Sydney Water Corporation v Abramovic

[2007] NSWCA 248

Reported Decision: (2007) Aust Torts Reports 81-913

New South Wales

Court of Appeal

CITATION:	SYDNEY WATER CORPORATION v ABRAMOVIC and Anor [2007] NSWCA 248
HEARING DATE(S):	19 June 2007
JUDGMENT DATE:	14 September 2007
JUDGMENT OF:	Mason P at 1; Santow JA at 2; Basten JA at 55
DECISION:	(1) Allow the appeal. ; (2) Set aside the judgment of the Dust Diseases Tribunal against Sydney Water Corporation.
CATCHWORDS:	APPEALS – error of law – formulation of scope of duty of care. - NEGLIGENCE – Duty of care – Extent of duty – Safe system of work – Employee of independent contractor, latter uneducated and ignorant of risk and former vulnerable – Exposure of respondent to injury from silica dust while undertaking rock drilling work – Whether duty of statutory authority to ensure by exercise of statutory powers that contractor required use of water dampening and respirators during rock drilling work. - STATUTORY AUTHORITY – Duty of care – Successor to liabilities of statutory authority established under the Metropolitan Water, Sewerage and Drainage Act 1924-1954 (NSW) – Carrying out rock drilling work for Water Board as statutory authority under statutory supervisory powers conferred on Water Board as exclusive authority for carrying out this work. - WORDS AND PHRASES – decision “in point of law”: Dust Diseases Tribunal Act 1989 (NSW), s32(1).
LEGISLATION CITED:	Construction Safety Act 1912 (NSW); Construction Safety Regulations 1950 Regulation 73 Dust Diseases Tribunal Act 1989 (NSW), s32(1) Metropolitan, Water, Sewerage, and Drainage Act 1924-1954 ss32, 34 and 38 Roads Act 1993 (NSW)
CASES CITED:	Abramovic v Brambles Australia Ltd & Ors [2005] NSWDDT 30 Amaca Pty Ltd v AB&P Constructions Pty Ltd [2007] NSWCA 220 Amaca Pty Ltd v New South Wales [2004] NSWCA 124, (2004) 132 LGERA 309 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Brodie v Singleton Shire Council (2001) 206 CLR 512 Coote v Forestry Tasmania (2006) 80 ALJR 1089 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 Kondis v State Transport Authority (1984) 154 CLR 672 Leichhardt Municipal Council v Montgomery (2007) 233 ALR 200 McArdle v Andmac Roofing Company (1967) 1 WLR 356 McPherson’s Ltd v Eaton (2005) 65 NSWLR 187 Pyrenees Shire Council v Day (1998) 192 CLR 330 Randwick City Council v T&H Fatouros Pty Ltd [2007] NSWCA 177 Rockdale Beef Pty Ltd v Carey [2003] NSWCA 132 Skulander v Willoughby City Council [2007] NSWCA 116 State Rail Authority of New South Wales v Gudgeon [2000] NSWCA 165 Stevens v Brodribb Sawmilling Co Pty Ltd (1985-1986) 160 CLR 16 Sullivan v Moody (2001) 207 CLR 562 Sutherland Shire Council v Heyman (1985) 157 CLR 424 Swain v Waverley Municipal Council (2005) 220 CLR 517 Tame v New South Wales (2002) 211 CLR 317
PARTIES:	SYDNEY WATER CORPORATION (Appellant) Jelka ABRAMOVIC a person appointed to represent the Estate of the late Ante Abramovic (First Respondent) BRAMBLES AUSTRALIA LIMITED (Second Respondent)
FILE NUMBER(S):	CA 40053/06
COUNSEL:	G M Watson, SC/ D R Sulan (Appellant) G F Little, SC/ S Tzouganatos/ C Patterson (First Respondent)
SOLICITORS:	Phillips Fox (Appellant) Maurice Blackburn Cashman Lawyers (First Respondent) Moray & Agnew (Second Respondent)
LOWER COURT JURISDICTION:	Dust Diseases Tribunal
LOWER COURT FILE NUMBER(S):	DDT 244 of 2004
LOWER COURT JUDICIAL OFFICER:	Curtis J
LOWER COURT DATE OF DECISION:	22 July 2005, 4 January 2006
LOWER COURT MEDIUM NEUTRAL CITATION:	[2005] NSWDDT 30

CA 40053/06
DDT 244/04

MASON P
SANTOW JA
BASTEN JA

14 SEPTEMBER 2007

SYDNEY WATER CORPORATION v ABRAMOVIC

Judgment

1 MASON P: I agree with Basten JA.

2 SANTOW JA:

INTRODUCTION
In the Dust Diseases Tribunal, Ante Abramovic, since deceased sued, inter alia, Brambles Australia Limited (“Brambles”) and Sydney Water Corporation (“Sydney Water”). He was awarded damages by Curtis J on the basis that each of Brambles and Sydney Water was responsible for negligently exposing him in course of his employment to excessive amounts of silica, so causing him personal injury.

3 Sydney Water (but not Brambles) appeals from that decision. Such appeal is limited to error of law (s32(1) of the Dust Diseases Tribunal Act 1989). The Tribunal’s findings of fact must stand. This is unless they require correction as manifesting error of law within the narrow scope for so doing. Speaking generally, that scope for correction arises where ultimate facts are found for which there is no evidence, where inferences are drawn from intermediate facts for which there is no basis and where there has been a perverse or unreasonable application of the law to the facts found; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156 per Glass JA. Refinements attendant on that last category do not need rehearsal in the present context.

SALIENT FACTS

4 Mr Abramovic was born in 1942 and migrated to Australia in 1964 (Red, 29D).

5 In about 1973 Mr Abramovic became incapacitated by a lung disease alleged to have been caused by his inhalation of silica in various employments.

6 In 2004 Mr Abramovic commenced proceedings, claiming damages on the basis that his injury had been caused in a manner which made each of five defendants liable to him. The five defendants, and the basis of the claim against them, were as follows:

(a) Brambles – on the basis that it had employed Mr Abramovic for a period during 1968 as a jackhammer operator (Red 1T-1X).

(b) QBE Insurance (Australia) Limited – on the basis that for a period during 1969, Mr Abramovic had been employed by Harnett Constructions Pty Limited as a jackhammer operator (Red 2E-2H), and that during the relevant time Harnett Constructions had a policy of insurance which required QBE to indemnify Harnett Constructions.

(c) Con Drake – on the basis that, for a period during 1972, Mr Abramovic was employed by Mr Drake as jackhammer operator (Red, 4G).

(d) WorkCover Authority of NSW – on the basis that for periods during 1970 and 1972 Mr Abramovic was employed by Arthur Alex as a labourer, carrying out excavation work using a jackhammer, jackpick and shovel (Red, 3T), and that during this time, Arthur Alex was insured in circumstances which required WorkCover to indemnify him.

(e) Sydney Water – upon the basis the sites upon which Mr Abramovic worked when employed by Harnett Constructions were sites controlled and operated by Sydney Water (Red, 2H-2P), and recognising, as is undisputed, that Sydney Water is heir to the liabilities of the Metropolitan Water Sewerage and Drainage Board.

7 By agreement, the trial was divided between liability and damages. The issue of liability was determined first and separately; the damages trial was deferred. The trial judge resolved the liability proceedings against each of the defendants as follows:

(a) Brambles – the trial judge found that Mr Abramovic had been employed by Brambles, and that Brambles had breached the duty of care owed to him. As a consequence, Brambles were found liable to pay damages (Red, 55R).

(b) QBE – no evidence was led to the effect that Mr Abramovic was ever employed by Harnett Constructions, and it was conceded that QBE was entitled to a judgment in its favour (Red, 31C).

(c) Con Drake – the trial judge found that Mr Abramovic had been employed by Mr Drake, and that the silica inhaled during this period materially contributed to his injuries (Red, 30S-30Y). As a consequence, a verdict was entered against Con Drake, but as Mr Drake had a limited insurance coverage, an agreement was struck whereby the whole of that amount was paid to Mr Abramovic.

