Santangelo v McDonough Contracting Pty Limited

[2023] VCC 324

IN THE COUNTY COURT OF VICTORIA

AT Melbourne

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-21-04660

ROCCO SANTANGELO	Plaintiff
v
MCDONOUGH CONTRACTING PTY LIMITED (ACN 005 576 376)	First Defendant
and
RABOT PAVING (AUSTRALIA) PTY LTD (ACN 074 228 014)	Second Defendant

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JUDGE:	HIS HONOUR JUDGE FRAATZ
WHERE HELD:	Melbourne
DATE OF HEARING:	27 and 28 February and 1 March 2023
DATE OF JUDGMENT:	14 March 2023
CASE MAY BE CITED AS:	Santangelo v McDonough Contracting Pty Limited and Anor
MEDIUM NEUTRAL CITATION:	[2023] VCC 324

REASONS FOR JUDGMENT
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Subject:NEGLIGENCE

Catchwords:              Contribution

Legislation Cited:      Wrongs Act 1958, Part X

Judgment:Contribution apportioned in the ratio 60/40 as between the second defendant and the first defendant.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T P Tobin SC with Ms J Frederico	Galbally & O’Bryan
For the First Defendant	Mr J Angenent	Meridian Lawyers
For the Second Defendant	Mr R Kumar with Mr D Churilov	Russell Kennedy

HIS HONOUR:

Introduction

1Rocco Santangelo, the plaintiff, was born in Italy, and is currently sixty-five years of age.  Mr Santangelo was injured in the course of his work as a concreter over the period from  1997 to December 2013.  For this entire period, he was engaged by Rabot Paving (Australia) Pty Ltd (“Rabot”), the second defendant, as a subcontractor.

2Rabot, itself, has no employees, and in order to provide concreting services under various contracts with local councils across Melbourne (“concreting services”), it engaged employees of the first defendant, McDonough Contracting Pty Limited (“McDonough Contracting”), and various subcontractors, including Mr Santangelo, from time to time.  There is no written agreement between any of the parties as to the manner in which those services were to be provided.

3Mr Santangelo settled his claim for damages against the defendants on the first day of the trial, and there remains unresolved only the question of contribution under Part X of the Wrongs Act 1958 (“the Act”).

4It is agreed that each defendant is liable in respect of the same damage within the meaning of s23B of the Act. My task is to determine the amount of contribution as between the defendants that is just and equitable, having regard to the extent of each defendants’ responsibility for that damage.

5Helpfully, the defendants prepared an agreed Statement of Facts and Issues in respect of the contribution issue[1] and the hearing proceeded by way of submissions, following oral evidence from Tony McDonough, who is the sole director and secretary of each defendant. 

[1]Dated 1 March 2023

6For convenience, I set out in full below, the agreed Statement of Facts and Issues:

“The plaintiff

1.From around 1997, the plaintiff was engaged by the second defendant as a concreter.

2.He was engaged as a contractor. He initially invoiced the second defendant as a sole trader, but at some point during the engagement established a partnership with his wife, and invoiced the second defendant via the partnership.

3.The plaintiff was not engaged by the first defendant.

The relationship between, and arrangements of, the defendants

4.From 1997 until 2010, the defendants shared the same directors:  Tony McDonough and Mario Rabottini.  In 2010, Mr McDonough bought out Mr Rabottini and became the sole director of both defendants.

5.Both Mr McDonough and Mr Rabottini were, in addition to being directors of both defendants, employees of the first defendant.

6.The second defendant, from time to time (and throughout the relevant period) tendered for, and then entered into, various contracts for the performance of concreting works.

7.The first defendant did not tender for contracts for the performance of concreting works.  It from time to time (and throughout the relevant period) tendered for, and then entered into, various contracts for the performance of grinding works.

8.The fulfilment of the second defendant’s concreting contracts was performed by:

(a)subcontractors engaged by the second defendant; and

(b)employees of the first defendant.

