic Crest, the opinions in Mersey Docks posited a need for “exceptional circumstances” for the transfer of the service and control of an employee from a general employer to a particular employer. ^[32] That constraint did not arise in Oceanic Crest because the transfer was effected by statute. However, the appellant submitted that no “exceptional circumstances” arose in the present case, to warrant the conclusion of transfer reached by the trial judge.

    32. Oceanic Crest at 646.

42. The appellant placed weight upon these statements of principle, submitting that the onus lay on Titan to demonstrate that its employees had, in the relevant sense, been transferred to Mt Owen and that there is a presumption that the general employer, being the party with whom the worker has a contract of employment, will remain liable.

43. Titan, on the other hand, challenged the view that the statement from Mersey Docks, and in particular a legal obligation to find exceptional circumstances, was a complete and adequate statement of the law in Australia. It had not, Titan submitted, been applied in Hallmark Construction Pty Ltd v Brett Harford. ^[33]

    33. [2020] NSWCA 41 at [83]-[84].

44. The reasoning in Hallmark is of relevance for present purposes, but the facts concerned a worker who had been employed by the relevant third party before it restructured its operations so as to transfer his employment to a labour hire firm. The worker continued to carry on the same work as he had been doing before his contract of employment was transferred to the labour hire firm. His continued employment was found to depend on the decision of the host, and not on which entity actually employed him.

45. On the other hand, the present circumstances also differed from those in Oceanic Crest. In that case the employer routinely transferred the services of its pilots to ships entering and leaving the harbour as required. The transfers were, in each case short-lived and appropriately described as “temporary”. In any event, the application of the principle in Mersey Docks had no significance because the effect of the statute was to resolve the issue of vicarious liability.

46. In Day v Ocean Beach Hotel the issue was whether there had been a transfer of the employment of a security guard, whose employer had provided him to undertake security work at the hotel, to the hotel management. This Court held that it had not. However, Leeming JA stated the applicable principle in terms which drew upon the distinction between an employee and an independent contractor, in the following passages:

“14   ‘[V]icarious liability derived originally from mediaeval notions of headship of a household, including wives and servants; their status in law was absorbed into that of the master’ …. The ‘general rule’ has long been that an employer is not liable for a tort committed by an independent contractor. The language of ‘general rule’ is that of Jordan CJ in Torette House Pty Ltd v Berkman (1939) 39 SR (NSW) 156 at 165, of Mason J in Stoneman v Lyons (1975) 133 CLR 550 at 574, of Brennan J in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 at 575 and of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ in Hollis at [32]. McHugh J has suggested a substantial reformulation of that general rule, so that it extends to the tortious acts of independent contractors who are ‘agents’ carrying out tasks for the benefit, and as representatives, of their principals …, but that has never commanded the assent of a majority of the High Court … and its adoption is not a matter for this Court. Notwithstanding that parts of Ms Day's argument resembled McHugh J's proposed reformulation in those cases, until the High Court otherwise determines, the distinction between independent contractors and employees is a ‘basic proposition’ and a ‘central conception’ of the law relating to vicarious liability, which is ‘too deeply rooted to be pulled out’ ….

15   The nature of that ‘general rule’ and ‘central conception’ is reflected in three qualifications to it. First, the labels ‘employer’ and ‘employee’ and ‘principal’ and ‘independent contractor’ are merely that. The classification does not of itself determine the legal conclusion that there is or is not vicarious liability, or, as the joint judgment in Hollis put it at [36], those terms ‘do not necessarily display their legal content purely by virtue of their semantic meaning’. To do so would be, to use Windeyer J's words in Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 at 458, ‘to invert the order of inquiry’ and to ‘allow linguistics to determine legal rights’. The real question is whether the ‘fundamental concerns underlying the doctrine of vicarious liability’, one of which is control, are established: Hollis at [45]. The second, which is a corollary of the first, is that a conclusion that a person is an ‘employee’ or ‘independent contractor’ for a particular purpose (such as payroll tax, or superannuation, or employment law) cannot determine whether the relationship is such as to engage the rules of vicarious liability …. The third is that there are exceptions to the ‘general rule’, which reflect the fundamental concerns underlying the doctrine. One is where an independent contractor is expressly authorised to commit the tortious conduct.”