(d) WorkCover – The trial judge found that Mr Abramovic had been employed by Arthur Alex and found a verdict against WorkCover (Red, 30G-30Q). As Mr Alex only had a limited insurance cover, an agreement was struck under which WorkCover paid the whole of that amount to Mr Abramovic.

(e) Sydney Water – the trial judge found that during a period of about six months in 1969, Mr Abramovic was employed by O’Donovan & Horan, and that O’Donovan & Horan had, during that time, a contract with Sydney Water to carry out the works upon the relevant sites (Red, 31M-32P). The trial judge also found that during this period Sydney Water owed a duty of care to Mr Abramovic, which it breached (Red, 32Q-41K).

8 Following the making of these findings, consent orders were made that each of Con Drake and WorkCover pay Mr Abramovic damages, limited to the full extent of the insurance coverage. The trial judge then proceeded to a separate trial of the damages to which Mr Abramovic was entitled, delivering a second judgment on 4 January 2006 (Red, 42-54). A verdict and judgment in favour of Mr Abramovic was entered against each of Brambles and Sydney Water in the sum of $349,060 (Red, 55R). Liability was determined against both, each being, it appears, liable in full. No party has appealed against the assessment of damages.

9 This appeal is brought by Sydney Water against the verdict and judgment found against it, and in favour of Mr Abramovic. Because it is potentially affected by this appeal in terms of possible contribution, Brambles has been joined as a second respondent but has otherwise taken no part in this appeal. No appeal is brought against QBE, Mr Drake or WorkCover as orders have been made finalising the proceedings against those parties.

The Primary Decision

10 The primary issue was whether Sydney Water owed Mr Abramovic any duty of care at all, Sydney Water submitting it did not. The trial judge held against the submission, stating the basis for doing so at different levels of generality in the judgment. At Red, 39H-39K, the trial judge concluded that there was a duty of care, there basing himself on failure to ensure by contractual stipulation a particular mode of carrying out the work (carry out the drilling work with water-dampening):

“I am satisfied that in all the circumstances of this case the duty of [Sydney Water] extended to ensuring by contractual stipulation that the work upon which the plaintiff was engaged was carried out with water dampening.”

11 The trial judge then put the matter more generally at the conclusion of his judgment. Sydney Water’s duty was expressed in terms of “requiring” the contractor to carry out drilling work with water-dampening; omitted was any reference to “ensuring” this “by contractual stipulation”.

“I find that [Sydney Water] owed a duty to the plaintiff the content of which extended to requiring of its contractors that they carry out drilling work with water dampening.” (Red, 41E-G)

12 Negligence put on the first narrower basis thus consisted in failing to negotiate such a contractual term in contractual negotiations between Sydney Water and Mr Abramovic’s employers. That basis was said to constitute an error of law. As I understand the submission, this was because it could not be said that there was any contract or if there were, that it was of such formality as to enable the insertion of such a term.

13 Also argued below, and again on appeal, in the latter case by Notice of Contention, was the following basis of liability:

“1. The respondent seeks to rely on a Notice of Contention. That notice seeks to provide for the respondent’s argument that the duty postulated contended for and proved in the evidence by the respondent was a duty on Sydney Water as an entrepreneur organising construction works, the performance of which carried with it a risk to the health and safety of the employees of subcontractors employed in such works to take reasonable care for the safety of those employees.

2. The duty was analogous to the duty as that considered in Stevens v Brodribb Sawmilling Co Pty Limited [1985] 160 CLR 16 and Crimmins v Stevedoring Finance Committee [1999] 200 CLR 1 referred to in the respondent’s prior submissions, together with McArdle v Andmac Roofing Company [1967] 1 WLR 356.”

The Appeal Grounds

14 The appellant abandoned any reliance on absence of procedural fairness. The four grounds of appeal were:

(a) to deny any duty of care existed in the circumstances;

(b) to contend that any duty of care was expressed both too narrowly, in terms of reliance on absence of contractual stipulation for water-dampening, and too stringently in requiring Sydney Water to ensure a particular event (as a safe system of work) rather than “to take reasonable steps” to achieve it;

(c) to contend that breach should not have been found, the alleged error of law being to formulate incorrectly the duty and its scope; and

(d) to challenge findings of fact in favour of the plaintiff below (Mr Abramovic) when there was no evidence sufficient to establish the relevant finding.

DISPOSITION

15 There is an important finding of fact at [13] of the judgment (Red, 32):

“13. I am comfortably persuaded that the work upon which the plaintiff laboured at Sylvania was work performed pursuant to a contract between the plaintiff's employers, noted on PX8 [Blue, 48-9] as "O'Donovan and Horan" and the Water Board and that the work was supervised by employees of the Water Board named in PX8 as W Donohue and L Fitzpatrick.”

16 I start by seeking to identify what could have qualified as contractual documentation to see what basis, if any, there was to infer a contractual basis for the work undertaken. At Blue, 48-9 there is a blow-up of part of a larger document at Blue, 49. It sets out a description of the relevant works and their location with details such as concrete driveway, etc. That accords with the earlier evidence recorded at [12] (Red, 31):

“12. Mr Abramovic described the work as the excavation of a major trench running alongside the footpath of the street with minor trenches connecting that trench to the individual properties. This description is consistent with the plan of the works commissioned by the Water Board. Into those trenches were laid red clay pipes. Mr Abramovic said he recognised the pipes as sewerage pipes. …”

17 The blown up section I have referred to as Blue, 48 is not itself expressed to be a contractor part of a contract. However, I would infer that it formed part of a wider document (Blue, 49) which, in recording the work to be executed, served a contractual purpose. Common sense indicates that work would not have been carried out with no contract at all. Thus in the blow up there is headed “Work As Executed” with what follows reproduced below:

WORK AS EXECUTED
COMPLETED 12.9.69
ENGINEER B. Christian
OVERSEER W. Donohue, L. Fitzpatrick
CONTRACTOR O’Donovan & Horan
T. Hanley DISTRICT ENGINEER
Southern DISTRICT
18 PIPE JOINTING CODE
A COMPO OR CLAY-CEMENT
B RUBBER RING
C POLYURETHANE
D POLYESTER-RUBBER RING

19 Significantly, Messrs Donohue and Fitzpatrick are each described as “Overseer”. It would readily be inferred that these were employees of Sydney Water with the supervisory and inspection role that went with that description, more especially when regard is had to the statutory powers of inspection inherited by Sydney Water.

20 Thus I turn to the terms of the Metropolitan, Water, Sewerage, and Drainage Act 1924-1954 (“the Act”) in force at the time (1969). They commence with the basal authority conferred on the Metropolitan Water Sewerage and Drainage Board (“the board”) to carry out the provisions of the Act thereafter set out.

“7. (1) The authority to carry out the provisions of this Act, save where otherwise provided, shall be the Metropolitan Water Sewerage and Drainage Board.

………”

21 Section 30(1) provides relevantly as follows:

“30. (1) Subject to the provisions of this Act the board is charged with -

………

(b) the provisions of reticulation and other means for the discharge of sewage and its treatment and disposal;

………

(d) the administration and management of all properties from time to time vested in it;

………

(f) the construction of any new, additional, or supplementary works of … sewerage …;”

22 Section 31 relevantly provides that:

“The board may construct

………

(b) such main and reticulating sewers … as in its opinion may be required for sewerage purposes;”

23 Section 32 provides that the board may enter upon any lands as the board may “from time to time deem necessary for the construction … of any works”. That power extends to entering upon any Crown or private land, public road or street and so that the board “may erect … any … sewerage main, pipe or drain …”.

24 Section 34 relevantly provides that “the board may make and enter into contracts or agreements with any person for the construction of works, or otherwise for the performance of services … in connection with the discharge or exercise by the board of its functions and powers”.

25 Under s37 the board is given exclusive powers in these terms: “[S]ubject to the provisions of this Act the board shall be the sole authority for the conduct of … sewerage services … within its area of operations” [emphasis added]. That removes any suggestion that this particular operation was carried out independently of the board. To the contrary it would have been within the board’s exclusive authority to authorise and supervise.

