Booksan Pty Ltd, Jaymay Constructions Pty Ltd v Wehbe, Elmir & Others; GIO General Ltd and & GIO Workers Compensation

Booksan Pty Ltd, Jaymay Constructions Pty Ltd v Wehbe, Elmir & Others; GIO General Ltd and & GIO Workers Compensation - [2006] NSWCA 3 - NSWCA 2006 case summary — Zoe

[37]

The plaintiffs' claims and the defendants' cross-claims 3 These reasons concern a number of appeals and cross-appeals arising out of a series of claims and cross-claims. Six parties are involved and a large number of issues have been raised. 4 Basically, the case involves two sets of claims. The first comprises actions brought by Mr Bilal Wehbe and Mr Salal Elmir (the "plaintiffs") against Booksan Pty Ltd and Jaymay Constructions Pty Ltd (the "defendants") for damages for personal injuries they sustained in the course of their employment with a sub-contractor, MK Tiling. The second comprises the defendants' cross-claims against their insurers, GIO General Ltd and GIO Workers Compensation (NSW) Ltd ("GIOWC"), for indemnity under policies the insurers issued. 5 At the time of their injuries, the plaintiffs were working on a construction site to which MK Tiling was supplying tiles. The trial judge, Truss DCJ, held that Booksan was the owner of the construction site and Jaymay was the supervisor of the construction work. The defendants were related companies. Mr John Sahyoun controlled both. 6 The plaintiffs were injured when the platform of a materials hoist, on which they were travelling, collapsed and fell to the ground. The platform was lifting them and a load of tiles to the third floor of a building that Jaymay was constructing on Booksan's site. 7 The plaintiffs contended that Booksan, as occupier of the site, owed them a duty of care. They contended that Jaymay, as supervisor of the construction work, also owed them a duty or care. They argued that Jaymay's duty of care was equivalent in content to that which Jaymay would have owed them had it been their employer. 8 The plaintiffs contended that Booksan breached its duty of care in not properly affixing the hoist to the building adjacent to which it was being operated. They contended that Jaymay breached its duty of care in operating the hoist when it was carrying an unsafe load. 9 Booksan and Jaymay accepted that each owed the plaintiffs a general duty of care. Each denied, however, that the duty it owed encompassed obligations to take care in regard to the hoist. Thus, each argued, it did not owe the plaintiffs a relevant duty of care. Alternatively, each argued that it had not breached any duty it may have owed. 10 The plaintiffs also sought to base their claims on breaches of various statutory duties under the Construction Safety Regulations 1950 (NSW) (the "Regulations") that, they alleged, the defendants committed. The defendants denied that the Regulations imposed the alleged duties on them and, alternatively, denied that they had breached the Regulations. 11 Booksan cross-claimed against GIO General, claiming an indemnity under an insurance policy, termed a Business Cover Policy, that GIO General had issued to it. Jaymay also cross-claimed against GIO General for an indemnity under a like policy issued to it. 12 GIO General denied that it was liable to indemnify Booksan and Jaymay on the ground that each had allegedly failed to comply with certain provisions of the Business Cover Policy, namely General Condition 2 and General Exclusion 3. 13 The defendants were also insureds under statutory policies of indemnity insurance issued by GIOWC and each claimed that GIOWC was liable to indemnify it. GIOWC denied liability to Booksan under the statutory policy on the ground that the latter had allegedly failed to comply with a condition (cl 13) of that policy. GIOWC denied liability to Jaymay on the ground that Jaymay was not the principal under s 20 of the Workers Compensation Act 1987 (NSW).

[38]

The trial judge's findings 14 Truss DCJ held that Booksan owed a duty of care to the plaintiffs. She held that Booksan had breached that duty by inadequately securing the hoist to the building to which the tiles were being taken. 15 Her Honour held that Jaymay owed a duty of care to the plaintiffs that it had breached when its employee, Patrick Sahyoun, activated the hoist whilst it was overloaded when carrying the plaintiffs. 16 Her Honour held that Jaymay had breached regs 122(5) and 122(7) of the Regulations but it had not breached any other regulations. She held that Booksan had not breached any regulations at all. 17 As Mr Wehbe commenced his action prior to the repeal of the Statutory Duties (Contributory Negligence) Act 1945 (NSW) ("the 1945 Act") and s 7 of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW) (the "1965 Act"), the parties agreed that s 2(1) of the 1945 Act applied and contributory negligence was not a defence to his statutory causes of action. Her Honour held that, in any event, he was not guilty of contributory negligence. 18 As Mr Elmir filed his statement of claim on 16 June 2003, after the repeal of the 1945 Act and s 7 of the 1965 Act, her Honour held that Jaymay was entitled to rely upon contributory negligence in respect of his statutory causes of action. The judge found, nevertheless, that Mr Elmir was not guilty of contributory negligence. 19 Her Honour was required to make a finding under s 151Z(2) of the Workers Compensation Act as to the contribution, if any, to the injuries of the plaintiffs brought about by the conduct of M K Tiling and determined the latter's contribution to be a proportional share of one-third. 20 Her Honour held that Booksan had not committed a breach of either General Condition 2 or General Exclusion 3. She found, however, that Jaymay had not complied with General Condition 2 and, also, had not complied with General Exclusion 3. Thus, the judge held that GIO General was liable to indemnify Booksan but not to indemnify Jaymay. 21 In regard to the GIOWC policies, Truss DCJ pointed out: "Clause 3 [of the policies in question] obliges GIOWC to indemnify the insured (defined as the 'employer', although not the employer in fact) against all compensation which the insured becomes liable to pay under the Workers Compensation Act to a worker 'including any person to whom the employer is liable under s 20 of the Act', and 'any other amount that employer becomes liable to pay independently of the Act … for any injury to any such person … ', that is, in respect of common law liability." 22 Her Honour observed that GIOWC's liability to indemnify was owed to the "principal" under s 20 of the Workers Compensation Act. She held that the principal was Booksan. This meant that Jaymay had no claim under the statutory policy. This finding is not now challenged. Her Honour held that Booksan had not failed to comply with cl 13 of the statutory policy and was entitled to an indemnity under the GIOWC's policy.

[52]

Standing 37 As I have mentioned, the plaintiffs argued that the insurers did not have standing in the appeal to argue that Booksan was not liable to the plaintiffs. They contended that this was a separate and independent matter between the insurers and the defendants. 38 The Court allowed the insurers to put their arguments in regard to Booksan's liability to the plaintiffs and indicated that it would deal with the question of their standing when delivering its written reasons for judgment. Mr King SC, who together with Mr Daley appeared for Mr Elmir, filed written submissions challenging the insurers' standing. Mr Gormly SC, who together with Mr Kelly appeared for Mr Wehbe, supported these submissions. Mr Nock SC, who together with Mr Beasley appeared for GIO General, filed written submissions in reply and Mr McIntyre SC, who together with Mr Sharpe appeared for GIOWC, supported them. 39 An insured, when claiming indemnity from an insurer, may establish its liability to a third party by a judgment of the Court (see Post Office v Norwich Union Fire Insurance Society Ltd [1967] 2 QB 363, referred to by Stephen J in Distillers Company Bio-Chemicals (Aust) Pty Ltd v Ajax Insurance Company Ltd (1974) 130 CLR 1 at 25). In this context, a judgment against Booksan in favour of the plaintiffs would be res judicata as between Booksan and the insurers. For that reason, at trial, the insurers were entitled to be heard on the issues which could result in them being liable to indemnify Booksan: Insurance Exchange of Australasia v Dooley (2000) 50 NSWLR 222. Whether, in fact, they raised the question at trial was in dispute. 40 In my view, whether the insurers will be heard on appeal on such issues depends on conventional appellate considerations involving whether they asserted that right at trial. That occurred in Dooley where the trial was conducted "on the basis that the insurer had full rights of defence in respect of the plaintiffs' claims against … Mr Dooley" (at 229). Another instance of this occurring is Helicopter Sales (Aust) Pty Ltd v Rotor-work Pty Ltd (1974) 132 CLR 1 where, at trial, the third party defended the plaintiff's action pursuant to an order giving it leave so to do (see at 15). In a case where the insurers at trial did not argue a point not raised by the insured, the insurers may well not be allowed to argue that point, for the first time, on appeal. 41 In the light of the conclusion to which I have come concerning the merits of the insurers' contentions on these matters, it is not necessary to determine whether, at trial, the insurers asserted directly as against the plaintiffs, that Booksan owed no duty of care to the plaintiffs and, if it did, had not breached it. I shall discuss the insurers' contentions in regard to Booksan's liability to the plaintiffs later in these reasons.

