Volman T/a Volman Engineering v Lobb; Mobil Oil Australia Pty Ltd v Lobb
[2005] NSWCA 348
•31 October 2005
NEW SOUTH WALES COURT OF APPEAL
CITATION: Volman t/a Volman Engineering v. Lobb & Anor.; Mobil Oil Australia Pty. Ltd. v. Lobb & Anor [2005] NSWCA 348
FILE NUMBER(S):
40651/04
CA 40904/04
HEARING DATE(S): 26 August 2005
JUDGMENT DATE: 31/10/2005
PARTIES:
John Volman and J. Volman t/a Volman Engineering - appellant/2nd repondent
Timothy Lobb - 1st respondent
Mobil Oil Australia Pty. Ltd. - 2nd respondent/appellant
JUDGMENT OF: Mason P Hodgson JA Tobias JA
LOWER COURT JURISDICTION: District Court
LOWER COURT FILE NUMBER(S): DC 3969/03
LOWER COURT JUDICIAL OFFICER: Balla DCJ
COUNSEL:
Mr. G.M. Watson SC with Mr. Kelly for Mobil Oil
Mr. R. Quickenden for Volman Engineering
Mr. D.J. Russell SC with Mr. A. Porthouse with Lobb
SOLICITORS:
Cutler Hughes & Harris, Sydney for Mobil Oil
Simpson & Partners, Galston for Volman Engineering
Herbert Weller, Windsor for Lobb
CATCHWORDS:
TORT - Negligence - Nuisance - Pedestrian slipping on mud on footpath - Whether lack of care for his own safety defeats claim in negligence - Whether person carrying out operations on adjoining land that caused the mud to escape liable in nuisance - Whether owner also liable - Whether owner should have known that nuisance occurring.
LEGISLATION CITED:
DECISION:
1. Appeal CA40651/04 allowed in part, and the cross-appeal allowed in part. 2. Judgment below for $122,268.77 against Volman and Mobil set aside, and in lieu thereof judgment for $117,156.02 against Volman and Mobil. 3. Judgment on the cross-claims below set aside, and in lieu thereof declaration that as between Volman and Mobil each is liable for 50% of Mr. Lobb's judgment and costs, with each having liberty to apply for a judgment after satisfaction of Mr. Lobb's judgment. 4. Appeal C40904/04 dismissed, and the cross-appeal dismissed. 5. Volman to pay 95% of Mr. Lobb's costs of appeal CA40561/04 and the cross-appeal. 6. Mobil to pay 95% of Mr. Lobb's costs of appeal CA40904/04 and the cross-appeal.
JUDGMENT:
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40651/04
CA 40904/04
DC 3969/03MASON P
HODGSON JA
TOBIAS JAMonday 31 October 2005
JOHN VOLMAN T/AS J. VOLMAN ENGINEERING V. LOBB & ANOR.
MOBIL OIL AUSTRALIA PTY. LTD. V. LOBB & ANOR
Headnote
FACTS
In 1998 Mobil engaged Volman to carry out the demolition of a Mobil service station in Richmond and conduct remediation of the site to make it environmentally safe. The site was located on the corner of a traffic light intersection, and there were footpaths outside both sides of the site that sloped downwards to the kerb and gutter.
In April and May 1998 when underground fuel tanks were removed from the site, a large pile of soil remained while testing of the site was conducted. Consequently, the footpaths alongside the site were covered with mud from the site for a period of weeks, and remained in that state after Volman ceased carrying out operations on the site.
On 16 May 1998, after a period of heavy rainfall, Mr Lobb slipped on the mud-covered footpath in the process of attempting to press the pedestrian button at the traffic lights outside the Mobil site. Mr Lobb suffered a fracture to his left knee.
Mr Lobb claimed damages in negligence and nuisance from Volman and Mobil for personal injury. There were cross-claims between the appellants for contribution and/or indemnity.
The primary judge found that negligence was not proved, but that public nuisance was proved against both Volman and Mobil, who were also found to be equally at fault. Contributory negligence of Mr Lobb was assessed to be 50%. Damages of $122,268.77 were awarded against both Volman and Mobil. In a separate judgment, the primary judge found that Mobil was not entitled to an indemnity by reason of its contract with Volman. Both Mobil and Volman appealed against these decisions, and Mr Lobb put on a cross-appeal in each appeal.
HELD
(per Hodgson JA, Mason P and Tobias JA agreeing)
(1)Since Volman had accepted the responsibility of taking precautions to ensure that mud would not escape from the site, Volman was negligent in failing to exercise reasonable skill and care in preventing mud from escaping the site and failing to clear the mud from the footpath.
(2)It was open to the primary judge to find that footpaths that were regularly covered with mud for a period of weeks constituted a substantial and unreasonable interference with the public’s right to pass along the footpath, and thus a public nuisance. Volman, as the creator of the nuisance, was liable for its foreseeable consequences, including personal injury to a person slipping on the mud: Fennel v Robson Excavations Pty Ltd [1977] 2 NSWLR 486 applied.
