Press v Broken Hill Pty Co Ltd & Anor
[2005] SADC 173
•23 December 2005
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
PRESS v BROKEN HILL PTY CO LTD & ANOR
Judgment of His Honour Judge Boylan
23 December 2005
NEGLIGENCE - ESSENTIALS OF ACTION FOR NEGLIGENCE - DUTY OF CARE
Industrial Accident
Plaintiff injured when caught between guardrail and moving machinery at premises of the first defendant. First and second defendants both breaching duty to provide a safe system of work. Contribution between defendants. No contributory negligence. Indemnity clause operating in favour of first defendant.
Judgment for the plaintiff.
Fennell v Supervision & Engineering Services Holdings Pty Ltd & Santos Ltd (1988) 47 SASR at 7 & 10; CSR Ltd v Wren (1997) 44 NSWLR 463; Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47; The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Limited (1968) 118 CLR 429 at 437, applied.
Valkonen v Jennings Constructions Pty & Ors (1995-1996) 184 LSJS 87, considered.
PRESS v BROKEN HILL PTY CO LTD & ANOR
[2005] SADC 173
This is a claim by Mr Press for damages for personal injury which he suffered in an accident at his work place.
Background
In 1998 Mr Press was employed by Rexco, a labour hire company. Rexco had placed him with the second defendant, Action Engineering Pty Ltd. (“Action”) for whom he worked as a maintenance fitter. Action had contracted with the first defendant, Broken Hill Proprietary Company Limited (“BHP”) to do maintenance work at BHP’s steel works at Whyalla. Mr Press had been working at BHP for about a year before his accident.
On the 23rd of June 1998, Mr Press was undertaking maintenance duties on BHP’s coke ovens. He was working from a platform about 15 metres above ground level. The platform had a guard rail, but there was a gap in one section to enable an extending or telescopic duct to pass through and make contact with a large abutting stationary duct positioned somewhat higher than the platform. Mr Press stood in that gap with his hands extended up to the stationary duct holding open a door on that duct. As he was in that position, the telescopic duct moved forward. A plate attached to its side pressed against Mr Press’s right hip, squeezing him between the plate and the guard rail. He suffered serious injuries.
Mr Press claims that both BHP and Action were negligent and that both were in breach of their statutory duty to him. He says that each of them owed him a duty of care which was non delegable. BHP claims that Mr Press was contributorily negligent. There is a dispute between BHP and Action about the effect of relevant clauses in a contract between them which purport to require Action to indemnify BHP.
Quantum is agreed.
The Accident
Most of the facts were not in dispute, and I shall proceed to describe the accident on the basis of those undisputed facts. I shall then turn to my findings on any disputed matters.
BHP made steel at its Whyalla plant. That process required the production of coke. BHP produced coke in ovens fuelled by coal. Mr Press was working on the coke ovens when he was injured.
There are a large number of ovens. Together, they form a long rectangular structure which rises about 15 metres from the ground. On top of that structure, and forming the top of the ovens, is a concrete roadway along which runs a railway track.
The coal which fuels the ovens is fed into them through holes in that roadway by means of battery chargers. Each charger runs on the railway track. Each contains a stock of coal and drops coal into holes which are situated along the track. Fuelling of the ovens is not a charger’s only purpose. It also has a function related to what is known as the fume emission control (“FEC”) system.
When the battery chargers drop coal into one of the ovens, fumes are displaced. To prevent atmospheric pollution, those fumes are contained. The FEC duct runs along the top of the ovens and is the stationary duct to which I referred earlier. It contains a number of doors along its sides. Those doors are usually sealed shut but when an oven is about to be fuelled and fumes displaced from it, the relevant door is opened and the telescopic duct extends out from the battery charger to receive the fumes emitted from the door. For that system to work efficiently, there must be a good seal between the door opening and the opening of the telescopic duct. At the time of his accident, Mr Press’s job was to check that the doors and the telescopic duct were sealing together properly and, if necessary, to adjust bolts on the doors to effect that seal.
