Coregas Pty Limited v Penford Australia Pty Limited  NSWCA 350
|Judgment date:||1 November 2012|
|Jurisdiction:||NSW Court of Appeal 1|
- The court will consider the nature of the relationship between the respective parties and the extent of those parties' knowledge and control when assessing the scope of the duty owed and apportionment.
- An employer will have primary and often overriding responsibility for the welfare of its workers.
- When assessing factual causation, it is appropriate to consider the steps which could have been taken to avoid or minimise the risk of injury in an otherwise unsafe working environment.
On 25 October 2005, Anthony Spence (Spence), an employee of the respondent, Penford Australia Pty Limited (Penford), was injured whilst using a ramp to unload a gas cylinder which had been supplied to Penford by the appellant, Coregas Pty Limited (Coregas).
Spence brought proceedings against Penford in negligence and those proceedings were settled in an amount clear of workers compensation payments of almost $470,000. Penford then brought proceedings against Coregas for contribution and/or indemnity pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). Penford was successful in those proceedings with his Honour Judge Lakatos in the District Court of New South Wales apportioning liability equally between Penford and Coregas.
Coregas appealed from that judgment.
The accident occurred at Penford's premises which operated as a dextrin plant. The relevant gas cylinders were stored in a cage and, for safety reasons which required the dangerous toxin to be ventilated, they were delivered to an outside area. In due course, the cylinders were transferred to another open area which had a roof over it on the outside of the building, at which point they were connected to pipe work.
Coregas had agreed to supply the said gas cylinders to Penford, although it was accepted that the cylinders and cages were manufactured and provided to Coregas by another entity, BASF.
The cylinders were delivered by Coregas to Penford already loaded in a cage. The cages were usually taken from the truck by a forklift to a designated outdoor area, and there were typically 12 cylinders to a cage in 3 rows of 4 cylinders. Each cylinder was approximately 1.6 m high and weighed 125 kg when full. Whilst there were no photographs of the actual cage, there were photographs taken by Penford's expert, Dr Cooke, in 2009, which depicted a similar cage.
At the time of the accident, Spence had been doing the job of unloading cylinders from such a cage for approximately 4 years. When he commenced that work, he had been instructed by a supervisor as to the method of removing the cylinders from the cage which involved opening the front of the cage and lowering a ramp. The safety bar and harness which was around the gas bottles was then undone and the cylinders were then manoeuvred by hand down the ramp onto a trolley. The trolley base had a wind-up mechanism so it could be raised above ground level and there was no issue as to the functioning of this mechanism.
Spence claimed that he was injured when, in attempting to move a cylinder with a view to rolling it down the said ramp, his back foot slipped from the ramp resulting in the gas bottle falling on him.
There was no contest that the subject ramp was wet at the time.
Spence indicated that although Penford had provided ongoing safety training, that training fell on his rostered days off and he therefore missed it. He also claimed that he had reported problems using the trolley to Penford on one or two occasions but no remedial action was taken. Having said that, however, neither Spence nor Penford were aware of any other similar incidents occurring. The operations manager of Penford did, however, give evidence that in recent times a change had occurred in cage construction which essentially removed the ramps.
As to the installation and storage of the gas cylinders, safety requirements were such that installation had to be undertaken in a certain way and Coregas played an active role in the positioning of the cages containing the gas bottles at Penford's premises. However, this role was more in approving and/or vetoing the positioning the cages rather than Coregas directing where the gas bottles should be located. However, it was clear that Coregas would have known that the gas cylinders were being stored in the open air and therefore exposed to the elements.
Expert evidence was led from 3 experts, Mr Dohrmann and Dr Cooke (for Penford) and Mr Horrigan (for Coregas), and there was little, if any, disagreement between those experts. Whilst Mr Dohrmann did not inspect Penford's premises nor a similar cage, he nonetheless found that there was insufficient room on the ramp to use the supplied trolley and, as a result, there was no option but for workers to manhandle the unstable, heavy metal cylinder down a slope. He stated that this was made more difficult if the sloping metal surface was wet.
