Parker v Transfield Pty Ltd - [2000] WASCA 382

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: PARKER -v- TRANSFIELD PTY LTD & ANOR [2000] WASCA 382

CORAM: MALCOLM CJ
IPP J
WALLWORK J

HEARD: 21 SEPTEMBER 2000

DELIVERED : 21 SEPTEMBER 2000

PUBLISHED : 7 DECEMBER 2000

FILE NO/S: FUL 47 of 2000

BETWEEN: CHRISTOPHER KEITH PARKER
Appellant
AND
TRANSFIELD PTY LTD
STOLT COMEX SEAWAY PTY LTD
Respondents

Catchwords:

Practice and procedure - Judgment - Default judgment - Setting aside - Credible defence - Need for a real prospect of success

Legislation:

Nil

Result:

Appeal dismissed

Representation:

Counsel:

Appellant: Mr P J Gethin
Respondents : Mr E M Corboy

Solicitors:

Appellant: Patrick Gethin & Co
Respondents : Phillips Fox

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

Gordon Reid v Australian Capital Territory Electricity Authority [1990] ACTSC 51
Kondis v State Transport Authority (1984) 154 CLR 672
Palmer v Prince [1980] WAR 61
Rollond & Anor v Bank of Western Australia Ltd, unreported; FCt SCt of WA; Library No 980026; 2 February 1998
Rollond & Anor v Bank of Western Australia Ltd, unreported; FCt SCt of WA; Library No 980498; 3 September 1998
Zerk v Finemores Transport (Qld) Pty Ltd (1994) 62 SASR 333

Case(s) also cited:

Sharples v Northern Territory (1988) 91 FLR 11
Stevens v Brodribb (1986) 160 CLR 16

