Baden Cranes Pty Ltd v Smith; Brambles Australia Ltd v Smith

Court of Appeal (NSW)|2013-07-17|Before: Basten JA, Ward JA, Schmidt J

of the appeal - one appellant partly successful in reapportioning liability - apportionment small part of argument in appellate court - appropriate costs order

DAMAGES - torts - negligence - liability for payment of workers' compensation - unsuccessful appeals against liability - liability reapportioned between three defendants on appeal - recalculation of damages - no point of principle Legislation Cited: Workers Compensation Act 1987 (NSW), ss 151A, 151Z Cases Cited: Baden Cranes Pty Ltd v Smith; Brambles Australia Ltd v Smith [2013] NSWCA 136 Category: Procedural and other rulings Parties: 2006/267240:

Baden Cranes Pty Ltd (Appellant) Craig Lionel Smith (First Respondent) Brambles Australia Ltd (Second Respondent) Gillespies Cranes Nominees Pty Ltd (Third Respondent)

Brambles Australia Ltd (Appellant) Craig Lionel Smith (First Respondent) Baden Cranes Pty Ltd (Second Respondent) Gillespies Cranes Nominees Pty Ltd (Third Respondent) Representation: Counsel:

D Macfarlane (Baden Cranes) S M Kettle (Gillespies Cranes) Solicitors:

Riley, Gray-Spencer Lawyers (Baden Cranes) McCabe Terrill Lawyers (Brambles Australia) Taylor & Scott Lawyers (Craig Lionel Smith) Hicksons Lawyers (Gillespies Cranes) File Number(s): CA 2006/267240; CA 2012/8069 Decision under appeal Jurisdiction: 9111 Citation: Smith v Brambles Australia Ltd [2011] NSWSC 1518 Date of Decision: 2011-12-09 00:00:00 Before: Schmidt J File Number(s): SC 2006/267240

