Smith v Brambles Australia Ltd - [2011] NSWSC 963

Supreme Court

New South Wales

Medium Neutral Citation: Smith v Brambles Australia Ltd [2011] NSWSC 963
Hearing dates: 23 May 2011, 24 May 2011, 25 May 2011, 26 May 2011
Decision date: 26 August 2011
Before: Schmidt J
Decision:
For the reasons given, I find for the plaintiff and propose to make orders against the defendants, in accordance with the terms of this judgment. The usual order as to costs would be that they follow the event. If the parties wish to be heard on costs, they should approach.
Various calculations still need to be undertaken, to give effect to the judgment. The parties should confer and bring in short minutes of the orders reflecting this judgment. They have liberty to approach in the event of disagreement as to those calculations.

Catchwords: TORTS - negligence - serious workplace injury - employee experienced crane operator - collapse of crane - crane modified for former owner and operator of crane - modification created risk of collapse of crane - serious risk of injury resulted for anyone operating crane once damaged - extension of time to bring proceedings against former employer - expert evidence - analogies drawn with a car - whether company who modified crane owed a duty of care - whether duty breached - whether causation proven - whether former owner and operator of crane owed a duty of care - whether duty breached - whether causation proven - whether former employer breached duty of care - whether causation proven - Occupational Health and Safety Act 2000 regulations - contributory negligence - whether employee's oversight an act done without reasonable care for own safety- contributory negligence not found - cross claims - whether former owner and operator can claim full indemnity - whether former employer owed a duty of care by former owner and operator and company that made modifications - duty of care found - no full indemnity for former employer - all defendants proportionately liable - employees injuries - 15% whole person assessment - back pain result of injuries - employee mitigated his damages - s 151Z of the Workers Compensation Act 1987 applied - DAMAGES - non economic loss - economic loss - past economic loss - future economic loss - future medical expenses - paid domestic assistance
Legislation Cited: Civil Liability Act 2002
Law Reform (Miscellaneous Provisions) Act 1946
Occupational Health and Safety Act 2000
Sale of Goods Act 1923
Trade Practices Act 1974 (Cth)
Workers Compensation Act 1987
Workplace Injury Management and Workers Compensation Act 1998
Cases Cited: Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem [2009] HCA 48; (2009) 239 CLR 420
Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301
J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142
Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520
Czatyrko v Edith Cowan University [2005] HCA 14; (2005) 214 ALR 349
Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 277 ALR 611
Davie v New Merton Board Mills Ltd [1959] AC 604
Roads and Traffic Authority of NSW v Dederer [2007] HCA 42; (2007) 234 CLR 330
Donoghue v Stevenson [1932] AC 562
Erwin v Iveco Trucks Australia Ltd [2010] NSWCA 113; (2010) 267 ALR 752
Fox v Wood [1981] HCA 41; (1981) 148 CLR 438
Ghunaim v Bart [2004] NSWCA 28
Grljak v Trivan Pty Ltd (In liq) (1994) 35 NSWLR 82
Imperial Furniture Pty Ltd v Automatic Fire Sprinklers Pty Ltd [1967] 1 NSWR 29
Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207
Jones v Dunkel (1959) 101 CLR 298
Kallouf v Middis [2008] NSWCA 61
Kondis v State Transport Authority [1984] HCA 61; (1984) 154 CLR 672
Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 276 ALR 375
Lanza v Codemo [2001] NSWSC 845
Laundess v Laundess (1994) Aust Torts Reports 81-316
Leighton Contractors Pty Ltd v Fox; Calliden Insurance Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1
McLean v Tedman [1984] HCA 60; (1984) 155 CLR 306
McPherson's Ltd v Eaton [2005] NSWCA 435; (2005) 65 NSWLR 187
Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313
J & V Pesl v Ray Smith Tractors [2007] NSWCA 74
Rabay v Bristow [2005] NSWCA 199
Rhoden v Wingate [2002] NSWCA 165
Rogers v Whitaker [1992] HCA 58; (1992) 175 CLR 479
Scott v Davis [2000] HCA 52; (2000) 204 CLR 333
Stojan (No 9) Pty Ltd v Kenway [2009] NSWCA 364
Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; (2006) 226 CLR 161
Sullivan v Moody [2001] HCA 59; (2001) 207 CLR 562
TNT Australia Pty Ltd v Christie; Crown Equipment Pty Ltd v Christie; Manpower Services (Aust) Pty Ltd v Christie [2003] NSWCA 47; (2003) 65 NSWLR 1
Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422
Woods v Multi-Sport Holdings Pty Ltd [2002] HCA 9; (2002) 208 CLR 460
Woolworths Ltd v Strong [2010] NSWCA 282
Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40
Zanner v Zanner [2010] NSWCA 343
Category: Principal judgment
Parties: Craig Lionel Smith (Plaintiff)
Brambles Australia Limited (First Defendant)
Baden Cranes Pty Limited formerly GM Baden Pty Limited (Second Defendant)
Gillespies Cranes Nominees Pty Limited t/as Gillespies Crane Services (Third Defendant)
Representation: Counsel:
Mr H Kelly SC with Mr T McKenzie, counsel (Plaintiff)
Mr M Joseph SC (First Defendant)
Mr G Curtin SC with Mr D Macfarlane (Second Defendant)
Mr S Kettle, counsel (Third Defendant)
Solicitors:
Taylor & Scott Lawyers (Plaintiff)
McCabe Terrill Lawyers (First Defendant)
Riley Gray-Spencer Lawyers (Second Defendant)
Hicksons (Third Defendant)

File Number(s): 2006/267240

Judgment

Early one morning in November 2003, the plaintiff, Mr Craig Smith, was operating a Liebherr LTM 1225 crane during a set up operation at the edge of Darling Harbour. The crane had a carrying capacity of some 225 tonnes and was being operated with a 65 tonne counterweight, when it collapsed without warning. Mr Smith was seriously injured when a part of the crane fell into the harbour and he was thrown some 4 metres to the ground. By a second amended statement of claim filed in 2010, Mr Smith sought damages.

Mr Smith alleged negligence against his former employer, the third defendant, Gillespies Cranes Nominees Pty Ltd trading Gillespies Crane Services ('Gillespies'); against the former owner and operator of the crane, the first defendant, Brambles Australia Limited ('Brambles'), who sold the crane to Gillespies and who employed Mr Smith before he worked for Gillespies; and against the second defendant, Baden Cranes Pty Limited, formerly GM Baden Pty Limited ('Baden'), who modified the crane pursuant to a contract with Brambles, while it owned the crane. Breach of various statutory obligations were also alleged.

The proceedings were defended and Brambles, Baden and Gillespies each alleged contributory negligence against Mr Smith. The proceedings are governed by the provisions of the Civil Liability Act 2002, so far as Brambles and Baden are concerned and the Workers Compensation Act 1987 in the case of Gillespies.

After the crane was recovered from the harbour, the WorkCover Authority of New South Wales ('WorkCover') undertook an investigation. In these proceedings there was finally no issue between the parties about what had caused the collapse. It was caused as the result of the shearing of two dowel rods which were part of a quick release mechanism. That occurred when Mr Smith first drove the crane early on the morning of the collapse, for a short distance, without first releasing a brake by activating a dolly switch in the cabin of the crane. The crane was later modified, in order to prevent another such collapse occurring, if activating the switch was overlooked.

There was also finally no issue that it was the result of Baden's modification of the crane for Brambles which created this grave risk of collapse, if the crane operator inadvertently overlooked releasing the brake by activating the switch, before the crane was driven. The serious risk of injury which resulted for anyone operating the machine, or indeed anyone in its vicinity, once it was damaged, was obvious.

All of the defendants defended Mr Smith's claim on the basis that they were not aware of the feature of the crane which had resulted in its failure, when Mr Smith came to operate it on site after the dowel rods had been sheared off. On their case, despite the catastrophic collapse this crane was prone to if the brake was not released, none of the defendants were negligent, because none of them knew of the risk of collapse which resulted, if activating the switch was overlooked.

The manufacturer of the crane, Liebherr-Werk Ehingen GMBH ('Liebherr'), was not made a party to these proceedings, even though it was Baden's case that the modifications it had made to the crane for Brambles, which had caused the collapse, had been undertaken in accordance with Liebherr's specifications. Five cross-claims were, however, brought. They were also each defended. They were:

The first cross-claim brought by Brambles against Baden, claiming amongst other things an indemnity or contribution under the Law Reform (Miscellaneous Provisions) Act 1946, damages for breach of contract and damages under the Sale of Goods Act 1923 and the Trade Practices Act 1974 (Cth);
The second cross-claim brought by Baden against Brambles also claiming an indemnity or contribution under the Law Reform (Miscellaneous Provisions) Act ;
The third cross-claim brought by Brambles against Gillespies also claiming amongst other things an indemnity or contribution under the Law Reform (Miscellaneous Provisions) Act and damages for breach of contract;
The fourth cross-claim brought by Gillespies against Brambles and Baden claiming amongst other things an indemnity or contribution under the Law Reform (Miscellaneous Provisions) Act ; damages for breach of contract; damages under the Sale of Goods Act and the Trade Practices Act ( Cth ); and in tort and negligent misrepresentation; as well as an indemnity under the Workers Compensation Act; and
The fifth cross-claim brought by Baden against Gillespies also claiming an indemnity or contribution under the Law Reform (Miscellaneous Provisions) Act .

Not all of these claims were finally pressed.

It is well settled that the issues lying between the parties may not be resolved with the benefit of hindsight. Attention must be paid to the evidence of what was done and known at the time (see Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 at [128]). I have so approached the resolution of what must here be determined.

Extension of time - Gillespies

There was a claim for an extension of time to bring the proceedings against Gillespies, under s 151D of the Workers Compensation Act . Gillespies accepted that the discretion there granted must be exercised in order to do justice between the parties (see the discussion in Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207 at [63] - [72]).

Affidavit evidence was given as to the circumstances in which it was that the claim was commenced outside the three year limitation period. On that evidence, it was shown the delay had to do with the time necessary to establish that the relevant statutory threshold could be satisfied (see ss 313 and 314 of the Workplace Injury Management Act and Workers Compensation Act 1998). As submitted for Mr Smith, it must be accepted that Gillespies took a rather different attitude in 2006, when Mr Smith's degree of permanent impairment was disputed, to that which it later took. It was conceded in April 2010 that Mr Smith had suffered more than a 15% impairment.

I am satisfied in the circumstances revealed on the evidence that the leave sought must be granted, having in mind the rationale for the imposition of the limitation period and the considerations discussed in Itek Graphix Pty Ltd, particularly at [73] - [85].

There was no suggestion that the delay here in question would preclude a fair trial, or that any other injustice or prejudice could flow to Gillespies from the grant of the relief sought. In this case, given the course which the parties respectively pursued and the evidence as to the work necessary to be undertaken by Mr Smith's solicitors, given the attitude initially taken by Gillespies, I am satisfied that justice demands that the leave sought be granted.

The issues identified by the parties

The parties did not agree about the issues lying between them. As the hearing unfolded, however, various concessions were made and some issues resolved.

The factual background

The cause of the accident

The accident was investigated by WorkCover. No prosecutions resulted from this investigation. Its report noted that the crane was one of only 10 of its type in the world. It was manufactured in Germany, sold into Korea and purchased by Baden in 1998, who then sold it to Brambles. As manufactured, this crane had to be dismantled in order for it to be transported. There was a mechanism which permitted its quick disassembly. Brambles later engaged Baden to modify the crane, in order to enable road travel under Australian conditions, without disassembly, by use of a trailing dolly.

As a result this crane was unique. There was no other crane of this type which had such a modification, and only one other such crane in Australia, which was transported by use of a dolly. It and the third crane of this type in Australia, did not, however, have a quick disassembly mechanism.

It became common ground that the collapse of the crane was the result of the shearing off of two dowel pins in the mechanism, which were designed to prevent a quick connection slew ring from rotating, when the crane was being operated. This fitting was variously described as similar to the bayonet coupling of a light bulb, or that of a camera lens. The slew ring had a hydraulic brake, which was designed to ensure the rigidity of the crane, during operation. This brake and two other levers, each had to be released by the operator, before the crane was driven, in order to allow the boom of the crane, which rested on the dolly, to articulate as the crane travelled around bends and corners when driven on the road.

The dowel rods sheared off while Mr Smith was still at Gillespies' Wetherill Park yard on the morning of the collapse. This happened because the brake had not been released before the crane was driven off. Mr Smith and the members of his crew were leaving the yard, in the dark, shortly after 4am in order to drive to Darling Harbour. He almost immediately noticed something unusual about the steering, as he was driving the crane out of the yard, which he described as a 'tightness'. He turned left onto the roadway and pulled over. On checking, he found that the levers had been released, but the brake had not. He released the brake by activating the dolly switch in the cabin of the crane and then drove on, without incident.

The dolly switch operated the slew ring brake. Unbeknown to Mr Smith, the failure to release the brake by use of this toggle switch meant that when the crane turned slightly to the right during the short drive out of the yard (of some 150 metres), the force placed on the dowel rods caused them to shear. This did not affect the crane as Mr Smith drove to the site. However, it did affect the operation of the release mechanism, when he came to operate the crane on site, with the result that the crane separated and the top part toppled into the harbour.

When Mr Smith came to operate the crane, as it was being erected, he was using a 65 tonne counterweight. The action of slewing the boom allowed the quick connection mechanism to unlock, it no longer being locked in place by the two dowel rods which had sheared off. This allowed the upper part of the crane to detach from the carrier and to fall. Mr Smith did not understand what was happening when this occurred and was thrown to the ground, as he was trying to get out of the collapsing crane.

On the evidence the failure to activate the toggle switch, which resulted in the dowel rods shearing off, was the result of operator error. The normal process which Mr Smith had been trained to undertake and had undertaken on hundreds of earlier occasions when driving the crane, involved him activating the switch, before driving off. His evidence was that he had failed to activate the switch before driving off only on a couple of prior occasions. On those occasions he had stopped, activated the switch and driven off, without incident. On the expert evidence, on those occasions he must have driven in a fairly straight line, before he realised his mistake, because even a slight turn when the brake was not released, created sufficient force for the rods to shear.

Investigations undertaken after the collapse by Liebherr, suggested that the rods had been correctly manufactured in material strength and hardness. What caused them to shear was the failure to release the brake, so that there was a resulting application of a force on the rods greater than that produced when the crane was normally being worked or slewed against the slew brake.

Liebherr was asked to investigate the cause of the accident. It advised Gillespies:

"1. The crane / Dolly operation has been hydraulically and electrically installed and connected correctly to Liebherr specifications.

2. The bayonet quick release coupling had two (2) holding pins of 30m/m diameter sheared off in a horizontal anti clockwise direction. a/ These pins are currently with work cover and under test, however we can make the following comment: We believe these pins have been correctly manufactured in material strength and hardness. To shear them in the manner they have, a force greater than can be produced by working or slewing the crane against the slew brake.

3. When driving the crane with a dolly, the operator must ensure the slew brake and the free luffing hydraulic circuits are being opened via moving the two (2) levers and switching on the system in the carrier cabin.

When this switch is engaged hydraulic pressure releases the swing brake and the luffing cylinder lowering brake valve. The hydraulic pump produces 55 bar pressure. To release this wing brake only 15 bar pressure is required. As a safe guard, should the hydraulic pressure drop to 35 bar than a red light will be flashing in the operators cabin alerting him that the slew brake may activate.

It is our belief that the slew brake was not released and therefore the mechanical force by the dolly / boom over the pinion was possibly up to 200 tonnes meter(sic). This force caused the slew gear box housing to crack and the two holding pins to shear."

The risk of any damage being caused by a failure to release the brake, before the crane was driven was not something of which Mr Smith was ever made aware and did not check, before operating the cane.

Operation of the crane

Mr Smith had set up the truck the preceding Saturday and had left it parked in Gillespies' yard. The yard was unlit at 4am, when he had to drive the crane to Darling Harbour, because of the Roads and Traffic Authority's ('RTA's) requirement to have the crane off the road by a certain time. He used his car headlights to provide sufficient light to conduct his checks of the crane. The switch had to be activated to release the brake, before the crane was driven off. Mr Smith could have either activated the switch when he left the crane on the Saturday, or before he drove it off on the morning of the accident. If he had forgotten to do that on Saturday, there was no mechanical reminder to do so before he drove off in the truck. Whatever be the explanation, Mr Smith overlooked activating the switch, before he drove off that morning.