Mr Press was undertaking that task positioned on a platform on top of the battery charger. The section of the platform on which he was standing when he was injured was next to the telescopic duct. That duct is on top of the battery charger and moves with the charger as it travels from oven to oven. After one oven has been refuelled and the fumes so produced contained, the telescopic duct is retracted, the oven door is closed and the charger moves to the next oven. The telescopic duct will then extend and attach to the door of that next oven.
Mr Press was familiar with the FEC system and the coke oven doors. He had worked on them as a maintenance fitter for some twelve months before 23rd June 1998. The job he was doing on that day was in no way unusual, but the position from which he was doing it was different. Until the 23rd of June 1998, Action’s fitters had always worked on the oven doors from a mobile platform which was pushed manually from oven door to oven door. That system had apparently not been satisfactory. It was described in evidence as “hit and miss”. The fitters might adjust the doors but would not know if the adjustments were successful until the mobile platform was moved away, the battery charger moved to the relevant door, and the duct extended. Even then, it seems that they had made their observations from the level of the railway line. To avoid the “hit and miss” problem it was decided that the fitters would cease using the mobile platform and check the seals on the doors from the platform on top of the battery charger.
Mr Press was working with another fitter, James Lockwood, on door number 4 at the time of his accident. Mr Press suggested that they hold the oven door open manually and, while doing so, have the telescopic duct extended up to the opening so that they could check the necessary adjustment. That is what they did.
The oven doors are hinged at the top. To hold the door open Mr Press stood across the gap in the handrail with his left hip hard up against the end of the rail. His arms were extended outwards and upwards to hold the door. He was almost facing, but slightly side on to, the telescopic duct and looking up to the oven door above him.
The telescopic duct is hydraulically operated and was controlled by an operator, Mr Moodie, from the control room which is also on top of the battery charger, but Mr Moodie was unable to see Press, Lockwood and the telescopic duct from his position. Press and Lockwood were in radio contact with Moodie. At the request of one of them he caused the duct, which had been in its fully retracted position, to extend out towards the oven door.
Press was on one side of the duct and Lockwood on the other. Their supervisor, Mr Gloyn, from Action, who had been working with them on other doors, had gone elsewhere. Attached to Mr Press’s side of the telescopic duct was a limit switch mechanism. Part of its function was to indicate to Moodie when the duct had reached either its fully extended or fully retracted position. When it is in either of those positions a striker on one part of the mechanism comes into contact with another part of it, causing an indicator light to come on in the control room.
The limit switch mechanism consists of two main parts. A striker plate and a limit switch plate ( “limit switch”). Both parts were attached to different but adjacent moving sections of the telescopic duct. The limit switch extended further out from the site of the duct work than did the striker plate. As I have said, there is a gap in the guard rail. The telescopic duct extends through the gap to connect with the oven doors. The gap is wider than the duct because both the striker plate and the limit switch plate also move forward as the duct extends and the gap has to be sufficiently wide for those two plates to pass through it. The limit switch moves last.
As Mr Press was standing in the position which I have described, the duct extended. The striker plate passed in front of him and cleared him, but the wider limit switch pressed against his upper thigh, squeezing him between the leading edge of the limit plate and the guard rail.
The Witnesses
The plaintiff gave evidence and called Mr Douglas Marshall, a mechanical engineer with many years experience in the design, operation and maintenance of industrial plants and facilities. Mr Marshall prepared a report about the accident. That report was tendered as Exhibit P7. In addition, the plaintiff tendered various photographs, videos of the coke ovens and the battery charger, statements of employees of BHP and Action, and other documents.
BHP called evidence only on the contractual issue between it and Action.
Action called Mr Bob Gloyn, one of its employees, who was supervising Mr Press and James Lockwood.
