Thornton v Wollondilly Mobile Engineering
[2012] NSWSC 621
•07 June 2012
Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: Thornton v Wollondilly Mobile Engineering [2012] NSWSC 621 Hearing dates: 28 - 31 May 2012 Decision date: 07 June 2012 Jurisdiction: Common Law Before: Adamson J Decision: (1) Judgment for the plaintiff against the second defendant.
(2) Judgment for the second defendant/ cross-claimant on the cross-claim.
(3) I direct the parties to deliver to my Associate within seven days short minutes of order which reflect the judgment sums calculated by reference to my reasons.
Catchwords: TORT - negligence - causation - novus actus interveniens - concurrent wrongdoers
REMEDIES - damages - apportionment - mitigation - duty to mitigate - onus of proof of mitigationLegislation Cited: - Civil Liability Act 2002
- Law Reform (Miscellaneous Provisions) Act 1946
- Occupational Health and Safety Act 2000
- Workers Compensation Act 1987Cases Cited: - Leighton Contractors Pty Limited v Fox [2009] HCA 35; 240 CLR 1
- Wynn Tresidder Management Pty Limited v Barkho [2009] NSWCA 149
- Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307
- Adelaide Stevedoring Co Ltd v Forst [1940] HCA 45; 64 CLR 538
- Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
- Galea v Bagtrans Pty Ltd [2010] NSWCA 350
- March v Stramare [1991] HCA 12; 171 CLR 506
- Medlin v State Government Insurance Commission [1995] HCA 5; 182 CLR 1
- Stevens v Brodribb Sawmilling Company Pty Limited [1986] HCA 1;160 CLR 16
- Rockdale Beef Pty Limited v Carey [2003] NSWCA 132
- TNT Australia Pty Limited v Christie [2003] NSWCA 47; 65 NSWLR 1
- Dorset Yacht Co v Home Office [1970] AC 1004
- Evans v Balog [1976] 1 NSWLR 36
- Gagner Pty Ltd t/a Indochine Cafe v CanturI Corporation Pty Ltd [2009] NSWCA 413; 262 ALR 691Texts Cited: - McGregor on Damages (17th ed, 2002) Category: Principal judgment Parties: Jarrad Morgan Thornton (Plaintiff)
Wollondilly Mobile Engineering Pty Ltd (First defendant)
Penrose Pine Pty Ltd (Second defendant, Cross-claimant)
Mechanical and Construction Insurance Pty Ltd (Cross-defendant)Representation: Counsel:
S Longhurst (Plaintiff)
D Kelly (Second defendant, Cross-claimant)
A Renshaw/G Stanton (Cross-defendant)
Solicitors:
RMB Lawyers (Plaintiff)
James Tuite & Associates (Second defendant, Cross-claimant)
McMahon's Lawyers (Cross-defendant)
File Number(s): 2010/101750
Judgment
Introduction
On 22 March 2007, the plaintiff Jarrad Thornton, who was then an apprentice boilermaker, was working with the late Benjamin Pendergast (the deceased) at the site of the second defendant (Penrose). They were extending a platform and installing a handrail on a platform above a bin which contained sawdust shavings. The deceased was tack welding the handrail into place when he and the plaintiff noticed smoke coming from the shavings bin. As a result of the plaintiff's attempts to get help, Stan Battersby, a foreman of Penrose, opened the doors at the base of the shavings bin. The effect of the sudden influx of air caused the contents of the shavings bin to catch fire. The deceased was engulfed in flames and leapt down from the platform to escape the fire. Shortly afterwards he died from injuries he suffered when he fell.
The plaintiff witnessed these events. He claims damages for nervous shock from Penrose arising from post-traumatic stress disorder (PTSD) and its consequences for his enjoyment of life and his earning capacity. Penrose, in turn, cross-claims against the first defendant (Wollondilly), which employed the deceased and which had engaged the plaintiff through his employer Sydney Training and Employment Limited (Sydney Training).
Issues to be determined
The following principal issues require determination:
(1) Is Penrose liable to the plaintiff in damages for negligence by reference to the Civil Liability Act 2002 (the Act)?
(2) If so, to what extent, if at all, are the plaintiff's damages to be reduced by reference to s 151Z(2) of the Workers Compensation Act 1987 by reason of any negligence by Sydney Training?
(3) Is Wollondilly liable to Penrose on its claim for contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946?
(4) Is Wollondilly liable to Penrose on its claim for property damage?
(5) If so, to what extent should such damages be reduced by reason of any contributory negligence by Penrose?
(6) Is Mr Greg Blackburn a concurrent wrongdoer within the meaning of Part 4 of the Act?
(7) If so, to what extent, if at all, should Wolllondilly's liability to Penrose under the claim for property damage be reduced?
(8) The quantum of the plaintiff's claim; Penrose's cross-claim for contribution and Penrose's claim for property damage.
Facts
Introduction
The shavings bin was a steel-framed structure about 12 metres high which Wollondilly had constructed for Penrose. It was fed with shavings and saw dust, which were bi-products from a moulding machine which manufactured timber products. The top of the shavings bin comprised overlapping sheets of corrugated steel cladding. At its base it had hydraulic doors positioned above a loading bay. When the doors were opened, the shavings would fall into open trucks and were carted for sale elsewhere. Air cannons operated in the bin. They released compressed air along the walls of the bin to dislodge any shavings or saw dust stuck to the walls. The cannons operated only when activated by an operator. Penrose had a long-standing arrangement with Wollondilly, which had begun a decade previously, to perform metallurgical work, including plant welding, on its site.
The request for work to be performed
Peter Cush, who was then the Managing Director of Penrose, spoke with the deceased about work that was to be done to install a second access door to a filter on top of the shavings bin. The modifications were intended to promote airflow through the filter and improve the conditions of those workers who were required to clean it. The preparatory work included extending the platform and replacing the associated handrail on top of the shavings bin.
The preparatory work
On Thursday 22 March 2007, the plaintiff went with the deceased, and Wollondilly workers, Paul Weatherly and Tom Mortimer to Penrose's site. When they arrived at 6 am, the deceased reported to Mr Battersby.
The plaintiff and the deceased put on harnesses to clean sawdust from the top of the shavings bin before undertaking the work of constructing the extension. Mr Weatherly and Mr Mortimer were working in a large shed about 50 metres away.
At about 9 am, the plaintiff and the deceased finished cleaning the top of the shavings bin and went down to ground level where they joined Mr Weatherly and Mr Mortimer who were talking to Greg Blackburn, a consultant engaged by Wollondilly to advise about work safety issues. Mr Blackburn asked the Wollondilly workers, including the deceased and the plaintiff, whether they had cleaned the area and whether they were taking a fire extinguisher up with them. He advised them to wear their safety harnesses when working at a height. This conversation took about ten minutes.
Subsequently Mr Blackburn told Mr Battersby of the work Wollondilly intended to perform that day, and told him that:
"he was there and [sic] to come and check on the boys."
The plaintiff and the deceased then returned to the top of the shavings bin so that the deceased could measure the lengths of steel required for the job. They went down again, took some steel lengths from the steel rack, the deceased measured out the lengths of steel and the plaintiff cut them to length using an angle grinder. The plaintiff wore head-muffs while performing this work because it was so noisy.
