VWA v A B Oxford Cold Storage Company Pty Ltd
[2012] VCC 2021
•20 December 2012
| IN THE COUNTY COURT OF VICTORIA AT Melbourne CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION
GENERAL DIVISION
Case No. CI-10-04876
| VICTORIAN WORKCOVER AUTHORITY | Plaintiff |
| v | |
| A B OXFORD COLD STORAGE COMPANY PTY LTD (ACN 005 104 361) | Defendant |
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JUDGE: | HIS HONOUR JUDGE BROOKES | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21, 24 and 25 September 2012 | |
DATE OF JUDGMENT: | 20 December 2012 | |
CASE MAY BE CITED AS: | VWA v A B Oxford Cold Storage Company Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 2021 | |
REASONS FOR JUDGMENT
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SUBJECT – ACCIDENT COMPENSATION
CATCHWORDS – Industrial accident – indemnity – contribution between parties – negligence – employer’s and occupier’s liability
LEGISLATION CITED – Accident Compensation Act 1985 s138; Wrongs Act 1958 (Vic) (as amended)
CASES CITED – VWA v Jones Lang Lasalle (Vic) Pty Ltd [2012] VSC 412
JUDGMENT – Indemnity granted – defendant’s negligence a cause of accident.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Stanley QC with Ms L Glass | Thomsons Lawyers |
| For the Defendant | Mr A Middleton | Norris Coates |
HIS HONOUR:
Introduction
1 On 13 April 2005, Mr Rahman Memishi (“the worker”) suffered personal injuries, being a Post-Traumatic Stress Disorder and/or Major Depressive Disorder, in the course of his employment with A B Oxford Managers Pty Ltd (“the employer”) at premises situate at 1 Hume Road, Laverton North in the State of Victoria (“the premises”). At the relevant time, the worker was driving a forklift loaded with two pallets of butter along a driveway when Steven Joseph Peluso (“the deceased”) walked in front of the forklift, causing the worker to engage the brakes suddenly, which resulted in the pallets falling off the forklift onto the deceased and fatally crushing him (“the accident”).
2 The worker subsequently made a claim for WorkCover statutory compensation benefits arising from his injuries, which were received by the employer on or about 2 August 2005. The claim was accepted, and to date amounts have been paid in respect of that claim totalling $301,903.31.[1] Further, the dependents of the deceased made a claim for WorkCover statutory benefits arising from the death of the deceased. The claim was accepted, and the compensation paid in respect thereto was $9,971.72.
[1]Exhibit AB
3 In this proceeding, the plaintiff, the Victorian WorkCover Authority (“VWA”), seeks an indemnity pursuant to s138 of the Accident Compensation Act 1985 (“the Act”), in respect of the payments of compensation made in relation to the worker’s injuries and in respect of the payments made to the deceased’s dependents. The indemnity is sought from the defendant, A B Oxford Cold Storage Company Pty Ltd. The VWA contends that the defendant was responsible for the occupational health and safety of the premises as a workplace, including safe traffic management plans, the occupational health and safety of persons working at the premises, the day-to-day supervision, direction and/or control of the worker, the deceased and their co-workers at the premises.
4 It was further alleged that the defendant’s negligence was a cause of the accident and the worker’s injuries. It was further alleged that the defendant was an occupier of the premises within the meaning of Part 2A of the Wrongs Act 1958 (Vic) (as amended) and at all material times, and in particular, pursuant to s14B of Part 2A of the Wrongs Act, owed a duty of care to the worker and/or the deceased to take care as in all the circumstances of the case was reasonable to see that the worker and/or the deceased would not be injured or damaged by reason of the state of the premises or of things done or omitted to be done in relation to the state of the premises. It was then pleaded that in the circumstances of this case, the defendant failed to discharge its duty of care owed to the worker and/or the deceased pursuant to the said section.
