Australia: Duty of Care Owed by Host Employer to a Labour Hire Worker

Hanson Construction Materials Pty Limited v Tawhai [2010] NSWCA 55
Last Updated: 15 April 2010
Article by Samantha Hubbard

Hanson Construction Materials Pty Limited v Tawhai [2010] NSWCA 55

NSW Court of Appeal1

In Brief

  • In assessing future economic loss, regard should be had to s 13 of the Civil Liability Act 2002 in determining the plaintiff's most likely future circumstances but for the injury.
  • An appellate court will not overturn the primary judge's findings in respect of the assessment of non-economic loss unless it is manifestly excessive.
  • An appellate court will not intervene on apportionment under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 unless error appears in the reasons of the primary judge or the result is plainly unreasonable.


On 4 June 2002, Paul Tawhai (plaintiff), sustained injury when a front end loader reversed into the plaintiff's truck while he was in the driver's seat. The plaintiff was employed by a labour hire company (Adecco) and was seconded by Adecco to work for Hanson Construction

Materials Pty Limited (Hanson) driving a truck supplied by Hanson. The front end loader which reversed into the plaintiff's truck was operated by Pioneer Road Services Pty Limited (Pioneer).

The plaintiff was 40 years old at the time of the hearing. On the medical evidence, the collision was found to have aggravated asymptomatic degenerative changes in the plaintiff's lumbar spine which caused continuous pain, restricted movement and referred pain into the plaintiff's legs. The plaintiff was found to be unfit for a range of tasks including working full time as a truck driver.

It was accepted that the plaintiff was capable of earning up to $800 net per week at the time of the accident, depending on the number of hours he worked. After the accident, the plaintiff was able to obtain alternative employment with Multiserv NSW Pty Limited (Multiserv) for which he received approximately $1,440 net per week, being substantially more than he was earning at the date of the accident.

District Court Decision

The plaintiff sued Hanson and Pioneer for compensation and each defendant cross-claimed for contribution against the other. On 3 October 2008, Delaney DCJ handed down a decision in which he found both defendants negligent and no contributory negligence by the plaintiff. Allowing 20% negligence on part of Adecco, the employer, Delaney DCJ awarded a verdict for each defendant on its cross-claim to the extent of 50%.

Delaney DCJ found that Hanson had an obligation to provide the plaintiff with a safe place and safe system of work. Hanson was found to have failed in their obligation by not providing the plaintiff with instructions on a system that required notice of the plaintiff's presence to be given to the front end loader driver. The primary judge also found Pioneer vicariously liable for the front end loader driver's negligence.

In assessing damages, the primary judge held that the plaintiff's claim against Hanson was to be determined under the Civil Liability Act 2002, whilst his claim against Pioneer was under the Motor Accidents Compensation Act 1999, with the consequence that the plaintiff could not recover non-economic loss from Pioneer.

The plaintiff was found to have injuries and disabilities at 35% of a most extreme case.

In relation to past economic loss, Delaney DCJ allowed $700 net per week until the plaintiff commenced alternative employment with Multiserv. He also added $8,500 for the lost opportunity to work overtime with Multiserv.

For future economic loss, Delaney DCJ determined that the plaintiff had not established on the balance of probabilities that he would lose his contract with Multiserv or be unable to obtain alternative work, which had been alleged by the plaintiff. Whilst it was noted the plaintiff earned significantly more than he would have had he not been injured, Delaney DCJ found it was not likely the plaintiff would remain employed with Multiserv until 65 years of age. It was therefore found that the plaintiff had lost a "significant degree" of earning capacity equating to $400 net per week to the age of 65 less 20% for vicissitudes.

NSW Court of Appeal Decision

Hanson appealed the decision of the District Court on numerous grounds, including that it was in breach of its duty of care to the plaintiff, that his Honour erred in apportioning liability equally with Pioneer, that the finding for non-economic loss was excessive and should have been no more than 20% of a most extreme case and that damages for future economic loss were also excessive noting the plaintiff was earning significantly more than he was likely to earn had he not been injured.

The plaintiff cross-appealed on numerous grounds, including the finding that the plaintiff was not likely to lose his job at Multiserv, the assessment of future economic loss being too low and departing from the normal 15% discount for vicissitudes. Pioneer also cross-appealed, relying on similar grounds to those relied on by Hanson.

