Northern Sandblasting Pty Ltd v Harris
[1996] HCATrans 317
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Brisbane No B14 of 1996
B e t w e e n -
NORTHERN SANDBLASTING PTY LTD
Appellant
and
NICOLE ANNE HARRIS (an infant by her next friend PAMELA HARRIS)
Respondent
BRENNAN CJ
DAWSON J
TOOHEY J
GAUDRON J
McHUGH J
GUMMOW J
KIRBY J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON THURSDAY, 10 OCTOBER 1996, AT 10.22 AM
Copyright in the High Court of Australia
MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR J.J. CLIFFORD, QC, for the appellant. (instructed by O’Mara Patterson & Perrier)
MR D.M.J. BENNETT, QC: If the Court pleases, I appear with my learned friend, MR F.J. TOY, for the respondent. (instructed by Boulton Cleary & Kern)
BRENNAN CJ: Yes, Mr Jackson.
MR JACKSON: Your Honours, may I hand to the Court a copy of our outline of submissions.
BRENNAN CJ: I might say, Mr Jackson, that it is intended that there should be new practice direction in relation inter alia to the notes of argument. That has been, I think, circulated to the Law Council and the Australian Bar Association. It should be understood that it is not necessary that the practices which are mentioned there necessarily have to wait until the commencing date. Yes, Mr Jackson.
MR JACKSON: Your Honours, as it is apparent from the papers, this is a tragic case of course where the events resulted in the electrocution of a nine year old girl. May I just go briefly to some aspects of the circumstances before turning to the submissions which we wish to make. Your Honours will see in paragraphs 1 and 2 of our outline of submissions that we set out the basic facts in very short compass. Could I just say something, your Honours, in relation to paragraph 3 of the matters there set out. Your Honours will see the reference at page 20 of the appeal book to the events which brought about the engagement of Mr Briggs, the electrician. They commence at the top of page 20 and your Honours will see that the element would not work on 2 June; the engagement was at the request of the plaintiff’s mother, who was one of the tenants, and that was done at the request of the mother. The landlord authorised the obtaining of a quotation and then the electrician reported to us by telephone and was authorised to carry out the repairs and the fault was a simple one and the repair of the actual fault itself was competent and effective.
Could we invite your Honours to note three matters in relation to paragraph 3. The first is that what was sought in the particular case by the tenant and what was provided by the landlord, as one might expect, was the services of an electrician, not, in effect, of the landlord itself, and it was obviously necessary for there to be services of an electrician. The second thing is that the services of an electrician were not just necessary as a matter of fact, but they were also necessary as a matter of law and that that is so appears from the Electricity Act 1976, your Honours. Your Honours will see section 322(1) of that Act provides that:
A person who is not the holder of a certificate of competency or permit shall not connect, disconnect, interfere with or remove any fixed portion of an electrical installation or do any electrical work specified in any of the definitions -
there set out. The definitions are in section 6, your Honour. The most relevant definition is the definition of “electrical fitter” and that term, your Honours:
means any person who supervises or performs any of the actual electrical trade work, whether in a workshop or on site, of constructing, manufacturing, fitting, assembling, erecting, operating or repairing electrical articles ‑ ‑ ‑
DAWSON J: You are reading from the Act now, are you?
MR JACKSON: Yes.
DAWSON J: We do not have that section.
MR JACKSON: I am sorry, your Honours do actually.
TOOHEY J: We do not have the definition section.
MR JACKSON: I am sorry, your Honours. I thought your Honours had section 6 and section 322.
DAWSON J: The section does not appear anywhere in the judgment.
MR JACKSON: No, it does not, your Honour, but I thought we had given the Court copies of it this morning.
BRENNAN CJ: We have got 322 but not 6.
MR JACKSON: The relevant definition of “electrical fitter” contains these words, your Honours. It means:
Any person who supervises or performs any of the actual electrical trade work -
of, amongst other things -
repairing electrical articles.
That is the second thing I would seek to mention. The third matter is this, that the case was one to which the allocation of responsibility effected by section 7 of the Residential Tenancies Act 1975 applied, and may I take your Honours to that Act? What your Honours will see is the long title provides, of course, that it is:
An Act to consolidate and amend the law relating to tenancies of dwelling-houses.
Section 5(1) then provides that:
Notwithstanding the Property Law Act 1974 and save as otherwise provided in this Act, this Act applies to -
and then your Honours will see paragraphs (a), (b) and (c). The terms “dwelling-house” and “tenancy agreement” are defined in section 6, your Honours, in effect, the way in which one might expect them to be defined, and I would refer particularly to “tenancy agreement”. Then, your Honours, from that one goes to section 7, and your Honours will see that what the legislature has done by section 7 is to adopt the method of putting obligations both on the landlord and on the tenant by way of implied terms of the agreement between them. Your Honours will see the opening words of section 7:
Notwithstanding any agreement between a landlord and tenant, in every tenancy agreement.....there shall be implied obligations -
(a) relates to the obligations to the landlord; (b) to the obligations of the tenant. And your Honours will see particularly 7(a)(ii), there is an implied obligation:
to provide and, during the tenancy, maintain the dwelling-house in good tenantable repair and in a condition fit for human habitation.
Then, on the part of the tenant, your Honours will see (b)(i) and (b)(ii).
DAWSON J: It is really (iii) that applies, is it not, not (ii)?
MR JACKSON: I am sorry, your Honour?
DAWSON J: (a)(iii) is the one that applies, does it not?
MR JACKSON: Yes, your Honour.
TOOHEY J: I am sorry, I did not follow that answer. Did you say that it is (a)(iii)?
DAWSON J: (a)(ii), and (iii) perhaps.
MR JACKSON: I had said, your Honour, (a)(ii) applies, and I think (a)(ii) is the one referred to in the reasons below. But your Honour is right to say (a)(iii) applies, of course.
DAWSON J: Both of them.
MR JACKSON: Yes, they both do, yes. And the position, of course, on the part of the tenant is that the tenant has the obligations set out in, amongst other things, (b)(i) and (b)(ii). Now, your Honours, if I could move back from that to our outline of submissions and, in particular, to paragraph 4. Your Honours will see summarised there what happened resulting in the electrocution of the child and, your Honours, when one comes to paragraph 5 your Honours will see the basis on which the primary judge decided. He accepted that the appellant was subject to a general duty to take reasonable care for the respondent’s safety.
