Tetu & Anor v James Thane P/L

[1999] QSC 91

IN THE SUPREME COURT

OF QUEENSLAND

No.1835 of 1995

Brisbane

Before the Hon. Justice Atkinson

[Tetu & Anor v James Thane P/L & Ors]

BETWEEN:
  HEATHER JANE TETU
  First Plaintiff

AND:
  MATTHEW HUGHES
  Second Plaintiff

AND:
  JAMES THANE PTY LTD
  ACN 002 995 119
  First Defendant

AND:
  CONRAD INTERNATIONAL HOTELS CORPORATION
  ARBN 010 471 137  
  Second Defendant

AND:
  JUPITERS LIMITED
  ACN 010 741 045
  Third Defendant

AND:
  WORKERS' COMPENSATION BOARD OF QUEENSLAND
  Third Party

REASONS FOR JUDGMENT - ATKINSON J

Judgment delivered on 21 April 1999

CATCHWORDS:     NEGLIGENCE - personal injury - trapeze artist - whether persons maintaining and operating equipment were grossly negligent.

NEGLIGENCE - contribution and indemnity - whether s.47 of the Workers’ Compensation Act 1990 applies.
NEGLIGENCE - apportionment of responsibility - application of s.6 of the Law Reform (Tortfeasor’s Contribution, Contributory Negligence and Division of Chattels) Act 1952.

Counsel:S C Williams QC and J P Kimmins for the plaintiffs

J A Griffin QC and C A Adams for the first and third defendants and the

third party

P H Morrison QC and R A Perry for the second defendant

Solicitors:Gadens Lawyers for the plaintiffs

Bain Gasteen for the first and third defendants and the third party
Allen Allen & Hemsley for the second defendant

Hearing dates:   16 - 20, 25 November and 4 December 1998

REASONS FOR JUDGMENT - ATKINSON J

Judgment delivered on 21 April 1999

1. This case concerns a tragic accident in which a talented young trapeze artist, Heather Tetu, fell and was grievously injured ruining her health and ending her career.  The defendants and the third party agreed that the proper payment of damages to her was $1,300,000.  The case was also settled in favour of Ms Tetu’s partner, Mr Matthew Hughes, who was the second plaintiff.  However the question remained and was vigorously contested as to the relative liability of the first defendant, James Thane Pty Ltd (“Thane”), her employer; the second defendant Conrad International Hotels Corporation (“Conrad”), who controlled the venue where she was performing; the third defendant Jupiters Limited (“Jupiters”), who was the registered lessee of the venue;[1] and the third party, then called the Workers’ Compensation Board of Queensland (“WorkCover”).

   [1]Jupiters Limited holds a lease of the land and improvements from Jupiters Custodian Pty Ltd as trustee of Jupiters Trust.

2. The terms of settlement were as follows:

   “1.       Following the settlement of the plaintiffs’ action by the first, second and third defendants, and the third party, it is agreed that, in the first instance, judgment will be entered in favour of the plaintiffs against James Thane Pty Ltd.

   2.        The amount of the judgment in the case of the first plaintiff will be $1,300,000, and in the case of the second plaintiff, $150,000.

   3.        There will also be an order that the first defendant pay the plaintiffs’ costs.

   4.        It is acknowledged by the first, second and third defendants, and the third party, that the purpose of the entry of judgment against the first defendant is to facilitate settlement of the plaintiffs’ action, and to enable the plaintiffs’ legal representatives to withdraw from the proceedings.

   5.        The entry of judgment against James Thane Pty Ltd is without prejudice  to the right of James Thane Pty Ltd to contend that it is entitled to an indemnity (or contribution amounting to a complete indemnity) from the second defendant, Conrad International Hotels Corporation.

   6.        The settlement of the plaintiffs’ action, and the entry of judgment against James Thane Pty Ltd, is also without prejudice to the claims inter se between the first, second and third defendants and the third party. 

   7.        In the event that the court should hold that the second defendant, the third defendant or the third party ought to be held directly liable to the plaintiffs, the judgment in favour of the plaintiffs will be enlarged accordingly.

   8.        In the event that contribution/indemnity is ordered, the first plaintiff is to be treated as having received $1,399,372.03, being the amount of $1,300,000 plus the Work Cover refund amounting to $99,372.03.

   9.        The terms of this agreement are to be brought to the attention of the Court.”

3. Heather Tetu was a brilliant young aerialist and trapeze artist.  From the age of 12 she trained and performed with the Flying Fruit Fly Circus, an organisation in Albury/Wodonga, which trained children and presented shows.  She toured with the group nationally and internationally, and trained and performed in China.  As well as touring with the Flying Fruit Fly Circus she also performed with other groups, both as a solo trapeze act and as a double trapeze act with Matthew Hughes.  Ms Tetu and Mr Hughes planned to sell their double trapeze act, then called “Desire” and later “Aerial Passion”, commercially and perform both in Australia and internationally.  There seems little doubt that they had the talent, originality and excellence to be able to do so successfully. 

4. February 1991 saw the first commercial production of “Desire”, the double trapeze act on which “Aerial Passion” was based.  In about May or June of 1992, Heather Tetu was approached by a representative of the first defendant, Thane, who was looking for an aerial/trapeze act to be performed in “Jewel of the Orient Express” at the Conrad Jupiters[2] complex[3] on the Gold Coast.  After some negotiations, particularly with David Mitchell on behalf of Thane, agreement was reached.

   [2]Conrad Jupiters is a registered business name of the business carried on by Conrad International Hotels Corporation.

   [3]The complex consists of a hotel, casino and convention centre located at Broadbeach, Queensland: see also footnote 20.

5. The show “Jewel of the Orient Express” was written and directed by David Mitchell, the choreographer was Robyn Moase, and the technical direction was by Mort Clark.  Mr Mitchell and Ms Moase were employed by Thane.  Mr Clark was a director of Key Largo Pty Ltd (“Key Largo”), a production company which specialised in the technical management of musicals, scenic design and theatre consulting[4], which Thane contracted to attend to the technical management of the show. In the programme,[5] Michel Venker (a Jupiters’ employee) is given a prominent billing as Mechanical Services Manager, while lesser billing is given to Richard Martin (a Key Largo employee) as Mechanical Manager, and John Mignon (an employee of the Adelaide Centre Festival Trust “ACFT”) as Mechanical Workshop Manager. 

   [4]Exhibit 1 Annexure I.

   [5]Under cl.10 of the Pre-Production and Presentation Agreement, Conrad was responsible for the production and sale of the programme.

6. On 16 July 1992, Mr Hughes signed an employment contract with Thane and on 26 July 1992 Ms Tetu signed a similar contract with Thane.  Ms Tetu and Mr Hughes then moved to the Gold Coast to commence rehearsing “Aerial Passion”.  The trapeze act was changed by the director and choreographer in a number of ways with different costumes, choreography and music, and a change to the ending.  The name was changed from “Desire” to “Aerial Passion”.  Significantly, once the trapeze act was rehearsed at the performance venue, it was decided to perform it in the body of the auditorium over the audience rather than on the stage.  This decision was made for a number of reasons: firstly because there was insufficient height to perform on the stage; secondly because the audience would have difficulty seeing all of the act behind the proscenium arch; and thirdly for aesthetic reasons that it would be more exciting and more in keeping with the nature of a circus act that it be performed over the audience.  The decision was made by Thane, Key Largo and the plaintiffs with the assent of the complex staff, including Grant Bowie, the hotel manager.  At about this time it was also decided that Ms Tetu should be lifted mechanically.  Immediately prior to that time, Key Largo had decided not to use a motorised winch because there was no motorised winch in the vicinity.  However the director, Mr Mitchell, informed Thane that Ms Tetu’s rise on a winch was desirable and asked if it was “over the $2000 reserved for rigging the aerial act?”  Mr Venker informed Thane that the complex had a spare winch which he moved from the stage into the auditorium for use with the trapeze act.

7. The change from the stage to the auditorium meant that it was no longer possible to rely on the equipment in the fly tower over the stage.  Equipment, including a frame to be attached to the ceiling of the auditorium, had to be designed and constructed.  Once the decision was made to move the trapeze act into the auditorium, Mr Bowie said the complex would take charge of the installation of the trapeze frame because it was over the audience and had to be attached to the fabric of the building.  This was done by and under the supervision of an engineer employed by Jupiters, Jack McLaggan, who like the other employees of Jupiters worked under the supervision of employees of Conrad.  Mr McLaggan reported to the hotel manager, Mr Bowie, who was a Conrad employee.  Mr McLaggan had responsibility for all engineering matters throughout the complex.  His responsibilities included operating and maintaining the complex safely and efficiently.  The frame was constructed and certified by a firm of engineers, Weathered Howe.

