Armstrong & De Mamiel Constructions Pty Ltd v. Virenius, Henry Reino Pekka [1981] FCA 208

ORDER JUDGES MAKING ORDER : CONNOR, McGREGOR and ELLICOTT JJ. DATE OF ORDER : 19 November 1981. WHERE MADE : CANBERRA, A.C.T.

2. The appellant pay the respondent's costs.
3. Cross-appeal stand over generally with liberty to either

party to restore it to the list on seven days notice.

IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY

) ) DISTRICT REGISTRY ) No. A.C.T. G.22 of 1981 ) GENERAL DIVISION }

ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: ARMSTRONG s& DE MAMIEL CONSTRUCTIONS PTY. LIMITED Appellant (Defendant)

This is an appeal from a judgment of the Supreme Court of the Australian Capital Territory given by Kelly J. on 2 July 1981.

(a) the respondent to this appeal, who was the pliaintiff in the Supreme Court, was an

(b) on 2 March 1977 the respondent suffered injury when he fell from part of the wooden framework of a dwelling which the appellant was erecting; and (c) the respondent's fall was caused by the appellant's breach of reg.73(3) of the Scaffolding and Lifts Regulations of the State of New South Wales in

their application in the Australian Capital Territory.

"73. Any person who directly or by his servants or agents (including every independent contractor from time to time engaged in that work) carries out any building work shall take all measures that appear necessary or advisable to minimise accident risk and to prevent injury to the health of persons engaged in such building work and for this purpose,

without limiting the generality of the foregoing, he shall -

(3) provide means by fencing or otherwise for securing the safety of any person working at a place from which he would be liable to fall a distance of more than six feet".

Before us counsel for the appellant conceded, and in my

(a) the appellant was a person carrying out building work; -

(b) the respondent was a person engaged in such building work;

(c) the appellant was in breach of its duty to the respondent under reg.73(3); and

(d) the breach was a cause of the respondent's fall and subsequent injuries.

The appellant contended, nevertheless, that the respondent

was precluded from recovering by reason of his own breach of reg.73(3).

The steps in this argument are that the respondent was not an employee but an independent contractor, that as an independent contractor he was a person carrying out building work within the meaning of reg.73(3), that consequently he was under an obligation to persons engaged in such building work to provide means for securing the safety of any person working at a place from which he would be liable to fail a distance of six feet and that if he had done so he would probably not have fallen.

In support of this argument the appellant relied upon

Ginty v. Belmont Building Supplies Limited 1959 1 Al1 E.R. 414 and Shedlezki v. Bronte Bakery Pty. Limited (1970) 92 W.N. (N.S.W.) 151. In Ginty's Case a regulation required the employer to provide and use

crawling boards where work was being done on roofs covered with fragile materials. Another regulation required the employee to use the boards so provided. Pearson J., as he then was, found that the employer had provided the boards but that the failure to use them was solely the fault of the plaintiff. Consequently Pearson J. held that though the plaintiff and, through him, his employer were both in breach of a duty under the regulations because the boards had not been used, the plaintiff was not entitled to recover damages against his employer because the fault was the plaintiffs and there was no fault on the part of his employer which went beyond or was independent of the plaintiff's own admission.

In Shedlezki's Case the plaintiff was Chairman of Directors and Managing Director of the defendant company. He was also employed by the company as a baker and undertook responsibility for the general management of the company, including the supervision of machinery used in the bakery and the system of work in connection therewith. He suffered injury while operating a machine and sued

the company for breach of statutory duty to guard the dangerous

parts of the machine. The Court of Appeal of New South Wales

dismissed an appeal from the trial judge who had held in these circumstances that the plaintiff could not recover because he was himself solely to blame for his injury. I agree, with respect,

with the analysis of Ginty's Case made by Asprey J.A. in Shedlezki's Case at p.154:-

