Samways v WorkCover Queensland & Ors [2010] QSC 127

The Queensland Supreme Court has affirmed that an appropriately worded contractual indemnity is adequate to effectively transfer liability in negligence from a tortfeasor to the party granting the indemnity.

Background

Scott Samways injured his shoulder when he walked into the raised bucket of a bobcat at a construction site. The bobcat was not being operated at the time, and the bobcat and bucket were stationary. The bucket had been left in a raised position because a hydraulic hose that governed the tilting of the bucket had failed. However, at the time that the incident occurred, the hydraulic hose had been repaired and the bucket could have been lowered.

Samways argued that the bucket of the bobcat being left in a raised position at the site gave rise to a foreseeable risk of injury. Samways alleged that the injury was due to the negligence and / or breach of statutory duty of:

  • His employer, Tessman Concreting Pty Limited
  • The principal contractor for the site, De Luca Properties Pty Limited
  • The owner of the forklift, Lynsha Pty Limited, who had hired the forklift with an employee operator to De Luca.

Samways alleged that Lynsha's operator created the risk (by leaving the bucket in a raised position at the site) and that De Luca and Tessman took inadequate steps to remove or reduce the risk.

The defendants all claimed that Samways caused or contributed to his injury by failing to pay sufficient attention to the position of the bobcat and by failing to have regard to his own safety.

Liability

Despite finding Samways' testimony as a witness unsatisfactory, the Supreme Court concluded that the injury would not have occurred, if not for the negligence of:

  • Lynsha's operator in leaving the bucket in a raised position, given the risk of injury posed by the bucket being left in a raised position and the minimal inconvenience that would have been occasioned to the operator in moving the bobcat after it had been repaired
  • De Luca in failing to either direct Lynsha's operator to move the bobcat to a safer location or arranging for the bobcat to be fenced off so that workers at the site could not walk into the bucket
  • Tessman, who importantly was responsible for supervising Samways and other Tessman employees' work at the site, in failing to direct its employees not to work in the vicinity of the bobcat.

Liability was apportioned between the defendants as follows:

  • Lynsha – 60%
  • De Luca – 30%
  • Tessman – 10%.

The Supreme Court held that as each of the defendants were found to have been negligent, it was unnecessary to address the alleged breaches of statutory duty and whether any such breaches gave rise to a cause of action.

The Supreme Court further held that the plaintiff had failed to exercise reasonable care for his own safety by failing to look up from the ground regularly, in order to avoid potential hazards, and accordingly reduced the plaintiff's award of general damages by 20%.

Indemnity

The Supreme Court was then required to consider the application of an indemnity clause, which Lynsha sought to rely upon. The indemnity clause was contained within the hire agreement between De Luca and Lynsha and provided as follows:

'The Hirer (De Luca) shall fully and completely indemnify the Contractor (Lynsha) in respect of all claims by any person or party whatsoever for injury to any person or persons and / or property caused by or in connection with or arising out of the use of the plant and in respect of all costs and charges in connection therewith whether arising under statute or common law'.

The Supreme Court held that:

  • The words 'arising out of' and 'in connection with' have a wide meaning. However, in the context of the case at hand, it was necessary for a 'sufficient nexus' to be established between the use of the forklift and the injury
  • Notwithstanding that the bobcat was not in operation at the time that the incident occurred, the deployment of the bobcat to the site constituted 'use' for the purposes of the hire agreement and the indemnity clause.

The Supreme Court concluded that the injury was 'in connection with' or 'arising out of' the use of the bobcat and that Lynsha was consequently entitled to a full indemnity from De Luca with respect to the claim made against it by Samways.

Comment

This case affirms that a contractual indemnity may be sufficient to transfer liability in negligence from a tortfeasor to another party. Accordingly, contracting parties should be vigilant when considering whether or not to enter into an agreement that requires them to indemnify another party.

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