Court of Appeal (WA)|2005-06-16|Before: Malcolm CJ

Bgc Contracting Pty Ltd v Webber & Anor [2005] WASCA 112 (16 June 2005)

BGC CONTRACTING PTY LTD -v- WEBBER & ANOR [2005] WASCA 112 (16 June 2005)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA

Citation : WEBBER -v- ARIMCO MINING PTY LTD & ANOR [2003] WADC 234

Tort - Personal injury - Liability of employer and contractor to worker - Whether worker contributorily negligent - Construction of contractual indemnity - Damages - Admissibility of evidence - Turns on own facts

In FUL 162 of 2003, the appeal against liability dismissed, and the appeal against quantum upheld in part

Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28; (2004) 78 ALJR 907

Baum v Greenhalgh [2003] WASCA 62

Electric Power Transmission Pty Ltd v Orgaz, unreported; FCt SCt of WA; Library No 7914; 3 November 1989

Jongen v CSR Ltd & Anor (1992) Aust Torts Reps 81-192

Kondis v State Transport Authority [1984] HCA 61; (1984) 154 CLR 672

Sheppard v Swan [2004] WASCA 215

Sungravure Pty Ltd v Meani [1964] HCA 16; (1964) 110 CLR 24

Voli v Inglewood Shire Council [1963] HCA 15; (1963) 110 CLR 74

Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491

Borowski v Quayle [1996] VR 382

Brambles Ltd v Wail; Brambles Ltd v Andar Transport Pty Ltd [2002] VSCA 150; (2002) 5 VR 169

Darlington Futures Ltd v Delco Australia Pty Ltd [1986] HCA 82; (1986) 161 CLR 500

Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370

Purkess v Crittenden [1965] HCA 34; (1965) 114 CLR 164

Reynolds v Roche Bros Pty Ltd [1993] WASCA 141

Schenker & Co (Aust) Pty Ltd v Maplas Equipment [1990] VR 384

Speno Rail Maintenance Australia Pty Ltd v Hamersley Iron Pty Ltd [2000] WASCA 408; (2000) 23 WAR 291

Villasevil v Pickering [2001] WASCA 143; (2001) 24 WAR 167

1 MALCOLM CJ: I have had the opportunity of reading in draft the reasons to be published by McLure J. I agree with those reasons and her Honour's conclusions with the result that BGC's appeal should be allowed in part by upholding ground 2 and that part of ground 7 relating to superannuation, but the appeal should otherwise be dismissed. In the case of Arimco's appeal, I agree that grounds 1, 2, 4 and 9 should be upheld and that the remaining grounds have not been made out. I also agree with the orders proposed by her Honour and the need to hear from the parties regarding the precise terms of the orders to give effect to the reasons published.

2 MURRAY J: I have had the advantage of reading in draft the reasons to be published by McLure J. I respectfully agree with what her Honour has written and I have nothing to add.

3 I would allow the appeal FUL 162 of 2003 to the limited extent necessary to vary the judgment in favour of Mr Webber to the sum of $513,680.

4 As to the appeal FUL 168 of 2003, I would allow that appeal to the extent necessary to order that the second respondent should indemnify the appellant for the amount of the judgment in favour of Mr Webber, and costs.

5 MCLURE J: There are two appeals before this Court from a decision by learned Commissioner Giles awarding damages to Mr W Webber (the first respondent in each appeal and the plaintiff in the action) for personal injuries suffered by him in the course of his employment with Arimco Mining Pty Ltd (In Liq) (the second respondent in FUL 162/2003, the appellant in FUL 168/2003 and the first defendant in the action).

6 BGC Contracting Pty Ltd ("BGC") is the appellant in FUL 162/2003, the second respondent in FUL 168/2003 and the second defendant in the action.

7 Mr Webber suffered a back injury on 20 April 1998 in the course of driving a dump truck for Arimco at its open-cut mine at the Gidgee gold mine in Western Australia. BGC supplied the dump trucks used by Arimco at the mine and was contractually responsible to Arimco for the maintenance of the trucks.

8 The Commissioner found BGC and Arimco liable in negligence and entered judgment for Mr Webber in the amount of $519,868. The

Commissioner apportioned liability on a 50:50 basis. Arimco had sought a full indemnity from BGC under the terms of the contract between them. The Commissioner ordered a partial indemnity to the extent of 50 per cent of the judgment and costs.

9 Both BGC and Arimco challenge the Commissioner's findings on tortious liability and quantum. In addition, BGC contends the Commissioner erred in relation to its claim that Mr Webber was contributorily negligent and Arimco challenges the Commissioner's failure to conclude that BGC was required to fully indemnify Arimco.

10 Two dump trucks are of particular relevance in this case. Arimco's records describe the trucks as "RD3" and "RD5". The same trucks are referred to in BGC's records as "DT23" and "DT25" respectively. Although the Commissioner intended to adopt Arimco's description, she erroneously describes RD3 as RD23 and RD5 as RD25. When quoting the Commissioner's reasons, I will make the necessary correction to avoid confusion.

11 At the start of each shift, Arimco's dump truck drivers conducted a basic safety check of the dump truck they had been allocated, and then drove to the bottom of the pit where excavators loaded ore onto the back of the dump truck. The roads on the way to and from the bottom of the pit were in relatively good condition at the time. However, the floor of the pit was often very rough and pitted. The load was dumped at various locations at the mine, depending on the nature of the ore.

12 On the afternoon of 20 April 1998 Mr Webber was driving dump truck RD3 conveying loads of ore from the pit. He commenced to suffer back pain symptoms that gradually increased in severity. The back pain was attributable to the driver's seat in RD3. The suspension system of the driver's seat in the dump trucks included a spring coil and damper mechanism. A knob at the front of the seat was used to adjust the load rating of the seat to accommodate the weight of the driver. Mr Webber's evidence was that he adjusted the driver's seat to his weight before starting the dump truck in accordance with usual practice. He noticed after about the second load that the seat was "bottoming out". That is, the seat's suspension was not cushioning his ride, and when the truck hit a bump or depression in the ground, his seat hit the bottom of its normal travel with a hard impact, jarring his body and his spine. He tried to further adjust the seat but it continued to bottom out.

13 Mr Webber said he started to experience some back pain during the shift but did not consider it serious enough to stop working. He says he contacted BGC's workshop by two-way radio after he started to feel a twinge in his back, but nothing too severe. He could not recall to whom he spoke when he made the radio call, but says he informed them that the seat was bottoming out and he was advised to keep on working and the mechanics would have a look at it after the shift. By halfway through the shift he had started to feel quite bad back pain but he continued and finished the shift. His evidence was that before leaving the truck at the conclusion of the shift he noted the defect on the daily log sheet. In the space provided in the log sheet to describe machine defects Mr Webber wrote "seat stuffed". The Commissioner accepted Mr Webber's evidence on this and all other relevant matters.