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The circumstances of the accident 42 At the time of the accident, M K Tiling had subcontracted to Jaymay for tiling work on three blocks of three-storey home units being constructed on Booksan's site. The plaintiffs, as M K Tiling employees, had worked on the site for less than two weeks. They were not experienced labourers. Mr Wehbe was 19 years old and Mr Elmir was in his early twenties. 43 The three buildings (or "blocks") were described as "three storey walk ups". Work had proceeded for some twelve months prior to the accident and on the day of the accident the blocks were in an advanced state of construction. The hoist was affixed to one of the three blocks (I shall refer to this as the "third block"). 44 Previously, M K Tiling had delivered tiles to the site for installation at the other two blocks. Stairways to the two upper floors had been constructed at the rear of those blocks. Mr Elmir testified that, previously, "we" delivered the tiles to other blocks "by using the stairs" (although there was evidence that they had previously used the hoist). After the accident had occurred, Mr Luland, a building inspector, found that a stairway had been constructed at the rear of the third block. The stairways in the other two blocks were in the identical position. 45 The stairway could have been used to take the tiles to the top floor of the third block, rather than using the hoist. There was no direct evidence that the plaintiffs' knew of the existence of the stairway; the accident occurred on the first day on which they had worked on the third block. 46 One Mr Sassine brought the tiles in three pallets to the site. Mr Sassine was the proprietor of a business known as "Tile Power Parramatta" and he supplied the tiles used by M K Tiling at the site. The boxes of tiles from the first pallet were passed down from Mr Sassine's truck to a chain of workers who moved them on to the hoist, about 15 metres away. The chain included the plaintiffs and Mr Khaled Wehbe, one of the partners of M K Tiling. 47 The hoist was described as a two-barrow cantilevered materials hoist commonly used to convey materials to upper levels of construction sites. It was comprised of four sections. A wire rope was used to lift the lifting platform of the hoist. The base section contained an electronic winch and the controls for it. The top section contained two sheaths or pulleys which guided the wire rope. 48 The lifting platform of the hoist was situated within the four sections of the hoist. The platform was constructed of steel and was 1.6 metres long by 1.7 metres wide. It had wire mesh guards about 90 centimetres high on the back and the front. The sides were open but, according to Truss DCJ, there may have been a chain across them. 49 A sign was attached to the mesh guard at the back. The sign stated "Maximum Load" but specified no weight. Apparently a weight of 500 kgs had been written on the sign but this had faded and was illegible. The words "Standing or Riding on Platform Strictly Prohibited" appeared on the sign. 50 Mr Patrick Sahyoun was the site foreman. His responsibilities included opening and closing the site, supervising subcontractors and ensuring that the work was completed safely and satisfactorily. He operated the hoist when the accident occurred. He did so by pressing a button that caused the platform to ascend. At the time four men, being the two plaintiffs, another worker, and Mr Mahmoud Khodr (one of the partners of M K Tiling) were on the platform. 51 Truss DCJ found that no less than 34 boxes, weighing 612 kgs, had been loaded on to the platform. The combined weight of the four men was at least 320 kgs. This meant that the minimum total weight on the hoist was 932 kgs. 52 As I have said, the sign on the platform at one time stated that the maximum load was 500 kgs. At trial, the defendants accepted that "the hoist was subject to a load rating of 500 kgs". There was a dispute as to what the phrase "a load rating" meant in this context. The dispute was whether the phrase meant that the rating was determined in accordance with the Regulations, or whether it meant the manufacturer's estimate of a safe load, or whether it had some other meaning. Whatever it meant, the defendants did not dispute that a weight exceeding 500 kgs was unsafe. 53 Patrick Sahyoun knew that the hoist had a 500 kgs "rating". He knew that half a pallet of tiles had been unloaded off the truck and that half a pallet weighed at least 480 kgs. He knew that if another person got on to the platform the 500 kgs limit would be exceeded. With four people on the platform he knew that the rating would be exceeded substantially. 54 Although the maximum weight limit on the sign could not be discerned, the sign unmistakably indicated that standing or riding on the platform was strictly prohibited. The sign plainly indicated that the hoist was intended to lift materials and not human beings. 55 What occurred after the men got on to the platform with the tiles was a matter of dispute. According to Mr Elmir, after the boxes were loaded on the hoist, Patrick Sahyoun told him and the other men to get on the platform. The defendants' evidence, on the other hand, was that Patrick Sahyoun several times told the men to get off the platform but they refused; they kept nagging him to send them up and eventually he gave in and did so. Truss DCJ said in this regard: "… I am not persuaded that Patrick Sahyoun directed the tilers on to the platform and I am prepared to accept that once on it, he ordered them to get off."

[54]

As her Honour observed, the inescapable fact was that Patrick Sahyoun activated the platform when the tilers were on it. 56 After Patrick Sahyoun pressed the button to operate the hoist, it travelled to the top floor and then dropped a short distance. He attempted to drive it upwards but it collapsed. The collapse occurred more or less when the platform had reached the top storey. 57 The platform did not fall vertically downwards; it fell outwards, away from the building. The two upper sections of the hoist came away from the two lower sections and, together with the platform, fell to the ground. As the platform fell away from the building it moved so that it was almost inverted when it reached the ground. It had almost turned over on itself. This led to the tiles falling on top of the plaintiffs and probably caused them to suffer worse injuries than they would otherwise have sustained. 58 Pieces of equipment known as acrow-props or acrow-jacks had been used to stabilise the hoist. The acrow-props were attached to the hoist and then connected to the building solely by pressure. The pressure was brought about by means of an adjustable screw that enabled the connecting rod of an acrow-prop to be lengthened or shortened. The screw was turned so as to compress as far as possible the one end of the connecting rod against the side of the building. In this way lateral support for the hoist was provided. 59 Acrow-props had plates with holes drilled at the ends and could have been bolted to the concrete floors and ceilings of the building, but they were not. After the accident, scuff-marks were found on the building consistent with an acrow-prop being dragged sideways. The judge found that the acrow-prop had come away from the building "not only because it had not been properly attached, but because it had not been attached at all". 60 After the accident, the steel wire rope by which the platform was raised and lowered was found to have broken in two places. Mr Luland testified that the rope had broken simultaneously at each side of the two sheaths or pulleys. The rope was tested and found to be in good condition and Mr Luland expressed the opinion that the main mode of failure was overloading. The judge made a finding to this effect and it is not challenged.