Mr Dohrmann characterised the system of work as a "recipe for an accident" and suggested that Penford could have taken measures to prevent exposing Spence to such a risk of injury, including carrying out a safety audit; providing effective training and safe lifting techniques; providing a wider platform at the front of the cage; providing a slip resistant surface on the ramp; providing a roof over the cage; and storing the bottles level with the ground on the concrete pad. It was noted from the incident report that it was "standard practice around Australia to manhandle cylinders in this way", although Mr Dohrmann suggested that the practice of requiring people to manoeuvre a heavy cylinder down a wet surface should not be regarded as standard practice.
Dr Cooke inspected cylinder cages at Penford's site and conducted co-efficient of friction tests. Whilst the cage and ramp tested by Dr Cooke were not the actual ones involved in the accident, they were nonetheless indicative of the slip resistance of the subject ramp.
Dr Cooke applied Australian Standard AS1657-1992 and tested the slip resistance of the chequerplate surface. He was of the opinion that it was possible to obtain a reliable reading on steel chequerplate under wet conditions, provided care was taken to set up the slider so that it had a smooth passage across the surface of the ramp.
Dr Cooke determined that the co-efficient of friction of the ramp was 0.65, compared to the minimum dynamic co-efficient of friction of 0.63 under the Standard, and concluded that the cages had not been designed to provide a safe ramp surface for unloading full cylinders, particularly under wet conditions. Whilst there was some concession that the said Standard did not specifically apply, Dr Cooke considered that it provided a guide against which the slip resistance could be assessed.
Dr Cooke also recommended alternative systems including propping up the ramp with blocks of wood to provide an approximately level surface, or having legs fitted to the ramp which could be dropped down to provide a horizontal surface.
Mr Horrigan, whilst essentially agreeing with the reports of Mr Dohrmann and Dr Cooke, nonetheless expressed some reservation with the accuracy of Dr Cooke's methodology in using a pendulum tester on a chequerplate surface. Notwithstanding that, however, he concluded that it was probable that Spence experienced a slip leading to a loss of control of the cylinder, rather than him simply losing control of the cylinder.
Mr Horrigan agreed with Dr Cooke that a level surface would be preferable to a ramp as the chance of maintaining control would be better.
District Court Decision
Duty of care
For Penford to succeed, it had to establish that Coregas owed a duty of care to Spence; that the duty had been breached; and that the breach caused Spence's injury.
At trial, Coregas denied the existence of any such duty and submitted that it simply supplied gas cylinders to Penford under a contract and that this occurred in a work environment where Penford had a non-delegable obligation relating to the safety of its employees. Coregas submitted that it was under no obligation to design a safe system of work for those employees and, given that the cylinders and cages were branded BASF, it should be treated as a non-manufacturing distributor of goods pursuant to the principles set out in McPherson's Limited v Eaton & Ors 2 .
Lakatos DJC relied upon Kuhl v Zurich Financial Services Australia Limited 3 and rejected the proposition that Penford's non-delegable duty owed to Spence did not itself exclude a duty of care being owed to Spence by Coregas. He noted that the arrangement was more than simply one of supply in that Coregas was responsible for approving the location of the cage at Penford's premises. In requiring the cage to be located in an outdoor area, it followed that Coregas knew or ought to have known that the cage and ramp would be subject to the weather conditions.
His Honour also commented that Coregas would have known the weight of the cylinders when full and, given that it also supplied the cage and ramp, it would have known that workers working alone would be required to manually manhandle full cylinders down the chequerplate ramp. Potential inadvertence on the part of such workers was also said to be foreseeable given that the task was repetitive in nature.
Accordingly, his Honour concluded that Coregas did in fact owe Spence a duty of care to take reasonable steps to supply a cage and ramp which would not subject him to the unreasonable risk of injury whilst manoeuvring the cylinders. The principles of Kuhl were reiterated.
Breach of Duty and Causation
Having found that Coregas owed Spence a duty of care, his Honour then considered breach of duty and causation. His Honour accepted that establishing a breach required more than simply proving that a particular preventative measure was reasonably practicable. He concluded that a reasonable person in Coregas's position would have realised that moisture, in combination with the slope of the ramp and the need for Spence to physically manoeuvre the cylinder down the ramp, would have rendered him susceptible to slipping and sustaining a potentially significant injury. The consensus of all experts supported this.
As to the absence of any prior incidents, his Honour was satisfied that this did not invalidate the opinion of the experts. He therefore concluded that the risk of injury was not insignificant as required by s 5B(1) of the Civil Liability Act 2002 (CLA). Furthermore, given that Coregas distributed the cylinders in the cage and required the cage to be kept outside, the burden of taking precautions to prevent injury to Spence fell partly on it. He concluded that a reasonable person in Coregas's position would have advised Penford to take steps to make the ramp horizontal.