14 The Commissioner also found that the log sheet completed by Mr Webber on 20 April 1998 was provided to BGC's employees who changed the seat in RD3 with a seat from another truck on the following day, 21 April 1998. She also found that "on 20 April [1998] a defective seat from RD5 was removed from that truck and installed in RD3, and that it was that seat which injured Mr Webber". In reaching that conclusion she gave weight to the following:

(1) The seat in RD5 was clearly giving considerable trouble in April 1998 prior to Mr Webber's accident as evidenced by several daily log sheets;

(2) The seat in RD5 was worked on on 15 April 1998 and then removed on 20 April 1998, as shown by its record card;

(3) Prior to Mr Webber's accident, RD3 was in the workshop on the morning of 20 April 1998 for sufficient time for the seat to be taken out of that truck and to be replaced with another seat, as evidenced by the daily log sheet for RD3 for 20 April 1998;

(4) The swapping of seats about which there had been a complaint, between trucks, without repairing those seats, was a common practice of "BGC", as confirmed by Mr Hoffman (a mechanical fitter employed by BGC) and Mr Heales (BGC's maintenance supervisor).

15 The record card referred to in item 2 is a reference to machine maintenance record cards created and maintained by BGC. Other relevant BGC documents include time sheets completed by BGC's employees.

16 A log sheet was created for each truck each shift (whether day or night shift), though a single log sheet might be completed by more than one driver if there was a change of driver during the shift, as occurred with RD3 on the accident date. There was no general challenge to the reliability of the log sheets. However, BGC's witnesses freely conceded that accuracy was not a high priority in the creation of the BGC documents.

17 Before addressing the grounds of appeal it is necessary to refer to the terms of the contract between Arimco and BGC. BGC agreed to supply and maintain specified items of mining equipment, which included the dump trucks. BGC was solely responsible for the maintenance, in a safe and good working condition, of all its equipment and was required to provide on-site supervision for, inter alia, overseeing the maintenance and repair of that equipment and for liaison with Arimco. BGC was also required at all times to carry out its obligations under the contract with the highest possible regard to the safety of all personnel on the site and, should any unsafe situation arise, to immediately report the situation to the Superintendent (the person authorised to act on behalf of Arimco under the contract). BGC was paid for the hours worked by each item of mining equipment, including the dump trucks, although stand-by rates are provided for.

18 The first two grounds of BGC's appeal challenge the Commissioner's finding that on 20 April 1998 BGC removed a defective seat from RD5 and fitted it to RD3. It is said the matters relied upon were insufficient to discharge Mr Webber's burden of proving that conclusion (ground 1) or, if those grounds were sufficient, they were misconceived in specified ways (ground 2). I will deal with both grounds together.

19 RD3 started work on 20 April 1998 at 7.30 am. It was driven by Christopher Kirkpatrick who ceased using RD3 at 10.45 am. He completed part of the log sheet for RD3 on 20 April 1998. Mr Kirkpatrick gave evidence at trial, but he had no independent recollection of the events on the day in question.

20 The log sheet shows the machine identification, the hour meter reading at start, finish and the total hours and the work location details. The RD3 log sheet for 20 April 1998 shows start hours of 14,863, finish hours of 14,870 and a total of seven hours. The work location details are as follows:

21 Neither Mr Webber nor Mr Kirkpatrick thought they made the notations in the log sheet of "315" or "workshop". They gave no evidence on whether, and if so why, RD3 was in the workshop on that day.

22 I turn now to the evidence relating to the Commissioner's conclusion that the seat in RD5 was giving considerable trouble in April 1998 prior to Mr Webber's accident. The log sheets for RD5 in the period 6 to 19 April show that one driver, Mr Doug Naylor, recorded problems with the seat (including bottoming out) on 6, 11, 14 and 15 April. On 15 April he recorded "stuffed seat: waiting for parts". Mr Webber drove RD5 on 14, 15 and 16 April but did not record any problem with the seat. His evidence was that if there had been a problem, he would have recorded it and said Mr Naylor was about 15 kilograms heavier than him and therefore the seat may have been operating satisfactorily for him but not for Mr Naylor.

23 There is also a time sheet for a BGC fitter, Leigh Rumens, for the night shift on 15 April 1998 in which is recorded "DT025 seat u/s 1 [hour]". Mr Rumens did not give evidence.

24 The next matter relied on by the Commissioner is that the seat in RD5 was removed on 20 April 1998 as shown by its record card. The RD5 machine maintenance record card is the history of the work performed by BGC on that truck. It shows an item for 20 April 1998 in terms "change driver's seat". However, the record card has a column "SMU" which is a reference to the hours shown on the truck's clock; the hours recorded for the change of the driver's seat (13,119 hours) appear as the hours on the RD5 clock at the end of the day shift on 16 April. The record card was completed by Mr Heales who gave evidence that the dates he wrote on record cards were unreliable.

25 BGC conceded its documentation was not reliable and the Commissioner found that BGC's system of keeping the record cards and the time sheets was haphazard [142]. As to log sheets completed by Arimco employees, the Commissioner concluded that they were treated as a serious and important record by the drivers and she considered them reliable [126].

26 There is no entry in the BGC documents recording a change of seat on the RD3 on 20 April 1998. Further, and more significantly, the log sheet for the RD5 for 20 April 1998 shows a full day shift (nine hours) with no downtime at the workshop. Mr Webber accepted that if RD5 did the whole shift on 20 April, it could not have been in the workshop having its seat removed.

27 Having regard to the log sheet for RD5 on 20 April and the ambiguity in the RD5 record card, the weight of the evidence does not support the Commissioner's finding that the seat in RD5 was removed on 20 April 1998. To the contrary, such a finding is not reasonably open in light of the unchallenged findings as to the reliability of the log sheets and BGC's haphazard record-keeping. This undermines the basis for so much of the challenged finding that relates to the removal of the RD5 seat on 20 April.

28 The third conclusion is that RD3 was in the workshop for sufficient time for the seat to be taken out and replaced. The only evidence that RD3 was in the workshop on 20 April 1998 is the log sheet for that day. The Commissioner found that the truck was at the workshop for three and a quarter hours between Mr Kirkpatrick ceasing and Mr Webber commencing. It seems the Commissioner misread the log sheet. The "315" entry is a reference to the hours Mr Kirkpatrick drove the truck, not the hours the truck was in the workshop. The time between Mr Kirkpatrick finishing and Mr Webber starting is 2.75 hours, which BGC conceded in its written submissions was sufficient for a seat change to occur.

