Penrith City Council v Healey; GIO General Ltd v Healey

[2016] NSWCA 161

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Penrith City Council v Healey; GIO General Ltd v Healey [2016] NSWCA 161

Hearing dates:

26 November 2015; 27 November 2015

Decision date:

07 July 2016

Before:

Basten JA at [1]; Simpson JA at [24]; Emmett AJA at [179]

Decision:

In CA No 2015/104539 (the appeal by Penrith City Council):

 

(1)  Allow the appeal and set aside the orders made in the Common Law Division on 2 April 2015.

 

(2)  Dismiss the proceedings brought by the plaintiff and order that the plaintiff pay the defendant’s costs of the trial.

 

(3)  Order that the first respondent (Ralph Healey) pay the appellant’s costs in this court.

 

(4)  No order as to the costs of the second defendant (GIO General Ltd).

 

(5) Grant the first respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

 

In CA No 2015/109911 (the appeal by GIO General Ltd):

 

(1)  Allow the appeal and set aside the orders made in the Common Law Division on 2 April 2015.

 

(2)  Dismiss the proceedings brought by the plaintiff and order that the plaintiff pay the defendant’s costs of the trial.

 

(3)  Order that the first respondent (Ralph Healey) pay the appellant’s costs in this court.

 

(4)  No order as to the costs of the second defendant (Penrith City Council).

 

(5)  Order that the first respondent repay to the appellant any amount paid to the first respondent pursuant to orders made on 2 April 2015, with interest at the post-judgment rate.

(6) Grant the first respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

Catchwords:

INSURANCE – public liability policy – exclusion – construction – whether injury to worker performing work for benefit of insured – whether business of employer included supply of labour – whether work performed in part under the care, control, direction or supervision of the insured

 

TORTS – negligence – personal injury – plaintiff injured when emptying bins in Penrith local council area – plaintiff employed by independent contractor which had contract with Penrith City Council to empty bins in municipality – negligence claims brought by plaintiff against Council and insurer of company associated with employer company – challenge to findings of fact – finding that plaintiff’s injuries “mainly” caused by damaged bins unsubstantiated – not possible on medical evidence to differentiate effect of lifting damaged bins from effect of lifting heavy bins

 

TORTS – negligence – scope of duty of care of principal for employee of contractor – principal under a duty to repair damaged bins – duty to ensure rubbish collection was in hands of competent contractors – whether Council owed duty of care to ensure safe work conditions – no relevant breach of duty by Council – Council’s appeal allowed

TORTS – negligence – proceedings against insurer of deregistered company under Corporations Act 2001 (Cth), s 601AG – alleged negligence by deregistered company – whether insurer liable directly to the plaintiff under s 601AG – whether deregistered company had liability to pay compensation to plaintiff for personal injury suffered during relevant period despite change of employer – whether liability fell within cover afforded by policy – applicability of exclusions under policy – insurer’s appeal allowed

Legislation Cited:

Civil Liability Act 2002 (NSW), ss 15, 16
Corporations Act 2001 (Cth), s 601AG
Supreme Court Act 1970 (NSW), ss 75A(6), (10)
Workers Compensation Act 1987 (NSW), ss 151H, 151Z

Cases Cited:

Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd; Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd [2005] NSWCA 19; 62 NSWLR 148
Central Darling Shire Council v Greeney [2015] NSWCA 51
Fox v Wood [1981] HCA 41; 148 CLR 438
Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd [2014] NSWSC 723
Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd (No 2) [2014] NSWSC 1870
Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1
Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16
Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; 226 CLR 161
Sydney Water Corporation v Abramovic [2007] NSWCA 248; Aust Torts Reports 81-913
Wooby v Australian Postal Corporation [2013] NSWCA 183; 233 IR 471

Category:

Principal judgment

Parties:

2015/104539
Penrith City Council (Appellant)
Ralph Stewart David Healey (First Respondent)
GIO General Ltd (Second Respondent)

  2015/109911
GIO General Ltd (Appellant)
Ralph Stewart David Healey (First Respondent)
Penrith City Council (Second Respondent)

Representation:

Counsel:
R A Cavanagh SC/S J Walsh (Penrith City Council)
R Sheldon SC/L Welsh (Healey)
L Gyles SC/B McManus (GIO General Ltd)

  Solicitors:
James Tuite & Associates (Penrith City Council)
Brydens Law Office (Healey)
Kennedys (GIO General Ltd)

File Number(s):

2015/104539; 2015/109911

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd [2014] NSWSC 723

Date of Decision:

30 June 2014

Before:

Adams J

File Number(s):

2007/292443; 2010/350196

HEADNOTE

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

Between 7 February 2000 and 25 April 2005, Mr Healey was employed by an independent contractor to collect and empty garbage bins in the local government area of Penrith City Council (the Council). Mr Healey’s employer held a contract with the Council pursuant to which it was responsible for emptying street litter bins and wheeled garbage bins on a daily basis. The bins belonged to the Council and the Council was responsible for their maintenance.

Until 1 December 2004, Mr Healey’s employer was Usshers Pty Ltd (Usshers). On 1 December 2004 following a restructure, Mr Healey was employed by a related company, Usshers Solid Waste Pty Ltd (Solid Waste). The contract with the Council was not assigned to Solid Waste.

From 30 October 2004, Usshers held a policy of public liability insurance with GIO General Ltd (GIO). The policy indemnified Usshers, subject to specific exclusions, in respect of any liability to pay compensation for, inter alia, personal injury occurring during the period of insurance and caused by an occurrence connected with Usshers’ business.

On 29 November 2004, while still employed by Usshers, Mr Healey sustained a shoulder injury while lifting and emptying a heavy and damaged bin. Mr Healey ceased work on 29 April 2005; it was not in dispute that he was incapacitated to do work of the kind that he had been doing. WorkCover found that Mr Healey’s injury did not meet the 15 per cent permanent impairment threshold required by s 151H of the Workers Compensation Act 1987 (NSW). This disentitled Mr Healey from bringing a claim against his employer.

In 2007 Mr Healey commenced negligence proceedings in the District Court against the Council. In 2012 Mr Healey commenced proceedings in the Common Law Division of the Supreme Court against GIO General Limited (GIO), pursuant to s 601AG of the Corporations Act 2001 (Cth), Usshers having been deregistered.

The proceedings against the Council were transferred from the District Court to the Supreme Court and consolidated with the proceedings against GIO. The consolidated proceedings were heard in November 2013.

Mr Healey’s case against the Council was that the Council’s involvement in determining the manner in which the contract services were to be provided by Usshers and later Solid Waste placed the Council in the position of a “quasi-employer”. Consequently, Mr Healey alleged that the Council owed him a duty of care and was in breach of this duty because it failed to repair damaged bins within a reasonable time, it unreasonably insisted that every bin be emptied every night, regardless of its weight or contents, and it failed to ensure that the independent contractor employed an adequate number of personnel to empty the bins. Mr Healey pleaded his claim against the Council as a discrete shoulder injury suffered on 29 November 2004 and as an accumulated injury from the nature and conditions of his work. The Council accepted that it was under a duty of care that obliged it to repair damaged bins within a reasonable time, but contended that it had in place systems sufficient to discharge that duty.

Mr Healey’s case against GIO was based on the asserted negligence of Usshers during the period after 1 December 2004 when he was employed by Solid Waste. Since the discrete injury on 29 November 2004 had been suffered during the period of his employment with Usshers (and he was ineligible to bring any claim against Usshers based on this injury under the Workers Compensation Act), Mr Healey limited the claim against GIO to the nature and conditions of his employment with Solid Waste from 1 December 2004. Mr Healey claimed that notwithstanding the fact that he was then employed by Solid Waste, Usshers continued to carry out waste collection services pursuant to the contract and maintained direction and control over the manner in which he worked. Accordingly, Mr Healey alleged that Usshers continued to owe him a duty of care the same as or analogous to that of an employer and that Usshers was in breach of that duty, and that the policy responded to his claim.

The primary judge found that both the Council and Usshers were liable for Mr Healey’s injuries. In relation to the Council, the primary judge held that Mr Healey’s injuries were mainly caused by lifting damaged bins which the Council had the responsibility to repair and that the Council had retained sufficient control regarding the performance of the contract to render it liable. In relation to the claim against GIO, the primary judge held that, after 1 December 2004, Usshers retained a measure of involvement and supervision over the manner in which the contractual obligations were performed, sufficient to impose upon it a duty of care to Mr Healey and that Usshers was in breach of this duty of care by exposing him to an unreasonable risk of injury by the nature and conditions of his work. The primary judge held that the exclusion clauses in the policy did not protect GIO from liability.

Judgment was delivered in favour of Mr Healey against the Council in the amount of $650,631.50 (plus interest) and against GIO in the amount of $455,422.05 (inclusive of interest).

The Council and GIO appealed against the determinations of liability and the quantification of damages.

Held

In relation to the appeal by Penrith City Council

Simpson JA (Basten JA agreeing at [6]), allowing the appeal:

(1)   The primary judge erred in determining that Mr Healey’s injuries were “mainly” caused by damaged bins. This finding was not supported by the medical evidence. It was the general nature and conditions of Mr Healey’s work (including, but not limited to, the problems occasioned by damaged bins) that were the cause of his ongoing symptoms: Simpson JA at [65]-[66], [74].

(2)   The Council was not responsible for the conditions of Mr Healey’s work other than for the problems caused by the damaged bins. Consequently, there is no relevant breach of duty on the part of the Council: Simpson JA at [85]-[88], [91].

Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16 considered.

(3)   The discrete injury of 29 November 2004 was caused when the plaintiff attempted to remove a bin that was damaged. But Mr Healey was unable to establish that this injury was caused by an unreasonable failure of the Council to repair damaged bins: Simpson JA at [73], [89]-[90].