This approach may be adopted in considering the circumstances in which the employee of an independent contractor (in this case Titan) is incorporated into the workforce of the principal (the appellant), so as to render the latter vicariously liable for the worker’s negligence.

47. In Kondis v State Transport Authority ^[34] Brennan J stated:

“A defendant is not vicariously liable for a tortious act done by a workman who is not his servant if the defendant has no authority to control the doing of the act and does not directly authorize it. It makes no difference that the tortious act is done in performing work for the defendant’s benefit. Prima facie, the workman’s employer is vicariously liable for the tortious act, but if he is able to transfer and transfers authority to control the doing of the act to the defendant, the defendant is liable. It has been said that the nature and extent of the control transferred to the defendant or retained by the employer determines whether there is a shift of liability from the employer to the defendant ….”

34. (1984) 154 CLR 672 at 692; [1984] HCA 61.

48. This language did not, significantly, adopt an exceptional circumstances criterion. Two further observations should be made in response to the appellant’s reliance on this phrase. First, Mersey Docks was undoubtedly a case of a temporary transfer, of both a worker and machinery. The present case concerned a worker who had worked with the appellant for three years before the accident. In that sense the facts were closer to Hallmark than to Mersey Docks. Secondly, industrial arrangements in New South Wales in 2023 do not necessarily mirror those in the UK in 1947. The extensive use of labour hire firms, the primary function of which is to employ staff to work for other businesses, which often have fluctuating needs for labour,^[35] might itself have been viewed as an exceptional circumstance 76 years ago. Further, modern workplace health and safety requirements necessitate a degree of control over the operation of any workforce which would not have been envisaged in 1947, and certainly not as other than exceptional. The legal test was clearly articulated in Kondis, and its application will turn on the facts established on the evidence.

    35. Hallmark at [84].

49. Nevertheless, the transfer of control will not usually be sufficient to shift vicarious liability to the host for whom the work is done unless that party is also in control of the manner in which the work is undertaken. The relevant factors are frequently found in the following considerations:

1. the contract of employment of the worker;

2. the contract pursuant to which the services of the worker are transferred to a third party, and

3. evidence as to how the work is undertaken and controlled by the third party.

Before considering this material it is convenient to note the factual circumstances giving rise to the claim.

Background circumstances

50. The injury to Mr Parkes occurred whilst he was working on a nightshift in winter, namely on 29 July 2017. He was working with a group identified as “maintenance crew B” under the supervision of a Mt Owen employee, Cameron Wallace. The intention was to carry out a 1,000-hour service on the bulldozer. Of the three Titan employees assigned to the task, Mr Kemp had been designated by Mr Wallace as the person in charge of the operation. The task being undertaken at the material time was to obtain hydraulic and engine oil samples from the machine (referred to as “scheduled oil samples” or “SOS”). There were two methods of obtaining such samples. One method was to use a vacuum pump with the motor off; the alternative method was to take samples by bleeding pipes containing circulating oil while the motor was running. The latter course was adopted. Further, apparently in order to warm and lower the viscosity of the oil, Mr Kemp was in the cabin of the bulldozer and operated the hydraulic system so as to raise and lower the attached implements.

51. As described by the trial judge:

“4   … He first operated the ‘ripper’ attached to the rear of the bulldozer and then the dozer blade at the front of the bulldozer. While lifting and lower the blade, I infer, whether accidentally or deliberately, Mr Kemp initiated a ‘quick drop’ manoeuvre of the blade, which as the expression makes clear, caused the blade to drop suddenly. Its descent is halted abruptly creating acceleration/deceleration forces. These forces caused the track on which Mr Parkes was standing to ‘flick up’ suddenly crushing his right leg between the elevated track and the edge of an access or inspection platform over which Mr Parkes was leaning to access the sample port. Mr Colby, still standing on the track on the other side, was uninjured.”

52. Whether the blade was dropped accidentally or deliberately did not, as the judge noted, matter: either way it was a negligent act. The reason the judge was unable to determine exactly how it happened was that Mr Kemp did not give evidence.