29 BGC relied on the evidence of Mr Andrew O'Leary in support of its claim that the seat in RD3 was not defective. He confirmed that he completed a log sheet for a dump truck for the night shift on 20/21 April 1998. The log sheet relied on by BGC as the log sheet for RD3 for the night shift commencing at 7.30 pm on 20 April 1998 shows the operator's name as Andrew, the finish hours as 14,879 and the total hours as nine, making the start hours 14,870 which corresponds with the finish hours for RD3 the previous shift. Unfortunately, the machine identification is obscured in the photocopy of the only document available at trial. Mr Kirkpatrick had no recollection of relevant events on the day in question, but said he would have made a note of a seat which was bottoming out. There was no such note in the log sheet. The Commissioner was not satisfied that Mr O'Leary drove RD3 on the night shift in question. However, without the benefit of an analysis of the log sheets, it would seem an unlikely coincidence that the relevant finish and start hours corresponded. In any event, the Commissioner noted the evidence that the same seat could behave differently with different drivers.

30 The final matter on which the Commissioner relied for the challenged finding was that the swapping of seats was a common practice by BGC. Both Mr Heales and Mr Hoffman gave evidence to that effect. Mr Heales explained that in the event of a driver complaint about a seat and, notwithstanding he could not find anything wrong, he would arrange to swap seats to keep the driver happy. According to Mr Heales, swapping seats between trucks was common practice in the mining industry. However, he said seat swapping would only occur if the seat could not be faulted. Mr Hoffman's evidence was that of the approximately 200 truck seats he had changed in his career, only five to 10 of them had been genuinely defective. However, the test utilised by Mr Heales and Mr Hoffman to determine whether a seat was defective was the "flop test". This involved the tester altering the weight adjustment to correspond with his weight and then flopping onto the seat to determine whether the seat suspension was working properly. Mr Heales said this test was used in the mining industry. However, he had never checked the relevant truck maintenance manual or any other document regarding testing for faults in the seats.

31 I have concluded that the weight of evidence does not support the finding that the seat in RD5 was removed on 20 April 1998. Accordingly, the only evidence to support the finding that BGC had replaced the driver's seat in RD3 on 20 April 1998 was, firstly, that the time between when Mr Kirkpatrick ceased driving RD3 and Mr Webber commenced was sufficient to enable seat replacement; secondly, the truck was in the workshop for at least part of that period; and, thirdly, BGC's practice of swapping seats in the trucks. That is insufficient evidence to support a finding that the driver's seat in RD3 was replaced on 20 April. I would uphold ground of appeal 2.

32 However, it does not necessarily follow that the ultimate finding of negligence against BGC is undermined. That depends on the correctness of the Commissioner's conclusion that the seat in RD3 was in fact defective, which is the subject of the next ground of appeal.

33 In ground of appeal 3, BGC contends the Commissioner's finding that the seat was defective is against the weight of the evidence. It is claimed the Commissioner should have found that Mr Webber had not properly adjusted the seat for his weight. BGC relies on Mr Heales' evidence and aspects of Mr Webber's evidence-in-chief.

34 Mr Heales examined the seat in RD3 on 21 April 1998. He adjusted the seat tension to suit his weight and performed the flop test while the truck was stationary. He found nothing wrong with the seat or the adjustment mechanism. As the seat did not bottom out, he concluded it was functioning correctly.

35 Mr Webber's evidence on relevant matters is as follows. He adjusted the seat to his weight before he started to drive the truck on 20 April. His evidence was the seat was bottoming out over the rough surface on the pit floor. He was asked in examination-in-chief what that entailed:

"What do you mean by bottoming out?---It wouldn't carry my weight.

Right?---Every time I hit a bump it would thump down to the floor of the seat.

Was it jarring?---It was jarring, yes.

Was the seat - how far in did you have the seat in terms of the hardness of it? Was it rigid or what was the position as far as the seat goes?---It just wouldn't carry my weight with the handle screwed in and then I'd readjust it again and it didn't make any difference.

Did you have the handle screwed right in, did you?---Probably right in, I would say, yes.

So it was as firm as it could get?---Yes.

What happened when you were driving over the - - -?---It was bottoming out, as I was going over the rough areas."

36 It is clear from this exchange that after the seat started to bottom out he adjusted the knob in an attempt to correct the problem but without success. He was cross-examined at length as to his understanding of the term "bottoming out" as follows:

"As I understand what you're saying the seat travelled through its range of travel?---Yes, it has a range of about 8 to 10 inches travel.

It travelled right to the bottom of its range of travel?---Yes.

And reached a jarring stop?---That's correct.

Like metal on metal. Is that right?---That's right.

That's what you're calling bottoming out?---Bottoming out, yes.

So that the problem with it was that the seat was - the excursion of the seat - do you know what I mean by that?---Yes.

It was too great?---Yes.

It was moving too far down?---It was.

And you attempted to offset that by - - -?---Adjusting the pressure.

Yes, by adjusting that spring tension so that the seat ought to have got firmer?---It would have got firmer but then it wouldn't have bottomed out.

So the idea was that you were trying to minimise the travel of the seat by adjusting it?---You still have the same travel but the seat would take the extra weight.

I don't understand that. You were trying to avoid it actually making contact at the bottom of the travel?---With the floor, yes, the bottom.

Yes. So you're [sic] objective in adjusting it was to reduce the range of its travel?---It would still travel but not all the way.

Not all the way?---No. It wouldn't hit bottom.

It wouldn't travel as far?---As the bottom.

That's what you were trying to do?---Yes.

But you say even adjusting it - - -?---It still bottomed.

It still bottomed?---Yes."

37 Mr Webber's statement of claim had alleged that the dump truck had a rigid seat with inadequate suspension. He was asked about the difference between a rigid seat and one that bottomed out as follows:

"Your complaint is, to read your statement of claim, that you had a rigid seat with inadequate suspension. Now, what I'm putting to you is that what you meant when you instructed your solicitors that the seat was rigid, was that the seat had insufficient movement, it was too hard, it was too hard?---The seat itself that you sat on was fine. It's just that I couldn't get any floating movement out of it because it was bottoming out. It wouldn't carry my weight. If a light person had sat on that seat the same as I had, they would have got some cushioning.

...

What does 'rigid' mean to you?---Rigid, meaning that it was bottomed out and there was no springing left in it. I couldn't get that travel because it was bottomed out and every time you went over a bump you'd lift up off the seat because the truck would go down and then you'd bang down.

So the seat had an excessive range of movement and yet you have described - what you are telling us now is that you described that as being rigid?---Yes, because it was hitting the bottom all the time which is - it's a rigid movement. There's no travel.