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The no duty of care argument 71 The defendants contended that the trial judge erred in finding that Booksan and Jaymay owed a relevant duty of care to the plaintiffs. They conceded that Booksan, as occupier of the site, owed the plaintiffs a general duty of care to take reasonable care for their safety as visitors to the site. They conceded that, for the purposes of determining the nature of the duty of care owed by Jaymay, it should be regarded as the plaintiffs' employer. They conceded that Jaymay, in that capacity, owed the plaintiffs a general duty of care to take reasonable care for their safety while they were working for it. They submitted, however, that the scope and content of their duties of care did not extend "to persons who were taking responsibility for their own safety in the circumstances that happened when they were on the lift". 72 The defendants' argument bears a close similarity to that advanced by the appellant in Consolidated Broken Hill Ltd v Edwards (2005) Aust Torts Reports 81-815. In that case, the appellant, CBH, argued that the duty owed by an occupier of private land to an entrant did not extend to obvious risks. CBH argued that if a danger is not hidden or unusual, and is obvious, "an occupier does not need to provide against it". This Court rejected that argument. 73 The defendants sought to distinguish Consolidated Broken Hill Ltd v Edwards on a number of grounds. These were: (a) Patrick Sahyoun ordered the plaintiffs to get off the platform but they refused to comply. (b) An unidentified person on the platform persistently asked Patrick Sahyoun to take the men up. Patrick Sahyoun replied more than three times, "that's enough". On this evidence the plaintiffs acquiesced in the encouragement of Patrick Sahyoun to activate the hoist. (c) It was obvious that the lift was intended for materials and that riding on the platform was "strictly prohibited". (d) It was also obvious that, with the tiles and the men on the platform, it was heavily loaded. (e) The top storey of the building was at least 30 feet high and the sides of the platform were unguarded or, at least, inadequately guarded. It was obviously dangerous to travel on the platform. 74 I accept that the risks of travelling on the platform were obvious, that the plaintiffs must have known from the sign that riding on the platform was prohibited, and that at one point Patrick Sahyoun told them to get off the platform. None of these matters, however, has the effect of negating the general duty that the defendants owed to the plaintiffs. (I would add that the obviousness of the risk is not a factor that distinguishes this case from Consolidated Broken Hill Ltd v Edwards. The risk in that case was also obvious.) 75 Mr Einfeld sought to support his argument with references to the same passages from Vairy v Wyong Shire Council (2005) 221 ALR 711, Mulligan v Coffs Harbour City Council (2005) 221 ALR 764 and Ghantous v Hawkesbury Shire Council (2001) 206 CLR 512 that were relied on by the appellant in Consolidated Broken Hill Ltd v Edwards. This Court, in Consolidated Broken Hill Ltd v Edwards, did not regard those passages as supportive of the appellant's argument in that case. The subsequent decision of Neindorf v Junkovic [2005] HCA 75 reinforces this approach. Neindorf v Junkovic involved the liability for negligence of an occupier of private land. The appellant occupier relied on the obviousness of the risk in asserting, "the duty owed did not extend to protecting entrants from obvious risks" (at [48]). The High Court, however, dealt with this issue on the basis that it concerned the standard of care owed by the appellant and whether there was, in the circumstances of the case a breach of duty. The High Court did not treat the obviousness of the risk as bearing upon the existence of the general duty owed by the occupier. See Gleeson CJ at [3], Kirby J at [56] and [87], Hayne J at [90] to [97] and Callinan and Heydon JJ at [114] and [117]. 76 In McPherson's Ltd v Eaton [2005] NSWCA 435 Mason P, after discussing recent pronouncements by the High Court concerning the scope, extent or content of a duty of care, said at [11] that additional matters, beyond the kind of damage suffered and the class of which the plaintiff was a member, may be factored in at the duty stage (see Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 205 CLR 254 per Hayne J at [100] -[106]; 288), "but only for some situations". 77 The situation of an occupier of private land is not one of those situations: see Neindorf v Junkovic, particularly at [56] per Kirby J and Vairy v Wyong Shire Council (2005) 221 ALR 711 at [25-27]; 718 per Gleeson CJ and Kirby J. The relationship of occupier and entrant falls within the familiar categories of cases where, by the mere existence of the relationship, a duty of care arises: Neindorf v Junkovic at [57] per Kirby J, [91] per Hayne J, and [114] per Callinan and Heydon JJ; cf Vairy at [25]-[27]; 718 per McHugh J; Australia Safeways Stores Pty Ltd v Zaluzna (1987) 162 CLR 479. 78 The relationship of employer and employee also does not give rise to a situation where "additional matters may be factored in at the duty stage"; Vairy at [27]; Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18 and Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301. 79 In the circumstances of this case, the obviousness of the risk and Patrick Sahyoun's conduct in requesting the plaintiffs to get off the platform before he activated the hoist are relevant to the reasonableness of the defendants' response to the risk involved (Thompson v Woolworths (Queensland) Pty Ltd (2005) 79 ALJR 904 at [36], 911). These matters, however, do not detract from Booksan's duty, as occupier of private land, to take reasonable care to protect the plaintiffs from reasonably foreseeable risks of injury. They also do not detract from Jaymay's duty, as putative employer of the plaintiffs, to take reasonable care to avoid exposing employees to unnecessary risks. 80 Mr Einfeld argued that once Patrick Sahyoun had directed the men to get off the platform he was absolved from taking any further care and could not be fixed with liability because he activated the hoist when he did. In my view, there is no substance in this argument. Jaymay had a continuing obligation to take care for the safety of its workers. Patrick Sahyoun, in activating the lift, breached that duty. The fact that he had earlier told the men to get off the lift and they had disobeyed his instruction is no justification for activating the hoist when it was plainly dangerous to do such a thing. 81 Mr Einfeld submitted that the Court had to be careful "not to work backwards to conclude the defendant owed a duty of care". In my view, however, the imposition of a duty of care on the defendants in this case owed nothing to hindsight reasoning. It is merely the application of long-standing principle. As far as Booksan is concerned, the principle is to be derived from Australian Safeways Stores Pty Ltd v Zaluzna, as far as Jaymay is concerned it is to be derived from cases such as Hamilton v Nuroof (WA) Pty Ltd and Bankstown Foundry Pty Ltd v Braistina. See also, in this Court the judgment of Beazley JA in Boyded Industries Pty Ltd v Canuto [2004] NSWCA 256 at [7]). 82 In my view the argument advanced is untenable.

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Did Booksan affix the hoist to the building? 83 The insurers sought to argue on appeal that Booksan did not attach the hoist to the adjoining building and the defendants conditionally supported this argument. The insurers submitted that her Honour should have found that John Sahyoun and Patrick Sahyoun, as employees of Jaymay, erected the hoist. 84 The judge's finding was that John Sahyoun, on behalf of Booksan, affixed the hoist to the building. It is not entirely clear on what basis she made this finding, although she said that she did so "having regard to the totality of the evidence". 85 As a consequence of the collapse of the hoist, Jaymay and Patrick Sahyoun were convicted of breaches of the Occupational Health and Safety Act 1983 (NSW). For the purposes of the hearing as to penalty in those prosecutions, a statement of agreed facts was tendered. In that agreed statement Jaymay admitted that the hoist had been installed and erected by it. Patrick Sahyoun made a similar admission. At one point in his cross-examination at the trial, John Sahyoun said that he was employed by Jaymay and Booksan had no employees on the site and in fact had no employees at all. 86 The problem for the insurers in now challenging the finding that Booksan affixed the hoist, is that, at trial, they did not dispute that Booksan erected it. 87 In his closing address at the trial, Mr Einfeld on behalf of the defendants accepted that Booksan erected the hoist. The insurers did not then dispute this proposition. They contended merely that Booksan had not been negligent. On appeal, Mr Nock explained: "I think the matter got fairly complicated in respect of the tactics involving insurance companies and the like as to what was going on." 88 Mr Nock, also, very properly drew the attention of the Court to the fact that GIO General did not contend, in its cross-claim, that Booksan had not erected the hoist. Mr McIntyre accepted that position as well as regards GIOWC. 89 Thus, at trial, there came a time where it was common ground that Booksan had erected the hoist and had affixed it to the adjoining building. The plaintiffs did not then have to adduce more evidence on the issue. 90 In all the circumstances, I do not think that it is now open to the insurers to contend otherwise on appeal.