"Pearson J., as he then was, held that the plaintiff could not recover on the ground, inter alia, that

in substance and reality the accident was due solely

sole author of his own wrong, that the fault of the

defendant-employer under the regulations consisted of,

and was coextensive with, the wrongful act of the plaintiff and that there was no fault on the part of

the defendant causally related to the accident which

went beyond or was independent of the wrongful act of

I think these two decisions are clearly distinguishable from the present case. Here there was no evidence that the appellant had made any attempt to comply with reg.73(3) either directly or through the respondent. In my view it would be incorrect to say in this case that in substance and reality the accident was due solely to the fault of the respondent so that he was the sole author of his own wrong. The appellant had an entirely independent obligation to persons engaged in the building work which, it was common ground, included the respondent, whether he was an employee or an independent contractor. It would also, in my view, be incorrect to say that the appellant's breach of the regulation consisted of or was coextensive with the respondent's breach.

Counsel for the appellant conceded, and in my opinion correctly, that the appellant in these circumstances was unable to bring itself within the terms of the joint tort-feasor's legislation in this Territory.

In the view I take of this issue I find it unnecessary

to consider the question, which was much argued before us,

whether the respondent was an employee or an independent contractor. In either event, it is conceded that the appellant owed a duty to him under reg.73(3) and, on the assumption that he was an independent contractor, the defence based on the doctrine in

Ginty's Case is not in my view open to the appellant.

It was argued by the respondent that there was a further reason why the appellant's defence should fail, namely that reg.73(3), in its present form, applies only to the head contractor and not to sub-contractors.

The words in parenthesis in reg.73 "(including every independent contractor from time to time engaged in that work)" were added by s.2 of the Scaffolding and Lifts Ordinance 1976, presumably as a result of the decision of the High Court in Buckman s Son Pty. Limited v. Flanagan (1974) 133 C.L.R. 422.

It was argued that the insertion of this parenthesis called for a construction of the regulation different from that given to it by the majority of the Full Court of New South Wales in Davey v. Skinner [1961] S.R. (N.S.W.} 648. Until the 1976

Ordinance it was clear from Davey v. Skinner that an employee

was entitled to sue his employer for a breach of reg.73, whether

the employer was a head contractor or a sub-contractor. Acceptance of the respondent's argument would mean that the employee would

lose this right if his employer happened to be a sub-contractor.

This was the view taken in the powerful dissent of Sugerman J. in Davey v. Skinner supra. Now, however, for a period of some 20 years, trade unions, employers and insurers have ordered their affairs in accordance with the majority view in Davey v. Skinner that reg.73 applies both to the head contractor and sub-contractors. Acceptance

of the respondent's argument would also have the practical result

that, if the employer was a sub-contractor, an injured building

worker would in an ordinary industrial accident have to sue his employer for common law negligence and in addition join the head contractor for breach of reg.73. For my part I doubt whether it was intended, by this parenthetical side wind, to alter such a fundamental employee's right or to alter the correlative liability of employers and insurers inter se. However, in the view that I take of the principal question argued, I do not find it necessary to decide this question. Moreover I think it better that its resolution should be left to a case where it is necessary for the decision.

I would dismiss the appeal and order the appellant to pay the respondent's costs.

I think the respondent's cross appeal on the quantum of damages should stand over until the appeals on these questions currently before the High Court are determined. I would therefore order that the cross appeal stand over generally with liberty to

either party to restore it to the list on seven days notice.

I certify that this and the Que preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Gennet .

ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

PTY. LTD. Appellant AND: HENRY REINO PEKKA VIRENIUS Respondent

ARMSTRONG & DE MAMIEL CONSTRUCTION PTY. LTD. (Defendant) appeals against a decision in a case in which

HENRY REINO PEKKA VIRENIUS (Plaintiff) sued the defendant

for damages for personal injuries said to have been suffered by him as the result of the alleged negligence of the defendant and breach by it of statutory duty owed to the plaintiff

pursuant to reg. 73(3) of Scaffolding and Lifts Regulations ofthe State of New South Wales in their application to the Australian Capital Territory.

