A decision handed down by the High Court of Australia on 27 February 2007 will have wide implications nationally for the extent of Local Government's liability.
In Leichhardt Municipal Council v. Lesley Montgomery, the Court held that road authorities, such as Councils, are not automatically liable for the negligent acts of employees of independent road contractors.
The case involved a Plaintiff, Lesley Montgomery, who suffered an injury to his knee when he fell into a 60cm deep manhole whilst walking along a footpath on Parramatta Road in Sydney.
The Leichhardt Municipal Council had engaged a sub-contractor Roan Constructions, to carry out improvements to the footpath and one of its workers covered the manhole, which had a broken lid, with a piece of carpet that could not support Mr Montgomery's weight.
At first instance, the New South Wales District Court awarded Mr Montgomery $265,450.75 in damages against the Council less $50,000.00 he had agreed to accept in a settlement from Roan Constructions. Both the District Court and the New South Wales Court of Appeal concluded that Mr Montgomery was owed a non-delegable duty of care by the Council and that there had been a breach of that duty.
Specifically, the Court of Appeal upheld the Primary Judge's findings that there had been negligence on the part of workers employed by Roan Constructions and that Council was therefore liable without any need for Mr Montgomery, to establish fault on the part of Council employees. The Leichhardt Municipal Council subsequently was granted leave to appeal to the High Court on condition that it met the costs of the Appeal.
The Council's Appeal was successful and the Court unanimously held that the Council did not owe Mr Montgomery a nondelegable duty of care.
In arriving at its judgement, the High Court noted that the proposition that a non-delegable duty of care arises when an independent contractor's services are engaged is not supported by legislation, public policy or recent judgements of the High Court. Instead, the Court maintained the standard test of negligence, namely that the Council's duty was to take reasonable care to prevent injury. In arriving at its judgement, the High Court was also mindful that the New South Wales roads legislation did not contain any restrictions that roadworks and works on footpaths be carried out only by workers employed by road authorities with the engagement of contractors to carry out those types of works being very common.
The Court held that it was implausible for a duty to be placed on the Council to ensure that carelessness such as placing a carpet (as opposed to a board) over a broken manhole lid did not occur regardless of whether employees of the Council were at fault.
Whilst it was acknowledged by the High Court that the Council had a duty to exercise reasonable care in supervising a contractor or in approving the contractor's plans and system of work, that duty did not make it automatically liable for the negligence of an independent contractor's employees.
This Appeal to the High Court was restricted to the issue of whether a non-delegable duty of care was owed by the Council and the case will now be remitted to the Court of Appeal to determine whether there was any actual lack of care or negligence on the part of the Council's officers.
Contractors and principals should ensure they have appropriate insurance coverage instead of relying on indemnity clauses.
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