26 Under s38 the board is given the power to carry out inspections on any land or building “to ascertain the character and condition of the land or building and of any pipe, sewer … or fitting in connection therewith”.

27 Section 38(2) provides that, “If such pipe, sewer … or fitting or other works are found on inspection to be made to the satisfaction of the board and in proper order and condition, it shall cause the same to be reinstated and made good as soon as may be …”.

28 Section 57 relevantly provides that, “The board shall cause all sewerage works to be constructed, maintained, kept, and cleansed, with due regard to the health and convenience of the public.” [emphasis added]

29 The requirement to pay “due regard to the health and convenience of the public” is not in terms directed to employees of the independent contractor save as a section of the public. But in safeguarding the public the board, in course of carrying out its functions must have the necessary power to enter upon premises and carry out inspections. Reference to overseers in the earlier contractual document reinforces the inference that the named individuals were employees now of the board with that functional capacity; Sydney Water of course inherits the board’s liability in relation to its past works.

30 That inference also finds some support in relation to its past works in by-laws made pursuant to the power in that behalf under s125(1)(o). It authorised, inter alia, by-law 36 which is in the following terms: “Only approved materials, pipes, fittings, fixtures and apparatus shall be used and where required shall be submitted to the Board for examination and test”. There is further provision that “[N]o person shall cover up or conceal from view any underground or enclosed sewerage service … or put into use any sewerage service … until it has been inspected and approved”. Finally, by-law 36 provides that “[E]very person carrying out or engaged on or in connection with any work of sewerage … and his employees shall afford every reasonable facility and information to enable an inspection to be made.”

31 The picture that emerges is this. The work on which Mr Abramovic was engaged, namely excavation and laying of sewerage pipes in trenches, was carried out under the oversight of the board. Sydney Water would therefore inherit any liability, should there be such, attaching to the board’s role vis a vis employees of third parties carrying out excavation work under the board’s supervision. It remains to be considered whether any liability does so attach in the circumstances and if so, how it arises.

32 I consider that the present case does not invoke the duty of a principal to co-ordinate the activities of a number of independent contractors on a complex site, as was the case in Stevens v Brodribb Sawmilling Co Pty Ltd (1985-1986) 160 CLR 16. Rather it invokes a cognate or analogical duty to take reasonable steps to supervise the work carried out by a single independent contractor, pursuant to the statutory powers in that behalf inherited by Sydney Water. Here there was never any interaction between several sub-contractors requiring co-ordination in order to take the reasonable steps needed in organising the activity in order to avoid or minimise the risk thereby entailed.

33 Stevens v Brodribb Sawmilling Co Pty Ltd (supra) has been invoked in subsequent decisions which have imposed analogous duties upon an entrepreneur or principal, though there was lacking that interdependence of activities upon a complex site calling for co-ordination. For example in Rockdale Beef Pty Ltd v Carey [2003] NSWCA 132 Ipp JA, with whom Mason P and McColl JA concurred, extended the principle beyond cases akin to those described in Stevens v Brodribb. The court concluded that one must judge the case for such extension by reference to the totality of the relationship between the parties. At [84] in Rockdale Ipp JA said:

“… Such a duty may arise in circumstances where there is no need for the entrepreneur to give directions as to when and where the work is to be done and to co-ordinate the various activities, but where, for other reasons, reasonable care on the part of the entrepreneur affects the way in which the work is to be undertaken and the safety of the work site, and where other considerations … such as vulnerability, inequality of bargaining power, control, and the other manifold factors that the law recognises as being relevant to the existence of a duty of care, are present.”

34 At [88]-[92] of Rockdale, Ipp JA considered the following a most relevant matter when assessing whether that case was one for the more stringent duty. Mr Carey successfully recovered though he was an independent contractor. But Mr Carey had worked for no-one apart from Rockdale for many years and his work did not change with his new status. Moreover, in carrying out that work, his principal Rockdale had control over risk on site. Mr Carey was not really in a position to protect himself. He was clearly vulnerable as a semi literate ex-employee, rehired on a cattle station to do the same work as before and working for no-one else.

35 When one compares the circumstances in Rockdale to the position of Mr Abramovic, the latter it appears was not a former employee now rendered an independent contractor. Rather he was employed by an independent contractor. But there is no doubt that he was vulnerable to the dangers from silica dust arising from the drilling he was required to carry out. His employer, it can be safely inferred, failed to require the necessary precautions of water-dampening and masks. Mr Abramovic had been employed all his working life as a labourer, and had been an immigrant to this country arriving not long before in 1964. He was hardly likely to take the necessary precautions without some such guidance, if not requirement. In that way he too was vulnerable, and the work he was carrying out subject to the board’s statutory power. The question is however whether this sufficed to render the board and thus Sydney Water liable.

36 The trial judge imposed a liability on the basis of Stevens v Brodribb. His Honour cited as cognate authority McArdle v Andmac Roofing Company (1967) 1 WLR 356 for the proposition that “the duty of an entrepreneur to take reasonable care for the safety of persons engaged upon his works extends to employees of the sub-contractors there engaged”.

37 However, that is to state the propositions derived from McArdle too widely. It was the particular circumstances which rendered the entrepreneur liable in that case. There were “no arrangements whatsoever for safety in relation to … dangerous work which was being undertaken” at the request of the entrepreneur. It was the entrepreneur who “in a practical sense … was conducting and organising the operations and had not … parted with overall responsibility to anyone”; per Sellers LJ at 363.

38 The scope for any duty of care here, as it was in Brodie v Singleton Shire Council (2001) 206 CLR 512 and subsequently in Leichhardt Municipal Council v Montgomery (2007) 233 ALR 200 turns ultimately upon a question of statutory construction, here of the board’s statutory powers, as they operated in the present context. Montgomery (supra) dealt with the scope of the duty of a council in relation to a contractor it engaged to carry out road maintenance, when each were sued by a passer-by injured in a disturbed area of pathway. The Council was, by statute (the Roads Act 1993 (NSW)) the road maintenance authority. It was by reference to that statute that the court determined the scope of the Council’s duty of care. Thus Gleeson CJ observed:

“[20] At the centre of this problem there is a question of statutory construction. The common law should define the duty of care to which a roads authority is subject by reference to the nature of the statutory powers given to the authority, and the legislative intendment discernible from the terms in which those powers are granted, considered in the light of the purposes for which they are conferred.”

39 In the present case Sydney Water disclaims any duty of care at all. In Leichhardt Municipal Council the issue was whether the council’s undoubted duty of care was of the non-delegable kind. If it was the latter it had a heightened duty, akin to a special kind of vicarious responsibility. This was to “ensure” the exercise of reasonable care by the independent contractor engaged to perform the road maintenance function, akin to a special kind of vicarious responsibility. The High Court concluded that the duty of care was not of that absolute kind. Rather it was limited to the taking of “reasonable care” to prevent physical injury to a road-user in the carrying out of the road-works; Gleeson CJ at [22]-[24]. In the present case, the trial judge found a duty of care. His Honour did not appear to place the duty at the heightened level of a non-delegable duty, though that issue was not expressly considered.

40 Leichhardt Municipal Council invoked the special responsibility of a road maintenance authority for safety of those using the road. I consider that Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 is closer to the present case. Crimmins (supra) posed the issue of the responsibility of a stevedoring authority with extensive statutory powers on the work site towards the employees carrying out unloading operations and employed by others. Those statutory powers included allocating waterside workers employed by others to the stevedoring operations.

41 The majority, Gleeson CJ, Gaudron, McHugh and Callinan JJ, concluded that the authority was liable because:

(a) it had or should have had knowledge of the special risks, here exposure to mesothelioma from asbestos fibres, to which members of the class including the worker were subject;

(b) it was in a position to control or minimise those risks by the exercise of its statutory powers;

(c) the worker was vulnerable to injury because of the casual and potentially hazardous nature of his employment; and

(d) there was nothing in the legislation governing the authority’s powers and functions which negatived the existence of a common law duty of care.