I found the plaintiff, Mr Marshall and Mr Gloyn to be honest and credible witnesses. Generally, I accept their evidence. On some issues I have preferred the evidence of Press or Gloyn to that of the other of them, but differences between them arise from faulty memory with the passage of time and not from any lack of candour. Mr Press suffered extensive and painful injuries. He was sedated for some days and had, no doubt been in a state of shock. I am not surprised that his memory is faulty on some issues. He was an honest witness who did his best to assist the court.
Mr Press’s prior experience of the battery charger
It was not disputed that the 23rd of June 1998 was the first occasion on which Action fitters had worked on the coke oven doors from the platform of the battery charger. But it was suggested in cross-examination (at T99 and following) that Mr Press had been on the platform on previous occasions. If so, then it may be thought that he would have been aware of the limit switch and should have been mindful of its operation when deciding where he would stand on the platform. He was cross-examined particularly about the entries which his supervisor Gloyn had made in what could best be called a diary of jobs done or planned to be done on the coke ovens in the months before the accident. Press was recorded in the diary as having been one of the fitters who worked on those jobs.
The effect of Mr Press’s evidence was that he had no memory of working on any of them. He said that Gloyn may have marked down his name intending when he did so that Mr Press would work on those jobs but that he may not have ended up working on them. Mr Press said “He [that is, Gloyn] might have been pencilling in for me to do those jobs and I could have been sent on other jobs.” He was unable to say definitely if he had worked on any of those diarised jobs. He did say that he had been down on the battery top every day, but it was a dangerous place owing to smoke, noise and flames and he concentrated on going straight to where he had to go to do the job he had to do. Mr Press’s evidence was unclear about whether he had been involved in fitting new springs to the FEC ducting, a job which would have required him to work on the very part of the platform of the battery charger where he was working at the time of the accident. He said that he did not remember doing that job. He said (T106 line 8) that he might have been on the battery charger to change a cylinder. When asked if, during the course of doing that job, he would have become aware of the limit switch plate, he said that he could even have put his tools on it. He continued “… but as far as the relevance of that, the plate and anything else there, wouldn’t have probably come into mind. If you had thought there was any real danger to it you would think there would be a guard around that”.
Gloyn said of the diary that it was a record of planned work.
There is no evidence that Mr Press was ever on the charger on any occasion before the 23rd of June 1998 when the duct work was in operation. I find that he had worked on the battery charger platform before that date but never when the telescopic duct was in operation. I also find that he had no reason to know that the limit switch plate would move forward with the duct as it extended. And I make the same finding in the case of Gloyn. Both gave evidence that the limit switch mechanism was unusual in that the limit switch plate moved. Usually in such a mechanism, only the striker plate moved. There was no evidence to the contrary.
On the 23rd of June 1998 had Press worked on any doors before working on No. 4 door?
There are some 70 doors on the coke ovens. Mr Press was injured while working on door number 4. In his evidence he said that he had no memory of working on any doors before door number 4 on 23rd June 1998. He said (at T114) “I can’t remember working on any other doors”. He agreed that in a statement made the day after the accident he had said “I was adjusting FEC doors at the BHP coke oven battery top, we had operated a couple of doors using number one battery charger.”
Gloyn’s evidence on the topic was that the Action’s workers were checking every door and that Press had worked on doors 1 and 2. Gloyn said that he had worked with Press on those two doors before going away from the battery charger. BHP’s employee, Mr Moodie, was operating the controls in the control room of the battery charger. He was not called, but a statement which he gave on the 23rd of June 1998 was tendered. He said that Press, Lockwood and Gloyn had worked on doors 1, 2 and 3, but that Gloyn left before they began work on door number 4. The discrepancy between Gloyn and Moodie does not matter. I find that Mr Press had worked on doors 1, 2 and 3 before moving onto door number 4.
While I have found that Mr Press worked on doors 1, 2 and 3, I find that he did not become aware of the operation of the limit switch while working on them. I find that his, Gloyn’s and Lockwood’s activities with respect to those doors were done from the side of the telescopic duct away from the limit switch. That was Gloyn’s evidence and I accept it.
