Tolhurst v Cleary Bros (Bombo) Pty Limited & Anor  NSWCA 181
Beazley JA, Giles JA and Tobias JA
- The Court of Appeal considered the circumstances in which a head contractor can be liable for negligence causing damage to employees of independent contractors.
- Where there is a subsequent accident the question to be answered is whether the damage sustained is greater because of aggravation of the earlier injury rather than seeking to establish if the initial incident was a substantial and independent cause of the plaintiff's long term problems.
- The plaintiff was employed by a plant operated by Cleary Bros (Bombo) Pty Limited ("Cleary"), the first defendant. Cleary supplied and operated earth moving equipment and other heavy machinery at a colliery owned and operated by Endeavour Coal Pty Limited ("Endeavour"), the second defendant.
- In early November 2001 the plaintiff was using a front end loader to take coal from a stock pile at the colliery in preparation for loading into trucks. The face of the stock pile collapsed, forcing the loader backwards. The plaintiff was thrown forward across the steering wheel and his head was thrown forward and jerked back, and he suffered injury to his chest and neck.
- Both defendants were found liable to the plaintiff, and Phegan DCJ ordered that there be verdicts and judgments for the plaintiff against Cleary for $35,966 and against Endeavour for $55,000. His Honour found that there should be equal contribution between Cleary and Endeavour.
Court of Appeal
- The plaintiff appealed on quantum, in substance against the trial judge's findings as to causation of his present condition in respect of which he claimed compensation. Cleary did not appeal on quantum, but appealed against the trial judge's finding that the plaintiff had not been contributorily negligent. Endeavour appealed against the findings that it was liable to the plaintiff and that the plaintiff had not been contributorily negligent.
- In relation to Endeavour's liability, Giles JA, who wrote the leading judgment, noted the trial judge's findings that the use of loaders at Endeavour's premises had not been developed in any formal manner, or recorded in any kind of manual for management of the stock piles. The plaintiff was not given instructions when he began the stockpile work, but learned by watching what other operators did. The procedure was known to be dangerous, as acknowledged by Cleary's senior plant operator.
- Endeavour submitted at trial and on appeal that it neither owed a duty of care to the plaintiff, nor breached a duty of care, because it engaged Cleary for the loading operations amongst other earth moving and like activities, and it was entitled to leave a safe procedure for the loading to Cleary. It particularly relied on the case of Kolodziejczyk v Grandview Pty Limited  NSWCA 267 where it was held that the need to secure a ladder could be left to an experienced tradesman engaged in installing roof cladding.
- Giles JA noted the trial judge's findings that, unlike in Grandview, Endeavour was the occupier of the premises and contributed to the danger which caused the plaintiff's injury.
- Giles JA noted that in Stevens v Brodribb Sawmilling Co Pty Limited (1985) 160 CLR 16 it was held that a sawmiller owed a duty of care to a trucker who was injured by the negligence of a snigger, both the trucker and the snigger being independent contractors, because although the fellers, sniggers and truckers were responsible for their own safety in carrying out their own functions, they had to rely on the care and skill of the sawmiller and any arrangements it made for the disposition of their work and on the care and skill of the persons engaged by the sawmiller in the execution of the work. In that case Mason J stated:
"Although the obligation to provide a safe system of work has been regarded as one attaching to an employer, there is no reason why it should be so confined. If an entrepreneur engages independent contractors to do work which might as readily be done by employees in circumstances where there is a risk to them of injury arising from the nature of the work and where there is a need for him to give directions as to when and where the work is to be done and to co-ordinate the various activities, he has an obligation to prescribe a safe system of work. The fact that they are not employees, or that he does not retain a right to control them in the manner in which they carry out their work, should not affect the existence of an obligation to prescribe a safe system."
- In that same case Brennan J stated as follows:
"The entrepreneur's duty arises simply because he is creating the risk (Sutherland Shire Council v Heyman) and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organising an activity does not import a duty to avoid any risk of injury; it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. Once an activity has been organised and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power or in leaving undefined the contractors' respective areas of responsibility, the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility".
- Giles JA stated that:
"At the heart of this is the need to take care that there is a safe system of work in the exercise of the entrepreneur's overall control of the operations. The need to take care may be in the selection of competent contractors, retaining a power to control the activities, in co-ordinating their activities or in other ways, including in relation to the conditions in which the contractors must do their work."
- Giles JA noted that it was said by Heydon JA in Grandview that the duty recognised by Mason J in Stevens v Brodribb Sawmilling Co Pty Limited
"only arises in the category of cases discussed by Mason J, namely where there is a need for directions to be given as to when and where the work is to be done and for the co-ordination of various activities". In Giles JA's opinion "that was an adequate statement of the facts of that case, but, with respect, the need to take care that there is a safe system of work may call for something more, and so there may be a duty of care beyond the category of cases involving co-ordination of activities."
