Safety is a significant part of all construction projects. Questions often arise over the nature of the various duties owed in relation to safety and whether such duties are delegable. Another key consideration is the effect of the various contractual relationships on safety and the duties owed. These issues were considered in the recent case of Transfield Services (Australia) v Hall; Hall v QBE Insurance (Australia) [2008] NSWCA 294.

The Facts

In 2002, Mr Hall was employed by the Royal Australian Navy as a member of the Reserve Service. He worked as a facilitator and maintainer at a physical fitness facility at HMAS Stirling in Western Australia. There was a ropes course at the facility on which participants carried out various physical activities. Mr Hall was responsible for conducting periodic safety inspections of the ropes course. On one of these inspections, the rope broke, causing Mr Hall to fall a height of 10 metres and sustain significant injuries.

Transfield was responsible for maintaining the ropes course under a plant and equipment maintenance contract with the Commonwealth. Adventure Training Systems Pty Limited (ATS) was one of Transfield's subcontractors and inspected the ropes course in December 2001. At the time of the inspection, the ropes course was closed because of concerns about its safety. Following the inspection, ATS issued Transfield with a report dated 17 December 2001 that said:

'An inspection was carried out on all elements and found to be in safe working order. On each element all cables, eye bolts (and nuts), strand-vices, wire rope grips, stays and belay pulleys were checked and found to be ok. Belay wire rope lines and belay pulleys are 20 months old at time of this report.'

The part of the steel that broke, leading to the injury, was covered with a plastic shrink wrap material (similar to electrical tape but opaque).

It was realised after the accident that the wire rope underneath the shrink wrap was badly corroded. In addition, the engineering evidence put forward, which was uncontested at the trial, stated that corrosion underneath the shrink wrap was foreseeable given that the ropes course was in an open-air environment approximately 100 metres from the sea.

Decision At First Instance

The trial judge found that Mr Hall had adopted the correct abseiling checking procedure and damages were assessed at $1,457,711.91. In addition it was held that Transfield was liable for the negligence of ATS because Transfield owed a non-delegable duty of care to users of the ropes course. This was despite the fact ATS was an independent contractor engaged by Transfield.

Issues On Appeal

  • Did Transfield owe a non-delegable duty of care to Mr Hall?
  • Is Transfield vicariously liable for the negligence of its subcontractor, ATS?

Court Of Appeal Decision

In the Court of Appeal the trial judge's decision was overturned and the appeal was allowed finding that Transfield:

  • Did not owe a non-delegable duty to the respondent.
  • Was not vicariously liable for the negligence of ATS.

Reasons For Decision

Non-Delegable Duty Of Care

The trial judge recognised that a non-delegable duty of care arises when any one or more of the following circumstances exist:

  • The relationship between the plaintiff and defendant evidences elements of control by the defendant.
  • There is special dependence or vulnerability on the part of the plaintiff.
  • The activity being carried out by the defendant's independent contractor is sufficiently dangerous, or alternatively a substance associated with the activity being carried out by the defendant's independent contractor is sufficiently dangerous.

It is the third category which the trial judge referred to in this case when finding that a non-delegable duty of care arose.

In the appeal, the Court stated that nothing in recent decisions of the High Court provides reason to believe that the law has changed from that stated in Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1. That case found that the effect of employing an independent contractor to carry out extra hazardous activities is not sufficient to impose on the principal a non-delegable duty of care concerning the carrying out of those activities.

In Stevens v Brodribb, four of the five judges expressly rejected the proposition that a person has a non-delegable duty to ensure that reasonable care is taken by an independent contractor employed to engage in an extra hazardous activity.

The Stevens v Brodribb case followed the Full Court of the New South Wales Supreme Court in Torette House Pty Limited v Berkman [1939]. In that case, the Court recognised that there were some categories of relationship in which one party owed the other a non-delegable duty of care. In relation to a person who engaged an independent contractor to carry out work, the Court held:

'Although he is liable for all consequences of the results contracted for, he is not as a general rule responsible for damage occasioned by negligence on the part of the contractor in applying the methods selected by the contractor for achieving those results, these methods and their application being matters over which the employer has no control, and not being methods which must necessarily be used and from which damage must necessarily result.'

This case also noted the English Court of Appeal decision of Honeywheel & Stein Limited v Larkin Bros [1934] concerning the act of the independent contractor regarding the work the contractor was engaged to do:

'If the work was lawful in itself and of such character that if executed with due care involve no injury as a consequence to others there was no special or particular hazard in the work which the plumber was employed to execute.'

The Transfield v Hall judgment states at paragraph 107 that the doctrine of extra hazardous activity related only to 'an act which in its very nature involves in the eyes of the law a special danger to others'. On that doctrine, the only thing that could even arguably be said to be extra hazardous, or inherently dangerous, about the activity of inspecting the wire ropes, is the fact that the person doing the inspection is working at a height. That is, it is not a 'special danger to others', it is a special danger to the contractor himself.

Vicarious Liability

Transfield was not held vicariously liable in relation to the acts of ATS (its subcontractor), because it had not directed ATS to do something specific, which in turn causes damage. Transfield did not specifically direct ATS to visually survey the extremities of the cable. Transfield merely directed ATS to inspect the course for safety.

Even if part of the task that Transfield required ATS to do was to visually survey the extremities of the cables, and surveying the extremities of the cables would necessarily involve removal of the shrink wrap, that does not bring the case within the principle of vicarious liability. That principle is concerned with a situation where a person directs an independent contractor to perform some act, and the doing of the very act that is directed to be performed causes damage. That was not the case here.

Implications For Principals

This case makes it clear that the duty of care in relation to injury to others is not of itself non-delegable. This is particularly the case where the activity being carried out is not extra hazardous. In addition, both principals and principal contractors will not be vicariously liable for independent contractors' actions unless those actions are specifically directed by them.

Accordingly, it is important that principals consider when contractors and subcontractors may be carrying out extra hazardous work or activities, as in such cases the duty of care is non-delegable.

Principals should also take care not to direct the work of contractors or subcontractors because in such circumstances they become vicariously liable.

Finally where the duty is delegable, and the principal does not direct the work, it is important to ensure contracts clearly set out what is being done by whom, and who is responsible for safety and in what circumstances.

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