Who had the radio?
When they were working on door number 4, Mr Press and Lockwood were in contact with Moodie by radio. There was conflicting evidence about which of Mr Press and Lockwood had the radio when the request to Moodie to extend the duct out to door number 4 was made. I do not think it matters, but I have considered the evidence and shall make a finding in case a finding should ever be necessary. In evidence, Mr Press said that he thought Lockwood was on the radio but in his statement (Exhibit P6) made to an investigator the day after the accident, he said that he thought he had requested Moodie to extend the duct. Moodie said in his statement that Gloyn told him Lockwood would be giving the radio instructions. In his statement given on the 23rd of June 1998, the day of the accident, Lockwood says that Mr Press had given the radio instruction and that he, Lockwood, grabbed the radio after Mr Press started to scream. I accept Lockwood’s account. He was an eye witness and Moodie could not see from the control room and had only been told that Lockwood would be on the radio.
In summary, then, I find that Mr Press had worked on doors 1, 2 and 3 but had not been working near the switch plate. I accept the undisputed evidence of Press that the switch plate was unguarded, was not painted with hazard paint and that there was no sign or indication that it moved. I find that the switch plate was unusual in that the limit switch plate moved. I also find that Mr Press was not given any warning about the limit switch plate by Action or BHP. That fact is not disputed. I then turn to considering if he should have been warned and if so by whom.
The site at which Mr Press suffered his injury was owned, operated and controlled by BHP. It is a very large site, covering an area about the same size as the town of Whyalla. The coke ovens were only one part of its operations. A BHP employee, Mr Tom Harkness was the project controller for the job which Action was doing on the oven doors on the 23rd of June 1998. I accept Mr Gloyn’s evidence that it was Harkness who had decided that the job would be done from the platform of the battery charger.
Tom Harkness prepared an authority to work permit (“ATW”) in respect of the job. He prepared the ATW on the 22nd of June 1998. The permit records that Mr Harkness waived the necessity for a job safety analysis (“JSA”) to be done on the basis that the job required only “basis trade skills”. There is no dispute that the job required only such skills. The skills which Mr Press and Lockwood were to use were the ordinary ones they had used on the same job often before. The significant feature of the job was that it was to be done from a new position, the platform of the battery charger. That meant that the fitters would be working very close to moving machinery, the telescopic duct.
The job safety analysis
In my view, the failure to prepare a job safety analysis is a significant matter. I accept the evidence of the expert witness Marshall that a job safety analysis is a document prepared by an employer to identify hazards before and during a change in a system of work at the plant. There is an issue in this case about which of BHP and Action was responsible for preparing JSAs for jobs to be done by Action. Of course, no JSA was prepared for the job Mr Press was working on at the time of his accident. Harkness had prepared an authority to work in respect of that job and in it had waived the requirement for a JSA on the basis that the job required basic trade skills only. Mr Press, who had at an earlier time worked as a leading hand, gave evidence that it was Gloyn’s job to prepare JSAs for jobs to be done by Action. Mr Press’s evidence was that a JSA for the type of job he was working on should have been done by fitters. He said that he was not the supervisor and that it was not his job to do a JSA. Gloyn’s evidence was that he would do a JSA if BHP had provided him with a list of hazards. I find that the practice between Action and BHP was as described by Gloyn: BHP would identify any hazards and Action would then prepare a JSA with a view to eliminating or controlling those hazards. That accords with the contractual terms between them.
But the matter does not end there. Although Harkness waived the necessity for a JSA and none was prepared, I find that Gloyn and Harkness had inspected the battery charger platform on the day before the accident. When questioned on this topic, Gloyn initially denied that he had “gone over the job” with anyone from BHP before the job was started. Having seen the statement which he made about a year after the accident, he agreed that he had said this:
“The day before the accident we were up there and we looked at what we had to do, how we were going to go about doing it, where we were going to park the machine, where we was going to lift things up, where we were going to work from. We did go through things a bit.”