MALCOLM CJ: This is an appeal pursuant to leave granted by this Court on 17 March 2000 against an order of the District Court made by Viol DCJ dated 28 January 2000. By that order the learned Judge:
(1)allowed an appeal against an order by Deputy Registrar Harman dated 15 September 1999 by which the learned Deputy Registrar dismissed an application by the respondents for an order setting aside the judgment entered against them on 11 June 1999 in default of defence for damages to be assessed; and
(2)set aside the default judgment.
At the conclusion of the hearing on 21 September 2000 the Court was unanimously of the opinion that the appeal should be dismissed. It was then ordered that the appeal be dismissed and that the appellant pay the respondents' costs of the appeal. These are my reasons for joining in the making of those orders.
In such cases the relevant test is that stated in my judgment in Rollond & Anor v Bank of Western Australia Ltd, unreported; FCt SCt of WA; Library No 980498; 3 September 1998 at p 41 as follows:
"[F]or an application to set aside a default judgment to be successful, the defendant must present a credible defence demonstrating that, if the default judgment was set aside and the matter was argued on its merits, the defendant would have a real prospect of success."
This is a reformulation of the test previously formulated in terms that the issue is whether there is a reasonably arguable defence on the merits such that the default judgment should not be allowed to stand: Palmer v Prince [1980] WAR 61 per Jackson CJ at 62; and see Burt J at 64. See also the formulation of the test by Ipp J in Rollond & Anor v Bank of Western Australia Ltd, unreported; FCt SCt of WA; Library No 980026; 2 February 1998 at 10.
In the present case, as pleaded in his statement of claim, the appellant claimed damages against the respondents arising out of incidents which occurred on 23 and 24 October 1995 in the course of his employment by the respondents as a saturation diver. At the time the appellant was working from a diving support vessel, the DSV Seaway Osprey ("the DSV") at sea in an area west of Karratha. The appellant was working near the Wanaea 3 10" production riser.
As pleaded in par 9 of the statement of claim, at all material times the appellant was:
(1)working underwater at a depth of approximately 27m;
(2)wearing a diving suit connected to a diving bell by a tube which, among other things, contained:
(i)a tube through which hot water flowed to his diving suit to maintain his body temperature at a sufficient level;
(ii)a tube connected to his diving helmet which supplied him with a mixture of gases, including oxygen;
(iii)a cable enabling him to give and receive oral communications to and from his diving supervisor and for those communications to be heard by other personnel working for the respondents as part of a "round robin communication system";
(iv)a cable to connect the video camera in the appellant's helmet to the DSV to enable the respondents' employees on the DSV to see what was happening at the appellant's work site together with an electric cable connected to a light on the appellant's helmet to enable him to see his way underwater and to provide light for the video camera; and
(v)a "pneumo cable" to transmit information to the respondents' diving supervisor to enable the latter to check the depth at which the appellant was working;
(3)carrying a "bail out bottle" containing an emergency supply of breathing mixture;
(4)working in accordance with the directions of the respondents conveyed through their diving supervisor, Mr M Young.
Paragraph 10 of the statement of claim alleges that, at all material times, there was located at a depth of approximately 23m a remote operated vehicle ("the ROV") under the control and direction of the respondents for the purpose of making video film showing the position of divers employed by them, including the appellant.
Paragraph 11 alleges that:
(1)the movements of the ROV were at all material times under the control of the respondents by their ROV supervisor, Mr R Hitch;
(2)Mr Hitch was at all material times the servant or agent of the respondents.
Paragraph 12 pleads that:
"The [respondents] were at all material times under a duty of care to the [appellant]:
(1)to provide him with a safe system of work;
(2)to keep his position underwater under observation;
(3)not to move the ROV;
(i)when to do so might endanger the life or well being of the [appellant];
(ii)without first ascertaining from the diving supervisor directing the [appellant's] work that it was safe to do so;
(iii)without communicating beforehand to the diving supervisor in charge of the [appellant's] work and the [appellant] beforehand via the [respondents'] round robin communication system of the [respondents'] intention to move the ROV;
(4)to maintain a continuous supply of breathing mixture to the [appellant] through his main supply;
(5)to stop the ROV moving instantly when the [appellant] gave the emergency signal over the communications system, 'all stop on the ROV';
(6)not to cause or permit the ROV to snag the [appellant's] umbilical and cause him to ascend."
It is then alleged in pars 13 to 15 of the statement of claim that:
(1)at or shortly before 5.00 am on 23 October 1995 Mr Hitch commenced to raise the ROV from its position underwater;
(2)as the ROV was ascending it snagged the appellant's umbilical cord and pulled him upwards;
(3)the appellant called on the round robin communication system, "All stop on the ROV. All stop on the ROV.", but the ROV failed to stop;
(4)although the appellant swam to delay his ascent with the ROV and delayed it a little, it continued to draw him up towards the surface; and
(5)after about a minute the ROV stopped and was redeployed to its previous level, enabling the appellant's umbilical to be cleared from it.
In par 16 it is alleged that while he was being pulled upwards by the ascent of the ROV:
"(1)he could see he was being drawn up towards the thrusters in the bottom of the DSV Osprey;
(2)he feared a painful death through being drawn into the thrusters of the DSV Osprey and cut to pieces;
(3)he feared a painful death through rapid and explosive decompression or at least severe and permanent injury to his health;