The level of the duty was one to take reasonable care to protect the employee from reasonably foreseeable risks of injury arising from his employment by the registered stevedores.

42 I consider that these requirements were likewise fulfilled here. As to the second requirement, it was properly conceded at trial that issues of foreseeability and preventability were not live issues in relation to Sydney Water; Black T, 54Q-U. Thus it can be taken that the risk of injury of the kind in relation to silica dust suffered by Mr Abramovic from drilling rock was reasonably foreseeable to Sydney Water and preventable had Sydney Water taken the steps open to it in exercise of its statutory powers. It could have done so by contractual stipulation (s34 of the Act) or by entry and supervision through its inspectors (ss32, 34 and 38) or by a combination of both and by instructions to those carrying out the drilling work to use water-dampening (and possibly respirators as well).

43 The trial judge concluded that Sydney Water “in its contractual dealings with the plaintiff’s employers had to a sufficient extent the capacity to control the manner in which the work was carried out” this was said to be admitted. The trial judge went on to conclude that “the injury resulted not remotely but directly from the failure to exercise control by contractual stipulation to the plaintiff’s employers”; Judgment at [29] (Red, 37).

44 At [30] the trial judge concluded that:

“The Water Board, a large enterprise which included, to the specialist knowledge of this jurisdiction medical staff, had access to specialised knowledge concerning the latent dangers of inhaling microscopic silica particles. These were dangers not immediately apparent to laymen such as the plaintiff or his employers. Those employers, upon the evidence, worked with tools on the site. I infer that the enterprise was small and the employers were not men of education or sophistication. The dangers of silica are not readily apparent such as dangers created by a failure to shore excavation trenches or direct local vehicular traffic. They comprised an ‘undisclosed and unexpected hazard’ (see Sheller JA in Boral Roof Tiles Limited v O’Brien 2 BC 9403385 p7).”

45 It might fairly be said that Sydney Water’s concession at trial did not extend to the way in which control could be exerted being by contractual stipulation. But in my opinion nothing hangs on that. “Preventability” was conceded. The mode of prevention could have been as readily by contract as by a closer supervision through overseers of the work practices on the site; or simply by issuing instructions as to how the work was to be carried out. It is readily apparent from the earlier statutory provisions of the Act that the powers of Sydney Water were quite wide enough to encompass any of these means of prevention. Insofar as the appeal grounds rely upon the concession having been unduly stretched in this regard, I do not consider this argument avails the appellant.

46 I likewise consider the finding well open to the primary judge without error of law, that Sydney Water was a large enterprise which would have had ready access to specialised knowledge concerning the latent dangers of inhaling microscopic silica particles, being in that regard at an advantage over the employer. That the evidence in support of it was not extensive was no doubt the product of the long gap in time between injury and trial. Such evidence as would have survived would reside now with Sydney Water.

47 In particular I consider that the inferences drawn by the trial judge were open both as to the relative size of the enterprise employing Mr Abramovic and the danger of silica not being readily apparent. I do not disregard the argument here put by the appellant that Regulation 73 of the Construction Safety Regulations 1950 made under the Construction Safety Act 1912 (NSW) requires preventive measures to minimise accident risk and prevent injury to the health of persons engaged in building works.

48 This is in particular under sub-para (9) (provide adequate ventilation in relation to dust or other impurities) and sub-para (10) (provide respirators). That does not foreclose that there was a failure of supervision on Sydney Water’s part to make sure these protections were in place. This is for the benefit of employees of contractors carrying out that work under the board’s supervision.

49 The critical question is whether as a matter of statutory construction, taking into account the statutory powers of the board under the Act, the board having knowledge of the special risks was in a position to control or minimise those risks, given the workers’ vulnerability to injury. To that I would give an affirmative answer. It can moreover be taken that there was not anything in the powers and functions conferred in the Act which negatived the existence of a common law duty of care. That duty was to take reasonable steps to control or minimise the risk of injury, here from silica dust of employees of contractors carrying out excavation to lay the pipes in question.

50 In my view the statutory provisions to which I have earlier made reference imposed the authority exclusively on the board to carry out the provisions of the Act (s7(1)). Where, as it was permitted to do, it elected to employ an independent contractor to carry out that authority imposed on it, the board had adequate powers as would enable it to take reasonable steps by way of supervision and otherwise which encompassed the safety of employees of an independent contractor carrying out the relevant task, here excavation and sewerage pipe laying. Reasonable steps on its part would have required exercise of the statutory powers to which I have earlier made reference, stipulating water-dampening and possibly respirators.

Conclusion

51 It is true that the Act does not in terms provide for the board to secure the safety not only of the public but of employees (cf s57). Nor does it have any role so direct as in Crimmins of allocating waterside workers to stevedoring operations. But its statutory powers of oversight and supervision, superadded to its exclusive authority, were in my judgment sufficiently extensive to invoke an analogous duty, though differentiated from the co-ordination role. That duty extended to exercising its powers of supervision over the contractors it appointed so it took reasonable steps directed at site safety, such as guarding against risk of injury from silica dust in drilling. Like a roads authority or port authority, while not required to “ensure” safety for employees of its contractors, it could not abdicate from that less absolute standard of reasonable care. I do not consider that the trial judge’s conclusion that this duty of care was here breached gave rise to any error of law calling for appellate intervention.

Postscript

52 Since preparing these reasons I have had the advantage of reading Basten JA’s judgment and his extensive and helpful analysis of the relevant authorities.

53 While it does not lead me to alter the views I have formed, I set out below what I conceive to be the essential differences (and common ground) on the issue of liability and why I adhere to my earlier conclusion.

(1) The Tribunal made the following findings of fact. These I do not consider open to challenge as constituting errors of law, and they underpin my reasons.

(2) (i) a failure to take care for the safety of workers such as Mr Abramovic, drilling through sandstone, could lead to the inhalation of silica dust and physical harm,
(ii) Mr Abramovic employers were “ not men of education or sophistication ”, so that the dangers (from silica dust) were “ not immediately apparent to laymen such as [Mr Abramovic] or his employers ”, thereby rendering him vulnerable;

(iii) those dangers were however known to the Board, which had the power to control the system of work; and

(iv) Mr Abramovic was vulnerable because he could not reasonably be expected to have safeguarded himself adequately from the risk of injury;

(3) The Tribunal held that the board had the statutory power to protect workers in that situation, including by imposing conditions on the manner in which the work was carried out. That proposition though a question of statutory construction, was not itself in dispute;

(4) To state the duty of care applicable to the Board as extending to require it to institute a safe system of work is to go further than the cases justify. Thus in Crimmins the issue was whether the authority was in a position to control or minimise a particular risk by the exercise of its statutory powers, because it had special knowledge of that risk (exposure to asbestos causing mesothelioma) and where the worker was vulnerable to injury because of that risk (there being nothing in the legislation negativing the existence of a common law duty of care in such circumstances). The duty found was never put in such broad-ranging terms as to institute a safe system of work, given the interposed role of the employers.

(5) Here, to place the duty at the generalised level of the Board being obliged to impose a safe system of work on the independent contractors is to erect a higher level of duty than could possibly be justified. It fails to recognise the level or standard of duty that was directly concerned with the particular risk. Put shortly, that level of duty called for a direction not merely to warn, given the lack of education and ignorance of both contractor and employee but, as the Tribunal found, some form of stipulation to use water-dampening and possibly respirators as well. So framed, the duty is commensurate with the position of the board as a statutory authority with ample powers to do so.

(6) At [98] Basten JA refers to the cases suggesting that satisfaction of one of the following criteria may give rise to such a duty though as his Honour formulates it, a duty at the higher level to impose a safe system of work on independent contractors. The relevant criteria are those he identifies at (c) and (d), namely:


“(c) the principal has or ought to have knowledge of the risk and the employer does not and cannot reasonably be expected to have such knowledge;

(d) the principal has the means to alleviate the risk and the employer cannot reasonably be expected to do so.”