- Giles JA also relied on the case of Rockdale Beef Pty Limited v Carey  NSWCA where Ipp JA, with whom Mason P and McColl JA agreed, stated:
"The judgments of Wilson and Dawson JJ and Deane J in Stevens are authority for the proposition that an entrepreneur may owe a duty of care to an independent contractor when, according to the general law of negligence, the circumstances are such that a duty arises. The existence of the duty is not conditional on the existence of any particular factual element ... in my opinion, nothing said by Mason J or Brennan J in Stevens, or Heydon JA in Kolodziejczyk prevents the general law of negligence imposing on an entrepreneur a duty of care owed to an independent contractor. Such a duty may arise in circumstances where there is no need for the entrepreneur to give directions as to when and where the work is to be done and to co-ordinate the various activities, but where, for other reasons, reasonable care on the part of the entrepreneur affects the way in which the work is to be undertaken and the safety of the worksite, and where other considerations (not applicable in Stevens and Kolodziejczyk) such as vulnerability, inequality of bargaining power, control and the other manifold factors that the law recognises as being relevant to the existence of a duty of care, are present".
- Based on the above authorities Giles JA affirmed the trial judge's decision that Endeavour did owe the plaintiff a duty of care, and based on the trial judge's findings upheld the finding that the duty of care was breached.
- The Court of Appeal also upheld the trial judge's findings that there should be no contributory negligence found against the plaintiff. In this regard Giles JA referred to the High Court case of McLean v Tedman (1984) 155 CLR 306 which determined that, in considering whether there was contributory negligence by the employee in a case in which the employer has failed to provide a safe system of work, "the circumstances and conditions in which he had to do his work must be taken into account".
- Giles JA noted s 5R of the Civil Liability Act provides that the principles applicable in determining whether a person has been negligent also apply in determining contributory negligence. S 5R(2) provides that the standard of care is that of a reasonable person "in the position of that person", that is, a reasonable person in the plaintiff's position: Waverley Council v Ferreira (2005) NSWCA 418.
- In relation to damages, the substance of the plaintiff's submissions was that the trial judge had misdirected himself in declining to find causation between the subject accident and his condition at the time of trial. The plaintiff had preexisting injuries and also suffered a subsequent injury at work on 4 July 2002 to his neck.
- The trial judge found that:
"what the evidence fails to establish is that the incident was a substantial and independent cause of his long term problems, physical and psychological, the disruption of his full-time employment while he remained in the employee of the first defendant, for any long term loss of earning capacity."
- Giles JA stated that the defendants:
"took Mr Tolhurst as they found him, and if the November 2001 incident aggravated existing neck and chest deficits the damages compensated for the whole. But if the existing neck and chest deficits would have impaired Mr Tolhurst's functioning and that brought reduction in earning capacity quite apart from the November 2001 incident, and if Cleary and Endeavour discharged an evidentiary burden of disentangling their effect from the effect of the November 2001 incident the damages would not compensate for the whole Watts v Rake (1960) 100 CLR 158; Purkiss v Crittenden  114 CLR 764; Shorey v PT Limited  HCA 27".
- In relation to the subsequent accident Giles JA noted that the relevant principles were stated in the case of State Government Insurance Commission v Oakley (1990) Australian Torts Report 81-003, relevantly:
"2. where the further injury results from a subsequent accident, which would have occurred had the plaintiff been in normal health, but the damage sustained is greater because of aggravation of the earlier injury, the additional damage resulting from the aggravated injury should be treated as caused by the defendant's negligence; and
3. where the further injury results from a subsequent accident which would have occurred had the plaintiff been in normal health and the damage sustained includes no element of aggravation of the earlier injury, the subsequent accident and further injury should be regarded as causally independent of the first".
- Giles JA noted that the trial judge did not find that the plaintiff had recovered entirely from the effects of the November 2001 incident. Giles JA found that the trial judge erred in calculating damages as the plaintiff did not have to prove that the November 2001 incident was an independent cause of his present condition; it could be a cause by aggravation of a pre-existing condition or together with aggravation by a subsequent event.
- Beazley JA also separately found that the trial judge erred in determining that the question to be answered was whether the accident was a substantial and independent cause of the plaintiff's problems, when the question to be answered was whether the accident was a cause of his on-going problems.
- Accordingly the Court of Appeal found that his Honour had erred in relation to causation in relation to the award of damages and that that issue must be remitted for the District Court for reconsideration. Whilst Giles JA would have remitted the whole matter back to the District Court for a new trial, Beazley JA and Tobias JA, whilst otherwise agreeing with Giles JA, determined that the matter should be remitted on the issue of causation in relation to damages only.
- The decision affirms the principle, most recently affirmed in Rockdale Beef Pty Limited v Carey, that an entrepreneur or head contractor may owe a duty of care to an independent contractor (including their employees), depending on the circumstances of each case.
- Such a duty may still arise in circumstances where there is no need for the entrepreneur or head contractor to give directions as to when and where the work is to be done and to co-ordinate the various activities, but where, for other reasons, reasonable care on the part of the entrepreneur or head contractor affects the way in which the work is to be undertaken and the safety of the work site.
- In relation to damages where causation is in issue due to subsequent injuries, the decision confirms that the question to be answered is whether the accident was a cause of the plaintiff's on-going problems, not whether the accident was a substantial and independent cause of the plaintiff's problems.
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