They then hoisted the lengths of steel to the top of the shavings bin with rope. After a break for morning tea they donned their harnesses and attached them to the handrail of the walkway at the top of the shavings bin and started to set up.
The fire in the shavings bin
The plaintiff and the deceased removed the old handrails, lowered them to the ground and then started to put the new steel in place by lining it up and making small tack welds. The deceased wore a helmet while he did the tack-welding to protect this face from the flashes of light that were emitted. The welding took about fifteen or twenty minutes. Welding is known as "hot work" because it produces hot particles, sparks and hot surfaces.
The plaintiff noticed smoke coming through openings between the ridges in the roof of the shavings bin. The plaintiff passed a fire extinguisher to the deceased, who started to hose the roof of the shavings bin. The deceased told the plaintiff to go down and ask Mr Battersby to open the doors at the base of the shavings bin.
When Mr Battersby opened the doors, fire engulfed the shavings bin. In order to escape the flames the deceased leapt to the ground from a height of about 9 metres. Mr Battersby was also seriously injured.
The plaintiff went to the deceased, who was curled up on the ground on his left side. He did not respond to his name being called, but was still breathing. An ambulance arrived about half an hour after the fire had started along with police, and later, a rescue helicopter. The deceased died in the helicopter on the way to the hospital.
Penrose pleaded guilty to, and was convicted of, offences under s 8(1) and s 8(2) of the Occupational Health and Safety Act 2000 (the OH&S Act) for failing to ensure the health, safety and welfare at work of its employees, in particular Mr Battersby (the s 8(1) charge) and failing to ensure that people other than its employees, in particular the deceased and the plaintiff, were not exposed to risks to their health and safety arising from the conduct of its undertaking while at its place of work (the s 8(2) charge).
Wollondilly was convicted of offences under s 8(1) and s 8(2) of the OH&S Act for failing to ensure the health, safety and welfare at work of its employees, in particular the deceased and the plaintiff (the s 8(1) charge) and failing to ensure that people other than its employees, in particular Mr Battersby, were not exposed to risks to their health and safety arising from the conduct of its undertaking while at its place of work (the s 8(2) charge).
Liability: the plaintiff's claim
The plaintiff initially sued both Wollondilly and Penrose. He did not pursue his claim against Wollondilly. Penrose cross-claimed against Wollondilly's insurer (whom I will also refer to as Wollondilly).
The plaintiff based his negligence case against Penrose, in part, on alleged breaches of Occupational Health and Safety Regulations (the Regulations), including Regulation 34, 35, 36 and 39 and alleged that Penrose was the controller of the premises within the meaning of the Regulations.
In Leighton Contractors Pty Limited v Fox [2009] HCA 35; 240 CLR 1 (Leighton), the High Court considered the relationship between breaches of statutory duty and the law of negligence. The Court (French CJ, Gummow, Hayne, Heydon and Bell JJ) said, at 22:
"The obligation imposed on Leighton under the Regulation, while not founding an action for breach of statutory duty, is central to the Court of Appeal's conclusion that a common law duty existed. While it is true that obligations under statutory or other enactments have relevance to determining the existence and scope of a duty, it is necessary to exercise caution in translating the obligations imposed on employers, principal contractors and others under the OHS Act and the Regulation into a duty of care at common law. This is because, as Gummow J explained in Roads and Traffic Authority (NSW) v Dederer ([2007] HCA 42; 234 CLR 330 at 345 [43]), 'whatever their scope, all duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden'."
For this reason I do not propose to make findings as to whether any particular regulation has been breached by Penrose, since this exercise will not advance the task I have to undertake of determining whether any one or more of the defendants is liable in negligence to the plaintiff.
Further, none of the parties contended that there was an implied repeal of the Act by the OH&S Act and Regulations. Accordingly, it is not necessary for me to determine the questions expressly left open by the Court of Appeal in Wynn Tresidder Management Pty Limited v Barkho [2009] NSWCA 149 at [87] - [101], per McColl JA (Tobias and Young JJA agreeing) including whether there is such an implied repeal.
The negligence alleged against Penrose
The plaintiff submitted that Penrose knew that welding work would be performed on top of the shavings bin and that it owed a duty to the plaintiff to stop the moulding machine and empty the shavings bin before the welding work was performed. Penrose accepted that if I found that it knew that the work was to be performed, it was negligent, and liable to the plaintiff.
The plaintiff also submitted that Penrose was negligent because it was vicariously liable for the acts of Mr Battersby, who opened the doors to the shavings bin when the plaintiff passed on the deceased's request that he do so. This caused a, influx of oxygen sufficient to enlarge the fire and engulf the bin in flames. To save himself, the deceased jumped.
Whether and at what stage Penrose was aware that welding work would be performed on top of the shavings bin
Penrose's defence to the plaintiff's claim was that it was not aware that welding was to be conducted on the top of the shavings bin. Accordingly, there was no obligation on it to empty the bin or stop the moulding machine. It is therefore necessary to examine the evidence as to whether, and when, Penrose became aware of the welding work that was performed on the shavings bin on the day of the accident.
Discussions with Mr Cush
About a month before the accident, Mr Cush spoke with the deceased and Michael Turner, a principal of Wollondilly, about the proposed modifications to the bin. Mr Cush's evidence was that he told the deceased that the job would require careful planning because of the potential for fire, since the hot work provided a potential ignition source. The moulding machine would have to be stopped while the hot work was being done which would require planning because of the importance of the moulding machine to Penrose's production. He requested that the deceased speak to Mr Turner so that Penrose and Wollondilly could develop a safe procedure for doing the work.
Mr Cush said that it was the usual practice of Penrose and Wollondilly for any significant work to be planned and the site at which it was to be performed to be inspected before the work was done. I accept his evidence that he did not expect the job to be started until a safe procedure had been determined. When Mr Cush was told at the beginning of the week of the accident that Wollondilly was sending workers to Penrose to do work, Mr Cush did not understand that they proposed to do work on the shavings bin. There was other work being done by Wollondilly for Penrose in that period.
Although I accept that Mr Cush spoke to either or both of Mr Turner and the deceased about the need for planning the job, I am not satisfied that Mr Cush specifically adverted to the potential for fire and the need to empty the bin and stop the moulding machine. I consider that Mr Cush's recollection is affected by hindsight and a sense of regret and, possibly, culpability for what occurred. Mr Cush was obviously deeply affected by the tragedy of what occurred and thoughts of those conversations have probably been replayed in his mind over the intervening years.
Furthermore, I am not satisfied that when Mr Cush spoke of the need for planning the job, the deceased understood him to mean that this was required for the work of installing the walkway and replacing the handrail, as distinct from the more substantial work of cutting the door in the filter.
Information given to Mr Battersby on the day of the accident
The deceased had worked on the site from time to time for a few years before the accident. It was his usual practice, as the Wollondilly supervisor, to inform Mr Battersby when he arrived at Penrose's site of the work that Wollondilly intended to perform that day. Mr Battersby agreed that the work actually performed usually corresponded with the work the deceased had described on any given morning.