8. Once the change was made from the stage to the  auditorium, the technical aspects of the trapeze act were under the control of employees at the complex.  Indeed, once the show opened, Key Largo’s responsibilities were complete and Mr Venker and Chris Bowker, another employee of Jupiters, with Mr Bowie’s knowledge, had responsibility for the operation and maintenance of the lifting equipment for the trapeze act.  Had the change to the auditorium not occurred, the rigging of the trapeze act might well have fallen under the responsibility of Key Largo as agent for Thane.  In particular the work would probably have been performed by, or more likely under the supervision of, Mr Martin, an experienced stage technician employed by Key Largo.  Mr Martin was also a licensed rigger. 

9. Mr Martin was engaged to assist the stage designer in working out a way to manufacture the scenery and props to fit within the budget constraints and to assist in installing the scenery into the showroom.  However the crew employed by the venue would always have retained responsibility for their own equipment such as winches, the stage machinery and the fly tower.  There was some hostility towards Mr Martin and members of the ACFT and their methods from Mr Venker and Mr Bowker.  For this reason and because the auditorium, as opposed to the stage, was outside his area of responsibility, Mr Martin did not have anything to do with the installation or design of the trapeze equipment.  Mr Clark told Mr Martin not to be involved in the installation or design of the trapeze act as it was going to be manufactured and controlled by “Conrad staff”.

10. Attached to the winch was a steel cable, which in turn was attached to the trapeze equipment, and which was used to lift Ms Tetu.  The lifting system was different from that usually used by Ms Tetu.  In previous shows she had come down a rope onto the trapeze.  In this venue that was not possible so Mr Clark and Mr Martin from Key Largo and Mr Venker and Mr Bowker, who were employees of Jupiters, decided to use the winch and the particular equipment that was used to lift her.  Mr Venker and Mr Bowker told the others what was technically possible within their venue.  Mr Bowker was introduced to Ms Tetu as her rigger although she did not find out until well after the accident that he was not a qualified rigger.  There was no reason for the plaintiffs, Thane or Key Largo to doubt their experience as Mr Bowker and Mr Venker had been employed at the Conrad Jupiters complex for many years.  Mr Witham, who was company manager for Thane at the time of the pre-production and performance of “Jewel of the Orient Express”, raised safety concerns he had about moving the trapeze act into the auditorium, in particular the safety of the audience.  Mr Venker told Mr Witham words to the effect that he was totally au fait with high wire and aerialist work, and he had done extensive work in that area in overseas circuses.  Mr Clark also assured Mr Witham that he did not have to be concerned about the safety of the audience in the circumstances.

11. From the time the complex opened in 1985 until mid-1992, Delicado, whose principal was James McDonald, provided shows to the complex.  “Jewel of the Orient Express” was the first show not produced by Delicado.  Delicado’s contract was not renewed because Conrad believed it was time for a fresh approach.  An entertainment services department was set up in July 1992 by Conrad to give Conrad more control over the showroom.  Mr Bowker was employed by Delicado until mid-1992 as head flyman and thereafter he became a Jupiters employee.  Peter Condon, a Delicado employee, became the complex’s Entertainment Services Manager.  He had no technical skills or interests. One of his duties however was to be responsible for the condition and maintenance of backstage facilities and related equipment.  Approximately twenty former employees of Delicado became employees of Jupiters.  None of the Delicado employees filled in any application for employment or were interviewed.  All of the Delicado employees were employed by Conrad in like positions.  None of them received any further training.  Mr Bowker’s resume showed long experience as a flyman and senior mechanist, but he had no qualifications or certifications as a rigger.  Mr Venker was an employee of Jupiters throughout his employment as Mechanical Services Manager at the complex and was employed on the recommendation of Mr McDonald who had previously employed him at Delicado.  Mr Bowker reported to Mr Venker who in turn reported to Mr McLaggan, the head of engineering at the complex, on the technical aspects of his work.  Mr Venker’s duty statement as Mechanical Services Manager ‑ Showroom, discloses that his responsibilities included:

    “4.Required to be capable of liaising on a technical level with producers, production teams, convention centre personnel and clients for all showroom mechanical and scenery presentation;

    5.Install and operate scenery for different productions;

    6.Responsible for ‘hiring and firing’, training and supervision of all stage hands;

    . . .

    8.Technical expertise and experience to ensure that all the productions are staged within the established guidelines and to the satisfaction of the designers and producers;

    9.Responsible to maintain and repair faulty equipment;

    10.Responsible to operate all equipment in a safe manner as set down in the standards;

    . . .

    13.Carry out preventative maintenance on scenery and equipment.”

12. It is apparent that in their respective positions, both Mr Venker and Mr Bowker were engaged in the work of a rigger, work for which they did not hold the qualifications required under the Workplace Health and Safety Regulation 1989 (“WHS Reg”).[6]  Mr Bowie the hotel manager was aware that they were doing that work although not of the statutory requirement for a licence.

    [6]As at December 1992, the definition of “rigger” in the Workplace Health and Safety Regulation 1989 was “a person who is responsible for the rigging and safety of rigging involved in the erection, positioning or dismantling of any building or structure, or plant that requires the erection of tackle involving the use of wire, fibre rope or other gear for the purpose of lifting, lowering or moving an object.”

13. The winch and the steel cable for lifting Ms Tetu were installed by Mr Bowker under Mr Venker’s supervision.  I reject Mr Venker’s evidence that the lifting equipment was installed by Thane and Key Largo and in particular that Mr Clark hand swaged or clamped the wire cable using a Conrad hand swaging tool.  When Mr Venker gave oral evidence he resiled from the references in his statement[7] to particular people taking part in meetings, giving instructions or doing particular tasks such as swaging the cables used to lift the trapeze.  I formed the view that his evidence was quite unreliable.  For example, in his written statement Mr Venker said:

    “It was my understanding that Key Largo had a hydraulic swaging tool but for some reason Mr Clark asked if we had a swaging tool.  I told him we had a manual swaging tool and he said that would be all right.  He used that to swage the wire rope used for the lift.”

    In evidence‑in‑chief, Mr Venker said that when he said Mr Clark asked if they had a swaging tool, he meant Thane or Key Largo so asked, and that although his written statement says Mr Clark swaged the wire rope used for the lift, he did not know who swaged the wire.  In addition, the late change to his evidence after Thane had closed its case meant that witnesses called by Thane either met allegations that were subsequently withdrawn or did not have the opportunity to deal with allegations that were subsequently made.  Mr Bowker was not called to give evidence when one would have thought that had he been called his evidence would have supported or contradicted the evidence given by Mr Venker.

    [7]Exhibit 53.

14. I also accept that Mr Martin did not do any of the hand swaging of the cables.  He said he did not do any hand swaging on site and it would have been out of character for him to do so in these circumstances.  He had worked for eleven years as a stage technician with the Australian Opera and had never known hand swaging to be utilised in connection with the lifting of people.  He had only ever hand swaged cabling which was used to lift small scenic items such as a handbag, a shoe or a small piece of cloth.  He had only seen hand swaging tools used for very thin wire - certainly not a 5-6 millimetre cable as was used in this case.

15. The steel cable used to link the winch to the trapeze equipment was left over from that used by the ACFT when installing the stage machinery.  Under the terms of the Pre-Production and Presentation Agreement,[8] all such material belonged to Conrad.  Key Largo supplied management services rather than materials.  Where the steel wire was cut, it was doubled back on itself and clamped with a ferrule by a clamping or swaging tool which seals the ferrule around the two pieces of wire clamping them together.  The swaging tool used was a hand tool with “Conrad” stamped on it, although a machine or hydraulic swaging tool owned by the ACFT was at the complex for use in swaging the wires attached to the floor winches installed under the stage floor by the ACFT.  If employees of the production company had swaged the cable, there is no reason why they would not have used the machine or hydraulic swaging tool.  I do not accept Mr Venker’s evidence that it had broken down.

    [8]Exhibit 29.

16. The winch which lifted Ms Tetu into position for her performance was operated by Mr Bowker, who pressed a switch to operate the lifting device.  During rehearsals Ms Tetu was informed that there would be a limit placed on the winch so that she would stop automatically in the same position every night.  It was set by Mr Bowker during a technical rehearsal to the precise height.  At that point when she was about 8 or 9 metres off the floor she would perform a spin and then step onto the trapeze.  She was lifted by a secure hand loop at the end of a web rope which was then attached to the steel cable by a shackle.  The steel cable was attached to the drum of the winch that lifted her.  This winch had previously been used at the venue to lift people by pulling a counter weight system.

17. Not long before the show opened, Ms Tetu became aware of a noise emanating from contact between the steel plate supporting the cable and the guide collar of the lug attached to the frame which was bolted to the roof.  Mr Bowker and Mr Venker fitted a flat piece of rubber to stop the noise.