(3)While the nature of the operations being carried out did not give rise to a non-delegable duty on the part of an occupier, Mobil nevertheless had a duty to ascertain from time to time whether those activities were causing a nuisance: Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520 distinguished. Mobil should have known of the hazard at a time when reasonable steps to deal with the hazard would have prevented the accident: Torette House Pty Ltd v Berkman (1940) 62 CLR 637 applied.
ORDERS
Appeal by Volman allowed in part, and the cross-appeal allowed in part.
Judgment below for $122,268.77 against Volman and Mobil set aside, and in lieu thereof judgment for $117,156.02 against Volman and Mobil.
Judgment on the cross-claims below set aside, and in lieu thereof declaration that as between Volman and Mobil each is liable for 50% of Mr. Lobb’s judgment and costs, with each having liberty to apply for a judgment after satisfaction of Mr. Lobb’s judgment.
Appeal brought by Mobil dismissed, and the cross-appeal dismissed.
Volman to pay 95% of Mr. Lobb’s costs of appeal and the cross-appeal in relation to Volman’s liability.
Mobil to pay 95% of Mr. Lobb’s costs of appeal and the cross-appeal in relation to Mobil’s liability.
**********
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40651/04
CA 40904/04
DC 3969/03MASON P
HODGSON JA
TOBIAS JADate
JOHN VOLMAN t/as VOLMAN ENGINEERING V. LOBB & ANOR.
MOBIL OIL AUSTRALIA PTY. LTD. V. LOBB & ANOR.
Judgment
MASON P: I agree with Hodgson JA.
HODGSON JA: On 11 June 2004, Balla DCJ gave judgment in proceedings in which Timothy Lobb claimed damages from the appellant in appeal CA40651/04 (Volman) and the appellant in appeal CA40904/04 (Mobil) for personal injury allegedly caused by negligence and nuisance, and in which there were cross-claims between the appellants for contribution and/or indemnity.
The primary judge found that negligence was not proved, but that public nuisance was proved against both Volman and Mobil. She found each of them were equally at fault; and she also found contributory negligence against Mr. Lobb, which she assessed at 50%. She awarded damages of $122,268.77 against each appellant.
In a separate judgment of 2 July 2004, the primary judge found that Mobil was not entitled to an indemnity by reason of its contract with Volman, and she gave a verdict for each defendant on its cross-claim to the extent of 50% of Mr. Lobb’s claim.
Both appellants have appealed against these decisions, and Mr. Lobb has put on a cross-appeal in each appeal. The following issues arise:
1.Mr. Lobb challenges the primary judge’s rejection of his negligence claim.
2.Volman and Mobil challenge the primary judge’s finding of public nuisance.
3.Mr. Lobb challenges the primary judge’s assessment of his contributory negligence at 50%.
4.Volman challenges the primary judge’s assessment of damages.
5.Volman challenges the primary judge’s assessment of contribution as between Volman and Mobil.
6.Mobil challenges the primary judge’s rejection of its claim for a contractual indemnity from Volman.
CIRCUMSTANCES
At the time of the accident, Mr. Lobb resided at 40 Bosworth Street, Richmond, and was employed at the nearby Colonial Motel in March Street, Richmond. Mr. Lobb’s habitual route to the Colonial Motel was along the eastern side of Bosworth Street in a northerly direction, to traffic lights at the south-eastern corner of the intersection of March and Bosworth Streets. At these traffic lights, he would cross March Street to the north-eastern corner of the intersection, and then he would cross Bosworth Street to the north-western corner, and proceed to the Colonial Motel.
In 1998, a Mobil Oil service station that operated on the north-eastern corner of the traffic light intersection was demolished. Volman was retained by Mobil to carry out the demolition of the service station and the remediation of the site. Demolition consisted of the removal of all structures associated with the service station, and remediation was the process of cleansing the site to make it environmentally safe.
During April and May 1998, a large pile of soil created from the removal of the underground fuel tanks was left on the site, while experts were undertaking testing at the site. During the demolition and remediation process, the site was surround by a 1.9 metre cyclone wire fence, along the base of which had been attached material similar to shade cloth, as a silt trap. Vehicles were able to use driveways in both March and Bosworth Streets for access to the site. The footpath outside the site sloped downwards to the kerb and gutter.
In the early morning of Saturday 16 May 1998, Mr. Lobb left his house to do some shopping, had two alcoholic drinks at the Windsor Hotel, and bought some food for lunch, after which he returned home at around 11.00-11.30am. At around 3.00pm on the same day, Mr. Lobb walked back from his residence to go to the Colonial Motel in order to conduct some work on the swimming pool there. He crossed March Street at the traffic lights, so that he was then adjacent to the Mobil site. As he turned and stepped towards the traffic light pole to press the pedestrian button in order to cross Bosworth Street, he slipped onto the ground, landing next to the pole. Two members of the public came to his assistance; and before he was assisted from the scene, Mr. Lobb noticed there was mud covering the footpath and a skid mark in the mud.