Injury

9.From time to time, whilst performing concreting work, the plaintiff made complaints to McDonough about having a sore back.

10.The plaintiff suffered injury in the performance of concreting duties.

11.Both defendants are liable for the plaintiff’s damage (within the meaning of s23B of the Act).

Issues for determination

12.Broadly, just and equitable contribution having regard to the defendants’ respective responsibility for the plaintiff’s damage (pursuant to s24(2) of the Wrongs Act 1958), including taking into account:

(a)The extent (if any) of the first defendant’s involvement in, or responsibility for, the second defendant’s concreting works.

(b)insofar as McDonough and Rabottini were involved in:

(i) designing and implementing the system of work in respect of concreting;

(ii) supervising and directing the plaintiff;

(iii) supervising and directing employees of the first defendant engaged in concreting works –

the extent (if any) to which they were doing so as directors of either/both defendants, and/or employees of the first defendant.”

Background

7According to the evidence of Mr McDonough, the defendants conducted a concreting business through a corporate structure adopted in order to take advantage of lower WorkCover premiums which applied to the principal business of McDonough Contracting (concrete grinding), as opposed to that of Rabot (concreting works). 

8Although the concreting services were provided by Rabot to the various councils pursuant to a head contract, McDonough Contracting, via its employees, provided a substantial component of the labour component of those services.  In the latter part of the period, Mr Santangelo was the only subcontractor to Rabot providing the concreting services.  Crucially, as part of the labour-hire arrangements between the defendants, McDonough Contracting invoiced Rabot for the concreting labour, including supervision of the works.  During the relevant period, this supervision was typically provided by Mr McDonough and, prior to 2010, Mr McDonough and Mr Rabottini.

9A number of documents prepared by an external company at the request of both defendants were tendered in evidence.  The hearing was conducted on the basis that these documents are relevantly identical in their content as they relate to the various occupational health and safety duties and obligations, whether workers were engaged in concreting or concrete-grinding work.  Mr McDonough accepted the proposition in cross-examination that specific work instructions provided by McDonough Contracting in the performance of concreting work were directed to both its employees, and also subcontractors of Rabot, including the plaintiff.

10While different systems of work nominally apply to each defendant, to the extent the relevant policies and other document were in evidence, those systems appeared identical in substance and form. 

11I reject Mr McDonough’s evidence that each of his instructions to, and any supervision of, the plaintiff was provided “as the managing director of Rabot”.  This evidence, while it might reflect Mr McDonough’s understanding of his role, is inconsistent with the contractual arrangements between defendants and other evidence relating to the provision of concreting services by employees of McDonough Contracting, including supervision of employees and, relevantly, the plaintiff, by Mr McDonough and Mr Rabottini in their capacity as directors and employees of McDonough Contracting.

12The McDonough Contracting Health and Safety Coordination Plan[2] specifically provided for individual projects for Rabot as the principal contractor.  This document specified that responsibility for all occupational health and safety issues for individual projects lay with the Director and/or Operations Manager.  The “director” can only have been Mr McDonough as director of McDonough Contracting.  Further, the “operations manager”, on the evidence before me, was either Mr McDonough or Mr Rabottini, with some responsibility since 2009 devolved to Amanda McDonough, the office manager employed by McDonough Contracting, including in relation to concreting works.

[2]Exhibit 8

Submissions

13I was urged by counsel for McDonough Contracting not to conflate the various roles, responsibilities and entities in apportioning contribution, and to afford it a complete indemnity in respect of the agreed damage. 

14Counsel for Rabot submitted in turn that there was a fusion between the two businesses, including a single system of work, having regard to the contractual arrangements and the presence of the common directors, which was a fiction of accounting for the purposes of minimising WorkCover premiums.  Having regard to Mr McDonough’s role in supervising Mr Santangelo in the safe performance of his work, Rabot submitted that I should find Rabot responsible for only 25 per cent of the agreed damage.