(4)he feared that he would die through a combination of both the preceding events i.e. explosive decompression then being pulled through the thrusters and cut to bits."
It is pleaded that the incidents referred to in pars 13 to 16 were caused through the negligence of the respondents in that they:
(1)failed to provide the [appellant] with a safe system of work;
(2)failed to maintain any or any proper observation of the [appellant's] position underwater;
(3)are vicariously liable for the negligence of their ROV supervisor, Mr R Hitch, in
(i)failed to keep any or any proper observation of the [appellant's] position underwater;
(ii)failed to make any or any reasonable enquiries of the [respondents'] diving supervisor, Mr M Young, before moving the ROV, to ascertain whether it was safe to move the ROV before doing so;
(iii)failed to give any or any adequate notice through the [respondents'] round robin communication system to notify the [appellant] and others that he intended to move the ROV;
(iv)moved the ROV when he knew or ought to have known that to do so might endanger the [appellant's] life and well being;
(4)failed to take steps to stop the ROV moving instantly when the [appellant] gave the emergency signal as pleaded in paragraph 15 hereof;
(5)caused or permitted the ROV to haul the [appellant] upwards when they knew or ought to have known that it would put him in fear of death through explosive decompression or being cut to pieces by the thrusters of the DSV Osprey."
The appellant alleges in par 18 that as a result of the respondents' negligence on 23 October 1995, as alleged above, he has suffered personal injury, loss and damage.
The appellant also pleads a second incident on the following day. It is alleged in par 19 that, while he was working underwater in the relevant area in the course of his employment by the respondents:
"(1)The [respondents] did at all material times have under their operation, direction and control the means by which breathing mixture was supplied to the [appellant] in his diving suit.
(2)Negligently and in breach of their duty of care as pleaded in sub‑paragraph 12(4) hereof the [respondents] stopped the supply of breathing mixture to the [appellant].
(3)Being without breathing mixture from his regular supply the [appellant] had to use part of the emergency supply of breathing mixture he had with him until the [respondents] resumed supplying him with breathing mixture to his diving suit."
Paragraph 20 alleges that as a result of this incident the appellant "feared an unpleasant underwater death through being unable to breath".
Paragraph 21 alleges that as a result of the trauma he suffered on 23 and 24 October 1995:
"… he suffered from major depressive disorder and post traumatic stress disorder from the latter of [sic from] which he is unlikely to recover."
It was common ground on the pleadings and the affidavit evidence filed by the respondents that on both occasions Mr Hitch moved the ROV without authority contrary to the respondents' instructions, causing the appellant to be put in fear which resulted in damage in the manner alleged. The issue raised by the respondents was that at the material time Mr Hitch was not employed by the respondents, but was employed by Australian Underwater Contractors Pty Ltd ("AUC") which was a subcontractor employed by the respondents. This issue is raised by the affidavit of Mr Hannaford who is employed by the second respondent, Stolt Comex Seaway Pty Ltd ("SCS") as Regional Controller. He says in par 2 of his affidavit that he is authorised to swear the affidavit on behalf of "the defendant". No affidavit was filed on behalf of the first respondent, Transfield Pty Ltd ("Transfield") at that stage, but nothing appears to have been made of this point.
Mr Hannaford exhibits a copy of an undated report into the incident on 23 October 1995 on an SCS incident report form which suggests that the correct procedures were not followed when the ROV was moved and stressed that communications were not properly maintained. The ROV services were said to have been provided by AUC by whom Mr Hitch was employed. Mr Hannaford says in par 7 of his affidavit that he was not present at the time of the alleged incident and that all of the witnesses to the incident who prepared statements, save for the appellant, remain in the employ of SCS, but all of them are "now residing overseas". SCS maintained that it had a defence to the appellant's claim on the basis that if (which was denied) the appellant suffered injury then:
(1)the party responsible was AUC and its employee Mr Hitch; and
(2)the cause or part of the cause of the appellant's injury was his failure to keep a proper lookout for his own safety when he knew that it was possible that his umbilical cord would get caught on the ROV cage (given that this had happened previously on the same dive).
It was also contended that if the appellant had suffered injury (which was denied) then the appellant's alleged symptoms were due, at least in part, to matters unrelated to the alleged incident, based on a report by Dr Finlay‑Jones dated 23 September 1996.
In a second affidavit sworn on 9 August 1999 Mr Hannaford expanded on his first affidavit. On this occasion he said that the respondents had authorised him to swear the affidavit in support of the application to set aside the judgment. He deposed to his belief concerning the contract between AUC and the respondents to provide and operate an ROV vessel to observe and photograph or videotape divers while working underwater in the course of their employment with the respondents.
Counsel for the appellant drew attention to the fact that Mr Hannaford's affidavits were substantially based on information and belief without personal knowledge of the facts and circumstances. The explanation given for that was that, although all of the respondents' witnesses were said to be employed by it, they were all overseas. In my opinion, the materials referred to contain copies of statements made by potential witnesses following what appears to have been an extensive investigation of the relevant incidents at the material time and the papers reveal no substantial dispute about matters of fact.