The following day, Mr. Lobb was taken by a friend to Hawkesbury Hospital on account of swelling and pain in his left knee. An x-ray conducted at the hospital showed a fracture of the patella. His left leg was placed in a solid full-length back slab from his hip to the sole of his foot.
On 18 May 1998, Mr. Lobb attended an orthopaedic surgeon, who recommended that the plaster be replaced with a fitted hinged leg brace. This was fitted on 20 May 1998, and was left on for a total of about thirteen weeks. By August 1998, Mr. Lobb was ready to return to work on light duties. However, on 30 August he injured his left knee in a gardening accident.
In August 1999, Mr. Lobb increased the number of shifts he worked, but the pain in his left leg increased.
On 22 August 2000, Mr. Lobb injured his right ankle at work, and had about two and a half weeks off work.
In December 2001, an arthroscopy was performed on his left knee. He returned to work on 27 January 2002; but the pain in his left knee grew too much, and he did not complete his first shift. He was then on social security for a period, and did some casual labour paying about $1,000.00 per week. Since the middle of 2002, he has done minimal paid work. He began to receive a disability pension in 2003. One reason for his inability to work is severe sleep apnoea.
DECISION OF PRIMARY JUDGE
Although the primary judge did not make explicit findings on these matters, it appears that she accepted that Volman completed the demolition work in about mid-March 1998; that he carried out the remediation work between about the end of April 1998 and about 12 May 1998; and that he returned to the site on about 20 or 21 May 1998 to remove some soil under an above-ground tank. On the basis of evidence of two local residents, the primary judge was satisfied that the footpaths alongside the site in Bosworth Street and March Street were regularly covered with mud from the site, in the weeks leading up to Mr. Lobb’s fall. The primary judge held that this was because the silt trap was not placed around the whole of the site, and there were places where it had not been dug into the ground; and she was satisfied that water carrying mud escaped from the site either under or around the silt fence.
Although the primary judge did not make an explicit finding, it is clear that it rained on the day of the accident, and that some mud washed from the site on that day. The primary judge found that Mr. Lobb slipped in mud from the site.
However, she found that Mr. Lobb should have been aware that there would be (and was) mud and water on the footpath; and she was not satisfied that a person taking reasonable care would have slipped. The primary judge expressed the view that this defeated Mr. Lobb’s claim in negligence because “the law requires a person (in his position) to exercise sufficient care by looking where they are going and perceiving and avoiding obvious hazards”.
The primary judge held that Mr. Lobb’s claim in nuisance was not subsumed into his claim in negligence; and she held there was a public nuisance, because the mud constituted a substantial and unreasonable interference with the public’s right to pass along the footpath, and was there because all reasonable precautions had not been taken to prevent its escape.
The primary judge held that the plaintiff by his injuries incurred special loss; that Mobil was liable for the nuisance, because it was the occupier of the site, and knew or ought to have known of the hazard; and that Volman was liable for the nuisance, because he had created it.
The primary judge then found that both appellants were equally at fault, Volman for creating the nuisance and Mobil as owner/occupier in failing to ensure that its subcontractor had installed an adequate barrier.
The primary judge found contributory negligence against Mr. Lobb, and assessed it at 50%.
The primary judge assessed general damages at $65,000.00, past economic loss at $55,000.00, future economic loss at $84,227.50, out-of-pocket expenses at $6,860.15, and future out-of-pocket expenses at $13,000.00.
In the second judgment, the primary judge considered Mobil’s claim for an indemnity under its contract with Volman, giving the following reasons:
The first defendant then relies on a breach of clause B1.15 of the Special Conditions of Tender which relevantly provides:
“... The Contractor is responsible for maintaining the site in a clean and safe condition ..."
I accept the submission made by counsel for the second defendant that this clause does not apply as the plaintiff did not suffer an injury on site and there is no evidence of any failure to maintain the site in a clean and safe condition on the day of the plaintiff's injury.
The first defendant then relies on clause 5.1 of the Environmental Health and Safety Services Contract which relevantly provides:
"Contractor (the second defendant) shall defend, indemnify and hold Mobil, its subsidiaries and affiliates, employees and agents harmless from all losses ... and cause of action of any kind and character .. for .. personal injury ... arising out of or in connection with the Contractor's Services or performance under this Agreement, to the extent caused by any negligent act, error or omission of Contractor"
I am satisfied that, although the second defendant had been directed by Handex on behalf of the first defendant to ensure that nothing left the site, it failed to do so. In addition I have found that the first defendant, as owner and occupier, failed to ensure that the second defendant had done so.