When originally trained, Mr Smith had been told that it was important to activate the switch because it had something to do with driving. When he drove off, what he noticed was a tightness in the steering. That was consistent with his training and so he stopped and checked the switch, found it had not been activated and then activated it. The result was that the difficulty was alleviated and he proceeded, not knowing of the risk he incurred in doing so. Mr John Gillespie was the managing director of Gillespies. On his evidence that was the correct procedure for Mr Smith to follow. He had done the same himself. Mr Gillespie's evidence was that:

" I would regard that it was very simple, something that he procedurally forgot. It's like driving a car at night time. You might not turn your lights on, but then a further five metres you realise you haven't got them on. You turn them on and proceed."

Nothing told Mr Smith that there might then have been any further problem with proceeding. There was no warning system alerting him to any damage to the crane. He had not been warned or instructed about any such problem or its potential catastrophic consequences. On the earlier occasions when he had overlooked activating the switch and driven a short distance before realising his oversight from how the steering was affected, nothing untoward had occurred when he proceeded after activating the switch. While it was argued that I would reject his evidence about these earlier occasions, I am unable to do so.

In my assessment, Mr Smith was an impressive witness. He responded to questions promptly, making concessions even when they might have been adverse to his interests. Further, his evidence was corroborated by that of Mr Gillespie, who was an equally impressive witness. He too, had been a crane driver and he too, gave evidence that on occasions he had driven off and had then stopped, engaged a switch, and proceeded without any adverse consequences.

Safe operation of the crane depended entirely on operator memory. When the switch was first activated, a light illuminated in the cabin, while the hydraulic system reached the correct pressure to release the brake. The light then went off. This took about 30 seconds.

Once the light was off, whether the switch had been activated, in order to release the brake, could be observed by the driver, so long as there was adequate light in the cabin. The switch is located in the cabin to the right of the driver and whether it has been activated can thus be seen at a glance. There was, however, no warning given if activating the switch was overlooked. There was also nothing which warned the driver that the dowel rods on which safe operation of the crane depended, had been damaged, in the event that the crane was driven, without the brake being released.

The absence of such warning mechanisms has to be considered in a context where it was essential for the crane driver to activate the switch, before driving off in the crane, in order to avoid catastrophic damage to the crane. Without the brakes being released, the dowel rods could easily be sheared off, if the crane was turned even slightly. The result was that the crane would then collapse, when later operated during set up. Such damage could be caused by driving the crane even for a very short distance, without the brake being released.

The only warning of inadvertent failure to activate the switch was that it affected the steering, causing it to feel 'tight', but that gave no indication to the operator of the crane that the rods had been damaged, or that the crane was thus at risk of collapse, if operated.

The system thus relied entirely on operator memory, to ensure that there was no inadvertent failure to activate the switch which released the brake, before the crane was driven. That system operated in circumstances where Mr Smith had not been instructed about the consequences of any failure to activate the switch, before the crane was driven. Nor was he warned of the need to check for damage before the crane was operated, in the event of inadvertent failure to activate the switch.

The documentary evidence

There was but little evidence as to the contract under which the modification work was performed by Baden for Brambles; the information provided by Liebherr to Baden about the modifications; or the information which Baden later supplied to Brambles about the work it had undertaken and the resulting operation of the modified crane. What was in evidence was the crane's operator's manual and the sale contract between Brambles and Gillespies, as well as various correspondence and other documents.

The operator's manual was considered to be a part of the crane, always kept in the cabin, available for operator use. It was not modified when the crane was modified by Baden. The functions of the slew ring, the brake and the toggle switch, in the context of the modifications which had been made, were not described or dealt with in the original operator's manual which was provided to Mr Smith, both while he was employed by Brambles and by Gillespies. It was the original manual which went with the crane when it was sold to Gillespies.

There was thus no explanation given in that manual of the risk of damage or collapse of the crane, which Baden's modification of the crane had created. That risk was that if the toggle switch was not activated to release the brake before the crane was driven, the crane would collapse on operation. In fact, the switch was identified in the manual as having to do with air-conditioning and not the slew ring brake.

The evidence suggests that it was intended that the operator's manual would be modified, to reflect the modifications Baden made to the crane. Such information was not supplied to Mr Smith while in either Brambles' or Gillespies' employ. When the modification document came to light is not extremely clear. It is certainly referred to in the WorkCover report. Even if Mr Smith had been supplied with what appears to have been the modified manual produced at some point, it seems by Liebherr, that it would have alerted an operator to the risk which had resulted from the modification of the crane Baden had made, was not apparent.

The accident occurred in November 2003. In evidence, was various correspondence. On 19 November 2003, Baden wrote to Liebherr:

"Hans,

With all the current investigations taking place by Work Cover (Berufsgenossenschaft) Liebherr come under strong criticism for not having operating instructions and work methods in the operators manual. I think you should act quickly and supply this information for all cranes. They have picked on the LTM 1250/1 just delivered to Gillespie and due to the accident on the LTM 1225 of Gillespie you must act immediately.

The only Dolly operation we have is for the LTM 1090/2 and if you are going to use this than make it applicable to all crane models, than we can fit into operators manual as a supplementary addition."

In December 2003, Liebherr advised Gillespies:

"Liebherr LWE remains in the belief that there are safe guards in place and are sufficient, providing the operator adheres to operating instructions. It has been suggested by John Gillespie that additional safe guards should be considered for the event that the operator has a lapse of concentration."

What operating instructions were being referred to by Liebherr, is not clear. That it was not the instructions in the original operator's manual supplied with the crane when it was sold to Gillespies, is apparent. This is confirmed by correspondence in March 2005, when Liebherr enquired whether Baden had modified or added to the operator's manual. Baden replied:

"The additional section has been added to the operation manual. The added section refers to the original system as fitted to the crane prior to the accident & does not include the additional pins or the other safety systems.

The customer, currently, does not use the "Quick Connection" as the crane now uses a "Dolly" to comply with axle weight requirements.

The "Dolly" was fitted as describe in my F1996/04 12 Nov 2004."

Baden's case was that it was not its role to write manuals. That was Liebherr's responsibility. The evidentiary basis for that submission is difficult to see. Baden was engaged to modify the crane. Modifications of the operator's manual, which was part of the crane, to reflect the modifications made, appears essential, given what the modifications permitted, transport of the crane without disassembly and the risks they created. Even if Baden's approach were accepted, clearly it was obliged to provide Brambles with any modifications to the manual which Liebherr had, in fact, made. On the evidence, none were supplied.

If there was a written contract between Baden and Brambles, or Baden and Liebherr in relation to the modifications which Baden says it undertook in accordance with Liebherr's specifications, which could have shed light on these matters, it was not in evidence. Nor were the specifications in evidence. What was in evidence was a drawing and an undated unsigned 'After Sales Service Agreement', which was concerned with Baden providing after sales service for Liebherr, repair and maintenance, as well as dealing with the supply of spare parts. This agreement was said to have come into effect in May 1996. It does not deal with the modification work commissioned by Brambles. Nor does it deal with changes to the operator's manual of cranes.

On the evidence, there is no question that Baden was aware of the need to provide an operator's manual for the crane. That was apparent from its request to Liebherr in 1998, when it acquired the crane, and asked for '2 sets of complete books and drawings for this crane'. The need to update the manual, once it had modified the crane, given the nature of the modifications undertaken, was obvious.

Indeed, that was the matter which Baden itself raised with Liebherr in November 2003, after the accident. There it recognised that operating instructions and work methods for cranes were needed and it observed that it could fit what Liebherr supplied, in the operator's manual. So far as this crane was concerned, after the modifications, amended operating instructions and other information was required to be provided in the manual, in order to alert Brambles and operators of the crane to the fact that one result of the modifications Baden had made, was to create a risk that the crane would collapse, if the dolly switch was not activated so as to release the brake before the crane was driven, were not provided.

That Baden ought to have ensured that such crucial information was provided in the operator's manual, is in my view unarguable. At the least, it ought to have warned Brambles of what was required, in order to ensure safe operation of the modified machine.

That Brambles was aware that the operator's manual had not been modified to reflect the modification it had commissioned, is also apparent. There was no evidence that it took any steps to deal with that obvious deficiency. Indeed, it led no evidence as to what information it was provided by Baden about the modified machine and what instructions it gave the operator of the machine whom it then employed, as to safe operation of the modified machine. Nor did Baden lead any evidence about any instructions it provided to Brambles' employees about such matters. The inference is that such evidence would not have assisted their respective cases.

What was provided to Gillespies when the crane was sold by Brambles, was the original operator's manual. It was not provided with any information as to the modifications which Baden had made to the crane, or any risks thereby created. On Brambles' case, it was entitled to rely on the sale contract, which obliged Gillespies to conduct its own due diligence as to the equipment it had purchased. In this respect the sale contract provided:

" 17.4 Buyer Acknowledgment

(a) The Buyer

(1) acknowledges and agrees that it has completed all due diligence enquiries and investigations it considers necessary or appropriate with respect to its purchase of the Business Assets from the Seller pursuant to this agreement and in particular has received independent certification as to the fitness for purpose and merchantability of the lifting equipment referred to in schedule 4;

(2) indemnifies and releasees and discharges the Seller absolutely with respect to any losses sustained by or Claims made against the Seller arising as a result of any due diligence carried out by the Buyer being incomplete or inadequate;

on the basis that the Seller's warranty in Clause 17.1A is correct.

(b) To the maximum extent permitted by law, all conditions, warranties, representations and undertakings (express, implied, written, oral, collateral, statutory or otherwise) except the Warranty in clause 17.1A, are excluded. To the extent that terms implied by statute cannot by law be excluded, the Seller's liability for breach of such terms is limited at its option to:

(1) replacing or repairing the assets in question;

(2) supplying equivalent assets;

(3) paying the cost of replacing or repairing the assets; or

(4) paying the cost of acquiring equivalent assets.

(c)

(d) Neither the Seller nor any Related Person makes any express or implied representation or warranty as to future matters, including future or forecast costs, revenues or profits.

17.1A Sellers Warranties

The Seller warrants and represents to the Buyer as at the date of this agreement that the written records and written information relating to the Business which the Seller has made available to the Buyer before the date of execution of this agreement are true, complete and up to date copies of the documents which they purport to be.

For the avoidance of doubt, neither the Seller nor any related person makes any express or implied representation or warranty as to future matters, including future or forecast costs, revenues or profits, which may be contained in any such written records or written information which have been made available to the Buyer.

The training and instruction given to Mr Smith

Mr Smith was a very experienced crane driver. He was employed as a crane driver by Brambles for some years before he took up employment with Gillespies, about a year before the crane collapsed, when it acquired the Brambles' crane operation. He then continued operating that crane for Gillespies.

The only witnesses called to give evidence were Mr Smith and Mr Gillespie. From Mr Gillespie's evidence, it is apparent that Mr Smith was regarded to be a highly experienced, efficient and valuable employee. When Gillespies acquired Brambles' crane operation, it sought to obtain his services. When he was employed, Mr Smith was given no further information, training or instruction by Gillespies in relation to the crane or its safe operation. Gillespies acquired the business as a going concern. It continued the operation, acquiring both this crane and its driver, without taking steps itself to ensure that the information, training and instruction which Mr Smith had received in its operation was adequate, or that the system of work in operation ensured his safety. It simply permitted him to continue working under the existing system.

Mr Smith's evidence in chief was given by way of statement, where he said as to the training which he received in the operation of the crane from Brambles:

"5. I note this mobile crane was designed to be taken apart and it was modified to go into a dolly. I wasn't trained in relation to the relevant switch and I assume I didn't activate the switch. As soon as I set it up at Darling Harbour the crane collapsed. I never had formal training in relation to this crane but I have an open crane ticket. This machine was similar but different."

Mr Smith's evidence was that he had not been trained in relation to the operator's manual which was kept in the crane cabin, but he referred to it when necessary. During the investigation into the incident, a WorkCover Inspector had shown him a copy of a document entitled 'driving with a dolly'. He said that was a document he could not remember seeing. On the evidence it was not a document he was ever supplied by any of the defendants. The document was finally not tendered.

Mr Smith also gave oral evidence about the training he received at Brambles, from the former operator, Mr Hicks. In his cross-examination for Baden his evidence was:

"Q. So you were told some time before your accident that having the dolly switch in the on position for travelling was "pretty important"?

A. Yeah.

...

Q. You were told some time before the day of your accident that having the dolly switch in the on position for travelling was "it's pretty important you do it as it's to do with the trailer"?

A. Yeah, as in "trailer" he is referring

Q. No, I am not asking you to explain anything.

A. Okay, yes.

Q. I'm asking you is that what was said to you?

A. Yeah, that's right.

...

Q. Perhaps I misunderstand you. Firstly, did you regard it as safe practice to drive the crane without having the dolly switch in the on position?

A. No.

Q. Do you regard not checking whether the dolly switch is in the on position before travelling as safe practice?

A. Not checking, no.

Q. As in you agree it is unsafe?

A. Well, it's detrimental to the crane, apparently.

Q. I'm sorry?

A. Yes, it's unsafe.

Q. Can I take you to a typical occasion when you had driven the crane without incident but before your accident? Either before travelling you would first either turn the dolly switch on the day or would have turned it on a day or two earlier, correct?

A. (No verbal response)

Q. We are talking about the occasions when you did not do this?

A. Yeah, yeah, yeah.

Q. And when you get to the work site to use the crane you had to turn the dolly switch off--

A. That's right.

Q. --to allow the crane to operate properly?

A. And the levers, yes.

Q. And the levers?

A. Yes.

Q. And when you finished at the work site and were taking the crane somewhere else you'd have to turn the dolly switch and the levers back on, correct?

A. Correct.

Q. And then take the vehicle away to either another work site or Gillespies or one of Gillespies' or Brambles' yards, correct?

A. Yes.

Q. This red light on the dolly switch you have told Mr Joseph about and keeping in mind the answer you gave about the pump, that was a hydraulic pump, wasn't it, that the dolly switch operated?

A. I would imagine it would have been."

Mr Smith was also cross-examined for Baden about the training he had received in relation to the need to ensure safety. He agreed that if he had been told that something about the operation of the crane was very important, he would have followed the instruction without exception, whether he knew the consequence of following or not; he would do so because in his mind that would be the safe thing to do, even if he did not know what would happen, if he disobeyed the instruction. He also agreed that:

"Q. When the boom slews, whether travelling or in operation, all of the force and weight goes through where the crane is attached to the chassis, is that correct in a layman's

A. The actual fitting to the superstrata, the lower as in through the slewing where it is actually attached?

Q. Yes.

A. In the dolly position it is not all there, probably some would be supported by the dolly.

Q. But what I mean is if the boom is slewing left or right

A. Yeah.

Q. the rotating forces, can I put it like that?

A. Okay.

Q. Go through where the crane is attached to the main chassis?

A. Yes.

Q. So if the boom could not slew left or right because of the dolly switch being in the off position, that would apply some force to the parts which attached the crane to the main chassis, correct?

A. I'm not an engineer but yes, I would say so.

Q. As a crane operator?

A. As a crane operator, it would obviously transform.

...

CURTIN

Q. So, Mr Smith, you also came to know because of what you had been told and because of your experience of these earlier occasions that it was pretty important to have the dolly switch on in respect of those parts of where the crane attached to the main chassis, correct?

A. Yes.

Q. Accepting that you didn't have engineering qualifications, but being an experienced man and having been told what you did and having the experience that you did, you appreciated that one of the reasons why it was pretty important to have the dolly switch on was the possibility of safety issues, correct?

A. Correct.

Q. And you had driven this crane and dolly was it several hundred times before your accident?

A. Oh no, not "700" times.

Q. Not "seven," I meant several or hundreds?

A. I used the word "hundreds" but I meant just as many times, yeah, over that employment time."

Mr Smith also agreed that he regarded checking the dolly switch to be safe practice and did not consider it to be safe practice to drive without the switch being on, because that would be detrimental to the crane and unsafe. He was not exactly aware of the function of the flashing light in the cabin, but believed that oils would pass through to allow hydraulic pressure to build up to what was required and once pressurised, the boom could slew freely when travelling.

In re-examination, Mr Smith agreed that he didn't always necessarily check that he had engaged the toggle switch before he drove off, because he had already engaged it when he had previously left the crane. He said that there were two past occasions when he could remember forgetting to engage the switch, but he was able to immediately remedy his oversight by engaging the switch after he driven about 30 metres, during which the effect of his oversight became apparent to him.

When cross-examined for Gillespies, Mr Smith said that he was not aware that the crane could be split. He agreed that it was common for a crane of that size to have a dolly and that the dolly switch in this crane was not directly in his line of sight, but easy to see in the cabin. He also agreed that its position made it obvious whether it was on or off and that there was nothing to stop him from referring to the operator's manual, if he needed to.

On the evidence Mr Smith was never instructed by anyone as to what any tightness in the steering indicated, if he inadvertently overlooked releasing the toggle switch, or the consequences of a failure to activate the dolly switch, before the crane was driven off.