The learned Justice of the Supreme Court delivered his reserved judgment on 2 July 1981 in which he entered judgment for the plaintiff by reason of the breach of the defendant of the reg.73(3) in the sum of $150,139.80 comprised of the sums to which reference is made at the

or agents (including every independent contractor from time to time engaged in that work) carries out any building work shall take all measures

that appear necessary or advisable to minimise accident risk and to prevent injury to the health of persons engaged in such building work and for this purpose, without limiting the generality of the foregoing, he shall -

provide suitable and safe scaffolding, which shall conform to the requirements of these Regulations, for all work which cannot be done safely by a person standing on permanent or solid construction, except when such work can be done safely from ladders constructed in conformity with the provisions of these Regulations;

provide means by fencing or otherwise for securing the safety of any person working at a place from which he would be liable to fall a distance of more than six feet;"

The defendant in its appeal makes no criticism of the amount awarded or any component of it; though there is a cross appeal by

the plaintiff of the application of a discount rate of 4%

per annum to a calculation made by his Honour in his judgment

It appears from the judgment that on 2 March 1977 the plaintiff fell a distance of more than 10 feet from what appears to have been the top of the wooden framework of a cottage then being erected by the defendant. As a result, the plaintiff suffered severe injury to his right leg with consequent pain, suffering and a permanent impairment of his earning capacity. We do not understand there to be any dispute

about these facts. No submission in that regard was made to us.

A significant issue in the case was whether the plaintiff was engaged in a "contragt of service" and not as a sub-contractor as had been argued by the defendant. On that issue the learned trial Judge found, for reasons which he has set out with care and in detail, that the plaintiff was engaged in a "contract of service". It followed from that finding and his Honour so concluded, that the plaintiff was not a person required to make the provision set out in reg.73(3) of the Scaffolding and Lifts Act 1912-1948 of the State of New South Wales(applied in the Territory by virtue of s.7 of the Scaffolding and Lifts Ordinance 1957.) To use its

terminology the plaintiff was thus "engaged in" but not

His Honour in holding that the defendant was in breach of sub-regulation 73(3) of those regulations also held that there was no requirement that the defendant supply scaffolding pursuant to sub-regulation 73(1). Further, his Honour found that the breach referred to was a cause of the plaintiff's damage, for which the defendant was prima facie liable.

But his Honour was not satisfied that there was any breach

Before us, the points argued were that his Honour erred

in concluding that the plaintiff was not a person "carrying out" puilding work within the meaning of the Regulation; and in that regard his Honour should have found the plaintiff

was said that if his Honour ought to have found that a plaintiff was a person carrying out building work he ought then to have found that the plaintiff was precluded from recovery by reason of his own breach of statutory duty, i.e. that plaintiff's own default in observing the provisions of Reg.73(3) caused the accident; and that, therefore, he is

not entitled to recover damages from the defendant.

In support of his argument that the plaintiff was an independent contractor, senior Counsel for the defendant listed matters which are really common ground and, he argued,

supported that interpretation of the plaintiff's status, viz. -

The engagement of the plaintiff was really pursuant to a contract to deliver results for a price, i.e. to instal a whole floor or the framework of a cottage or trusses on houses for a price for that particular parcel of work. He submitted that this view of the evidence was a more accurate way of summarising the plaintiff's appointment than to say that he was employed to do "piece work'.

The Court showld have inferred from the manner in which the plaintiff did his work that there was, in fact, no control in the relevant sense; that he went ahead once directed to a particular cottage and thereafter was in receipt of instructions only possibly for the positioning of a window frame or in the construction of a new type of porch. He was not, during the course of this activity, subject to supervision; but if anything was wrong he would be then told to fix it.

The plaintiff had said that he was in partnership. He told the Bank this and had spoken thus to his employer; he had arranged a joint account for a former partnership into which the one cheque, which was used to pay him and his partner at the time of the accident, was banked, so that from it each partner would be able to draw his share of remuneration.

here were no fixed hours of work required of him except that he was expected to do some 40 hours per week, not permitted to work on Saturdays and not required to sign on or off.

He supplied not only his own tools but certain power tools, viz. an automatic planer and saw. In the ordinary way, it was submitted, an employer would not permit an employee to bring on to a building site power tools.

The mode of his payment was against progress certificates.

<A receipt which was referred to in evidence and quoted in the judgment of the leaimed trial Judge in terms acknowledged that the plaintiff was a sub-contractor.