The Wollondilly workers arrived at Penrose's site at about 6 am. The deceased reported to Mr Battersby who was in the site office. Mr Battersby gave evidence that the deceased told him that he was going to go up to the top of the shavings bin to measure the lengths of steel required and cut those lengths on the ground. Mr Battersby could not recall the deceased telling him that Wollondilly also intended to construct a new handrail on top of the shavings bin.
The plaintiff understood the task for that day to include extending a steel platform above a large sawdust shavings bin in the sawmill and constructing a new handrail in the vicinity of the filter box on top of the shavings bin.
Although I consider Mr Battersby to be an honest witness I do not consider that his lack of recollection of the full extent of the work actually performed means that the deceased did not inform him of it. His recollection is affected not only by the passage of time, but also by the serious injuries he sustained in the accident and his involvement in the actions that led to the death of the deceased. I consider these factors to have been influential in affecting his memory as to what he was told by the deceased and also, later, by the plaintiff. Mr Battersby conceded, and I accept, that his memory of what the deceased had told him could have been defective.
I am not satisfied that the deceased departed from his usual practice of giving an accurate daily description to Mr Battersby of the work that Wollondilly was to perform at Penrose's site. I find, accordingly, that the deceased told Mr Battersby of his intention to construct a handrail on top of the shavings bin. I accept Mr Battersby's evidence that if he had appreciated that hot work would have been involved he would have stopped the machine that fed the shavings bin with shavings because of the risk of the shavings catching fire. It is probable that although the deceased told Mr Battersby that he was going to install a handrail on the shavings bin, Mr Battersby did not appreciate that such installation would necessarily involve hot work. It follows that Penrose was, or ought to have been aware, through Mr Battersby, that welding equipment would be used there.
Although I accept Penrose's submission that it would be unreasonable to require Mr Battersby, who was relevantly unqualified, to conduct an interrogation of Wollondilly's workers to ascertain whether they were complying with safe work practices in performing hot work, I consider that in circumstances where he was aware of the work that was to be done on the shavings bin, Penrose was negligent in not telling Wollondilly that the work could not be done there unless the shavings bin was emptied and the moulding machine stopped while the welding was being done.
The conduct of Mr Battersby: opening the doors to the shavings bin
Shortly before the accident Mr Battersby received a call on a two-way radio from James Hansen, a loader driver employed by Penrose, who told him that there was smoke coming out of the shavings bin. As he walked towards the shavings bin, Mr Battersby came across the plaintiff coming towards him. According to the plaintiff, he not only asked Mr Battersby to come and open the lower doors to the shavings bin, but he also told him that there was a fire. Mr Battersby denied that the plaintiff told him that there was a fire. I prefer Mr Battersby's evidence on this question, since I consider that if the plaintiff had mentioned the word "fire", Mr Battersby would not have opened the shavings bin unless he had satisfied himself that there was no fire.
When Mr Battersby approached, he concluded that what Mr Hansen had thought was smoke was no more than fine shavings dust, which he usually observed whenever he opened the doors to the shavings bin to load a truck, as he had done about an hour before. Mr Battersby said that he did not smell any smoke. I accept Mr Battersby's evidence that had he realised that smoke was being emitted from the shavings bin, he would not have opened the doors.
Unlike the deceased, Mr Battersby appreciated that opening the doors would aggravate the fire, if there be one. The only urgency associated with opening the doors was that engendered by the deceased and the plaintiff. Mr Battersby, with his superior knowledge of the flammability of shavings in the bin when the doors were open, was under no obligation to open the doors in a hurry, and without consideration of the risk that what Mr Hansen had seen was smoke. I accept that at that time, Mr Battersby did not appreciate that there was ignition source on the top of the shavings bin, although, as I have found above, he should have been aware that there was from the description of the work to be performed that the deceased had given him that morning.
Mr Battersby agreed that if there was smoke there must have been fire. To open the doors when there was a possibility of a fire inside was negligent because of the foreseeable consequence that the influx of oxygen could fuel the fire and enlarge its effect, thereby endangering persons in the vicinity, including the deceased. Mr Hansen worked at Penrose and I infer that he was familiar with the sight of the fine dust that emanated from the base of the shavings bin. Although he may not have been as expert at identifying fine dust as Mr Battersby, I do not consider that it was reasonable for Mr Battersby to dismiss his observation so quickly.
Whether Penrose was negligent
The shavings in the bin were flammable. It was foreseeable that the shavings in the bin would catch fire. The risk of their catching alight as a result of hot work being performed on the bin was not insignificant.
Because shavings burn so easily, it is likely that if the shavings in the bin caught fire, the harm would be serious having regard to the size of the bin and the difficulty of controlling the fire once it started. If there was a fire in the bin, it would be aggravated by the opening of the doors at its base because of the tendency of oxygen to promote combustion.
The matters referred to above are all matters which Penrose knew or ought to have known.
A reasonable person in the position of Penrose would have taken the precautions of emptying the shavings bin and stopping the moulding machine that fed shavings and sawdust into the bin whenever hot work was conducted on top of the bin. Mr Battersby agreed that this is what he would have done if he had known that hot work was being performed. I have found that Penrose knew or ought to have known that welding was to be conducted.
A reasonable person in the position of Penrose would not have opened the doors to the shavings bin unless reasonable enquiries had been made to exclude the presence of smoke emanating from the shavings bin.
No evidence was adduced that tended to suggest that the taking of such precautions would be onerous or would outweigh the social utility of creating wood products from local timber or performing associated welding work on a shavings bin.
Accordingly, a finding of negligence is not precluded by s 5B of the Act. None of the principles outlined in s 5C has any particular application here.
Causal connection between Penrose's negligence and the harm suffered
The cause of the fire
The first question that arises is the cause of the fire.
Penrose admitted, in a Statement of Agreed Facts filed in a prosecution brought against it pursuant to the OH&S Act:
"The likely cause of the initial fire within the shavings bin was the ignition of wood shavings and saw dust by hot sparks or molten metal from the grinding and welding work being performed by Pendergast and Thornton."
Because the admission constitutes evidence rather than a pleading in these proceedings, it is not binding on Penrose and I must take into account other evidence on this issue. Furthermore, the cause of the fire is also relevant to Wollondilly's liability and Penrose's admission is not admissible against it.
Ray Manser, whose report was relied upon by the plaintiff, opined that a spark from the welding equipment was a likely cause of the fire. It then became apparent that Mr Manser used the word "likely" as a synonym for possible, rather than probable. Mr Manser identified other possible causes of the fire and was not prepared to say that one was more probable than any other. It appears from the following passage that Mr Manser was not prepared to venture such an opinion in the absence of a full scientific investigation:
"Q. And as I understand it from your report you disagreed that the probable cause was sparks emanating or something else emanating from the hot work being done by Mr Pendergast up on silo?
A. No I didn't disagree it could have been a likely cause. I said if an investigation was done in accordance with the scientific procedures of NFPA document 921 which is in the annexure, the scientific procedure would have looked at all possible causes, promoted a hypothesis and tested that hypothesis on whether that was the cause or not. The problem with this [is] there was never a proper fire investigation done."
In these circumstances, I do not consider that Mr Manser's unwillingness to express an opinion as to the probable cause of the fire prevents the plaintiff, or indeed any other party, establishing the cause of the fire on the balance of probabilities.