He also agreed that what he there said was true. His statement accords with Mr Press’s evidence that Gloyn had been up checking the job in the days before the accident. On that topic, Mr Press said (at T50)
“… I remember Bob having to come and go quite a bit with those up to that job to go onto the charger to check the operations of the ducting and that, so my guess was that they will be doing a JSA and so we knew what, you know, what was involved more, involved in the job from the safety point of view and from the aspect of finishing things.”
I also find that, during the inspection Gloyn and Harkness did not observe or cause the telescopic duct to be extended. That is, Harkness and Gloyn conducted an inspection to work out how the job was to be done and to assess the risks involved but did not take into account during that inspection the possibility of the limit switch plate’s being a hazard.
Would a JSA have identified the potential hazard presented by the limit switch?
Mr Press, who had done JSA’s in the past, said that, had he done a JSA on this job, he would hope that he would have identified the hazards. I accept Marshall’s evidence that a properly prepared JSA would have identified the hazards arising from the moving duct and the unguarded opening.
What should the JSA have involved?
Harkness waived the necessity for a JSA as he thought the job that Action was to do involved only basic trade skills. There is no dispute that he was right about that. The work to be done on the doors was standard fitting work that Mr Press had done often before. But the method of gaining access to the doors to do the work was new. There is no evidence to support a finding that, when Gloyn and Harkness inspected the job before the accident, they had any reason to think that any of Action’s fitters would stand on the battery charger platform and hold the door open as the duct extended towards it. But they knew that the men would be working on the platform when the duct was being extended. That was the whole purpose of the new method.
Gloyn agreed with Press that the limit switch was unusual in that both sections of it moved. Harkness was not called. I do not know what knowledge, if any, he had of the operation of the limit switch. I accept Mr Marshall’s evidence that the knowledge of the limit switch was within the expertise of BHP’s electricians and that a proper JSA would have involved the electricians who were familiar with the limit switch.
I therefore summarise my findings as follows. Both Gloyn and Harkness knew that the new method would involve the fitter’s being on the platform when the duct work was moving, but they did not know that a fitter would manually hold a door open while the duct was moving. Neither of them adverted to the limit switch’s presenting a potential danger. Harkness waived the necessity for a JSA because he was of the view that the job involved basic trade skills only. Gloyn agreed.
Was the System of Work Safe?
In my view the system of work was not safe. Both Press and Lockwood had been instructed to work near moving machinery. Part of the machinery had an unusual feature, namely, that the limit switch moved with the telescopic duct. Neither of the men could be expected to know of that feature. The moving machinery was unguarded and there was no sign or hazard paint to warn that the limit switch would move. No warning was given to Mr Press or to Mr Lockwood by BHP or Action. Further, the operator of the moving machinery was so placed at the controls that he could not see the duct and those working near it as he extended and retracted the duct. There was no one in place to observe the men and the moving machinery.
BHP’s Duty
There is no doubt that an employer owes a duty of care to its employees. That duty is to take reasonable care for the safety of its workmen or, put another way, to take reasonable care to avoid exposing employees to unnecessary risk of injury. The employer’s duty extends to providing a safe system of work. (Raimondo v State of South Australia (1979) 23 ALR 573 at 517).
The duty is not confined to the employer. In Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 31 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 provide 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 effect the existence of an obligation to prescribe a safe system.”
Here, although BHP was not Mr Press’s employer, it was in a closer relationship to him than the “entrepreneur” in Steven’s case. BHP was using its own equipment for the carrying out of the work (the battery charger) and the equipment remained under the control of its employee, Moodie. In those circumstances, the employer’s duty to its employees extended to BHP.
Action’s Duty
Action owed to Mr Press a duty of care similar in scope to that owed to him by BHP. Although Action was not Press’s employer, Action had assumed the duties of an employer to its employee when it took him on hire from Rexco (Fennell v Supervision & Engineering Services Holdings Pty Ltd and Santos Ltd (1988) 47 SASR 6 at 7 & 10, CSR Ltd v Wren (1997) 44 NSWLR 463).