Your Honours, could I pause to say this was not a case where we contended for the brutality, if I can put it that way, of the rule in Cavalier v Pope. We accepted the proposition, both at the trial and on the appeal, that there was a duty of care owed by the appellant to the respondent, but the question - and this is the matter to which we refer in paragraph 7 - was what was, in effect, the content of that duty? That came down ultimately to the question whether the duty obliged us to do more than to employ a competent person to carry out the work, bearing in mind the nature of the work.
Your Honours, I mention that in passing because what your Honours will see in the reasons of the President and also of Mr Justice McPherson in the Court of Appeal there is a considerable discussion of the question whether there is a duty at all. Now, your Honours, no doubt discussing that was a matter that led their Honours to the views they ultimately arrived at, but it was not the case in which that was being contended from our side, namely, that there was no duty. Your Honours will see also‑ ‑ ‑
BRENNAN CJ: Was there a concession made as to the basis on which that duty arose?
MR JACKSON: Well, your Honour, arising from the general law of negligence, if I could put it that way, brought about by the foreseeability of injury to people using the premises on the one hand, and on the other hand, by reference to the fact that in performing work of that kind one could see that there was a proximity between persons who lived in the house and persons who might be injured by the duty not being performed.
DAWSON J: Which of the cases in this Court amount to the point of departure from Cavalier v Pope?
MR JACKSON: Your Honour, I do not think it is right to say that any case in this Court has done that. What certainly has happened, however, has been, first of all, in Parker v South Australian Housing Trust, the South Australian Full Court adopted the view that Cavalier v Pope was no longer the law in Australia and it should not be applied. That is discussed. That decision seems to have been followed, your Honour, without the issue itself being, I think, further agitated in a number of other cases.
BRENNAN CJ: I must say for my part I would be advantaged to have some definition of what this duty of care is, to whom is it owed, by whom, and in respect of what matter?
MR JACKSON: Your Honour is referring to the duty of care which we accept that existed?
BRENNAN CJ: Yes.
MR JACKSON: Your Honour, in relation to that what we would seek to say is that the duty of care was one that, by reason of the fact that we undertook - if I can put it that way, to see - may I start again. What I would seek to say is this: we were the landlord of the premises; they were the tenants. They asked us to have the stove fixed up. By undertaking to have the stove fixed up we undertook, your Honour, to exercise reasonable care to persons who might be injured if that was not done properly.
BRENNAN CJ: Undertook to whom?
MR JACKSON: To whom, your Honour? To persons who might be injured; they being, your Honour, in the ordinary course of events, the persons who were the tenants ‑ this being a residential tenancy ‑ living there, members of their family on the premise or other persons who might come on the premises, at least, persons who might come on the premises, in effect, in the ordinary use of the premises.
DAWSON J: Is it so much a matter of undertaking, as merely a duty arising out of the relationship; such as, the duty an occupier owes to people coming on the premises, and, is there any difference between a duty in the latter case and this case?
MR JACKSON: Well, your Honour, in one sense it is no different from that duty, but in another sense it is, and, your Honour, may I seek to answer ‑ your Honour put to me a number of things. The difference is this, your Honour, that one does have a situation where, ex hypothesi, we are not in occupation of the premises. To that one must add a qualification and that is that one of the provisions of the Residential Tenancies Act, to which I referred a moment ago, but have not taken your Honours, is section 8, which gives an implied right on the part of the landlord to enter upon the premises and view, and so on. But, prima facie, we are not in occupation of the premises, but, in relation to the premises, we, as between ourselves and the tenant, have said that we will carry out these works ‑ we will carry out repairs in the premises, in relevant respects.
Now, in doing that, your Honour, the carrying out of repairs gives rise to the situation where persons are capable of being injured in certain circumstances by reason of the carrying out of those repairs. So, your Honour, it is, in effect, the general duty, in our submission, that arises from, in ordinary circumstances giving rise to negligence, the circumstance of landlord and tenant is a factor which, in effect, gives rise to it. But it is the circumstance of giving rise to it, where one has undertaken to carry out the particular work.
DAWSON J: So the duty arises from the carrying out of repairs?
MR JACKSON: Yes.
TOOHEY J: Well, that is not quite the way the primary judge saw it, is it? He seems to have seen it on a broader footing, and I am looking at page 42, by reason of your paragraph 5, Mr Jackson ‑ page 42 line 24, in which his Honour speaks of the:
circumstantial context set up by this contractual arrangement.....and the general duty and powers allocated to the landlord under that arrangement ‑
I only put that to you because I am still not clear in my own mind whether you are speaking of a general duty to take care, of which the engagement of the electrician is simply a manifestation, or, whether you are saying that by reason of the engagement of the electrician, there was a duty to take reasonable care for the safety of those on the premises.
MR JACKSON: Well, your Honour, it is possible to look at it from, really, two points of view. One point of view is to say that one looks at the particular circumstances and says that the duty arose in the particular circumstances because of the undertaking to carry out the work. Another way to look at it is to say that, by reason of the particular relationship between the landlord and tenant, the landlord was under an obligation, in certain circumstances, to carry out, or have carried out, work on the premises. And, in those circumstances, the landlord, by reason of that obligation, that gave rise to a duty which the landlord might owe to people who might be injured by reason of the carrying out of the work.
DAWSON J: I do not understand that. If the landlord, instead of being required to do this work by the tenant, had just done it of his own motion, I suppose you would say that was still pursuant to a contractual obligation, but what does the contractual obligation matter? If in fact he undertakes to do repairs, would your case not rest on the fact that he was under a duty by the mere fact that he embarked upon the carrying out of repairs?
MR JACKSON: Your Honour, that is the principal position I was seeking to put.
DAWSON J: The reason he embarked on carrying out the repairs may be that he was under a contractual obligation to do so, but that is not really relevant.
MR JACKSON: May I seek to say - and I am not trying to avoid what your Honours have said - the position that I am seeking really not to resile from is the fact that we did accept that there was some obligation that we had. The obligation that we accepted was an obligation which I suppose in a sense is that referred to at page 42 to which Justice Toohey has just referred a moment ago.