The Court of Appeal refused to disrupt findings by Delaney DCJ of fact as they did not consider there was any error in the primary judge's conclusions which could be considered "plainly unreasonable". The Court of Appeal held it was open to the primary judge to take the view that the exercise of reasonable care by Hanson required it to be aware of the conditions at the place to which it was frequently sending the plaintiff and to assess the safety of those conditions. To the extent that there was a system of notification of loader drivers in place, reasonable care would have disclosed that system to Hanson, and required Hanson to notify the plaintiff of that system.

The Court of Appeal emphasised that issues such as determining apportionment between defendants was very much a matter of judgment as to which reasonable minds can differ. The Court of Appeal applied the decision of the High Court in Podrebersek v Australian Iron and Steel Pty Limited 2 in reaffirming an Appeal Court should not intervene on apportionment under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 unless error appears in the reasons or the result is plainly unreasonable.

In relation to the finding of 35% for non-economic loss, the Court of Appeal noted that the primary judge had accepted the plaintiff as both reliable and truthful. In all the circumstances, although the Court of Appeal considered that 35% was at the higher end of the range, it was not thought to be so high as to justify appellate intervention.

In relation to economic loss, the Court of Appeal accepted submissions by Hanson that compensation for loss of overtime should be excluded on the basis that had the accident not occurred, the plaintiff would not have been working for Multiserv and would therefore not have had the opportunity to earn overtime. In relation to future economic loss, the Court of Appeal noted that Delaney DCJ had not been directed to refer to s 13 of the Civil Liability Act, which includes at (1):

"A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury."

Hanson and Pioneer submitted that the primary judge had erred in basing an award for future economic loss on a loss of capacity referrable to the plaintiff's current earnings. Rather, they submitted the plaintiff should have been awarded no more than a buffer in the order of $60,000. On the other hand, the plaintiff submitted that the plaintiff's employment with Multiserv had in fact been terminated at some stage after Delaney DCJ's decision and that economic loss should therefore be awarded based on a total loss of earning capacity equating to $826.88 per week.

The Court of Appeal accepted the submissions of Hanson and Pioneer over those of the plaintiff and held that future economic loss had to be assessed pursuant to s 13 of the Civil Liability Act, including a determination of the plaintiff's "most likely future circumstances but for the injury". In determining the assessment of future economic loss, the Court of Appeal noted that the primary judge had accepted that the plaintiff had sustained a loss of earning capacity equating to approximately 28%, when taking $400 as a percentage of $1,440.

The Court of Appeal determined that the District Court had erred in applying the loss of 28% to the plaintiff's subsequent earning at Multiserv. Rather, the correct approach was to assess the loss of 28% based on the current value of the plaintiff's earnings at the time of the injury, which were thought to equate to $850 per week taking into account CPI. Accordingly, an award was made for future economic loss on the basis of $250 per week for 25 years deducting 20% for vicissitudes.

Additional findings made by the Court of Appeal were that the threshold of six hours per week for at least six months pursuant to s 15 of the Civil Liability Act only refers to gratuitous domestic assistance and not to paid commercial care. Accordingly, a finding of two hours per week paid assistance for house maintenance and lawn mowing was allowed.


The Court of Appeal has reaffirmed their reluctance to review any decision made by the primary judge based on findings of fact which accord with at least one view of the evidence, despite the fact that other views of the evidence might exist.

This is especially so in relation to assessments for non-economic loss, which will only be disturbed if they are so excessive and unreasonable as to justify appellate intervention. This accords with previous decisions by the Court of Appeal including Wynn Tresedder Management v Barkho 3 and Basha v Vocational Capacity Centre Pty Limited4 that a primary judge's award of damages for non-economic loss will only be overturned if it can be shown the conclusion reached by the primary judge was "manifestly erroneous".

The case highlights the difficulty for defendants in having decisions of a primary judge in respect of apportionment of liability overturned, particularly in circumstances where the defendants elect not to call any evidence, unless error appears in the reasons or the result is plainly unreasonable.

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.

1Hodgson JA, Basten JA and Sackville AJA
2 [1985] HCA 34
3 [2009] NSWCA 149
4 [2009] NSWCA 409

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