Emmett AJA, allowing the appeal:

(4)   The terms of the contract did not include any obligation on the part of the Council to supervise the employees of the independent contractor in carrying out the work of emptying the bins. The terms also did not include any entitlement of the Council to interfere in the day-to-day manner in which bins were to be emptied by the independent contractor, through its employees: at [210]

(5) There was no breach by the Council of the limited duty it owed to Mr Healey to ensure that bins were promptly repaired: at [221].

In relation to the appeal brought by GIO

Basten JA, allowing the appeal:

(6)   The primary judge made inconsistent findings regarding any duty of care owed by Usshers in relation to the nature and conditions of Mr Healey’s work from 1 December 2004. However, the evidence did not support the view that when Mr Healey’s employment was transferred to Solid Waste, Usshers no longer retained any obligation to supervise his work: at [13], [17]-[21].

(7) The exclusion in clause 13 of the policy applied because the work was performed for the benefit of Usshers, the business of Solid Waste included the supply of labour and the work was in part under the care, control, direction or supervision of Usshers; accordingly the policy did not respond to any liability Usshers may have had to the plaintiff: at [22]. If the work was not at least in part under the care, control, direction or supervision of Usshers, it would have no liability: [18] and [20].

Emmett AJA, allowing the appeal:

(8)   GIO is not entitled to rely on any of the exclusions in the policy: at [229]

(9)   After 30 November 2004, Usshers did not owe a duty analogous to that of an employer to its former employees, who had then become employees of Solid Waste. The primary judge’s finding that Mr Healey was no longer under the care, control, direction or supervision of Usshers is inconsistent with a finding of a breach of duty on the part of Usshers: at [241]-[242].

Simpson JA (dissenting), dismissing GIO’s appeal:

(10)   The failure of the primary judge to make express findings with respect to the elements of liability in negligence does not indicate that GIO’s appeal must succeed. To the extent that relevant findings were not made by the primary judge, this Court has the power to make those findings: at [102]-[103]

Supreme Court Act 1970 (NSW), ss 75A(6) and (10) applied.

(11)   It was open to the primary judge to find (as he did by implication) that Usshers continued to owe Mr Healey a duty of care after 1 December 2004. To accept this finding, the inconsistent finding that Mr Healey was not under the care, control, supervision or direction of Usshers must be set aside: at [109]-[110].

(12)   There was ample evidence of breach of the duty of care owed by Usshers and that this breach caused Mr Healey’s injuries. Accordingly, Usshers was liable to pay compensation to Mr Healey despite the change of employer from 1 December 2004: at [111]-[112], [115].

(13)   The exclusions in clause 13 of the policy did not apply. Therefore the finding of liability against GIO was correct: at [121]-[128].

Judgment

1. BASTEN JA: The claimant, Mr Ralph Healey, brought proceedings in the Supreme Court claiming damages for injuries suffered by him whilst emptying street bins for the Penrith City Council. Although his primary claim was brought against the Council, it was not his employer. Rather, the claimant had, from 7 February 2000, been employed by an independent contractor, Usshers Pty Ltd (“Usshers”), which had a contract with the Council pursuant to which it was responsible for emptying the bins on a daily basis.

2. The claimant’s employment with Usshers ceased on 30 November 2004, although Usshers continued to be the contractor employed by the Council to empty the street bins. From 1 December 2004 that work was still carried out by the claimant, who was then employed by Usshers Solid Waste Pty Ltd (“Solid Waste”). Due to injuries suffered in the course of his employment, the claimant ceased work on 29 April 2005.

3. The claimant did not bring proceedings against his employers, Usshers and Solid Waste, because he failed to satisfy the statutory requirement of 15% whole person impairment, being a precondition to the liability of an employer in negligence, pursuant to s 151H of the Workers Compensation Act 1987 (NSW).

4. However, on 18 June 2007 the claimant commenced proceedings in the District Court in negligence, naming the Council as the sole defendant. Those proceedings were later removed to the Common Law Division of the Supreme Court. In 2012, the claimant commenced separate proceedings in the Common Law Division against GIO General Ltd, which had been the public liability insurer for Usshers from 30 October 2004 until a date well after the claimant ceased his employment with Solid Waste. Those proceedings were brought pursuant to s 601AG of the Corporations Act 2001 (Cth), Usshers having been deregistered in October 2008.

5. The claimant was successful in the Supreme Court, the principal judgment being delivered on 30 June 2014. [1] The claimant obtained a judgment against both the Council and against GIO General Ltd (“the insurer”). Both defendants have appealed.

   1. Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd [2014] NSWSC 723. References to paragraphs in the judgment accord with the numbering of the version on Caselaw and not the hard copy handed down in court.

Appeal by Penrith City Council

6. The background to the appeals has been set out by Simpson JA and Emmett AJA and need not be repeated. For the reasons given by Simpson JA, the appeal from the judgment against the Council should be allowed and the orders made by the trial judge set aside.

Appeal by GIO General Ltd

7. For the reasons which follow, I agree with Emmett AJA that the appeal by the insurer should also be allowed and the judgment in favour of the claimant against the insurer should be set aside.

8. Usshers had a public liability policy with the insurer from 31 October 2004. For the month of November, the plaintiff was employed by Usshers, a period which included the date of a specific injury (29 November 2004). It remained Usshers’ public liability insurer after the plaintiff commenced employment with Solid Waste on 1 December 2004. The policy was an occurrence based policy; it did not cover liability to employees. It was not in dispute that the policy did not respond to any liability of Usshers whilst the claimant was in its employ.

9. The plaintiff brought proceedings against the insurer in relation to the period of his employment by Solid Waste, but alleging negligent breach of duty by Usshers. The claim was brought pursuant to s 601AG of the Corporations Act 2001 (Cth), which provides:

601AG    Claims against insurers of deregistered company

A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:

(a)   the company had a liability to the person; and

(b)   the insurance contract covered that liability immediately before deregistration.

10. Two questions arose with respect to the claim against the insurer, namely:

1. was Usshers liable to the claimant with respect to events occurring during his employment by Solid Waste?

2. if Usshers were liable for events occurring during that period, did the policy respond to that liability?

11. The second question requires reference to the terms of the policy and in particular the exclusions in cl 13, which read (relevantly):

“Exclusions

This policy section does not insure liability arising directly or indirectly out of or caused by, through, or in connection with, or for:

…

13.   Contractors and Supplied labour

personal injury to any person who is not your employee but 'has been engaged to perform work on your behalf or for your benefit where the contract price or value of the total works relating to the engagement of the person (whether the work of the person forms all or part of such works) exceeds $20,000 during the period of insurance.

However, this exclusion only applies to personal injury to persons:

(a)   who are employed by an employment or placement agency, labour hire company or any other organisation, government body or person whose business is, or includes, the supply of labour; and,

(i)   whose work is performed in whole or part under your care, control, direction or supervision; or

(ii)   ….”

12. Simpson JA would answer both questions in the affirmative, and would therefore dismiss the appeal brought by the insurer. (That conclusion may give rise to several questions relating to the assessment of damages and the application of s 151Z of the Workers Compensation Act, which do not arise if the insurer’s appeal is upheld.) Emmett AJA would answer the two questions by denying the operation of the exclusions in the insurance policy (thereby rendering the insurer potentially liable), but also denying any liability on the part of Usshers in the relevant period. Accordingly, he would allow the insurer’s appeal and set aside the judgment against the insurer.

13. It is convenient to address both the questions identified above by reference to the terms of cl 13 of the policy. The first issue was whether the plaintiff had been engaged to perform work on behalf of Usshers, or for Usshers’ benefit. This language should be understood as engaging a factual analysis. It is not necessary to address the first phrase because the second was satisfied; the benefit of the work was the fulfilment of the obligations of Usshers to the Council. Whatever the precise legal relationship between Usshers and Solid Waste, the contract for emptying the bins remained an agreement between Usshers and the Council.

14. There was no dispute that the other elements of the chapeau to cl 13 were satisfied. The next question was whether the chapeau to par (a) was also satisfied. That would have been so if Solid Waste were either a “labour hire company” or “any other organisation, … or person whose business is, or includes, the supply of labour”. Again the descriptions are factual, not requiring an analysis of a legal relationship. The phrase “labour hire company” is not one having any precise delimitation. It covers circumstances where a contractor, with obligations to a third party, does not employ workers to fulfil its obligations but obtains the services of the necessary workers from a second company, which remains the employer of the workers. The second company is known as a labour hire company.

15. The primary judge explained the circumstances in the following terms:[2]

“Usshers continued to be the contracted party with the Council in respect of the litter bin run. Solid Waste fulfilled its responsibilities under the contract, but by arrangements with Usshers and not with the Council.”

2. Judgment at [75].

16. The judge also found, “that Usshers paid Solid Waste sufficient to pay the wages of its workers including the plaintiff.”[3] There was no finding (or evidence) that Solid Waste had any other function than to supply labour, being persons to drive the truck and empty the bins. Even if ownership of the truck had been transferred to Solid Waste, the description of at least part of Solid Waste’s business as supplying a driver (and truck) could render it a labour hire company. Alternatively, if “labour hire company” were construed to refer only to an exclusive business of labour hire, then the description would satisfy the second part of the definition, identifying any other organisation, … or person” whose business included the supply of labour.

    3. Judgment at [85].

17. With respect to the third element, sub-par (i), the insurer submitted that unless the work performed by the plaintiff was at least in part under the care, control, direction or supervision of Usshers, there can have been no liability on the part of Usshers for any conduct causing the injury to the claimant. The trial judge dealt with this proposition in the following passage:[4]

“It seems to me that the plaintiff was not under the care, control, direction or supervision of Usshers but that Ms McBurney, in controlling and directing his work, was acting as general manager of Solid Waste although, at the same time, she was responsible to Usshers to ensure that Solid Waste emptied the bins which Usshers had contracted with the Council would be emptied. It follows that this subparagraph does not apply.”

