Judgment date: 2 September 2009
Leighton Contractors Pty Limited v Fox; Calliden Insurance Limited v Fox  HCA 35
High Court of Australia1
- The High Court was asked to reconsider the question of whether a principal should be liable for the negligent acts of independent contractors engaged by them.
- The High Court upheld the decision in Stevens v Brodribb Sawmilling Co Pty Ltd2 which found that:
"The [principal's] duty arises simply because he is creating the risk and his duty is more limited than the duty owed by an employer to an employee...it imposes a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury...if there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, the [principal] is not liable for damage caused merely by the 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".
- In this case, the High Court overturned a decision by the NSW Court of Appeal that a principal was negligent for failing to provide OH&S induction training and held that the proper question was to ask whether the principal had implemented a reasonable system for ensuring that workers had undertaken relevant induction training.
- The High Court also stated that it was necessary to exercise caution in translating obligations imposed under statutes, such as the OH&S Act, into a duty of care at common law. It emphasised that "whatever their scope, all duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden".
On 7 March 2003, Brian Fox (Fox), the first respondent in each of the appeals, suffered severe injury in the course of working at a construction site. Leighton Contractors Pty Limited (Leighton), the appellant in the first appeal was the primary contractor for the project.
Leighton had contracted with Downview Pty Limited (Downview) to carry out the concreting, who in turn had subcontracted the concrete pumping to Quinton Still (Still) and Jason Cook (Cook). Still and Cook had then engaged Fox and Warren Stewart employed by Warren Stewart Pty Limited (Stewart) as labourers in connection with the concrete pumping for the pour.
The injury occurred when Still, Stewart and Fox commenced a clean of the concrete delivery pipes by blowing an object through the pipes with compressed air. This process was found to have been done in a negligent manner and in breach of the Pumping Code which required, amongst other things, the end of the pipe to be tied to a waste bin. Due to a build up of air pressure, the pipe swung around and struck Fox in the head, causing injury.
The primary judge accepted evidence that Still had been working in the concrete pumping industry for 19 years, Stewart had worked in the industry for 11 years and Fox, an independent contractor, had previously worked as a concrete linesman/pump truck offsider.
District Court Decision
Fox brought proceedings in the NSW District Court in negligence against Leighton, Stewart and Downview. The trial judge, Gibb DCJ, determined that the accident had been caused by the negligent conduct of Still and Stewart. It was found that Still was in charge of the concrete pouring operation and that Stewart had followed his directions. It was also accepted that no person associated with Leighton or Downview gave any direction in connection with the operation.
The claims against Leighton and Downview were ultimately dismissed as there was found to be no relevant breach of duty by either of them. A judgment in the sum of $472,561.95 was entered against Stewart. Unfortunately, however, Stewart had since been de-registered.
Court of Appeal Decision
Fox appealed against the dismissal of claims against Leighton and Downview. The Court of Appeal overturned the decision of the District Court. Giles, McColl and Basten JJA rejected Fox's case that Leighton was subject to a duty requiring it to supervise the concrete pumping and the line clearing. Rather, it held that Leighton had a general law duty to ensure safe work practices and to take reasonable steps to ensure that those working on the site were properly trained. Specifically, it was decided that Leighton was negligent in failing to ensure that Fox and Stewart had undergone Occupational Health & Safety (OH&S) induction training in accordance with the OH&S Regulation 2001 (NSW) and in failing to ensure the operation was carried out in accordance with the Pumping Code. Downview was negligent also for the later failure.
Based on the evidence provided to the primary judge, the Court of Appeal found that had Stewart and Fox undergone relevant induction training, not just a general site induction, they would have been informed of the requirement in the Pumping Code to tie down the end pipe to the waste bin, thereby avoiding the accident. Ultimately, Leighton and Downview were each found to be subject to a common law duty of care for the benefit of Fox and each found to be in breach of that duty. The Court of Appeal then entered judgment against Leighton and Downview in the sum of $472,562.95.
High Court Decision
Leighton and Downview appealed the decision of the Court of Appeal contending that the imposition on each of them of a common law duty of care owed to Fox, an independent contractor, involved an unwarranted extension of the liability of principals for the negligent acts of other independent contractors engaged by them. After the institution of the appeals, Downview was de-registered and leave was given to substitute Calliden Insurance Limited as a second respondent. In response, Fox submitted that the Court of Appeal was correct to find a relevant duty on Leighton to ensure that each person working on its site provides satisfactory evidence of having completed induction training, which was not unduly onerous, costly or time consuming.
In coming to their decision, the High Court firstly noted that the common law did not impose a duty of care on principals for the benefit of independent contractors engaged by them of the kind which they owe to their employees. They applied the decision in Stevens v Brodribb Sawmilling Co Pty Ltd and noted that in some circumstances, a principal will come under a duty to use reasonable care to ensure that a system of work for one or more independent contractors is safe. A principal is under a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury but is not liable for damage caused by a negligent failure of an independent contractor, so long as there was no failure to take a reasonable care in the employment of that independent contractor competent to control their own system of work.