DAWSON J: But what is being sought from you at the moment is whether the duty stems from the obligation or is irrespective of the obligation. You are not contending for a contractual obligation of people not parties to the hearing.
MR JACKSON: No, your Honour, quite the opposite. What we are suggesting is that, so far as the respondent is concerned, the duty arose from undertaking the work.
DAWSON J: On the other hand, if he had not undertaken the work and there was a defective state of affairs not due to him in the premises, he would not be liable, if that is the principle.
MR JACKSON: That is so, yes.
BRENNAN CJ: The measure of the duty does depend, does it not, or at least it is related to the source of a duty of care, whatever that may be? If, for example, to take Justice Dawson’s question further, the duty of care arises because what was done was a repairing of the stove by the agent of your client, that would give rise under the ordinary Donoghue v Stevenson formulation to a duty to exercise reasonable care in the doing of that act. If, however, you put the duty of care arising from some relationship that is anterior to the doing of the act, then different considerations may arise.
MR JACKSON: Your Honour, that is right in a sense, but may I also say that in seeking to answer Justice Dawson and speaking of undertaking to do the act, I did not further define what the act was. What your Honours will have seen from that passage at the top of page 20 was that the undertaking was to do the act, namely to obtain the services of an electrician to do the repairs. That is the particular thing that arises, your Honour.
Now, your Honours, in the Court of Appeal your Honours will see, set out in paragraph 6 of our submissions, the fact that two different bases were adopted by members of the Court of Appeal. The President ‑ ‑ ‑
DAWSON J: Can I just make that quite clear, I am sorry, Mr Jackson. So that if he is going to do the act, that is the landlord, of repairing, if he is going to repair, he has to do it without negligence, but if he is not going to do the repair, he may be in breach of contract but he is not in breach of any duty.
MR JACKSON: Your Honour, what I would seek to say in relation to that is it depends what he undertakes to do, your Honour; that is really the starting ‑ ‑ ‑
DAWSON J: Undertaking is - you do not mean contractually undertaking, you mean just ‑ ‑ ‑?
MR JACKSON: Yes, if I could put it this way: if you have a situation where the landlord is told the stove is not working, it needs to be fixed up, and the common understanding is that what the landlord will do, and lawfully would have to do, is to obtain the services of an electrician - the landlord was not an electrician, of course - to do it, then, in those circumstances the landlord’s undertaking - if I could use that expression - is, in our submission, to do no more than to obtain the services of an apparently competent electrician to carry out the work and it falls, we would submit, in the ordinary class of cases where, by employing a competent, independent contractor the employer of the independent contractor is not personally liable for negligence of that contractor. Your Honour, that is the way in which I would really seek to put that part of the case. I do not know if that answers what your Honour is putting to me.
DAWSON J: Well, what happens if the landlord does nothing and the premises are in a defective condition and someone is injured who is not the tenant?
MR JACKSON: Your Honour, that then gives rise to really another question and that question is whether the landlord’s failure to repair could be, first of all, foreseen as being likely to give rise to that type of injury and, secondly, whether the person was a person who was in proximity. Now, probably the answer to ‑ ‑ ‑
DAWSON J: I do not see any difference between that or any significant difference between that and the occupier’s duty, post-Zaluzna and those cases.
MR JACKSON: Yes, well, your Honour, that does of course give rise to the question which, in a sense, I suppose, is unanswered, whether the occupier’s duty can be satisfied by the use of independent contractors. Our submission is that it could and one sees it falls into the class of case to which Haseldine v Daw is one where the occupier employed the services of electricians, lift contractors, to fix the lift, the sort of things that the occupier could not do itself and the occupier was held not to be liable for the negligence of the lift engineers.
DAWSON J: I suppose there is one difference between an occupier and a landlord is that what the occupier, who is there on the spot, might reasonably foresee may be different from what the landlord, who is not there, may reasonably foresee.
MR JACKSON: Indeed, your Honour, and in many circumstances the events which occur, and as your Honour has said, and possibly give rise to a perception of danger are ones of which the landlord could not ordinarily be aware. I was referring your Honours, I think, to paragraph 6 of our outline of submissions which sets out the two bases on which the members of the Court of Appeal arrived at their view. Your Honours will see that there was not a common view in the court, so that in a sense there was a result without there being ratio, but if I could move to the two bases upon which the decision was arrived at and, first of all, to the common law duty of care that was arrived at by the President. Your Honours will see that referred to in his Honour’s reasons at page 102.
GUMMOW J: There is a preliminary, perhaps at page 85 line 10. The word foreshadows ‑ ‑ ‑
MR JACKSON: Yes, your Honour. As his Honour says, that is not a precise description of it. It is not a particularly precise description of it and that defines its relationship to events rather than its content. The content to which he refers, your Honours, is at page 102 lines 25 to 35. Your Honours will see he says at line 25:
the respondent’s duty of care to the appellant was breached as she submits. As an aspect of letting its house for reward, the respondent was required to ensure its fitness for human habitation, including the safety of the electricity system and electrical equipment. That was not a responsibility which it could delegate, or discharge, by waiting for notification of problems from an ingoing tenant or, given such notification, by appointing apparently qualified and competent persons.
Now, your Honours, I am conscious of the fact that the term “non‑delegable” can be used generically in a sense and sometimes very loosely, but it seems to be clear from what his Honour there says that what he is seeking to indicate is that the responsibility to ensure the fitness of the premises for human habitation could not be delegated, in effect, or could not be satisfied or discharged by obtaining appropriately qualified and competent persons to carry out the work. Your Honours, his Honour then goes on to say in the next paragraph, with respect, a little unfairly perhaps, what he understood the content of that to be because his Honour says in the next paragraph:
In summary, in my opinion the respondent was under a duty to the appellant to make the premises reasonably safe at the commencement of the tenancy and whenever maintenance or repairs were carried out during the tenancy.
DAWSON J: It is hard to see where that duty comes from. What if it were part of the tenancy agreement that there was no liability on the part of the landlord to do any repairs or to take any responsibility for the condition of the premises? The appellant was not a party to that contract. Where would the duty arise from?