The facts relevant to ascertaining the cause of the fire are:
(1) Welding work creates a substantial risk of fire when performed in the vicinity of shavings, particularly where it is done on or near a metal surface such as the corrugated iron sheeting on top of a shavings bin.
(2) Welding work was performed on top of the shavings bin immediately before smoke was first observed.
(3) The doors to the shavings bin had been opened that morning by Mr Battersby about an hour before the accident to load a truck. Mr Battersby could not say whether this had emptied the bin. Nor could he estimate the quantity of shavings that remained in the bin after he had loaded the truck.
(4) At the time of the accident, the moulding machine was idling while Theo Jongsma, who operated the moulding machine, was straightening out the timber to grade it. The moulding machine had not been operating for about half an hour before the accident. There was no saw dust being transported through the dust extraction system from the moulding machine into the shavings bin at that time. The air cannons were not operating.
(5) Mr Jongsma who had operated moulding machines for 33 years had never known the machine to create sparks.
(6) Mr Jongsma did not know that any hot work was to be performed on the shavings bin on the day of the accident and took no steps to stop the moulding machine while it was being done.
An inability to call lay or expert evidence that shows the precise way that something has happened is not fatal: see Bendix Mintex Pty Ltd v Barnes (1997) 42 NSWLR 307 at 317, per Mason P, referring to Adelaide Stevedoring Co Ltd v Forst [1940] HCA 45; 64 CLR 538. In that case a worker performed two strenuous tasks and then collapsed and died of coronary thrombosis. There was expert evidence, which was accepted by the arbitrator, to the effect that death from coronary thrombosis could not generally be related to exertion. The Supreme Court of South Australia overturned the arbitrator's finding and the employer appealed to the High Court. The High Court dismissed the appeal on the basis of a "presumptive inference which this sequence of events would naturally inspire in the mind of any common-sense person uninstructed in pathology" (at 563 - 564, per Rich ACJ).
I consider that the facts set out above are sufficient to give rise to a presumptive inference of a causal link between the welding work and the fire in the shavings bin. I do not consider Mr Manser's evidence, which reflects a disinclination to opine on causation in the absence of a full scientific investigation, to be sufficient to rebut it. My conclusion is fortified by the apparent dearth of evidence concerning incidents where there has been spontaneous combustion of shavings in a bin in the absence of an apparent ignition source. Mr Manser conducted some research on the Internet to ascertain whether there had been any such incidents. He was aware of one: in Dungog in 2008, after this incident. Mr Cush had never heard of a fire in a shavings bin, although he had been involved with Penrose for 30 years.
I find that the probable cause of the fire was a spark or molten metal from the welding work performed on top of the shavings bin which ignited shavings or sawdust in, or on top of the bin.
Wollondilly sought to dissuade me from drawing this inference by formally calling on Penrose for:
"any expert's reports stating, investigating and expressing expert opinion on the events that give rise to these proceedings."
Penrose produced a report from Commercial and Criminal Forensic dated 12 April 2007. In submissions, Wollondilly submitted that I could draw a Jones v Dunkel inference against Penrose because it did not tender the report. Penrose then sought leave to re-open to tender the report to rebut any inference and Wollondilly objected.
The call made by Wollondilly was so broad that I could not confidently conclude that the report produced to answer it contained an opinion as to the cause of the fire. But in any event the force of the inference is only that the evidence would not have assisted the case of Penrose. Indeed there is also an inference that it would not have assisted the case of Wollondilly, since the report could also have been tendered by it: Galea v Bagtrans Pty Ltd [2010] NSWCA 350. Even if the inference were open in respect of the expert who wrote the report called for, a matter about which I entertain some doubt, it does not affect the substantial strength of the inference as to the cause of the fire.
Penrose's negligence, as found above, caused the fire. The negligence of Penrose in opening the doors to the shavings bin after smoke had been observed aggravated the fire.
I am persuaded that Penrose's negligence was a necessary condition of the occurrence of harm and also that it is appropriate for its liability to extend to the harm so caused within the meaning of s 5D of the Act.
It follows that the plaintiff is entitled to judgment against Penrose.
Assessment of damages under the Act
Facts
The plaintiff was 17 at the time of the accident, and is now almost 23. He left school in 2005 once he had completed Year 10. The following year he started work as an apprentice boilermaker with Nepean Engineering. After about seven months the plaintiff left his position and worked in his father's rose-growing business until about February 2007. His supervisor at Nepean Engineering recorded on the termination form that the plaintiff had left of his own accord "as he didn't like the work" but noted that he would re-employ the plaintiff. The plaintiff denied that he had told anyone that he did not like the work. He said that he left because he did not get along with some of his co-workers.
He then worked for Wollondilly at Picton. According to his mother, Mrs Thornton, "he seemed very happy". As a second year apprentice, he cut steel, welded and retrieved and sealed the tools for the other operators.
The deceased was the plaintiff's workshop supervisor.
The plaintiff felt guilty about what happened to the deceased and blamed himself for not being able to save him. He became upset and cried. He was anxious, angry, aggressive and violent. In the following weeks he drank himself to sleep. He had previously consumed alcohol, mainly beer, but after the accident he took to consuming large quantities of it, including spirits. His alcohol consumption has since returned to a more socially acceptable level.
The plaintiff took a fortnight off work. He was greatly affected by the deceased's funeral. He spent time with the deceased's parents. He had frequent nightmares.
He was reluctant to return to work, but he persevered with obtaining his trade certificate. When he did so, his work performance was poor and gave rise to complaints. He constantly had the feeling that something was about to go wrong. In July 2007 he saw Barbara McKern, a psychologist, at the request of Wollondilly. When she suggested that he needed medication, including anti-depressants, he became scared and did not see her again and avoided medical practitioners until he saw Dr Rankin at Bargo in October 2007.
According to Mrs Thornton, the plaintiff was "in a terrible mess" for a couple of years after the accident. He has improved but not consistently. The anniversary of the accident and the surrounding period is particularly difficult.
Because of the difficulties the plaintiff was having working with Wollondilly, Sydney Training permitted him to change secondment to H & H Steel Pty Limited (H & H). Sydney Training also referred him to Alex Frater, a psychologist at Campbelltown, whom he consulted from April until December 2008. He did not complete the course of therapy and has not had further counselling since that time. The plaintiff told Dr Pickering that he stopped attending counselling sessions with Mr Frater because they were no longer helpful.
When he completed his apprenticeship in August 2009, the plaintiff received his trade certificate, but he left H & H because he did not want to be a boilermaker. He was permitted, apparently on compassionate grounds, to complete his apprenticeship a year early on 12 August 2009. But for the accident, he would not have completed his apprenticeship until 12 August 2010.
He has worked for periods as a boilermaker since receiving his trade certificate, but only in the workshop and not on site. He worked at Brookvale from 22 November 2010 to 19 December 2010 and resumed on 10 January 2011 until 27 February 2011. During this period he lived with his girlfriend at Galston. He also worked at Maitland for three weeks in metal fabrication. He says that he has worked as a boilermaker when he needed more money than he could earn when working for his father.