The relevant contract is exhibit JH4 to the affidavit. The contract is dated 15 December 1994 between the respondents' joint venture (referred to as "T‑SCS" in the contract) and AUC as "the Contractor". Clause 1.1 provides that:
"The Contractor shall, from the commencement dated noted in Annexure 1 ('Commencement Date') or if no Commencement Date is stated, from the date of the Agreement, be responsible for the timely provision of the Services so as not to disrupt or delay the other activities of T‑SCS. The Agreement shall remain in full force and effect from the Commencement Date until the date of completion noted in Annexure 1 ('Completion Date'), or if no Completion Date is stated, after written notice is given by T‑SCS to the Contractor that the Services are no longer required. T‑SCS may extend the Completion Date by giving written notice to the Contractor that an extension is required and the Contractor shall confirm in writing that it is able to provide the Services for the required extended period."
Clause 1.2 provides that, "The scope of the Services shall be as described in Annexure 1". Annexure 1 cl 1.2 refers to "Provision of Services as detailed in Appendix 1". Appendix 1 is headed "SCOPE OF SUPPLY". The Contract Scope cl 1.1 provides that the following equipment shall be provided:
"•100 HP Sealion ROV (see attached specification) including ROV standard bathymetric system.
•50 HP Seal ROV (see attached specification) including tether management system."
The specification is not included in the papers before us, but it is apparent that the relevant ROV supplied was the 100 HP Sealion which was to be equipped with the following "in addition to the attached specification". The additional equipment referred to included the video cameras and associated equipment. AUC was also required to supply "Vessel specific operating procedures" and a "Job Safety Analysis". It was also requested that:
"All senior pilot technicians/supervisors shall have a minimum of ten (10) years relevant subsea construction experience using ROV's."
Although the contract with AUC provided for mobilisation of personnel in Dampier "around 22 March 1995", provision was made for advanced notice of exact dates, with a schedule for demobilisation of the contractor's equipment between mid‑April to mid‑July 1995. It is apparent, on the face of it, that the contract was still on foot at the material time. There is nothing to suggest to the contrary.
The respondents set up a system by which they were able to co‑ordinate the activities of the independent contractors engaged by them. One of the requirements of the system was that the subcontractors, including AUC, were not permitted to move the ROV underwater without having first obtained the permission of the respondents' Dive Supervisor. The communications system to which I have referred placed all of the divers in communication with the Dive Supervisor in the ROV control room. This is the system by which every person who spoke into the communications system was able to be heard by all other people connected to it.
It appears from the material before us that, in relation to the incident on 23 October 1995, the appellant was working at a depth of approximately 27m. At the material time, one of the respondents' employees contacted Mr Hitch and told him that the underwater work that the appellant was undertaking would be finished shortly and that they would be ready to move in the next 5 to 10 minutes. This message was in the nature of a warning. Mr Hitch then said he would recover the ROV. In fact, Mr Hitch proceeded with the recovery manoeuvre without the necessary permission of the respondents' Dive Supervisor.
A report of the incident dated 23 October 1995 was compiled by an investigation team, which included Mr Hitch. The report includes a statement by the Project Engineer, Mr Bowman, that, after the warning that the job was near completion and movement of the ROV would be required:
"… the Dive Supervisor had a call from one of the divers that he was being dragged off the job. The initial response was to contact the ROV as it was assumed that the ROV had snagged the divers [sic diver's] umbilical. At this time it was seen on the monitor in dive control that the ROV was being raised.
On trying to contact the ROV no reply was obtained. Realising that the ROV crew were not replying I quickly went onto the main deck and found the ROV supervisor [Mr Hitch] raising the ROV. I immediately called for him to stop raising the ROV as a diver was being dragged off the job. The ROV was stopped being raised and commenced being lowered again, I then returned to dive control.
On returning to dive control I found that the dive supervisor was still unable to contact ROV personnel. I returned to deck and enquired who was in the ROV shack as they could still not be contacted. The ROV supervisor informed me that no personnel were in the shack and that he was the only one on deck. The ROV supervisor also informed me that he had attempted to contact dive control on the port bell TOA and stocktronics before recovering the cage. After not contacting dive control on these lines or by coming down to them in person he decided to recover the cage based on the fact that he was able to see the cage and the divers [sic divers'] umbilicals from the surface. The ROV supervisor raised the cage based on this visual inspection."
It is to be inferred from the materials that, as ROV supervisor, Mr Hitch controlled the ROV and the ROV personnel. When notified that movement of the ROV would be required, Mr Hitch realised that the ROV personnel had gone to breakfast. Instead of making this fact known to the Dive Supervisor who could have put the situation on hold while the ROV personnel were recalled, he said nothing. He went to winch up the ROV himself and left his station unattended. Hence he did not hear the appellant's call to stop. The person ultimately in charge of the operation was the Diving Superintendent. He had two Dive Supervisors under him, each of whom had the task of controlling a particular diving bell and the diving operations carried out from it. Each diving bell was normally operated by three workers per shift consisting of an ROV supervisor and two assistants.