As to causation, his Honour noted the measure of agreement between the experts regarding appropriate alternatives and concluded that as the measures involved no apparent complexity or sophistication, there was sufficient basis to conclude that they were reasonably practicable and did not offend the operation of s 5B(2) of the CLA. The lack of evidence as to costing of those alternatives was not significant.
His Honour noted that when addressing apportionment, the parties' respective share in the responsibility for the damage to Spence involved a comparison of culpability. He accepted that the evidence established that Coregas supplied the cylinders in a cage with an attached ramp. The ramp was made of chequerplate steel which necessarily sloped to ground level. Coregas also specifically stipulated that the cage be stored outside which therefore exposed it to the elements. The design of the cage and ramp was out of the control of Penford and for present purposes was within the control of Coregas.
Contrarily, Penford had been supplied with such gas bottles in the same manner for a considerable period of time and it was Penford's responsibility as employer to conduct a proper risk assessment and to ensure a safe system of work. As with Coregas, Penford knew that the cage and ramp was to be stored outside and therefore exposed to the elements and the potential for slipperiness of the ramp when wet should have been obvious.
Accordingly, his Honour apportioned liability equally between Coregas and Penford.
Court of Appeal Decision
Hoeben JA delivered the unanimous judgment of the court. The Appeal focused primarily on the existence of a duty of care; the apportionment of liability between Penford and Coregas; the admissibility of Dr Cooke's report; breach of duty of care; and whether it was unreasonable not to have taken measures to make the ramp level.
Duty of Care
Coregas argued that the finding that it owed Spence a duty of care extended the legal responsibility of a distributor to the employees of a customer further than had otherwise been recognised.
Coregas argued that it had no knowledge of any inherent defect which could foreseeably cause injury and, in the absence of Coregas having any control over the unloading of the cylinders, it lacked the "something more" required by Kuhl to establish a duty of care on its part.
The Court of Appeal rejected that submission and accepted that the primary judge had correctly applied Kuhl, noting particularly that Coregas would have reasonably foreseen that the cylinders would be unloaded in the manner in which they were and that the ramp could become wet given that it required the cages of cylinders to be positioned in the open. In addition, the court determined that it was also reasonably foreseeable that when attempting to perform such an activity, a worker such as Spence could slip and be injured due to the weight and awkward shape of the cylinders and the slope and wetness of the ramp.
Further, the court determined that Coregas did not merely supply a product or plant and equipment; rather the cage it supplied was designed to enable the cylinders to be unloaded in a prescribed manner and that this was the most likely method that Coregas's customers (ie Penford) and their employees would use to unload the cylinders.
Accordingly, the court determined that there was a duty on Coregas to provide a cage and ramp which did not, used in that way, subject those foreseeable users to an unreasonable risk of slipping on the ramp while doing so.
The court referred also to the general consensus between all liability experts as to the inherently unsafe unloading procedure required. Indeed the court determined that the dangers associated with unloading the cage were real and evident given that the very construction of the cage invited the said method of unloading.
The court reiterated that, as noted in Kuhl, the fact that Penford might have owed a duty of care to Spence did not necessarily exclude Coregas also owing such a duty. Hoeben JA stated that:
"The manner in which [Coregas] chose to present its goods created a direct relationship between [Coregas] and whomsoever might attempt to unload the cage by use of the integrated, purpose built ramp. The relationship was so close that a duty arose. It matters not whether [Coregas] owned the cages. That was the mechanism by which it chose to supply the gas."
His Honour articulated the duty owed by Coregas to Spence in that it was required to provide cylinders in a cage that would not subject foreseeable users, including those who might be inadvertent at times, to an unreasonable risk of injury when attempting to manually unload them by using the integrated ramp on the cage.
Coregas submitted that in the event that a duty of care was owed, a proper apportionment would have been 90% against Penford and 10% against Coregas. It submitted that the duties imposed on Penford as Spence's employer were much higher than on Coregas as a distributor of goods which otherwise had no control over the occupation of the site.