1. The show opened on 31 August 1992 and ran for eight performances a week.  The maintenance of the equipment once it was installed was entirely the responsibility of Mr Venker and Mr Bowker.  By this time, Key Largo’s contractual responsibilities to Thane had been completed.  Some time immediately before or after the show opened, the automatic limit switch on the winch was deactivated by Mr Bowker.  Mr Martin said, and I agree, that doing so was a dangerous practice.  This was even more so in this instance because the winch operator was not on the same horizontal plane so that the precise point at which the hitch plate should be stopped manually was even more difficult to judge.  This was done without the knowledge of Ms Tetu or Mr Hughes or anyone from Key Largo or Thane. 

2. In addition, after 100 shows, Mr Bowker, who was not a qualified rigger and therefore did not have the appropriate skills to do so, changed the steel cable which had begun to fray.  He did this with the approval of Mr Venker but without informing anyone else.  In particular, he did not tell Ms Tetu of his plans to do so but later told her that he had changed the cable and assured her that everything was in order.  He said he had put two swages or ferrules on the new steel cable, making it doubly safe.  He used cable left behind by the ACFT.

3. About two weeks later, on 12 December 1992, Ms Tetu fell while she was performing the trapeze act, and severely injured her feet, back and left knee, which ended her career and has caused her continuing intense pain and severe mobility impairment.  She has endured many painful operations and feels despairing, irritable and pessimistic, and has nightmares and flashbacks which are very distressing.  She also suffers from chronic post-traumatic stress disorder and depression.

4. Ms Tetu’s fall occurred during the one hundred and thirteenth show.  Mr Hughes saw her fall but was unable to immediately help as he was on a platform some distance away.  When he saw her limp body, he thought she was dead.  The fall occurred when Ms Tetu was suspended some 9 metres in the air.  It occurred when the ferrules used by Mr Bowker to hand swage the joins in the steel cable failed.  However the weakness of the swaged joins was only part of the problem. 

5. On 14 October 1993 Thomas Heron, a highly qualified mechanical engineer, who is the senior principal adviser (technology) at the Technical Unit, Inspection and Advisory Services Branch, Division of Workplace Health and Safety of the Department of Training and Industrial Relations, prepared a report on the technical issues surrounding the accident involving Ms Tetu.  This report describes the  system that was used for lifting Ms Tetu.  An electric winch with a 7/32 inch (5.56 millimetre) wire rope was used to raise Ms Tetu from floor level to a trapeze frame.  A requirement of the performance was that Ms Tetu was to be stopped at the same height each time she was hoisted up to the frame.  A hitch plate attached to the wire cable prevented the lift being higher than the guide lug on a cantilevered arm attached to the frame.  An upper motion limit switch was provided to accurately position the hitch plate but this safety device had been disconnected and the winch motion was manually controlled by the winch operator to ensure power to the motor was cut precisely at the point of impact.  The hitch plate used to connect the hoist rope to the performer’s wrist strap or hand loop was larger in diameter than the opening in the guide lug which it could not pass through.  Without the limit switch, when the performer was raised the hitch plate was allowed to impact on the guide lug.  The guide lug was found to be indented and worn as a result of continual impact by the hitch plate.  If the power to the winch motor was allowed to remain on too long, a virtual certainty given the manual operation, the winch would begin to bend and distort the cantilever which attached the guide lug to the trapeze frame.  A piece of rubber and plywood was attached to the hitch plate to lessen the noise which occurred when the hitch plate impacted on the guide lug.

6. After the accident it appeared that the cantilever attaching the guide lug to the frame had been bent.  The failure to stop the winch at the precise moment when the hitch plate came into contact with the guide lug caused the cantilever to distort and also caused the load on the wire rope to be increased due to interference between the hitch plate and the guide lug, resulting in the winch rope being torn from its swaged connection because of the failure of the swaging.  The force applied to the structure by failure to stop the winch motor at the instant of impact of the hitch plate with the guide lug was of sufficient magnitude to cause failure of the swaged joint.

7. The winch used to raise Ms Tetu comprised a Stone McColl Motor, a Westate Rossi worm wheel gear box, a winching drum of steel construction, spiral grooved and cable.  The maximum tensile load generated by the winch, i.e. how much the winch would lift before it failed and stalled, was 1268 kilograms.  It was seven times more powerful than was required to lift Ms Tetu.  The power of the winch was such that it had the power to create kinetic stress on the 5.5 millimetre cable sufficient to almost break the cable.  The cable had a capacity of only 1587 kilograms.  The factor of safety between the cable and the winch was only 0.06.  Since a safety factor of 10 is required under the Australian Standards,[9] that was virtually no safety factor at all.

   [9]AS 1418.2 - 1990  s.5.4.2(b).

8. The evidence showed that the winch did not comply with the Australian Standard relating to hoists used for lifting persons.[10]  The reasons that it did not comply with the Standard were that the winch was rated at that time at a higher safety working load than should have been used in this case; the winch had only one independent holding device and not the two required by the Australian Standard;[11] the winding drum was designed to suit a 5 millimetre hoist rope rather than the 8 millimetre hoist rope which should have been used; there was no electrical overload cut-out on the winch other than the mains pass circuit breaker;[12] there was no stop switch mounted on the winch;[13] there was no emergency hand winding devices available on the winch; there was no rope keeper on the winding drum or the diverter sheaths; and the hoist rope was 5 millimetres in diameter where it should have been 8 millimetres.  It is important when a winch is carrying personnel that it is designed in such a way that it will carry the load of the personnel plus 50 percent of that load and no more, so that if for some reason there is a seizure, the winch cannot generate enough power to cause any major injury or fatality.

   [10]AS 1418.2 - 1990 does not apply specifically to trapeze artists but is the closest Australian Standard which is applicable. 

   [11]Section 5.4.3.1.

   [12]Sections 5.6; 8.8.

   [13]Section 5.4.6.

9. Further, a report for the Division of Workplace Health and Safety by Martin Kortlucke of ETRS Pty Ltd who examined the wires, thimbles and ferrules and swaging tool used, concluded that a similarly swaged assembly on the same type of cable using the same type of ferrules and the same hand swaging device failed in a simulation of the original at 890 kilograms being about half the wire strength.  The ferrules used were the incorrect size.  They were nominal quarter-inch ferrules.  The wire is nominal 7/32 inch wire.  The ferrules used were the incorrect type.  They were flat-sided ferrules intended for hydraulic machine swaging rather than the waisted or figure-8 shaped ferrules intended for hand tool swaging.  The hand tool used was nominally the incorrect size.  It was nominal 1/4 inch HIT 600.  When tested, assemblies hand swaged using the nominal 7/32 inch ferrules failed before the wire. 

10. The cable in this case frayed when the swage failed.  When a swage is correctly done it exceeds the strength of the wire and the wire breaks at the point of entry to the swage rather than the swage failing and the wire fraying as a result.  The performance of a hand swaged joint is difficult to predict.  The two swages in this case failed at about half the strength of the wire so each of them failed at about a quarter of the strength of the wire.  It is an essential feature of any joining system that the joining system should exceed the strength of the component that is being joined so that one can rely on the wire strength rather than having to worry about a weakened fitting.  Each swage in this case was about a quarter of the strength of the wire rather than being greater than the strength of the wire as it should have been.  However even if the swages had been of the right size and type, it is unlikely that a hand swaging tool could have produced a swage of the appropriate strength.  Mr Kortlucke’s evidence was that not only should the wire strength be well above the winch capacity because of the consequence of wire breakage in, for example, hung sculptures in the foyers of hotels, but also that swages should always be stronger than the wire.

11. As at December 1992, there was a wire testing station at Loganholme at the premises of John L Robertson Pty Ltd.  Had they tested the wire rope, they would have required it to be replaced by a rope which had a breaking strain of ten times the weight of the person being lifted, in accordance with part 3 of AS 1891. 

12. As well as a failure to comply with AS 1418.2, there was also a failure to obtain design registration of the hoist used to elevate Ms Tetu. Hoists designed to lift people are required under s.23 of the WHS Reg to obtain design registration prior to installation. It was Mr Heron’s opinion that the wire rope fitted to the hoist had a breaking strain slightly lower than the maximum line pull, and that therefore an acceptable factor of safety was not provided in respect of the wire rope fitted to the hoist. With the upper final limit switch disconnected it was possible to load the wire rope to approximately its breaking strain, should the rope be restrained in any way. He concluded:

    “This accident occurred because the load placed on the wire rope exceeded the strength of the swaged joint.  Excessive load on the winch wire rope was generated when the hitch plate impacted the guide lug and the winch continued to operate causing the load on the wire rope to increase until failure of the swaged joint occurred.”

13. In his opinion, which I accept, it was practical to design and manufacture a hoist which would comply with all the requirements of the appropriate safety code and that hoists suitable for hoisting people which fully comply with the legislation and codes are readily available at a cost comparable with the hoisting installation employed to elevate to Ms Tetu.