5 Although not specifically argued, it would appear that Part 2A of the Wrongs Act does not create a statutory duty, the breach of which sounds in damages at the suit of an injured person. Part 2A redefines the common law duty owed by an occupier of premises, setting out matters to be taken into account in determining the scope of the duty and whether the duty has or has not been discharged in a particular case.[2]
[2]VWA v Jones Lang Lasalle (Vic) Pty Ltd [2012] VSC 412 at paragraph [5] per Beach J
6 The issues may be briefly stated as follows.
7 The relevant provisions of s138 of the Act applicable to this claim are sub‑sections (1) to (3). Those sub-sections provide:
“(1)Where an injury or a death for which compensation has been paid, or is or may be payable, by the Authority, a self-insurer or an employer was caused under circumstances creating a liability in a third party to pay damages or that would have created such a liability if the injury or death had been caused in Victoria or that would, but for section 134A, create such a liability in respect of the injury or death, the Authority, self-insurer or employer is entitled to be indemnified by the third party in accordance with this section.
(2)In determining for the purposes of subsection (1) whether an injury or death was caused under circumstances creating a liability in a third party to pay damages or that would have created such a liability if the injury or death had been caused in Victoria in respect of the injury or death, Divisions 8A and 9 of Part IV must not be taken into account.
(3)The amount which a third party is required to pay as indemnity under subsection (1) is the lesser of—
(a) the amount of compensation paid or payable under this Act in respect of the injury or death; and
(b) the amount calculated, were it not for the provisions of this Act, the Transport Accident Act 1986 and Parts VB, VBA and X of the Wrongs Act 1958, in accordance with the formula—
where—
Xis the extent, expressed as a percentage, whereby the third party's act, default or negligence caused or contributed to the injury or death;
Ais the amount of damages (disregarding the extent, if any, whereby any other person's act, default or negligence caused or contributed to the injury or death) for pecuniary loss and non pecuniary loss which the third party is or would have been liable to pay in respect of the injury or death;
Bis the amount recovered or recoverable by the Authority, the self-insurer or the employer under section 137 from the Transport Accident Commission (otherwise than under a settlement);
Cis the amount paid by the third party in respect of the injury or death to the worker or the dependants of the worker under any settlement of, or judgment in, an action by the worker or dependants of the worker against the third party.”
8 The VWA contends that the defendant was negligent and that this negligence was a cause of the worker’s injuries. It concedes that there is still an issue remaining in the proper quantification of Factor X and Factor A. On the other hand, the defendant denies that it was negligent and denies that any negligence that might be found was causative of the worker’s injuries. It asserts that it was the employer’s negligence which caused the worker’s injuries, or alternatively, Factor X should be assessed in such a way that the defendant’s contribution is far less than that of the employer.
9 I will deal, first, the question of whether there was negligence on the part of the defendant which was causative of the worker’s injuries. In doing so, it is first necessary to examine the position and any relevant obligations owed by the defendant.
The Defendant
10 Essentially, at the time of the accident, the premises was the site of a cold storage business carried on under the umbrella of a number of companies, which had common directorships and shareholding, and basically carried on as a family business by Mr Gabor Fleiszig and his brothers. It was stated that the premises was owned by a company called 36 Olive Branch Pty Ltd and that the defendant and employer were companies which performed specific services in connection with the business, based on accountant’s advice.
11 Before examining the evidence in regard to the respective roles of any of the companies and/or individuals, it should be recorded that the parties were ultimately in agreement that Factor X should ultimately be decided based on the relative contributions, if any, of the two companies, being the defendant and the employer. Allegations by the defendant of contributory negligence by the worker were withdrawn and the role of any other company such as 36 Olive Branch Pty Ltd was specifically disavowed by the defendant.
12 It should also be recorded that the cause of the accident was not in dispute. The worker’s vision of the deceased prior to the happening of the accident was markedly restricted by the stacking of two pallets on the tines of his forklift and by having pallets stacked too high close to intersecting passageways within the premises, such that there was clearly an unsafe traffic management plan and a breach of occupational health and safety requirements by an entity, or entities, with respect to causing the accident. Further, it was not really contested that if the defendant was “an occupier” within the meaning of Part 2A of the Wrongs Act, then the worker had been injured by reason of the state of the premises or of things done or omitted to be done in relation to the state of the premises, such that there had been a prima facie breach of a duty of care owed by an occupier.