Wouldn't you agree that if you were a person, a very light person, and you sat on the seat, an ordinary functioning seat, which had been adjusted up so that - which was adjusted for a 120 kilogram person, so that the seat was very firm - - -?---Very firm, yes.

It might appear to a person of your weight that it was rigid?

---Yes, it would have been. There would be no travel.

Exactly. It's the point I'm making. Your complaint up to now has suggested that the problem with the seat was that it was adjusted for a 120 kilogram person and a 70-something kilogram person sat on it?---No, not so ever.

And it was rigid because it didn't move?---Not so ever.

And now you complain that it moved too much?---If the seat was adjusted for a 120 kilo person I wouldn't have even been able to move that seat if I went over a bump.

Yes?---But the fact remains that I'm a 75 kilo person and I would have adjusted that seat so I would have got floating action. It would be like sitting on the floor."

38 Mr Webber was 57 at the time of the accident and an experienced truck driver. The Commissioner found him to be an honest, hardworking person and believed his account of all relevant events, including the malfunctioning of the seat on 20 April 1998. On a reading of Mr Webber's evidence as a whole, it is clear he understood the purpose and intended effect of adjusting the seat and that the problem was not inaccurate adjustment for his weight; rather, the seat was bottoming out because it was defective.

39 Messrs Kirkpatrick and O'Leary had no recollection of events on 20 April 1998 and their evidence went no further than if they had experienced a problem, they would have recorded it. This evidence does not prevent a finding that the seat was defective when used by Mr Webber on 20 April.

40 Mr Heales' test did not replicate the driving conditions encountered by Mr Webber or depend for its efficacy on anything other than industry practice. Further, the large discrepancy between the number of driver complaints about defective seats and the small number of seats "proven" (to BGC personnel) by the flop test to be defective leaves open an inference that the flop test is unreliable.

41 In the circumstances, the Commissioner's finding that the seat was defective is clearly supported by the weight of the evidence. I would dismiss this ground.

42 Having regard to the outcome on grounds of appeal 1, 2 and 3, it is necessary to determine whether the finding of negligence against BGC can stand. The Commissioner concluded that BGC was negligent in swapping the seat from RD5 to RD3. She said (at [154] - [156]):

"Was the second defendant negligent in simply swapping the seat from RD25 to RD23 in response to a complaint from a driver of the seat 'bottoming out', rather than repairing or replacing the seat? In my view, it was. There had been repeated complaints about the seat in RD25. In a pit as rough as this mine it was entirely foreseeable that a back injury would result from inadequate suspension in a driver's seat. This 'musical chairs' approach was bound to eventually result in an injury to a driver.

The second defendant had alternative means available to it. It could have repaired the seat, by replacing the shock absorber. It had spare shock absorbers in its workshop. It could have replaced the seat with a new or reconditioned seat. Indeed there was a reconditioned seat in the workshop at the time. While undoubtedly there was a cost involved, in time and materials, the likely injury to a driver could be extremely severe. Moreover the swapping of seats itself involved considerable expenditure of time and resources.

The second defendant says that most drivers' complaints about seats were thought by them to be baseless. However, their rough and ready 'flop' test was not done in operating conditions and had been devised by the mechanics themselves without reference to the manufacturer's instructions. Their assumption was based on inadequate information."

43 I have concluded it was not reasonably open on the evidence to find that seat swapping involving RD3 occurred on 20 April 1998. However, the other findings made by the Commissioner impel a finding of negligence against BGC that is within the scope of Mr Webber's pleading. Those findings are that Mr Webber's injuries resulted from a defective seat in RD3 which is attributable to the "musical chairs" approach of BGC swapping seats the subject of driver complaints without adequately testing them for defects. The Commissioner's findings relating to the seat swap on 20 April are not essential to her finding of negligence.

44 Mr Webber contends the Commissioner made a further finding of negligence against BGC based on BGC's instruction to Mr Webber to keep working. She said at [157]:

"The other act which contributed to the plaintiff's injury was the instruction by the mechanic employed by the second defendant for him to keep on driving the truck, rather than bringing it in. This arose from the lack of any established protocol, rule or guideline which was communicated to drivers or enforced by either the first or second defendants to permit an operator to bring in a truck to be repaired, in the event of a defect which could result in injury to the driver."

45 BGC challenged the finding that a BGC agent informed Mr Webber to keep driving the truck. I consider and dismiss that challenge in addressing ground of appeal 4. It is clear that BGC was aware of a potential safety problem for which it was responsible and did nothing to prevent the continuation of the situation; to the contrary, the Commissioner found that BGC instructed Mr Webber to continue driving and that act contributed to the damage. Prima facie these findings provide a further basis for concluding that BGC was negligent. However, the Commissioner did not take that step because at this stage of her analysis she was focused on explaining the basis for Arimco's liability. In the circumstances, it is unnecessary to determine whether BGC is liable on this additional ground.

46 BGC contends the Commissioner failed to rule on its claim of contributory negligence by Mr Webber, which claim was based on, inter alia, Mr Webber's continued use of RD3 when the seat was defective, his failure to report the defective seat to Arimco and his failure to use a spare truck.

47 The Commissioner dealt with Arimco's contributory negligence claim which was based solely on the allegation that Mr Webber failed to immediately or within a reasonable time report the problems with the seat to Arimco. The Commissioner did not deal with BGC's claim. The parties approached the matter on the basis that it was open to this Court to deal with the issue.

48 We were not addressed on the test of contributory negligence. A plaintiff will be guilty of contributory negligence if he ought reasonably to have foreseen that, if he did not act as a reasonable and prudent man, he would expose himself to risk of injury: Sungravure Pty Ltd v Meani [1964] HCA 16; (1964) 110 CLR 24. In applying the standard of care to contributory negligence on the part of an employee, the courts take into account a variety of factors which have a tendency to excuse an employee for inattention to his personal safety: Sungravure (supra) at 37 per Windeyer J. Relevant factors include the nature and extent of the risk of injury, the effective cause of the omission to take precautions and the employee's knowledge or understanding of what is required of him: Electric Power Transmission Pty Ltd v Orgaz, unreported; FCt SCt of WA; Library No 7914; 3 November 1989 per Ipp J at 4. Having regard to the responsibility assumed by BGC for the maintenance and safety of the trucks, the standard of care should approximate that applicable as between an employee and his employer.