Breach of Duty
In considering the question of breach of duty by both BHP and Action, I refer to the well known passage from the judgment of Mason J in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47:
“In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant’s position would have foreseen that his conduct involved the risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man’s response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant’s position.”
In my view, there can be no doubt that a reasonable employer in the position of both BHP and Action would have foreseen that their conduct in permitting workmen to work near unguarded machinery, without warning or instructions about its movement and without the workmen being visible to Moodie, involved a risk of injury. That risk was not slight and could easily have been avoided by making Mr Press and Mr Lockwood aware of the danger. Both BHP and Action breached the duty which each of them owed to Mr Press.
Delegability of Duty
BHP argued that its duty was delegable, that it had delegated it to Action Engineering and, therefore, that it is not liable for any breach. The breach, says BHP, is Action’s breach. I do not accept that submission. In my view, the question of delegability does not arise. BHP did not delegate all of its functions to Action. It remained very much in control of the system of work. As I have said, Mr Press was working on BHP’s plant on its property. The particular piece of plant, the battery charger, was under BHP’s control and it was being operated by a BHP employee. It does not, in my opinion, matter that Mr Moodie was receiving requests from Press and Lockwood to extend and retract the duct. Moodie remained in control of the machinery. Further, BHP’s plant was unusual in an important way: the limit switch moved. That was a matter within the knowledge of BHP. Proper management of workmen on that plant required the consideration of BHP’s electricians, who had nothing to do with Action. Further, BHP knew that Mr Press would be working near to moving equipment when he was out of sight of its operator. In those circumstances, it cannot be said that BHP has, or has purported to, delegate its duty to Action.
Given my conclusions about the breaches of duty owed at common law, it is not necessary for me to consider other issues under the Occupation Health Safety and Welfare Regulations, 1995 or the issue of BHP’s liability as occupier of its premises.
Apportionment
At the time of his injury, Mr Press was working on equipment owned and controlled by BHP. That equipment included the unusual feature to which I have referred. Action could not have been expected to know about that feature. It was within BHP’s knowledge only. In those circumstances, BHP’s liability is greater than Action’s.
I apportion liability 70% against BHP and 30% against Action.
Contributory Negligence.
BHP has pleaded that Mr Press was contributorily negligence in standing in what he must have known was a “pinch point”, that is, the gap between the guard railing and the telescopic duct.
Mr Press will have been contributorily negligent if he failed to take reasonable precaution against foreseeable risk of injury to himself. In my view, he did not so fail. The particular danger which resulted in his injury was not one of which he could have been aware without specific warning from BHP. When he positioned himself in what was described as the “pinch point” he did so on the basis that the duct and the striker plate only would move. As it happened, both the duct and the striker plate cleared him as he stood in that position. The injury was caused by his being struck by the limit switch plate only. There was no fault on his part.
Indemnity
There remains the issue of BHP’s entitlement to an indemnity from Action for BHP’s liability to Mr Press.