MR JACKSON: Your Honour, it could only arise - and this is the point we would seek to come to later - if one took a view of the Residential Tenancies Act provision, contrary to the terms of it, that said that it in fact imposed a statutory duty as distinct from being an implied term of the agreement. Your Honours, could I just say that the situation that your Honour referred to, if I could just mention in passing, really, in a sense, could not arise completely because of the non-contracting out provisions of the Residential Tenancies Act, but, your Honour, I ‑ ‑ ‑
DAWSON J: Put that to one side, that is a statutory invasion of the area and assume we are just back at common law and the landlord contracts out of any responsibility for doing any repairs. Where then does the duty arise, if any?
MR JACKSON: Your Honour, the case would simply seem to be one of the ordinary case of occupier’s liability assuming the landlord was out of occupation. It would be the occupier, not the landlord, that had the ‑ ‑ ‑
DAWSON J: The owner would have no duty in that circumstance.
MR JACKSON: Your Honour, I would answer that yes, but with a qualification. If one had circumstances where the landlord was conscious at the time of letting the premises that there was some hidden trap in them, in effect, and that that was something that might not be perceived by people going into them but knowing that people would go into them, it would be very difficult, in a sense, to see that the court today would say that there was no obligation on the part of a ‑ ‑ ‑
DAWSON J: So he, in that situation, would not be liable to the tenant but would be liable to others who he could reasonably foresee would be using the premises.
MR JACKSON: Yes, your Honour. The position of the tenant, of course, would be really the exception, but would perhaps attract the exception about fraud that is referred to, I think, in Cavalier v Pope, and so on.
TOOHEY J: Mr Jackson, do you read that paragraph in the middle of page 102 as identifying an obligation in tort or in contract?
MR JACKSON: Your Honour, in tort. His Honour’s discussion of the case is one that uses the existence of the contractual provisions and the deemed contractual provisions as one of the matters giving rise to the obligation, but the obligation to which his Honour does refer seems to be throughout one in tort rather than in contract.
TOOHEY J: It is just the words, “As an aspect of letting its house for reward”, are somewhat cryptic perhaps.
MR JACKSON: Your Honour, I do not think his Honour was using that in a contractually precise way, or intending it to convey that.
TOOHEY J: Thank you.
MR JACKSON: Your Honours, as we say in paragraph 9 of our submissions, in view of the findings of fact as to the employment of an apparently competent specialist and the findings in relation to the fact that there had not been established any breach of the duty of care in relation to the neutral link in the premises, the case came down ultimately to the proposition that the duty owed was one which could be regarded as being non-delegable in the sense of being unable to be discharged by the employment of people who were apparently competent.
Now, your Honours, the circumstances in which duties of that kind may be owed have been dealt by the Court in the two cases to which we refer in paragraph 10 of our submissions: Kondis v State Transport Authority and Burnie Port Authority v General Jones. Could I take your Honours first to Kondis in 154 CLR 672.
BRENNAN CJ: Are we leaping one step ahead here, Mr Jackson? If we are speaking of non-delegable duties, one has first to discover if there was a duty which was in existence, and I am not sure that, at least for my part, I yet understand what the duty is.
MR JACKSON: Well, your Honour, I do not know that I can advance it beyond - and your Honour will appreciate there is a matter of concession, that is why it is ‑ ‑ ‑
BRENNAN CJ: That seems to me to be, in a sense, the problem. In other words, if there is a concession of a duty, it carries with it the concession of some standard of care and also, you would think, the question of whether it is delegable or non‑delegable. It cannot exist in the air and yet it does not seem that there was any clear understanding of the duty that was conceded.
MR JACKSON: Well, your Honour, perhaps I ‑ ‑ ‑
BRENNAN CJ: I am not saying that it should have been or should not have been; it is just that I am endeavouring to understand it.
MR JACKSON: No, your Honour. Your Honour, it think it right to say first, that the duty that was conceded and, secondly, the duty to which we would now refer is really no more than a duty to take reasonable care; in the particular circumstances, the duty to people who might be injured if reasonable care was not taken. I appreciate that is putting it in the very broadest form. And it arises because, once one goes from the proposition that the landlord would owe no duty to persons who might be on the premises, it becomes a question of what the ambit of the duty might be.
McHUGH J: Well, you say that there is no duty, but why can you not approach this the way Californian courts have approached this sort of problem for 40 years, and that is to analyse the situation in this way: this plaintiff could have sued her parents for breach of an implied term in the licence that the premises would be fit for human habitation for her living there. The parents in turn could have sued their landlord for breach of the section 7 warranty and, as part of their damage, recovered from the landlord the amount they had to pay to the daughter. That being so, why does not the common law in the circumstances impose a duty on the landlord, having regard to those contractual arrangements between the parties, owe a duty direct to the licensees on the premises to keep the place in repair?
MR JACKSON: Your Honour, if I could deal with a couple of aspects involved in that. We would not contest the broad proposition that if, in circumstances giving rise to a breach of the term implied by section 7, a liability arose from the tenant to a third party that the tenant would be able to recover the damage which flowed from the breach by the landlord, but, having said that, there are a couple of steps on the way. One step is to identify the nature of the breach by the tenant that would give rise to the obligation to the child, for example.
McHUGH J: I am assuming for the moment - and I may be quite wrong about that - that there would be an implied warranty in the licence agreement between the licensee of the premises, somebody that is living there, and the tenant, that the premises would be fit for human habitation.
MR JACKSON: Even an obligation of that kind is not necessarily interpreted as being an absolute warranty in the sense of requiring the person who is giving the licence, the occupier for example, to do more in cases where what has to take place is the repair of material than to employ the people who are competent and the only people qualified to do it because, your Honour, it would require the obligation to be expressed in very strong terms and, really, in a sense, stronger than the terms of section 7 as, at least the Canadian cases would suggest, to arrive at a situation where that obligation, itself, involved perhaps more than that. Assuming it did, what would follow from that would be that then there would, assuming a liability in the tenant to the third party - no doubt that would be contractual, but, your Honour, the next point, however, is that what one sees is that the basis for recovery against the landlord is one that is contractual, brought about by the legislative interposition of a term into the agreement.