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The mutual agency argument 91 At trial the plaintiffs argued that there was "an interwoven relationship of agency" between Booksan and Jaymay. By notice of contention they raised this argument again and the insurers supported them in this regard. This argument formed the basis of a contention by the plaintiffs that Booksan was liable for the negligence of Jaymay, the latter being its agent. The insurers sought to rely on the argument in submitting that the recklessness of Patrick Sahyoun (as an employee of Jaymay), and Jaymay's alleged breach of the Regulations, constituted conduct by Booksan that exempted them from liability to it under the relevant conditions of their respective insurance policies. 92 Truss DCJ described the argument as being that the defendants and John Sahyoun "operated as a single inextricably mingled amorphous entity whose respective functions related no doubt more to accounting and management issues of the principal than separate legal personalities". 93 Her Honour accepted that neither Patrick nor John Sahyoun was aware "of [the] entity they were purporting to act for in terms of the day to day conduct of the site". Nevertheless, she found that Patrick Sahyoun was an employee of Jaymay alone and not an employee of both defendants. She found that John Sahyoun was not employed by Jaymay, but erected and installed the hoist on behalf of Booksan. The judge rejected the mutual agency submission. 94 Mr Gormly submitted that Booksan and Jaymay conducted themselves as a single business entity with the only real separation occurring by accounting records after the event. He submitted that Booksan was actively involved not just as the site owner but as a builder and supervisor. He submitted that Mr John Sahyoun's actions did not distinguish between one company and the other and he was acting in a way consistent only with treating the two companies as one, that is, each as agent for the other. Mr King supported this argument. 95 The evidence on the issue was undoubtedly confusing and contradictory. The defendants were related companies owned and operated by the Sahyoun family. The registered office of both companies was the residence of John and May Sahyoun and their son Michael Sahyoun. John Sahyoun engaged the contractors and Patrick Sahyoun (who was the site foreman and supervisor) reported to John Sahyoun. There was no evidence of formal decision making processes or of directors' meetings. John Sahyoun, in a statement of 30 June 2000, was unable to inform WorkCover of the identity of the other directors of Booksan. John Sahyoun and Patrick Sahyoun both told WorkCover immediately after the accident that they were employed by Booksan but later corrected that to Jaymay. John Sahyoun at one point claimed not to have any responsibilities on behalf of Jaymay but also, as I have mentioned, accepted that Jaymay employed him. 96 Nevertheless, there was a body of evidence on which the judge was entitled to rely for her findings that there was no mutual agency and that Jaymay employed Patrick Sahyoun but did not employ John Sahyoun. 97 According to a letter dated 30 June 2000 from Elie Sahyoun (it is not clear what relationship Elie Sahyoun had with the defendants but the letter was admitted into evidence) Booksan "has engaged the services of a related company being Jaymay Constructions Pty Ltd to act as [its] building consultant". According to this letter Jaymay acted as the building supervisor and provided employees to work on the construction. 98 A PAYE slip dated 27 July 2000 reflected that Patrick Sahyoun was an employee of Jaymay and a Jaymay group certificate for the relevant period was to the same effect. 99 Booksan owned the site and John Sahyoun testified that it owned the project, was responsible for all subcontractors, and for purchasing the materials. He gave evidence (albeit at times contradictory and inconsistent) to the effect that Jaymay, in effect, was the main contractor. 100 Michael Sahyoun, a director of Booksan and Jaymay, was in charge of financial matters for the companies. He supervised all the accounting of the businesses. He testified that Jaymay paid the employees on the site. The cashbook and ledger he kept differentiated between Booksan and Jaymay. 101 In my opinion, there was evidence, including oral evidence, on which Truss DCJ was entitled to rely for her findings that, while Booksan owned the site, Jaymay supervised the construction and that Patrick Sahyoun acted for Jaymay. I have held above that the finding that Booksan affixed the hoist is not now open to challenge. That John Sahyoun physically affixed the hoist was not in dispute. 102 The factual findings made by Truss DCJ on this issue were based, to a degree, on oral testimony and the credibility of witnesses. Therefore, they can only be overturned in accordance with the well-known principles relating to appellate review of factual findings expressed in cases such as Abalos v Australian Postal Commission (1990) 171 CLR 167, Devries v Australian National Railways Commission (1993) 177 CLR 472, State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1990) 160 ALR 588 and Fox v Percy (2003) 214 CLR 118. 103 In my opinion, it has not been shown that Truss DCJ failed to use or palpably misused her advantage, or acted on evidence which was inconsistent with facts incontrovertibly established by the evidence, or which was glaringly improbable, or was contrary to compelling inferences.

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Contributory negligence 108 Truss DCJ gave the following reasons for finding that there was no contributory negligence on the part of the plaintiffs. "(a) they were inexperienced and novices on a building site, (b) I am satisfied that they were not given any express instructions on directions about the use of hoists, (c) it was not unreasonable for them to rely upon Patrick Sahyoun, (d) even [if] they were made aware of the fact that they should not have ridden on the hoist, their injuries did not occur because they simply fell from it. What was causative of their injuries in this case was a combination of improper affixation, overloading and operating the hoist in this state, being matters within the control of the defendants, (e) Patrick Sahyoun agreed in cross-examination that he had not formed a view that the hoist was likely to collapse and that if he had formed such view he would not have operated the hoist. He was a trained and licensed operator. In my view, by comparison, the plaintiffs could hardly be expected to be in a position of forming a considered view about the risks to which they were exposed and which eventuated, (f) a number of other workers got on the lift as did one of the plaintiffs' immediate employers. In those circumstances it is not unreasonable that they followed suit, (g) it was not established that the plaintiffs were aware of stairs or any other means of access to the third storey of the building where the accident occurred, and this was the first time they were working on this particular building." 109 As I have mentioned, Mr Elmir submitted that Truss DCJ erred in preferring the evidence of Mr Sassine and Patrick Sahyoun as to the number of boxes on the hoist at the time of the collapse and what was said in the conversations prior to Patrick Sahyoun operating the hoist. He submitted that her Honour should have accepted his evidence in these respects. This bears on the issue of contributory negligence and I shall deal with this argument first. 110 Mr Elmir drew attention to the fact that, in an interview with Inspector Moore of the WorkCover Authority, Mr Sassine was asked to describe the events leading up to the accident and he stated: "I rang up Pat to see where he wanted the delivery, and he told me he wanted them on the Hume Highway at Bankstown. I parked the truck on the footpath and ask pat [sic] where did he want the tiles. He said just take them off the truck, and we'll help you on load them that's when they had about five guys we had a chain line going loading onto the hoist [sic]. The tiler said 'that's it' and I started opening up the other pallet of tiles that when I heard the bang. I ran up to where the hoist was. Along with other people we started to lift the hoist to get at the injured people there was a lot of yelling and screaming." (Blue 148) 111 Earlier, Mr Sassine had said that he could not say how many tiles were loaded onto the hoist as he was on the truck at the time. When he was asked whether he witnessed the accident, he said: "I saw the hoist when it was on the ground, I heard a noise and looked across to the hoist that's when I saw it on the ground." (Blue 148) 112 Mr Elmir submitted that the two pieces of evidence to which I have referred were "incontrovertibly inconsistent" with Mr Sassine's oral evidence in which he testified as to what was said between Patrick Sahyoun and the men who got on to the platform immediately prior to the accident. 113 I accept that the evidence in question was inconsistent with the evidence Mr Sassine gave at trial, but it was essentially a matter for her Honour as to which evidence she preferred. She gave detailed reasons for her reliance on Mr Sassine. She made specific reference to the interview with Inspector Moore. It is plain that the judge gave careful attention to the issues raised by Mr Elmir. Her Honour said: "Whilst there was nothing in [Mr Sassine's] demeanour to suggest other than that he was a witness of truth, the matters raised by the plaintiffs dictate a close scrutiny of his evidence… ." 114 Truss DCJ said that she was not persuaded by the arguments presented by the plaintiffs in regard to Mr Sassine's evidence. Her Honour's finding in this respect was substantially based on the credibility of the witnesses who testified before her. That finding was made with due care and deliberation. In my view, on the basis of the well-known principles applicable to appeals against findings of fact, Mr Elmir's arguments in this regard must be rejected. 115 I turn now to the arguments raised on behalf of the defendants. Mr Einfeld focused on to subparagraphs (c), (f) and (g) of Truss DCJ's reasons, referred to in [107] above. 116 Her Honour found that it was not unreasonable for the plaintiffs to rely upon Patrick Sahyoun (sub-paragraph (c)). But there was no evidence that the plaintiffs did in fact rely upon Patrick Sahyoun. Moreover, Patrick Sahyoun only reluctantly activated the hoist and, before doing so, three times requested the men to get off the platform. In my view, her Honour erred in taking into account that the plaintiffs did or might have relied on Patrick Sahyoun. 117 Her Honour's statement that "a number of other workers got on the lift" (sub-paragraph (f)) is not strictly accurate. The fact is that only one other worker, apart from the plaintiffs themselves, got on the platform. More importantly, however, Mahmoud Khodr got on to the platform and he was one of the partners in M K Tiling. In my view, Mr Khodr's presence on the platform must have weighed significantly with the plaintiffs and understandably so. They were young and inexperienced and must have been influenced by seeing one of their employers get on to the platform. 118 As regards sub-paragraph (g), as the configuration of the three blocks was the same, and as the plaintiffs knew that there were stairs at the rear of the other two blocks, they should have known that there were stairs at the rear of the third block. After all, the third block was in an advanced state of construction. It would have been reasonable for the plaintiffs, at the least, to check whether the tiles could have been taken up to the top floor by way of the stairs rather than the hoist. In my view her Honour erred in the reason expressed in this sub-paragraph. 119 Further, the dangers to persons travelling on the lift, loaded as it was with the tiles, were obvious to all. The sign made it plain that persons were prohibited from travelling on the hoist. The actual platform was obviously not safe for persons to stand on while it was being lifted to a height to which the plaintiffs intended going. Regard must be had to the fact that the plaintiffs disregarded a specific direction given by Patrick Sahyoun (Czatyrko v Edith Cowan University (2005) 79 ALJR 839 at [18], 843). Their actions in getting on the lift and travelling on it were foolhardy. 120 In my view, the judge erred in determining that the plaintiffs were not guilty of contributory negligence.