Mr Smith received his instructions from the prior operator of the crane. He was never given any explanation of the operation of the dolly switch, or the slew ring mechanism. Nor was he warned of the necessity to check that the crane had not been damaged, before he operated it, in the event that he forgot to activate the switch before he drove off.

There was no evidence that when Gillespies acquired the crane and Mr Smith's services, that it sought any understanding from Brambles as to what training Mr Smith had received in operation of the crane. It appears that Gillespies simply proceeded on the basis of an assumption that he had received whatever training was necessary from Brambles, to ensure safe operation of the machine. That it had any basis for making that assumption, was not apparent on the evidence, especially when consideration is given to the sale contract and the provision which it made in relation to due diligence and Gillespies being obliged to make its own enquiries.

What information did Baden, Brambles and Gillespies provide?

The contract under which Baden performed the modification work for Brambles was not in evidence. Nor was any contract Baden entered with Liebherr in relation to the modification work; the documents by which any advice or instruction was provided to it by Liebherr; or any documents which showed what information Baden provided to Brambles or operators of the crane, in relation to the modifications it had made. Baden called no evidence from anyone involved in the performance of the modification work, or in its dealings with Brambles or Liebherr, before or after the modifications were made.

Brambles called no evidence as to the information which it received from Baden about the modified crane and its operation, or the training which it gave Mr Smith or other operators in relation to the operation of the crane. Nor did it lead any evidence that it provided any information to Gillespies about such matters. It also called no evidence from anyone involved in its dealings with Baden or in providing instruction to Mr Smith as to the operation of the crane.

Baden clearly did provide Brambles with some information about the modified crane, given Mr Smith's evidence as to the instruction he received from Mr Hicks, the crane's former operator. That was the only information he ever received. The original operator's manual was not modified to reflect the modifications made to the crane. Whatever information was provided to Brambles, the information it conveyed to Mr Smith was inadequate and he received no more from Gillespies.

Brambles did not reveal to Gillespies that it had the crane modified by Baden. On Mr Gillespie's evidence, had this been revealed, he would have made enquiries of Liebherr, as to what had been modified. His evidence was that the only information that Brambles provided about the crane was the operator's manual which went with the machine. That document gave no relevant information about the operation of the switch, or that safe operation of the crane depended on it being activated, before the crane was driven.

The crane had a light in the cabin, which flashed for 30 seconds when the switch activated. It was apparent that light was not capable of providing any warning or reminder to a driver who had overlooked activating the switch, when driving off. There was no warning if activating the switch was overlooked, even though activating the switch was an essential step to be taken before the crane was driven, if catastrophic damage to the crane was to be avoided. Nor was this information provided in the operator's manual.

The result was that Mr Smith never had the information he needed to know, in order to be able to operate this crane safely, either while employed by Brambles or Gillespies. He certainly had no information as to the risk created by the failure to activate the switch, or the need to check for damage, if it was overlooked.

It is against this evidence that the expert evidence which was led must be considered.

The expert evidence

In November 2010, the parties were directed to file outstanding expert evidence and to ensure that the experts, in their respective areas of expertise, conferred and provided a joint report on matters agreed and disagreed, setting out reasons for any disagreement by 25 February 2011. The parties did not comply with this direction.

At the hearing it became apparent that there were seven experts who had provided reports, with expertise in essentially two areas, engineering and ergonomics. Six of the experts had met, but no joint report identifying what was agreed and disagreed was produced. Instead, the experts were asked to answer two sets of questions, one set proposed for Mr Smith and the other for Baden.

When the hearing commenced, I directed that the remaining expert should be asked to indicate his view on the conclusions reached by the other experts, on the questions which the parties had posed and that an agenda for the concurrent evidence be developed. Eventually, the experts were not required and the expert reports commissioned for Mr Smith were not tendered. What was tendered for Mr Smith was a part of the joint report, namely:

" Question 1 : Assume the dolly switch is in the off position when a driver comes to transport the crane in dolly mode to a worksite. Is the correct practice for the driver to:

a) Switch the engine of the vehicle on;

b) Move three levers to dolly operation mode;

c) Turn the dolly switch on which causes the dolly witch(sic) to start flashing;

d) Wait until the dolly switch stops flashing'

e) Not(sic) driver the crane until the dolly switch light ceases flashing?

Joint response of all experts : Yes, this is an acceptable sequence however the items a) and b) reversed, this would also be an acceptable sequence.

Question 2 : What is the period of time the dolly switch flashes as contemplated in paragraph 1d)?

Joint response of all experts : The experts believe that this would be in the order of 30 seconds or so. This is indicated in the WorkCover NSW Inspector's Summary at Paragraph 23.

Question 3 : Assume the dolly switch was in the on position when a driver comes to transport the crane in dolly mode to a worksite. Is it correct that when the driver switches the engine of the vehicle on, the dolly switch light will commence flashing?

Response of RC, PB, RF, JH, GWi : Yes

Response of GWa: It seems likely that the dolly switch would flash when the engine is turned on but I do not know if that is what actually occurs/occurred."

Finally, however, the response to question 3 in the joint report was not relied on by the parties, because it became common ground that when Mr Smith drove off in the crane, the light in the cabin did not flash, because the switch was not activated. Thus he had no warning that he had forgotten to activate the switch.

From the parties' submissions, it became apparent that while a large degree of common ground had been found by the experts in relation to what had caused the crane to collapse, which I have already dealt with, they had differing opinions on other matters. The joint report noted that the experts had not been provided with a set of assumed facts and assumptions. This came to be of some relevance.

It should also be observed that the course adopted for Mr Smith in relation to the expert evidence carried with it the obvious difficulty that there was no evidence led as to the experience or qualifications of the experts he had engaged and thus no basis upon which it could be concluded that their opinions rested on their specialised knowledge. That they had the relevant expertise was not in issue. I am satisfied, given the course adopted by the defendants and the conclusions I have reached, that this finally has not resulted in any practical difficulty.

Despite the course taken for Mr Smith, the defendants tendered various of their experts' reports. They were received over certain objections, while other objections were resolved. I received the reports on the basis discussed in Rhoden v Wingate [2002] NSWCA 165, where it was observed at [86]:

"When assessing the admissibility of expert opinions, it is not the case that an opinion is only admissible if at the close of the case of the party relying on it the evidence establishes each of the assumptions on which it is based on the balance of probabilities. The primary evidence relating to those assumptions might be controversial. Which parts of the primary evidence are to be accepted, and what the correct conclusions from the primary evidence are, are matters for the trier of fact at the end of the trial. The opinion evidence may be admitted if there is evidence which, if accepted, is capable of establishing the truth of the assumptions. On the appeal the defendant put no submission suggesting that the test was more onerous for the plaintiff in this case. For present purposes let it be assumed that it is not less onerous."

Since the hearing, the High Court has given judgment in Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 277 ALR 611, where somewhat differing views, as to how the receipt of challenged expert evidence should be dealt with, were expressed.

In this case there was no issue as to the expertise of those experts whose reports were tendered, or that their opinions rested on their specialised knowledge. Various assumptions on which their opinions rested, were, however, not finally dealt with in the evidence which the parties called. For example, Mr Williams, Baden's expert, made reference in his report to Baden having engaged a Liebherr employee to carry out work on the crane at the time that it was modified and then having provided particular training to Brambles' staff. No evidence was called about these matters.

The result was that certain opinions which were expressed by the defendants' experts thus rested on assumptions which were not established. Clearly, to this extent, those opinions can be given no weight. Strictly, as discussed in Dasreef Pty Ltd, such aspects of the experts' evidence is not admissible. Indeed, on the approach of Heydon J, they ought not to have been tendered by the defendants, without an undertaking being given that they would lead evidence to support the assumptions on which the opinions rested in their case (see his Honour's observations at [66] to [90]).

Given the conclusions which I have reached about the experts' evidence, I do not propose, at this stage, to further identify those parts of the reports which were not strictly admissible. Where the opinions rested on assumptions not established on the evidence, I have given them no weight.

There were, however, aspects of the reports which do bear on the issues which I have to resolve, which it is necessary to deal with.

Brambles' engineering expert, Mr Frost, responded to a number of questions. He was asked whether in his opinion, the dolly was constructed in accordance with Liebherr's specifications. There was a drawing attached to his report, but the specifications are not in evidence. In any event, Mr Frost did not answer the question posed, but instead referred to his opinion as to the cause of the accident and observations made in his earlier report. That answer shed some light on the nature of the risk here in question, about which Mr Smith received neither warning nor instruction. The views Mr Frost expressed included that:

"if the crane travels on the dolly and negotiates curves in the road with the slewing ring locked, the failure of the two subject pins is virtually assured to occur completely at the first more-than-very -slight curve which the crane has to negotiate as it is being driven in this configuration"

Mr Frost's view was that once the rods have been sheared off:

"the bayonet connector which secures the crane superstructure to the crane base is no longer locked in to its engage position. In my opinion it is then inevitable that the normal slewing motions which the crane is required to perform it setting up at a new work site, or in actual use at a work site, will quite quickly result in the bayonet connector rotating out of its engaged positions and becoming disengaged...The disengaging of the bayonet connector will inevitably result in the crane superstructure falling off the crane base and toppling over;"

The obvious nature of the risk of injury which arises from such a collapse of a crane of this size, is entirely apparent.

Question 4 asked of Mr Frost was:

"Whether the material provided by Brambles to Gillespie, specifically the operator's manual, either with or without document "6.06 - Driving with a dolly" would have adequately informed Gillespie's crane operators in the use of the crane."

In answering this question, Mr Frost referred to document 6.06, which is not in evidence. An extract from that document was, however, an appendix to his report. It outlines a number of steps to be taken before the crane is driven off. They include 'actuate the switch (120), the warning light (128) blinks'. The document also contains a note and a caution:

"Note: Warning light (128)

- turns off if the hydraulic system has reached a pressure of 40bar.

- blinks, if the pressure drops below 40bar.

CAUTION: When driving with a dolly, do not start out until the indicator light (128) does not blink anymore and the necessary pressure in hydraulic system for coasting has been reached. When the indicator light is off, the slewing gear is releases and the luffing cylinder lowering brake is set to coasting."

On the evidence this was a document not provided to Mr Smith. Even if it had been, the warning is inadequate. Mr Frost also noted that there was no warning device which would 'provide an a priori warning if the switch 129 were not actuated' and that the warning system was such that it was possible to drive the crane 'in a state in which it is virtually assured of suffering the damage' suggested in this accident and that 'is also virtually assured of them suffering the same type of hazardous collapse' as it suffered in 2003. His opinion was that:

"... this places onto the operator the major part of the reliance for safety in the preparation of the crane for the driving of the crane on its dolly. This preparation is a safety-critical, multi-step procedure which in my opinion is likely to be often carried out under somewhat adverse conditions, eg poor weather, difficult site conditions, or time pressure. In my opinion this situation represents an obvious shortcoming in the design of the crane, and is one which could easily have been avoided at the design stage."

Even so, Mr Frost was of the view that the design of many devices, such as the motor car, were capable of improvement; that many systems of work rely for safety on the exercise of due skill and care; the operator had an extensive history of safe and successful operation of the crane and that reliance on him was well placed. Accordingly:

"In my opinion, for these reasons, the operations required to be carried out on the crane and with the crane by the operator on the day of the incident, with the crane in the design condition in which it was on that day, did not represent an unreasonable situation. The toggle switch 129 which Mr Smith failed to activate was visible to the operator of the crane. It would have provided a visual indication of its state, ie either activated or not activated, by way of the visible position and/or orientation of its activating toggle leaver. The operator could have assessed the state of this switch by simply looking at its activating toggle lever. Given that Work Cover would have assessed and approved modifications to the crane, and would have given approval to the crane as being safe to use, it appears that Work Cover did not regard other additional safety features as being necessary."

Having considered the evidence, I am of the view that Mr Frost's views as to the shortcomings in the design of the crane must be accepted. I am not, however, able to accept his view as to the adequacy of the system on which safe operation of this machine relied.

The evidence showed that Mr Smith was not given any explanation of or warning about either the operation of the switch, or of the risk of catastrophic damage to the slew ring mechanism which inadvertent failure to engage the dolly switch gave rise to. In those circumstances, relying on operator memory and the ability of the operator to see the position of the switch when the crane was being driven in the dark, early in the morning, was not an adequate way in which to ensure safe operation of this crane.

Mr Casey, Baden's engineering expert, observed that the system did not contain any margin to cope with operator error. He also noted that the design of the bayonet pins appeared to have an intended purpose, namely to shear, as a part of a system 'that would prevent the boom (and superstructure) from being exposed to undue torsional loads'. His opinion was that:

"Finally, other systems in heavy vehicles also have no margin for operator error and they too rely on the operator's due care and attention. Operation of the indicators, use of seatbelts, application of the handbrake, clear view though the windscreen (mist or dirt on the glass) etc all rely on the driver's due care and attention to prevent damage and / or danger. Therefore the fact that this system too relied on the driver's due care and attention does not make it stand out in my view."

I do not accept that the analogies which Mr Casey drew were apt ones, a matter to which I will return. In coming to his conclusion, Mr Casey placed considerable emphasis on the fact that Mr Smith had successfully operated this crane on hundreds of occasions and that operation of such a heavy crane would warrant a great deal of care at all times, 'irrespective of what perceived risks the operator was aware of'. In his opinion additional training or information would not have changed the events which occurred, given that the accident was the result of Mr Smith forgetting to activate the switch.

Again, I am of the view that Mr Casey's opinion may not be accepted in the face of the evidence. The analogies drawn between the dolly switch and indicators, seatbelts, a handbrake and the windscreen are not apt. A driver's inadvertent failure in respect of any of those things, will not of itself result in such damage to the vehicle that its further operation will cause a catastrophic collapse.

If, as Mr Casey surmised, the modification made to the crane was designed to ensure that the dowel rods sheared off, if the switch was not activated, in order to avoid damage while the crane was being driven with a dolly, that further instruction would not have changed the events here in question, as they occurred, hardly follows.

Unbeknown to the operator, Mr Smith, an intended feature of this modified crane gave rise to a risk of catastrophic failure of the machine, if inadvertently, the brake was not released. Instructing the operator on the existence of such a risk, was hardly unnecessary, if safe operation of the crane was to be provided for. Instruction as to the existence of the risk, can only have increased the likelihood of safe operation of the crane. The end result of the failure to instruct was catastrophic failure of the machine, once it came to be operated, because Mr Smith was entirely unaware that the dowel rods were designed to shear if the brake was not released. On Mr Smith's evidence, it cannot be doubted that if he had been given the necessary information, even if inadvertent failure to activate the switch could not have been entirely precluded, operation of the crane, without first checking that the crane had not been damaged before it was operated, could have been. That inference clearly flows from the evidence as to Mr Smith's expertise and careful performance of his work and his attention to safety.

Mr Williams, Baden's crane consultant expert, also referred to his understanding of the training provided by Baden and the provisions of an updated chapter of the operator's manual created by Liebherr, entitled 'Driving with a Dolly'. Neither Baden nor Brambles called any evidence about these matters. That this document existed, is apparent. It is referred to in the WorkCover report. All that it dealt with and when, if ever, it was provided, was not shown on the evidence. What the evidence did establish was that it was certainly not a document which Mr Smith was ever provided.

Mr Williams said in his report 'that the operator was not satisfactorily trained in the use of the dolly and its control measures i.e. the hydraulic levers and the slew pump switch'. It was, however, his opinion that:

"... it is not absolutely necessary for an operator to be aware of the role or actual physical function of every switch in an electric control panel of such a sophisticated and highly engineered crane. The main point to note here is that he confirms that he had been instructed to activate this switch before transporting the crane in "dolly" mode."

Again, I do not accept this opinion. In my assessment it was essential for the operator of this crane to be instructed in the role of the dolly switch and the risk which failure to release it, would give rise to, if it was to be safely operated.

Having noted that Mr Smith had not seen the chapter 'Driving with a Dolly', Mr Williams was of the opinion that:

"Within that original manual there was sufficient information that if properly applied would have prevented this accident."

Again, that evidence may not be accepted. The original manual did not deal at all with the modifications made to the crane, or their consequences for its safe operation. It identified the switch as relating to air-conditioning.

After referring to the parts of the document annexed to Mr Frost's report and quoted above, Mr Williams was of the view:

"In my opinion giving regard to the relevant accident, if the operator had followed the information as provided in the version available to him the accident would not have occurred.

The additional information that was provided in the manual was not specifically related to the cause of the accident."

These opinions also cannot be accepted. The original manual provided no relevant information, which could have prevented this accident. The switch in issue had to be activated to avoid catastrophic damage to the crane. On the evidence, the failure to instruct Mr Smith in its purpose and the consequences of inadvertent failure to engage the switch, cannot permit Mr Williams' opinions to be accepted.