49 I turn now to the facts. The Commissioner found that Mr Webber contacted BGC's workshop by two-way radio to advise of the problem with the seat and was told to keep working. This finding was challenged at the hearing of the appeal. Mr Webber was asked on at least five occasions about the terms of BGC's response to his report. He was unable to remember exactly what was said and there are indications in his evidence that he was drawing on his experience of what BGC usually said. Notwithstanding variations in his evidence as to what was said, he repeated his recollection that the substance of what the person in the BGC workshop said was to the effect, "keep it going until the end of the shift and we'll look at it". Mr Webber said the workshop was always flat out and it was not very often you could get them to come and inspect anything straightaway. Mr Webber's evidence is consistent with the scepticism with which Mr Heales and Mr Hoffman treated driver complaints of seat problems. It is also consistent with Mr Kirkpatrick's evidence that if there was a problem and he was unable to contact the Arimco supervisor, he would contact the BGC workshop and BGC would make a decision about what to do. I am satisfied that the Commissioner's finding is reasonably open on the evidence.

50 It is the case that Mr Webber knew the seat was defective and experienced a back twinge and pain that increased towards the end of his shift. It appears he continued working because of BGC's response to his report of the problem and because he did not think it was necessary to stop using the truck. I take the latter to reflect his assessment of the extent of the risk of any significant injury. I am not persuaded Mr Webber's continuing to drive in these circumstances is a breach of the standard of care. BGC had assumed responsibility for the safety of its equipment, yet suggested the appropriate course was to continue driving. In those circumstances, and in the absence of evidence of training or guidelines in place to reduce the risk of injury, taking the risk was consistent with BGC's response to the reported defect and is excusable in the sense explained by Windeyer J in Sungravure.

51 BGC also relies on Mr Webber's failure to report the defective seat to Arimco. I infer Arimco would become aware of the problem from a perusal of the log sheets. I assume the complaint is that there was no timely report to Arimco. This substantially corresponds with the basis for Arimco's contributory negligence claim against Mr Webber which was dismissed on the ground that Mr Webber did report the problem to BGC within a reasonable time and that course was in accordance with accepted practice. There is no challenge to the correctness of either of those findings.

52 The final ground is Mr Webber's alleged failure to use a spare truck. No witness was able to positively say there was a spare truck available at the relevant time. The onus is on BGC to establish that fact and it failed to do so. In any event, a failure to use a spare truck could not be a breach by Mr Webber in view of BGC's instruction to Mr Webber to keep driving RD3 until the end of the shift.

53 For these reasons I would dismiss BGC's contributory negligence claim.

54 The Commissioner concluded that the events on 20 April 1998 ("1998 accident") resulted in Mr Webber being permanently incapacitated for work. BGC contends the finding is against the weight of the evidence and the Commissioner should have concluded that Mr Webber had recovered from the 1998 accident-caused symptoms by July 1998. BGC also contends the Commissioner failed to give reasons for preferring the evidence of medical expert Mr Slinger to that of Mr Bannan.

55 Mr Webber had been involved in a number of earlier incidents that had led to back pain, the most significant of which was an accident in January 1995 at the Gidgee Gold Mine when an excavator struck Mr Webber's truck, throwing it sideways ("1995 accident"). He injured his back in that accident which required a break of five weeks before he returned to full work duties. After summarising the medical evidence, the Commissioner set out her findings of fact which included:

(1) Mr Webber had degenerative changes in his lumbar spine, the onset of which preceded the 1995 accident;

(2) The type and extent of degeneration of the spine suffered by Mr Webber may remain completely asymptomatic in some individuals, either for a long period of time or permanently;

(3) In Mr Webber's case various incidents made his degenerative spine condition symptomatic, resulting in back pain. The incidents include the 1995 accident. That exacerbation resolved quickly, leaving ongoing but manageable pain, but not incapacity for work;

(4) The 1998 accident resulted in a major exacerbation of the plaintiff's degenerative condition and led to permanent incapacity for work.

56 BGC's case was that Mr Webber had recovered from whatever injury he sustained in the 1998 accident by July 1998. It relied on the medical evidence of Mr G Fraser, Mr P Bannan and Dr M Adonis. A report dated 7 July 1998 from Mr Fraser, an orthopaedic surgeon, was tendered by consent and he was not called to give evidence. Mr Fraser stated in his report that:

"[Mr Webber's] current symptoms and incapacity for work represent the most recent exacerbation and he is currently well on his way to returning to the 'normal status for him'. That is to say continuing to experience low back pain with certain activities and with the possibility of exacerbations in the future. ... Whether this is permanent or temporary remains to be seen as the patient is not yet stable. However there is no evidence of significant structural damage having occurred and there is a good chance that he will return to his former level within the next 4-6 weeks."

57 Mr Bannan, a neurosurgeon, provided two reports dated July 1998 and April 2002 respectively and gave evidence. In his July report he records Mr Webber's history of complaints and symptoms as follows:

"His mechanical back pain has settled since he stopped work in April and currently he does not have any significant ongoing back pain."

58 Later in his July report he records that the 1998 accident caused the recent exacerbation of his back pain "which has now settled". The history recorded by Mr Bannan in July 1998 is materially different from that recorded by Mr Fraser in July 1998.

59 In his 2002 report Mr Bannan noted that Mr Webber seemed to have deteriorated between 1998 and 2002, noting that he had significant lumbar degeneration and that his pain was real and consistent with that degeneration.

60 Dr Adonis is an experienced general practitioner with an interest in occupational medicine. His evidence was that his expectation in May 1998 was that Mr Webber would make a satisfactory recovery from the acute exacerbation caused by the 1998 accident but not the underlying degenerative condition.

61 Mr B Slinger, an orthopaedic surgeon, provided three reports and gave evidence at trial. Mr Slinger first saw Mr Webber in June 1999 and his first report is dated June 1999. He concluded that the major source of Mr Webber's symptomatology related to the 1998 accident which caused aggravation of the pre-existing degenerative change in the lumbar spine. He also concluded that the symptoms were likely to be permanent. He maintained that view in his subsequent reports. In cross-examination on behalf of BGC, Mr Slinger said his conclusion was based upon the history he was given by Mr Webber which was of continuing symptoms since April 1998.

62 Mr Webber was cross-examined on these matters as follows:

"Did you tell Dr Bannan in July 1998 that your back pain had settled since you stopped work in April and that you currently did not have any significant ongoing back pain?---I can't recall saying that at all, no.

Do you think you could have said it?---I don't think so.

You think if Dr Bannan says you said that, then he's wrong, he's got that wrong. Is that what you're saying?--- I don't think he would have even said - - -

Well, he has written it in a report but that need not trouble you. What I'm asking you to consider is whether it's possible that you said to him that your back pain had settled since you stopped work in April and you currently did not have any significant ongoing back pain?---I don't believe I said that, plus the fact I would have got - if that had been the case I would have got a work clearance to go back to work, which I didn't do.