Judgment 1BASTEN JA: On 3 November 2003 Mr Craig Smith (the plaintiff) was injured when a mobile crane he was operating at Darling Harbour collapsed. Mr Smith's employer, and the owner of the crane at the time of the collapse, was Gillespies Cranes Nominees Pty Ltd (Gillespies). At an earlier time the crane had been owned by Brambles Australia Ltd (Brambles) which had arranged for the crane to be modified by Baden Cranes Pty Ltd (Baden), which was a representative of the manufacturer in Australia. Mr Smith sued Baden, Brambles and Gillespies. He was successful against all three defendants at trial, liability being apportioned as against Baden (45%), Brambles (35%) and Gillespies (20%). 2Baden and Brambles appealed against those findings and the resultant orders. Their appeals were dismissed: Baden Cranes Pty Ltd v Smith; Brambles Australia Ltd v Smith [2013] NSWCA 136, judgment being delivered in this Court on 27 May 2013. There had been cross-claims between the defendants at trial and the final orders made by the trial judge, Schmidt J, were based on agreement as to a number of arithmetical calculations. On the appeals, liability was reapportioned as against Baden (40%), Brambles (20%), and Gillespies (40%). As a result, the judgments in favour of the plaintiff and with respect to the various cross-claims, required recalculation. This could not be done by the Court and further assistance was sought from the parties, both as to the amounts of the various judgments and as to the proper orders with respect to costs. 3Although the parties announced that they had reached agreement as to the appropriate substantive orders, though not as to costs, the draft orders attached to the further submissions were not identical. Nor were the proposed orders entirely coherent: for example, although the orders varied those made by the trial judge, none sought to set aside those orders. The difficulty for the Court in resolving the differences was complicated by the fact that the material before this Court did not explain how particular figures were reached. To the extent that explanation was available, it was not entirely helpful. For example, the figures included "post-judgment interest" for the period from 9 December 2011 (the date on which the trial judge made orders) and 27 May 2013 (the date of the principal judgment in this Court, which did not make orders). If the interest were indeed "post- judgment" it should not be included in the judgment. If the interest were post-judgment, it appeared to envisage (as is entirely possible) that the judgment of this Court would have effect from 9 December 2011, though no order to that effect was sought. 4The plaintiff did not make further submissions. Annexed to the submissions for Gillespies was a letter from its solicitors which referred to an earlier calculation by the solicitors for the plaintiff, which it accepted. As the other defendants appear to have accepted the same approach the appropriate course for this Court is to work from the figures contained in the letter, as incorporated in Gillespies' draft proposed orders. However, the preferable course in terms of timing is to backdate the orders to the date of judgment below and avoid calculations of interest. 5Although all of the defendants were found liable, and remained liable following the unsuccessful appeals, damages were calculated on different bases as between Baden and Brambles on the one hand (assessment being under the Civil Liability Act 2002 (NSW)) and Gillespies on the other (assessment being under the Workers Compensation Act 1987 (NSW)). 6Ignoring the misleading precision achieved by a calculation to the nearest cent, the amounts to which the plaintiff was entitled are $704,558 (as against Baden and Brambles) and $520,786 (as against Gillespies). The judgments as against Baden and Brambles are in an amount of approximately $80,000 less than the judgments given by Schmidt J, presumably because of the greater proportion attributable to the employer and the operation of s 151Z of the Workers Compensation Act. 7The Court should make the following substantive orders: (1) Set aside orders made by Schmidt J on 9 December 2011, other than orders 4, 9 and 17 (relating to payment of the plaintiff's costs of the proceedings at trial). (2) In place of those orders make the following orders, to take effect from 9 December 2011: (A) Give judgment for the plaintiff: (i) against the first defendant (Brambles) in an amount of $704,558; (ii) judgment for the plaintiff against the second defendant (Baden) in the sum of $704,558; (iii) judgment for the plaintiff against the third defendant (Gillespies) in the amount of $520,786. (B) Give judgment for the first defendant (Brambles) - (a) on the first cross-claim, against the second defendant (Baden) in an amount of $281,823, and (b) on the third cross-claim, against the third defendant (Gillespies) in the sum of $208,314. (C) Give judgment in favour of the second defendant (Baden) - (a) on the second cross-claim, against the first defendant (Brambles) in an amount of $140,911, and (b) on the fifth cross-claim, against the third defendant (Gillespies) in an amount of $208,314. (D) Give judgment for the third defendant (Gillespies) on the fourth cross-claim - (a) against the first defendant (Brambles) in an amount of $104,157, and (b) against the second defendant (Baden) in an amount of $208,314. (3) The total liability of Brambles under the second and fourth cross-claims is not to exceed $140,911. (4) The total liability of Baden under the first and fourth cross-claims is not to exceed $281,823. (5) The total liability of Gillespies under the third and fifth cross-claims is not to exceed $208,314. (6) Pursuant to s 151A(1)(b) of the Workers Compensation Act 1987, an amount of $194,245 is to be deducted from the damages payable by Gillespies to the plaintiff and is to be paid to the third defendant's workers' compensation insurer, Gallagher Bassett Services Pty Ltd. 8These amounts reflect those in the proposed orders, without allowance for interest. In relation to the amount of the workers' compensation payments, there are two additional variations. The first is, in effect, to require the plaintiff to pay Gillespies' insurer the sum in question pursuant to s 151A(1)(b) of the Workers Compensation Act, not pursuant to s 151Z(1)(b) as proposed in draft order 15. Section 151Z(1)(b) and (d) provide an indemnity to the person who paid compensation as against a third party tortfeasor liable to pay damages to the worker, or against the worker, out of such damages. 9Secondly, no order has been made in the terms of the proposed order 14 which stated: "Gillespies is to have credit for payments made to, for or on behalf of the plaintiff pursuant to the Workers Compensation Act 1987 in the sum of $194,245.29." 10An order in those terms would be uncertain. Gillespies has a number of liabilities under the orders: it is not meaningful to say that it has "credit for" a payment which it has not yet made, without reference to the person to whom Gillespies might otherwise be liable. There are obligations to repay workers' compensation out of damages imposed on the worker (under s 151A) and on any third party tortfeasor (under s 151Z): the Court has assumed that it is the intention of the parties that the amount be repaid by Gillespies out of the judgment otherwise due to the plaintiff. Such a payment would satisfy the indemnities which might otherwise be relied upon by the insurer. There is no need for an adjustment to any other payment.

Costs 11The trial judge made the following orders with respect to costs: "4. Brambles to pay the Plaintiff's costs on a party/party basis. ... 9. Baden to pay the Plaintiff's costs on a party/party basis. ... 17. Gillespies to pay the Plaintiff's costs in accordance with provisions of the Workers Compensation Act 1987 and Workplace Injury Management Act 1998 as assessed or agreed." 12No party sought a variation of these orders and accordingly they will stand as made by the trial judge. 13So far as the costs of the appeals were concerned, it is necessary, in principle to deal separately with the two appeals.