In par 15 of an affidavit sworn on 16 September 1998, the appellant said that on 23 October 1995 he descended in the ROV as diver 2. Diver 1 was the first to leave the ROV for the worksite which was on the rotary tower mooring ("RTM"). This was their worksite and was located not on the floor of the sea but "mid‑water". The appellant says in par 15 of his affidavit sworn on 16 September 1998:
"… A few minutes after diver 1 had left I followed him. There was a moderate current running. I swam across to the worksite at the RTM. While assisting diver 1 on the worksite, I looked back towards the diving bell and noticed that my umbilical had been pushed by the current onto the ROV. The ROV was situated at a depth slightly shallower than the depth at which I was working. It was at a point of about two thirds the way along the route back to the diving bell."
The appellant also said:
"16.I swam back to where my umbilical was fouled on the ROV. I cleared it away by pushing it underneath the ROV and then allowed it to stream away in the currents well clear of any possible future entanglements. I did not want my umbilical to be caught over the ROV so I cleared it even though I assumed I was being observed on its camera by dive control, ROV control and the bridge.
17.I assumed that in accordance with standard safety procedure I would be informed before any movement of the ROV occurred. I returned to my worksite. About thirty minutes after I had cleared my umbilical I suddenly felt a pull on it. I found myself being pulled away strongly from the worksite. I turned around and saw that my umbilical was again fouled over the ROV. This time however the ROV was heading to the surface and taking me with it by drawing me along in its wake by my umbilical.
18.I yelled at the top of my voice, 'All stop on the ROV', 'all stop on the ROV - its got my umbilical and it's on the way to the surface'.
19.I heard Mick Young the diving supervisor on my shift acknowledge my 'all stop' call. I heard him yell out, 'all stop ROV - you have got a diver hooked up'. I did not hear anyone answer him. Our communication system there is what is known as a round robin communication system. That means that everyone involved in the underwater operation can hear what everyone else in the operation is saying and can talk to any one of the other stations if and when required. There was no answer from ROV control. The ROV continued to ascend to the surface drawing me after it.
…
21.The ROV continued to rise to the surface. I was going up with it. I heard a lot of screaming and shouting. I vaguely remember screaming out, 'for Christ's sake all stop on the bloody ROV.' …
22.I tried to delay my continued upward ascent with the ROV. I swam as quickly as I could towards the position where the ROV had been. This took me about ten to fifteen seconds. The ROV continued to ascend and pull me up with it. …
…
24.I could still hear a lot of screaming and shouting over the communication network. … Suddenly my ascent stopped. The ROV had stopped ascending and was coming back down. It arrived back alongside me and I was able to clear my umbilical.
25.After the ROV had arrived back down alongside me I heard shouting over the communication system. I heard the South African shift diving superintendent, whose name I do not recall, shouting at the ROV supervisor that he (the ROV supervisor) was fired and would be on the first helicopter ashore. The South African said words to the following effect: 'We have had a near fatality before and now its happening again'. Later Mick Young, the [respondents'] diving supervisor, told me that he had managed to halt the ascent of the ROV by sending someone up on deck to tell the ROV operator to stop everything and get the ROV back down as quickly as possible as it had hooked up a diver and was pulling him to the surface. Mick Young also told me that of the three who were normally in charge of ROV control, the supervisor and his two assistants, the supervisor had sent his two assistants to breakfast and there was nobody manning ROV control while the supervisor was on deck [to] bring the ROV to the surface. At all times Mick Young was employed by the [respondents] as a diving supervisor.
…"
In the incident report dated 23 October 1995 the immediate causes of the incident on that date were listed as "Operating equipment without authority" and "Failure to warn". These points referred to the action of Mr Hitch in operating the winch to pull up the appellant without authority. This involved him in abandoning his monitoring task so that he did not hear the appellant's calls to stop when his umbilical became snagged. The second point was that Mr Hitch began to winch up the appellant without first warning him so that he could take steps to avoid snagging. The third point was that he acted without the authority of the respondents' Dive Supervisor.
The appellant's contention was that Mr Hitch was operating under the control and supervision of employees of the respondents when he caused the incident. The site report says under the heading "Evaluation of events to determine causes" that:
"The main cause of the incident was due to the ROV cage being recovered without the Dive Supervisor being aware. The subject of umbilical management by the diver was extensively discussed and not considered to be a contributory factor. The diver's umbilical lengths were correctly tied off as per the relevant procedure governing shallow water bell diving operations. The umbilical was leading directly from the worksite to the bell with a slight deviation caused by the current which was running from the stern to the bow of the vessel. The diver's umbilical was neutrally buoyant and this was not considered a contributory factor given that the work site was in open water.
The situation was exacerbated by the fact that the ROV Supervisor was recovering the ROV on his own. The 2 supporting ROV crew members had been instructed to break for a meal and were not on deck to assist with the recovery of the ROV.
The initial request for the ROV to be recovered came from the surveyor on the bridge who was relaying a message from the Dive Control that the work on the present site was almost completed and that a move to the next site was going to be undertaken.