Yes, that's dead right; that's dead right. You see how I'm going to put it, I'm going to say that you'd had enough at that time and you weren't going to go back to work even if you had recovered?---That's rubbish.

Did you say something to Dr Fraser along the lines - or something which might have led him to the view that you were currently - this is in July 1998, 3 months after you left Gidgee - that you were currently well on the way to returning to your normal status for you?---Well, I don't believe that, no."

63 He subsequently repeated that he had not recovered from the 1998 accident as suggested or at all.

64 It is clear that if Mr Webber's evidence is accepted, the consequence is the acceptance of Mr Slinger's opinion. The Commissioner formed a very favourable view of Mr Webber on these matters. She said:

"The plaintiff in my view has always had a robust work ethic. His history demonstrates a determination to work, and a preparedness to return to work after accidents. He genuinely enjoyed his work.

I find that the plaintiff is an honest, hardworking person, who fully intended to work to the age of 65. I believe entirely his account of the first and second accidents.

...

I believe the plaintiff's account of all the relevant events, including the malfunctioning seat on 20 April 1998 resulting in severe back pain."

65 She rejected the suggestion that Mr Webber was exaggerating the consequences of the 1998 accident in order to secure his early retirement. The Commissioner's reasons for finding that Mr Webber was permanently incapacitated for work are sufficient having regard to the source of the conflict in the expert evidence (see Sheppard v Swan [2004] WASCA 215 at [17]). I would dismiss these grounds of appeal.

66 This ground relates to the calculation of the loss of superannuation and the Commissioner's alleged failure to discount the award for future loss of earnings to take account of pre-existing back symptoms. BGC's submissions on the second aspect travelled well beyond its ground of appeal to coincide with the scope of Arimco's challenge to these matters. No objection was taken to that course. I will deal with this ground in the context of Arimco's challenge.

67 The Commissioner found that two negligent acts caused or contributed to Mr Webber's injuries, the first being swapping the seat from RD5 to RD3 and the second being the instruction from the BGC workshop to Mr Webber to keep driving the truck. The Commissioner concluded the latter act occurred because of the lack of any established protocol communicated to drivers or enforced by either Arimco or BGC to permit an operator to bring in a truck to be repaired, in the event of a defect which could result in injury to the driver. She said (at [158]):

"The policy of [Arimco] was to insist on its supervisors' right to determine if a truck was to be removed from service for maintenance. This was clear from Mr Heales' evidence, which was not challenged or contradicted."

"This failure to provide a clear line of communication between the operator and the supervisor to facilitate the removal of a defective truck out of service is a failure of [Arimco]. This is not through the effect of its non-delegable duty but one directly attributable to [Arimco], which had overall control of the site, and overall responsibility for its employees' safety."

69 The Commissioner then estimated the extent to which each negligent act or omission contributed to Mr Webber's injury and apportioned 50 per cent to BGC's negligent placement of the seat and 50 per cent to Arimco's "failure to have a safe system of withdrawing defective trucks from service".

70 Arimco contends that the following findings were not open on the evidence:

(1) Arimco's policy was to insist on only its supervisor's right to determine if a truck was to be removed from service for maintenance (ground 1);

(2) There was a failure to provide a clear line of communication between the operator and the supervisor to facilitate the removal of the defective truck out of service (ground 2);

(3) The failure of Arimco was not attributable to its non-delegable duty of care (ground 3).

71 I start with the finding concerning Arimco's policy in relation to the removal of equipment from service. It is to be expected that the roles and responsibilities of each of BGC and Arimco would be governed by the terms of the contract, as they arguably appear to be. However, the finding was based solely on the evidence of Mr Heales who admitted to never having read the contract. In any event, Mr Heales' evidence was equivocal. In examination-in-chief, Mr Heales said that BGC could not "pull a truck out of service" without obtaining an instruction from a representative of Arimco. It is clear from his evidence that it was BGC's responsibility to obtain those instructions from Arimco. However, when asked what should happen if a driver informed the workshop that the seat was bottoming out, Mr Heales said:

"If someone called up and said their seat was bottoming out you would ask them to bring it to the workshop so it could be checked.

All right. Mr Webber says that he was told ... by a BGC person at the workshop to continue driving?---That's not our call."

72 Mr Heales conceded in cross-examination that in practice, equipment operators contacted the workshop without first speaking to their Arimco supervisor. A summary of his evidence was put to him in cross-examination as follows:

"Depending on what the nature of the problem was you would then, if it was an issue involving safety, it would be dealt with appropriate [sic] either by parking the vehicle up or the vehicle being brought slowly up to the workshop, but otherwise in the ordinary course you would, once the operator radioed up and it wasn't a safety issue, liaise with Mr Brown or was it Mr Mather?---Woosnam [Arimco personnel]."

73 Mr Heales accepted that a seat bottoming out was a safety issue. It appears, from the totality of Mr Heales' evidence, that the policy did not apply if safety was involved. This is consistent with Mr Kirkpatrick's evidence concerning BGC's preparedness to make decisions. Mr Heales' evidence is an inadequate foundation for the finding concerning Arimco's policy.

74 However, even if the challenged finding is reasonably open, nothing turns on it. Mr Webber immediately contacted BGC's workshop. Mr Heales conceded the proper course was for BGC to speak with Arimco personnel before giving an instruction. However, BGC's employee (wrongly) assumed responsibility to give Mr Webber an instruction to keep driving. On the facts in this case, the existence of the policy did not cause or contribute to Mr Webber's injury.

75 The second challenged finding is of a failure to provide a clear line of communication between operators and Arimco supervisors. Arimco correctly pointed out that neither Mr Webber nor BGC pleaded such a failure to act. Indeed, BGC's defence to the third party claim is Arimco's failure (by its servants or agents) to inform BGC of the problem. However, the central question is whether, notwithstanding the scope of the pleadings and the absence of a formal amendment, the relevant issue had emerged during the hearing and was in substance joined or litigated by the parties: Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491 at 496 - 497. Having regard to the evidence and the parties' closing submissions, my assessment is the issue was not fully litigated. However, the ground of appeal can be dealt with on its merits. The failure is only significant if Arimco's policy was to insist on its supervisor determining whether a truck could be taken out of service. Mr Heales' evidence was that BGC could act to take equipment out of service for safety reasons without instructions from Arimco.

76 In any event, there was a reporting system in place. The evidence of Mr Webber, Mr Kirkpatrick and Mr O'Leary was that operators could report a defect in the BGC equipment to their Arimco supervisor or, if he was not available, to the BGC workshop. Mr Heales accepted it was then BGC's responsibility to confer with the Arimco supervisor. That did not occur and the BGC employee acted beyond his authority in instructing Mr Webber to keep driving. I am not persuaded there was a failure to provide a clear line of communication or that the failure caused the damage.