Contract of employment

53. The terms of the contract of employment between Titan and Mr Kemp were not treated as determinative. ^[36] That is likely to be so, unless the contractual obligations and entitlements are expressly assigned to the third party: there must be such a contract for the question of “transfer” to arise. However, the terms of the contract of employment may still be relevant. They may reflect the contractual arrangement between the employer and the third party. There was no evidence of a written contract of employment between Titan and Mr Kemp, although there were in evidence a number of documents on Titan letterhead identifying Mr Kemp’s areas of competence, accompanied by appropriate certificates. It appeared, however, that Mr Kemp, who had been working at Glendell for three years prior to the accident, was not employed by Titan throughout that time. In a letter of competency dated 2 May 2017, Titan noted that Mr Kemp “has recently been employed as a Heavy Vehicle Mechanic at Titan”. It also noted that Mr Kemp had “over 9 years’ experience as a Heavy Vehicle Mechanic with 4 and a half years mine site experience working at Bulga and Glendell and MTW for [other companies]”.

    36. Parkes at [88].

Contractual arrangements: Titan – Mt Owen

54. Stewart Thrift, a Titan employee who described himself as both “compliance and training officer” and “operations manager”, gave evidence that “all labour arrangements between Glencore [the parent of Mt Owen] and Titan were through purchase orders”. He annexed a copy of a purchase order relating to the employment of the plaintiff.

55. Mark Robinson, who described himself as “purchasing and supply coordinator” employed by Glencore Coal Asset Pty Ltd annexed a series of documents relating to a purchase order dated 14 July 2017. Purchase orders appear to have been issued on a weekly basis for a particular mine identifying an item and quantity of labour, with a “delivery date”. No individual was identified, nor were the skills or other requirements of the positions. The second page of the purchase order stated that an attached set of terms and conditions applied, unless there was a separate contract in existence in respect of the “goods and/or services that are the subject of this purchase order”. The terms and conditions were generic and many, which applied to both goods and services indiscriminately, would have required a degree of manipulation to have any relevant effect. However, relevantly for present purposes, clause 5 was headed “[p]erformance of the services” and read as follows:

“5.1   You [Titan] must, in performing the services:

(a)   use your best endeavours not to interfere with any of our activities, or the activities of any other person, on our premises;

(b)   comply with, and ensure that your employees, agents, contractors and subcontractors comply with:

(i)   all applicable laws, regulations and industrial awards and agreements;

(ii)   all safety, health and environment guidelines, rules and procedures provided to you by us; and

(iii)   all directions and orders given by our representative; and

(c)   ensure that our premises are left secure, clean, orderly and fit for immediate use.”

56. Titan submitted that pars (b)(ii) and (iii) conferred on the appellant authority to give directions and orders to workers provided by Titan. That submission must be accepted: the relevant language of cl 5.1 patently conferred that authority.

57. The appellant relied upon these arrangements to demonstrate that Mr Kemp was at best a temporary employee working with Mt Owen on a week-by-week basis. However, the evidence contained in the Titan documents supported the finding that Mr Kemp had been working for a period of three years at the Glendell mine prior to the accident. The innominate purchase orders and the terms and conditions attached to them did nothing to contradict that proposition.

58. The appellant relied upon cl 2.5 in the terms and conditions which required that “services must be performed by appropriately qualified, competent, skilled, experienced and professional personnel and must be rendered with due care and skill”. Counsel submitted that “a pure labour hire contract … would not contain such a clause”. ^[37] That proposition depended on the principle that a skilled and experienced worker would not be the subject of instruction as to the manner in which tasks were carried out. For reasons already explained, the legal premise underlying that submission should not be accepted. Further, however, the factual inference should not be drawn. The evidence included documents prepared by the appellant which involved, for each activity, a “job safety analysis (JSA)”. The JSA for the activities undertaken on 29 July 2017 was in evidence. It identified Mr Kemp as the “Person In Charge of Live Testing”. ^[38] It was signed by him. Each box on a check list was ticked and one referring to the provision of “two-way communication equipment” was changed in his handwriting to state that “verbal communication equipment” had been provided to all live-testing personnel.

    37. Tcpt, 03/03/32, p 11(3).

    38. JSA, 29/07/17, p 2 (Live Testing Checklist).

59. This evidence demonstrated that (i) Mr Kemp’s employment could not aptly be described as temporary; (ii) that he was subject to direction by the appellant’s supervisors as to the tasks to be performed, when they were to be performed and their manner of performance; (iii) the appellant imposed detailed safety requirements on their manner of performance, and (iv) the purchase orders confirmed the appellant’s authority to undertake all these functions.