14. Mr Heron’s report also indicated that if instead of attaching rubber to the hitch plate to prevent it rattling, the inside of the guide lug was lined with some form of compound, then the stopping tolerance would not have needed to be so precise and there would have been no occasion to turn off the limit switch.  Mr Heron said that no competent or qualified rigger would ever have allowed the limit switch to become inoperative.  Doing so where the winch was so powerful and there was such a large safety factor required between the winch and the cable was itself very dangerous.  Added to that danger in this case was the use of ferrules which were the wrong size and type which were inadequately swaged using a hand swaging device which made the swaged joints even weaker than the wire.  However even if the wire had been correctly swaged, without the automatic limit switch it is likely that within a very short period of time the strain on the wire would have been too great and it would have broken in any event.  Had the winch used to raise Ms Tetu been the subject of an application for registration of its design with the Division of Workplace Health and Safety it would have been deemed unsafe.  The design was not registered.

15. On 22 and 23 December 1992, as a result of a request from Mr Venker, John L Robertson Pty Ltd, chain and lifting equipment specialists, quoted for a hydraulic swaging press, a fall arrester and equipment required for the modification of flying bars and associated gear in the backstage area.  The hydraulic press and various chains, shackles and quicklinks were subsequently purchased for use at the complex. 

16. All in all, the system of work was entirely defective.  Furthermore, as Mr Heron said it is generally well accepted by experts in the area that a cable for lifting a person must be hydraulically swaged rather than hand swaged.  In this case, the ferrule was the wrong size, was the wrong type and it was wrongly swaged.  All of this work is properly the work of a rigger, and one would expect this work to be done by a competent and qualified rigger who would immediately see the defects in the system and who would also be looking to test the system as well.  A rigger would be aware that it needed to be inspected.  Such an inspector would require to see a certificate from an NATA laboratory or to be present when the testing took place.

17. That a rigger would be aware of these matters was confirmed by Mr Martin from Key Largo whose evidence was that if people were to be lifted the apparatus needed to be designed by an engineer with recognised qualifications and the apparatus would then have to be certified or registered with the relevant authority to make sure it complied with the rules and regulations of the particular State where the lifting was to occur.  Once it was certified it would have been manufactured by a qualified person, usually off-site.  The swaging of the wire would have been done by either hydraulic or machine swaging methods by a specialist wire rope company.  The whole apparatus would then be tested and a safety working certificate would be supplied.  Such equipment would ordinarily be regularly inspected by a rigger while it was being used.  The rigger would check the fastening at the end of the winch, the operation of the winch, the cable attachment, the cable condition and the casing at the end of the cable, in this case the ferrule.  Such regular inspections would reveal any defects.  Such inspections should have occurred before each performance when the apparatus would be used to lift people.  Mr Venker, who became a licensed rigger in 1995, was aware of these matters at the time of giving evidence but not at the time of rigging the wire cable.  From the Department’s records, Mr Heron was able to say that as at 12 December 1992 neither Mr Venker nor Mr Bowker were the holders of a rigger’s certificate of competency. 

18. It was put to Mr Martin that he had reviewed the lifting equipment for safety and while he agreed that this was possible he did not recall doing so.  I have concluded that he did not do so.  Mr Martin’s awareness of what was required for safety leads me to conclude that had he reviewed it he would have been only too aware that the equipment did not comply.  It was not, as he said, part of his scope of work and so was a matter he avoided.  Mr Martin was certain that had he discovered that the lifting device was not registered, or did not have the correct certification, he would have raised his concerns with Mr Clark, his immediate superior. 

19. Mr Clark gave evidence that he asked Mr Martin and Mr Mignon from the ACFT if they were satisfied that the operation was safe, and that they had said they were satisfied.  But I do not accept that the conversation occurred in those terms.  It is highly unlikely that Mr Martin would have said that he was satisfied that the operation was safe when it clearly was not.  Mr Clark’s answer under cross-examination is more revealing.  When asked if he had a report back from Mr Mignon or Mr Martin as to the safety of the trapeze set up he said:

    “My understanding is that because things happened very quickly - you know, you then go straight into rehearsal mode and the thing was operating correctly - I can’t think that either of them would have not said anything when it was lifting someone.”

    On the basis of this evidence it seems more likely that, rather than asking if the lifting apparatus was safe, Mr Clark assumed that it was because he had not been told otherwise.  As Thane had engaged Key Largo and in particular, Mort Clark, to assume responsibility for the mechanical aspects of the show, the failure to ensure that the equipment used by the trapeze artist was safe was an abrogation of Mr Clark’s proper responsibilities for which Thane is liable to its employees.

20. The deficiencies in the rigging and swaging of the trapeze equipment was not an isolated event.  A preliminary inspection by a firm of chain and lifting specialists in December 1992 showed that all 300 terminations of the fly pick‑up lines in the showroom did not conform to the Australian standard; the rope ladder scene in the show used cable that was 5 millimetres rather than 8 millimetres as required by the Australian standard; all of the winches needed to be regrooved to accommodate 8 millimetre cabling.  A number of collard eye bolts, rope grips shackles, rigging screws, swages and thimble eyes needed to be purchased to conform with the Australian standard, and the flying scenery needed to be re-rigged.

21. In November 1993, Conrad and Jupiters were charged with a number of offences under the Workplace Health and Safety Act 1989(“ WHSA”). As a result, Mr Illsley recommended that Mr Bowker and Mr Venker should train to become licensed riggers as there was “no doubt” that the work done by them was that of a rigger and it was unlawful to employ persons to perform the work of a rigger unless they were so licensed. Neither Mr Venker or Mr Bowker became licensed riggers until May 1995.

22. In May 1994 Conrad was convicted of the following charges

    “1.That on or about 12 December 1992 at Broadbeach Island in the Magistrates Court District of Southport, Conrad International Hotels Corporation, being a person who had to some extent, control of plant, in premises not being domestic premises, that has been provided with the use of a person at the workplace, not being its employee, failed to ensure that the plant was safe, when it was practicable for it to do so, contrary to section 11 of the Workplace Health and Safety Act 1989 ... [A]s a consequence of the above contravention Heather Tetu suffered serious bodily injury namely two broken ankles.

    2.That on or about 12 December 1992 at Broadbeach Island in the Magistrates Court District of Southport, Conrad International Hotels Corporation, being an employer, failed at a workplace to ensure that a winch complied with the requirements of Australian Standard 1418 part 2 contrary to section 170 of the Workplace Health and Safety Regulation 1989;

    3.And that on or about 12 December 1992 at Broadbeach Island in the Magistrates Court District of Southport, Conrad International Hotels Corporation, used plant of a kind listed in schedule 4 of the Workplace Health and Safety Regulation 1989, (namely a winch) at a workplace when neither the details of the plant design was registered with the director nor had a copy of approval of registration of the plant design by another State or Territory Occupational Health and Safety Authority had been lodged with the director contrary to section 23 of the Workplace Health and Safety Regulation 1989.”

23. I have not had regard to the transcript of the proceedings in the Magistrates Court, part of which was tendered in evidence, mainly because the admissions of control of the workplace and employment of staff by Conrad appear to have been made merely for the purposes of that prosecution and in pursuance of an undertaking not to say that Jupiters rather than Conrad was the correct defendant to the prosecution.  This undertaking was made pursuant to an agreement between Conrad and Jupiters to protect Jupiters’ reputation and on the understanding that Conrad would pay any fine from funds supplied by Jupiters in accordance with the management agreement.[14]

    [14]Memorandum from W R Sheppard to R K Barnes, dated 18 May 1994.

1. However, the evidence led in this case establishes the following breaches which were pleaded of the WHSA and the WHS Reg made under that Act:

   1.The first defendant, Thane, was in breach of s.9(1) of the WHSA in failing to ensure the safety of all of its employees in circumstances where it was practicable to do so;

   2.The second defendant, Conrad, was in breach of s.10(1) of the WHSA in failing to conduct its undertaking in such a manner as to ensure the safety of persons not in the second defendant’s employment who were exposed to risks arising from the conduct of the second defendant’s undertaking, in circumstances where it was practicable for it to do so;

   3.The second and third defendants, Conrad and Jupiters, were in breach of s.11(1) of the WHSA in that they each had to some extent, control of premises (not being domestic premises) that had been made available to persons (not being the person’s employees) as a place of work, and of plant in those premises which had been provided for those persons’ use and they failed to ensure that the premises or the plant were safe, and it was practicable to do so;

   4.The second defendant, Conrad, who had control, charge or management of plant, and who therefore was by operation of ss.6(1) and 18, a principal contractor, was in breach of s.109(1) of the WHSA in that it caused, permitted, allowed or employed persons, being Mr Venker and Mr Bowker, to perform the work of a rigger[15] without a current certificate of competency issued by the Director.

   5.The second defendant in breach of s.23 of the WHS Reg, installed, used, or altered for use at a workplace a hoist designed to lift a person[16] which was not registered with the Director or by the occupational health and safety authority of any other State.

   6.In breach of s.24(1) of the WHS Reg the second defendant, who had the control, charge or management of classified or specified plant, being a personnel hoist,[17] used or permitted that plant to be used at the workplace when the plant was not registered.