I am accordingly satisfied that the first defendant, under this clause, is entitled to a 50% indemnity from the second defendant being "the extent" of the responsibility of the second defendant.
The first defendant then relies on clause 19 Environmental Health and Safety Services Contract which relevantly provides:
"Before the Contractor commences work, the Contractor shall take out an insurance policy covering all of the things referred to in clause 5 against loss or damage resulting from any cause whatsoever until the Contractor ceases to be responsible for their care... "
Counsel for the first defendant submitted that the first defendant was entitled to a full indemnity as a consequence of the breach on the basis that the measure of damage for the breach is the extent of the plaintiff's loss (Western Sydney Regional Organisation of Councils Group Apprentices v. Stratona Pty Ltd. 29 August 1995 (unreported).
I am satisfied that the second defendant breached clause 19 by failing to effect insurance for his liability to the plaintiff as a consequence of the breach of clause 5.1. However I do not accept that the first defendant is entitled to a full indemnity. The wording of the clause only requires the second defendant to insure its liability which I have assessed as 50% of the plaintiff's claim. The loss can only be that amount which would have been covered by insurance, i.e. 50% of the plaintiff's claim.
ISSUES ON APPEAL
I will consider in turn the following issues:
1. Volman’s negligence.
2. Public nuisance by Volman.
3. Liability of Mobil.
4. Contributory negligence.
5. Contribution and/or indemnity as between Volman and Mobil.
6. Damages.
VOLMAN’S NEGLIGENCE
SubmissionsMr. Russell SC for Mr. Lobb submitted that the primary judge was in error in that her not being satisfied that a person taking reasonable care would have slipped was insufficient of itself to defeat his claim in negligence.
Mr. Quickenden for Volman submitted that it was critical to the majority decision in Ghantous v. Hawkesbury City Council (2001) 206 CLR 512 that pedestrians must take reasonable care to avoid obvious hazards: cf. Burwood Council v. Byrnes [2002] NSWCA 343, Richmond Valley Council v. Standing [2002] NSWCA 359, 127 LGERA 237, and Temora Shire Council v. Stein [2004] NSWCA 236, 134 LGERA 407. Similar considerations can apply in cases against entities other than highway authorities: Gillies v. Saddington [2004] NSWCA 110, A.V. Jennings Ltd. v. Thomas [2004] NSWCA 309, Turnbull v. Alm [2004] NSWCA 173, and Bartolo v. Owners of Strata Plan No.10535 [2005] NSWCA 256. Mr. Quickenden also referred to Phillis v. Daly (1988) 15 NSWLR 65. The primary judge had found that Mr. Lobb was acting unreasonably, given his knowledge of the hazard, his failure to look where he was stepping and his ability to avoid slipping.
Mr. Quickenden also submitted that Volman’s duty of care came to an end when he completed his contract a few days before the accident, in circumstances where Mobil maintained occupation and control of the site; and it was not shown that the mud on which Mr. Lobb slipped escaped while Volman was on the site.
Decision
In my opinion, the reason given by the primary judge for rejecting Mr. Lobb’s claim in negligence, namely lack of satisfaction that a person taking reasonable care would have slipped, was not of itself a sufficient reason to reject his claim.
In the first place, statements to the effect that the duty of highway authorities should be formulated in terms which require that a road be safe for users (particularly pedestrians) exercising reasonable care for their own safety (Ghantous at [163]) do not, in my opinion, mean that a pedestrian can never succeed in a negligence case against a highway authority unless the pedestrian proves that he or she suffered injury while exercising reasonable care for his or her own safety.
I adhere to the view that the duty of highway authorities is to exercise reasonable care to avoid injury; but that in assessing what this requires, it is relevant to consider the magnitude of the risk of injury (to the plaintiff or to a class including the plaintiff) that a reasonable person in the position of the highway authority would have foreseen and considered it appropriate to take action against, and that, in relation to the road users in general and pedestrians in particular, the relevant risks are those to persons exercising reasonable care for their own safety: see Temora Shire Council v. Stein and Sutherland Shire Council v. Henshaw [2004] NSWCA 386. Broadly similar views are expressed in the former case by Giles JA and in the latter case by Bryson JA.
Thus, if a highway authority does not take reasonable care on that basis and there is a resulting defect in the road, and if a pedestrian is thereby injured, the authority may be liable even if this particular pedestrian was not exercising reasonable care for his or her own safety and even if the injury could have been avoided by the exercise of reasonable care. If the highway authority proves that this lack of reasonable care contributed to the injury, there would be a reduction of damages for contributory negligence.