60. It was also relevant to consider Titan’s arrangements with its employees. The judge referred to the fact that Titan had its own occupational health and safety policies, which it required its employees to follow, unless the policies of the host were to the same or a higher standard. Titan’s document, “Employee Induction – General Information” stated: ^[39]

“As a general rule employees working on Host Company premises are expected to comply with the Host Company’s management systems, standards and appropriate permits unless they afford a lower level of protection to that provided by the TTE Management Systems and Standards in which case they should comply with the relevant TTE Policy, System or Standard.”

39. Version 1, 19/12/2016, p 4.

61. The trial judge accepted that Titan’s occupational health and safety policies were “not mere matters of compliance by a corporation working in the coal mining industry”. ^[40] He also concluded that these policies did not interfere with the practical performance of Mr Kemp’s work, nor did they impinge on the capacity of the appellant to control it. Titan’s policies recognised the authority of the host to set safety standards, and conceded their application, if of a sufficient standard.

    40. Parkes at [101].

Circumstances surrounding the maintenance work

62. Mt Owen’s supervisor, Mr Wallace, gave the following evidence by way of a statement admitted at trial:

“7   Titan employees were not trained by Mt Owen in the trade specifics of how to do their job, including live testing and commissioning tasks. That is to say, they were not taught the work of a fitter by Mt Owen or shown the step by step process of extracting live oil samples and the like. This was assumed knowledge for a qualified maintenance fitter supplied by Titan. Mt Owen did arrange Titan employees to undergo Commissioning and Live Testing Competency Assessment though, to check that qualified maintenance fitters could comply with the Commissioning and Live Testing safety procedure in use at the Mine.

8   At the beginning of the nightshift on 29 July 2017, during a prestart meeting, I assigned three fitters employed by Titan to the 10:00pm servicing task of [the bulldozer], which included live testing work. The Titan employees were Mitchell Kemp (Mitch), Glen [Parkes] and Timothy Colby (Tim).

9   At the prestart meeting I also assigned Mitch as the service leader and person in charge of the live testing of the bulldozer.”

63. Mr Wallace also gave evidence of checking and signing the JSA prior to the work being undertaken. The JSA was detailed. It covered some eleven pages of which six had four columns headed “Critical steps in activity”, “Potential hazards”, “Control” and “Responsibility for controls (signature)”. On page 7, for example, under the first heading was the step, “carry out maintenance live testing task”. It is not necessary to note the potential hazards, but ten were identified including “unplanned movement”, “pinch or crush” and “unclear communications”. Under the heading “Control” the following points appeared:

“•   designated person in charge of live testing to manage all activities;

•   plant and equipment is parked fundamentally stable;

•   personal locks placed onto live testing sandwich board;

•   isolation and removal of external energy sources that are not directly involved with live testing;

•   establish exclusion zone next to operating excavator or dozer tracks;

•   live testing leader, tradesman and operator in place to complete tasks;

•   follow the relevant operating/maintenance procedures;

•   person in charge of live testing is to confirm all persons are out of the machine footprint before any equipment movement is undertaken;

•   positive communications;

•   PPE – hearing protection and gloves.”

64. There was an additional aspect to the JSA which was significant in relation to the finding of negligence. Each of the first five of the six pages with columns contained three initials against each item. The sixth page ^[41] had a further “critical step” added in handwriting namely “live samples – blade move”, the potential hazard was identified as “blade movement” and the added control was “stand clear when obtaining hyd oil sample as blade moves”. This item was signed (not initialled) by Mr Kemp and Mr Parkes. Mr Parkes gave evidence that he was asked by Mr Kemp to sign it after the accident had occurred but before it had been reported. Understandably, the trial judge drew the inference that Mr Kemp had made this handwritten addition to the typed document after the accident in an attempt to exonerate himself. However, the point for present purposes is that the JSA was a document required and prepared by the appellant, containing detailed direction and control of the steps to be undertaken in the course of carrying out the maintenance on the bulldozer.

    41. JSA, p 9.

65. The conclusion to be derived from the documentary material was supported by the evidence given by the appellant’s supervisor, Mr Wallace. In the course of his evidence in chief, the following exchanges occurred: ^[42]

“Q.   Mr Wallace, in the course of your supervision of personnel carrying out maintenance work on bulldozers, and, in particular, taking oil samples, did you see any other fitters standing on the track to do so as distinct from the deck next to the driver’s cabin?