Disposition

15The issues for determination set out in the agreed statement are relatively confined, and may be answered shortly.

16The practical reality is that, at all times during the relevant period, the defendants conducted a single concreting business.  In my view, it is a complete fiction for McDonough Contracting to employ its corporate personage in order to avoid its responsibility for the damage suffered by Mr Santangelo.

17Mr Santangelo suffered injury in the performance of concreting duties as a subcontractor to Rabot under the direct supervision of Mr McDonough and/or, at the relevant time, by Mr Rabottini, in their capacity as employees of McDonough Contracting. 

18Both defendants designed the system of work in respect of the concreting work engaged in by Mr Santangelo.  I find that each defendant had substantially the same occupational health and safety policies and work instructions; and that both systems of work related to the duties performed by Mr Santangelo in his capacity as:

(a)   subcontractor to Rabot; and

(b)   in performing concrete services under the supervision and direction of the director and operations manager of McDonough Contracting from time to time.

19Mr McDonough and Mr Rabottini were both involved ꟷ in their dual capacity as directors and as employee operations (site) managers of McDonough Contracting ꟷ in designing and implementing the system of work in respect of delivering the concreting services.  Each supervised and directed Mr Santangelo in both capacities but, on a day-to-day basis, principally as employees of McDonough Contracting. 

20Mr McDonough and Mr Rabottini were each also responsible for supervising and directing other employees of McDonough Contracting engaged in concreting works performed as part of a team together with the plaintiff.

21The defendants each had knowledge about Mr Santangelo having a sore back from time to time by virtue of his complaints made to Mr McDonough. 

22I reject McDonough Contracting’s submission that Mr McDonough directed and supervised Mr Santangelo solely in his capacity of director at Rabot, because it is completely removed from the reality of Mr McDonough’s co-extensive roles set out in McDonough Contracting’s occupational health and safety documentation as:

(a)   senior supervisor employed by McDonough Contracting; and

(b)   director of McDonough Contracting.

23I did not have the benefit of any evidence or, indeed, submissions, in relation to the relative responsibility of each defendant for the specific breaches of the duties alleged by Mr Santangelo in his Statement of Claim.  However, in resolving the question of contribution, I take into account the following factors:

(a)   the existence of the separate legal entities providing discrete services of concreting works and concrete grinding in separate capacities;

(b)   the labour hire arrangements between the defendants, which included employees of McDonough Contracting and subcontractors of Rabot providing the concreting services to fulfill contractual obligations of Rabot to its customers;

(c)   Mr Santangelo was only ever engaged as a subcontractor by Rabot;

(d)   Rabot admitted it owed Mr Santangelo a duty to take reasonable care to not expose him to unnecessary risk of injury;[3]

(e)   all training of Mr Santangelo was provided by Rabot;

(f)    the day-to-day supervision of Mr Santangelo was effected by Mr McDonough and/or Mr Rabottini in their capacities as employees and directors of McDonough Contracting;

(g)   complaints were made by Mr Santangelo to Mr McDonough from time to time about his sore back.  I attribute this knowledge to both defendants by its common director; and

(h)   separate systems of work which existed in respect of each defendant seemingly applied co-extensively to the plaintiff.

[3]        Rabot Defence to Amended Statement of Claim, paragraph [5F]

24The key factor in my mind in assessing the relative contribution of each defendant is that while, on the one hand, Mr Santangelo was a subcontractor to Rabot, the direction, control and supervision of Mr Santangelo on a day-to-day basis was provided by Mr McDonough and Mr Rabottini, in their capacity as employees and directors of McDonough Contracting, in respect of the very work which resulted in the plaintiff’s injury.

25Having regard to the extent of each defendants’ responsibility for the agreed damage, I apportion contribution in the ratio 60/40 as between Rabot and McDonough Contracting.

26I will hear the parties on the question of costs and the form of final orders.

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