Whether Advantage Breached the Labour Supply Contract and if so Whether any Breach Caused Loss or Damage
56The labour supply contract was admitted into evidence. By the agreement Advantage agreed to carry out and complete "the Goods" in accordance with the contract. "Goods" is defined to mean "the goods (if any) required under the contract." Both parties also agreed to perform "all their other obligations under the contract."
57The contract was said to incorporate a number of documents including Centennial Standard Conditions of Contract, Scope of Work, Schedules, and certain attachments. These attachments included the Centennial Standard Contractors Site Regulations, Centennial Coal Policies and Contractor's Insurance Details.
58The only evidence given in the proceedings about what Advantage did under this contract was confined to the provision of the plaintiff's services to Centennial, and also the provision of the services of one other person who performed maintenance work at the mine.
59The contract itself, in the manner in which it is framed, seems directed principally to the supply of goods and the carrying out of works at the mine. For example there is a definition of "supply" which reads "includes the supply and delivery of Goods in accordance with this contract". "Work" is defined to mean "the work or services required under the contract including the supply of Goods." The contractor is required to carry out and complete the Work in accordance with the contract by the date specified in the purchase order. There are detailed provisions about the passing of the risk in goods, their delivery and the like.
60In the same vein, there is a requirement by the contractor to comply with all laws and all occupational health safety and environmental and rehabilitation requirements of Centennial relating to the contract, compliance with site regulations and Centennial policies whilst on site, a requirement to obtain a copy of the site regulations before commencing work and to make personnel aware of them, to provide all safety devices and warnings which may be necessary or desirable for ensuring the protection of persons, a prohibition against interfering with or disrupting the work of Centennial staff, a requirement to avoid damage to property, a warranty that the site has been fully inspected and that provision has been made for "all reasonable contingencies that may arise while you are performing the contract at the Centennial sites." Provisions of this kind are more appropriate to circumstances where a contractor enters a site to perform a work project, rather than making persons available to perform work in the circumstances which apply to the plaintiff.
61Notwithstanding this, portions of the contract are clearly able to be applied to the supply of the plaintiff's labour by Advantage to Centennial. This is because a schedule to the contract describes the scope of the supply of work and services as confined to "labour for Longwall maintenance" and "labour on maintenance days...." There is included a schedule of rates on an hourly basis, calculated by reference to the shift which is worked. There is a special insurance requirement for public liability cover of $5 million. The commencement date is said to be 1 July 2008 and the completion date 30 June 2009.
62The only evidence about payment to Advantage by Centennial under the contract is that of an hourly rate paid for time worked by each of these two persons.
63In support of its claim for breach of contract, Centennial relied on certain provisions of the site regulations which were incorporated into the contract. In particular Centennial relied on the provisions of clause 6, entitled "Safety." Cl 6.1 required in general terms that all site work be carried out so as to minimise the risk of injury to people and damage to equipment. Centennial submitted that Advantage had breached this condition because the work which was being carried out by the plaintiff was not done so as to minimise the risk of injury to him. This submission is typical of some of the other breaches alleged against Advantage.
64Clause 6.2 states that Centennial:
"Requires risk assessments and regular reviews of these assessments to be conducted of all operations carried out on site together with regular meetings between supervisors, employees and contractors, employees and subcontractors to specifically address safety issues."
Furthermore, clause 6.3 provides that consistent with this policy and "prior to commencing site works", the contractor is to document work activities and the system of work and of safety precautions, conduct a risk review on site involving the contractor and their appropriate employees who are going to undertake the site works, and provide Centennial with a formal copy of the risk review and supporting documentation. By clause 6.3.3 the contractor is to conduct regular site inspections to identify assess and eliminate or control risks, discontinue site works where there are uncontrolled hazards, hold regular meetings with all site employees to review safety aspects of the job, promptly report all accidents or incidents, and document the results of safety inspections and key issues arising from safety meetings with employees. Furthermore, regular site inspections are to be conducted "at least once per day, prior to the commencement of work on site, and as directed or deemed necessary" by Centennial. There is also provision for regular safety meetings to be conducted each month during work on site with 15 named matters to be considered.