4. Judgment at [86].

18. This provided an answer to part only of the insurer’s submission. The argument was that, unless the claimant was in some way subject to the care, control, direction or supervision of Usshers, Usshers would not be responsible for the nature and condition of his work and hence would not have been liable to him for any breach of duty.

19. Earlier in his reasons, in a passage immediately following that set out at [15] above, describing the relationship between Usshers and Solid Waste, the trial had said:[5]

“In my view it is clear that the two companies undertook the run. Put otherwise, the emptying of the Council litter bins was the joint enterprise of the two companies. Ms McBurney managed Solid Waste alongside, in respect of the litter bin run, her responsibilities to Usshers to ensure that its contractual obligations were satisfied.”

5. Judgment at [75].

20. If that description were apt and there was some kind of “joint venture”, no doubt Usshers retained a duty of care with respect to the nature and conditions of the claimant’s work. However, if that were the case, the claimant’s work was performed, at least in part, under Usshers’ care, control, direction or supervision. In that case, the exclusion in cl 13(a)(i) was engaged.

21. The inconsistency between the respective findings was not explained in the course of the appeal. On one view, the claim against the insurer failed whichever analysis were to be adopted. However, the evidence did not support the view that when the claimant’s employment was transferred to Solid Waste, Usshers no longer retained any obligation to supervise his work. The contract with the Council was not assigned and Usshers remained responsible for carrying out the work. Solid Waste provided the claimant’s labour to Usshers, which continued to supervise his work.

22. Accordingly, the exclusion in cl 13 applied; the policy did not respond to any liability Usshers may have had to the plaintiff. The appeal by the insurer should be allowed.

Orders

23. The Court should make the following orders:

In CA No 2015/104539 (the appeal by Penrith City Council):

1. Allow the appeal and set aside the orders made in the Common Law Division on 2 April 2015.

2. Dismiss the proceedings brought by the plaintiff and order that the plaintiff pay the defendant’s costs of the trial.

3. Order that the first respondent (Ralph Healey) pay the appellant’s costs in this court.

4. No order as to the costs of the second defendant (GIO General Ltd).

5. Grant the first respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

In CA No 2015/109911 (the appeal by GIO General Ltd):

6. Allow the appeal and set aside the orders made in the Common Law Division on 2 April 2015.

7. Dismiss the proceedings brought by the plaintiff and order that the plaintiff pay the defendant’s costs of the trial.

8. Order that the first respondent (Ralph Healey) pay the appellant’s costs in this court.

9. No order as to the costs of the second defendant (Penrith City Council).

10. Order that the first respondent repay to the appellant any amount paid to the first respondent pursuant to orders made on 2 April 2015, with interest at the post-judgment rate.

11. Grant the first respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

24. SIMPSON JA: Between early 2000 and 29 April 2005 Ralph Healey (“the plaintiff”) was employed to collect and empty garbage bins in the Penrith local council area, west of Sydney. Until 1 December 2004, he was employed by Usshers Pty Ltd (“Usshers”). Usshers was owned and operated by various members of the Ussher family, including Ms Susan McBurney Snr, Mr Robert Ussher, and Ms Susan Benzie (referred to as Ms Susan McBurney Jnr). On 1 December 2004 Usshers effected a restructuring of its business. Thereafter, the plaintiff was employed by a related company, Usshers Solid Waste Pty Ltd (“Solid Waste”).

25. From 2000 Usshers held a waste collection contract with the first appellant, Penrith City Council (“the Council”) for the supply of services emptying street litter bins and wheeled garbage bins. The bins were the property of the Council, which was responsible for their maintenance. They were of a common type found in shopping centres and other public places, and usually sat in stands or cradles.

26. The contract contained detailed provisions, to which it will be necessary to refer, some concerning the manner in which services were to be performed. Issues of various kinds with respect to the performance by Usshers of their contractual obligations arose from time to time. Supervision of the contract on behalf of the Council was the responsibility of Mr Geoffrey Brown, the Council’s Waste Management Coordinator.

27. On 29 November 2004, while still employed by Usshers, the plaintiff sustained a shoulder injury while lifting and emptying a heavy and damaged bin which was jammed into its cradle, causing it to jolt when released. Notwithstanding the injury the plaintiff completed his shift, at the conclusion of which he reported the injury to Usshers. He continued to work, although with increasing pain and discomfort, until 29 April 2005. He has not worked since that date and it is not in issue that he is incapacitated, at least for the kind of work that he had been doing. He has received payments of workers compensation under the Workers Compensation Act 1987 (NSW). Certificates issued by the WorkCover Authority repeatedly certified him as unfit for work, diagnosing, for example:

“Tendon damage both shoulders and neck, elbow and knee [joint]”

His injury was investigated by WorkCover, which found that it did not meet the 15 per cent permanent impairment threshold required by s 151H to entitle him to claim against his employer under the “modified common law damages” provisions (Pt 5 of the Workers Compensation Act). On 8 December 2005 Solid Waste terminated his employment on the basis that he was, and was likely to remain, unfit for work.

28. In 2007 the plaintiff commenced proceedings in the District Court, naming the Council as defendant. He pleaded that the Council’s involvement in determining the manner in which the contract services were to be provided by Usshers, and later Solid Waste, placed it in the position of “quasi-employer”, as a consequence of which it owed him a duty of care which it had failed to discharge, and as a result of which he suffered injury. He pleaded his claim both on the discrete injury suffered on 29 November 2004, and as an accumulated injury resulting from the nature and conditions of his work. Put briefly, the plaintiff’s claim against the Council was that, to the Council’s knowledge, the bins he was required to lift and empty were often damaged or defective or were too heavy for safe lifting. The repeated lifting of heavy bins, and difficulties in lifting created by damaged bins, caused progressive damage to his back, shoulders, neck, arms and knees, and aggravated pre-existing but asymptomatic degenerative changes to those parts of his body. He also claimed that the discrete injury of 29 November 2004 had the same effect. The claim against the Council, so far as it involved allegations of negligence after 20 March 2002, was governed by the provisions of the Civil Liability Act 2002 (NSW).

29. In 2010 the plaintiff commenced separate proceedings in the District Court against various members of the Ussher family. The details of this claim were not clearly revealed in the evidence. What is known is that judgment was ultimately entered for the first defendant.

30. From 30 October 2004 Usshers held a policy of public liability insurance with GIO General Ltd (“GIO”). Usshers was deregistered in October 2008. In 2012 the plaintiff commenced proceedings in the Common Law Division of the Supreme Court against GIO, under s 601AG of the Corporations Act 2001 (Cth), claiming on Usshers’ public liability policy and alleging negligence against Usshers, in respect of which the public liability policy responded. Since the discrete injury of 29 November 2004 had been suffered during the period of his employment with Usshers, and any claim against Usshers based upon that injury, if sustainable, would have involved a claim for damages under the Workers Compensation Act, for which he was ineligible, he limited the claim against GIO to the “nature and conditions” of his employment by Solid Waste from 1 December 2004. The basis of the claim as pleaded was that Usshers had continued to carry out waste collection services pursuant to the contract and had maintained direction and control over the manner in which the plaintiff worked, and therefore owed the plaintiff a duty of care “the same as or analogous to” that of an employer, and was, accordingly, liable in negligence. This claim was governed in its entirety by the provisions of the Civil Liability Act.

31. The proceedings against the Council, and those against the members of the Ussher family, were transferred from the District Court to the Supreme Court, and consolidated with the proceedings against GIO. They were heard by Adams J (“the primary judge”) over five days in November 2013.

32. On 30 June 2014 the primary judge delivered judgment: Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd [2014] NSWSC 723 (“the primary judgment”). He found both the Council and Usshers were liable for the plaintiff’s injuries, and indicated his intention of awarding damages under the following heads (not all of which he quantified):

• non-economic loss;

• past out of pocket expenses (agreed);

• future out of pocket expenses (buffer);

• past economic loss;

• past gratuitous attendant care;

• future gratuitous attendant care, to be calculated at 17 hours per week for 19.3 years;

• loss of superannuation on past earnings;

• compensation for tax paid on the plaintiff’s workers compensation payments (Fox v Wood [1981] HCA 41; 148 CLR 438)

He made no allowance for future economic loss, noting that the plaintiff was 65 years of age at the date of judgment.

33. For the purposes of s 151Z of the Workers Compensation Act, he assessed the responsibility of the Council for the plaintiff’s injuries as 50 per cent. He attributed to the period during which the plaintiff was employed by Solid Waste 15 per cent responsibility for his injuries.

34. He directed the parties to bring in draft orders relating to the calculation of those heads of damages he had not quantified, and in relation to the apportionment required by s 151Z of the Workers Compensation Act, and costs. When this was done, the primary judge made orders giving judgment in favour of the plaintiff against the Council in the amount of $650,631.50 (plus interest to be quantified), and against GIO in the amount of $455,422.05 (inclusive of interest). At the same time he ordered that judgment be entered for the first defendant in the proceedings against members of the Ussher family.

35. The orders were made in accordance with reasons for judgment delivered on 30 June 2014, subject to one correction. As set out above, the primary judge initially indicated an intention to include, in the award of damages, an allowance for attendant care services to be rendered to the plaintiff in the future on the basis that they would be provided gratuitously. On 23 December 2014, he delivered a second judgment (Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd(No 2) [2014] NSWSC 1870 in which he said that the reference to gratuitous assistance was mistaken; after hearing further submissions, he applied the “slip rule” to correct the order and reflect his intention, which had been to award damages for future assistance quantified on a commercial basis. He made other corrections which do not need here to be addressed. He issued an “updated judgment” effecting the corrections and calculations. The “updated judgment” has the same medium neutral citation as the original judgment.

36. Both the Council and GIO appeal against the orders, both as to liability and the quantification of damages.

The Council

The waste collection contract

37. Usshers’ contract with the Council specified the bins to be emptied and, by cl 15.1, obliged it to report daily to the Council as to, inter alia, bins that had become unserviceable (and to receive any orders or complaints about the service it was providing).