A.   No. …

…

Q.   And had you seen any other fitters standing on the track to obtain an oil sample instead of the deck, what would you have done?

A.   I would have … intervened.

Q.   In what way?

A.   I probably would have stopped what they were doing. Had a bit of a conversation with them about the line of fire, where they were positioning themselves, especially during live testing itself. Possibly suggested just to – to [stand] on the deck as opposed to in a position where they possibly could be in harm.”

42. Tcpt, 22/06/21, p 131(15)-(40).

66. With respect to the JSA, Mr Wallace gave the following evidence during cross- examination by senior counsel for Titan: ^[43]

    43. Tcpt, p 135(16)-(29).

“Q.   And we know that a JSA was completed for this task during which Mr Parkes was injured, don’t we?

A.   That’s correct.

Q.   And it was your job to look at it and say whether it was satisfactory or not?

A.   That’s correct.

Q.   And if you’d been unhappy with it and thought it needed to be tightened up and made better, you would have stepped in and done that, wouldn’t you?

A.   That’s correct.

Q.   And you’d do that in relation to any JSA that was required for a particular task, wouldn’t you?

A.   Yes, I do.”

67. Thereafter, Mr Wallace was taken to his statement: ^[44]

    44. Tcpt, pp 136(23)-137(11).

“Q   In paragraph 22, Mr Wallace, your second sentence is ‘had I noticed that on the JSA at the time I would have asked Mitch if he really needed to use the blade, and otherwise suggested he use the ripper to produce oil pressure’, what I want to ask you is if you step back and consider what you’ve said there don’t you agree with me that you haven’t put it firmly enough, and that the real position is that if you had seen on the JSA that Mr Kemp was intending to use the blade you’d have said, ‘Don’t do that’?

A.   Yeah, that’s right.

Q.   And you’ve expected that he would do what he was told?

A.   Yes.

Q.   … You say that you visited the job during the initial phases and you were satisfied with the way the task was being undertaken, and you didn’t notice Titan’s crew doing anything contrary to the JSA. Again, if you had noticed something being done contrary to the JSA you’d have intervened, wouldn’t you?

A.   Yeah, I would have.

Q.   And you don’t deal specifically there with seeing somebody positioned on tracks, and if you had seen somebody on the tracks during live testing you’d have intervened very firmly, wouldn’t you?

A.   Yeah, that’s correct.

…

Q.   … you say you didn’t consider any continual supervision of Titan’s crew to be required and that Mr Kemp is the nominated person in charge who was responsible to dictate how the work was being carried out, but again even though you nominated him as the person in charge, if you came by and saw something being done wrongly you’d have intervened?

A.   Yeah, absolutely.

Q.   And you would have overridden Mr Kemp if he’d argued with you, wouldn’t you?

A.   Yeah, that’s correct.”

68. The judge concluded, on the basis of this evidence, that “Mr Wallace in his capacity as a Mt Owen supervisor obviously was of the view that he was ‘entitled to tell the employee the way in which he is to do the work’: Mersey Docks at 17”. ^[45] Although the judge held that it was not necessary to do so, he concluded that “Mt Owen actually exercised the relevant control”, as well as having the legal authority to do so. ^[46] Those findings were not shown to be erroneous in any respect.

Cross-appeal – Titan

45. Parkes at [99].

46. Parkes at [101].

Findings as to Titan’ liability

69. Having determined Mr Kemp’s negligence, the judge deferred the question of vicarious liability for that negligence until after he had considered whether either Mt Owen or Titan breached duties of care which they owed to Mr Parkes.