The plaintiff applied for a position with the NSW police force but did not proceed with his application because of his concerns about handling stressful situations.
He told Dr Pickering in April 2011 that he was thinking about doing a business course in connection with the flower growing industry but he said in evidence that he had not done the course and was no longer considering it.
His relationship with his girlfriend, which began around the time of the accident, has been adversely affected by the accident, although they are still together.
He presently works in his father's rose-growing business at Thirlmere where he picks, packs and delivers roses and does other general duties. He lives with either his father or his mother, who, though separated, live a short distance apart. From time to time he has supplemented his income by working as a boilermaker, as referred to above.
Expert opinion evidence
The only significant difference between the opinions of the psychiatrists, Dr Pickering and Dr Selwyn-Smith is the extent to which, if at all, the plaintiff's earning capacity has been affected by PTSD. Both experts agree that the plaintiff developed PTSD as a result of the accident and that this disorder has remitted significantly.
Dr Pickering opined, when he saw him for medicolegal assessment in April 2011, that the plaintiff had made an incomplete recovery. The panic attacks that he had previously experienced no longer occur. Dr Pickering identified the major lasting consequence of the PTSD as being his inability to work on site as a boilermaker and considered him to be permanently unfit for sustained employment in a workshop setting and entirely unfit to work on site in his trade. Dr Pickering considered that, while it is unusual for someone with PTSD to have such generalised aversions, the plaintiff has residual symptoms of avoidance which prevent his continuing in his trade.
By contrast, Dr Smith opined that there was no impairment in the plaintiff's ability to perform his duties. He considered the plaintiff's generalised aversion to working as a boilermaker was caused by extraneous reasons, which could be related to increased alcohol consumption.
Non-economic loss
The plaintiff is entitled to non-economic loss against Penrose only if I am satisfied that the severity of non-economic loss is at least 15% of a most extreme case: s 16 of the Act.
The plaintiff suffered a serious and traumatic event, which affected his life significantly, at least in the couple of years following it. It will continue to affect his life because of its undoubted trauma and the plaintiff's relative youth at the time of the accident. Nonetheless there has been a significant recovery, although residual symptoms persist.
I find that the severity of the plaintiff's non-economic loss is 25% of a most extreme case. Accordingly, he is entitled to $34,000 pursuant to the scale set out in s 16 of the Act.
Damages for past economic loss due to loss of earnings
The plaintiff makes no claim for past economic loss until August 2009, when he completed his apprenticeship.
When the plaintiff was working as an apprentice on secondment to Wollondilly, he was paid about $17,000 net per annum, or $327 per week.
The plaintiff claims that but for the accident he would have worked a 35-hour week and been paid $32.50 per hour in the year ending 30 June 2010 and that his hourly rate would have increased to $40 in the following years.
In order to fortify his claim for economic loss, the plaintiff relied on advertisements for boilermaking jobs in Western Australia which advertised higher rates of pay than that for which he is claiming. I do not find these advertisements of particular assistance since there is no assessment of the costs that might be incurred in travelling and living in such locations. Furthermore, I am not satisfied that but for the accident the plaintiff would have been inclined to travel to such locations in any event to obtain work.
I consider that the plaintiff's capacity to work in an unrestricted way as a boilermaker is diminished. It is not reasonable to expect him to return to a position that would put him in circumstances reminiscent of those surrounding the accident. In particular, working on site at heights may be difficult for him for the foreseeable future.
On the other hand, he is a young, physically fit man who has shown not only stoicism in his determination to obtain his trade certificate as a boilermaker but has also demonstrated his ability to work as a boilermaker since becoming qualified, when financial considerations motivate him to do so. That he took only a fortnight off after the accident, and that no claim for economic loss is made for the following year is testament both to his capacity, and his fortitude.
There is some indication that the plaintiff would not necessarily have continued with his trade, since he left Nepean Engineering and worked in his father's rose-growing business before the accident and before he started working for Wollondilly. It appears that his parents instilled in him the importance of obtaining a trade certificate, so that he would always have a qualification to "fall back on". However, I am not satisfied that, but for the accident, the plaintiff would necessarily have continued working as a boilermaker for the rest of his working life.
In the year ended 30 June 2010 the plaintiff received a total of $7,579 from his short-term boiler-making work at H & H and his work with the family rose-growing business. I accept Penrose's submission that but for the accident, the plaintiff would have continued as an apprentice with Wollondilly until August 2010 and, accordingly, been paid at apprentice rates. I accept that his earning capacity in the year ended 30 June 2010 was affected by the accident and I allow a loss of $10,000 for that year, being the approximate difference between what he would have earned as an apprentice and what he in fact earned.
In the year ended 30 June 2011, the plaintiff's net earnings were $23,985. I accept that they were likely to have been substantially higher but for the accident and the aversion it caused to his working on-site as a boilermaker. However, I am not satisfied that the plaintiff would necessarily have worked full-time as a boiler-maker in any event and may well have found other employment. I propose to allow a sum of $20,000 for this period.
In the period from 1 July 2011 until judgment I accept that there is still some diminution in the plaintiff's earning capacity arising from PTSD, which disinclines him to travel far from home for long periods, or to engage in full-time employment as a boilermaker. I also accept that these proceedings are likely to have aggravated the plaintiff's symptoms, at least in the lead-up to, and during, the hearing. I allow the sum of $20,000 for this period.
The plaintiff is entitled to interest on these damages under s 18 of the Act. I request that the parties calculate the applicable interest and bring in short minutes of order reflecting their calculations.
Loss of past superannuation benefits
I have calculated this head by reference to 11% of the net figure for past economic loss.
Damages for future economic loss due to the deprivation of earning capacity
I have recorded in the reasons above my impression of the plaintiff's prospects of employment and my conclusion that it was by no means probable that but for the accident the plaintiff would have continued as a boilermaker.
Nonetheless I accept that this traumatic event and its consequences result in a diminution of the plaintiff's earning capacity in that he will be unable to work in circumstances which might evoke similar circumstances to those which surrounded the death of the deceased.
If the plaintiff continues in the family rose-growing business, it will be, in my view, because of his preference for so doing and his fondness for the work and the surrounding area rather than because of any diminution in his earning capacity occasioned by the accident. The plaintiff could, in my view, retrain for another trade or occupation other than boilermaking. Although some occupations, such as police officer, may be unsuitable because it may tend to expose the plaintiff to horrifying sights, there are many other occupations open to the plaintiff, notwithstanding the accident.
I do not consider that it is appropriate to apply a mathematical approach as if the loss of earning capacity will continue in any uniform way into the future. Section 13 of the Act does not preclude the award of damages by way of a buffer in circumstances where the impact of the injury on earning capacity is difficult to determine: Penrith City Council v Parks [2004] NSWCA 201 at [5], per Giles JA, with whom Cripps JA agreed. In these circumstances, there is no question of a percentage adjustment, and so in the application of s 13(2), the percentage adjustment is nil.
I allow a buffer of $100,000 for future economic loss, which includes loss of future superannuation benefits.
Out of pocket expenses: past and future
There is no claim for out-of-pocket expenses.