McHUGH J: I appreciate that. I would have to refresh my recollection. I have only just thought about it this morning while you have been on your feet. The Californian courts that adopted this approach - and they have allowed the consumer to sue the manufacturer because when you have got this series of contracts they have imposed the common law obligation rather than making everybody sue through a series of contracts, but would you give some thought to that at some stage?
DAWSON J: I add, why would you need a licence which is artificial in the extreme where the parents have a duty to care for the child, but why would you need one after Zaluzna when the parents are, after all, occupiers owing a duty to people who come onto the premises?
McHUGH J: Yes, that is - - -
MR JACKSON: Your Honour, accepting that, it would still give rise in the first part of it to the question whether the duty of the parents as occupiers would not be satisfied by themselves employing competent independent contractors.
DAWSON J: Yes.
MR JACKSON: That is the first part of it, your Honours. The second part is this, that so far as the position as between the landlord and the tenant is concerned, the duty imposed by section 7 is one that is imposed by the use of the device, if I can put it that way, of it being an implied term of the agreement implied by statute. Section 7 really could not be clearer in that regard. If that is the case then what one does see is that, for example, the English cases dealing with a provision of this kind certainly are quite against the proposition that that gives rise to an independent cause of action. It simply is a provision which is contractual. Your Honours have seen the - and also the decision to which we refer when dealing with, in effect, the equivalent provision in section 106.
The case to which we refer in paragraph 19 of Wallis v Downard Pickford Pty Ltd also suggests that where one sees provisions inserted as being implied terms, then that is what they are. The legislature has chosen that method and no more. Perhaps I can come back to that when I come to it, but that is essentially what we would seek to say. Your Honours may recall in Wallis v Downard Pickford there was provision for a term to be implied by a statute and it was held, adopting what had been said I think by your Honour the Chief Justice in an earlier case in the Federal Court, that that was the range of remedies that came from it.
TOOHEY J: Mr Jackson, could I just ask you this: none of the defences are in the appeal book. Was there anything in your client’s defence by way of an acknowledgment of a duty of care?
MR JACKSON: I am sorry, your Honour, I cannot answer that immediately.
TOOHEY J: Could you let us know.
MR JACKSON: I will try to give your Honour an answer very shortly.
TOOHEY J: If it is relevant, could you let us have a copy of that pleading.
MR JACKSON: Yes, your Honour.
TOOHEY J: Thank you.
MR JACKSON: I think I was endeavouring to get to Kondis v State Transport Authority 154 CLR 672. I was going to refer your Honours to pages 677 to 678. Your Honours will see at page 678, about two‑thirds of the way down the page, Justice Mason - and I think your Honour Justice Dawson and his Honour Justice Deane agreed with his Honour’s reasons - said:
Leaving to one side for the moment the possibility of the respondent being negligent independently of the negligence of Clissold, the question then becomes whether, in such circumstances, the respondent is liable to the appellant for an admitted act of negligence on the part of an employee of an independent contractor.
I will not read out the next paragraph but we would invite your Honours to read it.
GUMMOW J: Is there some circularity in the paragraph on page 679 about halfway down, commencing “However”, in the last sentence?
This is to say that the duty is of such a nature - - -
MR JACKSON: Your Honour, his Honour later in the succeeding part of his Honour’s reasons, which discuss the issue, does recognise that there is indeed that circularity. I was not going to take your Honours through lengthy passages in this because the issue is really further dealt with in Burnie Port Authority, to which I will come in a moment, but may I just indicate to your Honours where the further discussion of the topic appears in this case. It is particularly, your Honours, at page 680, commencing the last new paragraph on the page going through to page 688. Now, what your Honours will see, in particular at page 681 about three-quarters of the way down the page, his Honour refers to a matter, which I think may be bound up in what your Honour said to me:
Lord Wright’s approach is vulnerable to the criticism that he advances no reason -
et cetera, and your Honours will see particularly in the passage which appears at page 688 at the top of the page or perhaps I should say, at the bottom of page 687, what your Honours will see is:
That such an element exists in the relationship of employment is beyond serious challenge.
His Honour then speaks of:
The employer has the exclusive responsibility for the safety of the.....premises -
and that goes through to the end of that paragraph, halfway down page 688, and we would invite your Honours to note particularly the last eight or ten lines of that paragraph - 12 lines perhaps:
Indeed, there is a stronger case for concluding that the employer’s duty is non-delegable than there is for reaching the same conclusion in the case of the invitor. It is not immediately obvious that it is appropriate to impose liability on the occupier of a house for injury caused to an invitee by the negligence of an independent contractor, eg, in making or repairing an electrical installation carelessly, when it is reasonable -
and your Honours will see the remainder of that paragraph. That is speaking, of course, of the position of the invitee, but we would submit, your Honours, similar observations would apply in the case of a landlord of the premises.
Your Honours, if I could move from that decision to Burnie Port Authority v General Jones Pty Limited 179 CLR 520. At pages 550 to 552, in the joint judgment of five members of the Court, there is discussed then circumstances which can give rise to a non-delegable duty and what your Honours will see at page 550, at the bottom of the page, a reference to Kondis and their Honours say that in that case:
Justice Mason identified some of the principal categories of case -
your Honours will see them listed, and then the second-last line on that page:
and (arguably), occupier and invitee. In most, though conceivably not all, of such categories of case, the common “element in the relationship between the parties which generates [the] special responsibility or duty to see that care is taken” is that “the person on whom [the duty] is imposed has undertaken the care, supervision or control of the person or property of another -
and so on, and their Honours then describe that as being -
“the central element of control”.
And then your Honours will see the last four lines of that paragraph:
Viewed from the perspective -
from the other side is the:
special dependence or vulnerability on the part of that person.
And your Honours will see that developed a little in the next paragraph.
KIRBY J: Is the fundamental idea here one of shifting the economic burden from one who is least able, or may not be able to bear it, to one who can better bear it?
