The Supreme Court of NSW considered the apportionment of
liability between an employer and an independent contractor where
the failure of a product caused a plaintiff serious injuries.
The plaintiff was employed by Sydney Ports Corporation
(Sydney Ports) as an engineer. From time to time
he was required to board vessels moored at the port in order to
perform his duties. The plaintiff boarded vessels via the emergency
response gangway which was stored vertically and lowered to a
horizontal position when being used for boarding.
The gangway was held in place by a D-shackle which was linked to
a 750kg counterweight. On 23 July 2001, the plaintiff was walking
across the gangway when the shackle fractured and the counterweight
was released. This caused the gangway to rotate suddenly to its
vertical position, violently propelling the plaintiff onto the
wharf below and causing him serious injuries.
The cause of the event was uncontroversial as the shackle was
found to be made of a material which was inappropriate for
sub-marine use. Australian Winch & Haulage Company Pty Ltd
(Australian Winch and Haulage) was the company
that selected, supplied and installed the shackle and it was joined
as the second defendant in the proceedings.
A point of contention in the case was the apportionment of
liability in respect of the failed shackle. Put simply, the Supreme
Court was required to consider which parties were responsible for
the failed shackle and to what degree.
Ultimately, the Court found that both defendants had breached
their duty of care, and made the following observations with
respect to the parties' respective liability:
Sydney Ports, as the plaintiff's employer, was in effective
control of the gangway and responsible for its upkeep and
maintenance. It was found to have breached its duty of care,
because a failure of the shackle was not only predictable or
inevitable, it was preventable. The gangway had failed before and,
despite this, Sydney Ports did not regularly inspect or maintain
the gangway and instead adopted a 'reactive approach', only
intervening in response to problems.
as to the contribution of Australian Winch and Haulage, the
Court noted that it was regularly involved in dealing with problems
with the gangway and the frequent replacement of failed components
carried with it an obligation to specify an appropriate grade of
stainless steel shackle.
The Court had regard to section 5(2) of the Law Reform
(Miscellaneous Provisions) Act 1946 (NSW) in finding a just and
equitable apportionment of the defendants' liability to pay
damages to the plaintiff. Ultimately, the Court considered the
appropriate apportionment to be 65% with respect to Sydney Ports
and 35% for Australian Winch and Haulage.
This decision reinforced the High Court's view articulated
in the case of Podrebersek v Australian Iron and Steel Pty
Ltd  HCA 34, where it was stated that:
"A finding on a question of apportionment is a finding
upon 'a question, not of principle or of positive findings of
fact or law, but of proportion of balance and relative emphasis,
and as weighing different considerations...
"The making of an apportionment ... involves a
comparison both of culpability, i.e. 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" (references omitted).
The findings made by the Court in Collins v Sydney
Ports confirm that, when considering issues of apportionment,
courts will examine and focus on the conduct of the parties.
Further, that primary liability will be sheeted home to employers
if they are on notice of similar incidents having occurred in the
past and do not take proactive steps to minimise the risk of future
harm to their employees in such circumstances.
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Whereas most insurance policies exclude liability arising under contract, insurers can
positively benefit where an insured has limited or excluded its liability under contract.
This usually arises where the insured's contract has a limitation or exclusion of liability clause in the insured's favour.