70. There was some awkwardness in approaching the matter in this fashion: with respect to vicarious liability, the question was, as noted above, whether Mr Kemp could be characterised as an employee pro hac vice of Mt Owen as the host employer. It is apparent that this characterisation was at the heart of the dispute as to liability. However, in dealing with the position of Mr Parkes, the same conclusion did not necessarily apply. On the other hand, it did not need to apply. As the occupier and operator of the premises, Mt Owen undoubtedly owed Mr Parkes a duty of care. Nevertheless, the submissions for the plaintiff, identified by the trial judge at [63], appeared to assume that Mt Owen was a host employer with respect to Mr Parkes. The trial judge, however, was alert to this issue. Referring to submissions of counsel for Mt Owen that Messrs Kemp, Colby and Parkes were operating as a “Titan team” whom it was reasonable for Mt Owen “to leave to their own devices”,^[47] the judge noted that Mr Kemp was a long-term “fulltime equivalent” worker in Mt Owen’s workforce and had been for about three years prior to the incident. On the other hand, Mr Parkes and Mr Colby were newer, especially Mr Colby, and were accepted as “supplementary workers to take the place of Mt Owen’s direct employees who were then on strike”. ^[48] The judge accepted, however, that they worked under the supervision of Mr Wallace, a fulltime senior employee of Mt Owen, and were required to follow the system of work set out in Mt Owen’s JSA and risk assessment. The finding that they were part of Mt Owen’s Maintenance Crew B was not challenged for the purpose of the cross-appeal: in effect Mt Owen relied upon the same matters raised with respect to its submissions as to vicarious liability in relation to the incorporation of the Titan employees into its workforce. Mt Owen’s written submissions on the cross-appeal concluded that the trial judge did not err in apportioning liability to Titan on the basis found, or in finding that such primary liability should be divided equally between Titan and Mt Owen. ^[49]

    47. Parkes at [65].

    48. Parkes at [66].

    49. Second respondent’s submissions on cross-appeal, 23/12/22, par 24.

69. The basis upon which the trial judge found direct liability on the part of Mt Owen was the failure to spell out in the JSA the requirement that no implement movement should occur while tradesmen were within the footprint of the bulldozer. ^[50] That finding was not challenged by Mt Owen. However, Titan challenged both that finding and the finding that “Titan, as the legal employer, is negligent on the same basis”. ^[51] The judge further stated:

“77   As an employer of, inter alia, diesel mechanics within the mining industry, Titan would be aware of the matters relevant to my decision about foreseeability, significance of risk and available precautions that I have set out above dealing with the liability of Mt Owen. On the same basis I am of the view that Titan is negligent.”

50. Parkes at [71].

51. Parkes at [66].

Evidence as to Titan’s role

72. In its written reply, Titan submitted that Mt Owen in its submissions (and by implication the trial judge) had ignored both the JSA and its implications, and the presence of Mr Wallace, a supervisor employed by Mt Owen, and his evidence to the effect that he had power to control how the task was to be performed. That was true, but was in part explicable by the fact that Mt Owen did not challenge the finding as to its primary liability. Titan also relied upon the proposition that there was “an absence of evidence that Titan ever attempted to interfere, or had cause to interfere, in the performance of work tasks at the premises of Mt Owen and in particular live testing”. ^[52]

    52. Submissions in reply, 3 February 2023, par 8(iii).

73. To the extent that that was true, it might have been thought that such a position was equally consistent with Titan’s negligence as its non-negligence. It was only consistent with an absence of negligence to the extent that it demonstrated that Titan had no power to interfere. The evidence did not support that conclusion. Mt Owen had tendered against Titan an evidentiary statement of Matthew Thrift, Titan’s operations manager who was responsible for overseeing the labour coordinator, WHS officer and recruitment consultant. Mr Thrift stated: ^[53]

“Titan management carry out regular inspections of all customer sites, including the Mt Owen site. At the time of 29 July 2017, these inspections were carried out by me, Mr Stephen Freeman, managing director and Mr Stuart Thrift, WHS officer. The inspections were generally carried out twice a week, depending on the number of Titan employees at Mt Owen at the time. We performed these inspections for routine visible leadership, to complete safety inspections and to discuss any concerns with Titan employees as well as the Mt Owen supervisors, superintendents and the contract manager. The inspections took place on the job after approval was sought from the Mt Owen maintenance supervisor. Glencore employees would on occasion attend the inspections with Titan, but generally it would just be attended by the Titan senior representative and the Titan employee(s). Titan employees viewed the live testing procedures during routine site visits.”