On the assumption that Mr Smith had not been provided with the updated instructions it was Mr Williams' opinion that:

"In the event that the chapter "Driving with a Dolly" was not included in the manual I am of the opinion that the accident could have been prevented due to the fact that the plaintiff had received previous verbal instructions from Mr Mark Hicks and/or from the former crane driver.

There were only two major items for him to remember:-

1. The hydraulic slew and luff levers.

2. The activation of the toggle switch in the drivers cabin.

Given consideration that the plaintiff had driven the crane about 100 times over the period of a year in my opinion he should be well and truly familiar with the system and I see no reason why he could not act upon these two simple functions other than for lack of attention and forgetfulness."

Given the evidence of the paucity of the instructions, in fact, given to Mr Smith by Mr Hicks, merely that the switch was important because it had something to do with driving the dolly, but which did not include information about the catastrophic damage which would be caused to the crane by driving it, even for a short distance, without activating the switch, I am not able to accept this opinion.

Gillespies' expert, Mr Heazlewood, was of the opinion that:

the Liebherr-Werk Ehingen GMBH have not fulfilled their duty to provide a safe workplace by the design of the modification in March 2001.

The supplier of the modification to the mobile crane have not ensured that transfer of the modification details to the maintenance and operation manuals.

The supplier of the mobile crane to Gillespies Crane Service has not supplied the maintenance manual and logbook with crane.

The wheel loading conditions during travel with the dolly fitted require to be checked to ensure undue loadings are not being distributed into other components. "

Gillespies' expert Mr Buckland, observed that the arrangement was not fail safe and that it 'did not contain any margin to cope with such an operator error'. He was of the opinion that the subsequent modifications made to the crane, addressed the deficiencies he had identified.

The analogies drawn with a car

It is convenient to say something more at this stage about the analogies variously drawn with cars, which some of the defendants' experts drew in explaining their opinions, as did Mr Gillespie and which were the subject of competing submissions. That the analogy was apt, was not accepted by all of the defendants. Gillespies and Brambles embraced it, but Baden did not. In my view the analogy is an apt one in this case.

The difference in approach to this analogy reflected competing views as to various issues, including in relation to the duty to warn. As discussed by Kirby J in Woods v Multi-Sport Holdings Pty Ltd [2002] HCA 9; (2002) 208 CLR 460, there are many situations where there is a duty to warn:

"[128] ... In a sense, the greater the risk, even if obvious, the greater may be the obligation of the party in control of it to warn others about it. Take the occupier with a deep hole in the middle of the path that in darkness could become a great danger[108]. Take employers who must warn employees of risks, taking into account possibilities of "inadvertence or carelessness" on the part of the employee[109]. Or take the manufacturer of cigarettes. Apart from any statutory obligations that might apply, it could not seriously be suggested that such a manufacturer was relieved of the duty to warn because the risk of cigarettes to health is now "obvious". Warnings are sometimes required by those in control of situations to alert those who are inattentive, distracted or unlikely in the circumstances to consider the risk, although objectively, and with hindsight, it is "obvious". The duty to warn depends on the circumstances of the case, not just a suggested lack of "obviousness" of the risk."

It is a matter of common experience that a car has various features, such as a handbrake, which a driver must operate, but which on occasions are inadvertently overlooked. It is also a commonplace experience that the failure to release a handbrake soon becomes apparent to the driver from the way in which the car operates with the handbrake on. In the case of this crane after Baden's modification, a failure to activate the dolly switch, in order to release the brake was also soon apparent, once it was driven off. The difference, however, is that in the case of the car, it is entirely unlikely that catastrophic damage can be caused, which makes it unsafe to operate the car further, if releasing the handbrake is forgotten when the car is driven a short distance.

In the case of this crane, if the switch was not activated, so as to release the brake, even if driven for a very short distance, when the crane was turned even as little as 1.5 degrees to the right, the dowel rods would shear. On the expert evidence, that would inevitably result in a catastrophic collapse of the crane during set up, on this occasion, while lifting a 65 tonne counterweight.

It seems to me unarguable that if a car was modified so as to introduce a feature like the dolly switch introduced into this crane, there would be a duty imposed on whoever had made the modification, upon the owner and any employer who required an employee to drive that car, to warn of two things. Firstly, of the serious risk of catastrophic damage to the car arising from the inadvertent failure to activate the switch, before driving the car. Secondly, of the need to ensure that such damage had not resulted, if inadvertently, the switch had not been engaged, before the car is further used.

For Brambles it was argued that a similar feature of a car was a seatbelt. In my view that may not be accepted. Failure to wear a seatbelt, even inadvertently, could no doubt put an occupant at risk of serious injury, if an accident occurred. Absent an accident, it could not, however, lead to catastrophic damage to the car and resulting injury to the occupant, if the car was driven without accident. It follows that the comparison between a seatbelt and the dolly switch, is not an apt one.

Given the nature of the modifications made to this crane and the serious risk which they created, it seems to me that a duty to warn operators of the crane of the risk arising from a failure to activate the dolly switch, before the crane was driven, arose for Baden and also for both Brambles and Gillespies.

The defendants each resisted the case brought against them on the basis that they had no such duty, because they were not aware of the feature of the crane which caused it to collapse. For reasons which I will explain, I am not able to accept the cases which they so advanced.

The case against Baden

In Roads and Traffic Authority of NSW v Dederer [2007] HCA 42; (2007) 234 CLR 330, Gummow J observed at [18]:

"... First, the proper resolution of an action in negligence depends on the existence and scope of the relevant duty of care. Secondly, whatever its scope, a duty of care imposes an obligation to exercise reasonable care; it does not impose a duty to prevent potentially harmful conduct. Thirdly, the assessment of breach depends on the correct identification of the relevant risk of injury. Fourthly, breach must be assessed prospectively and not retrospectively. Fifthly, such an assessment of breach must be made in the manner described by Mason J in Wyong Shire Council v Shirt [(1980) 146 CLR 40 at 47-48.]. "

In the cases brought against Brambles and Baden the Civil Liability Act applies. Sections 5B and 5C provide:

"5B General principles

(1) A person is not negligent in failing to take precautions against a risk of harm unless:

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

(b) the risk was not insignificant, and

(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.

(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):

(a) the probability that the harm would occur if care were not taken,

(b) the likely seriousness of the harm,

(c) the burden of taking precautions to avoid the risk of harm,

(d) the social utility of the activity that creates the risk of harm.

5C Other principles

In proceedings relating to liability for negligence:

(a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and

(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and

(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk."

It has been accepted that the matters set out in s 5B(2) of the Civil Liability Act are, in substance, a reiteration of Mason J's observations in Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40 (see Erwin v Iveco Trucks Australia Ltd [2010] NSWCA 113; (2010) 267 ALR 752 at [82] - [85]). Mason J observed (at 47 - 48):

"[T]he tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a 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.

The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable. But, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risk and its degree of probability remain to be considered with other relevant factors."

In summary, in my assessment, Mr Smith, as a crane operator, has established that Baden owed him a duty to exercise reasonable care to warn of the risk of collapse which its modifications of the crane had created, so that he would not be exposed to an unreasonable risk of injury.

Given the risk of cata strophic damage to the crane which Baden had created by its modification, in the event of any failure to activate the dolly switch before the crane was driven and the serious risk of injury which would result to operators and those in the vicinity of the crane, if it collapsed, there can, in my view, be no question about the duty of care which arose and the foreseeability of the risk in question, in the s 5B(1)(a) sense. The magnitude of the risk of injury in question for an operator, or indeed anyone in the vicinity of the collapsing crane, required a reasonable person placed in Baden's position to take precautions to guard against the risk materialising. That the duty was breached, with the result, Mr Smith's injury, has also been established.

The evidence showed there were various precautions which a reasonable person in Baden's position could have taken in the circumstances. They included p roviding relevant information about the modification made to the crane and the risks thereby created to Brambles and operators of the machine. The obvious and unquestionably available means of doing this, which would have addressed the risk which had been created, was by amendment of the crane's operator's manual. Thereby the necessary information could have been conveyed, to all who required it, including later purchases such as, by Gillespies. There were other simple and inexpensive steps which were later taken, which were other ways in which Baden's duty could have been met. They included the white line painted on the boom, which indicated at a glance if the brake had been released and the installation of various safety features in the crane. Such steps were not burdensome, but still they were not taken. Had they been, the accident would not have occurred.

The duty of care

In Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 276 ALR 375, French CJ and Gummow J recently emphasised the need to first consider the nature and scope of the duty of care in question (see at [17] - [22]).

The duty which Baden owed was argued for Mr Smith to rest on first principles. Just as in Donoghue v Stevenson [1932] AC 562, a manufacturer of a bottle of ginger beer owed a duty to somebody who might purchase the bottle from a retailer, Baden, who modified the crane to achieve Brambles' purpose, owed a duty of care to operators of the crane such as Mr Smith. It had undertaken modifications to the crane, which had not failed mechanically, but which had the result that they introduced a grave risk, namely, that a failure to activate the dolly switch to release the brake before the crane was driven, could result in damage to the rods, which would lead to catastrophic failure of the machine when operated. In those circumstances, Baden had a duty to alert operators of the crane to that possibility, the risk not otherwise being apparent. It had failed in that duty, having not even modified the crane's operator's manual, to reflect what it had done to the machine.

Mr Smith argued that any entity which performs work of the kind which Baden had performed by way of modification to the machine, had the duties of a manufacturer, even if the modifications were carried out in accordance with someone else's design. The only evidence as to what Liebherr had specified, was a letter reproduced in a statement made to the WorkCover Inspector. The blank assertion there made could not establish that what Baden had done, was in fact in accordance with Liebherr's specifications.

The operator's manual, which formed part of the crane, was not modified to reflect the modifications which Baden had made. No steps were taken to amend the manual to include any reference to driving with the dolly. There was a document shown to Mr Smith, which had been referred to in the WorkCover report. Mr Smith said he had never seen it before and it was not tendered. In the circumstances it would be inferred that the modifications had not been carried out in accordance with Liebherr's specification.

Baden's case was that it owed Mr Smith no duty of care at all in relation to the risk created by the modifications it had made to the machine. It had acted reasonably in going to the manufacturer, Liebherr, for advice in relation to the modification Brambles wanted to have made. It had undertaken the modifications in accordance with its instructions, it being a world class manufacturer, on Mr Gillespie's evidence. If there was any negligence, it was in Liebherr's design. Its contract with Liebherr required it to maintain and repair using Liebherr parts. There were only 10 of these cranes in the world and the correspondence showed that after the accident, everyone looked to Liebherr, not it.

Baden also argued that it had expertise in repair, but it was not the manufacturer of the crane and had no duties analogous to those of a manufacturer. It stood between the position of manufacturers on the one hand and repairers on the other. There was no authority which had considered a circumstance such as that in which it found itself. Baden accepted that it had duties like those of a mechanic, who owed duties to those who might drive a car which the mechanic had repaired. What also had to be considered, however, was that it was not asserted that the work which it had performed, had failed.

Baden's case was that in performing its work it had adhered to Liebherr's specifications and had not understood the risk which the modifications it had made gave rise to. There was no evidence that Baden knew or ought to have known that if the dolly switch was not turned on and the driver drove off and turned a corner, the locking pins would snap. The negligence alleged against it was that of omission, namely failing to provide a relevant manual for the new dolly operation, failing to provide adequate training and failing to take steps later taken, after the accident, in accordance with the advice then given by Liebherr. That case was not established by the evidence.

What Baden ought to have known at the time of the accident had to be considered in two ways. On what was held in McPherson's Ltd v Eaton [2005] NSWCA 435; (2005) 65 NSWLR 187, Mr Smith had to prove that the facts relied on were known. Absent such proof, he had to establish that it ought to have known of those facts. There was not 'one single fact' which established that having undertaken the modification work, Baden was aware of the risk of the dowel rods shearing.

As to the legal test, the assessment of breach depended on the identification of the relevant risk of injury, in this case, that if the switch were not activated, the locking pins would snap. That was to be determined on the basis of what a reasonable person might know, given the facts. Reliance was placed on what was observed in McPherson's Ltd at [77] - [82]:

"77 In Lanza v Codemo (at [171]), Wood CJ at CL accepted that the mere fact of entry into a contract for the sale of goods did not necessarily establish a duty of care. His Honour relied on Laundess , S W Cavanagh and C S Phegan, Product Liability in Australia (1983) Sydney, Butterworths, at 510, and J G Fleming, The Law of Torts 9th ed (1998) Sydney, Law Book Co, at 457 for this proposition. His Honour went on to say (at [171]):

"[171]... The existence of the duty depends upon the nature of the goods sold, the risk involved and the extent to which that risk was known to, or should have reasonably been known to the supplier."

78 In Elliott v Bali Bungy Company Young CJ in Eq held that the general duty of retail dealers was to warn of dangers of which they knew or had reason to know but not of which they "should have known". As I understand his Honour, "should have known" in this context means duty- bound to know. His Honour referred to a number of text books to this effect. To those to which his Honour referred I would add Clerk & Lindsell on Torts, 18th Ed 531 (at para 9-12) where the learned authors say that retailers may be liable in tort "if they sell goods with reason to know they are likely to be used to harm others". See also the reporter's notes to paragraph 401 of the Restatement of Law of Torts (2nd Ed).

79 In Graham Barclay Oysters Pty Ltd v Ryan the distributors grew and harvested the oysters (that being the additional factor).

80 In Dovuro Pty Limited v Wilkins the distributor also produced the canola seed.

81 We were not referred to any other case in Australia or England, nor have I been able to find one, where a duty of care has been imposed on a retailer merely because a relationship of vendor and purchaser, or vendor and end-consumer, existed.

82 In my opinion the relationship of vendor and purchaser, or vendor and end-consumer, does not automatically give rise to a duty of care. Such relationships do not fall within the familiar categories of cases where, by the mere existence of these relationships, a duty of care arises: cf Vairy v Wyong Shire Council [2005] HCA 62 at paras 25-27 per McHugh J. I agree with Mahoney JA's view that "something more" must exist before a duty of care arises."

I am not able to accept the case so pressed. Here, there was clearly 'some additional factor', which gave rise to the relevant duty. On the evidence, Baden had expertise in repairing and maintaining Liebherr cranes. In accepting Brambles' brief to modify the crane, it had to exercise the standard of reasonable care and skill required of the ordinary skilled person exercising and professing to have the special skill which it possessed (see Rogers v Whitaker [1992] HCA 58; (1992) 175 CLR 479 at 487).

Baden's case was that it turned to Liebherr and modified the crane in accordance with its specifications. The evidence did not provide a basis for the submission that Baden had adhered to Liebherr's specifications and in doing so, had not understood the risk which the modifications it made gave rise to. Had such evidence been available, no doubt it would have been led from someone involved in the modification work undertaken, either at Baden or Liebherr. It was argued for Baden that no Jones v Dunkel (1959) 101 CLR 298 point arose against it, unless there was a case to meet on the evidence. In my view there was such a case established, given the modifications made; the failure to modify the operator's manual to reflect those modifications; and the inadequate information given to Mr Smith about safe operation of the modified crane.

It seems to me unarguable, given the catastrophic damage which resulted from any failure to activate the switch and the absence of any mechanical warnings of the need to release the switch, or of damage caused to the dowel rods, if the switch was not released, that a reasonable person in Baden's position, acting reasonably in the circumstances, would have known that it was not proving adequate information as to the modifications it had made, or what safe operation of the machine required, Given the reasonable foreseeability of the risks created by unsafe operation of the machine, had Baden acted reasonably, it would have supplied Brambles, other owners of the crane and operators like Mr Smith, information about the modifications and what safe operation of the crane required.

In evidence was the correspondence between Baden and Liebherr and the documents annexed to experts' reports, I earlier referred to. They showed that after the accident, Liebherr's advice was that the crane was safe to operate 'providing that the operator adheres to the instruction in the operator's manual.' There were no relevant instructions in the original crane operator's manual. Liebherr was presumably referring to the document, part of which was annexed to Mr Frost's report. On the evidence, inadequate as that information was, it was not supplied by Baden.

Mr Smith's evidence was that he used the operator's manual as a reference document. He had never read it in its entirety. There was no suggestion that Mr Hicks had referred him to it. Had Mr Hicks or Mr Smith looked to the original manual provided in the crane, to understand the operation of the dolly switch, it could not have assisted them. To the contrary, it would have told them the switch had to do with air-conditioning.