Schedule of damages
For the foregoing reasons I assess damages as follows, subject to the application of s 151Z(2) of the Workers Compensation Act, which is considered below:
Head of damages
Amount
Non-economic loss: 25%
$34,000
Past economic loss
$50,000
Past loss of superannuation
Parties to calculate
Interest on past economic loss
Parties to calculate
Future economic loss, including loss of superannuation
$100,000
The application of s 151Z(2) of the Workers Compensation Act
The plaintiff conceded that, had he sued his employer, he would not have reached the threshold of "at least 15%" provided for under s 151H of the Workers Compensation Act in light of relevant lay and medical evidence and the WorkCover Guidelines (the Guidelines). Accordingly, the damages to which the plaintiff would be entitled from Sydney Training are zero: Izzard v Dunbier Marine Products (NSW) Pty Limited [2012] NSWCA 132 (Izzard) at [41] per Basten JA, [114] - [118] per Macfarlan JA and [140] - [148] per Barrett JA.
Sydney Training, as the plaintiff's employer, had a non-delegable duty to take reasonable steps to provide the plaintiff with a safe system of work. It is vicariously liable for any negligence committed by Wollondilly, since it entrusted it with the discharge of its duty: s 5Q of the Act.
There is no evidence that Sydney Training did anything material to discharge this duty. It contacted the plaintiff by telephone from time to time from its own premises in Sydney. It placed him with Wollondilly but did not inspect either Wollondilly's premises, or those of Penrose. It did not provide him with safety training. A representative of Sydney Training would visit the plaintiff at his home, or after the accident, at H & H's premises. It effectively sought to abdicate its responsibility to the plaintiff. It was not entitled do so. It was in breach of the non-delegable duty of care which it owed to the plaintiff.
I consider that Penrose would, but for Part 5 of the Workers Compensation Act, have been able to recover 30% of its liability from Sydney Training as contribution but which is not in fact recoverable (due to s 151H in Division 3 of Part 5): Izzard, at [124] per Macfarlan JA.
In those circumstances, the effect of s 151Z(2)(c) is to reduce the damages recoverable by the plaintiff from Penrose by the 30% of the plaintiff's damages that Penrose would have otherwise been able to recover from Sydney Training. This deduction ought be reflected in the short minutes of orders that the parties bring in to reflect these reasons.
Penrose's cross-claim against Wollondilly: whether Wollondilly would be liable if sued by the plaintiff
Penrose's cross-claim has two elements: a claim for economic loss arising from damage to the shavings bin and a claim for indemnity and contribution for any damages for which Penrose is found to be liable to the plaintiff.
Wollondilly's duty
Wollondilly sought to minimise its obligation by submitting that the plaintiff and the deceased were essentially "guest workers" at Penrose's premises and that Penrose was accordingly obliged to ensure that they were trained in safety procedures and that the premises be made safe for whatever work they were engaged to do. This submission is at odds with Leighton, where the High Court found that Leighton was not obliged, as the principal contractor, to provide training in the safe method of carrying on every trade and conducting every specialised activity carried out on the site to every worker on the site. It emphasised the distinction that the common law draws between the obligations of employers to their employees and of principals to independent contractors.
As referred to above, it is common ground that the plaintiff was employed by Sydney Training. As far as Wollondilly was concerned he was an independent contractor, having been seconded by Sydney Training to Wollondilly for his apprenticeship.
The duty Wollondilly owed to the plaintiff is substantially the same as if he had been Wollondilly's employee: Stevens v Brodribb Sawmilling Company Pty Limited [1986] HCA 1;160 CLR 16 at 31, per Mason J. The difference between the plaintiff, who was employed by Sydney Training, and his co-workers, who were employed by Wollondilly, was that the plaintiff was an apprentice. It is difficult to see that there would be any material difference in the way in which Wollondilly treated and directed the plaintiff had he been one of its employees. Wollondilly had a right, which it exercised, to control the plaintiff in the work he performed on its behalf and for its benefit. Indeed the standard of care owed to the plaintiff was, if anything, higher than that owed to employees because of his particular vulnerability as an apprentice.
The duty Wollondilly owed to the plaintiff was akin to that which would have been owed had he been an employee, namely a duty to take reasonable care to avoid exposing him to the risk of injury: Rockdale Beef Pty Limited v Carey [2003] NSWCA 132 at [94], per Ipp JA (Mason P and McColl JA agreeing). It owed a non-delegable duty to the plaintiff to prescribe and provide a safe system of work: TNT Australia Pty Limited v Christie [2003] NSWCA 47; 65 NSWLR 1 at [41], per Mason P and [178], per Foster AJA. To the extent to which Wollondilly entrusted its duty to Mr Blackburn, it is vicariously liable for any breach by him: s 5Q of the Act.
Wollondilly also sought to minimise its obligation and share of responsibility for what occurred by submitting that Penrose, as the occupier of the premises, owed them a non-delegable duty to take reasonable care to make the premises safe. This submission that an occupier's duty is non-delegable would appear to be at odds with what the majority of the High Court decided in Northern Sandblasting v Harris [1997] HCA 39; 188 CLR 313; namely, that the duty owed by a landlord to the occupants was not non-delegable and could be discharged by engaging a competent tradesperson to perform repairs. Further, there is no particular analogy between an occupier and an invitee and this case. The plaintiff and the deceased were on Penrose's premises because Penrose had engaged Wollondilly for reward to perform work. Wollondilly sent its employees to the premises to perform that work on its behalf.
The following statement from Mason P's judgment in TNT, at [67] concerning the labour-hire company, Manpower, applies as much, in my view, to Wollondilly as it does to Sydney Training:
"In my view, it would be contrary to principle to enable or even to encourage an employer that operates a labour hire business to treat the normal incidents of the employment relationship as modified simply because its employees are sent off to work for a client. Indeed, the very fact that employees are dispatched to external venues and placed under the de facto management of outsiders will, in some cases, have the practical effect of requiring the employer to adopt additional measures by way of warning or training in order to discharge its continuing common law duty of care to its employees."
Wollondilly's breach
As between Wollondilly and Penrose, Wollondilly had a higher duty to safeguard its employees and a quasi-employee such as the plaintiff than did Penrose. It was negligent in failing to train them in safe work practices and in failing to bring to their attention the dangers of working on a shavings bin while it contained shavings and was in operation. It also failed to instruct them that if there was a possibility of a fire in a shavings bin, the prudent course was to disembark from the bin as soon as possible because of the potential for the fire to get out of control. As Mr Manser said, a fire in a silo bin makes the silo a "very risky place to be".
Mr Turner said that it was only with the benefit of hindsight that he appreciated that there was a risk in performing hot work on top of the shavings bin while it contained shavings. He knew in advance that the work that was in fact done on the day of the accident was going to be done that day. The effect of his evidence was that he did nothing to warn the deceased or the plaintiff because he had not considered that there was a risk in their performing the work. He left it to the deceased and Mr Blackburn to work out how the work could be performed. Wollondilly is responsible for his, and Mr Blackburn's negligence.
Wollondilly failed to comply with Australian Standard 1674 (AS 1674) which makes provision for Safety in welding and allied processes. Sawmills are included in the definition of hazardous areas. A form is provided for a "Hot Work Permit", which is one of the matters to be arranged before hot work is performed in any hazardous area, whereby the employer (or person performing the hot work) would obtain a permit from the occupier of the premises on which the hot work was to be performed.
