Australia: Labour Hire Company - scope of duty owed – apportionment between employer and host employer

Curwoods Case Note
Last Updated: 26 January 2012
Article by Samantha Thorndike

Judgment date: 22 December 2011

Clarence Valley Council v Macpherson [2011] NSWCA 422

New South Wales Court of Appeal1

In Brief

  • In determining any breach of an employer's duty of care, the relevant consideration is whether the employer knows or ought to have known equipment provided was unsafe, not necessarily what workplace law or industry standards and regulations prescribe.
  • In determining apportionment between a labour hire employer and a host employer, it is necessary to look at the respective degrees of departure from the standard of care and the relative importance of the acts of those parties in causing the damage.
  • The Court of Appeal will only review a primary judge's findings with respect to damages if the compensation assessed is so inadequate as to be beyond the limits of what a sound discretionary judgment could reasonably adopt.


On 30 October 2008, the respondent to the appeal, Robert Macpherson (plaintiff) sustained a severe twisting injury to his right wrist together with a fractured metacarpal. The injury occurred whilst the plaintiff was using a chainsaw to drill holes into trees to enable them to be poisoned. The plaintiff was employed by a labour hire company, APS Pacific Pty Limited (APS), who had hired the plaintiff's services to the appellant to the appeal, Clarence Valley Council (Council).

The plaintiff brought proceedings against the Council for breaching their duty of care, akin to that of an employer, in failing to provide adequate and safe equipment, and in particular failing to provide a chainsaw fitted with a clutch.

District Court

The primary judge in the District Court, Flannery DCJ, handed down her judgment on 16 March 2011 with a verdict and judgment for the plaintiff in the sum of $536,880.47. Her Honour assessed damages for non-economic loss, economic loss, medical expenses and domestic assistance and reduced the total by 15% to take into account a deduction under s 151Z of the Workers Compensation Act 1987 for APS's share of responsibility. The Council appealed the decision with respect to liability, apportionment and damages.

The primary judge discussed the requirements for breach of duty of care found at s 5B(1) and (2) of the Civil Liability Act, 2002 (CLA). In particular, the primary judge found that the risk of harm was foreseeable and not insignificant and the likelihood of the harm occurring was probable. The primary judge relied on an Injury Form completed by the Council within 12 hours of the injury, which stated that the likelihood of the incident occurring was "medium" and the recommended "corrective action" was to always use a powered boring machine with a torque clutch. It was relevant that the Council had in their possession on the day a chainsaw with a clutch. Accordingly, the primary judge concluded that a reasonable person in the Council's position would have provided a torque-limiting clutch with the chainsaw provided to the plaintiff.

Court of Appeal

Tobias AJA delivered the unanimous judgment of the Court of Appeal. The Court dealt with each of the Council's appeal points as follows:


The facts relating to the issue of liability were not challenged. This included that the plaintiff had been provided by the Council with a chainsaw without a clutch on the day of the incident. Immediately after the plaintiff was injured, 2 other employees of the Council checked over the plaintiff's injuries and then showed him a chainsaw with a clutch attached saying that the incident "probably would not have happened if [the chainsaw] had this clutch".

The plaintiff's forensic engineer, Mr Colin Simpson, opined that it was almost universal practice to fit chainsaws with a clutch to limit the torque if the chainsaw struck a hard section of tree causing it to abruptly stop its rotary motion. Mr Simpson considered it was foreseeable that a chainsaw without a clutch could cause injury, although it did not offend any Australian standard or regulation.

The Council did not seriously dispute that it owed the plaintiff a non-delegable duty of care to avoid exposing him to unnecessary risks of injury, analogous to that of an employer.

Given the unchallenged evidence of Mr Simpson that the chainsaw itself normally comes with a clutch, the Court of Appeal found that even if an employer abides by workplace laws and industry standards and regulations, that of itself cannot necessarily negate any breach of the employer's duty of care where it has provided equipment which it knows or ought to have known is unsafe. The Court of Appeal therefore upheld the primary judge's finding with respect to breach of duty of care as no error had been demonstrated.


Evidence was presented at trial that APS neither attended the site nor required the Council to report back about work performed by the plaintiff. APS did not provide any training or instruction to the plaintiff in the use of machinery. When the plaintiff commenced work with the Council 8 days prior to the injury, his job description was to assist with weed spraying. Although the plaintiff submitted the APS had not breached its duty of care to the plaintiff as it could not have prevented the provision of defective or unsafe equipment on the morning of the accident, the primary judge found APS still owed a non-delegable duty of care to its employee. The primary judge assessed APS's negligence at 15%.

The Court of Appeal referred to the decision of Podrebersek v Australian Iron and Steel Pty Limited2 which found:

"The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man ... and of the relative importance of the acts of the parties in causing the damage."

The Court of Appeal noted each case is to be determined on its own facts and circumstances. Further, a finding on a question of apportionment is one which involves individual choice or discretion and should not be reviewed lightly.

The Court of Appeal found that the ultimate figure which the primary judge came to (15%) was not outside the bounds of a sound discretionary judgment. It noted there was a high degree of departure from the standard of care of a reasonable employer by the Council but a low degree of departure from that standard by APS. In particular, APS was not aware that the method of work had been changed to the use of a chainsaw on the morning of the incident. The Court of Appeal agreed the immediate and major cause of the plaintiff's injuries lay with the Council rather than APS. Accordingly, no error by the primary judge had been demonstrated.


Non-Economic Loss

The medical evidence indicated the plaintiff had fractured the base of his fourth metacarpal and strained a ligament in his wrist. The plaintiff was initially placed in plaster and then commenced physiotherapy. The plaintiff continued to experience constant pain and restriction of movement and underwent surgery to repair his ligament on 26 May 2010. The plaintiff was again placed in plaster and resumed physiotherapy. Following surgery, medical evidence suggested the plaintiff had ongoing stiffness and restriction of movement but no significant pain. It was thought the plaintiff would be able to resume suitable duties but with a lifting restriction of 2 to 5 kg and no jarring activity.