   7.The second defendant did not ensure that the hoist and winch and each item of the lifting gear used at the workplace complied with AS 1418.2 - 1990 in breach of ss.155(1) and 170 of the WHS Reg.

   [15]See WHS Reg s.33(h).

   [16]Schedule 4 reg.2.

   [17]Schedule 3 reg.3A.

   Relationship between Jupiters and Conrad

2. The relationship between Jupiters[18] and Conrad was governed by contracts dated 30 June 1983 and then 16 May 1988[19] (the “management agreement”).  The complex was owned by Jupiters but was managed for them by Conrad which had the sole and exclusive right to supervise and direct the management and operation of the complex.[20]  As might be expected, Jupiters maintained a close interest in the operation of the complex[21] but Conrad did not surrender its contractual control.  Under the management agreement, all the employees who worked at the Conrad Jupiters complex on the Gold Coast, with the exception of four members of senior management, were employees of Jupiters.[22]  However they worked under the control of the four Conrad employees[23] and were paid by Conrad out of accounts operated by Conrad as agent for Jupiters.  Jupiters had no involvement in staff recruitment or training, nor did it set their remuneration, nor determine their responsibilities, nor give them directions.  Tony Davies, who was the director of human resources as at December 1992, gave evidence that Conrad had responsibility for decisions in regard to staff including hiring, supervising and discharging staff.  All of the employees were under Conrad’s supervision and control.  Jupiters had no input into, for example, staffing levels and human resources policies and procedures, which were the responsibility of Conrad.  Although group certificates were issued to employees in the name of Jupiters, those group certificates were issued by Conrad and the documentation regarding all employees was held by Conrad.  Mr Bill Sheppard, a senior executive employed by Conrad, in a letter to Mr Richard Barnes, the managing director of Jupiters Ltd, on 14 April 1992, referred to the employees at the complex as “our employees”. 

   [18]Originally Jupiters Development Ltd but later its successor in title, Jupiters Ltd.

   [19]Exhibit 30.

   [20]Clause 4.1.1.

   [21]The Jupiters board received regular reports from Conrad on all matters affecting the operation of the complex.

   [22]According to the evidence, there were between 2,300 and 2,400 employees at the complex as at December 1992.

   [23]Clause 4.5 of the contract provided:

   “4.5.1General - Conrad shall hire, discharge, promote and supervise the executive staff of the complex (i.e. the general manager and controller, the casino manager and controller, the assistant managers, department heads and other key executive personnel) and will supervise through said executive staff the hiring, discharging, promotion and work of all other operating and service employees of the complex.    . . .

   4.5.2Development as Employer - Except as provided in Sub-section 4.5.4 below, all employees of the Complex shall be employees of [Jupiters], and all Compensation of such employees shall be paid by Conrad as agent of [Jupiters].   . . .

   ...

   4.5.4Employees of Conrad - The general manager and controller, and the casino manager and controller, shall be employees of Conrad.  . . . ”

3. So far as property was concerned, Jupiters approved a capital expenditure budget annually and from that budget Conrad acquired, maintained, disposed of, had possession of and took responsibility for the real and personal property.

4. Under cl.4.6(f) of the management agreement, Conrad was obliged to use its best efforts to do all things necessary to comply with all legal requirements. On 3 September 1990, Jupiters wrote to Conrad listing many of the requirements of the WHSA and reminding Conrad of their obligation under cl.4.6(f) to ensure that the requirements of the WHSA in respect of the complex were complied with and asking for confirmation of that compliance. Another letter requesting confirmation of compliance was sent by Jupiters to Mr Bowie, the hotel manager, on 2 September 1992. In response, David Illsley, the director of security at the complex, sent a memo to Mr Bowie on 25 September 1992 saying that as the chairman of the health and safety committee and the chief safety officer for the complex, he was “happy to confirm that all provisions of the Workplace Health and Safety Act” were being complied with. He boasted that the complex was regularly used by the Division of Workplace Health and Safety as a role model for other establishments. The hubris in this letter was exhibited shortly after the opening of the show “Jewel on the Orient Express”. Given the large number of breaches of the WHSA and the WHS Reg that occurred in the showroom and a failure to conduct a comprehensive safety audit there, it is impossible to conclude that Conrad used its best efforts to do all things necessary to comply with all legal requirements.

5. Clause 4.8 of the management agreement provided a limit on Conrad’s liability to Jupiters.  It provides:

   “It is understood that many of the undertakings of Conrad hereunder will be performed by the executive staff or other employees at the Hotel.  It is agreed that Conrad shall not be liable to [Jupiters] for the failure to perform any duty hereunder to the extent that such failure is due to the act or omission of any member of the executive staff, or other employees of the Hotel, who is an employee of [Jupiters]
   PROVIDED THAT Conrad has used reasonable diligence in hiring, discharge and supervision of the executive staff and the supervision through such executive staff of the hiring, discharge and supervision of the other employees of the Hotel.”

   In this case, Conrad has failed to use reasonable diligence in the supervision through the executive staff of the supervision of other employees of the hotel. It failed to implement systems which insured that all provisions of the WHSA were complied with and in particular that Mr Bowker and Mr Venker did not do work in breach of that Act. The failure of supervision included a failure to identify the qualifications required when Mr Bowker and Mr Venker were first appointed, a failure to review their qualifications after the WHSA came into effect, a failure to train either of them, a failure to properly audit the safety procedures in the showroom which manifested itself in unsafe work practices, a failure to apply for registration of the plant design as required by s.23 of the WHS Reg and the numerous other breach of the WHSA and the WHS Reg. As was submitted by counsel on behalf of the first and third defendants and the third party, the lifting equipment failed because inadequately qualified and supervised personnel maintained and operated the system. Those personnel were provided by the complex and not by Thane. These matters amount to a failure by Conrad, in breach of the management agreement, to use its best efforts to comply with all legal requirements and of the reasonable diligence referred to in the proviso to cl.4.8 and of the duty to supervise referred to in cl.4.5.1.

6. Under cl.5.1.1(f) Conrad had the duty to procure and maintain workers’ compensation insurance at the expense of Jupiters.  Clause 5.2.3 provides that any such policy of insurance should be carried in the name of Jupiters and Conrad.

7. Clause 12.4 of the management agreement deals with the extent to which Jupiters is obliged to indemnify Conrad.  It provides, inter alia, as follows:

   “12.4.1 General.  [Jupiters] will indemnify and hold Conrad and its officers and employees harmless from and against all actions, suits, claims, penalties, damages and expenses, including reasonable attorneys’ fees, based upon, or arising out of, any occurrence or event happening in or about the Complex, or occurring in connection with the operation thereof, unless it is ultimately determined that liability has in fact arisen, and that such liability was caused by the gross negligence or wilful misconduct of Conrad, if Conrad is seeking indemnification, or of the officers or employees seeking such indemnification; the indemnity contained in this subsection 12.4.1 shall not apply to any liabilities or obligations  based upon, or arising out of any contract between [Jupiters] and Conrad, including this Agreement.”

8. Clause 12.4.2 is in the same terms but relates to any claim arising out of any breach, or alleged breach, or investigation relating to a possible breach, of any legal requirement, unless it is ultimately determined that there has, in fact, been a breach of a legal requirement and such a breach was caused by the gross negligence or wilful misconduct of Conrad or of the officer or employee seeking the indemnification.

9. Clause 12.4.5 is the obverse of cl.12.4.1 and deals with the extent to which Conrad is obliged to indemnify Jupiters.  It provides as follows:

   “Indemnity to [Jupiters]  Conrad will indemnify and hold ... Jupiters ... and their respective officers and employees harmless from and against all actions, suits, claims, penalties, damages and expenses, including reasonable attorneys’ fees, based upon, or arising out of, any occurrence or event happening in or about the Complex, or occurring in connection with the operation thereof, where it is determined that liability has in fact arisen and that such liability was caused by the gross negligence or wilful misconduct of Conrad; such indemnity will apply to any breach of a legal requirement that has in fact occurred and which was caused by the gross negligence or wilful misconduct of Conrad.”

   Relationship between Conrad, Jupiters and Thane

10. The relationship between Conrad, Jupiters and Thane is governed by a contract dated 16 March 1992 which is said to be between Conrad, as agent for Jupiters, and Thane.[24]  This contract was entered into by Conrad without the prior specific approval of Jupiters.[25]

    [24]Exhibit 29: The Pre-Production and Presentation Agreement.

    [25]Details of the production “Jewel of the Orient Express” were presented to the Jupiters Board at its meeting in August 1992.