There was no tax deducted from his remuneration.

10. Ordinary advantages which accrued to an employee workman, for example associated with awards, were not present. He had no sickness benefits, no wet weather allowance, no site allowance as one might have expected were he an employee.

Paragraph 9 is not, I suggest, supportable on the evidence.

It was implicit in senior Counsel's argument that these were facts not in dispute; that the proper inference

from them was able to be drawn by this Court as well as had been by the trial Judge; that in all the circumstances it was

clear that the plaintiff was, in fact a sub-contractor.

sub-contractor as opposed to a servant, senior Counsel referred

to Performing Rights Society Ltd, v. Mitchell & Booker (Palais de

Dance) Limited (1924) 1 K.B. 762 per McCardie J. and, in particular, his summary at p.766. Though not conceding there was any retained control upon the evidence in the present case, Counsel submitted that the inference that plaintiff was a sub-contractor could still arise despite some residue of

control in the defendant. In this regard he referred to

Queensland Stations Pty. Ltd. v. Federal Commissioner of Taxation (1945) 70 C.L.R. 539 particularly at p. 552 where Dixon J. (as

"In considering the facts it is a mistake to treat as decisive a reservation of control over the manner in which the droving is performed and the cattle are handied. For instance, in the present case, the circumstance that the drover agrees to obey and carry out all lawful instructions cannot outweigh the countervailing considerations that are found in the employment by him of servants of own, the provision of horses, equipment, plant, rations, and a reumuneration at a rate per head delivered.

"That a reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract appears from... (authority cited)"

Counsel submitted that on the evidence there was nothing to justify a contention that the plaintiff and his partner were not permitted to hire servants of their own had they chosen. He submitted that cases dealing with the test of a person being an independent contractor evinced emphasis of different indicia depending on whether the question was one of the status of the alleged contractor for the purpose of vicarious liability; or the liability of a master to a servant in tort; that there has been a change of emphasis to be noticed in the decisions

which culminate in Australian Mutual Provident Society v. Allan & Anor. (1978) 52 A.L.J.R. 407, from which it emerges,

so ran the argument, that matters such as a right to enter into a partnership, a power of unlimited delegation, remuneration by commission and the absence of an obligation to do work emerged as strong indications that a person is not a servant. Further, Counsel submitted, there was no bar as appears from the evidence in this case, against the plaintiff and his partner incorporating themselves if they

He contended that the obligation to comply with the regulation applied to an independent contractor just as much as the other person carrying out building work, i.e. the employer. So, he argued, the plaintiff was in reality a sub-contractor; he was 'carrying out" building work as opposed merely to being "engaged" in it and, accordingly, his obligation was at least

He conceded that there had been a breach of regulation 73(3), that this was causally related to the injuries suffered by the plaintiff; but in the circumstance there was "an excess of fault" on the part of the plaintiff which disentitled him to recover. As to this comparison of degrees of fault, he

cited, inter alia, Ross v. Associated Portland Cement

Manufacturers Ltd. (1964) 1 W.L.R. 768 The point of principle was stated by Lord Reid at p.777 -

"The question really is whose conduct caused the accident because it is now well established that a breach of statutory duty does not give rise to civil liability unless there is proved a causal connection between the breach and the plaintiff's injury."

He conceded that a finding of no contributory negligence on the part of plaintiff had been made, and he

Senior Counsel for the plaintiff submitted that on its proper construction, reg.73 imposed a liability on but one person, i.e. the head contractor; that the regulation should be read as if the bracketed portion in the opening

statement appear immediately after "any person" (sic) -

R.73 Any person (including every independent contractor from time to time engaged in that work)...