53. Evidentiary statement, filed 19 February 2021, par 17.

Legal principles: liability of employer

74. The relevant legal principles relied on by the trial judge, not challenged on the appeal, were those set out by Mason P in TNT Australia Pty Ltd v Christie. ^[54] As Mason P explained at [41], each of the host employer (TNT) and the legal employer (Manpower) owed a non-delegable duty of care to the worker, Mr Christie. The circumstances were summarised by Mason P in the following terms:

“It can be seen that the plaintiff and TNT placed themselves in a relationship day in and day out, indistinguishable from that of employee and employer. I am not saying that every client of an employment bureau will assume such a relationship with the person at whose workplace he or she attends. But here the plaintiff had for months been under the daily control of TNT and its managerial staff at the brewery. He was a relatively unskilled labourer. He reported daily to the brewery and everything that he did there was done under the full control of TNT. TNT’s relationship was more than that of an occupier of the factory. In all respects relevant to the imposition of a duty of care the plaintiff was in an identical position to that of the four TNT employees with whom he worked.”

54. (2003) 65 NSWLR 1; [2003] NSWCA 47.

75. Apart from the lack of skill, that description applies to the present circumstances. It was of course expressed in relation to the duty of the host employer, a matter which is not presently relevantly. However, it was significant that the degree of control exercised by the host employer in Christie did not derogate from the general duty of care imposed on the legal employer. In TNT, the plaintiff was injured by a negligently serviced or maintained jack. Mason P held:

“61   … An employer’s duty of care with respect to plant and equipment extends to the exercise of reasonable care in its maintenance and repair. Here the employer (Manpower) chose to delegate the responsibility to TNT and TNT chose to delegate this responsibility to an independent contractor, that is, Crown. But such conduct could not relieve Manpower or TNT of legal responsibility if it could be shown that the plaintiff employee’s injury was the result of negligence in regard to the maintenance and repair of the equipment.”

76. Having found negligence on the part of Crown, Mason P further held:

“97   Manpower seeks a full indemnity from TNT on the basis of TNT’s exclusive control of the system of work. It also invokes … the argument … that Manpower did not have a primary liability to the plaintiff because it did not have the employer’s non-delegable duty of care notwithstanding its status as the plaintiff’s employer. I have already rejected the latter proposition. And I can see no basis for disturbing the primary judge’s apportionment as between the two ‘employer’ tortfeasors.”

77. As the trial judge noted, the High Court in Leighton Contractors Pty Ltd v Fox ^[55] stated:

“An employer owes a personal, non-delegable, duty of care to its employees requiring that reasonable care is taken. This a more stringent obligation than a duty to take reasonable care to avoid foreseeable risk of injury to a person to whom a duty is owed. While an employer is not vicariously liable for the negligent conduct of an independent contractor, it may incur liability where the negligent conduct occasions injury to its employee. This is because it will have failed to discharge the special duty that it owes to its employees to ensure that reasonable care be taken, whether by itself, its employees or its independent contractors, for the safety of its injured employee.”

55. (2009) 240 CLR 1; [2009] HCA 35 at [21] (French CJ, Gummow, Hayne, Heydon and Bell JJ).

78. There is no doubt that the content of the employer’s duty of care is variable and may depend upon the circumstances in which it is said to be engaged. Thus, the employer of a tanker driver will not ordinarily be responsible for road hazards negligently created by road authorities or other road users. Similarly, the circumstances in which an employer will be liable for the condition of premises at which a driver delivers goods may also be limited. As this Court held in DIB Group Pty Ltd t/as Hill & Co v Cole,^[56] the employer of a tanker driver who fell through the cover over of an inspection pit whilst returning to his truck after adjusting valves which were required to be opened to discharge fuel, was found not to be liable for the injury suffered by the driver.

    56. [2009] NSWCA 210; [2009] Aust Torts Rep 82-022.

79. Further, as Ipp JA stated in Estate of the Late M T Mutton v Howard Haulage Pty Ltd:^[57]

“Devising and implementing a safe system of work would ordinarily not be an overly difficult task where the worker is working in the employer’s own premises. The situation is different where the employee delivers materials over vast distances to several different farms where workplaces, work conditions and equipment differ from farm to farm and where changes can be made at any time by the farmers concerned. In the latter situation, the employer has no real control over the circumstances in which each delivery is made. Due regard must be had to this absence of control when determining what amounts to the taking of reasonable care to avoid exposing employees to unnecessary risks of injury, and what amounts to a safe system of work.”

57. [2007] NSWCA 340 at [146] (Hodgson JA agreeing, Spigelman CJ dissenting).