13 What was in dispute was whether the defendant, given the various company structures within the family business, had breached its duty to the worker, and if so, by what relative proportion compared to the negligence of the employer.
14 It is common ground that at the time of the accident, the defendant was “the owner” of the registered business name “Oxford Cold Storage”.[3] The defendant, as part of its business, contracted with entities such as Bonland Dairies Pty Ltd (“Bonland”) to provide chilled and frozen warehouse services at the premises.[4] As part of that agreement, the defendant contracted to allow Bonland’s staff, advisers and customers full and unimpeded rights of access to the premises and ancillary premises at all times for the purpose of inspection of the defendant’s premises and inspection and counting of stock and to ensure compliance with the agreement. Such access was subject to the prior approval of the defendant to be given within 24 hours of notice by Bonland requesting such access.[5]
[3]Exhibit V, T115, L14
[4]Exhibit T, Agreement dated 15 December 2004
[5](ibid) Clause 7.1
15 The relevant services the subject of the contract are contained in Schedule 1 and include a requirement by the defendant that it provide a safe workplace and otherwise comply with all laws and health and safety obligations with respect to warehousing at the premises.[6]
[6](ibid) Schedule 1
16 Further, in answer to Interrogatory No 1(a), the defendant swore that it operated at and/or from the premises.[7] Then in answer to Interrogatory No 17, the defendant, when asked to describe what precautions were taken by the defendant prior to and on the day to avoid or minimise the risk of injury being suffered by persons arising from the operation of forklifts in close proximity to pedestrians at the premises, it answered:
“Walkways for pedestrians were marked throughout the premises with yellow paint. Forklift drivers were also expected to sound the horn on the forklift prior to crossing a pedestrian zone.”[8]
[7]Exhibit AH
[8]Exhibit AJ
17 By Interrogatory No 8, it was asked whether it was a requirement and/or expectation of the defendant whether certain entities were to provide a traffic management plan for the operation of forklifts at the premises. In answer thereto, it swore that the employer and itself operated the business together. The two companies shared common directors and interests. As a result, they collaborated with respect to the operation of all aspects of the business. This included occupational health and safety issues relating (to) the provision of a traffic management plan for the operation of forklifts. Accordingly, while (the defendant) employed supervisory and administrative staff, the Occupational Health and Safety Officer was employed by (the employer).[9]
[9]Exhibit AO
18 Then, by Interrogatory No 20, the defendant is asked whether it took any action after the accident to avoid any recurrence of any injury arising from the operation of forklifts in close proximity to pedestrians at the premises. It replied that immediately after the accident, induction procedures were extended to incorporate all existing workers and contractors who visit the premises. The practice of moving two pallets of crates at a time was also prohibited and the first three pallets surrounding the walkways and the loading area are only stacked individually.[10]
[10]Exhibit AK
19 By Interrogatory No 21, the defendant was asked whether it had received any complaints about the risk or possible risk of injury arising from the operation of forklifts in close proximity to pedestrians at the premises. In answer thereto, it swore that the issue of double stacking pallets was raised at an occupational health and safety meeting on 16 March 2005. A decision was made that there were too many pallets in the loading area and that the issue would be raised at the subsequent management meeting[11] (approximately one month prior to the accident).
[11]Exhibit AL
20 There was further evidence that Mr Fleiszig met with WorkSafe investigators in his capacity as managing director of the defendant following the accident. On 19 April 2005, it was recorded in a WorkSafe field report[12] that Mr Fleiszig, in his capacity as managing director of the defendant, advised that remedial action had been undertaken across the site with respect to the storage of pallets and to seeking advice from an external service provider.