Thus the words in brackets, in amplification of the regulation widen the possible range of persons who are recognizable

as a head contractor. Counsel argued that this would give

a clear instruction to one person who was ex hypothesis in charge of the whole project, and avoid the 'Ludicrous' situation which could arise if (as for example in this very case) the defendant and plaintiff had both been required under penalty

to erect scaffolding. He supported the finding of the learned Judge of the Supreme Court that the correct inference from the facts was that the plaintiff was employed under a contract

of service (i.e. a servant) not required by the terms of his employment, so the evidence showed, to provide anything but ordinary tools of trade, working for a remuneration which could not have envisaged the supply or erection of scaffolding,

He cited Humberstone v. Northern Timber Mills (1949) 79 C.L.R. 389 at p.404 as showing that so long as control of work or direction as to it was retained the indication was of a contract of service; even though the control was not exercised. He argued that the choice for the trial judge of deciding whether plaintiff was an employee or sub-contractor, required the weighing of facts. The effect of the- argument was that the learned judge was in a better position to do that than was an appellate Court; that this Court should give some weight to this decision

However, he submitted that it would make no difference to the liability if the plaintiff had been a sub- contractor equally bound with the defendant head contractor to comply with reg.73(3). On the authorities to which he referred. it was possible to distinguish between degrees of culpability so as to compel the conclusion that a plaintiff himself in breach of such a regulation could recover where there was an excess of fault in the defendant, but would fail if the plaintiff, on analysis, was really to blame

for the accident; or perhaps where they were equally at fault.

Counsel relied on Ginty v. Belmont Building Supplies Ltd. & Anor. (1959) 1 All E.R. p.414 and particularly at p.417-8 where

it was pointed out that the plaintiff was shown the different kinds of boards which were available and a ladder and was told

to help himself to whatever boards he ~ wanted; and thus in the context of those articles being of assistance in the particular building operation then being undertaken. He referred to the

statement in the Judgment of Pearson J. at p.424 as follows -

"One has to enquire whether the fault of the employer under the Statutory Regulations consists of, and is co-extensive with the wrongful act of the employee. If there is some fault on the part of the employer which goes beyond or is independent of the wrongful act of the employee, and was a cause of the accident, the employer has some liability."

His Honour's analysis of the case is to be found at p.428 as follows:

"...we have here the case in which the fault of the employer ~ and it is a fault under

the definition of "fault" contained in the definition section, s.4, of the Law Reform (Contributory Negligence) Act, 1945 - was

a breach of statutory obligation by the employer because, through the employee,

the employer did not use the boards; but that fault of the employer consisted of,

and was co~extensive with, that of the plaintiff, and in substance this unfortunate accident was due to the fault of the plaintiff in breach of, and in defiance of, his instructions and of regulations which were well known to him. He decided to do the work on this roof without the use of boards. It would not be right, however, to take too severe a view; he was not in any direct sense going to gain anything for himself; he was

taking the risk for himself with a view to getting the work done."

to Shedlezki_v. Bronte Bakery Pty. Limited (1970) 92 W.N. 151.

In that case the plaintiff himself was the Chairman and Managing Director of the defendant company and its master baker. The work performed by the plaintiff for the defendant company was of a two-fold nature, included in which was the work as a master baker with equipment of the defendant. Apparently the plaintiff failed to switch off the electric current in a machine which was concerned in the production of the bread which the defendant

"But if the employer can prove that the only act or default of anyone which caused or contributed to the noncompliance was the act

or default of the plaintiff himself, he establishes a good defence."

In referring to non-compliance his Honour had in mind non-compliance with regulations. Later in his judgment, his Honour referred to the fact that the plaintiff had not elected to fulfil the statutory obligation of the defendant

"But the decision of the defendant company whether or not to fulfil its statutory obligation was at one and the same time the decision of the plaintiff. The only default of the defendant company was committed through the default of the plaintiff himself, and the failure of the defendant company to perform its duty for which it would be vicariously responsible was completely co-extensive with the failure of the plaintiff, who was under a concurrent obligation to perform the same duty. The injured person and the person whose default caused the injury were identical.