The communication from the bridge to the ROV was ambiguous in as much that it was intended merely to keep the ROV crew informed as to what was happening and not as an instruction to recover to the deck of the vessel. Notwithstanding this the attempts by the ROV Supervisor to contact Dive Control to request or inform them of his intention to recover were inadequate. An attempt was made by the ROV Supervisor using 1 of the 3 available communication systems only and when he was unable to get through he continued with his recovery without any further attempts to contact the Dive Supervisor.
The situation became immediately apparent to the diver who informed the Dive Supervisor he was being pulled off the job horizontally (approx 4‑5m) by the ROV cage. The situation was arrested in less than 1 minute."
The learned Judge approaching the appeal against the decision of the learned Deputy Registrar on the basis that:
"The real question to be determined turns substantially on the merits of the [respondents'] defence. The question whether the appeal should be granted depends largely on the strength of the [respondents'] defence to the [appellant's] claim. In Rollond v Bank of Western Australia Ltd, unreported; FCt SCt of WA; Library No 980026A; 2 February 1998, Ipp J considered the test to be applied in relation as to what is considered to be a 'prima facie' defence or a 'good defence'. Having considered the authorities and in particular Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co Inc ('The Saudi Eagle') (1986) 2 Lloyd's Rep 221, Ipp J adopted the tests of the requirement for the defendant to show that he had 'a defence which has a real prospect of success', the 'arguable' defence to 'carry some degree of conviction'. Ipp J followed the tests set out in the Supreme Court Practice 1997 Ed. Vol (1) (the White Book) at 13/9/14 (after making reference to 'The Saudi Eagle') ie, 'the preferred view is that unless potentially credible affidavit evidence demonstrates a real likelihood that a defendant will succeed, in fact no "real prospect of success" is shown and relief should be refused'."
In my opinion, the approach adopted by the learned Judge was entirely correct. Earlier in his reasons his Honour had referred to Mr Hannaford's affidavit sworn on 28 June 1999 as being to the effect that:
"… the [respondents] had a defence to the [appellant's] claim on the basis that if the [appellant] had suffered any injury (which was denied by the [respondents]) then the party responsible for the alleged injury was AUC and its employee Robert Hitch. Further, it was said that the cause of the [appellant's] injury was his failure to keep a proper lookout for his own safety when he knew that it was possible that his umbilical would get caught on the ROV cage (given that this had happened previously on the same dive). Further, it is denied that any of the [appellant's] alleged symptoms of depression are due to matters unrelated to the alleged incident. The [respondents'] defence was expanded on by counsel for the [respondents] during the appeal."
The learned Judge was satisfied that no impediment was revealed in the history of the matter which would prevent the respondents from having judgment set aside on the basis of any failure to comply with the Rules of the Supreme Court 1971. His Honour also considered that there was no basis for any suggestion of delay in making the application to set aside the default judgment.
His Honour referred to the necessity for the appellant to prove that his injury was caused by the negligence of the respondents. In this respect, the learned Judge said:
"19… In this case it is not a physical injury which is alleged but a depressive condition said to have been brought about by some fear or apprehension of considerable injury or death by the [appellant]. There is in that respect alone, the potential for a triable issue, as confirmed by the medical reports of the psychiatrist, Dr Finlay‑Jones, annexed to the affidavit of Mr Hannaford, Exhibit JH3. The report is dated 23 September 1996. At p8 of that report Dr Finlay‑Jones expresses the opinion that there was little evidence of any psychological response from the incidents consistent with the development of post‑traumatic stress disorder. He appears to accept that there may have been some symptoms of depression which he said may have been due to his wife leaving the [appellant] as much as his work incidents.
20More importantly, however, it is the questions of law which arise in this matter which must be considered. It is the case for the [respondents] that the first incident occurred as a result of the acts or omissions of AUC's employees, not the acts or omissions of the [respondents] or its employees. It is said that AUC was an independent contractor and it is said that a principal is not liable for the wrongdoing of an independent contractor in the course of the very work for which the contractor has been engaged. Similarly, it is said that if the job is such that it is only the negligence in the manner of conducting the operation (as distinct from the character of the operation itself) which causes damage to others, a principle [sic principal] cannot be held to answer - reliance is placed upon the authorities of Stoneman v Lyons (1975) 133 CLR 550 and Torrett House v Birkman (1940) 62 CLR 637."
It was submitted on behalf of the appellant that there was no arguable defence to the appellant's claim because of the failure of the respondents as employers to comply with their duty to provide a safe system of work, being a duty which was non‑delegable: Kondis v State Transport Authority (1984) 154 CLR 672 per Mason J at 680 - 682, 687 and 688; per Murphy J at 690 and per Deane J at 694; Zerk v Finemores Transport (Qld) Pty Ltd (1994) 62 SASR 333; Gordon Reid v Australian Capital Territory Electricity Authority [1990] ACTSC 51.
So much may be accepted. In the present case, however, there is clearly room for argument that the system of work established by the respondents was safe in itself and that it was the negligence of Mr Hitch, an employee of AUC, which was responsible for the relevant incident. Thus, in Kondis at 692 Brennan J said:
"A defendant is not vicariously liable for the 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: see McDonald v The Commonwealth (1945) 46 SR (NSW) 129 at 132; and Karuppan Bhoomidas v Port of Singapore Authority [1978] 1 WLR 189."