Coregas submitted that the primary judge failed to give relevant consideration to factors including the failure of Penford to ensure that Spence underwent refresher safety courses; that Spence had complained about a problem but that the problem had not been remedied; and also that the incident report identified actions which should have been taken by Penford to prevent the injury.
Hoeben JA accepted that there was no doubt that it was a requirement of Coregas that the cage be positioned in the open. However, he concluded that the primary judge had erred in concluding that the design of the cage and ramp was within the control of Coregas, and in proceeding on the basis that Penford could do little about the design of the cage and ramp because they were outside its control.
He considered that there were measures Penford could have undertaken to reduce the risk of injury to its employees which did not require any alteration to the current design. Those included providing blocks of wood or other supports to make the ramp flat or providing anti-slip matting for use on the ramp, together with further training of its employees, and possibly providing a machine to enable the cylinders to be lifted directly from the cage. He referred to both the incident report and the evidence of Dr Cooke and Mr Horrigan in that regard.
His Honour further indicated that, as employer, Penford had much greater responsibility for the welfare of Spence than did Coregas whose obligation was restricted to the safety of the cage itself. He noted that it was Penford who was in control of the unloading process and referred to the incident report which identified problems with the method of removal of the cylinders and the different types of lifting machines that had been trialled without success.
Accordingly, the Court of Appeal apportioned liability 75% against Penford and 25% against Coregas.
Breach of Duty of Care
Coregas submitted that the primary judge erred in finding that Coregas was in breach of its duty of care. Hoeben JA rejected this ground of appeal and reiterated that the ramp was in fact unsafe when assessed in the context of its intended use. He went on to find that, in the absence of any evidence to the contrary, it was open for the primary judge to infer that the relatively simple modification to the ramp as proffered by Dr Cooke and Mr Horrigan was practicable and could have been carried out by Coregas.
His Honour also rejected the argument that Coregas did not know about the manual system of unloading the cylinders given particularly the design of the cage and ramp and also the evidence as to standard practice contained in the incident report.
Having determined that some response to the foreseeable risk of injury by Coregas was necessary, Hoeben JA accepted the primary judge's findings that a reasonable person in Coregas's position would have taken appropriate precautions to avoid the risk of injury as required by s 5B(2) of the CLA.
Whether it was unreasonable for Coregas not to have provided a ramp with chocks and/or legs
The Court of Appeal rejected this ground of appeal which itself raised issues under ss 5B(1)(c) and (2) of the CLA. Hoeben JA referred to Coregas's oral submissions that a finding of a "reduced" risk of injury would not satisfy the requirements of factual causation in s 5D(1)(a) of the CLA because a worker, such as Spence, would still be required to manhandle the cylinder across a level chequerplate ramp and that injury could be sustained in doing so.
Hoeben JA determined that the submission was not made out. He referred to the statement of principle in relation to s 5D(1)(a) of the CLA as enunciated in Strong v Woolworths Limited 4 where it was determined that the test of factual causation may be satisfied in circumstances not only where a defendant's negligence was a necessary condition of the occurrence of the harm, but also in circumstances where there were 2 sets of conditions jointly sufficient to account for the occurrence of the harm and the defendant's negligence was necessary to complete one of those conditions.
Coregas's appeal was partially successful in that the Court of Appeal found error in the primary judge's apportionment of liability. As indicated above, apportionment was reassessed 75% as to Penford and 25% as to Coregas. All other grounds of appeal were unsuccessful.
This case reaffirms the decision in Kuhl that, whilst an employer has a non-delegable duty to exercise reasonable care for the safety of its workers, a duty of care can nonetheless be owed to those workers by another party such as a non-manufacturing supplier or distributor.
When assessing the content of that duty and apportionment, it is appropriate to consider the level of knowledge and control of the parties including, in this case, the employer and a non-manufacturing supplier. In those circumstances, it is appropriate for the court to consider what steps the respective parties could have taken to avoid foreseeable risk of injury when applying s 5B of the CLA.
The incident-free history of equipment is not irrelevant, but is not determinative in assessing the duty of care of a supplier of equipment.
In determining factual causation under s 5D(1)(a) of the CLA, it is sufficient for a plaintiff to prove that it is more probable than not that the taking of steps would have prevented or minimised the risk of injury.
1 Meagher and Hoeben JJA and Bergin CJ in Eq
2  NSWCA 435
3  HCA 11
4  HCA 5
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