MR JACKSON: Your Honour, that is the result that was arrived at, no doubt, by the decision in the particular case, but the validity of the underlying proposition, in our submission, is one that, with respect, must be debatable, because, your Honour, no doubt it is true to say, as a broad general proposition, that people who are landlords are probably better off than people who are tenants of residential premises. But, it is very much a broad general proposition. There are a couple of things that have to be added to put into the imperfect equation; one, of course, is that one can sometimes find tenants who are much better off than landlords. Sometimes people will be both tenants in one place and landlords in another. One sees that, for example, with people who have moved, for a time, from one State to another, for example, and other bizarre occurrences.
Your Honours, one can also see, of course, that it is an imperfect equation because you have, in cases like this, the independent contractor, and the independent contractor may well be someone who is much bigger, much better off and much more covered by insurance, than either the landlord or the tenant could ever hope to be.
KIRBY J: But, I think the question is where that fails, where does, as Justice McPherson, I think, began his judgment, two relatively innocent people, on whom should the law fix the burden? You will, no doubt, come to this in due course, because it is discussed in both the majority opinions as to the policy reason, but I am just trying to understand what caused the law to shift to the Kondis/Burnie principle. What is the special vulnerability that is at the heart of this added duty of care?
MR JACKSON: Perhaps one can see what was contemplated by looking at, in a sense, what is in the next paragraph. It is, perhaps not so much a not entirely economic vulnerability. Your Honour will see there ‑ I go four or five lines down that paragraph:
One party to that relationship ‑
it is speaking of the former Rylands v Fletcher rule ‑
is a person who is control of premises and who has taken advantage of that control to introduce thereon or to retain therein a dangerous substance ‑
and, your Honours, I will not read out the next sentence, but it goes down to about two‑thirds of the way down the page, speaking of the person “outside the premises” being in the “position of special vulnerability and dependence”. Vulnerability ‑ the company might be BHP that is the vulnerable one, but vulnerable because of lack of knowledge, for example, and matters of that kind; lack of control over what is going on and things of that kind, and, your Honours, that seems to be the contest in which the expression is being used, rather than pure economic comparison of resources and ability to insure.
KIRBY J: I think the President refers in his reasons to a number of articles on this. Are there any that you have come upon that would be helpful to understanding the Kondis line of authority?
MR JACKSON: Not really, your Honour, but I can give your Honours an article dealing with Burnie and discussing the Court’s decision in Burnie. Perhaps I can give your Honours a copy of that later today. But the articles - Burnie is relatively recent. The articles tend to be ones which are descriptive of the case and rather adding little new to it, if I could put it that way. Your Honours, what we would seek to say is that if one looks at the factors to which we refer in paragraph 11 of our outline of submissions, that this is not a case which attracts any of those special elements and, your Honours, it was, as we say in paragraph 11(a), simply the case of an ordinary commercial relationship where the legislative terms were implied.
We make the submissions set out in paragraph 11(b) that if the legislature had wanted to go further it could have and, your Honours, we invite your Honours to note a matter referred to earlier: we were not the occupier of the premises and whilst we have the ability to go on, generally speaking, the landlord would not control and know what was done or being done in the premises and that relates back to the passage to which I was referring your Honours to a moment ago at page 551 about halfway down the page. Your Honours, we note, of course, in subparagraph (d) that the tenants themselves had obligations in relation to the premises and in relation to observing and reporting and in some cases repairing defects and, your Honours, the important matter in (e), that we did not profess to have any expert knowledge in the field in which the risk arose, neither party did, and the task was one that did require expert knowledge and the two other matters to which we refer in paragraphs (f) and (g).
Now, your Honours, it is in those circumstances that we submit, as we do in paragraph 12, that it imposes too high an obligation on us to say that we could not reasonably have relied on engagement of a reputable tradesman to carry out the work and if one looks at what else we could have done, the only other thing we could have done was to engage someone else as well to check the work the first person had done.
DAWSON J: And someone else again.
MR JACKSON: And again, your Honour. Your Honour, I will not attempt to say anything more about that, but that is the position and we could not do the work ourselves. We had to engage someone who was licensed in that regard. Now, your Honours, could we also draw attention to the matters to which we refer in paragraph 13.
KIRBY J: I thought the theory of the non-delegable duty is that even if you cannot engage a solution, then it is just bad luck, that is where the buck stops.
MR JACKSON: That is if the duty is non-delegable, your Honour, but to determine whether the duty is non-delegable, one has to look at the circumstances, and if what you have is a situation where none of the persons involved has themselves the ability to do the work where the work, it is contemplated in the ordinary course of events, would be carried out by people who are independent contractors and where statute requires it to be carried out by independent contractors, there seems, in our submission, no very good reason in the ordinary course of events from taking a view similar to that that was adopted in Haseldine v Daw, and that is that, your Honours, one has a situation where the duty of, say, the occupier is satisfied by employing an appropriately qualified person.
Your Honours, we refer also to the matters to which we have referred in paragraph 13. Your Honours, in our submission, one could probably adopt the view that a landlord may or may not have insurance covering liability of this kind. Some landlords will, some will not. One could expect a situation where it may well be that the occupiers of residential premises have, as part of their ordinary insurance of the premises, because you would expect in many agreements for residential property that there be an obligation on the tenant to insure for the benefit of the landlord as well in respect of liability to other parties and, your Honours, one will also expect most electrical contractors, or most people who are tradesmen engaged in business on their own behalf, to have some form of public liability policy to be used in relation to their work.
Your Honours, in short, one simply has a case here, I suppose, where the position of the electrician was such that his policy was not big enough and, your Honours, the fact in particular circumstances you end up with one party having better insurance than another, I suppose, should not be the dominant factor in determining what the law should be as amongst the various parties.
GUMMOW J: Particularly when there is never any evidence of these things.
MR JACKSON: No, your Honour.
GUMMOW J: It is all left in the air.
MR JACKSON: That is so, your Honour.
KIRBY J: I was intrigued to see you say that it was not a very strong reason, which implies that it is a reason, whereas the old theory used to be that you completely ignore it. It has just got nothing to do with the case. Do I take it you concede that the existence or possible or likely existence of some form of insurance is a factor relevant to fixing liability?
MR JACKSON: Well, your Honour, could I say two things to that? The first is that the view that insurance was irrelevant really had two applications, I suppose. One was the fact that in relation to cases - particularly cases heard by juries - the fact of insurance was one that sometimes those appearing for plaintiffs would, one way or another, endeavour to have before the jury. On the other hand, the rule was that that was a matter that could not be allowed in as such. So that is one aspect of it.