It was contended on behalf of the respondents before Viol DCJ that there were some situations in which the non‑delegable duty of an employer to take reasonable care may not apply. It was said that there was no separate negligent act or omission by the respondents in this particular case. Similarly, it was argued there was no negligence on the part of the respondents' employees upon which the appellant could rely.
The appellant's case as argued before Viol DCJ was that, although Mr Hitch was employed by AUC, which was an independent contractor, Mr Hitch was under the direction and control of employees of the respondents and, in particular, the Dive Supervisor whose authority was required before the ROV could be moved.
Where an employer engages an independent contractor to perform part of the employer's system of work, the question, as formulated by Mason J in Kondis at 679 was:
"In what circumstances does the negligence of the contractor amount to a breach of the employer's duty of care. In recent times there has been a tendency to say that such a breach of duty arises when the employer's duty is 'non‑delegable'. This is to say that the duty is of such a nature that its performance cannot be delegated to a contractor on the footing that delegation to a competent contractor is a sufficient compliance with the duty."
In this case, the delegation was to a competent subcontractor of part of the work required, namely, the supply and operation of the ROV to lower and raise divers employed by the respondents from their worksite below the sea. The operation of the ROV was beyond the scope of the respondents' activities, but under which the employee of the subcontractor as operator was under the direction and control of the respondents regarding when he should raise or lower the ROV. The issue was whether the actions of Mr Hitch involved the breach of a non‑delegable duty on the part of the respondents. Mason J said at 687 - 688:
"The employer has the exclusive responsibility for the safety of the appliances, the premises and the system of work to which he subjects his employee and the employee has no choice but to accept and rely on the employer's provision and judgment in relation to these matters. The consequence is that in these relevant respects the employee's safety is in the hands of the employer; it is his responsibility. The employee can reasonably expect therefore that reasonable care and skill will be taken. In the case of the employer there is no unfairness in imposing on him a non‑delegable duty; it is reasonable that he should bear liability for the negligence of his independent contractors in devising a safe system of work. If he requires his employee to work according to an unsafe system he should bear the consequences."
Deane J at 694 agreed with Mason J and said:
"The obligation of an employer to provide a safe system and conditions of work for an employee is not discharged by mere delegation to an independent contractor any more than it is discharged by mere delegation to an employee. It 'is one of those' cases in which a person 'remains liable to third parties for the consequences of the negligence of an independent contractor, just as he would be if it were his own negligence or that of his servant' (per Windeyer J in Voli v Inglewood Shire Council (1963) 110 CLR 74 at 95). The employer 'may bargain with the contractor that he shall perform the duty, and stipulate for an indemnity from him if it is not performed but he cannot thereby relieve himself from liability to those injured by the failure to perform it' ibid., quoting Lord Blackburn, in Dalton v Angus (1881 6 App Cas 740 at p829). The reason is that, in the context of the particular relationship of employer and employee and of the undertaking by the employee of the general obligation to work in the interests of the employer, the content of the employer's duty to take reasonable care to provide a safe system and conditions of work for the employee is not discharged by delegation unless the delegate, be he employee or independent contractor, in fact provides the reasonable care which the employer was under an obligation to bring to bear."
Dawson J said at 695:
"I agree with Mason J that the respondent was in breach of his duty of care as an employer to provide a safe system of work. The breach was the failure of the foreman employed by the respondent to direct the appellant to stay clear of the jib of the crane whilst it was being extended. The fact that directions were being given during that operation by the operator of the crane, who was an employee of the independent contractor, did not displace the duty of the respondent to take reasonable steps to avoid risk of harm to the appellant."
In the present case, the respondents employed the divers, but the diving bells or the ROV vessel, as it was called, were provided by AUC together with its operator, Mr Hitch. Mr Hitch was only under the direction and control of the respondents to the extent that he was required not to move the ROV unless and until directed to do so by the respondents' Dive Supervisor.
In the present case, while, to the extent I have indicated, Mr Hitch was under the direction and control of the respondents, it was his failure to comply with the system of work laid down by the respondents which was the cause of the incident on 23 October 1995. He started to raise the ROV from its working depth without the authority of the Dive Supervisor. He did so at a time when his two assistants were at breakfast. Without notifying anyone he abandoned his control room workplace and endeavoured to winch up the ROV on his own. This created the situation where the ROV was being lifted and he was unable to hear the calls by the appellant to stop the lifting operation. He put himself out of communication with the Dive Supervisor. In these circumstances, it is at least arguable that, in such circumstances, the respondents were not liable but the liability rested on AUC. In this respect, it is somewhat surprising that AUC has not been joined in the action, at least as a third party. In Kondis at 689 Murphy J expressed the basis of liability of the employer in wider terms than the other members of the court, saying, at 689:
"It is well-settled that an employer has a personal, non‑delegable duty, to take all reasonable care to institute a safe system of work and to ensure that it is carried out, so that his employees will not be exposed to unnecessary risk (Wilsons and Clyde Coal Co Ltd v English (1938) AC 57.)"