In the second place, the statements applying to highway authorities do not necessarily apply to all persons creating obstructions or dangers on a public road. Again, the duty of such persons is a duty to exercise reasonable care to avoid injury; and the unlikelihood of injury to persons exercising reasonable care for their own safety is a matter that enters into determination of what reasonable care requires. However, depending on the nature of the activity of persons creating such dangers or obstructions, and on what it would require to avoid the risk of injury, reasonable care may require that such a person not create even a danger that is likely to cause injury only to persons not exercising reasonable care for their own safety.
In my opinion, the factual findings of the primary judge which supported her decision on nuisance, as against Volman, were sufficient to make out a case in negligence. In my opinion, even though careful pedestrians can generally avoid slipping in mud on a footpath, the exercise of reasonable care by a person conducting excavation operations adjoining a footpath, with a view to avoiding injury to pedestrians, would require reasonable measures to prevent the footpath being “regularly covered with mud” over a period of weeks. The failure to ensure that the silt trap was effective, with the results described by the primary judge, was in my opinion a breach of Volman’s duty of care.
Further, although it was not shown that Mr. Lobb slipped on mud that had escaped the site while Volman was carrying out operations on the site, and indeed it seems quite likely that he slipped on mud that had washed from the site on the day of the accident, it was Volman that had been given and had accepted the task of taking precautions to ensure that mud would not wash from the site; and on the findings of the primary judge, Volman had not exercised reasonable skill and care in doing so. It was due to that failure of Volman to exercise reasonable skill and care that there was mud on the footpath over a period of weeks leading up to the accident, and that mud was escaping from the site following rain on the day of the accident.
NUISANCE BY VOLMAN
SubmissionsMr. Quickenden submitted that the tort of negligence had subsumed the tort of public nuisance in respect of personal injury on the highway; or at least that negligence was a necessary element of public nuisance for personal injury on the highway: Ghantous, Cartwright v. McLaine & Long Pty. Ltd. (1979) 143 CLR 549, Australian Safeway Stores v. Zaluzna (1987) 162 CLR 479, Burnie Port Authority v. General Jones Pty. Ltd. (1994) 179 CLR 520, Dymond v. Pearce [1972] 1 QB 496. Also, he submitted, there was no public nuisance in this case because the mud was not a substantial and unreasonable interference with the rights of the public; and it was not the responsibility of Volman, which was never the occupier and had left the site. Mr. Quickenden submitted that Fennell v. Robson Excavations Pty. Ltd [1977] 2 NSWLR 486 was distinguishable, because that was a case where the contractor had removed support for adjoining land, and it was not a case of personal injury.
Decision
In my opinion, for reasons given above, the findings of the primary judge established sufficient fault in Volman to make out a case of public nuisance, even if negligence is a necessary element of such a tort.
In the light of the finding of the primary judge that the footpaths were regularly covered with mud for a period of weeks, it was in my opinion plainly open to her to find that there was a substantial and unreasonable interference with the public’s right to pass along the footpath, and thus a public nuisance.
In my opinion, in accordance with Fennell and other authorities, Volman as the person creating the nuisance was liable for its foreseeable consequences, including personal injury to a person slipping on the mud.
LIABILITY OF MOBIL
SubmissionsMr. Watson SC for Mobil submitted that the primary judge was in error in finding that Mobil or knew or ought to have known of the hazard: Mobil had engaged Volman to perform the work, and another subcontractor (Handex) to supervise the work; and Mobil’s own employee visited the site only once, on a date that was not identified and in relation to which it was not proved there was mud on the footpath. This was insufficient to make Mobil liable: Torette House Pty. Ltd. v. Berkman (1940) 62 CLR 637. It was not a case where Mobil’s duty was non-delegable: Burnie Port Authority at 550-51.
Decision
I accept that Mobil is not liable on the basis that it caused the nuisance, or that by neglect of any duty it allowed the nuisance to arise. I accept that the activities for which Volman was engaged were not of the kind that would give rise to a non-delegable duty, as would be the case if a subcontractor were engaged to excavate in a way that threatened to withdraw support from adjoining land: Burnie Port Authority at 550.
However, an occupier who was not liable for the creation of a nuisance may become liable if it omits to remedy the nuisance within a reasonable time after it did or ought to have become aware of it: Torette House, per Dixon J at 657. It was not proved that Mobil did become aware of the nuisance. The question is, ought it to have become aware of the nuisance and remedied it prior to Mr. Lobb’s accident?
The primary judge found that it should have known of the hazard, and perhaps (impliedly) known of it at a time when reasonable steps to deal with it would have prevented the accident. This gives rise to the questions (1) whether the finding that Mobil should have known of the hazard was justified, and (2) whether Mobil should have known of the hazard at a time when appropriate steps to remedy it would have prevented the accident.