38. It also required Usshers to employ a sufficient number of competent employees to carry out promptly and efficiently its duties and obligations under the contract, and to train them to a standard adequate to enable them properly to perform their duties. It required Usshers to comply with relevant occupational health and safety legislation.

39. A section of a tender document, completed by Usshers, and incorporated into the contract, is headed “Labour Imput [sic]” and is as follows:

No. of employees	Type & status	Working Hours/Day	Working Days/Annum	Total Hours/Annum
2	Driver fulltime	8
1	Driver casual	8
Contract Manager	2
Office Staff	1
Other

This was taken (apparently without dissent) to mean that the contract conditions required two employees to be engaged, for 8 hours per day, on the rubbish removal task, with a casual driver available for another 8 hours per day.

The plaintiff’s employment

40. The plaintiff’s employment conditions required him to work emptying the bins between 10.00pm and 6.00am six nights per week. Notwithstanding the labour input clause in the contract, he worked alone. Despite some issues in the evidence, the primary judge was satisfied that the number of bins he was obliged to empty each night exceeded 500. Specifically, the contract required Usshers to ensure that each bin was serviced in such a manner as to leave it completely empty each night.

41. The plaintiff gave evidence that many of the bins were damaged or deformed or misshapen, such that they were difficult to dislodge from their cradles. Although the bins (or some of them) were fitted with internal handles, many of the handles were broken. On occasions (although the litter bins were intended for only light refuse) building materials, concrete and landscaping rubble, and other heavy materials (including dead animals) were deposited in them. At times, large plastic bags filled with restaurant waste and food scraps were left around the base of the bins. These bags could be very heavy, and presented a risk of splitting when lifted. Notwithstanding that, the plaintiff was told (by Usshers) that the Council insisted that all rubbish was to be removed from every bin every night, and that all rubbish around the bins was similarly to be removed.

42. There was a significant conflict in the evidence about what instructions the plaintiff was given concerning heavy bins. It was the Council’s position that it told Usshers that it should be notified of bins that were too heavy to lift, in which case it would arrange for Council employees to empty them. One possibility is that, regardless of what the Council told Usshers, Usshers insisted that the plaintiff empty every bin every night, no matter what the contents were.

43. At the commencement of each shift, the plaintiff was given, by Usshers, a “Run Sheet”. It told him which truck to drive and gave details of the bins to be emptied. It also made provision for him to record any problems encountered during the shift. The plaintiff returned the completed run sheet to the Usshers office at the conclusion of his shift. His evidence was that he recorded problems with bins on most nights. Usshers’ administrative staff were expected to convey these to the Council. Notifications from Usshers to the Council were frequent and varied, and included numerous complaints of bins full of builders’ rubble, bins too heavy to lift, bins jammed in their cradles, and bins filled with rotting meat or commercial restaurant waste. Until February 2005, few of the notifications were of bins that were damaged.

44. There was conflict in the evidence about what the plaintiff was required to do about bins that were too heavy to lift safely, and, in particular, the role of the Council in this respect.

40. Mr Brown, the Council’s Waste Management Coordinator, whose duties included the administration of the Usshers contract, confirmed that the Council required each bin to be emptied each night, regardless of its contents, except where the bin was unserviceable by reason, for example, of excessive weight. That the Council required every bin to be emptied every night was stated explicitly (without the qualification as to weight) in a letter written by Mr Brown to Usshers on 8 November 2001. Mr Brown pointed out that Usshers were under an obligation to empty every bin every night “whether full or otherwise”, and referred to default provisions of the contract (by way of obvious threat to Usshers’ continued engagement with the Council). He made no mention of the numerous notifications Usshers had already given of overweight bins.

41. The plaintiff gave evidence of a conversation he said he had with Mr Brown sometime in 2001. He said that he returned from his run to find Mr Thomas McBurney Snr on the phone to Mr Brown. Mr McBurney told Mr Brown that he needed to speak to the plaintiff, and handed the telephone to the plaintiff.

42. The plaintiff said that he told Mr Brown that about 10 to 15 per cent of the bins were “inoperable” due to disrepair, that they were lacking handles, or were jammed into the wrong cradles, some were too heavy to lift, or impossible to “jar free from the surroundings”. He also told Mr Brown of restaurant waste left in black bags that burst and covered him in “swill”; of concrete poured into bins, and landscaping rubble and bricks deposited in the bins. He said that Mr Brown replied that he inspected the bins regularly and saw no evidence of any disrepair, or of excessive weight.

43. The plaintiff said that, during the conversation, Mr Brown asked him why he did not get help from “the other worker”, to which he replied:

““There is no other worker, I do this on my own, it’s a one-man operation.”

49. Mr Brown, in oral evidence, did not deny this conversation, but said that he had no recollection of any conversation with the plaintiff. In a statement made on 25 September 2007, Mr Brown confirmed that, on occasions that he learned of bins that had not been emptied, he contacted Usshers by telephone and mail to instruct them of the need to empty all of the bins every night.

50. There was a considerable amount of evidence from which it might be inferred that the Council (probably through Mr Brown) maintained some pressure on Usshers to empty all bins every night. For example, on a date not disclosed in the evidence, Ms McBurney sent the plaintiff a handwritten note, in very large print, which read:

“PENRITH COUNCIL SCREAMING DO EVERY BIN!!

- Especially

River Rd, Old Bathurst Rd, Emu Plains, GWH!!”

She said that she wrote that note in response to complaints from Mr Brown about bins not being emptied.

51. On another occasion the plaintiff received, from within Usshers, a post-it note with the following message:

“Ralph

On Orders from Penrith Council all Bins are to be emptied even if filled with foreign waste”

52. In late 2004 the plaintiff received from Ms McBurney a handwritten note. It read:

“*Ralph,

PCC on rampage – threatening to give you ‘on the spot’ fines for taking black bags out of bins!!! Please pick up bags especially ‘PIZZA shop’ – High Street, Penrith

Thanks

Susie”

53. On 17 February 2005 a meeting took place between Usshers and the Council. Ms McBurney represented Usshers. Mr Brown and others were present for the Council. The minutes of the meeting record Ms McBurney expressing specific concerns about the condition of bins. They also record that she had not previously made the Council aware of these issues. Following that, she wrote a note to the plaintiff in the following terms:

“RALPH

Please do EVERY bin tonight, (especially Peppertree & Swallow)

I don’t care how long it takes & I want you to STOP changing finishing times.

I need lots of paperwork from you about bins being ‘abused’ by residents or shopkeepers. I need to keep PCC busy!!!

Please see Sally before you go to discuss ‘chains’/handles/cradles/abuse sites’.

Meeting was good but we need to do EVERY bin.

…

Cheers

Susie”

Ms McBurney said that the note was in response to insistence by Mr Brown that every bin was to be emptied every night, no matter what its contents.

54. On 22 February 2005 Ms McBurney sent to Mr Brown a list of defective bins. As she said in her covering email note, most related to “handles, cradles, chains etc”. Mr Brown passed this note to Mr Ian Pell, who worked with Mr Brown, for “investigation + action as required”, and required a response as to “outcome”.

55. There is a strong inference that the directions given to the plaintiff by Usshers, with escalating force, were given in response to pressure applied to Usshers by the Council. None of the directions to the plaintiff contains any rider that he is to exercise any caution, or is exempted from lifting bins of excessive weight. Whether that reflects what the Council told Usshers is, of course, a different question.

Broken and damaged bins

56. On 29 April 2005, the last day he worked, the plaintiff made a list of defective bins. He divided this into three categories – bins with one handle, bins with no handles, and bins he described as “arm breakers”. “Arm breakers” were bins that would not budge and that caused great pain to an operator attempting to remove them from their cradles. He gave the list to Usshers.

57. In his oral evidence he said that the bins that were damaged were never repaired during his employment. After his employment was terminated, the plaintiff made something of a survey of bins in the district, and took photographs of them.

58. The plaintiff’s evidence about the condition of the bins was supported by the evidence of Mr Graham Blacklock, who had, for a time, worked the plaintiff’s shift on Saturday nights. He estimated that on any night about 40 of the bins were damaged in different ways. Some had been vandalised, some were missing handles.

59. The Council did not contest the evidence that bins sustained damage of various kinds, including by vandalism. While it acknowledged that it was under a duty to repair damaged bins, within a reasonable time, its response was that it had in place a system of inspection and repair that was adequate to discharge that duty. In his initial statement, Mr Brown said that the Council did not regularly inspect the bins, but relied on Usshers to notify it of any bin needing repair. In a later statement he retracted that, saying that he was not aware of any system of inspection maintained by “outdoor staff”.

60. Between 2002 and 2004 Mr Charles Micallef was a street sweeper in the Penrith/St Marys area. In 2004 he became a team leader in the St Marys area. In a statement he described the system of bin maintenance in that area at that time. He said that he and his team walked around the area every day, observing the litter bins. When they noticed, or their attention was drawn to, damaged bins, they took whatever steps were necessary to repair them.

61. Mr Pell, who was until 2007 the coordinator in charge of outdoor maintenance staff of the Council, said that, if he were notified by Mr Brown of a bin needing repair, he contacted a staff member to effect the repair.

62. The plaintiff claimed that the Council was in breach of its duty in three respects:

• that it failed to repair damaged bins within a reasonable time;

• that it unreasonably insisted that every bin be emptied every night, regardless of its weight or the nature of its contents, thereby causing Usshers to place an undue burden on the plaintiff; and

• that it failed to ensure that Usshers employed an adequate number of personnel for the task of emptying the bins.

63. The Council denied that it insisted that every bin, regardless of its weight or contents, be emptied every night, asserting that its position was that, if it were notified of overweight bins, or damaged bins, it arranged for its own employees to attend and empty them.