I would think that according to any "ordinary man's sense of culpability" the plaintiff himself was solely to blame for his injury. (Sherman v. Nymhoida Collieries Pty. Ltd.(17) and the facts

Boyle v. Kodak Ltd. (1969) 1 W.L.R. 661 was also cited. In that case, the plaintiff, an experienced painter, mounted a ladder in order to lash it at the top when it was possible for him to travel to the point of the ladder by using a fixed staircase. As he mounted the ladder in order to accomplish this task, the ladder fell before he had done so and he sustained injury. It was held, on appeal, that the defendants had not proved that they had done all they could reasonably be expected to do to ensure compliance with certain regulations and that therefore they could not rely upon a

defence so as to avoid their absolute vicarious liability that plaintiff was really to blame.

cited, the sentence in Zuijs v. Wirth Brothers Pty. Ltd.

(1955) 93 C.L.R. 561 by four members of that Court at p.571

"The duties to be performed may depend so much on special skill or knowledge or they may be so clearly identified or the necessity of the employee acting on his own responsibility may be so evident, that little room for direction or command in detail may exist. But that is not the point. What matters is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in incidental or collateral matters. Even if Mr. Phillip Wirth could not interfere in the actual technique of the acrobatics and in the character of the act, no reason appears why the appellant should not be subject to his directions in all other respects.

Assuming that the terms of the engagement fixed the character of the act and that from its very nature an acrobatic performance must be executed upon the unhampered responsibility of the performers, that does not remove the

relationship from the category of master and servant."

On a consideration of the careful and thorough submissions made to the Court, my view is that the construction of reg.73 sought on behalf of plaintiff is not the correct one; that the bracketed amendment was not intended to restrict or limit the responsibility for compliance with the Regulation in the way suggested, but rather to enlarge the ambit of the conglomerate, i.e.

ee.- anyperson-who-directly-or-by-his servants-or-agents

that if the narrower construction were intended it could have been easily achieved by placing the bracketed phrase immediately

There is much to be said for the proposition that plaintiff should, on the evidence, have been found to be a sub-contractor; but the arguments supporting a contract of services are significant. The task of the learned trial Judge was one of weighing up of matters supporting inferences, assisted, as he was, by viva voce evidence.Hé had the opportunity to evaluate the plaintiff's evidence having in mind that

The conclusion was a question of fact (cf. Global Plant Ltd. v. Secretary of State for Social Services

But whether the plaintiff was a sub-contractor or an employee he was not solely to blame as in Shedlezki's case; nor was his fault co-extensive with that of the

There was, on the uncontradicted evidence and objective facts, in my view, a considerable excess of fault on the part of the defendant going far beyond that of the plaintiff. It gave no instructions nor warning, provided no scaffold, made no arrangements for plaintiff to do so, and though I do not reach a decision on this basis, it seems did not include in remuneration to plaintiff a sum to enable

him to have funds to procure and erect scaffolding. It has not been attempted to do more than paraphrase scme of Counsels' arguments, but I have considered them all

and been'greatly assisted by their careful presentation.

Sarl utas chis avd the [6 preceding popes ore: arrose copy of che reasons for

AUSTRALIAN CAPITAL TERRITORY No. A.C.T. G.22 of 1981

ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: ARMSTRONG & DE MAMIEL CONSTRUCTIONS PTY. LIMITED

Appellant (Defendant) AND: HENRY REINO PEKKA VIRENIUS

In this appeal the facts are sufficiently set out in the reasons for judgment of Connor J. and McGregor J.

I agree with Gonnor J., for the reasons stated by him ,that,even if the respondent was subject to duties imposed by regulation 73(3) of the Scaffolding and Lifts

Regulations as in force in the Territory, this would not

have absolved the appellant from liability to the respondent in respect of the injuries suffered. In my opinion, the appellant's argument misconceives the true effect of the decisions in the cases cited. The appellant, in order to rely on this defence, must prove that it did all it could reasonably be expected to do in order to ensure compliance with the regulation. This it failed to prove and therefore this defence cannot succeed.

It is unnecessary to express any view as to whether, if the respondent was at the relevant time an independent contractor, reg. 73(3) would have been binding on him or as to the correctness of Kelly J's finding that the respondent was at the relevant time an employee of the appellant and not an independent contractor. I agree with

the orders proposed by Connor J. in relation to the appeal

I certify that this andthe ox (:) preceding page area true copy of the Reasons for Judgment herein of his Honour Mr. Justice Ellicott.