It follows that it is not surprising that when instructed in the operation of the crane by Mr Hicks, Mr Smith was not referred to the manual in relation to the dolly switch operation. The manual did not deal with that switch and could have been of no assistance to anyone who had read it. The instruction he received gave him no understanding of the operation of the switch or how safe operation of the crane depended entirely on him remembering to activate it, before the crane was driven.

While Baden did lead expert evidence, as did Brambles, no expert expressed the view that on the information available to Baden, given the nature of the work it had undertaken, that Baden could not have been aware of the risk which resulted from the modification it had made. To the contrary, the expert evidence was that the shearing of the rods caused by the failure to release the brake, was an intended feature, designed to protect the crane from certain damage.

Baden produced the modification Brambles desired, which permitted the crane to be transported by road, without disassembly. In doing so Baden had a duty to warn of any risks its modifications introduced, particularly of the inordinate risk of the crane collapsing, which had been created by those modifications. That it did not have sufficient information from Liebherr to understand the nature of the risk it had created, was, in my view not established. As discussed in McPhersons Ltd , given the work it undertook, Baden had reason to know of the risk and to warn of its creation.

Baden had a duty to operators of the modified crane, such as Mr Smith, given the modifications it had undertaken. The operational change which those modifications made to this machine was very significant. Baden accepted that new dangers which had not previously existed were thereby created. I am unable to accept that those dangers were not apparent to Baden, from the nature of the work it had undertaken on the crane.

Baden plainly knew what modifications it had made and how the crane operated, both beforehand and afterwards. This was a very substantial modification, to a very large, sophisticated and expensive piece of equipment, permitting it to be driven on the road, without being disassembled. Baden must have tested the modifications it had made, in order to ensure that they were operating correctly, on its case as Liebherr had designed, so that it could be safely driven and operated.

There can be no question that Baden was also aware that the modifications it had made did not include any mechanical warning being given to a driver, that the dolly switch had not been activated, before the crane was driven off. There was also no mechanical warning given when the crane was damaged, if driven without the brake first being released. As a matter of logic, in the absence of such warning, as the experts explained, safe operation of the modified crane depended entirely on operator memory, to ensure that the switch was activated, before the crane was driven; there being no technical reminder to activate the switch.

Having actual knowledge of the modifications made and how the crane thereafter operated, that a duty fell upon Baden to provide information about what safe operation required and to warn of the reliance being placed on operator memory, for safe operation of the crane, plainly follows.

What was contained in the existing operator's manual, was inaccurate, once the modifications were made. There it was wrongly identified that the switch was concerned with the operation of air-conditioning. Any document which Baden gave Brambles about the operation of the modified crane, was not tendered. The inference is that no adequate information about the risk which flowed from those modifications was thereby provided, particularly in the case of any failure to activate the dolly switch, if the crane was driven even for a short distance. Even if the amended manual had been provided to Brambles, on the basis of the page annexed to Mr Frost's report, that document did not identify the risk or the consequences of a failure to engage the switch, or the reliance placed on operator memory.

On the evidence it must have been apparent to Baden that adequate information was necessary to be provided to Brambles and operators of the crane, as to the result of the modifications it had undertaken, in order to ensure the safe operation of the crane. If Baden had any doubt that it fully understood what it had done, by its modification of the machine, it ought to have found out from Liebherr, in order to meet its duty to users of the modified crane, and Brambles. On the evidence such information would have been available.

Support for the case Baden advanced was also said to be found in Erwin , where it was submitted that the Court of Appeal had taken the view that manufacturers were entitled to assume that their vehicles would be properly maintained. By analogy, it was argued that Liebherr and Baden were entitled to assume that an experienced crane operator would turn on the dolly switch, before driving the crane. I am not able to accept the analogy.

Erwin was a case where proceedings were brought against the manufacturer of a truck, which the appellant had acquired second hand from a dealer in 1999. It had been manufactured in 1989. When acquired it had travelled over one million kilometres. It crashed in 2002, as the result of the failure of the steering mechanism. The appellant had maintained the truck, but had never undertaken preventative maintenance, nor had anyone else serviced, maintained or inspected the steering mechanism.

It was concluded that no negligence had been established. The cause of the failure of the mechanism was the result of a later serious mistake made by a specialist dealer in trucks, in adjusting a bolt to the required torque and then the appellant's egregious failure over a period of three and a half years, to undertake basic maintenance in defiance of the manufacturer's direction. It was observed at [111] - [112]:

"111 When the warning of McHugh J in Dovuro v Wilkins about the dangers of using hindsight to find negligence is borne in mind, it is difficult to disagree with the primary Judge's assessment that the risk was not shown to be otherwise than insignificant and that the appellant had not established that a reasonable manufacturer/designer in the respondent's position would have taken one or more of the precautions identified by the appellant when designing the steering system for the Truck. Manufacturers are not necessarily entitled to assume that purchasers or users of their products will invariably follow instructions or act in a prudent and sensible manner. But for this failure of the steering system to occur, there had to be two independent and serious departures from the standards of conduct reasonably to be expected by the manufacturer of the Truck. The first was the failure to adjust the pinch bolt to the prescribed torque in 1999. This was an apparently serious mistake committed not by an owner-operator attempting his or her own maintenance, but by a specialist dealer in trucks. The second consisted of the appellant's egregious failure, over a period of three and a half years and hundreds of thousands of kilometres of driving the Truck, to undertake basic maintenance of the steering system in defiance of the manufacturer's directions.

112 In these circumstances, it cannot be said that the primary Judge was wrong in concluding that the respondent did not breach the duty of care it owed to the plaintiff."

It is apparent that this is an entirely different case. Baden was not entitled to assume that all operators of the crane would invariably follow instructions to activate the switch before the crane was driven, particularly when the operator's manual provided no relevant information about the modifications made to the crane, the risk which they had created, or that safe operation of the crane depended on operator memory. Catastrophic failure of this machine could result from inadvertent failure to release the brake mechanism for even a short distance, at a slight turn. Mr Smith's oversight on the morning of the accident simply cannot be perceived as an 'egregious failure', of the kind dealt with in Erwin. To the contrary, it was an oversight easily made by even a careful experienced operator, one swiftly identified and remedied. Absent any knowledge that catastrophic damage had already occurred to the machine, that the crane was operated without Mr Smith first checking that it had not been damaged, was not failure of a kind with which Erwin was concerned.

The crane was not a piece of equipment intended to be driven by any operator, like an ordinary person drives a car. It was a highly specialised piece of equipment, which was only intended to be driven and operated by trained crane operators, in order to drive on the road to a job and then to operate it, in order to lift massive weights at building construction sites and other places, throughout industry. The design of the crane was such that a failure to engage the dolly switch before the crane was driven even a short distance, was likely to cause catastrophic failure of the crane when operated.

Unquestionably, Baden was entitled to assume that Brambles or the owners of the crane would properly maintain the machine and would employ competent, properly trained operators. The problem which emerged with the crane's operation had nothing to do with maintenance, or a failure to employ a competent operator, but with inadequate training of the operators, in part as the result of Baden's failure to warn of the reliance being placed on operator memory, to ensure safe operation of the crane.

Given the modifications Baden had made, which resulted in safe operation of the machine resting entirely on operator memory, it is unquestionable that adequate information had to be given to operators, to alert them to what safe operation required and the risks which flowed from inadvertent failure to engage the dolly switch. In the absence of any mechanical warning mechanism in the crane, account had to be taken by Baden of the possibility that an operator might inadvertently forget to activate the switch, before the crane was driven. Operators had to be trained to ensure, in that eventuality, that the dowel rods were checked for damage, before operating the machine.

In the circumstances, Baden could not assume that the crane would never be damaged, as the result of inadvertent failure to activate the switch. There was unquestionably a duty to warn Brambles, other owners of the crane and operators such as Mr Smith of the risk which its modifications had created and to provide adequate information about what safe operation of the modified crane required.

Breach

It was finally conceded for Baden that if the evidence established that it knew, or ought to have known, that if the brake was not released, the rods would shear if the crane was driven, it had to take that into consideration in the steps which it took, given the catastrophic harm which could result. It was argued to be relevant, however, that no evidence had been called, as to what a reasonable repairer in its position would have known about the risk of the dowel rods shearing. The plaintiff bore the onus of proof.

It was not accepted that as a matter of logic, given the nature of the crane and what the modifications achieved, that it was obvious that the rods would shear, from the force applied to them, if the brake was not released before the crane was driven. The question had to be determined on the basis of what was known before the accident occurred, not with the benefit of hindsight. There was no suggestion that the rods, while thin, were not fit for their intended purpose. They had been tested by WorkCover. Further, the evidence of Mr Williams in his report was that:

"Q27 On average, how often did the plaintiff transport the crane between the date in the answer to the above question and the date of the accident?

A. The plaintiff was the main driver of the crane from about early 2002 the date of the accident 3 November 2003.

He would have driven the crane at least a hundred times.

COMMENT. In my opinion any operator who had driven a particular crane at least a hundred times would be extremely familiar with its characteristics and its operation and I would consider and expect him/her to be quite capable of operating it in a proper and safe manner in accordance with the manufacturers instructions."

Mr Williams assumed that the operator's manual was deficient, but was still of the view that Mr Smith had been given adequate instructions from Mr Hicks. I am unable to accept that opinion, or the submissions advanced for Baden. On the evidence, given the modification work it had undertaken, it seems to me, that a reasonable person in the position of Baden ought to have warned that if the brake was not released, the rods would shear if the crane was driven. At the least, it had to warn that safe operation of the crane depended entirely on operator memory. Baden breached this duty knowing that there was no mechanical warning given with the operation of the crane, of either the need to release the brake, or what would occur if the brake was not released.

Such information was not provided by the operator's manual being amended, or otherwise. The failure to either provide such information, or some mechanical reminder that the switch had to be engaged before the crane was driven, leads inevitably to the conclusion that Baden breached the duty it owed to Mr Smith.

As a result of Baden's breach of its duty, the instructions given to Mr Smith in operation of the crane, were entirely inadequate. The instructions were consistent with Baden having failed to provide essential information and warning about the risks it had created when it modified the crane; which ought reasonably to have been provided. Given the work it had undertaken on the crane, in failing to convey the information necessary to ensure safe operation of the modified machine, to Brambles, other owners of the crane and those who had to operate it, Baden breached its duty of care.

No-one has sought to join Liebherr, an obvious party to the proceedings. Having in mind the correspondence from Liebherr after the accident in relation to the operating instructions it had provided and the evidence that no such instructions were supplied by Baden, that it failed to provide operators with necessary information, must be accepted. The necessary inference from the case Baden advanced, was that it must have tested the modifications it had made, in order to ensure that they had been undertaken in accordance with Liebherr's specifications and that they worked as intended, permitting safe operation of the crane. Baden must have conducted its tests in the context of whatever instructions and information Liebherr had supplied it, however, it called no evidence to explain what it knew about the modifications it had undertaken or the instructions and information it had received.

There can be no question that it was reasonably foreseeable that a failure to warn of the risks created by the modifications, particularly of the consequences of failing to activate the toggle switch to release the brake, before the crane was driven, might put the operator and others at serious risk of injury. Inadvertent failure to activate the switch could not be excluded, in the absence of any mechanical warning of the need to do so. In that event, absent any information or warning of the need to check that the crane had not been damaged, so that a catastrophic collapse would result, if it was operated, without activating the switch, the risk of serious injury to which operators such as Mr Smith were exposed, was foreseeable and indeed obvious. By failing to provide such information and warning, Baden breached its duty to Mr Smith and the owners of the crane.

Causation

Causation must also be proven by Mr Smith. It is to be considered in light of the provisions of s 5D of the Civil Liability Act , which provides:

"5D General principles

(1) A determination that negligence caused particular harm comprises the following elements:

(a) that the negligence was a necessary condition of the occurrence of the harm ( factual causation ), and

(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused ( scope of liability ).

(2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent:

(a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and

(b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest.

(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party."

In Woolworths Ltd v Strong [2010] NSWCA 282 it was observed at [48]:

"Now, apart from the "exceptional case" that section 5D(2) recognises, section 5D(1) sets out what must be established to conclude that negligence caused particular harm. That emerges from the words "comprises the following elements" in the chapeau to section 5D(1). "Material contribution", and notions of increase in risk, have no role to play in section 5D(1). It well may be that many actions or omissions that the common law would have recognised as making a material contribution to the harm that a plaintiff suffered will fall within section 5D(1), but that does not alter the fact that the concepts of material contribution and increase in risk have no role to play in deciding whether section 5D(1) is satisfied in any particular case."

In Zanner v Zanner [2010] NSWCA 343, Allsop P observed at [11]:

"The requirement to follow s 5D is clear. What its statutory content is and the extent of any continuity with developing common law concepts awaits judicial elucidation. In Woolworth's Limited v Strong [2010] NSWCA 282 at [48] Campbell JA (with whom Handley AJA and Harrison J agreed) said that s 5D(1) excluded notions of "material contribution" and increase in risk. To the extent that his Honour was referring only to factors or circumstances from which a negative "but for" answer was given, so much is clear. However, the notion of cause at common law can incorporate "materially contributed to" in a way which would satisfy the "but for" test. Some factors which are only contributing factors can give a positive "but for" answer. Both the driver who goes through the red light and the driver with whom he collides who is not paying attention contribute to the accident. If either episode of neglect had not occurred the accident would not have occurred. The facts of Henville v Walker [2001] HCA 52; 206 CLR 459 provide another example. However, material contributions that have been taken to be causes in the past (notwithstanding failure to pass the "but for" test) such as in Bonnington Castings Ltd v Wardlaw [1956] AC 613 are taken up by s 5D(2) which, though referring to "an exceptional case", is to be assessed "in accordance with established principle"."

The evidence I have referred to does not leave room for doubt that factual causation was established against Baden. It made the modifications which resulted in the risk that the crane would collapse, if driven without the switch first being activated. It did not warn of the risk, or provide information either as to how safe operation of the crane depended on operator memory, that is remembering to activate the switch, before driving the crane; or that failure to do so could result in catastrophic damage to the crane. That risk materialised on the day of the accident.

It follows that the 'factual causation' discussed in Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem [2009] HCA 48; (2009) 239 CLR 420 was here established (see at [41] - [57]). On the evidence it was more probable than not, that but for Baden's failures, the crane would not have collapsed as it did on the day of the accident and that Mr Smith would not have been injured. It is also apparent that Baden's failures were ' a necessary condition of the occurrence of the harm' which Mr Smith suffered, in circumstances where it is appropriate for the scope of its liability to extend to the harm it so clearly caused. That harm was entirely foreseeable. The damage to the crane was the direct result of Mr Smith's failure to activate the switch, in circumstances where he had not been given any warning that such a failure, even during the brief period that he drove the crane, would cause this massive crane to collapse without warning, when operated. The circumstances are such that it can only be concluded that a reasonable person in Baden's position, would have given the information and warning necessary about the risks its modification to the machine had created.

Given the evidence of Mr Smith's capacity, skills and experience as a crane driver and his attitude to safety requirements, about which he was extensively cross-examined, I am satisfied that had Baden supplied the necessary information about the modifications it had made to the crane, what its safe operation required and how operator memory to activate the switch was relied on, to avoid catastrophic damage to the crane, the accident would not have occurred.

In the circumstances, responsibility for the harm its actions and failures caused Mr Smith, must rest with Baden. It is appropriate for the scope of its liability to extend to the harm it caused by its acts and omissions.

The case against Brambles

The Trade Practices Act (Cth) claim was not pursued against Brambles and it was accepted that any contractual claim was time barred. The provisions of the Civil Liability Act are again relevant here.

In summary, in my assessment, Mr Smith has also established that Brambles owed him a duty to exercise reasonable care to warn its employees and other foreseeable operators of the crane of the risk of collapse which the modifications it had Baden make to the crane had created, so that they would not be exposed to an unreasonable risk of injury. The risk was foreseeable and required a reasonable person in Brambles' position to take precautions to guard against the risk materialising.

That duty was breached, with the result that Brambles, too, caused the injury which Mr Smith suffered, after he took up employment with Gillespies. It, too, had simple means available to it, to address the risk which had been created, by the modification it had Baden make to the crane. Had they been taken, this accident would not have occurred.

The duty of care

Brambles also disputed the existence of any duty of care owed to Mr Smith. While the duty which it owed to Mr Smith, while Brambles employed him, was uncontentious, Brambles denied that it had breached that duty; that this duty persisted after the termination of the employment relationship; or that any other duty arose or continued, when it sold the crane to Gillespies.

Mr Smith's case was that Brambles breached the duty it owed both while he was its employee and when it transferred its crane operation to Gillespies as a going concern. Its duty was to provide him with adequate information, training and instruction in relation to using the dolly to transport the crane, without the slew brake being damaged. It also had a duty to provide a system that would warn if the brake had not been released as well as a duty to provide a dolly capable of enabling the transport of the crane, that would not subject those who might foreseeably transport it, to an unreasonable risk of injury in relation to uses to which it was reasonably foreseeable that the dolly might be put.