As regards the first question, this in turn raises the question whether an occupier of land is under any duty to take reasonable steps to ascertain whether or not its condition is the cause of a nuisance. There is direct support for an affirmative answer to that question in the dissenting judgment of Jacobs J in Cartwright v. McLaine & Long Pty. Ltd. (1979) 143 CLR 549 at 568-9; and less direct support for it in the judgment of one of the majority, Gibbs CJ, at 554. The other judges of the majority, Stephen J and Aiken J, did not touch on this question. The judgment of Dixon J in Torette House at 657-9 also assumes that an occupier has some duty to exercise reasonable diligence in ascertaining whether its property is a source of nuisance.
In my opinion, if the nature of a property, or of operations carried out on the property, is such as to involve an appreciable risk that the property may become a source of nuisance to adjoining properties, or a public nuisance, its occupier should take reasonable steps to ascertain whether or not this is happening, so as to be able to take steps to remedy any such nuisance. The nature and frequency of such steps will depend on the nature of the risk.
In my opinion, this duty of an occupier is not a non-delegable duty, and it cannot make an occupier liable in respect of matters discoverable only by the exercise of expertise which the occupier does not have. The contract between Volman and Mobil is in evidence and as will appear later, it placed some responsibility on Volman relevant to the risk of causing nuisance. However, Mobil gave no evidence to the effect that it relied on Volman, or indeed on Handex, to keep it informed as to whether or not the operations were causing a nuisance. The documents concerning Handex that are in evidence do not suggest that Handex was entrusted with that task. In those circumstances, I do not think that Mobil can say it took reasonable steps to ascertain whether the operations were causing a nuisance, merely by giving instructions to Volman and/or Handex to do this and report back to Mobil
In the present case, the nature of the operations being carried out, although not extra-hazardous activities so as to give rise to a non-delegable duty in relation to the actual carrying out of the activities, were such that Mobil had a duty to ascertain from time to time whether those activities were causing a nuisance to adjoining properties or a public nuisance. In the circumstances, where the primary judge found that footpaths adjoining the site were regularly covered with mud from the site in the weeks leading up to Mr. Lobb’s fall, it was open to her to find that Mobil ought to have known of the hazard, and open for her to find that Mobil ought to have known of this at a time when reasonable steps to deal with the hazard would have prevented the accident. If it is considered that the primary judge did not impliedly make the finding as to the time of Mobils’ knowledge, I would myself make such a finding.
For those reasons, in my opinion Mobil is liable for the public nuisance, and the consequential injury to the plaintiff, on the basis of the principle stated by Dixon J in Torette House at 657. It is not necessary then to decide whether it was liable in respect of negligence.
CONTRIBUTORY NEGLIGENCE
SubmissionsMr. Russell submitted that Mr. Lobb had no reasonable alternative but to walk where he did (so that he could use traffic lights to cross busy roads), and should not have had to encounter the hazard at all. At worst, he was guilty of momentary inadvertence, so that 50% was much too high an assessment of his contributory negligence.
Mr. Quickenden submitted that Mr. Lobb was fully aware of the mud on the footpath, and failed to look where he was going, and he was the author of his own misfortune; so that the assessment of 50% was too low.
Decision
In my opinion, although the finding of the primary judge as to contributory negligence was not appropriately expressed as satisfaction that Mr. Lobb did not take reasonable care for his own safety, the whole of the judgment indicates that the primary judge did make that positive finding; and in my opinion, that finding was plainly open.
In my opinion, the primary judge’s assessment of contributory negligence at 50% is not shown to be wrong.
CONTRIBUTION AND/OR INDEMNITY AS BETWEEN VOLMAN AND MOBIL
The contract between Volman and Mobil contained a number of provisions which could possibly be relevant to the question of the liability of Volman and Mobil, as between themselves.
Items B1.8, B1.15 and B2.1 of the Special Conditions of Tender contained inter alia the following:
B1.8 Public Relations
Mobil requires the Contract works to be carried out with least inconvenience possible to site operators and the adjacent community. The Contractor and all staff including subcontractors are required to comply with the aims outlined in the Mobil brochure “Valuing Our Environment”.
…B1.15 Disposal of Materials
The Contractor is responsible for removal and disposal of any demolition and excess material from the site to safe disposal of the material. In the event of spillage of transported or inappropriate disposal of material, the Contractor at his own cost shall undertake or pay for all clean up costs required and indemnify and release Mobil against all such legal costs.Roads from the site shall be maintained clean and free of material from Contractors vehicles accessing and leaving the site. The Contractor at his own cost shall arrange regularly, or when directed by the Mobil's Representative, for roads from the site to be swept and/or cleaned.
The Contractor is responsible for maintaining the site in a clean and safe condition.