[65]

It was accepted that the term "load" in reg 122(7) bore the same meaning as it did in reg 122(5). 124 The argument that the defendants breached regs 122(5) and (7) was based on the submission that the hoist was subjected to a greater load than that determined by and in conformity with the Regulations as a limiting load. It was not suggested that an "Inspector" had "directed" a particular load for the hoist in question (or a particular incidence or manner or condition of loading). Thus, two significant elements of the breaches - that the plaintiffs needed to establish - were proof of a "limiting load" as determined by and in conformity with the Regulations and that the load actually on the hoist when it collapsed exceeded the limiting load so determined. 125 Mr Einfeld submitted: "Breach of Reg (5) … of the Construction Safety Regulations 1950 requires proof that the subject load is 'a greater load … than that determined by and in conformity with these Regulations'. Reg. 122(3) provides that unless 'otherwise prescribed in these Regulations': '(a) Every … hoist … shall be classified numerically in conformity with the following table, according to its working period, effective load and the dynamic effects to which it is subjected …' (emphasis added). There then follows a Table classifying hoists numerically according, in the case of 'effective load', to whether that load is low or high. In applying the Table, the following sub-paragraph (b) provides: 'The effective load of any … hoist … shall be considered to be low unless it lifts or may reasonably be expected to lift loads greater than two-thirds of its safe working load on more than 1,000 occasions per annum. The effective load shall otherwise be considered to be high' (emphasis added). The term 'safe working load' is defined in reg 3 relevantly as follows: ' Safe working load or working load means the greatest burden that may be imposed without contravening any provisions of these Regulations in or upon the lifting or lowering instrument with which any … hoist is therefore provided …'. The provisions are circular. Neither they nor any other provisions of the Regulations provide any mechanism for determining that the safe working load or rated capacity or rated lifting capacity of the subject hoist at Bankstown was 500 kg (or any other weight)." 126 The only argument that was advanced to suggest that these submissions were incorrect was a set of propositions put forward by Mr Nock on behalf of GIO General. These were as follows: "Regulation 122(5) relevantly provides: 'No person shall subject … any … hoist … to a greater load … than that determined by and in conformity with these Regulations as a limiting load …' Booksan and Jaymay submit that the plaintiffs did not establish a breach of reg 122(5), because there was no determination of the limiting load of the hoist by the Regulations. GIO General submits that the limiting load of the hoist was determined by and in conformity with the Regulations. This is because regard must be had to the definition of 'limiting' in reg 3 which relevantly provides: 'Limiting means: (a) a maximum such that if that were increased … such increase … would … in any way prejudice the safe working of the … hoist …' What is 'determined' then by the Regulations as a 'limiting load' pursuant to reg 122(5) is a maximum load such that if it were increased, it would 'in any way prejudice the safe working of the hoist.' It was reasonable for Truss DCJ to infer that the limiting load that would prejudice the safe working of the hoist was a load of at least 932 kg (Red 60Q at [34] of the Judgment) - a load that was almost double what would appear to be the manufacturers rated maximum loading for the hoist. As such, there was a breach by Jaymay of regs 122(5) and (7) of the [Regulations]." 127 GIO General's argument, however, does not resolve the problem. If the definition of "limiting" in reg 3 is incorporated in reg 122(5), the latter regulation would read, relevantly, as follows: "No person shall subject … any … hoist … to a greater load … than that determined by and in conformity with these regulations as a maximum [load] such that if that were increased … such increase would prejudice the safe working of the … hoist".

[66]

When reg 122(5) is read in this way, it remains necessary for the maximum loan to be determined "by and in conformity with these Regulations". 128 Mr Gormly and Mr King, on behalf of the plaintiffs, relied on the following exchange that occurred at trial: "Her Honour: Yes, … just one matter. Is it common ground that the rated lifting capacity was 500 kgs? Gormly: Yes, your Honour, as far as my understanding of it is. Einfeld: There is evidence that's been tendered through Mr Luland to that effect, and I won't be adducing any contrary evidence to that fact, if that answers your Honour's questions. Her Honour: But you're not prepared to say yes to my question? Einfeld: That's correct. Her Honour: I noted that statement by Mr Luland and if it was going to be an issue I was going to ask him the basis for it. But if there's not going to be any evidence to the contrary then I won't bother. Einfeld: I won't be adducing any - if your Honour pleases. 129 Thus, although Mr Einfeld did not accept that it was common ground that "the rated lifting capacity was 500 kgs", he informed the judge that there was evidence "to that effect" and said that he was not tendering evidence to the contrary. 130 The evidence in question was as follows. Mr Patrick Sahyoun admitted that "the weight restriction on the hoist" was 500 kgs and Mr John Sahyoun admitted that the "load limit" of the hoist was 500 kgs. Inspector Luland described the hoist as a "500 kg four section builder's material hoist". Mr Kozianski, the expert witness, described the hoist in similar terms. 131 The judge decided the issue as to whether 500 kgs was the maximum load determined by and in conformity with the Regulations as follows: "As to reg 122(5), whilst the defendants accepted that the hoist was subject to a load rating of 500 kg, they relied upon the fact that there was no evidence as to its source or basis in particular as to whether it was determined by or in conformity with the Regulations. The plaintiffs relied upon Mr Luland's evidence, the defendants' concessions in this case and in the Statement of Agreed Facts (Ex O, para 10) that the hoist had a rated lift capacity of 500 kgs. The rated capacity was never an issue in [this] case and whilst it would be true to say that the actual source of the rating was not identified, in my view the proper inference to be drawn is that it was determined in conformity with Regulations, particularly in the absence of any evidence to the contrary from the defendants." 132 On appeal, Mr Einfeld did not dispute that the defendants had accepted at trial that "the hoist was subject to a load rating of 500 kgs" and he did not challenge the evidence of Mr Luland, Mr Patrick Sahyoun and Mr John Sahyoun, to which I have referred. He submitted, however, that none of that evidence established that the weight of 500 kgs was a load "determined by and in conformity with these Regulations as a 'limiting load' within the meaning of reg 122(5)". Furthermore, he submitted, the Regulations did not provide for a mechanism whereby a load could be determined and, accordingly, no load was established "by … these Regulations" and no load could have been established "in conformity with these Regulations as a limiting load". He submitted, in effect, that because of the absence of any provision in the Regulations as to an appropriate mechanism of determining the load, reg 122(5) was of no force. 133 Mr Gormly accepted that at the trial the defendants did not concede that the expression "rated lifting capacity" was the same as a load determined by or in accordance with the Regulations. He accepted that "there was never any discussion about that". Mr King took a similar position. 134 On my understanding of what occurred, the plaintiffs simply assumed from the way in which the defendants conducted the trial that they accepted that 500 kgs was the load determined in accordance with the Regulations. But, at least by the time that Mr Einfeld concluded his closing address, that assumption could not reasonably have been made. In the course of his closing address Mr Einfeld said: "I'll say one more thing about the tile load. It's important. Evidence has been given about the rated capacity of this hoist. Nobody has told your Honour what that means. Nobody has ever actually produced a document identifying or certifying or indicating the statutory or regulatory source of this rating, whether it's part of some guide or some Australian Standard, whether it's compulsory or advisory. We just do not know, and the plaintiffs have called no evidence about it. We know - and it's been described by Mr Luland for one - as a something or rather technology brand name 500 kilogram hoist, and you now have plenty of evidence that it was rated to carry 500 kgs. No one has told us what that means. Does it mean that that's the guide for this type of hoist, so that there's no offence of any kind, no breach of any regulation, if it exceeds that limit? We just do not know. Everyone has assumed it but it's not there in the evidence. We don't know and we've not been told. The plaintiffs have not established it." (Black 465 to 466) 135 None of the other parties sought to reopen in consequence of these submissions and advanced no further arguments on the point. No objections were made to Mr Einfeld putting the defendants' case on this basis. 136 The judge well understood the defendants' argument on the issue. She observed, as I have mentioned, that the defendants relied upon the absence of evidence as to the source of the load being rated at 500 kgs and, in particular, "as to whether it was determined by or in conformity with the Regulations". Her Honour dealt with the issue merely by observing that while the actual source of that rating was not identified, the proper inference to be drawn from the evidence was that it was determined in conformity with the Regulations. 137 This approach, however, does not overcome the argument that the Regulations, themselves, do not establish a limiting load for the purposes of reg 122(5) and, moreover, provide no means for the determination of a limiting load "in conformity with these Regulations". This argument raises a question of law, not one of fact. It cannot be resolved by evidence. 138 Mr Gormly submitted that the trial judge was entitled to draw the inference that 500 kgs was the weight determined in accordance with the Regulations as there was "some evidence" to this effect and no contrary evidence was adduced. Mr King's submission was that, having regard to what Mr Einfeld said to the trial judge in the passage I have quoted, as well as the other evidence on the issue, her Honour's conclusion was open to her and "should not be seen to be wrong". These submissions do not, however, address the legal question raised by the defendants' argument. 139 Neither Mr Gormly nor Mr King was able to point to any provision in the Regulations that amounted to a mechanism for determining a "limiting load" as this expression is used in regs 122(5) and (7). 140 Mr King submitted that persons with engineering knowledge possibly could understand the Regulations as a whole in a way different to how lawyers or laymen would understand them. For that reason, he submitted, the unchallenged evidence that the "safe working load" was 500 kgs, coupled with Mr Einfeld's concessions at trial to which I have referred, entitled her Honour to find that the weight of 500 kgs had been determined by the Regulations and was in conformity with them. In my view, however, neither the evidence nor the way in which Mr Einfeld conducted the trial can be regarded as proof that a load of 500 kgs was determined by or in conformity with the Regulations. 141 GIO General sought to obtain assistance from a guide put out by the Department of Industrial Relations and Employment, referred to as "A Guide for Riggers". The Guide, however, is what it purports to be, namely, a set of guidelines. It has no statutory force. Accordingly, it does not assist in establishing how one is to determine a limiting load in accordance with the Regulations. That has to be found in the Regulations themselves. 142 In my opinion, therefore, Truss DCJ erred in finding that 500 kgs was a load determined by and in conformity with the Regulations. The Regulations do not stipulate a limiting load for the purposes of reg 122(5) or reg 122(7) and do not provide a mechanism for determining such a limiting load. Therefore, it cannot be said that the defendants committed a breach of either reg 122(5) or reg 122(7).