(7) The findings of fact which I have earlier identified indicate these criteria were satisfied in events that occurred (it must be remembered) as early as 1969. Issues such as whether the cost of relevant equipment could or could not have been passed on to the Board by the employer simply don’t arise – that the employer was ignorant of the dangers remains the unimpeachable finding of fact.

(g) Summing up, I consider that on the criteria stated and based on the findings of fact made, there was imposed upon the board the limited duty of instituting the kind of steps that would have eliminated that particular risk. Those steps, falling well short of imposing a safe system of work on the contractor, were to stipulate water-dampening at least if not also respirators.

OVERALL CONCLUSION

54 I consider that this appeal should fail. I propose orders as follows:

(1) Appeal dismissed.

(2) By agreement between the parties there is to be no order as to costs either in this Court or the Tribunal.

55 BASTEN JA: The background to his appeal has been set out by Santow JA and will not be repeated here, except to the extent necessary to give content and context to these reasons. In my view the appeal should be allowed.

Replacement of the late Mr Abramovic

56 The late Mr Ante Abramovic commenced proceedings in the Dust Diseases Tribunal (NSW) in 2004, claiming damages from five defendants, whom he sought to hold responsible for negligence leading to silicosis and related conditions resulting from the inhalation of dust containing silica, in the course of his work. The Tribunal dealt separately with questions of liability and questions of damage. On 22 July 2005 Curtis DCJ delivered a judgment holding that Sydney Water Corporation, the present Appellant, was liable to Mr Abramovic as the successor to the liabilities of the Metropolitan Water Sewerage and Drainage Board (“the Board”): Abramovic v Brambles Australia Ltd & Ors [2005] NSWDDT 30. On 4 January 2006, by further judgment, his Honour assessed the damages payable by the Appellant and Brambles Australia Ltd at $349,060. Judgment for that amount was entered against the Appellant and Brambles Australia Ltd on 6 March 2006. A notice of appeal was filed by Sydney Water Corporation on 1 February 2006 challenging the findings on liability contained in the judgment of 22 July 2005 and seeking to set aside orders made on 4 January 2006.

57 On 13 September 2006 Mr Abramvoic’s solicitors wrote to the Registrar of the Court advising that he had died on 16 August 2006 and attaching a copy of the death certificate. They noted that his wife, Mrs Jelka Abramovic who was the executor and trustee of his will had not obtained a grant of probate (the estate having no assets) and did not consent to being appointed as the legal personal representative of the estate for the purpose of the proceedings.

58 On 19 September 2006 the Appellant filed a notice of motion seeking an order that the proceedings continue in the absence of a representative of the estate, pursuant to r 7.10(2)(a) of the Uniform Civil Procedure Rules 2005 (NSW). The Appellant undertook not to seek costs from the estate or from Mrs Abramovic. Thereafter, counsel instructed by Mrs Abramovic appeared to resist the orders sought on the appeal.

Standing of Appellant

59 There is a second curiosity in relation to the parties: prior to the hearing of the appeal the damages were paid in full by Brambles Australia Ltd. As explained by counsel at the commencement of the present hearing, the interest of the Appellant in the proceedings was in anticipation of a contribution claim which might be made against it by Brambles, if the judgment against it in favour of Mr Abramovic were not set aside.

60 Brambles was not an appellant in this Court nor did it appear in the proceedings, although it was aware of them. Because Brambles did not dispute its liability to Mr Abramovic, the real dispute was between the Appellant and Brambles, as to which Mrs Abramovic had little if any interest.

61 The artificiality of the situation gives rise to concern: it is far from clear why, if Brambles, which has an interest in upholding the judgment against the Appellant, does not seek to appear in defence of it, the Court should entertain the appeal. Further, this appeal will not resolve all the issues between Brambles and the Appellant. There would still be an issue as to the extent of the contribution of each. Although Mr Watson SC, who appeared for the Appellant, expressed confidence that these matters would be resolved by agreement, he did not suggest that any agreement presently existed. Thus, in what would appear to be the remaining live dispute, between the Appellant and Brambles, a judgment on the appeal would in effect be a judgment on the question of liability only and would require leave pursuant to s 32(4) of the Dust Diseases Tribunal Act 1989 (NSW) (“the Tribunal Act”).

62 No party took any point in relation to these matters and the Court, having questioned Mr Watson, allowed the hearing of the appeal to proceed. In those circumstances I am content to address the matter on the basis that leave was required, but has been granted. In other circumstances, I would have refused leave unless the Court were satisfied that no issue as to the extent of contribution remained outstanding.

Nature of appeal

63 The jurisdiction of the Court in the present case is engaged by the Appellant as a party who is dissatisfied with the decision of the Tribunal “in point of law”: Tribunal Act, s 32(1). The Appellant sought to constrain its argument, in accordance with that provision. Thus, the two primary grounds involved a challenge to the existence and scope (respectively) of the duty of care identified by the Tribunal. Further, it asserted five factual findings as to which, it was said, there was “no evidence”.

64 It is convenient to deal first with the challenge to the finding that the Appellant owed Mr Abramovic a duty of care. As stated in the written submissions for the Appellant, the “question as to whether or not a duty of care exists in particular circumstances is a question of law”. The particular error was said to be the imposition of a duty because “absent a special relationship, no duty arises in one party to protect another from the damage caused by a third party”. It was contended that the third party was Mr Abramovic’s employer, which failed to institute a safe system of work.

65 The second ground asserted that an error “in the formulation of the scope of a duty of care is an error of law”, citing McPherson’s Ltd v Eaton (2005) 65 NSWLR 187 at [14] (Mason P) and at [35] (Ipp JA) as authority for that proposition. The specific complaint was that the Tribunal held that the duty extended to the negotiation by the Appellant of a contractual arrangement with Mr Abramovic’s employers, requiring that drilling work was to be carried out with water-dampening equipment and use of respirators.

66 Before turning to the substance of the complaints, it may be noted that, in McPherson’s Ltd, at [14], Mason P commenced with the following proposition:

“Obviously there will be cases in which debate about the scope of a duty of care involves purely factual enquires. Was a solicitor engaged to advise as to the commercial or simply the conveyancing aspects of a transaction?”


A similar point was made by Gleeson CJ in Swain v Waverley Municipal Council (2005) 220 CLR 517 at [4], noting that “the alleged duty of care might depend upon contested facts”. See also Skulander v Willoughby City Council [2007] NSWCA 116 at [87] and Amaca Pty Ltd v AB&P Constructions Pty Ltd [2007] NSWCA 220 at [8]. As suggested in the last authority, whether or not the appeal is competent in that it properly raises a question of law in the sense required by s 32 of the Tribunal Act, will depend not upon characterising the issue as going to the “existence” or “scope” of the duty of care, but by determining, in accordance with established principles, whether the question identified is one of law or fact.

Duty of care

67 In order to address the complaint that no duty of care arose in the present circumstances, it is helpful to note the manner in which the Tribunal addressed the question. The brief factual findings were that for approximately six months in 1969, Mr Abramovic was employed by a firm known as “O’Donovan and Horan” to excavate trenches for sewerage pipes at Sylvania, in southern Sydney: [2005] NSWDDT 30 at [10] at [13]. The works were commissioned by the Board and involved extensive drilling in sandstone with a jack-pick, which, if used without water dampening equipment and respirators, could give rise to inhalation of silica dust on the part of those operating the equipment. It was not in dispute that it was known in 1969 there were various lung diseases caused by the inhalation of silica dust.

68 In broad terms, the Tribunal found that a general duty of care arose in circumstances where the Board sought to have work undertaken for it, which involved hazards to the health of those undertaking the work, even if they were not the Board’s employees. Reliance was placed on the judgments of Brennan J in Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 479 and Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 47 and the application of those principles by this Court in Rockdale Beef Pty Ltd v Carey [2003] NSWCA 132 at [84] (Ipp JA, Mason P and McColl JA agreeing).