65It was submitted by Centennial that all of these provisions had been breached by Advantage. During the course of oral submissions I discussed with Mr McInerney whether in reality the contract should be read and applied so that provisions of this kind would be imposed on Advantage, given the limited nature of its subject matter. Notwithstanding that the contract applied, on the evidence, to the provision of the services of the plaintiff and one other maintenance person only, Mr McInerney asserted that these clauses operated and should be applied to their full effect. Accordingly, said Mr McInerney, the principal of Advantage or some other person would be required to attend the site at least once on each day that the plaintiff performed work there for the purpose of ensuring that all of the work activities, (presumably confined to those which the plaintiff would undertake during the course of that day) would be carried out safely and in compliance with all of the requirements outlined above. Given the subject matter of the contract, this would seem to create a situation which, when combined with the other provisions of clause 6.3 can only be described as bizarre. The commencing words of clause 6.3.1 are "prior to commencing site works." Notwithstanding the submissions made on behalf of Centennial, I would not be prepared to apply the provisions of this contract to the supply of two individual persons to perform labour as falling within the commencement of site works. The thrust of this provision is that it is intended to apply to circumstances where a contractor comes onto a Centennial site and carries out a particular project there.
66In taking this approach to construction of the provisions of the contract I acknowledge that consenting contractual parties engaged in commerce must not be protected from an unfavourable bargain. But this is far removed from applying terms and conditions in a manner which clearly are irrelevant to the particular circumstances of the contract. The form of the contract is one which is clearly intended to be capable of being applied to a variety of situations, especially the supply of goods and the carrying out of specific site works. To attempt to apply all of the provisions to every situation is an inappropriate exercise.
67That is not to say, however, that certain of the provisions of the contract referable to safety matters and the carrying out of work by the plaintiff cannot be said to apply; but in the case of these proceedings they need to be read down so that they are relevant to the supply of labour simpliciter. Mr McInerney did not suggest that those provisions of the contract which clearly related to the supply of goods should apply to Advantage, because clearly Advantage was not supplying goods under the contract. Accordingly, if Advantage is not engaging in site works as part of some discrete project why should the contract be construed so as to apply provisions which are clearly intended to cover site works of this kind, to the bare supply of labour? In my opinion the contract should be construed so as to be consistent with the fact that its provisions clearly cover and anticipate a variety of activities and circumstances. The provisions which are to be applied should be limited to those which are consistent with those activities and those circumstances which are the subject of the contract, so as to give efficacy to it.
68I conclude that the clauses relied upon by Centennial as having been breached by Advantage do not apply to the contract between them. Accordingly, no question of breach can arise.
69Assuming, however, that the conclusion which I have reached is incorrect, and the provisions of clause 6 apply to the agreement, it would be necessary to consider the consequences of any breach. There is no evidence that Advantage undertook any of the obligations imposed upon it under clause 6. On the contrary, the plaintiff in cross-examination said that Advantage did not participate at all and was not active in any way concerning the work which he performed for Centennial. In particular, to his knowledge, Advantage did not conduct any risk review, daily site inspections, monthly safety meetings and the like.
70It was the position of Centennial that by reason of these breaches, Advantage was required to pay it by way of damages any sum which it was ordered to pay to the plaintiff together with its own costs.
71Even if I were to read these provisions as extending to the obligations of Advantage in the context of this labour supply agreement, I am of the opinion that Centennial has not established the necessary causal nexus between the breach and the liability of Centennial to pay damages to the plaintiff. It is a trite observation, and well established on the authorities that in order to recover damages for breach of contract, there must be a causal connection between the breach and the loss which has been suffered. In Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310, McHugh JA (as his Honour then was) said:
".....to establish a causal connection between a breach of contract and the damage which the plaintiff has suffered, he needs only to show that the breach was a cause of the loss. This is to be decided by the application of common sense principles. In general, the application of the "but for" test would be sufficient to prove the necessary causal connection. But that test is only a guide. The ultimate question is whether, as a matter of common sense, the relevant act or omission was a cause." (at 358).
72Centennial submitted that the "evidential onus shifted to Advantage to demonstrate that no causal connection existed (examples could have included evidence which indicated that the plaintiff would not have acted on the warning because of lack of choice or personal inclination; or evidence that no alternative course of action would have eliminated or reduced the risk of injury)." In support of this submission Mr McInerney relied on observations of McHugh J in Chappel v Hart (1998) 195 CLR 232 at 247. I observe firstly that his Honour was in dissent. Secondly, any such comment needs to be read in the context of the overall discussion in which His Honour was engaging relating to theories of causation. I do not discern anything in his Honour's judgment which would avoid the imposition of the usual burden of proof in claims based on breach of contract. It is part and parcel of such a claim that the appropriate causal connection be established by the party asserting entitlement to a remedy consequent upon breach.