…B2.1 Scope
…
The Contractor shall protect all property designated to remain on the site, as well as protecting adjoining property, roadways, footpaths, poles fences and gates from damage.The agreement between them, as well as incorporating the terms of tender, included the following provisions in cls.5.1, 11.1 and 19.1-19.5:
5. INDEMNITY
5.1 Contractor shall defend; indemnify and hold Mobil, its subsidiaries and affiliates, employees and agents harmless from all losses, expenses, liens, claims, demands and cause of action of every kind and character, (including consequential damages where there is evidence of Contractor's gross negligence or wilful misconduct), for death, personal injury, property damage and/or contamination of and/or adverse effects on the environment and/or for fines and/or penalties (except where reimbursement of fines or penalties is prohibited by applicable law) including costs, legal fees arising out of or in connection with the Contractor's Services or performance under this Agreement, to the extent caused by any negligent act, error or omission of Contractor or any subcontractor, agent, employee, invitee or licensee of the Contractor.11. HAZARDOUS MATERIALS AND SAFETY
11.1 Contractor shall perform its Services and the Work in a safe manner, shall comply with all of the conditions relating to the environment health and safety specified in the Special Conditions attached to this Agreement and shall require the observance of such conditions by all subcontractors and vendors.
…19. INSURANCE
19.1 Before the Contractor commences work, the Contractor shall take out an insurance policy covering all the things referred to in Clause 5 against loss or damage resulting from any cause whatsoever until the Contractor ceases to be responsible for their care.19:2 Without limiting the generality of the obligation to insure, the policy shall cover the Contractor's liabilities under Clause 5 and things in storage off site and in transit to any site(s) referred to in the Letter of Tender in relation to which Mobil requires the Contractor's Services.
19.4 The insurance cover shall be for an amount not less than $1 million per occurance (sic) in relation to each policy obtained in accordance with clause 19.1 of this Agreement.
19.5 The insurance policy shall be in the joint names of Mobil and the Contractor, and shall cover Mobil; the Contractor and all subcontractors employed from time to time in relation to the work under the Contract for their respective rights, interests and liabilities and, unless otherwise specified elsewhere in the contract, shall be effected with an insurer and in terms both approved in writing by Mobil which approvals shall not be unreasonably withheld. The policy shall be maintained until the Contractor ceased to be responsible under Clause 5 for the Services or the Work.
Submissions
Mr. Quickenden submitted that Mobil was responsible for the site as its occupier, that the works on the site were for Mobil’s benefit and under Mobil’s supervision, and that the accident occurred some time after Volman had left the site; and that accordingly the assessment of Mobil’s responsibility at 50% was too low.
Mr. Watson submitted that (as found by the primary judge) Volman was entitled to be indemnified under cl.5.1, and that the primary judge was in error in limiting the indemnity by reason of the phrase “to the extent caused by any negligent act” etc. He also submitted that the injury to Mr. Lobb was caused by breaches by Volman of other terms of the contract, in particular item B1.15 of the Special Conditions of Tender; and that damages for those breaches extended to damages awarded to Mr. Lobb against Mobil: see Florida Hotels Pty. Ltd. v. Mayo (1965) 113 CLR 588, Oxley County Council v. MacDonald (1999) NSWCA 126.
Decision
I will deal first with the question whether Volman was relevantly in breach of contractual terms, apart from cls.5.1 and 19.1-19.5.
I have included in my recital of terms of the contract items B1.8 and B2.1 of the Special Conditions of Tender, and cl.11.1 of the agreement. These provisions contain terms that might possibly be considered relevant, although they were not explicitly relied on in argument by Mobil. In my opinion, the circumstances of this case do not establish any relevant breach of these provisions.
As regards B1.8, the brochure referred to was not in evidence, and the question of inconvenience was not addressed in the evidence. As regards B2.1, the offending condition of the footpath is not fairly described as “damage”. As regards cl.11.1, the requirement that work be performed “in a safe manner” relates in my opinion to the manner and performance of the work, rather than the creation of a public nuisance.
Turning to item B.1.15, which was relied on, in my opinion it applies to removal of material from the site, to materials brought off the site by vehicles leaving the site, and to the condition of the site itself; but not to the washing of materials from the site.
Turning to cl.5.1, the correct approach to such a clause is to give it its ordinary and natural meaning, although there is some room for the contra proferentem principle in cases of ambiguity: Darlington Futures Ltd. v. Delco Australia Pty. Ltd. (1986) 161 CLR 500.
What the clause provides is that Mobil is to be indemnified against all liabilities to the extent caused by the contractor’s negligence. Conceivably, this could extend to (1) all liabilities of Mobil that arise from the contractor’s negligence, or (2) so much of such liabilities as are properly considered as caused by the contractor’s negligence, as distinct from Mobil’s negligence or other causes for which the contractor is not responsible.
If the first meaning was intended, it may seem odd that the clause did not use an expression such as “all liabilities arising from the Contractor’s negligence”; and the language actually used tends to point towards the second meaning, as the primary judge found. On the other hand, if interpreted as found by the primary judge, the clause would appear not to alter the effect of the contribution legislation, and thus would achieve nothing.
I think the considerations are finely balanced, so that there is room for operation of the contra proferentem principle; and in my opinion, the primary judge’s interpretation is the preferable one.
