Australia: Head Contractors Can Breathe A Sigh Of Relief

In a recent landmark decision, the High Court has determined that head contractors have no common law duty of care to train their subcontractors in the safe methods of carrying out their respective specialist tasks. In making this finding, the High Court accepted the view that while the head contractor, Leighton Contractors Pty Ltd (Leighton), as occupier of the site owed the usual duties to site entrants consistent with the principle of occupier's liability, that duty of care did not extend to taking positive steps to prevent a subcontractor on that site from suffering injury as a result of the subcontractor's own negligence in undertaking the specialised task it was engaged to carry out.

The first respondent to the appeals, Brian Fox (Fox), suffered physical injury while working on the Hilton Hotel refurbishment project during 2003, for which Leighton was the head contractor. Leighton subcontracted the concreting works to Downview Pty Ltd (Downview) who subsequently subcontracted the concrete pumping works (Pumping) to Quentin Still (Still) and Jason Cook

On 7 March 2003, Still and Cook's usual concrete pump supplier/operator was unavailable. Accordingly, Still arranged for Shire Shark Pumping (Shire) to supply a concrete pump and staff to operate same. Shire duly provided a concrete pump along with an operator, Warren Stewart (Stewart) and Fox (Stewart's offsider), who were aware that they were to take directions from Still. While Stewart and Fox both possessed in excess of ten years experience in the concrete pumping industry, neither had ever worked on a project as large as the Hilton Hotel refurbishment.

On the day in question, Stewart and Fox assisted with the concrete pour, which was completed without incident. After completion of the pour it was necessary to clean the static lines of the concrete pump by forcing a purpose built sponge through the lines with compressed air. Still and Fox, who had been working together on level 12 of the project, moved to level 4 (where the pump was situated) to assist Stewart with the cleaning process. The line to be cleaned was positioned over the collection bin but was not secured to the bin with chains (as had been done after previous pours by the usual concrete pump operator), to prevent the line from whipping in the event of pressure buildup.

The Court found that prior to returning to level 12, Still saw that Stewart and Fox had not secured the line to the collection bin but did not direct either Stewart or Fox to do so.

In the first instance, a four inch sponge was forced through the lines successfully. However, some of the lines used during the pour were of five inch diameter and Stewart and Still were of the opinion that the four inch sponge was ineffective and should be substituted for a hessian bag filled with dacron insulation. The dacron filled bag became lodged in the line and Still and Stewart agreed to increase the air pressure to blow the bag out of the line. Prior to increasing the pressure, Still directed Fox to move away from the line, which Fox did by moving to a location approximately 30 feet from the line. Still increased the pressure, the bag was expelled with force and the line whiplashed, striking Fox and causing him significant physical injuries.

At trial, Gibb J found that the accident was caused by the negligence of both Stewart and Still and dismissed the claims against Leighton and Downview, finding that neither company had breached a duty of care owed by them to Fox. While her Honour found that the use of the dacron filled bag (instead of the proper sponge) was a contributing factor to the accident, it was the failure to secure the line to the collection bin (which was found to be in breach of the approved industry code of practice known as the Pumping Code) that was held to be the ultimate cause of the accident (i.e. the negligent conduct of Stewart). Accordingly, Fox was awarded damages against the company that employed Stewart, Warren Stewart Pty Ltd, which unfortunately for Fox had been deregistered.

Fox appealed against the trial judge's findings as against Leighton and Downview. The Court of Appeal overturned the relevant findings of the trial judge and held that Leighton and Downview owed a duty of care to Fox which they had breached. The Court of Appeal effectively extended the principle of occupier's liability, finding that Leighton was subject to a general duty of care to its subcontractors (and others who entered a site under its control), the scope of which included training subcontractors in matters of safety. In order to discharge this duty, Leighton was required to either carry out work activity OHS training (specific to each trade) or ensure that subcontractors (and others) coming onto its sites had undergone such induction training. While all persons coming onto the site were required to undergo general site induction training conducted by Leighton, such training was generic and did not necessarily address the unique or special risks that could arise in situations pertinent to each particular trade.

Leighton and Downview appealed to the High Court.

Leighton argued that despite recognising the difference between the relationship of an employee to his/her employer versus the relationship of a principal to his/her independent contractor, the Court of Appeal, in finding for Fox, imposed a duty on Leighton (with respect to its contractors) that was strikingly similar in scope to that of an employer to his/her employee, notwithstanding that Fox was not an employee of Leighton.

The High Court agreed with Leighton's argument.

After considering in detail the relevant statutory obligations of Leighton with respect to occupational health, safety and training, the High Court found that the Court of Appeal had misinterpreted the statutory provisions. In this regard, the Court of Appeal had assumed that the general site induction training provided by Leighton to its subcontractors was required to include instruction in the health and safety topics contained in each approved industry code of practice relevant to each subcontractor's trade/industry. The High Court disagreed with such a finding, opining that to impose such a duty was inconsistent with the maintenance of the distinction drawn by the common law between employers vis a vis their employees and principals vis a vis their independent contractors. Furthermore, the High Court found that to impose such a duty was untenable given that Leighton was unlikely to possess the specialised knowledge and experience required to properly instruct its subcontractors who presumably were experts in their particular discrete trades/industries. Accordingly, the High Court found that there was no justification for holding that Leighton, solely because it was the head contractor in control of the site, owed a duty of care to Fox, an independent subcontractor engaged to carry out a specialised task in which he possessed significant knowledge and experience.

In addition, the High Court rejected Fox's narrower argument that Leighton was not required to train Fox but was instead required only to ensure that Fox had received the relevant industry specific training before coming onto the site. The High Court held that there was no evidence that Leighton had failed to exercise reasonable care in ascertaining the status of each person coming onto the site, there was no evidence that work activity based OHS training would have included instruction regarding the restraint of lines during the line cleaning process in any event and finally, there was no evidence as to whether Stewart and Fox had undergone the relevant work activity based OHS training or not.

As to Downview, the High Court found that had Downview failed to engage a competent contractor then it may not have avoided liability for any negligence of the contractor. However, in circumstances where Downview had engaged a competent contractor to carry out the Pumping, and the Pumping was placed in that contractor's hands, Downview was not subject to an ongoing obligation with respect to the safety of the work methods employed by the contractor or those with whom the contractor subcontracted. Further, for the same reasons as those articulated in respect of Leighton's duty to Fox (or lack thereof), the High Court found that Downview did not have an obligation to train Fox or ensure that Fox had undergone work activity based OHS induction training.

Head contractors will now breathe a sigh of relief that their already relatively onerous obligations with respect to the safety of those who come onto their sites have not been extended to include the provision of work activity based OHS training to specialist subcontractors or the requirement to ensure that those subcontractors have undergone such training before entering upon the site. Nevertheless, head contractors should remain vigilant with respect to matters of safety, induction and training on their sites. This judgment, while favourable, should serve as a timely reminder of the adverse impact safety related incidents can have for head contractors in terms of cost, time and lost productivity.

Leighton Contractors Pty Ltd v Fox & Ors; Calliden Insurance Ltd v Fox & Ors (2009) 258 ALR 673

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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