Wollondilly knew what its workers were to do on the day of the accident. It ought to have known of the dangers of their performing welding work on the shavings bin and not only warned them of the dangers but ensured that the work was not performed until the bin was emptied and the moulding machine stopped.
Causation: whether Wollondilly's breach caused loss
Wollondilly submitted that, even were I to find that it was in breach, the real cause of the damage both to the plaintiff, the deceased and the shavings bin was Mr Battersby's act of opening the doors to the shavings bin, for which Penrose was liable. It relied, in part, on the following passages from Mr Manser's evidence:
"Q. The activities that Mr Pendergast conducted on the silo would not have resulted in the damage to the silo or Mr Pendergast without Mr Battersby's intervention?
A. Correct.
Q. Had Mr Battersby not opened the gates no damage would have occurred to a silo or Mr Pendergast?
A. That's correct."
Wollondilly relied on Bennett v Minister of Community Welfare [1992] HCA 27; 176 CLR 408 in support of the proposition that opening the doors had broken the chain of causation. I was referred to what McHugh J said in Bennett, at [13]:
"The causal connection between a defendant's negligence and the plaintiff's damage is negatived by the subsequent conduct of another person only when that conduct is 'the free, deliberate and informed act or omission of a human being, intended to exploit the situation created by defendant' (Hart and Honore, Causation In The Law, 2nd ed. (1985), p 136). When the subsequent conduct is a cause of the damage but is unrelated to the situation created by the earlier negligence, the subsequent conduct and the earlier negligence are treated as separate and independent causes of the damage."
I do not consider that this passage assists Wollondilly. Mr Battersby's act was related to the situation created by the earlier negligence. Even if it could be regarded as free or deliberate, it was not informed, since Mr Battersby thought, mistakenly, that what Mr Hansen had identified as smoke was fine dust. Had he recognised it for what it was, smoke, he would not have opened the doors.
I do not consider that it is appropriate to exclude the initial cause of the fire as a cause of the damage to the plaintiff and the deceased. Although the fire was fuelled by additional oxygen when the doors were opened the causal effect of the initial fire was still operative when the damage occurred. The initial fire and the opening of the doors were concurrent causes of the damage. When a fire is caused as a result of a wrongful act, its aggravation is the very thing that is likely to happen if others, including the original tortfeasor, respond in a negligent way.
In March v Stramare [1991] HCA 12; 171 CLR 506, the High Court considered whether the causal effect of the negligent parking of a vegetable truck in the middle of the road was superseded or exhausted by the act of an intoxicated driver, who collided with the truck at excessive speed. The Court found that the owner and driver of the truck were liable for the injuries to the driver because their wrongful act of parking the truck in the middle of the road had created the very risk that a careless driver would collide with it. Mason CJ said, at [27]:
"As a matter of both logic and common sense, it makes no sense to regard the negligence of the plaintiff or a third party as a superseding cause or novus actus interveniens when the defendant's wrongful conduct has generated the very risk of injury resulting from the negligence of the plaintiff or a third party and that injury occurs in the ordinary course of things. In such a situation, the defendant's negligence satisfies the 'but for' test and is properly to be regarded as a cause of the consequence because there is no reason in common sense, logic or policy for refusing to so regard it."
I do not accept Wollondilly's submission that the opening of the doors was an intervening act that broke the chain of causation between the initial fire and the damage that ensued. As I have said above, it is foreseeable that when a fire starts something will happen that will make the fire more difficult to control. This is what occurred when Mr Battersby opened the doors to the shavings bin. I consider that Wollondilly's negligence in permitting the deceased and the plaintiff to do hot work on the top of the shavings bin when it had not been emptied is, as a matter of commonsense and experience properly to be seen as having caused the harm: Medlin v State Government Insurance Commission [1995] HCA 5; 182 CLR 1 at [6].
It follows that there will be judgment for Penrose on its cross-claim.
Apportionment
In its cross-claim, Penrose seeks contribution from Wollondilly pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act.
As between Wollondilly and Penrose I consider that it is just and equitable that Wollondilly bear the substantial portion of responsibility for the plaintiff's loss. Had it discharged its duty, neither the deceased nor the plaintiff would have been on top of the shavings bin when there were shavings inside and when the moulding machine was still operating. The fire would not have started. If they had been properly trained, the deceased would not have remained on the bin for the time it took the plaintiff to go and speak with Mr Battersby and have him return to open the doors to the bin. They would both have removed themselves from the smoke as quickly as possible in order to alert others to the presence of the smoke.
As between Wollondilly and Penrose I find Wollondilly to be liable for 60% of the amount for which Penrose is liable to the plaintiff. The apportionment between Wollondilly and Penrose is accordingly 60% to Wollondilly and 40% to Penrose.
Penrose's cross-claim for property damage
Penrose also alleges in its cross-claim against Wollondilly that Wollondilly is liable for the property damage to the shavings bin.
Wollondilly owed a duty to Penrose to take reasonable care to avoid foreseeable damage caused by those persons under its care and control to Penrose's property (Dorset Yacht Co v Home Office [1970] AC 1004). It was foreseeable that if its employees were permitted to perform welding work on a shavings bin which contained shavings and which was being fed by a moulding machine, there was a risk that the shavings would catch fire and damage the bin. Wollondilly's negligence caused the damage to the shavings bin since, as I have found above, the fire was probably caused by a spark from the welding work performed by the deceased.
The cross-claim by Penrose for property damage is an "apportionable claim" within the meaning of s 34 of the Act. Accordingly Part 4 applies.
Section 35 relevantly provides:
"(1) In any proceedings involving an apportionable claim:
(a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss, and
(b) the court may give judgment against the defendant for not more than that amount.
...
(3) In apportioning responsibility between defendants in the proceedings:
(a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law, and
(b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.
(4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings."
Penrose contributed to its own loss in various ways. First, it did not warn Wollondilly that the shavings bin would need to be emptied before the welding work could be performed on it, either when Mr Cush met with Mr Turner or when the deceased spoke with Mr Battersby on the morning of the accident. Secondly, it did not have any system in place to ensure that the doors to the shavings bin were not opened if there was any smoke in the vicinity which might reveal that there was a fire inside the bin. Its conduct (through Mr Battersby) in opening the doors to the bin, notwithstanding that smoke had been detected, substantially aggravated the fire and the consequential damage to the bin.
I consider that Penrose's contributory negligence leads to a deduction of 70% of the damages to which it would otherwise be entitled against Wollondilly.
Wollondilly has identified Mr Blackburn as a concurrent wrongdoer within the meaning of Part 4 of the Act. He is not a party to the proceedings. There is evidence to the effect that he cannot be found. Wollondilly alleges that Mr Blackburn breached his engagement contract with Wollondilly by failing to implement a hot work system. Wollondilly also alleges that Mr Blackburn was aware of the work being performed on the day and failed to advise its workers of steps that could have been taken with respect to the danger involved in the work.