Turning to cls.19.1-19.5, a somewhat similar problem arises. The terms of cl.19.5, referring to a policy in the names of both Mobil and the contractor, suggests that the policy should cover any liability of Mobil. But what is referred to in cl.19.5 is “the insurance policy”, which must be the policy referred to in cl.19.1. That policy is a policy covering “all the things referred to in Clause 5”; and that does not go beyond insurance against whatever cl.5 provides.
Again, there is in my opinion room for application of the contra proferentem principle, so that the view of the primary judge, that cls.19.1-19.5 cannot make the contractor liable for any more than the contractor would have been liable for under cl.5, is correct.
For those reasons, in my opinion Mobil’s challenge to the finding of the primary judge on the contractual indemnity question fails.
As regards Volman’s challenge to the apportionment, there is in my opinion no substance to it. The assessment of equal responsibility is, if anything, favourable to Volman.
DAMAGES
Mr. Lobb concedes that the primary judge erred in selecting the multiplier for future economic loss, and that accordingly the total damages should be reduced by $10,225.50, thus reducing the verdict (after deduction of 50% for contributory negligence) by $5,112.75.
Submissions
Mr. Quickenden submitted that the primary judge had erred in not taking into account that Mr. Lobb was unemployed for three years between 1987-1990, and did not take into account the circumstance that Mr. Lobb said he had been working and paid cash since the accident. He submitted that it was insufficient to base the findings as to economic loss on just the two years prior to the accident. The primary judge found that Mr. Lobb could do most of his pre-injury duties and made no finding as to when he had become fit to do those duties. She made no attempt to determine when and to what extent his injuries in 1998 and 2000 contributed to his pre-trial loss of earning capacity.
He submitted that no basis was given by the primary judge to allow the sum of $55,000.00 for past economic loss. He submitted that, for future economic loss, it was not appropriate to use a net weekly figure: at best there should be a modest buffer. He submitted that the general damages award of $65,000.00 was grossly high, taking into account the effects of the accidents of 1998 and 2000.
Decision
The primary judge’s reasons did not give the calculation of the figure of $55,000.00 for past economic loss; but the Court has been provided with a calculation that had been put to her Honour, and it is clear from that document and from her Honour’s reasons how her Honour arrived at that figure. It is clear that in substance the primary judge allowed a net loss of earning capacity of $150.00 per week from 1 July 2002 to trial, and for the future. In my opinion, it is not shown that that was an inappropriate assessment, and in my opinion the challenge to the primary judge’s finding on economic loss fails.
In my opinion also, the award of $65,000.00 for general damages was well within the primary judge’s discretionary range.
CONCLUSION
In the result, Volman’s appeal succeeds to the extent of achieving a reduction of Mr. Lobb’s damages by $5,112.75; and although Mobil did not by its appeal seek a similar reduction in damages, in my opinion the verdict against Mobil should, for consistency, be similarly reduced. Because Mr. Lobb conceded that this reduction was appropriate, the success of Volman’s appeal to that extent will not have any costs consequences. Otherwise, the appeals of both Volman and Mobil fail.
The cross-appeal of Mr. Lobb succeeds to the extent of overturning the primary judge’s rejection of his negligence claim against Volman, but otherwise fails. The degree of success in that appeal has no consequence on the resulting orders, and so will have no costs consequences. However, apart from the challenge to the assessment of contributory negligence, which occupied little time, both cross-appeals were defensive.
Although there was no appeal specifically directed to the form of the primary judge’s order on the cross-claim, in my opinion it was not an appropriate form of order that there be a verdict for each defendant on its cross-claim to the extent of 50% of Mr. Lobb’s claim. Rather there should have been a declaration that, as between the defendants, each was liable for 50% of Mr. Lobb’s judgment; with liberty to apply for a judgment should that become necessary after satisfaction of Mr. Lobb’s judgment.
I propose the following orders:
1.Appeal CA40651/04 allowed in part, and the cross-appeal allowed in part.
2.Judgment below for $122,268.77 against Volman and Mobil set aside, and in lieu thereof judgment for $117,156.02 against Volman and Mobil.
3.Judgment on the cross-claims below set aside, and in lieu thereof declaration that as between Volman and Mobil each is liable for 50% of Mr. Lobb’s judgment and costs, with each having liberty to apply for a judgment after satisfaction of Mr. Lobb’s judgment.
4.Appeal C40904/04 dismissed, and the cross-appeal dismissed.
5.Volman to pay 95% of Mr. Lobb’s costs of appeal CA40561/04 and the cross-appeal.
6.Mobil to pay 95% of Mr. Lobb’s costs of appeal CA40904/04 and the cross-appeal.
TOBIAS JA: I agree with Hodgson JA.
**********
LAST UPDATED: 31/10/2005
6
16
0