At the time of the accident, two separate indemnity clauses subsisted in the relevant contract or contracts between BHP and Action. Those clauses are: Clause 4.12 in the Standard Conditions of Contract, Clause 6.2 in the Standard Conditions of Contract, which, in turn, incorporate Clause 13.2 in Appendix D to BHP’s general insurance conditions – Contractor’s Obligation. Those clauses are as follows:
4.12 PRECAUTIONS AND DAMAGES
(a)The Contractor shall not commit any act of trespass or any nuisance or be guilty of any negligence and shall take effective measures for the protection of and the prevention of injury loss or damage to any person or property by himself his servants or agents during the performance of the Contract and shall bear all risk of any injury accident or damage happening whatever the cause including the use of plant or equipment hired or lent to the Contractor by the Company. The Contractor shall immediately make good at his own expense any such injury or damage to the Works or to any property of the Company. The Contractor shall be responsible for the safety of all traffic and shall provide and maintain all necessary warnings lights and ba rriers and shall be responsible for any injury accident or damage arising from the neglect or insufficiency of such precautions. The Contractor shall not obstruct any road or railway track nor break or obstruct any telephone or power line, drain or watercourse and should any such obstruction or breakage occur the Contractor shall at once remove the obstruction or make the breakage good as the case may be to the satisfaction of the Manager. The Contractor shall indemnify and keep indemnified the Company its servants and agents from and against all damages claims, demands, suits proceedings, actions and rights of action whether under any laws relating to workers’ compensation or employers’ liability or otherwise which any person may suffer, have, make or commence against them or any of them in respect or arising out of any act, default or neglect of or loss, injury or damage caused by the Contractor, their servants or agents in or about the execution of the Works or arising out of the presence upon the property of the Company or property under the control of the Company, of the Contractor his servants or agents or any equipment, appliance, materials, tools or other things brought upon the said property by them or any of them or hired or lent to the Contractor by the Company.
(b)The Contractor shall insure himself fully against all liability referred to in this Clause with an insurance company approved by the Company whose approval shall not be unreasonably withheld and in the event of him failing to do so the Company may effect such insurance and the cost thereof shall be payable by the Contractor to the Company in accordance with the Insurance Conditions (Refer also Clause 6 herein).
6.2APPENDIX ‘D’
For any work carried out on Company property, the Contractor must comply with the requirements of the “Contractor’s Insurance Requirements Appendix ‘D’ to BHP General Insurance Conditions – Contractor’s Obligations” (Refer to Attachment 4 of the Customer Supplier Agreement SA.31.245).
Attention is drawn to Clause 11.1(d) of the Appendix ‘D’ in which it sta te s that a Public Liability Policy for not less than $10,000,000 is to apply and should include the Company named as a Principal. Also, when a vehicle is to be brought onto our site, Comprehensive and Third Party Property Insurance “Certificate of Currency” of your vehicle(s), for not less than $5,000,000.
It is a condition of any order/contract that such cover must apply for the duration of the work on site and failure to comply will result in immediate cancellation of the contract.
The Contractor will be required to confirm with his Insurance Company that his Insurance Coverage is adequate for the area/s in which the work covered by the contract will be carried out, and provide written confirmation to the Company that he has complied with these requirements.
13.2The Contractor shall be solely liable for and shall indemnify and hold harmless the Company, its officers, employees and agents from and against all liability, damage, loss, expense, costs and proceedings of any nature whatsoever or however arising in or in connection with the Contract, and however or by whomsoever caused whether as a result of or arising from negligence, breach of duty or breach of statute by the Company, its officers, employees or agents, or otherwise.
BHP submits that, pursuant to Clause 13.2, it is entitled to a full indemnity from Action. Mr Greenwell, who appeared for Action in its own right, eventually accepted that Clause 13.2 is an indemnity clause, as opposed to an insurance clause. (See Valkonen v Jennings Constructions Ltd & Ors. (1995-1996) 184 LSJS 87). He also argued that there is an ambiguity between Clauses 4.12 and 13.2 and that Clause 13.2 should therefore, be construed contra proferentem so that BHP’s claim for indemnity fails. I have been referred to a number of authorities about the way in which contracts should be construed where there is ambiguity. It is not necessary now for me to consider them, because, in my view, there is no ambiguity. The two clauses demonstrate an intention on the part of the contracting parties that BHP shall be indemnified by Action for liability occasioned by fault on BHP’s part. While there may be some overlap between the clauses, there can be no ambiguity about that matter. That is, the clear intention of the parties and the contract should be construed accordingly. (See The Council of the Upper Hunter County District v Australian Chilling and Freezing Co. Limited (1968) 118 CLR 429 at 437 per Barwick CJ).
BHP is entitled to be indemnified by Action.
On the issue of liability, there will be judgment for the plaintiff.
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