Another aspect of it is the extent to which courts are entitled to take into account the possibility that particular person will be insured. Now, your Honours, in our submission, one really cannot take it into account as a factor, other than really as a matter of broard general knowledge. What I mean by that is that all that one can really say is that, from one’s common experience, it is more likely than not that particular classes of people in the community are likely to have insurance than others. But even propositions of that kind tend, themselves, to have exceptions to them.
For example, large companies may, themselves, be self‑insurers in respect of particular classes of matter. Defamation is a common enough one where that occurs. Again, one really cannot use it - I am sorry, I am putting that badly - one cannot really use the concept of insurance as really other than a very general proposition. If you take the case, your Honours, of people who are engaged in electrical work, you may well find that the - that electricians are in a very large company, which may have very large insurance. It may not, too. One may well find that a person who is a professional person of some kind is likely to have some kind of across the board professional insurance. But again, particular cases may be ones to which the insurance does not apply.
Your Honour, all I am seeking to say about it is that one can take into account the existence of insurance for many classes of liability, but, having done that, it really does not provide very much of a guide at all. Now, your Honours, we would also seek to say that it really would be a rather curious situation if you had a landlord subject to a - this is what we say in paragraph 15 - if you have got a landlord subject to a special duty, which is rather higher than, and perhaps different from that of the occupier, when the occupier’s duty is to take reasonable care to avoid the foreseeable risk of injury - and, your Honours, but one would add to that, if the approach taken by the President of the Court of Appeal was correct, one would have the landlord having a different, special and non‑delegable duty in relation to it.
We have referred your Honours to what was said by Justice Mason in Kondis in relation to the position of the electrical contractor. Could I just give your Honours two further references in that regard? One is to a passage ‑ ‑ ‑
BRENNAN CJ: What is that passage in Kondis?
MR JACKSON: It is at page 688, about point 3, your Honour.
BRENNAN CJ: Yes.
MR JACKSON: It is the sentence commencing, “It is not immediately obvious”.
BRENNAN CJ: Does that not really raise the problems which are central here, and that is whether the propounded duty is said to rest upon the occupier or the landlord, what must make the duty non‑delegable, if anything, is that a failure to discharge it results in danger being found in the premises. So that, any person who enters on the premises, placing some trust in their safety, is likely to be deceived. Now, I am not saying this is the answer to it, just it seems to me that the relevant factor is that the breach of a postulated duty results in dangerous premises. Now, is that sufficient to make the duty, whatever it may be, non‑delegable? Or putting it another way - but it seems to me this is another way of putting it - to say that the occupier, or the landlord, is vicariously liable in those situations for the negligence of the independent contractor.
MR JACKSON: Your Honour, the difficulty with adopting that approach is that one could say that almost any activity carried on by a person who is an independent contractor engaged to perform work in what is a dwelling house, to take the simple example, is capable, if carried out negligently, of giving rise to dangers, broadly speaking, of the kind to which your Honour has referred. I am not speaking just about electricity, of course, but if you took, for example, gas and water and, indeed, simply carrying out building work by, for example, not fencing off bits of it at night and so on, things of that kind, your Honour, all those things which really are pretty much the ordinary stuff of everyday living and where people who are specialist contractors carry that kind of work out, are things where acts of negligence in the carrying out of it - and, your Honour, I do not mean in so using that expression, try to obscure it; negligence, in effect, in the ordinary carrying out of the word, or the carrying out of ordinary work, perhaps would be a better way of describing it, has the possibility of giving rise to injury.
So, too, if I could just go to the side for a moment, does driving a car, but, your Honours, in relation to all those things it is possible for there to be injury caused and danger brought about, to go back one stage, by not carrying out the work properly. It is a different situation, your Honour, from the situation where the very work itself in the kind of old Rylands v Fletcher way, is something which gives rise to danger. What I mean by that, your Honour, is that one could have a situation where the landlord says, “Do this”, and the work that is done is work, the nature of which is such that by carrying it out there is the possibility of‑ ‑ ‑
BRENNAN CJ: Yes, but that is a different case altogether. Why I raised the question of state of the premises as being the relevant factor is from consideration of Burnie and Zaluzna. In Burnie, liability was imposed by a majority on the footing that there was some duty of care. It arose by reason of the proximity of the premises. If one takes the facts in Zaluzna, what would have been the liability of the defendant if the cleaning of the floor had been entrusted to an independent contractor? None. It seems odd.
MR JACKSON: Could I perhaps put it this way: if one looks, for example, at Voli v Inglewood Shire Council. In that case the liability of the council as occupier of the hall was held to exist, notwithstanding the employment by the council of an apparently competent architect in relation to the work in the hall. Why that was held to exist was really because, although the council did not itself employ people who were themselves capable of carrying out the work, the council, as an entity, a local government authority, in effect, was the body which was held to have the obligation.
Now, in doing that, Justice Windeyer, who gave the leading judgment, recognised the difficulty in trying to separate the two classes of case. But the one thing to which he did refer and members of the Court agreed with his reasons, seemed also not to disagree with, was the proposition that so far as the employment by a person in the position of a landlord - I am sorry, I will start again. The employment of a person in the position of an occupier, the employment by that person of someone to carry out work of the kind that required specialised people to do could be satisfied, albeit liable to give rise to danger if something happened, such as the case to which I referred to earlier, the lift collapsing, was one that - the possibility of danger, although obviously existing if the work was not done properly, did not necessarily give rise to a non-delegable duty.
The passage to which I was going to refer your Honours is in Voli v Inglewood Shire Council (1963) 110 CLR 74. I thought I had copies to give your Honours - I am just having that checked - but may I just refer your Honours to one passage in it. His Honour’s discussion of this issue is at pages 94 to 98, but at the bottom of page 97 his Honour says:
The observations by their Lordships about the inescapable duty of an invitor thus remain important. They may not be of general application; but in some kinds of cases they are definitive. Is this one of them? As the decisions of the Court of Appeal stand at present, there is no absolute rule. It is not enough to find that a plaintiff was an invitee. Haseldine v C.A. Daw & Son Ltd stands on one hand; Woodward v Mayor of Hastings on the other. In each of these cases an occupier employed an independent contractor. In the first, the contractor was a firm of skilled electricians employed to repair a lift; in the other, a charwoman employed to sweep the snow off steps at a school. For the negligence of the electrician the occupier was not liable to an invitee; for the negligence of the charwoman he was. The distinction in point of policy and on the differing facts may be clear.