[67]

Other regulations relied on by the plaintiffs and the insurers 143 The plaintiffs contended that Truss DCJ wrongly held that reg 139 did not apply to the circumstances of the case. 144 Regulation 139 applies to "hoist towers". Regulation 139(1) reads: "(1) A hoist tower means a vertical tower of rectangular section, within which loads are raised or lowered by means of a guided platform, guided bucket, or other convenient guided medium. The tower is maintained in an upright position by guys or struts, or more commonly by being secured to an adjacent building or structure. Each of the four sides, or faces, of the tower shall comprise a simple truss of plain orthodox design, capable of resisting transverse forces." 145 The hoist, from which the plaintiffs fell, did not have within it a guided platform as referred to in reg 139(1). The platform of that hoist was constructed in such a way that it operated outside the tower and not within the tower. It was a different kind of hoist to that described in reg 139. In my view, her Honour correctly held that reg 139(1) did not apply. 146 Truss DCJ also rejected Mr Elmir's argument that there had been breaches of regs 68, 70 and 71. Her Honour observed that counsel appearing for Mr Elmir at the trial conceded that these regulations could only apply if the hoist fell within the definition of "lift" in s 3 of the Construction Safety Act. Section 3 of that Act excluded hoists, save for hoists for "personnel and materials", from the definition of "lift". The judge held that the hoist from which the plaintiffs fell was not a hoist for personnel and materials. Mr King, on behalf of Mr Elmir, submitted that her Honour erred in this finding. 147 Mr King submitted: "… once the hoist operator, Patrick Sahyoun, put the hoist into operation with both materials and persons upon it, the [defendants] became subject to the Regulations relating to lifts. At that point the hoist became a personnel and materials hoist and hence within the definition of lift." 148 In my view, the character of a hoist, for the purposes of s 3 of the Construction Safety Act, is not ambulatory. Assume that - by aberrant conduct - a hoist, not constructed or intended for use as a personnel and materials hoist and not normally used as such, is momentarily used to lift persons. It would lead to incongruous consequences if that hoist became a personnel and materials hoist for the few seconds while persons were being lifted in it, but regained its previous character as soon as those persons left the hoist. 149 In my view, the character of a hoist for the purposes of s 3 of the Construction Safety Act is to be objectively determined by reference to its construction and the general purposes for which it is intended to be used. In my view, Truss DCJ correctly held that the hoist in question was not a personnel and materials hoist and was not a lift for the purposes of s 3 of the Construction Safety Act. In my view, there is no substance in the argument to the contrary. 150 Mr King submitted that Truss DCJ wrongly rejected the arguments advanced on Mr Elmir's behalf that the defendants had breached regs 73(2) and 73(3). 151 These regulations are in the following terms: "73 Safeguards and accident prevention measures for construction work Any person who directly or by his servants or agents carried out any construction 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 construction work and for this purpose, without limiting the generality of the foregoing, he shall, subject to Regulation 74: (2) provide and maintain safe means of access to every place at which any person has to work at any time, (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 1.8m," 152 Truss DCJ dealt with the arguments based on regs 73(2) and (3) as follows: "When considering reg 73 in its proper context it should be noted that it is expressed to be subject to reg 74 which deals with provision of safety nets or belts and life lines. Regulation 73(2) deals with safe means of access. It is clear from the evidence that there was a safe means of access, the stairs, which were not used, although there was no evidence to suggest that the plaintiffs were aware of their existence. Mr Daley submitted that once the hoist was used it became a means of access, particularly as the plaintiffs had not worked on that particular building before. He relied upon Australian Paper Manufacturers Ltd v Conyers (1962) NSWLR 449 as authority for the proposition that it is not necessary for a plaintiff, who proves that the means of access chosen by him was unsafe, to prove that no safe route in fact existed. Conyers was followed in McGibbon v Illawarra County Council (1968) 1 NSWR 239 where it was determined that the question for the Court is the requirement on the defendant being provision of 'safe' means of access, not 'a' safe means of access . Nevertheless, I am not persuaded that this regulation applies. It refers to providing and maintaining a safe means of access and I do not consider that using a hoist as a means of access is a matter contemplated by the regulation and, having regard to Mr Luland's evidence, I am satisfied that a safe means of access was provided. I am not persuaded that reg 73(3) which imposes a requirement for fencing for a person working more than 1.8m above the ground applies for the simple reason that a materials hoist is not a place from which a person working is liable to fall." 153 On appeal, Mr King reiterated the arguments described by Truss DCJ as having been advanced by Mr Daley. In my opinion, her Honour, for the reasons she gave, correctly rejected those arguments. 154 I would add that, in any event, the failure to install fencing or some other means of preventing a worker from falling from the hoist was not causative of the plaintiffs' injuries. The plaintiffs' injuries were caused by the failure to affix the hoist to the building and the activation of the hoist while it was overloaded.