The conclusions of the primary judge

64. The relevant conclusions of the primary judge are substantially set out in four paragraphs of the primary judgment. He found the plaintiff to be “an impressive witness” who did not exaggerate. He accepted a submission on behalf of the Council that a principal will not generally be vicariously liable for the negligence of an independent contractor (Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; 226 CLR 161), and added:

“78  … although in one sense the Council had contracted out of its responsibility for rubbish removal, its active involvement day by day in the performance of that task showed that it had not surrendered its control over it …

…

80 … It is also correct to submit that the Council was not, in any sense, the plaintiff’s employer. However, it was or should have been aware that its deformed bins, bins without two handles, and bins with internal handles presented a hazard to any worker whose job was to lift and empty them. So far as the missing and internal handles are concerned, it is patently obvious that lifting by one handle effectively doubled the strain on the relevant limb and that lifting by internal handles obviously was awkward and destabilising. It was also aware or should have been aware that many of its bins were dangerous to lift simply because of the weight of rubbish that was frequently deposited in them. I accept the plaintiff’s evidence that the weight of the commercial waste left in bags around the bins was in the region of 30kgs. It is reasonable to infer that this was frequently the weight of such bags deposited in the bins. The effect of training the plaintiff appropriately would have resulted in his not emptying bins which, on his assessment (informed by that training), presented a risk of injury. Since the Council, through Mr Brown, insisted in effect that all bins were to be emptied unless it was physically impossible to do so, in the knowledge which he had or should have had that this exposed the single worker doing the task to injury, any training about not unloading dangerous weights – had it occurred – would have been immaterial. However, it is not necessary for me to go this far, since I am satisfied that the injury suffered by the plaintiff was mainly contributed to by the deformed and single handled bins of which there is no doubt the Council was well aware and which, despite its acceptance of the responsibility to repair, it left unrepaired for lengthy periods. It is clear that the injury suffered by the plaintiff, from which he never made a full recovery, and which (having regard to the medical evidence which I discuss below) had ‘knock on effects’ rendering his degenerative injuries symptomatic or more seriously symptomatic, was caused by a heavy, deformed bin which had been in that state for a long time. The injuries suffered by the plaintiff resulted from the concerted actions of Usshers and the Council, in the knowledge each had, or should have had, of the foreseeable injury that would likely be suffered by the plaintiff if he lifted the bins which Usshers and the Council jointly required him to lift.

81  It is submitted by [counsel for the Council] that the Council did not dictate how the job of emptying the bins was to be done. This is true, but it did provide a timeframe for the job to be completed and required, in effect, that every bin that could be emptied must be emptied by the end of the shift.

82  In my view, the risk that a worker in the position of the plaintiff might be injured by bins that were too heavy or too damaged to lift safely was one of which the Council knew or ought to have known. The risks associated with heavy lifting are notorious, more so when the lifting is repetitive and involves carrying. The risk was significant that serious physical injury might well result. A reasonable person in the position of the Council ought to have taken the precaution of ensuring that bins were promptly repaired and not agreed with Usshers that the bins must be emptied unless it was physically impossible to do so. Since the repair of bins was accepted by the Council as its responsibility, it is unnecessary to consider whether it is unreasonable to require it to do so. The possible delay in repair could have been easily overcome by allowing Usshers not to empty bins judged by its worker as relevantly unsafe. This latter approach would also have overcome the problem – well known as a general risk – that the bins were frequently too heavy for safe handling by one worker.” (italics added)

For purposes of s 151Z of the Workers Compensation Act, as between the Council and Usshers, the primary judge apportioned responsibility equally, that is 50 per cent to each.

The Council’s appeal

65. By Grounds 10 and 11 of the Notice of Appeal, the Council challenges the factual findings, in the italicised passage in [80], that the plaintiff’s injuries were “mainly” caused by the damaged bins. The finding is important, because it tends to relegate to relative insignificance any contribution made by the ongoing conditions of the plaintiff’s work, including the need to lift bins that were overweight. It is important, too, because the Council was directly responsible for the maintenance and repair of the bins, and, to the extent that the plaintiff’s injury was caused by a failure of maintenance and repair, the Council could (subject to other considerations) be held liable; to the extent that the cause of the injury was the nature and conditions of the plaintiff’s work (including lifting and emptying bins of excessive weight), it is Usshers that is prima facie primarily responsible. Any liability of the Council in those circumstances must depend upon the nature and circumstances of its engagement with Usshers, and its involvement in the supervision of the performance of the contractual obligations.

66. The medical evidence does not support the primary judge’s conclusion as to causation. It is not possible, on that evidence, to differentiate the effect of the broken or damaged bins from the effect of overweight bins. Generally speaking, the medical practitioners who expressed opinions addressed either the issue of the specific injury of 29 November, or the nature and conditions of the plaintiff’s work. There appears to have been no attempt on their part (and none appears to have been asked) to differentiate between the impact of lifting heavy bins and the impact of attempting to extricate damaged bins from their cradles. So far as the evidence shows, no medical practitioner was asked to consider the implications of the plaintiff’s lifting bins that had been damaged, as distinct from the general heavy lifting duties the plaintiff was required to perform.

67. Dr Peter Giblin, an orthopaedic surgeon who examined the plaintiff at the request of his solicitors on 24 August 2006, reported that:

“Based on his history and examination, he has the provisional diagnosis of a soft tissue injury to his upper limbs, cervical and lumbar spine, and knees, reasonably causally related to the nature and conditions of his work environment as being the substantial contributing factor.”

In a later report, dated 19 February 2008 he attributed 80 per cent of the plaintiff’s ongoing disability to the specific incident of 29 November, 15 per cent to the nature and conditions of employment until 1 December 2004, and 5 per cent to the period thereafter. He maintained those opinions in later reports.

68. Dr Mark Horsley, also an orthopaedic surgeon, reported to the plaintiff’s general practitioner on 27 February 2006, at, apparently, the request of the plaintiff himself. In recounting the history, Dr Horsley expressly referred to the plaintiff’s account of bins that were “occasionally rusted” or on which the locks were difficult to open, and which, the plaintiff said, accounted for pain in both thumbs as well as the shoulder and elbow injuries. Dr Horsley did not express any opinion of his own as to the cause of the injury, and does not appear to have taken any history of the plaintiff lifting bins loaded with concrete and other builders’ rubble.

69. Dr Warren Kuo was the plaintiff’s treating orthopaedic surgeon, and provided many progressive reports. On 30 November 2012 he reported to the plaintiff’s solicitors that he believed that the plaintiff’s left shoulder, right shoulder and elbow conditions were causally related to his employment as a garbage collector, and that there was a connection between his neck problems and his employment. He also did not distinguish between lifting heavy bins, and lifting damaged bins.

70. Dr Clive Sun, a consultant in rehabilitation and pain medicine, reported to the plaintiff’s solicitors on 10 August 2006, stating his belief that the nature and conditions of the plaintiff’s employment was the substantial contributing factor to his impairment and disability, but also did not distinguish between broken bins and heavy bins.

71. Dr Raymond Wallace, an orthopaedic surgeon who assessed the plaintiff for WorkCover purposes, considered the plaintiff’s employment at Usshers to be a substantial contributing factor to his neck and shoulder conditions. He did not distinguish between the effect of lifting damaged bins and lifting heavy bins.

72. A number of medical practitioners referred to the specific incident of 29 November, but none did so in the context of separating the effects of that injury from the general effects of the plaintiff’s work.

73. The evidence does establish that the discrete injury of 29 November was caused when the plaintiff attempted to remove a bin that was damaged and had become jammed in its cradle. That, however, raises different questions concerning the extent to which that injury is responsible for the plaintiff’s ongoing problems. It may be not without significance that, even on that night, the plaintiff completed his shift and continued working in the ensuing months.

74. The conclusion that it was the damaged bins that were the “main” contributing factor to the plaintiff’s ongoing condition cannot be sustained. What was established with relative clarity was that it was the general nature and conditions of the plaintiff’s work (including, but not limited to, the problems occasioned by damaged bins) that were the cause of his ongoing symptoms.

75. Once it is accepted that the main cause of the plaintiff’s injury could not be said to be the damaged bins, the finding that the Council failed to repair damaged bins within a reasonable time becomes of diminished relevance.

76. That, in turn, raises the question as to the nature and scope of the Council’s duty to the plaintiff, not limited to the duty to repair damaged bins. This is far from the first case in which this Court has had to give consideration to the scope of the duty of care owed by a principal who contracts with an employer to an employee of the contractor: see, for example: Sydney Water Corporation v Abramovic [2007] NSWCA 248; Aust Torts Reports 81-913; Wooby v Australian Postal Corporation [2013] NSWCA 183; 233 IR 471; Central Darling Shire Council v Greeney [2015] NSWCA 51. The issue has also been the subject of discussion in the High Court: see Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16; Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; 226 CLR 161.

77. In Stevens, Mason J said:

“Although the obligation to provide a safe system of work has been regarded as one attaching to an employer, there is no reason why it should be so confined. If an entrepreneur engages independent contractors to do work which might as readily be done by employees in circumstances where there is a risk to them of injury arising from the nature of the work and where there is a need for him to give directions as to when and where the work is to be done and to co-ordinate the various activities, he has an obligation to prescribe a safe system of work. The fact that they are not employees, or that he does not retain a right to control them in the manner in which they carry out their work, should not affect the existence of an obligation to prescribe a safe system. Brodribb’s ability to prescribe such a system was not affected by its inability to direct the contractors as to how they should operate their machines …” (at p 31, italics added)

Brennan J said:

“… An entrepreneur who organizes an activity involving a risk of injury to those engaged in it is under a duty to use reasonable care in organizing the activity to avoid or minimize that risk, and that duty is imposed whether or not the entrepreneur is under a further duty of care to servants employed by him to carry out that activity. The entrepreneur’s duty arises simply because he is creating the risk (Sutherland Shire Council v Heyman [[1985] HCA 41; 157 CLR 424] and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organizing an activity does not import a duty to avoid any risk of injury; it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimize other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. But once the activity has been organized and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power or in leaving undefined the contractors’ respective areas of responsibility, the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility.” (pp 47-48, italics added)

78. In support of the plaintiff’s case that the Council retained a significant measure of control over the manner in which Usshers performed its obligations under the contract reliance was placed on those clauses of the contract that specified the bins to be emptied, and on the Council’s requirement that Usshers report daily with respect to bins that had become unserviceable, and to receive and accept orders and complaints regarding its service. Of particular note is the final sentence in cl 15.1:

“… Complaints regarding the service, such as the omission of any service on the regular day shall receive the immediate attention of the Contractor and the cause of the complaint be removed forthwith.”