11. This contract recites that Conrad operates and manages the complex[26].  Thane was appointed by Conrad to produce and present the show to the public.  Conrad agreed to pay the actual pre-production costs, weekly running costs, and a fee, and agreed to be responsible for the costs of manufacture and/or supply of all plant and equipment, lighting, scenery, furniture, fittings, properties and costumes required for the show.  All equipment was to be the property of Conrad.  Thane, as producer, agreed to engage all persons engaged in the presentation of the show including all performers, singers, dancers, musicians, and the production managers except the sound technicians, machinists, electricians, wardrobe personnel and back stage crew whom Conrad would cause Jupiters to employ.[27]  These persons are referred to as “Conrad staff” in cl.5.2 of the Pre-Production and Presentation Agreement.  This clause regulates the relationship between the Conrad staff and the Thane employees.  It provides:

    “The Producers shall cause its employees and independent contractors to submit to the reasonable direction and control of Conrad staff referred to in Clause 5.3 [i.e. sound technicians, mechanists, electricians, wardrobe personnel and back stage crew] in respect of the areas of which they have control and to the direction and control of Conrad generally when they are in the Complex (including, without limitation, such control as is deemed necessary by Conrad for security purposes) PROVIDED HOWEVER that, for the purposes of the presentation of the Show to the public, the Producer may (subject to any directions from time to time issued by Conrad) direct the persons referred to in clause 5.3 in the performance of their duties.”

    [26]The “Complex” is defined to mean the International Hotel and Casino at Broadbeach Island, Broadbeach, Gold Coast, Queensland in Australia, and includes all equipment and other improvements contained therein and, where the context permits, includes any part thereof.

    [27]See cl.5.3 of the Pre-Production and Presentation Agreement.

12. Clause 6.1 provides that the producer shall undertake, co-ordinate and direct all activities necessary for the production and staging of the Show in accordance with the approvals, directions, requirements and other decisions of Conrad and the terms of the Pre-Production and Presentation Agreement.  The Show was to be known by the name which was determined by Conrad after consultation with Thane. 

13. Under cl.9.2, Thane agreed to indemnify Conrad and Jupiters against all claims arising from either loss, damage or injury to property or persons occasioned or contributed to by the negligent or default of Thane, its employees, agents or contractors, and for loss, damage or injury to property or persons caused by the use of any part of the complex by Thane or any employees, agents or contractors of Thane arising out of the neglect or default of Thane, its employees, agents or contractors.  Such a clause must be construed contra proferentem if there is ambiguity.[28]  The ambiguity here arises because the clause does not specify whether the indemnity is for all claims for all loss, damage or injury to persons occasioned or contributed to by the neglect or default of Thane or all claims for only that part of the loss, damage or injury occasioned or contributed to by the neglect or default of Thane. In these circumstances, applying the appropriate rule of construction, the latter construction should be preferred,[29] and Thane should only be liable for that part of the loss caused by it.

    [28]Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500 at 507-510; Schenker v Maplas Equipment [1990] VR 834 at 837.

    [29]See also Australian Paper Plantations Pty Ltd v Venturoni [1998] VSC 36 at [18], [29]; Canberra Formwork Pty Ltd v Civil & Civic Ltd (1982) 41 ACTR 1 at 22 per Blackburn CJ.

14. Under clause 9.5, Thane agreed to take out and maintain workers’ compensation insurance in respect of all its employees and to ensure that all its contractors and sub-contractors took out and maintained workers’ compensation insurance in respect of their employees involved or in connection with the show.

    Section 47 of the Workers’ Compensation Act (Qld)

15. The first Workers’ Compensation Act in Queensland was introduced into the Legislative Assembly in 1905 (the “1905 Act”) by the Attorney-General, who later became Sir James Blair and Chief Justice of Queensland. Blair said in his second reading speech that the Act was one of the most important Bills “that has ever been submitted to the consideration of any House of Parliament”.[30]  It was based on various Acts from the United Kingdom, including the Workmen’s Compensation Act 1897 and the Employers’ Liability Act 1880, and was similar to Acts in other States and in New Zealand.[31]  From the inception there was also a right for the employee to claim common law damages.  At that time, the right to recover at common law was severely circumscribed by contributory negligence, the doctrine of common employment[32] and volenti non fit injuria.[33] 

    [30]Hansard, 26 October 1905, p.1351    

    [31]Workers’ Compensation Act NZ 1901; South Australia 1901; Western Australia 1902.

    [32]See Law Reform Act 1995 s.3 and its predecessors.

    [33]To the willing there accrues no damages.

16. An innovation introduced by Blair was s.10 of the 1905 Act which provided:

    “In any case where any person (hereinafter called the ‘principal’) contracts with any other person (hereinafter called the ‘contractor’) for the execution of any work by or under the contractor, and the contractor employs any worker thereon, the following provisions shall apply:-

    (1)Both the principal and the contractor shall be deemed to be employers of the worker, and shall be jointly and severally liable to pay to the worker any compensation which the contractor if he were the sole employer would be liable to pay under this Act;

    (2)The principal shall be entitled to be indemnified by the contractor against  the principal’s liability under this section;

    (3)The principal shall not be liable under this section except in cases where the work to be executed under the contract, and in which the worker is employed, is directly a part of or a process in the trade or business of the principal:

    Provided that his liability shall be presumed until the contrary is shown;

    (4)In the case of subcontracts, the expression ‘principal’ shall extend to and include not only the original principal, but also each contractor who constitutes himself a principal with respect to a subcontractor by contracting with him for the execution by him of the whole or any part of the work; and the expression ‘contractor’ shall extend to and include not only the original contractor, but also each subcontractor:

    Provided that each principal’s right of indemnity shall be a right over against every contractor standing between him and the contractor by whom the worker was employed at the time when the accident occurred, and including such last mentioned contractor.

    (5)The mode in which any right of indemnification arising under this Act may be enforced may be prescribed by regulations.”

    Of this provision the Attorney-General said:

    “In the case I alluded to a successful tenderer employing various subcontractors would be liable for compensation at the suit of the injured worker.  The injured worker would have his option of proceeding against any of the subcontractors or the principal contractor.  He could make his choice, and if unsuccessful with one he could proceed against the other.  And it is right that it should be so, because in very many cases those subcontractors are men of straw.  There is a succession of them - it is not an Apostolic Succession - it is an injurious succession in which very often deprives workers of their rights.  ...  This Bill provides that the worker may choose to go against the principal contractor or any subcontractor, and, as  a fair compromise, it allows a person who has to pay compensation to seek indemnity over and against any of the other sub-contractors.”[34]

    [34]Hansard, 26 October 1905, p.1357.

1. This section was considered by the High Court in Cribb v Korn.[35]  Barton J held:[36]

   “The object of section 10 on its face is to make the person who may be called the secondary or ultimate employer, and the person who is the immediate employer, jointly and severally responsible in cases of injury to workmen employed by the latter, subject to indemnification of the former by the latter against the liability created by the section.”

   However Barton J[37] held there was a limitation on the principal’s liability:

   “The construction contended for by the respondent would expose to liability at the suit of a workman who has suffered injury ‘arising out of and in the course of his employment’, such a person, for example as a landowner for whom a contractor employing the workman is building a residence, or as a shipowner for whom a shipbuilder is building a ship. That construction is, I think, disposed of by section 3, which limits the operation of the Statute to cases in which the work, in the course of which the employee suffers injury, is carried on ‘by or on behalf of’ the employer and ‘as part of his trade or business’. In the cases I have enumerated and their like, the work is carried on by and on behalf of the contractor, or the shipbuilder, as the case may be, and the interests of each of these persons is separate from and independent of the interest of the landowner, or the shipowner, or their like. It is only in a special and secondary sense that the first of these is building a house, or the second is building a ship. These operations are not carried on by or on behalf of either of them ‘as part of his trade or business’, for it is not the business of the landowner as such to build houses, or of a shipowner as such to build ships.”

   [35](1911) 12 CLR 205

   [36]Cribb v Korn (supra) at 211.

   [37]Cribb v Korn (supra) at 212-213.

2. In 1916 the Act underwent substantial amendment and s.10 from the 1905 Act was substantially  reproduced in cl.25 of the Schedule to the 1916 Act.  Minor amendments were made and from 1978, cl.25 provided:

   “Where any person (herein called the ‘principal’) contracts with any other person (herein called the ‘contractor’) for the execution of any work by or under the contractor, and the contractor employs any worker thereon, the following provisions shall apply:-

   (i)Both the principal and the contractor shall be deemed to be employers of the worker;

   (ii)In the case of subcontracts, the expression ‘principal’ shall extend to and include not only the original principal, but also each contractor who constitutes himself a principal with respect to a sub-contractor by contracting with him for the execution by him of the whole or any part of the work;  and the expression ‘contractor’ shall extend to and include not only the original contractor, but also each sub-contractor;

   (iii)The regulations may declare the conditions under which any right of indemnity shall exist and be enforceable by and between any of the aforesaid persons, and may also prescribe the person or persons against whom the Board is entitled to recover any penalty or any moneys under the circumstances aforesaid.”

3. This clause was read with s.8 of the 1916 Act which provided that every employer was legally liable to pay compensation and that every employer was obliged to insure with the Workers’ Compensation Board against all sums the employer might become legally liable to pay in respect of injury to any worker employed by the employer whether by way of compensation under the Act or damages arising under circumstances creating also, independently of the Act, a legal liability in the employer to pay damages in respect of the injury. 