[68]

Does contributory negligence apply to a breach of statutory duty 155 Mr King argued that the defendants could not rely on Mr Elmir's contributory negligence as a defence to his claims based on breaches of the Regulations. As I have concluded that the defendants did not breach the Regulations it is not strictly necessary to determine this issue. Nevertheless, as this issue was fully argued by counsel and is not without importance, I propose to deal with it. 156 In paragraph 39 of F & D Normoyle Pty Ltd v Transfield Pty Ltd [2005] NSWCA 193 the following was said: "During the course of argument, Bryson JA pointed out the following to counsel: (a) By s 151N(3), read with s 151E(1), of the Workers Compensation Act 1987 (NSW), contributory negligence on the part of an injured worker is a partial defence to an action for the award of damages founded on a breach of statutory duty imposed on the worker's employer. This, however, does not apply in the present case as Mr Vranjkovic did not sue his employer, Chadwick, but the Joint Venture. (b) Mr Vranjkovic was injured on 18 August 1999 and, on 30 July 2001, commenced his action. At these dates s 7 of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW) was of application and, notwithstanding other changes to the defence of contributory negligence brought about by that Act, it provided, in effect, that the Statutory Duties (Contributory Negligence) Act 1945 (NSW) ("the 1945 Act") would continue to be in force. Section 2(1) of the 1945 Act provided that contributory negligence would not be a defence to an action for damages for injury founded on a breach of statutory duty. (c) With effect from 6 December 2002, the 1945 Act and s 7 of the Law Reform (Miscellaneous Provisions) Act were repealed by Sch 3 of the Civil Liability Amendment (Personal Responsibility) Act 2002 (NSW). (d) Clause 14 of Sch 2 to the Civil Liability Amendment (Personal Responsibility) Act inserted transitional provisions in the Civil Liability Act 2002 (the transitional provisions so inserted were contained in Sch 1, Pt 3, cl 6). By those transitional provisions, the amendments to the Civil Liability Act 2002 (NSW) made by the Civil Liability Amendment (Personal Responsibility) Act extended to civil liability arising before the commencement of the amendments, but not to proceedings commenced in a court before the amendment. Clause 6 of Sch 1 Pt 3 to the Civil Liability Act applied only to amendments to that Act, not to the repeal of the 1945 Act. (e) When regard is then had to ss 30(1)(c) and 30(1)(e) of the Interpretation Act 1987 (NSW), the position appears to be that the Joint Venture could not raise contributory negligence as a defence to Mr Vranjkovic's action for damages based on the breach by the Joint Venture of its statutory duties." [Emphasis added]

[72]

(c) If the first two arguments are wrong, the Civil Liability Act , as amended by the Civil Liability Amendment (Personal Responsibility) Act , does not retrospectively allow contributory negligence to be raised as a defence, and contributory negligence only becomes available as a defence to breach of statutory duty claim where the cause of action accrues after the repeal of the 1945 Act and s 7 of the 1965 Act (6 December 2002). 161 I shall deal with the first two arguments together. 162 Until the enactment of the 1945 Act, contributory negligence was a defence to a claim founded on a breach of statutory duty independent of negligence: Piro v W Foster and Company Ltd (1943) 68 CLR 313. As is noted above, s 2(1) of the 1945 Act provided that contributory negligence would not be a defence to an action for damages for injury founded on a breach of statutory duty and s 7(1) of the 1965 Act provided that the 1945 Act would continue to be in force. The repeal of the 1945 Act and s 7 of the 1965 Act by the Civil Liability Amendment (Personal Responsibility) Act thus had the effect of reinstating the rule laid down in Piro v W Foster and Company Ltd. Contributory negligence once more became a defence to a cause of action based on breach of statutory duty. 163 Many of the provisions of the Bill that became the Civil Liability Amendment (Personal Responsibility) Act were modelled on the recommendations in the Final Report by the Panel appointed by the Commonwealth and State Governments to review the law of negligence (Second Reading Speech, Hansard 23 October 2002 at 5765). I shall refer to the Final Report (the Review of the Law of Negligence Final Report September 2002) as "The Negligence Review". 164 In paragraph 1.28 of the Negligence Review the following was said: "Our view is that in order to be 'principled' and effective, reforms of personal injury law must deal with such liability regardless of the legal category (tort, contract, equity, under statute or otherwise) under which it arises. If they do not, it may be possible for a claimant to evade limitations on liability for personal injury and death that attach to one cause of action by framing the claim in another cause of action. For example, if a limitation on liability or damages were applied only to the tort of negligence, injured persons would be encouraged to explore the possibility of framing their claim in contract or for breach of a statutory provision."

[75]

Section 3B has no application in the present case. 166 Section 5A, by its express words, makes Pt 1A of the Civil Liability Act applicable to any claim for damages for harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise. The effect of this provision must be seen in the context of the repeal of the 1945 Act and s 7(1) of the 1965 Act resulting in contributory negligence once more becoming a defence to a claim for breach of statutory duty. 167 In my opinion the consequences of the repeal of the 1945 Act and s 7(1) of the 1965 Act, and the insertion of s 5A into the Civil Liability Act, are clear. Irrespective of how a claim is formulated, if - in substance - it is a claim for damages for harm resulting from negligence, a defence of contributory negligence may be raised to that claim even if it is based on a breach of statutory duty. Division 8 of Pt 1A of the Civil Liability Act (which sets out principles applicable to contributory negligence) will then apply to that defence. 168 The conduct of the defendants that gives rise to the plaintiffs' claims is the failure to affix the hoist to the adjacent building and the activation of the hoist when the platform was overloaded. Although the plaintiffs have formulated claims based on that conduct as breaches of statutory duties, in substance these claims are for damages for harm resulting from conduct held to have been negligent. 169 Were it to be open to a plaintiff to formulate claims based on negligent conduct in the form of breach of statutory duties (or in some other form), without provisions such as s 5A(1) and similar provisions that appear elsewhere in the Civil Liability Act the limitations on liability and damages introduced by the Act could be avoided. Rightly or wrongly, that is what s 5A(1) and other similar provisions in the Act seek to and do prevent. 170 Accordingly, I do not accept Mr King's first two arguments on this issue. 171 I now turn to Mr King's third argument. 172 Clause 6 of Pt 3 of Sch 1 to the Civil Liability Act provides: "(1) The amendments to this Act made by the 2002 amending Act [the Civil Liability Amendment (Personal Responsibility) Act ] extend to civil liability arising before the commencement of the amendments, but do not apply to or in respect of proceedings commenced in a court before that commencement." 173 As is noted above, cl 6 applies only to amendments to that Act, not to the repeal of the 1945 Act and s 7(1) of the 1965 Act. Moreover, although Mr Elmir commenced proceedings after the repeal, his cause of action arose before the repeal. Having regard to ss 30(1)(c) and 30(1)(e) of the Interpretation Act 1987 (NSW), I would accept Mr King's argument that contributory negligence is only available as a defence to causes of action that accrued after the Civil Liability Amendment (Personal Responsibility) Act took effect on 6 December 2002. Thus, I would uphold his third argument.

[84]

I shall refer to this definition as "General Definition 5". 179 Following the "General Definitions," the "General Conditions" are set out. The policy stipulates that the General Conditions "apply to and should be read in conjunction with all Policy Sections." General Conditions 2 and 3 provide: "2. Reasonable Care You must take all reasonable care to maintain the premises, structures, fixtures, fittings, furnishings, appliances, machinery, implements and plant in sound condition. You must take all reasonable care for the safety of the Property Insured and to avoid and minimise loss of or damage to property or injury to persons. You must also ensure that only competent employees are employed and that you and they comply with all statutory obligations, by-laws, regulations, public authority requirements and safety requirements. 3. Cancellation You may cancel this Policy at any time …" 180 The General Conditions provide also for such matters as alteration of risk, GIO General's right to take action or institute legal proceedings in the name of the insured, notification of other insurance, the making of claims and the amount payable as excess. The General Conditions include the following: "13. Breach of Condition The law gives GIO a number of rights if you do not comply with the General Conditions of this Policy or the specific Conditions applicable to individual Policy Sections. In particular cases, GIO may be able to: · Cancel individual Policy Sections. · Avoid an individual Policy Section from the commencement date of the Period of Insurance. · Refuse to pay a claim. · Reduce the amount to be paid out on a claim." 181 Following the General Conditions, the "General Exclusions" are set out. General Exclusion 3 is in the following terms: "This Policy does not insure: … (3) Non Compliance Loss or damage or liability caused by or as a result of your failure to comply with any relevant statutory obligations, by-laws, regulations, public authority requirements or safety requirements." 182 Following the General Exclusions, a number of different "Policy Sections" are set out. These concern fire and specified perils, business interruption, accidental damage, burglary, money, glass, public and products liability, goods in transit, fraud, dishonesty, stock deterioration, machinery breakdown, multi risks and personal accident and illness. 183 The Section termed the Public and Products Liability Section is made up of Part A, which is headed "Public Liability", and Part B, which is headed "Products Liability". Under the heading "Part A - Public Liability", the following appears: "GIO will insure you as set out in this Policy Section for any amount that you become legally liable to pay by way of damages … for: (1) personal injury, … " 184 Under the heading "Definitions" in the Public and Products Liability Section the following appears: "For the purposes of this Policy Section: … 4. You/your means (a) the Insured shown on the Schedule (b) any director, employee, executive officer or partner of the Insured shown on the Schedule when that person is acting within the scope of any duty required in that capacity."