Reliance was also placed upon the requirement for compliance with occupational health and safety legislation.

79. Essentially, the primary judge accepted that the Council had retained sufficient control in respect of the performance of the contract, to make it liable: see the opening sentence of [78], extracted above.

80. There was ample evidence that the Council, through Mr Brown, had actual knowledge:

1. that there were problems with damaged bins; and

2. that, contrary to the indication in the tender for the contract, Usshers was not employing two men for the task of emptying the bins; and

3. that bins were at times overloaded with heavy building materials and the like.

81. There was also ample evidence that Usshers insisted that every bin be emptied every night, regardless of its contents. That evidence has been set out above, and need not be repeated. The primary judge interpreted this as meaning that the Council required that the bins be emptied unless “it was physically impossible to do so”.

82. That inference is contrary to the evidence given by Mr Brown, which was to the effect that Usshers were told that, if the bins were too heavy, they should be left, and the Council should be notified; the Council would then arrange for its own employees to deal with those bins.

83. Because of his conclusion that it was primarily the damaged bins that caused or contributed to the plaintiff’s injury, the primary judge did not make any findings as to the extent (if any) to which the Council was responsible for the conditions of the plaintiff’s work, other than the problems caused by the damaged bins.

84. Whether the evidence lent itself to a conclusion that the Council’s requirements were so stringent is open to question. No witness – including the plaintiff – said that the Council’s availability to empty heavy bins was limited to those that it was physically impossible to lift. But there was room for interpretation as to what was “too heavy to lift”; certainly there was evidence that Mr Brown at times took a different view to the plaintiff as to what was “too heavy to lift”.

85. On the authority of Stevens, the duty of the Council apart from that conceded (to repair damaged bins) was to ensure that the rubbish collection was in the hands of apparently competent contractors; this it did. (Nothing was advanced to suggest that the Council had reason to doubt the competence of Usshers, or the suitability of its employment practices.)

86. However, the plaintiff’s case was that, by applying pressure to Usshers, the Council, in effect, caused Usshers to impose an unreasonable burden on the plaintiff, and subjected him to unsafe work practices.

87. The evidence that the Council did this was scanty. Certainly, there is evidence that it maintained a degree of control, by way of supervision of the performance of the contract. But the supervision was of the performance of the contract by Usshers, and not by the plaintiff. The Council had almost no connection with the plaintiff, the one exception (on the evidence) being the conversation with Mr Brown in 2001.

88. In submissions on behalf of the plaintiff, heavy reliance was placed upon what was construed as the failure of the Council to ensure that, in accordance with the contract, Usshers employed two men for the task of emptying the bins. However, the “two man” condition emerged from the tender documentation provided by Usshers to the Council, and was, no doubt, intended to provide justification for the tender price. It was no part of the Council’s role to supervise the day to day conditions of the plaintiff’s employment, including whether he worked alone or with assistance, and the Council did not purport to do so.

89. There was a good deal of evidence to support a cause of action in negligence against Usshers and/or Solid Waste. Unfortunately for the plaintiff, that cause of action was foreclosed by the operation of the Workers Compensation Act, with its limitation on award of damages to cases in which the injury is assessed to be 15 per cent permanent impairment or greater.

90. To the extent that the plaintiff would seek to rely on the frank injury of 29 November, he faces an even greater hurdle than he did in establishing that his injury was caused by a systematic failure of the Council to repair damaged bins. First, just as the medical evidence did not separate the effects of his lifting damaged bins from the effect of his work conditions in general, he was unable to establish that it was this particular incident that caused his ongoing condition. Second, the evidence does not establish that the Council knew, or ought to have known, of the damage to this bin. Not the least of his difficulties was that his own accounts of the location of the bin varied. In his incident report on the morning of the injury, he put the bin at Hewitt Street, Colyton; in his workers compensation claim form he stated the location as Smith Street; in his evidence, he said that the bin was in Station Street (in Penrith). He gave no evidence that he had previously encountered any difficulty with that bin, or was previously aware of its damage, and he gave no evidence of having reported any such damage to Usshers, to be passed on to the Council. It follows that it cannot be shown that the bin had been damaged for a period long enough to bring into play the Council’s acknowledged duty to repair damaged bins within a reasonable time.

91. The Council’s appeal must succeed. The plaintiff has been unable to establish a relevant breach of duty on the part of the Council.

GIO

92. The Usshers restructuring took effect from 1 December 2004. From that date, the plaintiff was nominally employed by Solid Waste. He was employed by Solid Waste for the purposes of the Usshers waste disposal contract with the Council, which was never assigned to Solid Waste. Solid Waste had no independent source of income. It depended upon a financial arrangement with Usshers to pay staff wages, including those of the plaintiff. Because Usshers retained its position as the contracting party, with contractual obligations to the Council, it also retained the responsibility of ensuring the provision of the services the subject of the contract.

93. Accordingly, the plaintiff maintained that, notwithstanding the nominal change of employer, Usshers continued to owe him a duty at least analogous to that of an employer.

94. The plaintiff’s case against GIO was brought under s 601AG of the Corporations Act. Section 601AG provides:

“Claims against insurers of deregistered company

A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:

(a)  the company had a liability to the person; and

(b)  the insurance contract covered that liability immediately before deregistration.”

95. Usshers’ policy of public liability insurance, issued by GIO on 30 October 2004 indemnified it, subject to specified exclusions, in respect of any liability to pay compensation for, inter alia, personal injury occurring during the period of insurance and caused by an occurrence connected with Usshers’ business. Usshers was deregistered in October 2008.

96. Accordingly, if the plaintiff proved:

1. that Usshers had a liability to pay compensation to him for personal injury; and

2. that that liability fell within the cover afforded by the policy,

then GIO was liable, under s 601AG, directly to the plaintiff: Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd; Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd [2005] NSWCA 19; 62 NSWLR 148.

97. Both questions were in issue. With respect to the second, GIO relied upon certain exclusions in the policy to which it will be necessary to come.

(i)  Did Usshers have a liability to pay compensation to the plaintiff?

98. The plaintiff’s case against GIO was based on the asserted negligence of Usshers. Relevantly, the case was pleaded in a Further Amended Statement of Claim as follows:

“11.  In so doing [that is, working for Solid Waste as a garbage collector] the Plaintiff was under the direction and control of [Usshers] although the Plaintiff was employed by another.

12.  Between approximately September [sic – December] 2004 and approximately May 2005 [Usshers] continued, pursuant to its contractual obligation as aforesaid, to carry out street litter bin waste collection services for the said council.

13.  During the said period in 2004 and 2005 [Usshers] owed to the Plaintiff a duty of care either the same as or analogous to the duty of care of an employer.

14.  During the said period in 2004 and 2005 the ‘nature and conditions’ of the work which the Plaintiff was performing involved him in the heavy and repetitive lifting and handling of the said rubbish bins so as to deposit the contents thereof into a waste collection vehicle.”

99. Four elements were involved in the first question. In order to prove that Usshers had a relevant liability it was necessary that the plaintiff prove:

• that Usshers was under a duty of care to the plaintiff;

• that Usshers was in breach of that duty;

• that the plaintiff suffered damage;

• that the damage was caused by Usshers’ breach.

This involved proving that, after the restructuring by which the plaintiff came to be employed by Solid Waste, Usshers continued nevertheless to control and direct the manner in which the waste collection contract was performed, and the plaintiff’s employment.

100. The primary judge made no express findings as to any of the four elements set out. The focus on the judgment so far as it concerned GIO was on the terms of the policy, particularly the exclusions. The relevant findings are as follows:

“75  Although there is little doubt that the plaintiff’s employment did change over from Usshers to Solid Waste … it is clear that nothing changed so far as his work was concerned. Of some significance is the fact that Ms McBurney who became general manager of Solid Waste remained in her previous role of general manager of Usshers Pty Limited. Usshers continued to be the contracted party with the Council in respect of the litter bin run. Solid Waste fulfilled its [Usshers] responsibilities under the contract, but by arrangements with Usshers and not with the Council. In my view it is clear that the two companies undertook the run. Put otherwise, the emptying of the Council litter bins was the joint enterprise of the two companies. Ms McBurney managed Solid Waste alongside, in respect of the litter bin run, her responsibilities to Usshers to ensure that its contractual obligations were satisfied. Moreover, the Council was well aware of this situation, although it was, no doubt, indifferent to it, provided the rubbish bins continued to be emptied in accordance with its contract. Its interactions over the contract were with Ms McBurney wearing, as it were, both her hats.”

101. Further relevant observations and findings were made in a different part of the judgment, in which the primary judge was dealing with the exclusions contained in the policy. They are, however, relevant to the first question. These findings were:

“84  … I am satisfied that Usshers, through Ms McBurney, ensured that its contractual obligations were satisfied, although the plaintiff was [not] actually employed by Usshers …

85  It is submitted that the plaintiff was engaged to perform work on Usshers’ behalf or for its benefit since he emptied the bins which were the subject of Usshers’ contract with Penrith Council. This however, is an oversimplification. It is clear that the arrangement between Usshers and Solid Waste was a commercial arrangement, one of the features of which was that Usshers paid Solid Waste sufficient to pay the wages of its workers including the plaintiff. The obligation of Solid Waste was to undertake such work in relation to the litter bins as was specified in the contract between Usshers and the Council. The plaintiff was not employed to assist (to attempt a neutral term) Usshers but by Solid Waste to enable it to fulfil its obligations to Usshers which was, for its part, obliged to have the litter bins emptied in accordance with its contract with the Council. The plaintiff was not working for Usshers in any sense.