73It will be remembered that the plaintiff had only undertaken this particular task before the installation of the AFC on four or five occasions in a career extending back to 1980. Accordingly, it was not a task which he encountered often. Furthermore, on the evidence, the incident occurred at about 2 pm during a shift which was due to finish at 4 pm. The task was unplanned in the sense that the plaintiff undertook it on his own initiative, without having been directed by anyone to do it, and, on the evidence, the need to do so was unusual. The plaintiff had never encountered a deputy dropping off a leg previously, and he had no previous knowledge that it was to occur. I infer that the circumstances leading up to the incident occurred as part of the process of operating a coalmine, and in general terms the plaintiff was expected to do what was necessary as and when he had to. Centennial submitted that each of the breaches was a distinct cause of the plaintiff's injuries. It was said that each breach was a particular act or condition which was one of the conditions or relations necessary to complete the set of conditions which represent the total cause, relying on the judgement of McHugh JA in Alexander v Cambridge Credit. Centennial further submitted that as a matter of practical commonsense but for each breach it was likely on the balance of probabilities that the plaintiff would not have suffered his injury.
74I reject these submissions. As a matter of commonsense, as I pointed out above, the work task which the plaintiff was to carry out was highly unusual in his experience, and not part of any planned work activity on his part. In these circumstances I am unable to conclude that if a risk assessment had been conducted before the commencement of the shift, or if a daily site inspection had been conducted before the plaintiff commenced work that day or if monthly safety meetings had been held, that the plaintiff would not have been confronted with the particular task towards the end of the shift that day, would not have attempted it in the manner in which he did, and would not have been injured. As a matter of commonsense, there is no relevant causal connection between any of these breaches as asserted by Centennial and the particular injury sustained that day by the plaintiff. The plaintiff's injuries were sustained because he was not appropriately instructed or supervised in carrying out the particular task which he attempted, and because he did not have available to him appropriate equipment with which to do it. In the circumstances of the plaintiff's employment, these were all matters within the control of Centennial, and unrelated to any obligations imposed on Advantage by clause 6.
75In summary I decline to find that there was a breach by advantage of its obligations under clause 6 of the contract in the manner contended for by Centennial. Furthermore I conclude that if there were any such breach that there does not exist the necessary causal connection with the plaintiff's injuries to found any entitlement to claim damages for breach from Advantage.
76Centennial also relied upon two indemnity provisions contained within its Standard Conditions of Contract.
77Clause 8 is entitled "Indemnities and Insurance". Relevantly, clause 8.1 provided that Advantage must indemnify Centennial and agree to hold and save Centennial harmless from all claims for:
"(a) Injury to or death of any of your personnel, except to the extent that a claim for such injury or death arises as a result of the negligence of Centennial or a breach of this contract by Centennial.
(e) Without limiting clauses 8.1(a)..... Breach by you or your personnel of any of your obligations under the contract or any negligent act or omission by you or your personnel relating to the performance of the contract."
78Centennial conceded that if I found, as I have, that the plaintiff's injury arose as a result of the negligence of Centennial, that clause 8.1 (a) would not apply.
79It is only necessary to consider the provisions of clause 8.1 (e). Assuming, for the purpose of discussion, that Advantage has breached clause 6 of the conditions, the indemnity extends to claims brought by someone other than Centennial arising from breach under the contract or any negligent act or omission relating to the performance of the contract. Having concluded that any such breach lacked the necessary causal connection with the plaintiff's injuries I am of the opinion that the provisions of clause 8.1 (e) can have no application so as to afford Centennial the benefit of any indemnity. The plaintiff's claim does not relevantly arise out of any breach by Advantage or any of its personnel of the obligations of Advantage under the contract. Nor does it arise out of any negligent act or omission by Advantage or its personnel relating to its performance of the contract. This claim must also fail.
80Finally, Centennial relied on the provisions of clause 43 of the Standard Contract which required Advantage to effect certain insurances.
"Clause 43.1
The contractor must have insurances referred to in the contract whenever performing its obligations under the contract and for the period (if any) set out in the contract after the contractor has performed all of its obligations under the contract.
Clause 43.2
43.2.1 All insurance policies must be with insurers which are subject to the Prudential supervision of APRA
43.2.2 Unless otherwise agreed in writing by the Principal, public and product liability policies must note the Principal and all subcontractors as interested parties and must cover the respective liabilities of each of those parties to each other and to third parties. The policy must cover each indemnified party to the same extent as it would if each of the parties had a separate policy of insurance.
43.3
The Contractor must provide evidence of insurances prior to performing any work and whenever requested to do so.
43.4
If the Contractor neglects, fails or refuses to obtain any insurance policies as required by the contract or the Standard Contractors Site Regulations the Contractor must indemnify the Principal for any loss or damage suffered by the Principal arising out of or in connection with the Contractor's failure to obtain the required insurance."
81Advantage effected a policy of insurance with GIO. If that policy complies with its obligations under clause 43.2, then no question of breach of that provision arises.