It was further argued to be reasonably foreseeable to Brambles that:

1. The modified dolly would be used by its employees and by Gillespie employees.

2. The crane structure would collapse if the slew brake was not released.

3. That if not properly instructed and trained, an employee would not activate the switch and if not activated, catastrophic injuries would result to the employee.

The evidence established a complete failure by Brambles to provide him, or later Gillespies, with useful or worthwhile information about the effects of the modification it had Baden make to the crane; the operation of the toggle switch; or the risks which failure to release the brake by activating the switch before the crane was driven, posed. If Brambles' case was that it was not aware of these things, it ought to have been, given the duty it owed Mr Smith as his employer.

Having had the crane modified to permit its transportation without disassembly, Brambles ought to have ensured that it supplied information to its crane operators about the operation of the dolly switch, the slew ring brake mechanism and the catastrophic consequences of failing to activate the switch, before driving the crane, sufficient to ensure the safe operation of this crane. It also had a duty to provide that information to Gillespies, when it sold it the crane, in circumstances where it continued to owe Mr Smith a duty of care.

It was also argued that while no authority could be pointed to, which suggested that a duty which an employer owed an employee, continued after the termination of the employment, there was no legislation or authority which permitted Brambles to avoid the result of the breach of the wider duty which it owed Mr Smith, because the injuries he suffered materialised only after the termination of his employment.

Brambles' case was that a claim that an employer was forever liable for its failures during the course of employment, was unsupported in law. A duty to a former employee was not owed, 'absent more'. An employer's duty was limited in scope and nature by the terms of the contract of employment. The duty was personal and did not survive the termination of the employment. While Mr Smith's employer, it only had a duty to ensure that he was aware that care needed to be taken, to activate the dolly switch. The fact that there could be inadvertence, was not a basis of any breach of duty.

Brambles also argued that the claim made against it was novel and would offend the balance discussed in Sullivan v Moody [2001] HCA 59; (2001) 207 CLR 562 at [42]:

"The argument was conducted upon the basis that it was foreseeable that harm of the kind allegedly suffered by the appellants might result from want of care on the part of those who investigated the possibility that the children had been sexually abused. But the fact that it is foreseeable, in the sense of being a real and not far-fetched possibility, that a careless act or omission on the part of one person may cause harm to another does not mean that the first person is subject to a legal liability to compensate the second by way of damages for negligence if there is such carelessness, and harm results. If it were otherwise, at least two consequences would follow. First, the law would subject citizens to an intolerable burden of potential liability, and constrain their freedom of action in a gross manner. Secondly, the tort of negligence would subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms. A defendant will only be liable, in negligence, for failure to take reasonable care to prevent a certain kind of foreseeable harm to a plaintiff, in circumstances where the law imposes a duty to take such care."

There was no such duty lying between Mr Smith and Brambles.

Support for Brambles' case was argued to be found in Mason P's observations in McPherson's Ltd v Eaton at [5]:

"Secondly, the issue presents at a time when the recent jurisprudence of the High Court shows that a choice must be made about the very question to be asked. Is there a broadly-stated duty to take reasonable care to avoid foreseeable risk of injury in which the reasonableness of the distributor's conduct is a factual issue dependant on the circumstances? Or is there in this (as in some categories) a more confined duty expressed as having a particular content or scope?"

It was accepted that in the case of a duty of care which required an employer to avoid employees inhaling asbestos dust during the course of their work, damages would not be evaded because the result of the breach of the duty only materialised after the termination of the employment. A later employer who breached that duty would also be responsible for the injuries it caused. But any analogy sought to be drawn with this type of situation was argued not to be apt, because any breach of Brambles' duty did not result in the injury the subject of the proceedings. It was Gillespies' breach of its duty as an employer, which caused the injury about which complaint was made by Mr Smith.

It was also argued that Brambles' duties as the seller of the crane to Gillespies were contractual and gave rise to no duty to it or Mr Smith. Contractual warranties had been agreed, which were relied on. Gillespies had conducted its own due diligence. Brambles did not warrant the competence or training of Mr Smith. Nor did it owe Gillespies or its employees any other duty of care. It was not the supplier of the crane. Even if it did owe such a duty, it was entitled to rely on Baden, in respect of the modifications (see Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; (2006) 226 CLR 161 at [12]). Baden was an independent contractor, for whom Brambles was not vicariously liable.

In my assessment there can be no question of the nature of the uncontested duty which Brambles owed Mr Smith, while he was its employee. T hat was a stringent duty which obliged it to provide a safe system of work (see Kondis v State Transport Authority [1984] HCA 61; (1984) 154 CLR 672 ; Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520 ; Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313 and Scott v Davis [2000] HCA 52; (2000) 204 CLR 333 at [245] - [249], [307] - [308] and [353]).

As discussed in TNT Australia Pty Ltd v Christie; Crown Equipment Pty Ltd v Christie; Manpower Services (Aust) Pty Ltd v Christie [2003] NSWCA 47; (2003) 65 NSWLR 1 at [49] - [50], while that duty was not absolute and an employer is not an insurer of workplace safety, the duty also extends to the safety of plant. In that regard, the duty requires the employer to take reasonable steps to provide the employee with equipment which is safe, for the purpose of carrying out the tasks of the employment (see at [175]).

After Brambles had the crane modified, the danger which resulted from any failure to activate the dolly switch, was extreme. That has to be considered in a context where it was obvious, even beforehand, given the size and nature of this crane, that any unsafe operation of the machine could give rise to considerable danger, both to an operator and those within the vicinity of the crane, which operated at different sites, throughout industry.

In those circumstances, that Brambles had a duty to ensure that it thoroughly understood the operation of the crane it had modified, so that it could ensure that the system under which those it employed operated the modified crane, was safe, cannot be questioned. It also knew that the operator's manual was an intrinsic part of the crane, but it did not ensure that it was modified, so as to reflect the modifications Baden had made to the crane itself and how they impacted its safe operation. Nor did it ensure that when it employed Mr Smith to operate the crane, that he was given adequate information, instruction and warning in relation to the modifications made to the crane; what safe operation of the crane required; or how the system of work relied on his memory, to avoid catastrophic damage to the crane.

In McLean v Tedman [1984] HCA 60; (1984) 155 CLR 306, a case where the plaintiff was also injured when following an unsafe system of work, where the employer had also either failed to establish a safe one, or had acquiesced in the unsafe one, it was said at 315:

"The issue of contributory negligence presents a little more difficulty, as the primary judge acknowledged. However, we are inclined to think that the difference between the approach adopted by the Full Court and that adopted by the primary judge largely reflected the difference in attitude to Brambles' responsibility in providing a safe system of work. The issue of contributory negligence has now to be approached on the footing that Brambles failed to discharge its obligation to provide a safe system, that is, to take appropriate precautions against the risk of injury arising from the motorist's negligence and the employee's failure to observe an oncoming vehicle as he carried out his allotted task. The question is whether that failure should be characterized as mere inattention or inadvertence or whether it amounts to negligence, there being a well recognized distinction between the two. It is accepted that in considering whether there was contributory negligence by an employee in a case in which the employer has failed to provide a safe system of work, the circumstances and conditions in which he had to do his work must be taken into account. And the issue of contributory negligence is essentially a question of fact."

In Ghunaim v Bart [2004] NSWCA 28 at [61] - [65] McColl JA said:

"61 The notion of "thoughtlessness" referred to in Bourke v Butterfield is also expressed in synonyms such as temporary inadvertence to danger, lapse of attention, taking of a risk, carelessness by an employee due to confusion, fatigue or natural slackening of attention or preoccupation in what he or she is doing. In Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 176, Lord Wright, speaking of the degree of want of care which constitutes contributory negligence, said '[t]he jury have to draw the line where mere thoughtlessness or inadvertence or forgetfulness ceases and where negligence begins'; see also John Summers & Sons Ltd v Frost [1955] AC 740 at 777.

62 Lord Wright's metaphorical reference to drawing the line should not obscure the fact that the question whether an employee has been guilty of contributory negligence is one of degree. The authorities upon which the appellant relies are useful illustrations of how the court should approach the task of distinguishing between thoughtlessness and negligence.

63 The fact that there is no clear demarcation between an act done without reasonable care for one's own safety and an inadvertent, thoughtless act was emphasised in Sungravure Pty Limited v Meani [1964] HCA 16, (1964) 110 CLR 24 by Kitto, Menzies and Owen JJ. Referring to a submission on behalf of the respondent (plaintiff) that he had merely acted thoughtlessly or inadvertently and not negligently and that in those circumstances a finding of contributory negligence should not be made, the majority said (at 33):

'An inadvertent or thoughtless act may also amount to a negligent act for the very reason that it is done without thought for or consideration of the consequences that may follow from the doing of it, and whether it is so or not is a matter for the consideration of the tribunal of fact.'

64 Windeyer J set the matter in context, saying (at 36-37):

'A safe system of work is one that is safe for the average workman taking reasonable care for his own safety. It is not a system which is safe only for persons of superior skill whose attention never wanders.... In the press of affairs anywhere a need to act promptly may sometimes lead to something being done, which has unfortunate results, but which is attributable to an error of judgment rather than a blameworthy want of due care.'

65 In Commissioner for Railways v Halley (1978) 20 ALR 409 at 415, Jacobs J emphasised that it was not sufficient for an employer seeking to establish that an employee was guilty of contributory negligence merely to demonstrate that the employee knew the task at hand was 'highly dangerous'. ... "

In the circumstances of this case, I am satisfied that where Mr Smith was never given any necessary warning, information, instruction or training as to the feature of the machine which caused its catastrophic damage, or even of the need to ensure that there had been no damage caused by his inadvertent failure to activate the switch, before the crane was operated, in the way the evidence revealed, cannot establish his contributory negligence. Mr Smith's oversight was certainly not an act done without reasonable care for his own safety.

The cross-claims

It is provided in s 5 of the Law Reform (Miscellaneous Provisions) Act that:

"(1) Where damage is suffered by any person as a result of a tort (whether a crime or not):

(a) judgment recovered against any tort-feasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tort-feasor in respect of the same damage,

(b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the spouse, brother, sister, half-brother, half-sister, parent or child, of that person, against tort-feasors liable in respect of the damage (whether as joint tort-feasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action,

(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by that person in respect of the liability in respect of which the contribution is sought.

(2) In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.

... "

Brambles claimed full indemnity from Gillespies and/or Baden, arguing that both were in a superior position of control and knowledge to it and that both their failures were significantly more causatively potent, than any failure on its part. It was also argued that there would be no apportionment of liability, having regard to the principles in Sweeney v Boylan Nominees Ltd and the scope of Gillespies' non-delegable duty as an employer.

I am unable to accept these submissions. For reasons which I have earlier explained, the evidence does not permit the conclusion argued for Brambles. In my view, there must here be an apportionment between all the defendants.

Gillespies' case that both Baden and Brambles owed it a duty of care, given the modifications made to the crane, which in Brambles' case existed independent of the sale contract, must be accepted. They failed to provide information vital to the safe operation of the machine. In so far as the risk was foreseeable, Brambles was in a much better position of identifying it than Gillespies was.

I accept that Gillespies established a case against both Baden and Brambles. For reasons which I have already explained, in my assessment Baden owed owners and operators of the crane a duty of care, as did Brambles. They owed a duty to Gillespies when it acquired the crane. That duty flowed from the modifications which Baden made to the crane at Brambles' request and the sale of that crane by Brambles. Both Baden and Brambles breached their duty to Gillespies.

The nature of the duty which Gillespies owed Mr Smith as his employer, did not relieve either Baden or Brambles of the consequences of the breach of their duty to Gillespies. Nor did those duties relieve Gillespies of the duty it owed Mr Smith.

The end result cannot, therefore, be a full indemnity for Gillespies. On the evidence as to its own approach to the duty which it owed Mr Smith, the breaches of the duties which Baden and Brambles owed it, cannot relieve it entirely of the consequences of its own breach of the duty it owed Mr Smith.

Having all of the matters I have dealt with in mind, I have come to the conclusion that the matters raised by the various cross claims must be resolved by a conclusion as to the defendants' respective responsibilities for the injuries which Mr Smith suffered. That will properly take account of the cases upon which each of the defendants succeeded. The result is an apportionment of Baden having a 45% responsibility, Brambles 35% and Gillespies 20%.

While at the time of the injury, Gillespies had day-to-day control of the crane and Mr Smith's work, owing him a stringent duty of care as his employer, the evidence showed that both Brambles and Baden both failed to meet the duties which they each owed to Mr Smith and Gillespies, in circumstances where they each had direct knowledge of the nature of the modifications which had been made to the crane and the inadequacy of the information provided to operators and purchasers of the crane, such as Mr Smith and Gillespies, of what safe operation of the crane required.

In that respect, Baden, which had made the modifications, was in a much better position than Brambles to understand what information was required to be given, if the crane was to be able to be operated safely. Its failures were more significant than those of Brambles.

Mr Smith's injuries

There were no real issues as to the injuries which Mr Smith sustained, other than a question as to back pain. As the result of his injuries, Mr Smith has never been able to return to his work as a crane operator and suffers ongoing pain. His life has otherwise been substantially affected in various ways. He is, for example, unable to pursue longstanding interests such as fishing and camping, without experiencing substantial pain.

His evidence was that he suffered a broken and crushed left ankle, a broken right foot, and severe bruising of the left ribs and right wrist. There was a communited displaced open fracture of the left foot, which required extensive surgery. The result was severe pain in his legs which had left him anxious and stressed. His foot tingled and was bloated up, which did not allow any rocking movement. He also suffered back pain.

Mr Smith was cross-examined as to his health since the accident. He said he now had increasing problems with his right knee, but he was not seeing anyone about that at the time of giving evidence. He was still taking pain medication as the result of his ongoing problems with his left ankle and leg.

Mr Smith's evidence was consistent with the assessment made of him by Dr Harrison, an orthopaedic surgeon, in 2006. This showed that Mr Smith had surgery on his left ankle on 3 November 2003, at a time when he was suffering intense pain and deformity, with displacement of fracture fragments. While hospitalised, bruising developed on his chest wall, with fractured ribs then suspected. That pain eventually settled. There was further surgery on his foot on 6 November. Problems in recovery were the result of the surgery to the left ankle, the injury to the right ankle and right wrist and the need to use crutches during recovery. There was follow up surgery on the left ankle in January 2004 and physiotherapy. Further surgery was required in April 2004, involving a bone graft. Dr Harrison believed further surgery might be beneficial to help relieve ongoing discomfort in that ankle.

Mr Smith was able only to return to light office duties at Gillespies and struggled to cope, before obtaining a position at Melrose Cranes, as an occupational health and safety supervisor, starting on 20 hours per week and building up to 40. He also struggled with that work, however, because of problems with his left ankle and hind foot. As at April 2006, Dr Harrison observed that there were no problems with his right wrist and that the chest wall pain had settled, but observed that there were residual problems with dysesthesia in both feet, some referred pain to his back and pain, swelling, restriction of motion and a tendency to limp, favouring his left leg and ankle.

The limp was described to be heavy, with the result that Mr Smith had problems with stairs, but there was no significant restriction with the right leg. He had problems sitting for long and was then being treated for ongoing pain and swelling. Dr Harrison concluded that Mr Smith's condition had stabilised; that he was experiencing referred pain from his back, accounting for the dysesthesia (that is pain or abnormal sensations such as tingling, burning or numbness) in both his limbs. His tendency to limp was likely to accelerate the pattern of wear in his left knee, with the result patterns of mechanical back pain, which would increase and create greater problems in time, if not helped by interim conservative measures. Dr Harrison concluded that:

"His tendency to limp favouring the left leg is a direct consequence of the calcaneal fracture and the back injury in the mechanics of the original injury on 3 November 2003 that I have described and certainly are likely to be substantially related to the injury and the subsequent incapacities which he has suffered, limping favouring the left leg and with asymmetrical loading on to his right lower limb at and following that injury over a long interval of time."

There was then a 15% whole of person assessment relating to Mr Smith's injury at work, irrespective of previous injury to which Dr Harrison had referred in his report, having in mind the referred pain from Mr Smith's back and the pain affecting both his limbs.