Leighton acknowledged that, as a principal contractor, it had the legal authority to determine who was permitted to come onto its site. It also acknowledged the OH&S Regulation which provided that a principal contractor for a construction project must not direct or allow another person to carry out construction work unless the principal contractor is satisfied that the person had undergone OH&S induction training.
Whilst Leighton acknowledged that a principal contractor was required to give site specific OH&S induction training to all persons carrying out any construction work, the High Court distinguished this from work activity based OH&S induction training. Leighton's obligation was satisfied by ensuring that a person carrying out construction work on site had undergone such OH&S induction training, rather than providing the training itself.
The relevant Code of Practice and OH&S Regulation at the time of the accident provided that a self employed person who had carried out construction work in the course of employment for any period within the two years immediately preceding 1 April 1999 was deemed to have undergone the general health and safety and work activity based health and safety components of OH&S induction training.
The High Court therefore held that Leighton need only be satisfied, that a person has completed OH&S induction training in general health and safety topics and work activity based health and safety topics or that the person had carried out relevant construction work in the course of their employment within the two years prior to 1 April 1999, in addition to completing site specific OH&S induction training.
The High Court agreed with submissions made on behalf of Leighton that the Court of Appeal had imposed on it a duty requiring it to train every worker coming onto its site across a spectrum of trades and professions in safe work practices, which was an unthinkable burden.
The High Court noted that there was no claim for breach of statutory duty but made the helpful observation that this was no doubt due to the terms of the OH&S Act which prevents the duties imposed by it on employers and others as giving rise to a correlative private right of action in civil proceedings.
The High Court acknowledged that it was settled law that a principal may incur liability for either the tortious acts of an independent contractor that it has directly authorised, for failure to co-ordinate the activities of independent contractors or for breach of specific duties as an occupier. However, it rejected that Leighton owed a duty to Fox to take reasonable care to prevent him suffering injury on the site as a result of the negligent conduct of Stewart.
The High Court criticised the Court of Appeal for failing to give consideration as to whether Leighton had implemented a reasonable system for ensuring that workers coming onto the site were identified, required to undergo a site induction and show evidence of completion of general and work activity based OH&S induction training. Finally, the High Court noted that considering Stewart's extensive experience, it was not clear whether he was even required to undergo further OH&S training nor whether that would have included instruction on the Pumping Code sufficient to prevent the injury occurring.
In conclusion, it was held that the Court of Appeal's decision that Leighton had been negligent by reason of an assumed failure to provide OH&S induction training to Fox and Stewart could not be sustained. Nor was it was possible to sustain the Court of Appeal's finding of liability by accepting that Leighton was negligent by its failure to take reasonable steps to ensure that Stewart and Fox had completed OH&S induction training.
In relation to Downview's appeal, the High Court found that had Downview failed to engage a competent contractor, it may not have avoided liability for the negligent failure of the contractor to take reasonable care to adopt a safe system of work. However, provided that the contractor was competent, and provided that the activity of concrete pumping was placed in the contractor's hands, Downview was not subject to an ongoing general law obligation with respect to the safety of the work methods employed by the contractor or those with whom the contractor subcontracted. The High Court found there was no evidence to the contrary to sustain a finding against Downview.
The High Court also warned of the necessity to exercise caution in translating the obligations imposed under statutory and other enactments, such as the OH&S Act and Regulation into a duty of care at common law. For the reasons set out above, each appeal was allowed and orders made by the Court of Appeal set aside.
The relationship between a principal and independent contractor is not one which, of itself, gives rise to a common law duty of care. The scope and content of the duty of care owed by a principal to an independent contractor is governed by the principles espoused by the High Court in Stevens v Brodribb Sawmilling Co Pty Ltd.
The High Court has maintained that a principal can discharge its duty of care by engaging a competent independent contractor responsible for its own system of work and the principal will not be liable for damage caused merely by the negligent failure of an independent contractor.
While principal contractors may be in breach of their duty of care for failing to engage competent contractors, an obligation requiring the provision of specific OH&S inductions in respect of safe work methods of carrying out specialised tasks was rejected. The principal need only ensure that the contractors carrying out the work had undergone job specific OH&S training, rather than provide the training itself.
Although no statutory breach was pleaded the High Court noted that duties imposed on principals and contractors by Part 2 of the OH&S Act do not give rise to a correlative private right of action.
The High Court has also emphasised the importance that other courts exercise caution in translating the obligations imposed on employers, principal contractors and others under the OH&S Act and Regulation into duties of care at common law. This is because, as Gummow J explained in Roads & Traffic Authority (NSW) v Dederer3, "whatever their scope, all duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden."
1 French CJ, Gummow, Hayne, Heydon and Bell JJ
2  HCA 1
3 (2007) HCA 42
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