69 The Tribunal found a general duty of care in circumstances where:

(a) the physical injury suffered by Mr Abramovic was reasonably foreseeable;

(b) the means for preventing the risk were known to the Board;

(c) the risk was created by the requirement of the Board for the activity to be undertaken;

(d) both Mr Abramovic and his employers were persons of limited sophistication to whom the dangers of silica dust were not readily apparent;

(e) the Board had power to control the operations, and

(f) Mr Abramovic did not, and was thus in a vulnerable position.

70 Some of these findings of fact and inference were challenged, but their existence may be assumed for the purposes of the present argument.

71 In circumstances where a foreseeable risk of injury is said to result from work carried out for a principal, the question of duty may be identified as whether, and to what extent, the principal remains responsible for ensuring a safe system of work. Where the injury arises from failure to co-ordinate different groups of workers, it may readily be seen that a general duty will operate where the different groups, with their different employers, are directed by the principal as to where and when they are to carry out their relevant activities. Stevens v Brodribb Sawmilling illustrates this point. At the other end of the scale, where the independent contractor is required to carry out standard services, where questions of co-ordination do not arise, a different result may obtain: see State Rail Authority of New South Wales v Gudgeon [2000] NSWCA 165. In other circumstances, a general duty may arise because elements of control and knowledge of risk remain with the principal and, in relative terms, the worker is vulnerable. Another relevant consideration may be the extent to which the employer itself is subject to a degree of control, albeit as an independent contractor, and the extent to which it has the relevant knowledge.

72 A final and highly significant consideration, is the fact that the principal is a statutory authority. Although a statutory authority, like a non-statutory corporation, may owe a duty of care to those who provide services or carry out functions on its behalf, the scope of its responsibilities must be identified taking into account the statutory context. As noted by Gaudron J in Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 at [27]:

“Legislation establishing a statutory body may exclude the operation of the common law in relation to that body’s exercise or failure to exercise some or all of its powers or functions. Even if the legislation does not do so in terms, the nature or purpose of the powers and functions conferred, or of some of them, may be such as to give rise to an inference that it was intended that the common law should be excluded either in whole or part.”

73 Crimmins provides a closer analogy to the present case than other authorities relied upon by the Tribunal. In Crimmins, the defendant was the successor to the liabilities of the Australian Stevedoring Industry Authority, established by the Stevedoring Industry Act 1956 (Cth). Under that Act, both employers and workers were required to be registered in order to undertake stevedoring work at a port. The Authority was responsible for allocating work and for paying the workers. Mr Crimmins had contracted mesothelioma as a result of inhalation of asbestos fibres between 1961 and 1965 whilst working at the Port of Melbourne. He estimated that he spent some 20 days each year handling asbestos cargos. As noted by McHugh J (with whom Gleeson CJ at [3] agreed on the duty question) at [58]:

“Neither the Authority nor any employer warned the plaintiff of the dangers of asbestos; nor was he provided with clothing or equipment to protect him from those dangers. From time to time, waterside workers complained of working in dusty conditions, and on occasion they were paid ‘dirt money’ as the result of inspections by Port Inspectors.”

74 His Honour noted that there was evidence to support a finding that the employers knew or ought to have known of the risk to health from inhaling asbestos dust and that the Authority was “the conduit for the provision of information respecting occupational health and safety to the industry”: at [59]. His Honour continued at [60]:

“Although the Authority had an overarching supervisory and regulatory role with respect to safety on the waterfront, it is clear that the primary responsibility fell upon the employers. The Award placed a number of very specific safety responsibilities upon the employers (and not the Authority) including an obligation to provide safety equipment where it was needed.”

75 After noting that the case had not been argued on the basis of a negligent exercise of the statutory power of the Authority to allocate waterside workers to particular operations, his Honour addressed the question of common law liability of the Authority in the following terms at [71]-[72]:

“71. The present case has no factors which require it to be categorised as a case where a duty always exists or never exists … . Nor is the case one where the factual situation is identical or nearly so with a situation where a common law court has held that the defendant owed no duty of care. It is a case where the plaintiff claims that the statutory authority owed him a duty to take affirmative action to protect him. The question of duty must therefore be determined by reference to what has been decided in similar cases.
72. Basic to that determination, as always, is the question: was the harm which the plaintiff suffered a reasonably foreseeable result of the defendant’s acts or omissions? A negative answer will automatically result in a finding of no duty. But a positive answer then invites further inquiry and a close examination of any analogous cases where the courts have held that a duty does or does not exist.”

76 The approach adopted by his Honour was expressed in the following terms at [93]:

“1. Was it reasonably foreseeable that an act or omission of the defendant, including a failure to exercise its statutory powers, would result in injury to the plaintiff or his or her interests? If no, then there is no duty.
2. By reason of the defendant’s statutory or assumed obligations or control, did the defendant have the power to protect a specific class including the plaintiff (rather than the public at large) from a risk of harm? If no, then there is no duty.
3. Was the plaintiff or were the plaintiff’s interests vulnerable in the sense that the plaintiff could not reasonably be expected to adequately safeguard himself or herself or those interests from harm? If no, then there is no duty.
4. Did the defendant know, or ought the defendant to have known, of the risk of harm to the specific class including the plaintiff if it did not exercise its powers? If no, then there is no duty.
5. Would such a duty impose liability with respect to the defendant’s exercise of ‘core policy-making’ or ‘quasi-legislative’ functions? If yes, then there is no duty.
6. Are there any other supervening reasons in policy to deny the existence of a duty of care (eg, the imposition of a duty is inconsistent with the statutory scheme, or the case is concerned with pure economic loss and the application of principles in that field deny the existence of a duty)? If yes, then there is no duty.”

77 Although expressed in different language, particularly at [36] and [42]-[45], I do not understand Gaudron J to have adopted a significantly different approach. Kirby J adopted the three-stage approach favoured by the House of Lords, which has since been said not to represent the law in Australia: see Sullivan v Moody (2001) 207 CLR 562 at [49] (Gleeson CJ, Gaudron, McHugh, Hayne and Callinan JJ). However, his Honour placed significant weight upon the close analogy between the role of the Authority and that of an employer and employee: at [235].

78 Callinan J dealt with the matter succinctly identifying the duty in the following terms at [360]:

“That duty I would define as a duty to take such reasonable care for the safety of Mr Crimmins in the workplace as the respondent was reasonably capable of taking as a matter of practicality in the performance of its functions, and which the employer could not be expected to, or did not itself to have the capacity to take, or was flagrantly failing to take, in circumstances in which measures available to the respondent, if taken, would have been likely to be effective in preventing or alleviating the harm done to Mr Crimmins.”

79 It is this statement of Callinan J which most expressly identified the need to have regard to the position of the actual employer. The approach adopted is clearly inconsistent with the suggestion made by the Appellant in the present case that the employer was to be viewed in some way as a “third party” responsible for the injury caused to the worker. Nor did his Honour treat the role of the employer as relevantly defined by any common law or statutory obligations which it might have to the worker as an employee.

80 Before leaving Crimmins, it may be noted that Hayne J (in dissent), with whom Gummow J agreed in relevant respects, discounted the analogy to be drawn between the position of the Authority and that of an employer, preferring to treat the Authority as, adopting the language of Professor Stapleton, a “peripheral party”, stating at [306]:

“At its highest, the complaint now made against the Authority is that it did not control others – the employers. And for the reasons I have given earlier, I reject the contention that the Authority was duty bound to exercise its order-making power to require modification of the system of work which was used by stevedores. The other complaints made (failure to warn, failure to encourage, failure to supply but not require) are even less causally significant.”

81 To an extent, the submissions of the Appellant would seek to have the Court adopt the approach of Hayne J in Crimmins: that, however, is not an option in this Court.