77 Ground 3 raises the relevant legal principles, most of which are not in dispute. An employer has a personal non-delegable duty to take reasonable care for the safety of its employees: Kondis v State Transport Authority [1984] HCA 61; (1984) 154 CLR 672 at 687 - 688 per Mason CJ; Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28; (2004) 78 ALJR 907 at [34]. The duty encompasses an obligation to take reasonable steps to provide, inter alia, a safe workplace and a safe system of work. The fact that a duty is non-delegable means it cannot be discharged through the medium of an employee or independent contractor. The employer will be personally liable if the evidence shows an absence of care by someone whom the employer has entrusted with performance of the duty. Accordingly, Arimco is personally liable for all failures by BGC to take reasonable care for the safety of Mr Webber. BGC's failure is Arimco's personal failure.

78 However, BGC's duty or standard of care may not be co-extensive with that of Arimco. There may be no failure by BGC in a particular respect because, for example, the scope of its contractual obligations somehow limit its duty of care. As I understand the position, all the Commissioner is saying is that the failure to have a clear line of communication is in the circumstances a breach by Arimco but not by BGC. There is no reason in principle why that could not occur, although I doubt whether it is the correct conclusion on the facts in this case. The nature and scope of BGC's contractual obligations, particularly in relation to safety, will impact on the scope of BGC's tortious duty and standard of care: Voli v Inglewood Shire Council [1963] HCA 15; (1963) 110 CLR 74 at 85; Bryan v Maloney (1995) 182 CLR 609 at 620 - 621. However, as this issue was not fully litigated and because I would uphold grounds 1 and 2, it is unnecessary to determine ground 3.

79 In the event of Arimco being held liable, it claimed an indemnity from BGC under Special Condition 7 of the contract which provides:

"(a) The Contractor shall be solely liable for and indemnify and keep indemnified the Principal and its directors, officers, agents and employees (hereinafter called 'the Indemnities') against all claims, damages, demands, losses, costs, liabilities, suits, actions, expenses or proceedings of whatsoever nature whether arising under any statute or at common law arising out of injury to (which shall include illness) or death of any person (including the Indemnities) whomsoever arising out of in the course of caused by the execution of the Works under the Contract or other obligations hereunder directly or indirectly associated herewith and damage to or destruction of any property real and personal (including property of the Indemnities and the Contractor and the officers, agents and employees of the Contractor) caused directly or indirectly by:

(i) the performance of the Works; or

(ii) the presence of the Contractor including any of its officers, agents employees or Subcontractors on or about the Site regardless of the negligence of the Indemnities except where such injury, death, damage or destruction is the result of the sole negligence of the Indemnities."

80 "Works" is defined as the supply and maintenance of mining equipment in conformity with the provisions of the contract. The Commissioner concluded as follows:

"Special Condition 7 is quite clear. Its effect is that [BGC] must indemnify [Arimco] against any award of damages to [Mr Webber] arising out of the injury caused to [Mr Webber] from the negligent placement of the seat.

In addition of course there is the negligence directly attributed to [Arimco] in failing to provide for a safe system providing for defective trucks to be taken out of service. Notwithstanding the broad terms of Special Condition 7 I do not consider this failure as arising out of or in the course of or caused by the execution of 'the Works under the Contract or other obligations hereunder directly or indirectly associated herewith ...'. It was a managerial failure of [Arimco] itself."

81 The Commissioner ordered that BGC indemnify Arimco to the extent of 50 per cent of the award to Mr Webber.

82 There are some difficulties with the drafting of cl 7. At first glance it appears the clause deals separately with personal injuries and damage to property, with pars (i) and (ii) relating only to the latter. However, if that was intended there would be no need to refer to injury or death in par (ii). The second task is to delineate the scope of operation of par (i) and (ii). My preliminary view is that par (ii) is confined to personal injury or property damage that is not incurred in the actual performance of the Works under the contract but only as a result of BGC's presence on site. However, regardless of whether limb (i) or (ii) applies, on its proper construction Arimco is entitled to be indemnified notwithstanding that it is concurrently liable with BGC for the same damage.

83 In my view, Mr Webber's injury was caused by BGC's performance of the Works. BGC was contractually responsible for the maintenance, repair and safety of the mining equipment. BGC supplied a truck with a defective seat which caused Mr Webber's injury. In the circumstances that conduct was negligent. Further, BGC was obliged to immediately report an unsafe situation to Arimco's superintendent. In this case BGC, with knowledge of a reported safety defect, told Mr Webber to continue using the truck and did not, it appears, fulfil its duty to inform Arimco of the problem. Even assuming the correctness of the Commissioner's finding that Arimco was solely responsible for providing a clear line of communication to facilitate removal of a defective truck and was negligent in its failure to do so, the damage is relevantly connected to BGC's performance of the Works. BGC remains liable to indemnify Arimco even if they are concurrently liable in tort.

Assessment of Economic Loss (Grounds 6, 7 and 8)

85 Arimco challenges the correctness of the Commissioner's deduction for contingencies in calculating loss of earning capacity and the nature and prospects for employment but for the 1998 accident.

86 Mr Webber's employment with Arimco would have come to an end in late 1998 because of the liquidation of Arimco, at which time he would have been aged 57. The Commissioner found that, absent the 1998 accident, Mr Webber would have been employable as a truck driver and the evidence was that experienced truck drivers earned $1000 net per week. She also found that it was more likely than not Mr Webber would have retired at 65 if he had not been forced to do so earlier as a result of the 1998 accident.

87 The Commissioner had regard to Mr Webber's pre-existing condition when determining the deduction for contingencies. She said (at [190] and [191]):

"The plaintiff's pre-existing degenerative condition of the spine requires some comment. Absent the second accident it may have remained asymptomatic for some time or permanently. There is no scientific or reliable means of determining the chance of this occurring. However, I think it possible that it would have become symptomatic to a disabling extent before the plaintiff's retirement.

The plaintiff suffered a number of insults to his back between 1992 and 1998 all of which he had overcome with little or no time off work. As he grew older however, it is possible that the aging process or simply the further exposure to driving over rough ground would render the condition symptomatic to the extent that he could not work. I propose to make a deduction for contingencies for this factor."

88 She made a deduction of 15 per cent from Mr Webber's award for future economic loss to take account of the possibility of him having to stop working as a consequence of another disabling back injury before retirement.

89 Arimco contends the deduction of 15 per cent for contingencies is unduly low having regard to Mr Webber's age, the fact that he would have lost his employment with Arimco because of its liquidation in late 1998 and his pre-existing degenerative condition.

