The NSW Court of Appeal has reaffirmed the principles in
Leighton v Fox in relation to the standard of care
required of principals with respect to injuries suffered by
employees of their contractors.
The plaintiff sustained strain injuries during the course of her
employment as a process server with ESP, a labour hire company. ESP
had been engaged by Swire to repackage ice-cream products for
Streets. ESP designed their re-packaging system, which was
undertaken at Swire's premises. Whilst Streets did not have
any contractual relationship with ESP, instructions on the quantity
and type of product to be repackaged were given directly by Streets
The plaintiff commenced proceedings against Swire and Streets
alleging that her injury was caused by their failure to take due
care in overseeing and directing her work for ESP. She did not
commence proceedings against ESP as her medical condition failed to
overcome the statutory threshold.
The trial judge held that the plaintiff's injuries were
caused by the negligence of Swire and Streets and awarded her
damages, after deducting one-third of the award to represent the
negligence of her employer, ESP.
Swire and Streets appealed against the trial judge's
decision which was delivered prior to the decision of Leighton
v Fox. Beazley JA who delivered the leading judgment on appeal
found that the trial judge effectively required both Swire and
Streets to do everything in their respective power to ensure that
ESP employees were provided with a safe system of work, which was
contrary to the principles stated in Leighton v Fox.
Specifically, Beazley JA rejected the trial judge's
finding that the ambit of the duties of care owed by Streets and
Swire required them to obviate the dangers posed to ESP's
employees. Rather, the applicable standard of care was one of
reasonable care. Her Honour also rejected the trial judge's
decision that the principles that governed the question of duty
were the same both in Streets and Swire's cases and stated
the law of negligence distinguished the duty of care that is owed
in particular relationships.
In this regard, Her Honour added the relationship between Swire
and ESP, which is of a principal to its contractor, did not import
a duty to retain control of working systems if it was reasonable to
engage the services of independent contractors who were competent
to control their system of work without supervision by the
principal. Her Honour also recognised that Streets did not have any
contractual relationship with ESP and that there was no duty on
Streets to control the system of work implemented by ESP following
the principles enunciated in Leighton v Fox.
It is notable that Beazley JA carefully considered the factual
circumstances around the plaintiff's injuries and
specifically analysed the degree of control exercised by Streets,
Swire and ESP over the plaintiff respectively. In this regard,
Allsop P added that the common law does not operate in a fashion
that ignores substance in preference for legal form.
An important consideration for the Court of Appeal in
overturning the trial judge's decision was therefore that
ESP was responsible for and carried out direct supervision of the
That is to say, whilst a principal's duty of care is not
coextensive with that of the employer, the degree of control it
exercised over the injured subject will still be relevant in
determining its liability.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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