After the hearing, written submissions were filed without objection for Brambles, where it was argued on the basis of various medical records in evidence, that the plaintiff did not injure his lower back in the accident; that he may have stirred up his neck, but that had clearly settled and that even at the time of the accident, he had degenerative changes which more likely than not caused non-compensable incapacities. He had also suffered from and received treatment for other non-compensable injuries, including to his right knee. It was submitted that there was no mention of back problems until May 2007, when reference was made to back pain since 2007; there was mention of non-compensable knee problems for several years, with in May 2007 osteoarthritis noted in the right knee and in 2008, pains in the lower lumbar, knees, hips and ankles, with a right knee arthroscopy, partial meniscectomy and chondropathy which would have caused non-compensable economic incapacity, with future implications as arthritis became established. Not to take these matters into account would result in overcompensation for the injuries suffered.

That Mr Smith suffered other non-compensable injuries in the past is apparent. They were dealt with in Dr Harrison's report and in later material. They may not be take into account in the assessments here made. Nevertheless, I am satisfied that the evidence clearly establishes that before 2007, Mr Smith was suffering back pain as the result of the injuries he sustained in the accident. Given his evidence and Dr Harrison's 2006 description of what he had experienced and the treatment that he had received, that Mr Smith suffered the back pain claimed, can readily be accepted. It follows that some account must be taken of back pain, even if later exacerbated by other things dealt with in the evidence.

Mitigation

Mr Smith's 2007 affidavit evidence was that he did not work for a substantial period after the accident. After an initial return to Gillespies on light duties, he obtained employment with Melrose Cranes through his contacts, in a job which did not involve crane driving, but was mainly office based. He could not manage rough terrain on sites and was taking pain killers and anti-inflammatories. His condition also precluded him working overtime, but he tried to keep up 40 hours per week. He was previously earning $1,032 gross per week and up to $2,000 with overtime. At Melrose Cranes he was earning between $940 and $960 per week. He left that employment in 2008 to commence his own business and had since been self-employed, working for a company of which he and his wife were directors. Little of his work is based at work sites and he does not operate cranes.

Mr Smith was cross-examined about this business, which he pursued after having undertaken various further training in occupational health and safety and first aid. The business provides various training and assessment, Mr Smith having also become a WorkCover accredited assessor, for crane operators seeking crane certificates.

The business is operated from home, with his wife performing the administration and finance work, with assistance from their accountants. Mr Smith charges rates ranging from $60 to $80 per hour for his work. To 30 June 2009 sales of some $41,000 were generated and in 2010, $80,841, with wages of some $33,635 paid. The schedule of income showed net earnings per week in 2003 of some $1,140, falling to $683 in 2004 and in 2008 when the business was commenced, $586, with earnings in 2010 estimated to be of some $272 per week. Mr Smith accepted that there was room for growth in his business, but that depended on his physical capacity.

On that evidence, I am satisfied that Mr Smith has acted in accordance with his obligation to mitigate his damages.

Section 151Z of the Workers Compensation Act 1987

It was common ground that s 151Z of the Workers Compensation Act 1987 must be applied. Its operation has been repeatedly considered in the authorities and is to be approached in the way discussed in J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142 and cases which have followed it. Mr Smith received workers compensation payments from Gillespies, which must be dealt with in the orders made.

The section relevantly provides:

"151Z Recovery against both employer and stranger

(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect:

(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,

(b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker's injury under this Act, and the worker is not entitled to any further compensation,

(c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,

(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),

(e) if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages,

(e1) if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been satisfied), the payment, to the extent of its amount, satisfies the judgment,

(f) all questions relating to matters arising under this section are, in default of agreement, to be settled by action or, with the consent of the parties, by the Commission.

(2) If, in respect of an injury to a worker for which compensation is payable under this Act:

(a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker's employer, and

(b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer,

the following provisions have effect:

(c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) are to be reduced by the amount by which the contribution which the person would (but for this Part) be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable,

(d) the amount of the contribution that the person is entitled to recover from the employer as a joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with provisions of Division 3 as to the award of damages,

(e) if the worker does not take proceedings against that employer or does not accept satisfaction of the judgment against that employer, subsection (1) applies as if the worker had not been entitled to recover damages from that employer, except that:

(i) if the compensation paid by that employer exceeds the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise-the indemnity referred to in subsection (1) (d) is for the amount of the excess only, and

(ii) if the compensation paid by that employer does not exceed the amount of that contribution-subsection (1) (d) does not apply and the employer has, to the extent of the compensation so paid, a defence to an action for such a contribution.

(3) This section applies to proceedings taken independently of this Act by a person to whom compensation is payable under this Act in respect of the death of a worker as a result of an injury.

(4) If a worker is liable under subsection (1) (b) to repay any money out of damages recovered by the worker, the worker is not liable to repay the money out of any damages payable after the date of recovery by way of periodic or other payments for loss of future earnings or earning capacity or for future expenses.

(5) For the avoidance of doubt, this section applies and is taken always to have applied to the recovery of compensation or damages, whether or not the compensation or damages were paid under an award or judgment. For example, compensation or damages may be paid under an agreement."

The Workers Compensation Act limits the damages which may be recovered by Mr Smith from Gillespies, but not from Baden and Brambles, although in the circumstances which have arisen, it does have an impact on what Mr Smith may recover from them (see Grljak v Trivan Pty Ltd (In liq) (1994) 35 NSWLR 82 at 91). In this case, damages are recoverable from Gillespies because I have assessed Mr Smith's degree of permanent impairment suffered at over 15% (see s 151H(1)). This Act, in the final result, means that Mr Smith may only recover less than what would have been the case, if Gillespies had not been a tortfeasor responsible for his injuries.

Section 151Z has similar aims to those of s 5(1) of the Law Reform (Miscellaneous Provisions) Act , that is to achieve a just and equitable contribution between those found to have been tortfeasors, having regard to the extent of their respective responsibility for the damages in question. Ultimately, however, it limits the amount paid by Gillespies on the basis that it should not pay an amount greater than if its proportionate share of the responsibility had been applied to an amount of damages quantified under the Workers Compensation Act.

Section 151Z(2)(d) requires that an assessment be made of the amount of the damages which Mr Smith would have been entitled, if all of his damages were calculated in accordance with the damages regime established by the Workers Compensation Act and to asses the respective proportionate responsibilities of Baden, Brambles and Gillespies. What Gillespies can recover from Baden and Brambles is not dealt with by s 151Z. The Law Reform (Miscellaneous Provisions Act) is the source for orders of contribution, as between them.

What must thus be ascertained is both the amount of Mr Smith's modified common law damages under the Workers Compensation Act , those ascertained in accordance with the Civil Liability Act and the proportionate responsibility of the defendants.

In this case, I have found that Baden and Brambles breached their duty of care and thereby caused the injuries which led to the payments made by Gillespies, which was also in breach of its duties to Mr Smith and caused his injures. The 15% threshold applying to Gillespies has been passed. The preconditions to s 151Z(2) have been satisfied.

I now turn to the calculation of damages.

Damages

There was finally no issue between the parties about past out of pocket expenses; the figure for Fox v Wood [1981] HCA 41; (1981) 148 CLR 438 ; the rate at which superannuation would be calculated (11%); Mr Smith's actual earnings; or those of crane drivers now employed by Gillespies, although that not accepted by the defendants, as a comparable figure.

The plaintiff's schedule of damages for Baden and Brambles was:

"1. Non-economic loss
35% CLA

175,000.00

2. Past economic loss
(i) wage loss
(ii) Loss of super at 11%

371,308.75
40,843.96

3. Future economic loss
(i) $1,200 pw x 13 yrs
i.e. $1,200 x 502.3 x .85

512,346.00

(ii) future loss of super at 11% to age 65

$56,358.00

4. Past out of pocket expenses
(i) workers compensation

103,471.57

5. Future out of pocket expenses

20,000.00

6. 2 hours pw x $35 x 32 yrs
i.e. $70 x 8.45.00

59,150.00

7 . Fox v Wood

4,164.97

$1,342,643.00"

The plaintiff's schedule of damages for Gillespies was:

" 1. Past economic loss
(i) Per Schedule 1
(iii)(sic) Past loss of super at 11% of wage loss

371,308.75
40,843.96

2. Future economic loss
(i) $1,200 pw x 13 yrs
i.e. $1,200 x 502.3 x .85

512,346.00

(ii) Future loss of super at 11% to age 65

56,358.00

3. Fox v Wood

4,164.97

$985,021.00"

Gillespies addressed some matters which did not directly affect it on behalf of the other defendants. The parties did not finally address on the impact of s 151Z, the calculation of which they hoped to agree. That calculation remains to be undertaken by the parties. Gillespies' schedule was:

"1.

Non-economic loss:
25% of a most extreme case - S. 16 Civil Liability Act 2002

32,500.00

2.

Past out-of-pocket expenses:
(Agreed)

103,471.57

3.

Future out-of-pocket expenses :
Calculated based on ongoing Panadeine Forte (caplets 50 price $12.50) (4 per day) (say) $6 per week and laxatives at 100 capsules for $23.44 (say) $5 per week
Attending GP twice per annum (say) $2 per week
Total: $13 per week for life (839.4)

10,912.20

4.

Past economic loss :
Pre-Injury earnings of $1,140 net per week
Period 1 : From 3 November 2003 to 30 June 2008 - $374.34 x 242 weeks - $90,590.28
Period 2 : From 1 July 2008 to 30 June 2009
$100 x 52 = $5,200
Period 3 : From 1 July 2009 to 30 June 2010
$100 x 52 = $5,200
Period 4 : From 1 July 2010 to 23 May 2011
$100 x 47 = $4,700
NB . S151I WCA

$105,690.00

5.

Past superannuation at 11%

11,625.93

6.

Future economic loss:
Based on comparable of $1,853 net per week
Based on earning capacity of $625 gross per day ($3,125 gross per week)
Suggested buffer based on (say) $100 per week, less 15% for vicissitudes
$100 x 502.3 x 0.85
NB. S151I WCA

42,695.50

7.

Future superannuation at 11%

4,696.50

8.

Domestic assistance

Nil

TOTAL:

311,591.70"

Non-economic loss

Section 16 of the Civil Liability Act governs the assessment of non-economic loss in respect of Baden and Brambles, providing that no such damages may be awarded unless the severity of the non-economic loss is at least 15% of a most extreme case.

Mr Smith claimed non-economic loss from Baden and Brambles, calculated at 35%, given the evidence of the overall effect of his injuries and their consequences. Brambles argued that this was but an ambit claim, not reflective of his ability to get on with his life.

In my assessment of the evidence to which I have referred, Mr Smith must be assessed as having suffered a 32% impairment. True it is that he has made commendable efforts to adjust his life to the injuries which he has suffered. Nevertheless, the ongoing effects which those injuries have had upon him, his health and well being and how he is able to live his day-to-day life, established that the result has been that he suffered a very substantial impairment, which is unlikely to improve.

Economic Loss

Damages for economic loss sought against Baden and Brambles was calculated at pre-injury agreed earnings of $1,140 net per week and the current agreed wage of a crane driver, $1,850. For Mr Smith reliance was placed on the principles discussed in Kallouf v Middis [2008] NSWCA 61, where it was observed at [50] that the principles to be applied are those discussed in Rabay v Bristow [2005] NSWCA 199:

"[73] Compensation for loss of earning capacity is awarded because the diminution in an injured plaintiff's earning capacity 'is or may be productive of financial loss': Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 at 347. It is incumbent upon the plaintiff to prove the loss for which compensation is claimed ( Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 at 412) but, conversely, it is not incumbent upon the injured plaintiff to prove what employment he or she 'is not incapacitated from performing'. It is for a defendant which contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such a person : H Luntz , Assessment of Damages for Personal Injury and Death (4th ed) at 118 [1.9.20].

[74] The primary judge was entitled to take into consideration the fact that the respondent had an employment history which demonstrated a consistent pattern of full time employment in work which might fairly be described as having been of a heavy manual nature: Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 at 143 per Gleeson CJ, Gummow, Kirby and Hayne JJ.

....

[79] The assessment of damages for future economic loss involves reference to future or hypothetical events. It was described as 'the process of estimation of possibility' in Malec v J C Hutton Pty Limited [199] HCA 20; (1990) 169 CLR 638 at 643 per Deane Gaudron and Gummow JJ. This is, as Santow JA has pointed out, 'necessarily an imprecise matter of estimation, carried out within broad parameters ...': Donald v McKeown [2004] NSWCA 285 at [38]." (emphasis added)

So far as Gillespies is concerned, s 151I of the Workers Compensation Act must be taken into account. It provides:

"151I Calculation of past and future loss of earnings

(1) In awarding damages, the court is to disregard the amount (if any) by which the injured or deceased worker's net weekly earnings would (but for the injury or death) have exceeded the amount that is the maximum amount of weekly payments of compensation under section 35 (even though that maximum amount under section 35 is a maximum gross earnings amount).

(2) The maximum amount of weekly payments of compensation under section 35 for a future period is to be the amount that the court considers is likely to be the amount for that period having regard to the operation of Division 6 of Part 3 (Indexation of amounts of benefits).

(3) This section applies even though weekly payments of compensation to the worker concerned are not subject to the maximum amount prescribed under section 35."

Past economic loss

What Mr Smith has in fact earned since the accident is not in issue. It was agreed that Mr Smith's pre-injury earnings were $1,140 net per week. On his evidence, even in 2003, he earned up to $2,000 per week gross, because he worked regular overtime. On Mr Gillespie's evidence as to Mr Smith's capacity as a crane operator, that he was capable of earning what a crane driver employed at Gillespies earns, but for the injury, must be accepted. That is a capacity which he lost at the time of his injury, albeit he now still has a capacity for part-time work, in a different occupation.

The loss claimed was $371,308.75, calculated by reference to pre-injury earnings of $1,140 up to 30 June 2010 and $1,850 thereafter, against actual wages earned (a total of $284,700), plus $86,608.75 weekly compensation paid since the accident by Gillespies.

Mr Smith's schedule of past income is relevant to that claim. It showed earnings of:

"Schedule 1

PERIOD

POSSIBLE
NET WAGE

ACTUAL
NET WAGE

DIFFERENCE

WEEKS

LOSS

3/11/03 -
30/6/04

1,140*

683

457

34

15,538

1/7/04 - 30/6/05

1,140

538

602

52

31,304

1/7/06 - 30/6/06

1,140

777

363

52

18,876

1/7/06 - 30/6/07

1,140

565

575

52

29,900

1/7/07 - 30/6/08

1,140

586

554

52

28,808

1/7/08 - 30/6/09

1,140

146

994

52

51,688

1/7/09 - 30/6/10

1,140

272

868

52

45,136

1/7/10 - 26/5/11

1,850**

500
(estimated)

1,350

47

63,450

$284,700

* From the 2003 Notice of Assessment

** The agreed current wage for a crane driver, operator if still working as such"

On Gillespies' case, past economic loss was $105,690. The calculations were, in part, based on actual income averaged out to a weekly figure of $765.66 net per week. In respect of the period from I July 2008, the loss was assessed at $100 per week, that being the loss its expert, Dr Hall, had identified. The result was that the loss per week was calculated as:

These calculations as to potential earning capacity had to be reduced in accordance with the provisions of s151I of the Workers Compensation Act in Gillespies' case.
For Brambles it was argued that the evidence of the actual earnings of a crane driver ought to be approached with caution, given individual propensities for overtime and differing individual cranes used in industry, different to that operated by Mr Smith for Gillespies. It also argued that it was relevant that during the period 1 July 2007 to 30 June 2008, the plaintiff's actual wages were $942 per week. This should be accepted as evidencing his capacity to earn, despite falls in income, when he changed his career path.
Also to be considered is that the earning capacity assessment relied on by Gillespies accepted that Mr Smith was not fit for his pre-injury work and that he was not able to perform a reasonable amount of overtime, or full-time work. Only 30 hours per week of sedentary work involving no lifting was suggested to be suitable.
The work options identified were training and development professional; occupational health and safety adviser; and safety inspector. Only 18%, 16% and 10% of such positions respectively were assessed to be part time, with gross assessed remuneration of $1,266.32, $1,314.47 and $1,245. The vacancies identified in such positions, respectively were 8, 94 and none. It was also noted that the positions identified might involve a level of function inconsistent with that assessed for Mr Smith. Nor was it apparent that any of the positions so identified provided for part-time work, at the number of hours Mr Smith was assessed as being able to perform. The two sample advertisements provided did not refer to such part-time work being available.
That Mr Smith experienced difficulties in performing the full-time work which he worked up to over time, while employed to at Melrose Cranes must be accepted. That he worked to obtain further qualifications, in order to establish a business in which he could be employed to perform part-time work of a kind which he could manage, given his ongoing physical difficulties, must also be accepted. He accepted that it was a business which had the capacity to grow, but that depended on his physical capacity to manage further work. I have no reason to reject that evidence.
In those circumstances, it seems to me that it must be concluded that even though while in employment in the business which he established, that Mr Smith has not been able to generate income at the same level as that which he previously generated, even in his employment at Melrose Cranes, that it has not been established that the claim advanced for Mr Smith, in respect of past losses has no proper basis on the evidence. To the contrary, I am not able to accept that the defendants have met the onus which fell upon them, to establish that Mr Smith could have done work which would have generated the earnings which they claimed.
The maximum amount is as specified in the submission advanced for Gillespies (see MFI 9). Its share of this aspect of damages, must be reduced, where it exceeds those amounts. That is a mathematical exercise which needs to be undertaken.
Future economic loss
Section 13 of the Civil Liability Act, which applies to Baden and Brambles, provides:
"13 Future economic loss-claimant's prospects and adjustments
(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury.
(2) When a court determines the amount of any such award of damages for future economic loss it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events might have occurred but for the injury.
(3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted."
Mr Smith's claim was explained to be for $512,346, calculated on the basis of a loss of $1,200 per week, by reference to current net earnings of $600 per week and an earning capacity of $650 and the agreed rate for Gillespies' crane drivers, for 13 years to age 67, he now being aged 54 years. This was accepted as being 'at the top of the range'. Superannuation also needed to be added.
Brambles argued that Mr Smith's present earnings would not be equated with his capacity to earn. While it was to his credit that he had started up a new business which he was building up, account would be taken of tax benefits flowing from working as a self-employed person in a family company. In the circumstances, gross earnings would be a fairer benchmark of capacity, given that they were shared with his wife, although it was accepted that money had to be spent, in order for those earnings to be generated. As to superannuation, account would be taken of the fact that by keeping his personal income down, that would reduce his superannuation contributions, as a matter of choice. That was not a matter of loss. If Mr Smith's daily rate was considered, it was argued that his earning capacity did not differ much to that of a crane driver.
It was also argued that despite Mr Smith's aim to work to 67, consideration would be given to the evidence that only one crane driver in Gillespies' employ was still working at age 60.
For Gillespies it was argued that this assessment would proceed on the basis that on his own evidence, Mr Smith could sometimes earn between $600 and $650 gross per day (at rates ranging from $60 to $80 per hour). Thus, his earning capacity must be assessed at $3,125 per week. In those circumstances a buffer of say $100 per week, would be awarded, less 15% for vicisitudes.
It is difficult to accept this calculation, notwithstanding what Mr Smith actually earns some days. Having in mind the expert evidence led as to his capacity to work only 30 hours per week, even that approach would only bring his earning capacity in the range of $1,800 to $2,400 per week gross.
Mr Smith's earnings are unquestionably not only affected by the part-time hours he can manage given his health, but also by the way in which he and his wife operate the company of which he is an employee and the work it can attract. The income it generates comes from the hours which Mr Smith works and the rates it is able to command for his work. It was also accepted that there are expenses involved in the running that business such as expenses of running a vehicle, in respect of the work his wife performs, the accounting services utilised and Mr Smith undertaking various training.
In all of these circumstances, it seems to me that the evaluation of future earnings may not proceed only on the basis of the actual earnings derived by Mr Smith from the company's business alone. Some consideration must be given to his potential earning capacity. The evidence that he has the prospect of employment, which if it could be obtained, would also generate significantly greater income than the business had recently generated, may also not be ignored, although his age and the availability of suitable part-time positions, is also a factor which must be considered.
The calculation was pressed for a period to age 67. On the evidence, it does not seem likely that but for the injury Mr Smith would then still have been in employment as a crane driver. Nevertheless, it is evident from the work which he performed at Melrose Cranes and that which he now performs, that Mr Smith could have continued working past 60, as he wished to do, albeit in different and less remunerative employment.
In all of those circumstances, it seems to me that the calculation must be undertaken to age 67 and that it must be approached on the basis of a buffer, as the defendants accepted was available in the circumstances. That buffer is to be calculated at the rate of $500 per week to age 60 and thereafter, at the rate of $300 per week thereafter to age 67. There must also be a 15% discount for vicissitudes and an amount in respect of superannuation. I do not accept that the possibility that Mr Smith could reduce any amount he has to contribute in respect of superannuation, because of his business arrangements, should lead to any reduction in this component.
Future Medical expenses
An amount of $20,000 was sought on the basis of Dr Horley's reports, which suggested a possible future need for further surgery and to cover visits to a general practitioner, and ongoing medication, assessed on a conservative treatment basis.
Gillespies argued that the sum would be calculated as $10,912.20, having regard to the cost of an ongoing need for panadeine forte and laxatives and attending a GP twice per annum, for life; Mr Smith having a life expectancy of 31.5 years.
In my assessment the amount proposed by Gillespies is too low, having in mind Mr Smith's ongoing medical needs, which on the evidence includes various medication, including anti-inflammatories, ongoing GP treatment and Dr Harrison's assessment that he would benefit from a further procedure on his ankle, to address discomfort caused by pinning.
Doing the best I can on the evidence, I assess future medical needs at $18,000.
Paid domestic assistance
Section 15B of the Civil Liability Act applies to Baden and Brambles.
There was no claim for past assistance for lawn mowing, some of which had been paid for and some undertaken by Mr Smith's son. Mr Smith's medical advice was that in future he would need assistance in attending to normal maintenance of his house and lawn mowing. The claim pressed was for two hours per week at $32 per hour for 32 years, that being his life expectancy.
For Brambles it was argued that 32 years was too long, given the plaintiff's evidence, which included that he would downgrade his house, as he got older. The claim made would result in overcompensation.
It seems to me that submission must be accepted. In my assessment this aspect of the damages should be calculated on the basis of 28 years.
Orders
For the reasons given, I find for the plaintiff and propose to make orders against the defendants, in accordance with the terms of this judgment. The usual order as to costs would be that they follow the event. If the parties wish to be heard on costs, they should approach.
Various calculations still need to be undertaken, to give effect to the judgment. The parties should confer and bring in short minutes of the orders reflecting this judgment. They have liberty to approach in the event of disagreement as to those calculations.
**********
TABLE OF CONTENTS
paragraph
Judgment ....................................................................................................................................... 1
Extension of time - Gillespies ......................................................................................................... 10
The issues identified by the parties .............................................................................................. 14
The factual background .................................................................................................................15
The cause of the accident ............................................................................................. 15
Operation of the crane .................................................................................................... 25
The documentary evidence ............................................................................................ 34
The training and instruction given to Mr Smith .............................................................. 48
What information did Baden, Brambles and Gillespies provide?.................................... 60
The expert evidence ..................................................................................................................... 67
The analogies drawn with a car .................................................................................................. 104
The case against Baden ............................................................................................................. 112
The duty of care ............................................................................................................. 118
Breach ........................................................................................................................... 149
Causation ...................................................................................................................... 155
The case against Brambles ........................................................................................................ 163
The duty of care ............................................................................................................. 166
Breach ........................................................................................................................... 205
Causation ..................................................................................................................... .213
The case against Gillespies 224
Breach .......................................................................................................................... 225
Causation...................................................................................................................... 249
The Occupational Health and Safety Act 2000 regulations ........................................................ 256
Contributory negligence - Mr Smith ............................................................................................ 258
The cross-claims ........................................................................................................................ 267
Mr Smith's injuries ...................................................................................................................... 277
Mitigation ................................................................................................................................... 286
Section 151z of the Workers Compensation Act 1987 ............................................................... 290
Damages .................................................................................................................................... 298
Non-economic loss ........................................................................................................ 302
Economic Loss............................................................................................................... 305
Past economic loss......................................................................................................... 307
Future economic loss .................................................................................................... 318
Future Medical expenses............................................................................................... 328
Paid domestic assistance .............................................................................................. 332
Orders ......................................................................................................................................... 336
Decision last updated: 31 August 2011

Policy and Procedures

Accessibility

Contact Us

Website last updated: 07 May 2018

"Past economic loss :
Pre-Injury earnings of $1,140 net per week
Period 1 : From 3 November 2003 to 30 June 2008 - $374.34 x 242 weeks - $90,590.28
Period 2 : From 1 July 2008 to 30 June 2009
$100 x 52 = $5,200
Period 3 : From 1 July 2009 to 30 June 2010
$100 x 52 = $5,200
Period 4 : From 1 July 2010 to 23 May 2011
$100 x 47 = $4,700
NB . S151I WCA "

$105,690.00

Medium Neutral Citation:	Smith v Brambles Australia Ltd [2011] NSWSC 963
Hearing dates:	23 May 2011, 24 May 2011, 25 May 2011, 26 May 2011
Decision date:	26 August 2011
Before:	Schmidt J
Decision:	For the reasons given, I find for the plaintiff and propose to make orders against the defendants, in accordance with the terms of this judgment. The usual order as to costs would be that they follow the event. If the parties wish to be heard on costs, they should approach. Various calculations still need to be undertaken, to give effect to the judgment. The parties should confer and bring in short minutes of the orders reflecting this judgment. They have liberty to approach in the event of disagreement as to those calculations.
Catchwords:	TORTS - negligence - serious workplace injury - employee experienced crane operator - collapse of crane - crane modified for former owner and operator of crane - modification created risk of collapse of crane - serious risk of injury resulted for anyone operating crane once damaged - extension of time to bring proceedings against former employer - expert evidence - analogies drawn with a car - whether company who modified crane owed a duty of care - whether duty breached - whether causation proven - whether former owner and operator of crane owed a duty of care - whether duty breached - whether causation proven - whether former employer breached duty of care - whether causation proven - Occupational Health and Safety Act 2000 regulations - contributory negligence - whether employee's oversight an act done without reasonable care for own safety- contributory negligence not found - cross claims - whether former owner and operator can claim full indemnity - whether former employer owed a duty of care by former owner and operator and company that made modifications - duty of care found - no full indemnity for former employer - all defendants proportionately liable - employees injuries - 15% whole person assessment - back pain result of injuries - employee mitigated his damages - s 151Z of the Workers Compensation Act 1987 applied - DAMAGES - non economic loss - economic loss - past economic loss - future economic loss - future medical expenses - paid domestic assistance
Legislation Cited:	Civil Liability Act 2002 Law Reform (Miscellaneous Provisions) Act 1946 Occupational Health and Safety Act 2000 Sale of Goods Act 1923 Trade Practices Act 1974 (Cth) Workers Compensation Act 1987 Workplace Injury Management and Workers Compensation Act 1998
Cases Cited:	Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem [2009] HCA 48; (2009) 239 CLR 420 Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301 J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142 Burnie Port Authority v General Jones Pty Ltd [1994] HCA 13; (1994) 179 CLR 520 Czatyrko v Edith Cowan University [2005] HCA 14; (2005) 214 ALR 349 Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 277 ALR 611 Davie v New Merton Board Mills Ltd [1959] AC 604 Roads and Traffic Authority of NSW v Dederer [2007] HCA 42; (2007) 234 CLR 330 Donoghue v Stevenson [1932] AC 562 Erwin v Iveco Trucks Australia Ltd [2010] NSWCA 113; (2010) 267 ALR 752 Fox v Wood [1981] HCA 41; (1981) 148 CLR 438 Ghunaim v Bart [2004] NSWCA 28 Grljak v Trivan Pty Ltd (In liq) (1994) 35 NSWLR 82 Imperial Furniture Pty Ltd v Automatic Fire Sprinklers Pty Ltd [1967] 1 NSWR 29 Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207 Jones v Dunkel (1959) 101 CLR 298 Kallouf v Middis [2008] NSWCA 61 Kondis v State Transport Authority [1984] HCA 61; (1984) 154 CLR 672 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 276 ALR 375 Lanza v Codemo [2001] NSWSC 845 Laundess v Laundess (1994) Aust Torts Reports 81-316 Leighton Contractors Pty Ltd v Fox; Calliden Insurance Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1 McLean v Tedman [1984] HCA 60; (1984) 155 CLR 306 McPherson's Ltd v Eaton [2005] NSWCA 435; (2005) 65 NSWLR 187 Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313 J & V Pesl v Ray Smith Tractors [2007] NSWCA 74 Rabay v Bristow [2005] NSWCA 199 Rhoden v Wingate [2002] NSWCA 165 Rogers v Whitaker [1992] HCA 58; (1992) 175 CLR 479 Scott v Davis [2000] HCA 52; (2000) 204 CLR 333 Stojan (No 9) Pty Ltd v Kenway [2009] NSWCA 364 Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; (2006) 226 CLR 161 Sullivan v Moody [2001] HCA 59; (2001) 207 CLR 562 TNT Australia Pty Ltd v Christie; Crown Equipment Pty Ltd v Christie; Manpower Services (Aust) Pty Ltd v Christie [2003] NSWCA 47; (2003) 65 NSWLR 1 Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 Woods v Multi-Sport Holdings Pty Ltd [2002] HCA 9; (2002) 208 CLR 460 Woolworths Ltd v Strong [2010] NSWCA 282 Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40 Zanner v Zanner [2010] NSWCA 343
Category:	Principal judgment
Parties:	Craig Lionel Smith (Plaintiff) Brambles Australia Limited (First Defendant) Baden Cranes Pty Limited formerly GM Baden Pty Limited (Second Defendant) Gillespies Cranes Nominees Pty Limited t/as Gillespies Crane Services (Third Defendant)
Representation:	Counsel: Mr H Kelly SC with Mr T McKenzie, counsel (Plaintiff) Mr M Joseph SC (First Defendant) Mr G Curtin SC with Mr D Macfarlane (Second Defendant) Mr S Kettle, counsel (Third Defendant) Solicitors: Taylor & Scott Lawyers (Plaintiff) McCabe Terrill Lawyers (First Defendant) Riley Gray-Spencer Lawyers (Second Defendant) Hicksons (Third Defendant)
File Number(s):	2006/267240

"1. Non-economic loss 35% CLA	175,000.00
2. Past economic loss (i) wage loss (ii) Loss of super at 11%	371,308.75 40,843.96
3. Future economic loss (i) $1,200 pw x 13 yrs i.e. $1,200 x 502.3 x .85	512,346.00
(ii) future loss of super at 11% to age 65	$56,358.00
4. Past out of pocket expenses (i) workers compensation	103,471.57
5. Future out of pocket expenses	20,000.00
6. 2 hours pw x $35 x 32 yrs i.e. $70 x 8.45.00	59,150.00
7 . Fox v Wood	4,164.97
$1,342,643.00"

" 1. Past economic loss (i) Per Schedule 1 (iii)(sic) Past loss of super at 11% of wage loss	371,308.75 40,843.96
2. Future economic loss (i) $1,200 pw x 13 yrs i.e. $1,200 x 502.3 x .85	512,346.00
(ii) Future loss of super at 11% to age 65	56,358.00
3. Fox v Wood	4,164.97
$985,021.00"

"1.	Non-economic loss: 25% of a most extreme case - S. 16 Civil Liability Act 2002	32,500.00
2.	Past out-of-pocket expenses: (Agreed)	103,471.57
3.	Future out-of-pocket expenses : Calculated based on ongoing Panadeine Forte (caplets 50 price $12.50) (4 per day) (say) $6 per week and laxatives at 100 capsules for $23.44 (say) $5 per week Attending GP twice per annum (say) $2 per week Total: $13 per week for life (839.4)	10,912.20
4.	Past economic loss : Pre-Injury earnings of $1,140 net per week Period 1 : From 3 November 2003 to 30 June 2008 - $374.34 x 242 weeks - $90,590.28 Period 2 : From 1 July 2008 to 30 June 2009 $100 x 52 = $5,200 Period 3 : From 1 July 2009 to 30 June 2010 $100 x 52 = $5,200 Period 4 : From 1 July 2010 to 23 May 2011 $100 x 47 = $4,700 NB . S151I WCA	$105,690.00
5.	Past superannuation at 11%	11,625.93
6.	Future economic loss: Based on comparable of $1,853 net per week Based on earning capacity of $625 gross per day ($3,125 gross per week) Suggested buffer based on (say) $100 per week, less 15% for vicissitudes $100 x 502.3 x 0.85 NB. S151I WCA	42,695.50
7.	Future superannuation at 11%	4,696.50
8.	Domestic assistance	Nil
TOTAL:	311,591.70"

PERIOD	POSSIBLE NET WAGE	ACTUAL NET WAGE	DIFFERENCE	WEEKS	LOSS
3/11/03 - 30/6/04	1,140*	683	457	34	15,538
1/7/04 - 30/6/05	1,140	538	602	52	31,304
1/7/06 - 30/6/06	1,140	777	363	52	18,876
1/7/06 - 30/6/07	1,140	565	575	52	29,900
1/7/07 - 30/6/08	1,140	586	554	52	28,808
1/7/08 - 30/6/09	1,140	146	994	52	51,688
1/7/09 - 30/6/10	1,140	272	868	52	45,136
1/7/10 - 26/5/11	1,850**	500 (estimated)	1,350	47	63,450
$284,700