[89]

(d) took reasonable care to ensure that they and their employees complied with all statutory obligations, regulations, requirements and safety requirements. 188 The insurers accepted that an employer's vicarious liability to a third party for the negligence of an employee is not relevant to the obligation of an insured. Thus, the fact that Jaymay's employee, Patrick Sahyoun, was negligent did not establish a breach of General Condition 2 by Jaymay: Fraser v Furman [1967] 1 WLR 898 at 905 to 906; Legal & General Insurance Australia Ltd v Eather. The insurers accepted that General Condition 2 would only not be satisfied if the conduct of Booksan and Jaymay were such that it amounted to a deliberate decision to expose persons to a risk of injury, or recklessness on their part. 189 Her Honour was not persuaded that Booksan recognised any risk of injury, "let alone deliberately courted any such risk". The judge came to this decision by having regard to the state of mind of Mr John Sahyoun, he being the person who erected the hoist on Booksan's behalf. Thus, her Honour found that Booksan did not breach General Condition 2. 190 As regards Jaymay, Truss DCJ held that Patrick Sahyoun had recklessly activated the hoist knowing that it was for materials only and was overloaded with the weight of the men on it. The issue before her Honour, therefore, became whether, by reason of Definition 4, the recklessness of Patrick Sahyoun constituted recklessness on the part of Jaymay, his employer. 191 Her Honour held that Definition 4 (and not General Definition 5) applied to General Condition 2. That was because the policy provided that the definitions in the General Definitions section were applicable "[u]nless otherwise defined in individual Policy Sections". Her Honour considered that the definition of "you/your" in Definition 4 (contained in the Public and Products Liability Section) was different to that of "insured/you/your" in General Definition 5. Therefore, by Definition 4, "you/your" was "otherwise defined" and General Definition 5 did not apply. 192 In consequence, Truss DCJ held that the word "you" in General Condition 2, when applicable to the Public and Products Liability Section, included - as the insured - employees of Jaymay (and, in particular, Patrick Sahyoun). On this basis, her Honour held that the conduct of Patrick Sahyoun was to be attributed to Jaymay. Accordingly, her Honour held that - by reason of the conduct of Patrick Sahyoun - Jaymay had failed to comply with General Condition 2 to the extent that that condition required Jaymay to "take all reasonable care … to avoid and minimise loss of or damage to property or injury to persons" and to "ensure" that it complied with "all statutory obligations, by-laws, regulations, public authority requirements and safety requirements". Thus, she held that GIO General was not required to indemnify Jaymay.

[90]

The meaning and effect of "you/your" 193 Mr Einfeld submitted that the definition of "you/your" in Definition 4 was intended only to define the identity of the insured persons for the purposes of the Public and Products Liability Section. He submitted that Definition 4 merely extends the meaning of "Insured" for the purposes of the Public and Products Liability Section by including as insured persons "any director, employee, executive officer or partner of the Insured shown on the Schedule when that person is acting within the scope of any duty required in that capacity". Mr Einfeld submitted that Definition 4 was not intended to have the general application expressly conferred on General Condition 5. Therefore, the word "you" in General Condition 2 bore the meaning as defined by General Condition 5. 194 Mr Nock, on the other hand, supported the judge's decision. He submitted that the words "you/your" were "otherwise defined" (that is, in the definition of "you/your" in Definition 4). On that basis, he submitted, the word "you" in General Condition 2 had the meaning defined by Definition 4 (and not General Definition 5) when General Condition 2 applied to the Public and Products Liability Section. This meant, he submitted, that in the context of the Public and Products Liability Section, the conduct of Jaymay's employees (including Patrick Sahyoun) was to be regarded as the conduct of Jaymay when determining whether Jaymay, as an insured, complied with General Condition 2. 195 Definition 4 plainly defines "you/your" otherwise than the definition of these words in General Condition 5. Therefore, when General Condition 2 applies to the Public and Products Liability Section, the word "you" in that condition must bear the meaning in Definition 4. I accept Mr Nock's submissions to this extent. 196 But that conclusion does not mean that the conduct of each separate insured is to be attributed to the others. Definition 4 means simply that each separate insured, as identified therein, is entitled to cover under the Public and Products Liability Section. It says nothing about vicarious responsibility and does not stipulate that the conduct of one insured be attributed to the others or any of them. 197 The intent of Definition 4 is made perfectly clear by Condition 2 of the Public and Products Liability Section. Condition 2 forms part of a set of conditions which, according to the Public and Products Liability Section, "apply to this Policy Section in addition to the General Conditions". Condition 2 provides: "(2) Joint Insureds When the Insured shown on the Schedule comprises more than one party, Definition 4 of this Policy Section applies to each party as if a separate Public and Products Liability Policy had been issued to each party…" 198 Thus, while Patrick Sahyoun is an insured for the purposes of the Public and Products Liability Section, he is an insured on the basis that a separate Public and Products Liability Policy is deemed to have been issued to him. His conduct affects only his rights under that deemed policy; it does not affect the rights of the other insureds, such as Jaymay, under the policies deemed to have been issued to each of them. 199 Accordingly, her Honour erred in attributing the conduct of Patrick Sahyoun to Jaymay.

[92]

GIO General contends that Booksan and Jaymay did not comply with regulations and public authority requirements and safety requirements. 203 I have held that neither Booksan nor Jaymay breached any regulations. 204 GIO General contended that the Riggers Guidelines fell within the ambit of "public authority requirements and safety requirements". I do not agree with this proposition. I have expressed the view that the Rigger Guidelines are nothing more than guidelines. They are not "requirements". Accordingly, this argument fails. 205 Therefore, I would uphold Jaymay's appeal in regard to General Condition 2 and dismiss GIO General's appeal against the judge's decision that it is obliged to indemnify Booksan. 206 At trial, GIO General accepted that it bore the onus of proving that the conduct of the defendants came within General Exclusion 3. 207 Truss DCJ held that Booksan had not failed to "to comply with any relevant statutory obligations, by-laws, regulations, public authority requirements or safety requirements" and, hence, its conduct did not come within General Exclusion 3. For the reasons previously expressed, I consider that her Honour was correct in this finding. 208 Truss DCJ held that, because Jaymay had breached regs 122(5) and (7), it had breached General Exclusion 3 and, hence, it was not entitled to indemnity from GIO General. 209 I have expressed the view that Jaymay did not breach regs 122(5) and 122(7) and that her Honour erred in this regard. 210 Truss DCJ also held that Jaymay had contravened General Exclusion 3 because it had breached s 16(1) of the Occupational Health and Safety Act 1983 (NSW). Section 16(1) provides: "(1). Every employer shall ensure that persons not in the employer's employment are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work." 211 Section 16(1) is contained in Division 1 of Pt 3 of the Occupational Health and Safety Act. Section 22 of that Act, which is also in Division 1 of Pt 3, provides: "(1) Nothing in this Division shall be construed: (a) as conferring a right of action in any civil proceedings in respect of any contravention, whether by act or omission, of any provision of this Division, (b) as conferring a defence to an action in any civil proceedings or as otherwise affecting a right of action in any civil proceedings." 212 GIOWC conditionally supported the defendants' appeals against GIO General. Mr McIntyre, on GIOWC's behalf, pointed out that s16 of the Occupational Health and Safety Act was in very broad terms and created an offence without importing any concept of duty of care, foreseeability, reasonable conduct or, indeed, damage. He submitted that this explains the purpose of s 22, which is to exclude the application of s 16, with its wide ambit of application, to civil claims. I accept these submissions. 213 GIO General, by relying on a breach of s 16(1), seeks to use that section as an essential element of its defence to Jaymay's action. Moreover, if GIO General were to be allowed to rely on a breach of s 16(1), that section would affect a right of action in the proceedings (namely, Jaymay's claim for an indemnity). Accordingly, in my opinion, s 22(1) precludes GIO General from relying on a breach of s 16(1) and Truss DCJ erred in holding that, because it had contravened s 16(1), Jaymay was in breach of General Exclusion 2.

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Judgment (97 paragraphs)

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Legislation Cited (11)

Cases Cited (24)