4. Subsection 8(7) provided:

   “Where any employer (in this subsection called the principal contractor) has made a contract to perform work and, in carrying out that contract -

   (a)utilizes labour that is provided by workers whose services are lent or let on hire to him by another; or

   (b)contracts with another person (in this subsection called the contractor) for the performance by or under the contractor, of the whole or part of that work,

   the indemnity provided for by a policy of accident insurance maintained by the principal contractor shall extend to indemnify him in respect of damages arising under circumstances creating independently of this Act, a legal liability in the principal contractor to pay damages in respect of injury to any worker hereinbefore in this subsection described or any worker employed by the contractor, in either case, while such worker is engaged in the work that the principal contractor has contracted to perform.”

5. Subsection 8(8) provided as follows:

   “Where a person engages a contractor other than a contractor to whom section 3(2) refers who, in performing his contract with that person, employs workers, the indemnity provided by a policy of accident insurance maintained by the contractor shall extend to indemnify that person in respect of damages under circumstances creating independently of this Act a legal liability in that person to pay damages in respect of injury to any worker employed by the contractor while that worker is engaged in the work that the contractor has contracted to perform for that person.”

   The combined effect of s.8 and clause 25 has been the subject of decisions in the Full Court and Court of Appeal of the Supreme Court of Queensland.[38]

   [38]Paron v Fry (No.1) [1990] 1 QdR 539; Wardle v Kennedy Taylor (Qld) Pty Ltd [1992] 1 QdR 331; Maroochydore Black Swan Rugby League Limited v Workers’ Compensation Board of Queensland [1994] 2 QdR 531; and Boyne Smelters Limited v Workers’ Compensation Board of Queensland [1998] 1 QdR 20.

6. The cases saw the development of a more expansive view of those sections.  The Court held that the limitation referred to by Barton J in Cribb v Korn[39] was removed by the 1916 legislation.[40]  The provisions which are in wide terms are to be interpreted in accordance with the purpose of the Act which is broadly to provide a comprehensive insurance scheme for injured workers.[41]

   [39]Cribb v Korn (supra) at 212-213.

   [40]Maroochydore Black Swan Rugby League Limited v Workers’ Compensation Board of Queensland (supra) at 535.

   [41]Boyne Smelters Limited v Workers’ Compensation Board of Queensland (supra) at 21 and 25.

7. Subsequently in the Workers’ Compensation Act 1990 (the “1990 Act”) s. 47 (originally numbered as s.4.12) was introduced. Section 47 of the 1990 Act provided as follows:

   “Extent of indemnity for principals and contractors
   47(1) In this section -
   ‘contractor’ means a person who by a contract undertakes to carry out, or to secure the carrying out of, work for another.
   ‘principal’ means a person for whom work is to be carried out by another under a contract to which the person is a contracting party.
   (2) A contractor under a contract for performance of work can also be a principal under any other contract for performance of the same work or any part of that work. 
   (3) When a contract is made between a principal and a contractor for work to be carried out and workers are used in carrying out the work, or any part of it -

   (a) the principal is declared to be an employer of every such worker used  in carrying out work in performance of the contract, or in performance of any other contract made with a view to carrying out the work for which the contract is made, or any part of that work; and

   (b) the cover of a policy maintained by the principal with the board extends to indemnify the principal against the principal’s legal liability existing independently of this Act to pay damages in respect of injury to any such worker while used in carrying out work for which the contract is entered into, or any part of that work.

   (4)The declaration of a principal to be an employer of a worker by subsection (3)(a) does not affect the relationship of employer and employee existing between the worker and the actual employer of the worker.

   (5)If in the case of a contract such as is referred to in subsection (3) the principal is not indemnified against the legal liability referred to in subsection (3)(b), under -

   (a)a policy maintained by the principal with the board; or

   (b)a contract of insurance made independently of this Act;

   the cover of a policy maintained with the board by the contractor extends to indemnify the principal against the principal’s legal liability referred to in subsection (3)(b).”

8. The expansive view referred to above has been held to apply to this section.  In Alchin v Pease,[42] Cullinane J held:

   “[Section 47] also protects the principal by providing an indemnity.  It is  expansive of the rights of the worker and also the principal.  Such a provision should not be afforded a narrow or technical construction ... .”

   This is consistent with one of the objects of the 1990 Act[43] which is to protect the interests of employers in relation to claims for damages because of injury to a worker. 

   [42]Unreported, Supreme Court of Queensland, Cullinane J, 14 December 1998, at 5.

   [43]See section 3(c).

9. In 1996, a report was produced by Mr Kennedy entitled “Report of the Commission of Inquiry into Workers’ Compensation and Related Matters in Queensland” (the “Kennedy Report”) which recommended that the definition of a “worker” who is covered by the Act be confined to “one who is subject to the PAYE scheme and Group Tax deductions are paid or payable by the employer at the time when the injury occurred or as one who is otherwise eligible and has sought to take out personal injury insurance cover with WorkCover Queensland”.[44]  The current Act, WorkCover Queensland Act 1996, no longer has an equivalent to s.47. The extended coverage provided by s.47 has been abolished.[45]  However this case falls to be determined by the law as it was on 12 December 1992.

   [44]Kennedy Report p.143.

   [45]See however amendments found in WorkCover Queensland Amendment Act 1999 to s.32 which adds to the definition of “employer” those persons mentioned in Schedule 2A.

10. In this case, the relevant contract for the purposes of s.47(3) is the Pre-Production and Presentation Agreement which was a contract for work to be carried out whereby workers including the plaintiffs were used to carry out the work. The contract must be between a contractor, in this case Thane, and a principal. The principal is the person or persons[46] for whom work is to be carried out by another under a contract to which the person is a contracting party.  In this case, both Conrad and Jupiters are contracting parties and work was carried out for them by Thane under the contract to which they were contracting parties.  Conrad is acting as agent for Jupiters but also undertakes obligations of its own pursuant to the contract[47] and acquires rights such as the indemnity referred to in cl.13.4.

    [46]See the Acts Interpretation Act s.32C.

    [47]See cll.3.1, 4.6, 5.3, 6.1, 6.6, 7.1, 9.2, 12.3.

11. Accordingly, this is not a contract where the principal and not the agent is a party to the contract[48] but rather where the agent is a party to the contract as well as the principal.[49]   The contract may state that Conrad is acting as agent for Jupiters but a reading of the whole of the contract[50] shows that it is also contracting in its own right. The term “principal” as used in s.47 is defined in that section. In this context it does not mean the person for whom an agent contracts.

    [48]Lucas v Beale (1851) 10 CB 739; [138 ER 292]; Fairlie v Fenton (1870) LR 5 Ex 169; Storaker v Southouse and Long Ltd (1920) 20 SR(NSW) 190.

    [49]Cooke v Wilson (1856) 1 CB(NS) 153; [140 ER 65]; Brandt (H.O.) and Co v H N Morris and Co Ltd [1917] 2 KB 784; Bridges and Salmon Ltd v The “Swan” (Owner) [1968] 1 Lloyd’s Law Reports 5 at 12 per Brandon J; Reynolds, F M B, “Personal Liability of an Agent” (1969) 85 LQR 92 at 95; Grime v Bartholomew [1972] 2 NSWLR 827 at 833 per Holland J.

    [50]General Accident Fire & Life Assurance Corporation Ltd v Midland Bank Ltd [1940] 2 KB 388 at 406 per Sir Wilfrid Greene MR.

12. In any event, it was not contested that Jupiters is entitled to be indemnified by WorkCover under s.47(3)(b). This extends to the relevant negligent acts or omissions which are properly characterised as acts and omissions of people for whom Jupiters is liable because they were employees of Jupiters. Similarly it was not contested that WorkCover would indemnify Thane for any of its legal liability to the plaintiffs.

13. I am satisfied that WorkCover is liable to indemnify Conrad, Jupiters and Thane against any legal liability any of them have to pay damages to the plaintiffs arising out of injuries suffered by them while performing their trapeze act at the complex.

14. The question remains as to the apportionment of liability against the three defendants.  By notice of contribution or indemnity Thane claimed contribution or indemnity against Conrad “in respect of any sum which the first and second plaintiffs may recover against” Thane on the basis of Conrad’s alleged negligence, breach of contract, or breach of statutory duty.  The Notice of Contribution by Conrad against Jupiters claims an indemnity “in respect of any sum which the first and second plaintiffs may recover against the second defendant [Conrad], pursuant to the provisions of cl.12.4 of the Management Agreement”.  Jupiters claim against Conrad is for contribution to such extent as it is just and equitable and damages for:

    “Indemnity or contribution, as damages for breach of contract, against any damages and costs which the Plaintiffs or either of them recover from the Third Defendant, which damages arise by reason of a breach or breaches by the Second Defendant of the express or implied terms of the aforesaid agreement between the Second Defendant and the Third Defendant.”