[12]Exhibit AN
21 Further, the plaintiff tendered in evidence a letter from the defendant to I D Transport Pty Ltd, being the employer of the deceased, enclosing “site rules for truck drivers” and dated 26 September 2003.[13] Further, the defendant issued a document entitled “Meat Safety Quality Assurance Manual - Volume 1” dated September 1998[14] and a document entitled “Loader/Counter Balance Driver Responsibilities” dated 4 August 2004,[15] all of which were relevant to prove that the defendant in fact carried on the business from the premises, and for all intents and purposes, was an occupier of the premises by exercising control there over.
[13]Exhibit M
[14]Exhibit N
[15]Exhibit O
22 On or about 5 December 2008, the defendant pleaded guilty to a charge that as an employer it failed to provide and maintain, so far as was practicable for employees, a safe working environment, and was fined $175,000. The incident summary provided by the prosecutor was that the defendant operated a cold storage facility in Laverton North whereby it provided cold storage of clients’ food products at controlled temperatures. There were approximately 288 employees at the site including transport drivers and office staff employed by other companies. The working environment was unsafe because the defendant:
(a)failed to ensure that pallets of foodstuffs were not stacked more than one high on the corner of the intersection of the pedestrian walkway and the forklift aisle leading to a loading bay, as this prevented either the forklift driver or the pedestrian from seeing each other; and
(b)failed to provide a bollard system comprising three bollards, signage and a protective guardrail as traffic management controls for pedestrians and forklifts at the intersection of a pedestrian walkway and the forklift aisle leading to a loading bay.
The forklift driver was employed by a company related to A B Oxford and, accordingly, was a deemed employee of A B Oxford. On 13 April 2005, a thirty-nine-year-old male pedestrian was struck and killed by a forklift while it was loading a truck. The incident occurred due to unsafe plant and systems of work which required the forklift driver to drive the forklift across the main pedestrian walk way to load the truck. The walkway was the main access to the dock office, staff amenities (lunch room and toilets) and to exits from the warehouse.
23 There can be no doubt in my mind that the defendant was an occupier of the premises and owed the relevant duty to the worker in all the circumstances. Counsel for the plaintiff submitted:
“Quite apart from the contract, where you have them coming on and they are doing work for you or to assist you, there will clearly be a duty of care owed and it would be a duty of care very, very close to that owed by an employer with the exception that it would be a non-delegable one. That would be our submission.”[16]
[16]T184, L20-25
24 Counsel also highlighted the defendant’s answer to Interrogatory No 8 to the effect the two relevant companies operated the business together and shared common directors and interests. Accordingly, they collaborated with respect to operation of “all aspects of the business”.[17]
[17]T183, L8-11
25 I accept both these submissions.
26 I will not canvass the rest of the evidence tendered by the plaintiff in this regard as I accept that the defendant was in breach of its duty as occupier of the premises, either at common law, or at common law as modified by Part 2A of the Wrongs Act (Vic).
27 This leaves the question as to whether the employer was also in breach of its duty to the worker. It was not in dispute that this company was the employer of the worker, and I accept the evidence tendered which shows that the persons responsible for the occupational health and safety with respect to his interests, were also employed by the employer. Given that the system of work was clearly unsafe and the worker was injured on account of a breach of same, there would appear to be no need to further explore the issues of duty and breach in this regard.
28 In determining Factor X according to the formula, I am mindful that the parties have agreed that 36 Olive Branch Pty Ltd and the worker are to play no part in my deliberations. For all intents and purposes, I accept that the two relevant companies collaborated with respect to the operation of all aspects of the business as sworn to in Interrogatory No 8. It is clear on the evidence, particularly as disclosed by Mr Fleiszig’s Answer to Interrogatory No 21, that the issue of double stacking pallets was raised at an occupational health and safety meeting on 16 March 2005, some four weeks before the accident. It is stated that:
“A decision was made that there were too many pallets in the loading area and that the issue would be raised at the subsequent management meeting.”