80. A similar approach was adopted in Top Hut Banoon Pastoral Co Pty Ltd t/as Trustee for the Wakefield Family Trust v Walker, ^[58] where Gleeson JA held that a shearing contractor was not liable for an injury suffered by an employee in using a timber step into an accommodation hut which came away from the stumps on which it had been placed (and to which it was apparently affixed). The shearing contractor, which travelled from station to station was found not to owe a duty to its employees to have its principal attend every station in advance of the arrival of the employees and conduct an inspection of the accommodation, shearing shed and surrounds. ^[59]

    58. [2021] NSWCA 296.

    59. Top Hut at [23] (Preston CJ of LEC and Stevenson J agreeing).

81. Although Spigelman CJ dissented in Estate of Mutton, the conclusions reached on the facts in each of these cases may be accepted but they provide no assistance in resolving the present case. In each case the assessment of the content of the duty of care turned on the level of control which it was reasonably practicable for the employer to exercise. In the present case, the ability to exercise control was established. This was not a case where the plaintiff was working at premises, the conditions of which were unknown to the employer, and of which the employer should not reasonably have been aware. Nor was this a case in which the plaintiff suffered injuries as a result of the defective condition of the premises. Rather, it was a case in which the injury resulted from the activities undertaken by other members of the team who were also subject to potential control by the employer. Accordingly, this case must be determined on its own facts.

Application of principles

82. Although Titan was not vicariously liable for the negligence of Mr Kemp, Mr Kemp, like Mr Parkes, was an employee of Titan. It therefore had greater control over Mr Kemp than did Mr Christie’s employer, including steps which it might have taken to ensure compliance with safety protocols; Mr Kemp was not as beyond the control of Titan as an independent contractor might have been. Focusing, however, on the “special duty that it owes to its employees”, Titan was obliged to ensure that reasonable care be taken for the safety of Mr Parkes. As Titan submitted, the JSA was not its document; however, that did not absolve it from responsibility.

83. The judge provided a careful analysis, including consideration of the opinions of the experts, in concluding that the JSA failed to make sufficiently clear to those undertaking the maintenance work that the controls it imposed with respect to movement of the equipment extended to movement of the implements. ^[60] Given that, as it appears, none of the three men working on the machine took the view that they had to stand clear of its footprint whilst the implements were manoeuvred, that finding should be accepted.

    60. Parkes at [73].

84. Titan had accepted its responsibility to take steps to ensure a safe working environment for its employees and, as has been noted, formulated extensive safety protocols which were to apply unless those of the host employer were of an equal or more demanding standard. In order to ensure that that standard was fulfilled, Titan should have been alert to imprecision, ambiguity or uncertainty in the JSA. Accordingly, there was no error on the part of the trial judge in finding Titan liable.

85. Since both Titan and Mt Owen had the relevant legal authority to impose constraints on the activities of Titan’s workers, in circumstances where Titan was able to take appropriate steps to carry out that function, there was no error in attributing equal responsibility to the host employer (Mt Owen) and the legal employer (Titan) for the injury to the plaintiff. Their proportionate liability was relatively low, reflecting the primary culpability of Mr Kemp.

86. Accordingly, the cross-appeal should be dismissed.

Conclusions

87. The trial judge identified and applied the correct legal principles in determining that Mr Kemp was operating as a de facto employee of the appellant at the time of the injury to Mr Parkes. Further, the judge was satisfied on the evidence that the appellant, as host employer, both had the authority to exercise control, not merely as to the specific tasks to be carried out, but as to the manner in which they were to be carried out, and in fact did so. No error has been shown in reaching those conclusions. Accordingly, the judge was correct to find that the appellant, and not Titan, was vicariously liable for the injury caused to the plaintiff by the negligence of Mr Kemp.

88. For these reasons, the appeal must be dismissed.

89. The appellant must pay the costs of the second respondent, Titan, as the party primarily responsive to the appellant’s challenge. The first respondent, the injured worker, supported Titan and was entitled to do so as he stood to suffer a diminution in the damages he could recover if limited to a claim against his employer, in accordance with Pt 5, Div 5 of the Workers Compensation Act 1987 (NSW). Accordingly, the appellant must pay the costs of both respondents.

90. The Court should make the following orders:

1. Dismiss the appeal from the judgment in the Common Law Division;

2. Order that the appellant pay the costs of the respondents of the appeal.

3. Dismiss the cross-appeal.

4. Order that Titan pay Mt Owen’s costs of the cross-appeal.

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Endnotes

Decision last updated: 26 April 2023