Australia: Principal contractor owed no duty of care to subcontractor's employee: Vella's Plant Hire Pty Ltd v Mistranch Pty Ltd & Ors [2012] QSC 77

Brief facts

Mr McKenzie was injured in a machinery rollover incident on 23 April 2007 during the course of his employment for Vella's Plant Hire Pty Ltd ("Vella's"). McKenzie sued Vella's and achieved a favourable settlement. Vella's maintained that the entities who engaged it to perform the work during which McKenzie was injured ("the principal contractors") should bear some responsibility for payment of McKenzie's damages. Justice McMeekin of the Supreme Court of Queensland was asked to determine the contribution proceedings between Vella's and the principal contractors.

Some relevant facts which were not disputed in the contribution proceedings included:

• Vella's were a well-established excavation company who employed competent operators.
• Vella's were retained by the principal contractors to complete uncomplicated and routine works.
• Representatives from Vella's had attended the principal contractors' site and had appreciated the risks prior to McKenzie's incident.
• Representatives of the principal contractors had no particular experience with excavation works.
• Representatives of the principal contractors had placed pink tape in certain locations at the site to identify underground services and land boundaries.

McKenzie encountered difficulties and ultimately suffered the rollover incident in a location at the site where the principal contractors had placed pink tape. McKenzie asserted that he had been told by the principal contractors that the pink tape marked the boundary of the desired excavation area, and thus the pink tape lead McKenzie into the location where the incident occurred. The principal contractors contended that the pink tape was erected in order to identify underground services in that location.

Vella's contended that the principal contractors owed a duty of care to McKenzie (Vella's employee). Vella's contended that the placing of pink tape by the principal contractors in the location where McKenzie's incident occurred was tantamount to an indication that the area was safe when in fact it was not. Vella's contended that the principal contractors were possessed of knowledge of the risk and the means to alleviate the risk, but they failed to do so.

The legal issue for Justice McMeekin's determination was whether the principal contractors owed a duty of care to their subcontractor's employee.

Brief findings

McMeekin J ultimately ruled that the principal contractors did not owe a duty of care to McKenzie, their subcontractor's employee, in the circumstances of this case. A brief analysis of McMeekin's J reasoning follows.

The High Court decision of Stevens v Brodribb Sawmilling Co Pty Ltd¹ and the contemporary decision of Leighton Contractors Pty Ltd v Fox² of the same court, obviously weighed heavily on any determination that McMeekin J would make in this case, and ultimately the principles set down in those cases were applied by His Honour.

First, McMeekin J recognised that a common law duty of care did not arise between the principal contractors and Mr McKenzie in this case simply by virtue of the contractual relationship between the principal contractors and Vella's (although a duty would not be precluded from arising in all cases). These principles were fundamental to the decisions in Stevens and Leighton.

Second, McMeekin J restated the High Court's reason for refusing to recognise a duty of care as between the principal contractor and subcontractor's employee in Leighton: a principal contractor on a busy construction site should not be liable to ensure that employees of subcontractors coming onto its site have induction training in a function that formed part of the essential works of subcontractors. The rationale for this principle stems from the principal's obvious lack of specialised knowledge pertinent to the trades conducted on site. McMeekin J accepted that ordinarily, specialised knowledge of a subcontractor's works solely rested with the subcontractor and the corollary of such a finding was that the subcontractor would have to demonstrate "some special circumstance justifying the imposition of a duty on the principal".³

Third, any alleged duty which a subcontractor alleged the law imposed on principal contractors in respect of their obligations to the subcontractor's employees framed on notions akin to the duty the law imposes on employers posed a "formidable obstacle" to any contribution claim, since the law unequivocally maintains a distinction between an employer's duties and a principal contractors' duties.

Finally, with reference to related High Court and appellate authorities which more generally dealt with the issue of imposing a duty of care in scenarios similar to that at hand, McMeekin J saw it as the correct approach to examine the evidence for any support that the totality of the circumstances, the control exercised or capable of being exercised by the principal contractors, any reliance placed upon the principal contractors, or the vulnerability of the employee warranted the imposition of a duty in this case.⁴

All considered, the abovementioned principles when applied to the following evidence accepted in this case, dictated that the subcontractor's contribution claim was doomed to failure:

• McKenzie gave no evidence indicating that he had relied on the principal contractors to identify the safety of the location where the incident occurred.
• McKenzie was in a superior position to that of the principal contractors to assess the risks involved in his designated task – he knew the machine's operational limits and the layout of the incident location.
• The principal contractors had no control or power in the sense of directing how Vella's work (and the work of its employees) was to be performed.
• All parties knew that the relevant location posed a risk and would require vigilance from machine operators in the area.

Conclusion and Application

The principles set down in Stevens relevant to a principal contractor's obligations at common law to subcontractors and their employers, and the modern-day refinement and application of these principles in Leighton are now firmly entrenched in Queensland law and are being applied by Queensland courts.

The contribution claim failed in this case because the subcontractor assessed the principal contractor's obligations to McKenzie as if the principal contractor employed McKenzie, when in fact the courts will strive to maintain the delineation between the employer's "stringent duty" which applies in all cases, and the principal contractor's duty, which exists in limited factual situations.

Those involved in such claims should heed McMeekin's J latest adaption of the Stevens and Leighton principles:

...the principal [contractor] was not subject to an ongoing general law obligation with respect to the safety of the work methods employed by the contractor provided the principal engaged a competent contractor and there is nothing unreasonable about contracting out the work...[if] it is an activity that requires specialised equipment and which lends itself to being carried out by independent contractors.⁵

Footnotes

¹ (1986) 160 CLR 16

² (2009) 240 CLR 1

³ Vella's Plant Hire Pty Ltd v Mistranch Pty Ltd & Ors [2012] QSC 77 at [32].

⁴ Amaca Pty Ltd v NSW [2004] NSWCA 124; Sydney Water Corporation v Abramovic [2007] NSWCA 248; Crimmins v Stevedoring Industry Financial Committee (1999) 200 CLR 1.

⁵ Vella's Plant Hire Pty Ltd v Mistranch Pty Ltd & Ors [2012] QSC 77 at [58].

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This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.