29 There appears to be a paucity of evidence as to who attended the meeting, but it seems clear enough that nothing was done prior to the happening of the accident and that both companies had knowledge of this state of affairs. It was submitted by counsel for the defendant that insofar as Mr Fleiszig had knowledge of this meeting, he did so wearing his two hats, and it would be incumbent upon him to direct the relevant officers of the employer to attend to their occupational health and safety issues, which clearly had not been done. Whilst I accept this submission on its face value, it would have also been incumbent upon him to direct relevant officers of the defendant to ensure that the duty as occupier was adhered to.
Contribution
30 On the one hand, the evidence would disclose that the employer, while collaborating in the operation of the business, had the power to make the requisite changes that would have addressed the foreseeable risk of injury. It owed a non-delegable duty to the worker as his employer and had the power to alter the state of the premises without seeking any particular permission or authority. Whether or not it was a joint occupier is not so material, as the matters that it needed to address were the same, no matter how the duty was to be strictly categorised. As I have already stated, I accept Counsel for the plaintiff’s submission that the duty is similar, except that the employer has a non-delegable duty.
31 Because the employer has that non-delegable duty and because it was charged specifically with the duties of occupational health and safety in the running of the business, which evidence of Mr Fleiszig I accept, nonetheless, the defendant was the contracting party with the clients of the business, pleaded guilty to the relevant breaches of the Occupational Health and Safety Act with respect to the accident and had the joint knowledge of the occupational health and safety meeting on 16 March 2005.
32 In all the circumstances, I consider that Factor X should be 50 per cent.
Factor A
33 The medical evidence tendered in the proceeding would leave no doubt that the worker suffered a Post-Traumatic Stress Disorder and/or Major Depression as a result of the accident. He had returned to work shortly thereafter, although there is some doubt as to whether he was ready to do so. In any event, he was shown a video of the accident which caused his condition to relapse and rendered him totally incapacitated thereafter. I do not accept that this event was a novus actus interveniens, because it is clear on the evidence that, but for the accident itself, the showing of the video would not have had the effect that transpired. In this sense, the accident was a continuing cause of the mental disorder.
Past Economic Loss
34 Dr Paul Kornan, psychiatrist, was called to give evidence in the proceeding. His reports of 31 August 2005, 2 June 2006, 3 October 2006, 8 June 2007, 5 August 2009 and 15 October 2010 were tendered in evidence.[18] On the last occasion that he examined the worker, he considered that, on a psychological basis, he was now fit for work and the matter that was preventing such a return was his own lack of motivation. At this point, however, the worker was receiving $680 a week by way of accident compensation benefits.
[18]Exhibit 3
35 However, since this time, the worker has been without weekly payments for in excess of twelve months and has not been able to return to work, on his own account. His wife gave evidence to the effect that it would be good for him to return to work but “[she did not] think he is able to go back.”[19] She elaborated this evidence by stating that the family were struggling to make ends meet on one wage and it meant her having to work extra hours.
[19]T82, L10
36 The most recent report from the worker’s treating psychiatrist, Dr Ingram, is dated 9 September 2011. At that stage, he related:
“In early 2011 he was continuing to find it a struggle and was finding it difficult to get motivated. He still felt anxious about the whole process and felt he had been victimised subsequently after the original trauma and upset that his problems had not been classified as a serious injury. He said he would like to work but he felt this would only possible when he got his confidence back. At this time he seemed more depressed than he had been and I increased his dose of Avanza. When last reviewed in May of this year, he felt a little better than he had earlier, but he continued to have nightmares and flash backs and a lack of confidence, which he felt would have prevented him from returning to work.”[20]
[20]Exhibit E at pages 135 and 136
37 At this stage, the diagnosis was still one of a chronic Post-Traumatic Stress Disorder with significant Depression.[21] Further, Dr Ingram stated:
“Mr Memishi is completely incapacitated from returning to pre-injury duties though I would hope that he would be able to find some kind of employment in the future though he will probably not regain his confidence for some years after his case is finalised. I feel it important that he continues to have psychological treatment, that support is helping him continue functioning. He needs ongoing psychiatric contact to supervise his medication.”[22]
[21](ibid) at page 136
[22](ibid) at page 137
38 There is no more recent report from the treating psychiatrist, Dr Ingram. I am told by the parties that weekly payments of compensation ceased approximately twelve months ago. I note in the print-out of recoveries claims and costs reports[23] that the last consultation with Dr Ingram as at 15 September 2012, was in fact 5 May 2011. Prior to that, he had seen the worker on 25 January 2010 and before that, approximately once every five or six months. Similarly, the last consultation with the psychologist, Dr C F Mogan, was on 24 August 2011, according to the same print-out. The worker has also undergone psychological occupational rehabilitation therapy from 13 October 2005 on a consistent basis until April 2010 and thereafter, on a limited basis until September 2011. Total payments with respect to these services is $19,085. Further, the worker gave evidence that he had ceased taking his medication some time ago and it would appear that there is no ongoing treatment in respect of his condition.