15. Contribution under s.6 of the Law Reform (Tortfeasor’s Contribution, Contributory Negligence and Division of Chattels) Act 1952[51] is determined according to each defendant’s “responsibility for the damage”.[52]  A person is “responsible for damage” when his or her wrongful conduct is one of a number of conditions sufficient to produce that damage.[53]  As Mason CJ said in March v Stramare (E&MH) Pty Ltd:[54]

    “These days courts readily recognize that there are concurrent and successive causes of damage on the footing that liability will be apportioned as between the wrongdoers.”

    [51]Now s.7 of the Law Reform Act 1995.

    [52]Section 6 provided:

    “In any proceedings for contribution under this Part 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.”

    [53]March v Stramare (E&MH) Pty Ltd (1991) 171 CLR 506 at 509 per Mason CJ.

    [54](supra) at 512.

16. The mutual obligations of Conrad and Jupiters to indemnify one another are set out in cl.12.4 of the management agreement.  Essentially Conrad is liable to indemnify Jupiters when Conrad has been grossly negligent and Jupiters is not required to indemnify Conrad where Conrad has been grossly negligent or where Conrad’s liability arises or is based on, or arises out of,[55] any contract between  Conrad and Jupiters including the management agreement.

    [55]The words “arises out of” should be given a wide interpretation: Ethiopian Oilseeds Pulses Export Corporation v Rio del Mar Foods Inc. [1990] 1 Lloyd’s Law Reports 86 at 97 per Hirst J; Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 at 165 per Gleeson CJ.

17. Under the Pre-Production and Presentation Agreement, Thane agreed to indemnify Conrad and Jupiters for any claims arising from Thane’s negligence but it did not undertake to indemnify Conrad and Jupiters for any liability arising from their own negligence.

18. Had Thane been responsible for the construction, erection, rigging, maintenance and operation of the trapeze and lifting equipment, it is likely that they would have been solely liable for the damage to the plaintiffs.  But that is not what in fact happened.  What in fact happened was that a decision was made after the Pre-Production and Presentation Agreement was entered into by Conrad staff and Thane people to move the trapeze act from the stage to the auditorium.  From this time, the control of the installation, operation and maintenance of the trapeze act was an area over which Conrad had control.[56]  That this was the case is reinforced by the instruction given by Grant Bowie, the hotel manager and a Conrad employee who was a very hands‑on manager and who took a daily interest in the installation of the show.  Brian Barnes, the general manager of Thane, gave evidence, which I accept, that the installation and maintenance of the winch and associated lifting equipment was under the control of the staff employed at the complex referred to in the Pre-Production and Presentation Agreement as Conrad staff who were in fact Jupiters employees under the control of Conrad.

    [56]Pre-Production and Presentation Agreement, cll.5.2 and 5.3.

19. After considering all of the evidence I have formed the view that the trapeze and the lifting equipment was set up, rigged, maintained and operated by Mr Bowker under the supervision of Michel Venker, both Jupiters employees at the complex.  At all times they were under the day to day control of Conrad[57].  Thane still had a non-delegable duty of care to its employees and failed to exercise sufficient care for their safety but the most significant causative negligence was that of Mr Bowker and Mr Venker, who were not under the control of Thane, and whom Thane had no reason to believe were not qualified for their task.

    [57]McDonald v The Commonwealth (1945) 46 SR(NSW) 129 at 132 per Jordan CJ.

20. Mr Bowker and Mr Venker were negligent because of the unsafe situation created by what they did, particularly in maintaining and operating the lifting equipment.  The installation of the trapeze and its lifting equipment was unsafe because the winch used was overpowered, the wire rope used as too thin, the wrong ferrules were used and a hand swaging tool rather than a hydraulic tool was used.  The operation of the trapeze and its lifting equipment was unsafe because the limit switch was turned off and the maintenance was unsafe because the replacement wire was too thin, the wrong ferrules were used and the ferrules were hand swaged causing the ferrules to fail and the wire rope to come apart leaving the first plaintiff to fall.  When the hitch plate hit the guide lug, it caused the cantilevered arm to distort putting intense pressure on the wire and swaging.  The swaging was not sufficiently strong to withstand that pressure.

21. There was no direction given to Mr Bowker and Mr Venker by Thane to attend to these matters.  They were part of responsibilities assumed by them.  Neither Key Largo personnel nor the employees of the ACFT installed the lifting equipment.  It might well be that those personnel had the capacity to do so but it was not done by them.  It was instead done by Mr Venker and Mr Bowker whom Mr Clark had no reason to believe were not qualified to do the job.  Mr Clark instructed Mr Martin to take no part in the installation or design of the trapeze act.  This was because the area in the auditorium was under the control of Conrad.  The apparently extensive workplace health and safety measures instituted by Conrad in the complex were not adequate to detect the problems in design, installation, maintenance or operation.[58]  Conrad was in breach of their obligations to Jupiters under the management agreement and so are not entitled to an indemnity from Jupiters under that contract.

    [58]In his report to the complex Workplace Health and Safety Committee on 28 October 1992 (a little over a month before Ms Tetu’s injuries occurred), Mr Illsley, director of security, reported that he had “looked at all aspects of the new show early in September, especially the aerial act and the use of fire in the closing scenes”.

1. Further, I am satisfied that such behaviour by Mr Venker and Mr Bowker was grossly negligent.[59]  In particular, their actions in disconnecting the limit switch, replacing the wire and hand swaging  the connections showed a reckless disregard for the safety of the plaintiffs given the magnitude of the risk of accident and injury.

   [59]For a discussion of the meaning of gross negligence see Cashill v Wright (1856) 6 E&B 891 at 899, 900; [119 ER 1096]; Grill v General Iron Screw Collier Co (1866) 35 LJCP 321 at 330 per Willes J; Martin v London County Council [1947] KB 623 at 631; Red Sea Tanker v Papachristidis (The Hellespont Ardent) [1997] 2 Lloyd’s Law Reports 547 at 586-588 per Mance J; City of Kingston v Drennan (1896) 27 SCR 46; Jackson v Millar [1973] 1 OR 399 at 404; Woolard v Mobil Pipe Line Company 479 F 2d 557 (1973); Boyce v Greenway 71 F 3d 117 (1996); McLenagan v Karnes 27 F 3d 1002 (1994); Lester v AT&SF Railway Co 275 F 2d 42 (1960); Ryan v Foster & Marshall Inc. 556 F 2d 460 (1977).

2. My view that the negligence was gross is reinforced by the number of unsafe aspects of the installation, operation and maintenance of the lifting system and the larger number of other inadequacies in the rigging in the stage area.  All of this led to a situation where it was not only foreseeable but almost inevitable that a performer would be injured.

3. Their gross negligence is attributed to Conrad because they were working under Conrad’s control and Conrad had failed to ensure they were appropriately qualified to ensure their actions in rigging this and other equipment were not in breach of the WHSA. Jupiters is also strictly liable since Mr Bowker and Mr Venker were acting in the course of their employment with Jupiters. However in the circumstances Conrad is contractually obliged to indemnify Jupiters.

4. Conrad is however entitled to be indemnified by WorkCover pursuant to s.47 of the Workers’ Compensation Act 1990. In the event that I am wrong and the negligence for which Conrad is liable was not gross or not in breach of the management agreement, then Jupiters would be liable to indemnify Conrad, and WorkCover would be liable to indemnify Jupiters; if the negligence was that of Jupiters, WorkCover would be liable to indemnify Jupiters. WorkCover is admittedly liable to indemnify Thane for its liability to the plaintiffs. The result is whatever the respective contributions of the first, second and third defendants and irrespective of whether the negligence was gross, WorkCover is obliged to indemnify the first, second and third defendants for their liability to the plaintiffs.

5. The appropriate basis for apportionment of liability between the defendants is 30 percent to the first defendant and 70 percent to the second defendant.  I do not believe that it would be just and equitable for Jupiters to make any contribution in these circumstances.[60]

   [60]Sherras v Van der Matt [1989] 1 QdR 114 at 117-118 per Thomas J.

6. All the defendants are liable to the plaintiffs.  I therefore give judgment in favour of the plaintiffs against all defendants.  The proportion of liability should be as stated above.  The third party is liable to indemnify each of the defendants.

7. The orders are:

   1.Judgment is entered in favour of the first plaintiff against the first, second and third defendants in the sum of one million three hundred and ninety nine thousand three hundred and seventy two dollars and three cents ($1,399,372.03), of which $99,372.03 is the amount of the WorkCover refund, and in favour of the second plaintiff against the first, second and third defendants in the sum of one hundred and fifty thousand dollars ($150,000.00);

   2.The first defendant is liable to contribute 30 percent of the plaintiffs’ damages;

   3.The second defendant is liable to contribute 70 percent of the plaintiffs’ damages;

   4.The third party is to indemnify the first and second defendants for their liability to the plaintiffs.