82 There will undoubtedly be cases in which one factor, which did not loom large in Crimmins, will be determinative, namely the inconsistency of imposing a common law duty of care upon an authority exercising statutory powers where the result will be conflicting duties or a lack of coherence of legal principles: see, eg, Sullivan v Moody, dealing with officers of the Department of Community Welfare (SA) engaged in investigating complaints of child abuse, at [30], [42] and [50]-[55], and Tame v New South Wales (2002) 211 CLR 317 at [25]-[28] (Gleeson CJ), [57] (Gaudron J), [125]-[126] (McHugh J), [231]-[232] (Gummow and Kirby JJ), [298] (Hayne J) and [323] and [336] (Callinan J).

83 In the present case, the trial judge made findings which would, at least on one view, satisfy the criteria identified by McHugh J in Crimmins. First, it was not in issue that a failure to take care for the safety of workers such as Mr Abramovic, drilling through sandstone, could lead to the inhalation of silica dust and physical harm. Secondly, his Honour held that the Board had the statutory power to protect workers in that situation, including by imposing conditions on the manner in which work was carried out. Thirdly, there is no doubt that Mr Abramovic was “vulnerable” in the sense that he could not reasonably have been expected to safeguard himself adequately from the risk of injury. Fourthly, the Board had knowledge of the conditions in which Mr Abramovic was working because it specified the precise nature and place of the work to be carried out and, through two inspectors, supervised the carrying out of the work.

84 In relation to the fifth criterion, no question seems to have been raised suggesting that the imposition of such a duty would be inappropriate or inconsistent with the statutory functions of the Board, nor that there were any other specific policy considerations which would render the imposition of such a duty inappropriate. Indeed, it was accepted that, had the Board employed Mr Abramovic and his fellow workers, as well it might under its statutory powers, there would have been no denying that it owed a duty of care of the kind for which Mr Abramovic contended. The question is whether these findings sufficed to give rise to the specific duty identified.

85 The duty of care finally identified by the Tribunal was one which “extended to requiring of its contractors that they carry out drilling work with water dampening. … The duty would not extend to such matters as protecting workers from obvious dangers such as trenches caving in for want of shoring or being struck by traffic for want of vehicular control, which matters may reasonably be left to the judgment of competent contractors”: [2005] NSWDDT 30 at [40]. In short, the Tribunal held that such a duty existed because the worker was vulnerable, his employers were “were not men of education or sophistication”, the dangers were “not immediately apparent to laymen such as the plaintiff or his employers”, but were known to the Board, which had the power to control the system of work: at [30]. The question is whether the circumstances, identified by Santow JA at [42] above, were sufficient to establish a duty of care. If they were, it is difficult to see why there will not be liability upon the principal in relation to work undertaken by an independent contractor in many if not most situations. Yet, as explained in Stevens v Brodribb Sawmilling, by Wilson and Dawson JJ in discussing the scope of McArdle v Andmac Roofing Co [1967] 1 WLR 356, at p 45:

“There is no reason why those same concepts should not provide a basis upon which it might be found that Brodribb was under a duty of care towards Stevens and we are prepared to assume that it was under such a duty of care, although it seems to us that the extent of the duty would have to take account of the independent functions of the contractors and be something less than that owed by an employer to his employees. To equate the duty with that owed by an employer to his employees would be to give no weight to the very circumstance which differentiates the contractors from employees.”

86 Although in dissent in Crimmins, Hayne J noted the explanation for the common law duty imposed upon an employer, as explained by Mason J in Kondis v State Transport Authority (1984) 154 CLR 672 at 687-688, as being dependent upon the power to direct and the power to control the employee. Hayne J further noted at [276]:

“The common law imposes a duty on the employer because the employer is in a position to direct another to go in harm’s way and to do so in circumstances over which that employer can exercise control.”

87 The position of the principal is different with respect to an independent contractor, because the nature of the relationship is likely to mean that the principal has less control over the system of work and how it is performed. In some cases the independent contractor will be the worker, in others the worker will be the sole employee of his or her own contracting company. Broadly speaking, the cases suggest that powers to direct and control will be critical in determining the existence of and scope of a duty. On one view, it was disparate assessments of those considerations which led to the conclusions of the majority and minority in Crimmins. In Coote v Forestry Tasmania (2006) 80 ALJR 1089 the High Court unanimously upheld a claim by a tree feller who was injured whilst working for an independent contractor, but in accordance with directions given by an officer of Forestry Tasmania. There was a statutory obligation to carry out the work in accordance with an “approved timber harvesting plan” which required that trees with good quality timber capable of milling were to be removed, but other timber was to be retained. The plan gave authority to officers of Forestry Tasmania to help with selection of relevant trees although trees considered to be unsafe by the contractor, were to be removed: at [45] (Gummow J). In effect, the direction given by the officer was found to have created a dangerous situation which resulted in injury to the plaintiff when a tree he was felling brushed against another tree which had been left standing, in circumstances where he would usually have first removed the other tree to prevent the danger materialising. The power of the officer of the authority to give directions as to how the work was to be carried out formed the basis of the finding of duty.

88 Rockdale Beef v Carey [2003] NSWCA 132 may be seen to be a similar case, where the plaintiff was employed as an independent contractor to do work he had previously undertaken as an employee of Rockdale Beef and in circumstances where Rockdale Beef exercised a high level of control over the manner in which the work was undertaken.

89 Questions of control involve judgments to be made in the particular circumstances of each case as to what level of control is vested in the principal, as opposed to the employer or indeed the worker. In this case the Tribunal held that the Board retained a significant level of control for two reasons. First, it was the Board which identified the work to be done and hence required that hazardous work, because it necessitated extensive drilling in sandstone, be undertaken: at [27]. Secondly, it employed supervisors to oversee the carrying out of the work: at [13]. In addition, it had the power to give directions to the employers as to how the work was to be undertaken through its contractual dealings: at [29].

90 Two factors should be clarified in these circumstances. The first is that there appear to have been no significant statutory powers or restraints on the operation of the Board. Pursuant to the Metropolitan Water Sewerage and Drainage Act 1924 (NSW), s 37, the Board was “the sole Authority for the conduct of water supply and sewerage services, and the construction, control and management of stormwater channels, within its areas of operations”. However, this says nothing about the present situation, other than that the Board had undoubted power to construct the sewerage line on which Mr Abramovic was working. It also had power to enter upon lands to undertake such necessary works: s 32(1). It had power to employ “officers and workmen to assist in the execution of this Act” (s 26(1)) and also to “make and enter into contracts or agreements with any person for the construction of works … in connection with the discharge or exercise by the board of its functions and powers”: s 34(1). There was no statutory function remotely similar to the degree of regulation to be undertaken by the Authority in Crimmins, nor was there the degree of control over the execution of the works required by statute in Coote. In most circumstances a principal will be able to demand a degree of control over the nature and manner of carrying out of works by independent contractors: that fact alone cannot determine the existence or scope of a duty to require a safe system of work, by identifying the manner in which it is to be carried out.

91 The next question is the degree to which the Board in fact exercised control over the works undertaken by Mr Abramovic’s employer. The Tribunal found that the work “was supervised” by employees of the Board: at [13]. However, there is a degree of ambiguity in this finding. The supervision may have been limited to ensuring that the cutting required for the pipes was undertaken in accordance with the specifications and was proceeding according to timetable: it did not necessarily extend to directing the manner in which the work was carried out. On the other hand, the fact of supervision may have been sufficient to draw to the attention of the Board the failure of the contractor to provide necessary safety equipment to prevent or alleviate the harm to Mr Abramovic, as envisaged by Callinan J as part of the duty he defined in Crimmins at [360]. In other words, the complaint may properly have been that the supervision which was undertaken was inadequate because it did not extend to insistence upon the employer’s adopting a safe system of work. That it was this “admitted failure to control the works of its contractors” which constituted the breach of duty, was identified by the Tribunal at [32].

92 If that duty is not to arise in all cases involving independent contractors additional elements, as in Crimmins, must be established. These appear to be that:

(a) the principal had knowledge of the risks which was not shared by the employer, or

(b) the principal created the risk through directions given to the employer, or

(c) the principal knew or at least ought to have known that the employer was not, or was not capable of, instituting a safe system of work.