86  … It seems to me that the plaintiff was not under the care, control, direction or supervision of Usshers but that Ms McBurney, in controlling and directing his work, was acting as general manager of Solid Waste although, at the same time, she was responsible to Usshers to ensure that Solid Waste emptied the bins which Usshers had contracted with the Council would be emptied …” (italics added)

The findings in [84]-[86] were expressly made in the context (and in the language) of the policy exclusions, for the purpose of the second question identified above. They cannot, however, be ignored in the context of the consideration of primary liability. The primary judge attributed to the period of employment with Solid Waste 15 per cent responsibility for the plaintiff’s ongoing condition. That assessment was made in light of the fact that Solid Waste required the plaintiff to continue to work dangerously even after the injury of 29 November (for which Solid Waste was not responsible).

GIO’s contentions with respect to Usshers liability to the plaintiff

102. The failure of the primary judge to make express findings with respect to the elements of liability in negligence gave rise to a number of GIO’s pleaded grounds of appeal (see Grounds 1(a), (c), (d), 3, 5(a), (e), 6, 7 and 9). Essentially, GIO contended that, in the absence of findings:

• that Usshers owed the plaintiff a duty of care;

• if it did, the scope and content of that duty of care;

• breach of duty; and

• any causal connection between breach of duty and damage suffered by the plaintiff,

it was not open to conclude that Usshers was liable to the plaintiff in negligence.

103. The logic of that proposition is difficult to avoid. However, it does not dictate that GIO’s appeal must succeed. To the extent that relevant findings were not made by the primary judge, ss 75A(6) and (10) of the Supreme Court Act permits this Court to fill the gaps.

104. It seems to me to be plain, from the passage quoted from [75] of the judgment, that the primary judge took the view that Usshers continued, even after the restructuring, to play at least an equal role in management decisions with respect to the administration of the waste collection contract and the plaintiff’s employment. Significant in this analysis is that Usshers did not assign the contract to Solid Waste. Usshers continued to bear responsibility for the discharge of the obligations under the contract. It is also clear from the evidence that Usshers continued to deal with the Council with respect to contract matters.

105. No clear picture emerged in the evidence as to the relative roles of Usshers and Solid Waste in the administration of the contract generally, or in the control of the manner in which the plaintiff performed his duties. That was probably because the members of the Ussher family themselves had no clear picture in their own minds as to the differentiation.

106. Ms McBurney was the general manager of Usshers, although how that came about was unclear. Ms McBurney said that she had started working at Usshers in about May 2000; at a time she could not pinpoint, her role “morphed” into that of general manager. When Solid Waste was incorporated for the purposes of the restructure, she became general manager of that company also. She said that Solid Waste received no income from the Council; it paid its employees from funds it received from Usshers via “book entry”. It was, in reality, Usshers that was responsible for payment of the plaintiff’s wages.

107. Correspondence between the Council and Usshers post-dating the restructuring confirms that Usshers (as distinct from Solid Waste) continued to have a dominant management role in the waste collection contract. While these documents are consistent with the contractual arrangements between Usshers and the Council, they also indicate that the lines (if they existed at all) between Usshers and Solid Waste were blurred. There was no distinction between what Ms McBurney did as general manager of Usshers, and what she did as general manager of Solid Waste.

108. All this is not to say that Usshers remained the plaintiff’s employer. It did not, as the primary judge accepted. It did retain the control, and supervisory role, of an employer. That was done by Ms McBurney, in her dual role of general manager of both companies.

109. It was therefore open to the primary judge to find (as he did by implication in [75]) that Usshers continued to owe the plaintiff a duty of care after 1 December 2004.

110. However, that has to be contrasted with his later express finding (for the purposes of the exclusion clauses in the policy) that the plaintiff was not under the “care, control, direction or supervision of Usshers”. That finding is difficult to reconcile with the conclusions, clearly expressed in [75], extracted above. In my view, the earlier finding is correct, and the later one cannot stand. GIO, in written submissions, in a proposition with which I agree, submitted:

“Unless that factual finding is set aside, the claim in negligence against Usshers must fail.”

206. While Mr Healey complained of numerous injuries during the time of his employment, he did not draw specific distinctions between injuries suffered because of damaged bins, on the one hand, and injuries suffered by trying to lift bins that were too heavy because of unauthorised garbage contained in them, on the other.

207. I am not persuaded that there was any breach by the Council of the limited duty that it owed to Mr Healey to ensure that bins were promptly repaired. There is no basis for a finding that the Council required that bins must be emptied unless it was physically impossible to do so.

Claim against GIO

222. GIO relied on two answers to Mr Healey’s claim against it. First, it said, Usshers did not owe a duty of care to Mr Healey, after he had ceased to be an employee of Usshers and had become an employee of Solid Waste. While Usshers may well have owed him a duty of care while he was its employee, and Solid Waste owed him a duty of care after he became its employee, Usshers ceased to owe any duty of care after 30 November 2004.

223. The second answer advanced by GIO was that, even if Usshers owed a duty of care to Mr Healey such that a liability on the part of Usshers arose from breach of that duty, that liability was not covered by the Policy. Rather, GIO said, any such liability was the subject of exclusions contained in the Policy.

224. Section 7 of the Policy dealt with public liability cover. By s 7, GIO agreed to insure Usshers for any amount that it might become legally liable to pay as compensation for personal injury during the period of insurance and caused by an occurrence connected with Usshers’ business. Section 7 did not insure liability arising directly or indirectly out of or caused by, through, or in connection with, or for employers’ liability or contractors and supplied labour.

225. Thus, exclusion 3, dealing with employers’ liability, excluded liability for personal injury to any of Usshers’ employees arising out of or in the course of their employment in Usshers’ business and liability for personal injury to any person deemed to be an employee of Usshers or in respect of which Usshers is entitled to seek indemnity under any policy of insurance required to be taken out pursuant to any statute relating to workers compensation. Clearly, any liability of Usshers to Mr Healey for personal injury caused by an occurrence before 1 December 2004 would be excluded by that provision.

226. Exclusion 13, dealing with contractors and supplied labour, excluded liability for personal injury to any person who is not Usshers’ employee, but has been engaged to perform work on behalf of Usshers or for Usshers’ benefit, where the contract price or value of the total works relating to the engagement of the person exceeds $20,000 during the period of insurance. The contract price or value of the total works relating to the work performed by Mr Healey in 2004 and 2005 exceeded $20,000. However, the first question is whether it can be said that Mr Healey was engaged to perform work on behalf of Usshers or for Usshers’ benefit, within the meaning of exclusion 13. That is to say, it is clear that, after 30 November 2004, Mr Healey was not engaged by Usshers but was employed by Solid Waste. The question is whether, in those circumstances, his engagement by Solid Waste to perform work in discharge of the obligations of Usshers under the Contract is sufficient to attract the exclusion.

227. In any event, exclusion 13 only applies, relevantly for present purposes, to personal injury to persons:

1. Who are employed by an employment or placement agency, labour hire company or any other organisation, government body or person whose business is, or includes, the supply of labour; and

1. Whose work is performed in whole or part under Usshers’ care, control, direction or supervision; or

2. Personal injury arises out of or in connection with any defect or deficiency in any fitting or plant used by Usshers in connection with Usshers’ business; or

2. …

3. Engaged to perform work in connection with any structure, machinery or plant “at the situation”.

In the Policy, the term “situation” is defined as meaning the places listed in the schedule at which and from which Usshers operates its business, and includes buildings and land within the legal boundaries. The only place listed in the schedule is an address in Berkshire Park, NSW, from which Usshers operated its businesses.

228. Thus, GIO must demonstrate that the personal injury suffered by Mr Healey fell within (a) or (c) summarised above. The first question is whether Mr Healey was employed by an organisation whose business included the supply of labour. That is to say, the question is whether Solid Waste was an organisation whose business included the supply of labour. Secondly, it must be shown that Mr Healey’s work was performed in whole or in part under the care, control, direction or supervision of Usshers or that his injury arose out of a defect or deficiency in any structure, fixture, fitting, machinery or plant used by Usshers in connection with its business. The primary judge found that Mr Healey’s work was not performed under the care, control, direction or supervision of Usshers. Further, although Mr Healey’s injury arose out of or in connection with defects or deficiencies in the litter bins or their cradles, it could not be said that the litter bins or cradles were used by Usshers in connection with its business. The litter bins belonged to the Council. Usshers simply provided the service of emptying the litter bins. It did not in any sense use the litter bins. Further, it could not be said that the litter bins constituted structure, machinery or plant at any place where Usshers carried on business. It did not carry on its business in the streets of the Council’s area.

229. It follows that GIO is not entitled to rely on any of the exclusions in the Policy. The primary question, however, is whether Usshers had any liability to Mr Healey that arose after 30 November 2004. Any liability that arose before 1 December 2004 would be the subject of exclusion 3, dealing with employer’s liability.

230. The primary judge found that, while Mr Healey’s employment changed from Usshers to Solid Waste, it was clear that nothing changed so far as his work was concerned. Thus, his Honour held, Ms McBurney became general manager of Solid Waste, but remained in her previous role of general manager of Usshers. Usshers continued to be the party to the Contract and continued to have its obligations to the Council in respect of the emptying of litter bins. His Honour found that Solid Waste fulfilled the responsibilities of Usshers under the Contract, but by arrangements with Usshers and not with the Council. Curiously, his Honour considered it was clear that “the two companies undertook the run” and that the emptying of the litter bins was “the joint enterprise of the two companies”. His Honour held that from 1 December 2004, Usshers was undertaking the work of emptying the Council’s bin “jointly with Solid Waste”.