Your Honours, I have some copies of those pages now. Their Honours go on to say:
The Council, of course, had to employ an architect. Its own engineer would not, one may assume, have been able to undertake the work even if the Council had wished it. Nevertheless the Council is not like a person who employs a contractor because he does not himself understand what is required and is unable to check what is proposed or examine what is done.
Your Honours, that position really that is referred to in that paragraph is, in our submission, the position of someone who is the landlord in relation at least to work of this kind.
DAWSON J: Are you not really talking about standards of care rather than duties of care? The standard of care, of course, does change with the circumstances. The standard of care with hazardous materials is a higher standard of care than with non‑hazardous materials. The standard of care with an employee in relation to a safe system of work is higher than otherwise it might be.
MR JACKSON: Your Honour, I would not disagree with that proposition.
DAWSON J: So that all one is really looking for is circumstances which would justify the imposition of a higher standard of care than would otherwise obtain.
MR JACKSON: Yes, and, your Honour, the view taken on this aspect by the President in the Court of Appeal is one that in a sense removes the issue from the particular facts and the particular facts having been found our way, but, again, goes on to say that this is a duty which cannot be satisfied by getting competent people to do the work.
DAWSON J: That is only saying that the standard of care here is not to take reasonable care but to see that reasonable care is taken.
MR JACKSON: Your Honour, that is what his Honour is in a sense saying, but what he is saying is that the only way of seeing that reasonable - I am sorry, your Honour, I will put it differently. What his Honour is saying is that in no circumstance can that obligation be satisfied if reasonable care had not, in fact, been taken and to do that, your Honour, really takes it above being a duty of care but makes it a case where the duty is to ensure that a particular thing is done.
DAWSON J: That is only a duty of care. As I say, it is a different duty of care. One step is to say you have a duty to take reasonable care yourself. A higher duty of care is to ensure that reasonable care is taken, to see that reasonable care is taken, but they are just standards which were imposed upon you. The duty is there all the time.
MR JACKSON: Your Honour, I accept the question is ultimately one of the standard. Our submission is that there really is no basis in a case like the present for adopting the view that the higher standard had to be taken.
KIRBY J: Can one find the basis in the especially dangerous quality of electricity and the fact that a landlord would ordinarily be expected to provide premises which are not going to electrocute a child just by turning a tap on?
MR JACKSON: Your Honour, of course, electricity is something that, if not dealt with, is dangerous, but it is also something that is used for practical purposes every day by everyone in every set of premises and what one does see is that there are, as we have demonstrated to your Honours, legislative restrictions upon the persons who may carry out works upon it. Landlords themselves who are not licensed cannot do so and ‑ ‑ ‑
KIRBY J: If we look at the generality of landlord/tenant relationships in Australia, I think most landlords probably would think they do enough if they get a licensed electrician.
MR JACKSON: They would probably be thought not to have done enough if they did not and, your Honour, if they went about doing it themselves and did it in ‑ ‑ ‑
KIRBY J: I do not think it is anywhere suggested that they should do it themselves. What is suggested is that if it is not done competently then the bottom line is it falls on the landlord because the landlord must provide premises which he or she assures is safe of electrical faults.
MR JACKSON: Your Honour, that is an obligation that legislatures may impose upon landlords in one of a number of ways no doubt, but it is not, in our submission, one that is imposed upon them by the law generally. The obligation imposed, in our submission, is to take the care appropriate and in the particular circumstances where what is involved is something that requires specialist work and which in the ordinary course of events one would not expect a landlord personally to be able to check or, indeed, be able to check otherwise than might employ another electrician and where, your Honours, the people who carry out that work are people who themselves must in their work be conscious of the possibility of themselves being liable to others, it is sufficient, in our submission, for the liability to be the liability of the person who carries out the work, the liability of the landlord being discharged by being required to employ someone who is competent to do it.
KIRBY J: Is there any other relationship other than landlord and tenant that would, as it were, show up the undesirability of pushing the law, as the President has, to this extra step? In other words, is there a creation of an artificial category by imposing on the landlord and tenant, or the landlord vis‑a‑vis the tenant, this obligation which is shown by contrasting it to other relationships where that would not exist?
MR JACKSON: Your Honour, in paragraph 25 of our submissions, we have said something that touches on the point that your Honour has referred to, namely, that if Parliament had wanted to create a greater duty in favour of third persons, it could have done so. What we would say, your Honours, is that if the position is one where there is to be a statutory creation, in effect, the cause of action, one does have to bear in mind that there would not seem to be any particularly good reason why similar considerations would not apply to all cases of landlord and tenant, not just residential properties; there seems no reason why one would distinguish between them because, in the ordinary course of events, they are used for all sorts of purposes.
BRENNAN CJ: Do you have anything to say to that, Mr Jackson.
MR JACKSON: Nothing at all to say, your Honour.
MR BENNETT: Yes. And the other thing, may I also have leave to give your Honours a couple of pages of transcript relevant to what my learned friend indicated about the inspection at the time of change of ownership, when my learned junior has found them in the transcript?
BRENNAN CJ: Mr Jackson, is that acceptable, or does it need further combing of the transcript to ensure that we have got everything that we need?
MR JACKSON: Your Honour, I heard of the proposition at the same time your Honours heard of it; we would need ourselves to look through to see if there is anything more we would want to put to the Court on the issue.
BRENNAN CJ: Yes. Well, perhaps the pages can be agreed between counsel as to those which contain anything conceivably relevant to the issue.
GAUDRON J: There is some transcript in the bundle which goes to that issue. Is it over and above that?
MR BENNETT: Yes, your Honour.
BRENNAN CJ: The Court will consider its decision in this matter.
AT 4.09 PM THE MATTER WAS ADJOURNED
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