93 These elements derive support in principle from cases, unlike the present, where a statutory authority failed to exercise, or exercised without due care, a specific power to inspect and require rectification of an unsafe building or contaminated waters: see, eg, Sutherland Shire Council v Heyman (1985) 157 CLR 424, Pyrenees Shire Council v Day (1998) 192 CLR 330 and Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540. The authorities (and Crimmins) were helpfully analysed by Ipp JA in Amaca Pty Ltd v New South Wales [2004] NSWCA 124, (2004) 132 LGERA 309 at [18]-[65] (Mason P and McColl JA agreeing). However, for present purposes it is convenient to focus on the authorities dealing with a possible duty owed by a statutory authority to the employee of its independent contractor.

94 In Crimmins, these elements appear from the passage in the judgment of Callinan J extracted above. They also gain support from a passage in the conclusions of Gaudron J at [45] to the following effect:

“As already indicated, the Authority ought to have known from its Inspectors of the frequency with which and the degree to which waterside workers at the Port of Melbourne were exposed to asbestos. Further, it knew that exposure to asbestos dust and fibres could be injurious to health. It was in a position to know what, if any steps, employers were taking to avoid the risks posed by asbestos. And more to the point, if employers were not taking adequate measures, the Authority was in a position to take various steps, short of making orders having the force of law, to control or minimise those risks.”

95 On the other hand, the other members of the majority in Crimmins appear not to go so far. McHugh J, with whom Gleeson CJ relevantly agreed, placed significant weight on the fact that “[s]afety on the waterfront was part of the Authority’s general responsibilities”: at [103]. He also placed weight, in assessing vulnerability, on the fact that the Authority “directed the waterside workers where they had to work and that the failure to obey such a direction could lead to disciplinary action and even deregistration as a waterside worker”: at [104]. Further, as already noted, Kirby J placed emphasis on the fact that the degree of control exercise by the Authority rendered its relationship with the workers “close enough to that of employment” to make it “fair, just and reasonable that the law should impose a duty of care”: at [235].

96 Where an activity required by a principal could result in a release of toxic or hazardous material which might affect people in the vicinity of the activity, the principal will have a duty to take reasonable care to protect people from the risk, which might require one of the following steps:

(i) not carrying out the activity;
(ii) warning those who may be affected of the risk, or
(iii) instituting controls to inhibit the release of the hazardous material.

Thus the initial question will be whether the duty is only satisfied by not carrying out the activity at all. Where the principal is a statutory authority the answer to that question will usually depend, at least in part, on the proper construction of the authorising statute. In any event, (i) does not arise in this case.

97 If the activity is to be carried out, it is clear that the principal will owe a duty to institute a safe system of work if it is the employer of the workers carrying out the activity. Where an independent contractor is interposed between the principal and the worker, that duty will rest upon the independent contractor as the employer of the worker. So much was accepted by the Tribunal in the present case in relation to what it identified as obvious risks, such as the risk of a trench collapsing.

98 However, the principal may also owe a duty to a worker who is an employee of an independent contractor. The legal question is to identify the criteria which must be satisfied to give rise to such a duty of care. The cases suggest that satisfaction of one of the following criteria may give rise to such a duty:

(a) the principal directs the manner of performance of the work;
(b) the work requires the coordination of the activities of different contractors;
(c) the principal has or ought to have knowledge of the risk and the employer does not and cannot reasonably be expected to have such knowledge;
(d) the principal has the means to alleviate the risk and the employer cannot reasonably be expected to do so;
(e) although the employer has or should have the relevant knowledge and can be expected reasonably to take steps to alleviate the risk, it does not, to the knowledge of the principal, do so.

99 The operation of criteria (a) and (b) is reasonably clear, but they were not engaged in the present case. The operation of (c)-(e) is not so obvious, nor is it clear that there may not be additional criteria. For example, the degree of control which the principal retains over the workplace and the statutory responsibility with respect to safety at the workplace, both of which existed in Crimmins, may be critical considerations in relation to criterion (e).

100 There is a question as to the inter-relationship of (c) and (d). For example, criterion (c) may operate only in tandem with (d) or, if it is sufficient by itself, it may give rise only to a duty to warn, that is to pass on the relevant information to the employer. Criterion (d), on the other hand, may give rise to an obligation to require the institution of a particular system of work and, if necessary, to supply the necessary equipment to alleviate the risk.

101 The particulars of negligence contained in the statement of claim embraced three sets of particulars, namely conduct which would have been expected of an employer, failing to warn the employers or the workers of the relevant risks and failing to direct the use of protective measures. It is no longer suggested that the duties were those of an employer. Further, although it exercised a degree of oversight and supervision, there was no evidence to suggest that, it either assumed or retained by contractual stipulation such a degree of control as would place it in a relationship closely analogous to that of employer and employee, as in Crimmins and Rockdale Beef v Carey, nor did the Tribunal so find. (Indeed, the implication from the finding of failure to impose a contractual stipulation was that it did not.)

102 So far as criterion (c) was concerned, the Appellant challenged the finding that the risks of harm from silica dust would not have been known to, or reasonably expected to be within the knowledge of, the employers, even if they were a small contracting business. The Appellant referred to a number of matters, including the fact that workers compensation premiums at that time included a special levy in relation to injuries caused by silica dust. Again, however, it is not necessary to address that challenge: such a finding would not impose on the principal a duty to institute a safe system of work, unless it was beyond that which could reasonably be expected of the employers. A claim based on a failure to warn would in any event probably not have succeeded, because there was a lack of evidence to support breach of such a duty. Rather, the case was apparently argued, as accepted by the Tribunal at [40], on the basis of a duty to require the taking of protective measures.

103 However, the Tribunal did not expressly find that it would have been unreasonable to expect the employer to take steps to alleviate known risks, but rather made inconsistent findings. Thus it considered that a requirement to use dust-suppressing equipment and respirators would have involved no significant cost to the Board. At least by inference, such equipment was available and would have been available to the employers, and, if they were required to use such equipment, any additional cost could have been passed on to the Board without rendering the contract price uncompetitive. The Appellant challenged the finding that there would be no additional cost, but that challenge can be put to one side for present purposes.

104 In my view the imposition of a duty on the Board to impose a safe system of work on independent contractors, is not justified in circumstances where the Board gave no direction as to the manner in which they were to carry out their work and no question of overall co-ordination or organisation arose. To take that step would require the application of the principle defined by Callinan J, and possibly by Gaudron J, in Crimmins out of the context of the case so as to apply it in circumstances which were, in legal terms, quite different. That Callinan J intended to place reliance on the special role of the Authority within the stevedoring industry is clear from his Honour’s comments on Crimmins in Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 at [317]; see also Randwick City Council v T&H Fatouros Pty Ltd [2007] NSWCA 177 at [46]-[58] (Ipp JA, Giles and Tobias JJA agreeing), and generally Amaca Pty Ltd v New South Wales [2005] NSWCA 124; (2004) 132 LGERA 309 at [52].

105 Nor is it known in the present circumstances what functions of supervision the overseers exercised. Although the Board was found, no doubt correctly, to have relevant knowledge of the dangers to health of inhaling silica dust, there is no evidence that its overseers understood what constituted safe systems of work nor that they had any function of reporting unsafe conditions to their superiors. This is a situation in which care must be taken in relying upon constructive knowledge of a particular area of risk, unless it can be said that there is an obligation to seek out the requisite knowledge: see McHugh J at [102].

106 I am conscious that this analysis identifies the duty in part by reference to the harm suffered by the worker (which may not be controversial) but also in part by reference to the conduct required of the Board in order to fulfil the duty. In my view the issue so identified involves a question of law, although the duty is defined with a level of particularity which depends upon aspects of the factual circumstances of the case.

107 This conclusion renders it unnecessary to consider whether the challenged factual findings made by the Tribunal were unsupported by the evidence. I would uphold the appeal and set aside the judgment of the Tribunal as against Sydney Water Corporation. By agreement between the parties, there is to be no order as to costs either in this Court or in the Tribunal.

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