231. The primary judge held that Ms McBurney managed Solid Waste alongside her responsibilities to Usshers to ensure that its contractual obligations, in respect of the litter bins, were satisfied. His Honour held that the Council was well aware of that situation, although it was indifferent to it, provided the litter bins continued to be emptied in accordance with the Contract. His Honour considered that the Council’s interactions over the Contract were with Ms McBurney “wearing, as it were, both her hats”.

232. The primary judge found that, after 30 November 2004, Mr Healey was no longer under the care, control, direction or supervision of Usshers. Rather, his Honour held, after that date, Ms McBurney controlled and directed his work, acting as general manager of Solid Waste, although, at the same time, she was responsible to Usshers for ensuring that Solid Waste performed the obligations of Usshers under the Contract. His Honour found that the arrangement between Usshers and Solid Waste was “a commercial arrangement”, one of the features of which was that Usshers paid Solid Waste sufficient to pay the wages of its workers, including Mr Healey. The primary judge held that the obligation of Solid Waste to Usshers was to undertake such work in relation to the litter bins as was specified in the Contract. Mr Healey was employed by Solid Waste to enable it to fulfil its obligations to Usshers. Usshers was, for its part, obliged to have the litter bins emptied in accordance with the Contract.

233. In his Further Amended Statement of Claim against GIO, Mr Healey made allegations that may be restated as follows:

6.    In October 1996, the Council entered into an agreement with RW Ussher & Sons with respect to the undertaking of street litter bin waste collection services in the area of the Council.

7.    In 1999, the said Contract was assigned from RW Ussher & Sons to Usshers by way of Deed of Assignment.

8.    From about 1999 until 30 November 2004, Mr Healey was employed by Usshers.

9.    Commencing on 1 December 2004 and ending on 29 April 2005, Mr Healey did not work for Usshers but was instead employed by Solid Waste.

10.    During that period, Mr Healey, employed as aforesaid, worked in the collection of street litter bin waste in the local government area of the Council.

11.    In doing so, Mr Healey was under the direction and control of Usshers, although he was employed by Solid Waste.

12.    From 1 December 2004 until 29 April 2005, and thereafter, Usshers continued, pursuant to its contractual obligation, to carry out street litter bin waste collection services for the Council.

13.    During that period in 2004 and 2005, Usshers owed to Mr Healey a duty of care either the same as or analogous to the duty of care of an employer.

14.    During the period, the nature and conditions of the work that Mr Healey was performing involved him in the heavy and repetitive lifting and handling of litter bins so as to deposit the contents thereof into a waste collection vehicle.

15-19.   Numerous of the bins had only one handle, had blocked drainage holes, had no handles at all, were deformed and bent and stuck in their bin holders, or had broken or stuck locking mechanisms of padlocks that required Mr Healey to strike them with his hand.

20.    Regularly, the litter bins were filled or partly filled with heavy objects.

21.    During the period, Mr Healey was required to lift and empty over 530 bins on each of his runs.

22.    During the period, the use of the litter bins by Mr Healey as aforesaid and in the condition of the bins aforesaid brought about to him injury, disability, loss and damage.

23.    On or about 29 November 2004, Mr Healey was required to lift and empty a bin located in Station Street, Penrith.

24.    The litter bin was owned by the Council and the emptying of that bin was part of Mr Healey’s job.

25.    The litter bin was stuck within its cradle and heavier than it ought to have been due to its contents.

26.    Arising out the work that Mr Healey did over the said period and in particular the emptying of the bin on 29 November 2004, Usshers was under a duty of care to Mr Healey as aforesaid and was in breach thereof and was negligent.

234. The particulars of negligence alleged against Usshers were as follows:

1. a.   Failing to take any or any adequate precautions for Mr Healey’s safety;

2. b.   Putting Mr Healey in a position of peril in the circumstances;

3. c.   Failing to provide Mr Healey with a proper and safe system of work;

4. d.   Failing to provide Mr Healey with a proper and safe system of work in that Usshers allowed the Council to dictate to them how that work was to be performed;

5. e.   Failing to heed Mr Healey’s complaints that the bins were too heavy and were often stuck in their cradles and the locks thereof did not work and the drain holes thereof were blocked;

6. f.   Requiring Mr Healey to lift and empty the litter bins no matter what their contents, as well as requiring Mr Healey to remove all rubbish surrounding those bins on the basis that, if he did not, arrangements with the Council would be in jeopardy;

7. g.   Requiring Mr Healey to work at an excessive speed;

8. h.   Requiring Mr Healey to empty far too many bins in the allocated time so that his working hours were necessarily extended;

9. i.   Failing to carry out any or any adequate risk assessment in respect of the litter bins;

10. j.   Failing to refuse to collect bins that were damaged or broken or in respect of which handles were missing or which contained objects that were far too heavy and in respect of which the bins were stuck in their cradles;

11. k.   Failing to direct Mr Healey not to empty bins that posed a risk of injury to him.

235. The primary judge found, in effect, that Usshers owed a duty of care to Mr Healey during the currency of the Policy and in particular from 1 December 2004 to 29 April 2005, as regards the nature and conditions of his work. His Honour found that Usshers was in breach of its duty of care to Mr Healey in exposing him to an unreasonable risk of injury by the nature and conditions of the work. His Honour found that there were two causes of Mr Healey being unable to work after April 2005. The first was the injury suffered on 29 November 2004. The second was the aggravation of an underlying degenerative condition for the whole of the period of his employment.

236. However, the primary judge made no express finding that Usshers owed a duty of care to Mr Healey during the period after 29 November 2004. For his Honour to find a duty, it would have been necessary to find that Usshers retained some residual power of care, control and supervision over Mr Healey. However, his Honour expressly found that Mr Healey was not at the relevant time under the care, control, direction or supervision of Usshers. GIO contends that, unless that finding is set aside, the claim in negligence against Usshers must fail.

237. Further, in order to establish some residual power of control on the part of Usshers so as to found a duty to Mr Healey, it would be necessary to make findings as to the arrangements on foot between Usshers and Solid Waste. Whether a head contractor continues to owe a duty to employees of a sub-contractor will depend upon the particular circumstances of each case. A principal will not generally be vicariously liable for the negligence of its independent contractor. The common law does not impose a duty of care on principals for the benefit of independent contractors engaged by them of the kind that they owe to their employees. However, in some circumstances, a principal will come under a duty to use reasonable care to ensure that a system of work for one or more independent contractors is safe. An entrepreneur who organises an activity involving a risk of injury to those engaged in it is under a duty to use reasonable care in organising the activity to avoid or minimise that risk. The entrepreneur’s duty arises because he is creating a risk and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organising an activity does not import a duty to avoid any risk of injury. Rather, it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. Once the activity has been organised and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power, or in leaving undefined the contractor’s respective areas of responsibility, the entrepreneur is not liable for damage caused merely by the negligent failure of an independent contractor to adopt or follow a safe system of work (Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [20]).

238. It is clear enough that there was no direct arrangement made between the Council and Solid Waste concerning the performance of the Contract. The arrangements between the Council and Usshers continued in force after 30 November 2004. His Honour found that Usshers remained contracted to the Council to continue to empty litter bins. However, Solid Waste performed the obligations of Usshers under the Contract by agreement between Usshers and Solid Waste. It fulfilled the responsibilities of Usshers under the Contract by arrangement with Usshers.

239. The primary judge expressly found that Mr Healey was not under the care, control, direction or supervision of Usshers after 30 November 2004. There is no notice of contention in relation to that finding. His Honour found that Mr Healey’s work was not performed to any degree, whether in whole or in part, under the care, control, direction or supervision of Usshers. There was no finding by the primary judge that Usshers retained a residual right of control and direction over the nature and conditions of the work performed by Mr Healey after 30 November 2004. There is every reason to conclude that the fact that Usshers was making payments to Solid Waste to enable it to pay its employees and that Ms McBurney continued in her role as general manager of both companies, indicates that it was the intention of Usshers and Solid Waste, through the guiding mind of Ms McBurney that the whole of the responsibility for the performance of the Contract, and as to the nature and conditions of Mr Healey’s work, be passed to Solid Waste, as his employer.

240. The primary judge simply did not make any finding as to the basis upon which a duty was owed to Mr Healey by Usshers after 30 November 2004. A fortiori, his Honour made no finding as to what the content of that duty might be. In the light of his Honour’s finding that Usshers ceased to exercise any care, control, direction or supervision of Mr Healey, it is not possible to glean the content of any duty that might have been owed to Mr Healey by Usshers, as distinct from his employer, Solid Waste.

241. Further, the primary judge did not make any finding of any breach on the part of Usshers of any duty said to be owed by it to Mr Healey. In order to do so, it would be necessary for his Honour to specify the responsibilities on the part of Usshers that continued after 30 November 2004 as regards the nature and conditions of Mr Healey’s work. His Honour made no finding as to any steps or action that Usshers’ should have taken in order to discharge any duty of care owed by it. Indeed, his finding that Mr Healey was no longer under the care, control, direction or supervision of Usshers is inconsistent with the finding of a breach of duty on the part of Usshers.

242. It is difficult to see why Usshers, once it had parted with its business to Solid Waste, would owe a duty analogous to that of an employer to its former employees, who had become employees of Solid Waste.

Conclusion

243. It follows that each of the appeals should be allowed. The orders made by the primary judge in each of the proceedings at first instance should be set aside. In lieu of the orders made against the Council, there should be an order directing a verdict for the Council. In the proceedings against GIO, there should be an order directing judgment for GIO.

244. I agree with the orders proposed by Basten JA.

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Endnotes

Decision last updated: 08 July 2016