90 The Commissioner expressly had regard to all the relevant factors on which Arimco relies. She concluded that Mr Webber had a strong work ethic, that his degenerative condition predated the 1995 accident and he continued to work after the 1995 accident against a background of some, albeit manageable, pain. None of the prior incidents resulted in permanent incapacitating symptoms. On these facts I am not persuaded the discount for contingencies is too low.

91 In ground 7 Arimco complains the Commissioner erred in failing to find that the realistic prospects of Mr Webber finding employment as a truck driver after the end of 1998 (when Arimco went into liquidation) were poor. The Commissioner concluded that Mr Webber would have been employable as a truck driver based on the evidence of Mr North and Mr Whitehead. This finding is reasonably open on that evidence.

92 Mr North owned a trucking company that transports freight intrastate and interstate. His company employed older drivers and he gave as an example a 65-year-old driver who was diabetic and who managed interstate journeys. Mr North regarded someone who had been working the hours that Mr Webber had been working prior to the accident as employable. That is a comment on Mr Webber's pre-1998 accident capacity notwithstanding his age and back condition. Mr Whitehead had worked at the Gidgee Gold Mine with Mr Webber. He too was an equipment operator. His evidence was he would not work for less than $1000 per week net and had not had any trouble obtaining work since leaving the Gidgee Gold Mine. Mr Whitehead said Mr Webber was a good deal more skilled and experienced than he was.

93 Finally, it is said the learned Commissioner erred in finding that Mr Webber would be capable of long-distance truck driving at a wage of $1000 per week net and gave no, or no sufficient, weight to the evidence that local truck drivers earned $800 per week. Mr North's evidence was that long-haul drivers (intrastate or interstate) earned between $1000 and $1400 per week net. Local delivery drivers work from 8 am till 5 pm weekdays and collect between $800 and $900 per week net. Having regard to the nature of Mr Webber's pre-1998 accident employment, it was clearly open to the Commissioner to select the low end of the range of the long-haul driving rate, which is close to the top of the range of the local-driver rate.

95 Mr Matthew Molloy, an actuary with Mercer Human Resource Consulting Pty Ltd, provided reports dated 8 October 2002 and 28 October 2002. Instead of relying on the standard formula in Jongen v CSR Ltd & Anor (1992) Aust Torts Reps 81-192, Mr Webber's solicitors instructed Mr Molloy to calculate Mr Webber's lost superannuation benefits on the basis of the expected lost value of his superannuation contributions on an actuarial basis.

96 Arimco (and BGC) contend the Commissioner erred in accepting Mr Molloy's evidence which they say was largely based on hearsay.

97 The controversial point concerns the selection of the long-term future investment return (net of tax and investment expenses) of 6.8 per cent per annum. Mr Molloy was asked about the basis for his selection of a rate of return of 6.8 per cent and said:

"I've relied upon information from Mercer Investment Consulting, a group of about 60 people within Mercer, split between Melbourne and Sydney and that is the rate that Mercer Australia-wide would use as reasonable.

What about in your personal view?---In my personal view I believe this is reasonable."

98 However, it emerged in cross-examination (at 328) that Mr Molloy did not regard himself as an expert on purely investment risk which was the responsibility of the group to which he referred. He said members of the group of 60 speak to investment managers for their opinion on where markets are heading and what is going to affect rates over the short and long term which they then couple "with economic forecasts and between the group they come up with long-term returns". Mr Molloy did not know the background or expertise of members of the group or the assumptions on which they based their conclusion.

99 When experts give opinion evidence within their area of expertise, some leeway is extended to them by what has been described as a pragmatic bending of the hearsay rule. For example, expert opinion will often be informed from a variety of sources at different levels of generality, yet the sources do not have to be proved by admissible evidence. For a discussion of the nature and extent to which it occurs see Freckelton and Selby Expert Evidence: Law, Practice, Procedure and Advocacy, 2nd ed, at 90 - 117. Further, there are the common law exceptions to the hearsay rule which permit the tender of market survey evidence and the statistical results of the work of other experts (see Cross on Evidence, 7th Australian edition, pars 29155, 29160 and 33825).

100 However, Mr Molloy's evidence goes further than the traditional indulgences and exceptions for a number of reasons. Firstly, the prediction of the future rate of economic return is itself a matter of opinion for which expertise is required. Mr Molloy conceded it was outside his area of expertise and he was unaware of the background of the participants in the group exercise. Secondly, the selection of the rate of return is very likely to depend on assumptions and assessment of various relevant factors, none of which have been disclosed to or by Mr Molloy. I accept the considered view of a large number of relevant experts in predicting the rate of economic return (with the likelihood that idiosyncratic and extreme views would be excluded) may be more reliable than the opinion of an individual expert on the same point. However, at the very least evidence from a participant in the group who was able to explain the process, assumptions and assessments involved in reaching the conclusion would be required.

101 In my opinion, the Commissioner erred in giving any weight to Mr Molloy's calculations because they were based on the rate of economic return. In those circumstances the approach in Jongen v CSR Limited (supra) should be applied. The first respondent provided a calculation applying that approach as follows:

$93,924 x 9 = 162

52 100

162 x 186.2 = $30,268

Less 30% = $21,188

102 The only criticism of the calculation was the failure to reduce the amount by a further 15 per cent for contingencies. A further reduction of 15 per cent reduces the figure to around $18,000. The amount awarded by the Commissioner was $24,188 ($28,457 less 15 per cent), being a difference of $6188. In the circumstances of this case that is of a sufficient magnitude to conclude that the resulting award is wrong in the sense of it being outside the range of a sound discretionary association (Baum v Greenhalgh [2003] WASCA 62 at [92]). I would uphold ground 9 of Arimco's appeal and ground 7 of BGC's appeal insofar as they relate to superannuation.

103 I would uphold ground 2 (which does not affect the outcome on liability) and that part of ground 7 relating to superannuation but otherwise dismiss BGC's grounds of appeal. I would uphold grounds 1, 2, 4 and 9 of Arimco's grounds of appeal. I would set aside orders 1 and 5 of the Commissioner's orders and order that judgment be entered for the sum of $513,680 and that BGC do indemnify Arimco for the amount of the judgment and costs. I would hear from the parties as to the precise terms of the orders necessary to give effect to these reasons.

Bgc Contracting Pty Ltd v Webber & Anor [2005] WASCA 112

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (152 paragraphs)

Bgc Contracting Pty Ltd v Webber & Anor [2005] WASCA 112 (16 June 2005)

BGC CONTRACTING PTY LTD -v- WEBBER & ANOR [2005] WASCA 112 (16 June 2005)

Parties

Cases Cited (14)