Mr Blackburn saw the deceased and the plaintiff beside the shavings bin on the day of the accident. He knew that they intended to do welding work on the structure which was a shavings bin on that day. Indeed he advised them to wear safety harnesses and take a fire extinguisher up with them. His conversation with them was proximate to their undertaking the work. Had he told them not to go up until the bin was emptied, I am satisfied that they would have abided by his direction because they knew him to be a consultant engaged by Wollondilly to advise it on OH&S matters.
The evidence does not reveal what the qualifications of Mr Blackburn were; how familiar he was with the Penrose site and business; whether he knew of the operation of the shavings bin; or, indeed, whether he knew what the structure contained. He had been engaged by Wollondilly in about May 2006 and had attended various toolbox meetings with Wollondilly's workers.
I consider it to be just that Wollondilly bear 20% of the total loss Penrose has suffered by the damage to its shavings bin having regard to Mr Blackburn's comparative responsibility (see Mitchell Morgan Nominees Pty Ltd v Vella [2011] NSWCA 390). But for Mr Blackburn's involvement, Wollondilly would have been responsible for 30% of the total property loss, once a deduction for contributory negligence is made.
Assessment of damages on the property cross-claim
The fundamental measure of damages for tort is the amount of money it will take to put the claimant in the position it would have been in had the tort not occurred. But for Wollondilly's negligence, Penrose would have had a functioning shavings bin. As a result of Wollondilly's negligence, Penrose needed either to repair or replace its shavings bin.
The relevant principles to be applied in assessing damages are identified in McGregor on Damages (17th ed, 2002) and can be summarised as follows.
The usual measure of damages is the amount by which the goods damaged has been diminished. Generally, the cost of repair is the correct measure of the claimant's loss. However the cost of repair is appropriate only if, in the circumstances, it is reasonable for the claimant to effect the repair rather than replace the goods.
The fact that the repairs or replacement have not yet been executed before the hearing, or will never be executed at all, does not prevent recovery.
If, however, the goods have been destroyed rather than merely damaged, the normal measure of damages is the market value of the goods destroyed. Should the replacement cost be more than the market value, the cost is still recoverable if it is reasonable to replace. The following principle, summarised in McGregor on Damages was adopted by the Court of Appeal in Evans v Balog [1976] 1 NSWLR 36 at 40, per Samuels JA, with whom Moffit and Hutley JJA agreed:
"The test which appears to be the appropriate one is the reasonableness of the plaintiffs' desire to reinstate the property; this will be judged in part by the advantages to him of reinstatement in relation to the extra cost to the defendant in having to pay damages for reinstatement rather than damages calculated by the diminution in value of the land."
The compensatory purpose of "making good" the damage that has been done may be fulfilled by the cost of replacement or repair, as the case may be, subject to the requirement of reasonableness: Gagner Pty Ltd Trading As Indochine Cafe v CanturI Corporation Pty Ltd [2009] NSWCA 413 at [103] - [106], per Campbell JA, Macfarlan JA and Sackville AJA agreeing.
Consequential losses are also recoverable, including expenses incurred, and, if it is proved, loss of profits caused by damage to, or destruction of, the goods.
The onus of proving any failure to mitigate loss is on Wollondilly. No evidence has been adduced to discharge that onus.
Proceeds of Penrose's insurance policy
The evidence reveals that Penrose obtained a payment from its insurer as a result of the damage to the bin, for which it is obliged to account if an award of damages is made referable to that damage. Penrose did not use the proceeds of its insurance claim to replace the bin because it required the money for its ongoing operations. The amount of the payout is not relevant to these proceedings since it presumably reflects the terms of the policy rather than the common law measure of damages.
Cost of repair and replacement
Penrose has established that many of the components that comprised the shavings bin were damaged by the fire to the extent that they need to be replaced. Aistrope Engineers advised Penrose as to which components could be retained and which needed to be replaced. Its report dated 2 October 2007 contains the following summary:
"In summary the major frame, most rolled steel girts, beams and wall bracing may be retained but those girts deformed by heat, all cold rolled girts, the roof structure and all roofing and wall cladding must be replaced to restore the facility to a safe usable condition. The hopper doors require repair and new linings must be fitted."
The evidence establishes that the cost of Penrose replacing the shavings bin and repairing components will be as follows:
Demolishing damaged shavings bin
Supply & install replacement bin
Dust filters
Bin Lining
Air cannons
Subtotal
$27,200
$101,750
$48,375
$41,023
$12,190
$230,538
I am satisfied that these amounts ought be included in the damages in the cross-claim.
Consequential losses
In 2007, Penrose constructed a 3-sided temporary bin from concrete blocks resting on the ground when the fire damage rendered the existing shavings bin unusable. Penrose continues to use the temporary bin, which is open on the fourth side, although it is not as useful as the damaged bin since the shavings stored there must be removed by front-end loaders, rather than dropping into a truck as occurred with the damaged shavings bin.
It engaged engineers to investigate and ascertain the extent of the damage to the shavings bin and the need for remedial work.
In November 2007, Penrose engaged Mr Davenport to make the wiring and power supply to the damaged shavings bin safe.
It also erected fencing around the damaged shavings bin, as required by WorkCover, and as a safety precaution.
I am satisfied that Penrose incurred the following expenses prior to 1 November 2007 and that it is entitled to be compensated by Wollondilly for these amounts in the percentage for which I have found it to be liable since they are consequential on Wollondilly's negligence.
Costs incurred
- Temporary Shavings bin
- Engineering Fees
- Temporary fencing
- Make safe work
Subtotal
$26,975.26
$2,690.55
$685.95
$1,470.00
$31,821.76
Penrose is entitled to interest on the sum of those amounts at the Court rate interest rate for judgments.
Summmary
For the foregoing reasons, the short answers to the issues raised at the outset are:
(1) Is Penrose liable to the plaintiff in damages for negligence by reference to the Civil Liability Act 2002 (the Act)? Yes.
(2) If so, to what extent, if at all, are the plaintiff's damages to be reduced by reference to s 151Z(2) of the Workers Compensation Act 1987 by reason of any negligence by Sydney Training? 30%
(3) Is Wollondilly liable to Penrose on its claim for contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946? Yes; their responsibility for the plaintiff's loss is 40% Penrose and 60% Wollondilly.
(4) Is Wollondilly liable to Penrose on its claim for property damage? Yes.
(5) If so, to what extent should such damages be reduced by reason of any contributory negligence by Penrose? There should be a 70% reduction.
(6) If so, is Greg Blackburn a concurrent wrongdoer within the meaning of Part 4 of the Act? Yes.
(7) If so, to what extent, if at all, should Wollondilly's liability to Penrose under the claim for property damage be reduced? It is just that Wollondilly ought bear 20% of Penrose's property damage having regard to Mr Blackburn's responsibility for the loss.
(8) The quantum of the plaintiff's claim; Penrose's cross-claim for contribution and Penrose's claim for property damage.
Orders
The orders I make are:
(1) Judgment for the plaintiff against the second defendant.
(2) Judgment for the second defendant/ cross-claimant on the cross-claim.
(3) I direct the parties to deliver to my Associate within seven days short minutes of order which reflect the judgment sums calculated by reference to my reasons.
**********
Amendments
22 June 2012 - hearing date amended
Amended paragraphs: coversheet
Decision last updated: 22 June 2012
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