(a) Baden's appeal 14Baden accepted that it should pay the plaintiff's costs of its appeal and an order to that effect should be made. It referred in its submissions to a letter pursuant to which the plaintiff sought an order for indemnity costs. That letter is not before the Court, nor has the plaintiff made any submission to the Court that the costs should be assessed otherwise than on the ordinary basis. 15So far as the other respondents to its appeal are concerned, namely Brambles and Gillespies, and having regard to the result in Brambles' appeal, Baden submitted that each party should bear its own costs, in accordance with the approach adopted by the trial judge with respect to the costs of the trial. Brambles took a different view, both in respect of Baden's appeal and in respect of its own appeal. With respect to Baden's appeal, Brambles submitted that Baden should pay Brambles' costs on the basis that it had been entirely unsuccessful on the grounds identified in its notice of appeal. Gillespies also sought an order that Baden pay its costs although it noted that Baden sought no variation of the apportionment adopted by the trial judge. Gillespies had resisted Baden's appeal, no doubt on the basis that if Baden escaped liability, there would be a significant increase in the liability of Gillespies to the plaintiff. That in fact occurred, but not as a result of any success of Baden on its appeal, it being entirely unsuccessful.

(b) Brambles' appeal 16Like Baden, Brambles' primary focus was on the duty of care, breach and causation with respect to the plaintiff and the failure of the primary judge to find contributory negligence on his part. Brambles was unsuccessful on these grounds. Its challenge with respect to apportionment of liability as between the defendants was partly successful, in that its liability was reduced from 35% to 20% - a 43% reduction - and the liability of Gillespies was increased accordingly. Because of the limitation on the damages recoverable from the plaintiff's employer and because of the reductions to be made in the liability of third party tortfeasors pursuant to s 151Z of the Workers Compensation Act, the overall result of Brambles' success on the ground of apportionment, benefited both it and Baden, at the expense of the plaintiff. For these reasons Brambles submitted that it should have its costs of its appeal as against all respondents. 17As noted above, Baden's primary position was that each of the defendants should bear its own costs of both appeals. However, if that approach were not adopted, Baden submitted that Brambles had failed to the extent that it sought to pass part of its liability on to Baden and accordingly should pay Baden's costs of Brambles' appeal. 18Gillespies also claimed an entitlement to costs of the appeal, if costs were to follow the event. If that approach were not accepted, Gillespies submitted that it should be liable only to the extent of 10% of the costs in Brambles' appeal because Brambles, like Baden, had been entirely unsuccessful in its attempt to challenge its liability to the plaintiff.

(c) orders as to costs of appeals 19So far as the plaintiff was concerned, the reduction in his entitlement to damages from Baden and Brambles was entirely a consequence, by virtue of s 151Z, of the increased liability of his employer. On all issues as to liability, which constituted the substance of both appeals, the plaintiff was successful. He should have his costs against both Baden and Brambles. To avoid any unnecessary assessment, the appropriate course is to allow the plaintiff the whole of his costs against both appellants, to be apportioned equally as between them. 20As between Baden and Brambles, there is much to be said for the approach proposed by Baden. The only qualification (which does not affect Baden) is that Brambles was successful in transferring a significant share of its liability to Gillespies. On the other hand, the bulk of its appeal, as with Baden's appeal, was devoted to establishing absence of liability to the plaintiff, in which it was entirely unsuccessful. 21Gillespies successfully supported the plaintiff to resist each appeal on questions of liability. It was unsuccessful only with respect to the question of apportionment. 22The preferable course in these circumstances is to treat Gillespies' costs as being divisible as to equal parts in respect of each appeal. It was an active and successful respondent in respect of Baden's appeal and should have that proportion of its costs (50% of its total costs) as against Baden. In respect of Brambles' appeal, Gillespies was entirely successful as an active respondent against the challenge on liability, but was unsuccessful in respect of apportionment. Nevertheless apportionment was a small part of the argument in this Court, partly because the underlying considerations had already been addressed in considering liability. Gillespies should have 75% of its costs of the appeal by Brambles, to be calculated as 75% of 50% of its total costs in this Court.

Costs orders 23With respect to the costs of the appeals, the Court accordingly makes the following orders: (1) Baden and Brambles are to pay the costs of the plaintiff in this Court, which should be borne as between them in equal shares. (2) No order as to the costs of the appeals as between Baden and Brambles. (3) Baden is to pay Gillespies' costs of Baden's appeal, to be assessed as 50% of Gillespies' total costs of the proceedings in this Court. (4) Brambles is to pay 75% of Gillespies' costs of Brambles' appeal, to be assessed as 37.5% of Gillespies' total costs of the proceedings in this Court. 24WARD JA: I agree with Basten JA. 25TOBIAS AJA: I agree with Basten JA.

Amendments 17 July 2013 - Amending format of orders Amended paragraphs: Coversheet; [7] DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 July 2013

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