At the trial, the plaintiff submitted the severity of non-economic loss was 35% of a most extreme case while the Council submitted 20%. The primary judge assessed non-economic loss at 30% of a most extreme case.

On appeal, the Court was referred to the decision of Kurrie v Azouri3 which referred to a "most extreme case" as including injuries such as "quadriplegia ... some serious cases of paraplegia ... serious brain damage and perhaps extremely serious scarring and disfigurement ... in young children". In that case, a severe laceration to the lower leg with permanent scarring, decreased sensation and psychological effect was reduced from 29% to 18% of a most extreme case.

The Court also considered the decision of Owners – Strata Plan 156 v Gray4 in which a finding for non-economic loss was reduced from 33% to 20% for a significant ligamentous injury to the left ankle. The assessment was overturned as the Court considered:

"... 33 percent of a most extreme case was so unreasonable and plainly unjust that it must be inferred that in some way his Honour failed properly to exercise the discretion reposed in him in making the determination he did."

However, the Court of Appeal also noted that restraint should be exercised by an appellate Court before interfering with what is essentially a discretionary judgment, as per Dell v Dalton5. Rather, the compensation assessed must be so inadequate " to be beyond the limits of what a sound discretionary judgment could reasonably adopt", as per Miller v Jennings6.

In this particular case, the Court of Appeal noted that in assessing non-economic loss, the parties essentially relied on medical reports, the authors of whom were not cross-examined. The Court of Appeal found the primary judge's assessment of 30% for non-economic loss was manifestly excessive and reduced the award to 25% of a most extreme case. In this regard the Court of Appeal noted although the plaintiff suffered quite a serious injury to his right wrist, it improved to the point where he was generally pain free.

Past Economic Loss

Evidence given during the hearing established that whilst the plaintiff had worked fairly regularly during 2007, he took time off work in late 2007 to look after his sick father and then his mother. The plaintiff did little work between February 2008 and October 2008 due to a shortage of work at APS. The evidence established that from 1 January to 30 October 2008, the plaintiff earned $14,000 gross.

The primary judge in assessing past economic loss did not consider the plaintiff's 2008 earnings were an accurate reflection of his earning capacity. It was noted that 2008 was an unusual year for the plaintiff due to the Global Financial Crisis and having to look after his parents. Accordingly, the primary judge considered earnings for 2007 were a more accurate reflection and adopted the wages earnt in that year as the basis for assessing economic loss.

The Court of Appeal disagreed and thought a more accurate reflection of the plaintiff's earning capacity as at the date of the accident was the amount he was being paid by APS for his employment with the Council, namely $20.52 per hour gross. On the basis of a 38-hour week, this totalled $670 net per week which the Court considered was an appropriate figure to take as a starting point.

The Court of Appeal made no allowance for residual earning capacity which, based on the medical evidence, was thought to be more theoretical than real. The Court awarded the plaintiff $670 net per week to the date of trial but discounted this by 20% to take into account the possibility the plaintiff would have been unable to obtain full time employment with APS. Accordingly, the assessment of past economic loss was reduced from $92,357.01 to $71,861.52.

Future Economic Loss

The primary judge accepted the plaintiff would have worked to the age of 67 and would have struggled to achieve more than casual intermittent work. She calculated future economic loss on the basis of a 50% reduction in earning capacity. On appeal, the Council submitted that the plaintiff had a drive and attitude to retrain himself, was medically capable of returning to work (although required permanently modified duties) and was optimistic about his future economic prospects. Accordingly, it was submitted a cushion of $75,000 was more appropriate.

Although the Court of Appeal accepted that a loss of earning capacity of 50% was reasonable in the circumstances, the Court adjusted the earnings to $670 net per week as a starting point, based on the above findings in relation to past economic loss. Further, to take into account the possibility the plaintiff would have been faced with periods of unemployment as a labour hire worker, the Court of Appeal increased the discount for vicissitudes from 15% to 25%. Accordingly, damages for future economic loss were reduced from $236,988 to $217,994.55 including superannuation.

Domestic Assistance

The Council challenged the primary judge's finding that the pldomestic assistance but no error was found in the primary judge's assessment. Based on the above, the Council failed in its challenge with respect to liability, apportionment and gratuitous care but succeeded in respect to awards for non-economic loss, past economic loss and future economic loss. In the circumstances, the Court thought it appropriate there should be no order as to costs of the appeal as each party had had some success. The judgment was ultimately reduced from $536,880.47 to $414,aintiff was entitled to gratuitous 207.94 in total.


This decision is an example of the Court of Appeal overturning a primary judge's findings in relation to the assessment of damages where appropriate. Only assessments which the Court considered were outside the bounds of sound discretionary judgment were reviewed.

In particular, it is interesting the Court of Appeal was willing to find that the assessment for non-economic loss of 30% had a sufficient disparity with what the Court ultimately assessed as being reasonable (25%) that they agreed to interfere with the award.

This case provides support for assessing greater than 15% deduction for vicissitudes in circumstances where the plaintiff has an inconsistent work history.

It does not appear that either party made submissions in relation to future economic loss being calculated to 67 years of age, despite the traditional retirement age being recognised as 65 years, pursuant to the decision of Allianz Australia Limited v Roger Ward & Ors7.


1 Young JA; Sackville AJA; Tobias AJA
2 [1985] HCA 34
3 (1998) 28 MR 408
4 [2004] NSWCA 304
5 (1991) 23 NSWLR 528
6 (1954) 92 CLR 190
7 [2010] NSWSC 720

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