Murphy J also said at 690:
"Even if the injury were caused by a casual act or omission of an independent contractor or its employee, the developing organisation test would provide another basis of liability in the Authority."
In relation to the first of the two incidents, the issue was said to turn on the failure of the respondents as the employer to fulfil their non‑delegable duty to provide a safe system of work. In my opinion, however, there is room for argument that the respondents complied with that duty, but that the actions of Mr Hitch were carried out in circumstances where he failed to apply the system and took action on his own which put the appellant at risk. The negligence of Mr Hitch defeated the system. In particular, he exposed the appellant to a risk of harm when, knowing that the employees who operated the winch were not there, abandoned his own position and attempted to winch up the appellant independently of any authority of the Dive Supervisor and in breach of the system. As appears from Kondis at 673, the Full Court of the Supreme Court of Victoria had held by a majority (Young CJ and Murray J, Marks J dissenting) that the Authority was not responsible for a casual act of negligence by their independent contractor. In that case, during the manual extension of the jib of the crane, which was operated by the independent contractor of an employer, part of the crane fell on an employee. The contractor had deliberately dropped the part and was found to have failed to keep a proper lookout or to have warned of his intention to drop the part. The employee's foreman had not instructed him not to stand under the jib during the extension operation. It was held that the employer was in breach of his duty to provide a safe system of work. Mason, Brennan, Deane and Dawson JJ so held on the ground that the foreman had failed to direct the employee not to stand under the jib of the crane during the extension operation. Mason, Brennan and Deane JJ on the further ground and by Murphy J on the ground that the contractor's failure to adopt a safe system of work constituted a failure by the employer to satisfy a non‑delegable duty to provide a safe system. In my view, however, the distinction between that case and this is, on the face of it, that there was a causal act of negligence in the course of the operation of an unsafe system in that the employer's foreman had not instructed the employee who was injured not to stand under the jib of the crane during the extension operation. This was the unsafe aspect of the system of work. In the present case it is open to the respondents to argue that Mr Hitch's negligence was in abandoning the system and endeavouring to raise the ROV on its own when he discovered that other members of his team were not present.
The submission on behalf of the appellant was that there was no triable issue on the question whether at the material time Mr Hitch was acting under the control or direction of the respondents. It is clear that when the system was operating Mr Hitch was under the control and direction of the respondents. At the material time he was working under the control and direction of the Dive Supervisor. Insofar as the issue was whether there was a safe system of work, it is arguable that the system which was implemented was safe. The question then became whether in the circumstances the respondents became vicariously liable for the actions of Mr Hitch. If it were established that the system itself was safe, but that it broke down as a result of the independent negligence of someone for whom the respondents were not responsible in the relevant sense, there is a case for saying that Mr Hitch's actions took the circumstances beyond the kind of case which would attract liability as in Kondis. What is alleged is that Mr Hitch, who was employed by an independent contractor, took it upon himself to do things in relation to the bringing of the ROV to the surface, which should have been done by his two assistants. They in turn had abandoned the system by going off to have their breakfast. Mr Hitch failed to notify anyone of this fact and abandoned his own post and role to winch the ROV up, knowing that no‑one was performing his duty to observe the progress of the ROV. The result was that the appellant's umbilical cord got tangled up with the ROV and he did not hear the calls by the appellant to stop. It is at least arguable that this involved a failure on the part of an employee of an independent contractor to adhere to the system of work laid down by the head contractor. In such circumstances, there is clearly a triable issue on the question of liability of the respondents for the actions of Mr Hitch, as Viol DCJ concluded.
Counsel for the appellant indicated that if the defence was that the incident was caused by the negligence of an independent contractor, the appellant would plead that the respondents were nonetheless liable under s 19(4) of the Occupational Safety and Health Act 1984. This provision renders an employer liable for the acts of his independent contractors in certain circumstances. Section 19(1) of the Act provides that:
"(1)An employer shall, so far as is practicable, provide and maintain a working environment in which his employees are not exposed to hazards and, in particular, but without limiting the generality of the foregoing, an employer shall -
(a)provide and maintain workplaces, plant, and systems of work such that, so far as is practicable, his employees are not exposed to hazards;
(b)provide such information, instruction, and training to, and supervision of, his employees as is necessary to enable them to perform their work in such a manner that they are not exposed to hazards;
…
(d)where it is not practicable to avoid the presence of hazards at the workplace, provide his employees with, or otherwise provide for his employees to have, such adequate personal protected clothing and equipment as is practicable to protect them against those hazards, without any cost to the employees; and
(e)make arrangements for ensuring, so far as is practicable, that -
(i)the use, … transportation and disposal of plant;
…
at the workplace is carried out in a manner such that his employees are not exposed to hazards.
…
(4)For the purposes of this section, where, in the course of trade or business carried on by him, a person (in this section called 'the principal') engages another person (in this section called 'the contractor') to carry out work for the principal -
(a)the principal is deemed, in relation to matters over which he has control or, but for an agreement between him and the contractor to the contrary, would have had control, to be the employer of -
(i)the contractor; and
(ii)any person employed or engaged by the contractor to carry out or to assist in carrying out the work;
and
(b)the persons mentioned in paragraph (a)(i) and (ii) are deemed, in relation to those matters, to be employees of the principal.
(5)Nothing in subsection (4) derogates from -
(a)the duties of the principal to the contractor; or
(b)the persons mentioned in paragraph (a)(i) and (ii) are deemed, in relation to those matters, to be employees of the principal."
It was submitted on behalf of the appellant that s 19(4) was applicable to the first of the two incidents pleaded in pars 6, 7 and 8 of the statement of claim by virtue of s 9 and s 10 of the Petroleum (Submerged Lands) Act 1967 (Cth). Assuming, without deciding that s 19(4) was applicable by force of s 9(1) of the Petroleum (Submerged Lands) Act 1967 (Cth), it would be necessary for the appellant to prove that the respondents had not, so far as reasonably practicable, provided and maintained a safe working environment in which the appellant was not unreasonably exposed to hazards. This would involve consideration whether there was a safe system of work in place. As I have already indicated, there is an issue to be tried whether the system in place was a safe system with the consequence that the conduct of Mr Hitch, an employee of the independent contractor AUC, went off on a frolic of his own for which it is at the least arguable that it involved an abandonment or breach of the system put in place by the respondents.
So far as the second incident is concerned, there is nothing in the evidence before this Court to explain why the appellant's normal or main source of breathing mixture was interrupted. No particulars of negligence are pleaded or provided. The doctrine of res ipsa loquitur is not pleaded. The appellant was supplied with an emergency supply of breathing mixture which he immediately operated.
The respondents contend that there was no breach of their duty of care because they had devised and implemented a safe system of work which took account of the possibility of an interruption to the appellant's main supply of breathing mixture. The appellant did in fact invoke the operation of that system.
The learned District Court Judge said in this context:
"As to the second incident, although it was said the [respondents] were hampered to a degree in effectively not knowing exactly what occurred, there was information available from the [appellant] which suggested that he had been supplied with a primary breathing mixture and a back‑up supply. The back‑up supply was available for the very purpose complained of by the [appellant], namely that the primary supply was interrupted. In the circumstances, it was argued that the [respondents] had taken reasonable care to avoid any reasonably foreseeable injury to the [appellant]. Further, it was argued that it was not reasonably foreseeable that someone in the position of the [appellant] would suffer a psychiatric injury as a result of the particular circumstances that arose in the second [incident]."
In my opinion the materials put forward on the part of the respondents have demonstrated that they have a credible defence to both of the allegations of negligence such that, if the default judgment was set aside and the matter was argued on its merits, they would have a real prospect of success. It is, of course, important to bear in mind that the facts as I have related them are those which are drawn from the affidavits and other materials exhibited to the affidavits filed on behalf of the

respondents. It is, of course, quite possible that the evidence led at the trial could lead to a different conclusion on the facts when those who have made statement or prepared reports are cross‑examined.

For these reasons, I am of the opinion that the decision of the learned Judge was correct.
IPP J: I have had the advantage of reading in draft the reasons published by Malcolm CJ. I am in agreement with those reasons and have nothing further to add.
WALLWORK J: I agree with the reasons for judgment of the Chief Justice. There is nothing I wish to add.