[23]Exhibit AB
39 Counsel for the plaintiff has urged that the total effect of the evidence from the treating psychiatrist and treating psychologist is that the worker will remain unemployable for the foreseeable future. Counsel for the defendant, on the other hand, contends that the overall effect of the evidence in the witness box is that the worker is quite confident in his activities of daily living and this is supported by most of the medical practitioners. Counsel points to the evidence that the worker performs odd jobs around the house, such as his garden; he shops; he cooks; he paints; takes his children to soccer and, in fact, coaches soccer.
40 Photographs of the worker engaging in social situations, as per his wife’s Facebook page, are said to show him enjoying a normal social life. The photographs range in date from 5 November 2009 through to 3 September 2012.[24]
[24]Exhibit 2
41 Counsel for the defendant also relies on psychiatrist, Dr Entwisle, who, in February 2006, considered that the worker had a capacity for suitable employment[25] and by 2009, he opined that the injury no longer affected his work capacity.[26]
[25]Exhibit 4 at page 107
[26](ibid)
42 That being said, I accept the submission of Counsel for the plaintiff that there is no suggestion the worker is malingering, but I do accept that if a finding of negligence had been made in a civil proceeding against the defendant in his favour, then this would have assisted in his psychological recovery.
43 Accordingly, I accept Counsel for the plaintiff’s submission that the plaintiff has been totally incapacitated to date and should be awarded a notional sum of $344,000 for past loss of earnings, together with a further sum of $39,000 for past loss of superannuation.
Future Economic Loss
44 The worker has not received medical treatment of an intensive nature for some time, as referred to above. In the notional world, prescribed by the formula, I consider it reasonable that he should be allowed a period of approximately twelve months into the future to reconcile himself with a return to the workforce. I would allow a sum of $50,000 for such loss, together with a further sum of $5,000 for loss of future superannuation.
Past Medical and Like Expenses
45 The figures set out in the print-out in Exhibit AB in this respect have not been seriously challenged by the defendant. I would the figure of $6,071 on account of past doctors’ expenses, together with the figure of $13,375 for past psychological services, and a further figure of $19,649 for past occupational rehabilitation psychological services. On balance, I do not believe the plaintiff has proved a need for ongoing medical and like expenses beyond the date of hearing.
46 On my calculation, the total loss of pecuniary damages is $477,095.
Pain and Suffering Damages
47 Counsel had put respective figures under this head at $100,000 and $200,000. I accept that a reasonable sum does, in fact, lie within this range. Further, I consider that Counsel for the plaintiff is probably closer to the appropriate mark and, doing the best I can, I assess pain and suffering damages at $175,000.
Conclusions
48 Accordingly, if my calculations are correct, Factor A is the total of the figure of $477,095 and $175,000 as referred to above, being a total of $652,095.
49 Accordingly, once a reduction is made pursuant to the formula for Factor X, the extent of the indemnity to which the plaintiff is entitled is a figure of THREE HUNDRED AND TWENTY SIX THOUSAND AND FORTY SEVEN DOLLARS ($326,047).
50 With respect to the claim relating to the deceased, it follows that Factor A is $9,971.72, Factor X is 50 per cent and the indemnity is $4,985.86.
51 I will hear the parties as to consequential orders, declarations and costs.
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