Cooper v Dexter & Ors [2003] QDC 31

[2] According to the claim and statement of claim filed on behalf of the plaintiff on 20 July 2001, on 10 October 1999 he was working on an overhead bridge then under construction in the course of work on the Gold Coast Highway, climbing on scaffolding, when part of the scaffolding gave way causing him to fall and causing him to injure his right shoulder in an attempt to stop his fall. The plaintiff at that time was working as a subcontractor for the first or second defendant[1], to carry out concreting work on the bridge. It was alleged in the statement of claim that the third defendant had provided the scaffolding, and that the plaintiff's injury was caused by negligence or breach of statutory duty on the part of one or more of the defendants.

[3] Notice of intention to defend and defences were filed. The first defendant admitted that the plaintiff was at the relevant time working as a subcontractor for the first defendant but alleged that his work was fitting formwork, adjusting jacks and props, removing formwork and general carpentry. The first defendant alleged that the injury actually occurred on 9 September 1999.[2] Subject to this, the first defendant admitted that the plaintiff fell and injured himself at the place alleged. The first defendant admitted that the plaintiff was moving around on the scaffolding but alleged that it had been provided by the third defendant, not the first defendant. The first defendant also alleged that the scaffolding in question had been erected by Gunn Scaffolding Pty Ltd, a company engaged for that purpose by the first defendant as an experienced and apparently competent scaffolder.

[4] The third defendant in its defence denied that it provided scaffolding to the first defendant, alleging that what it provided to the first defendant was shoring equipment, which it owned. It denies that it had erected any scaffolding.

[5] Some correspondence between the solicitors for the parties has been put in evidence,[3] which suggests that the point about whether the plaintiff fell from scaffolding or shoring may be a dispute as to terminology rather than an issue about where the plaintiff was standing when he fell. The first defendant maintains that, whatever it was called, the thing from which the plaintiff fell was supplied by the third defendant, and erected by Gunn Scaffolding Pty Ltd. In January 2002 the solicitor for the first defendant foreshadowed third party proceedings against Gunn Scaffolding Pty Ltd.

[6] On 5 March 2002 documents were provided by the first defendant to the plaintiff's solicitors, including a letter to the first defendant from "John Holland and Barclay Mowlem Joint Venture"[4] dated 27 June 1998 which foreshadowed an intention to award a subcontract for the construction of the deck structure on the Logan to Pacific Overpass. Presumably further negotiations led to a quote dated 8 July 1998 from the first defendant to "Barclay Holland Joint Venture" which covered the construction of the cast-in-situ box girder on the Logan to Pacific Overpass. In that quote the first defendant was to supply among other things the "shoring system, formwork system." By a fax apparently sent on 19 August 1998 Gunn Scaffolding quoted "to supply labour only, to erect support system to overpass bridge, for deck and soffit support." There was also a separate quote for dismantling.

[7] Among the documents produced was a copy of a project subcontract agreement dated 6 August 1998 between the first defendant and "John Holland and Barclay Mowlem Joint Venture". The work to be undertaken under that agreement was set out in clause 3 and involved provision of "all supervision, labour, plant, including cranage and concrete pumping, site compound and facilities, temporary materials, including falsework and formwork design, and small plant to construct the reinforced concrete box girder deck, including installation of all cast in items necessary for the post tensioning system, for the Logan to Pacific Overpass, all in accordance with this agreement." Among other things, the contract provided in clause 14, inter alia, that "if at any time, in the opinion of the contractor, the subcontract works or any part of the works is proceeding ... in a manner unsatisfactory to the contractor, the contractor may vary the works by taking away from the subcontractor such part of the works as the contractor considers necessary and employ other contractors or its employees and equipment to carry out that part of the works taken away from the subcontractor ...." Clause 16 provided that the project was being performed by the contractor under a formal Project Quality Plan written to ISO:9001, and that the subcontractor "shall be responsible for establishing, documenting and maintaining a formal quality system for all work under the subcontract agreement." It also provided that the contractor reserved the right to audit quality records and systems and carry out random checks or other inspections from time to time, to ensure that the quality verification requirements were being practised.

[8] It appears that Gunn Scaffolding became a company Gunn Scaffolding Pty Ltd, which was incorporated on 30 September 1998, after the quote was given on 19 August 1998. A number of invoices for parts of the work dated between 6 June and 5 August 1999 were all in the name of the company.[5] That company was deregistered on 13 October 2001. In April 2002 the plaintiff's solicitors wrote to the former liquidators of the company seeking information about public liability insurance. It was not until June 2002 that copies of documentation held by the liquidator in relation to insurance policies was provided, but it took much longer to obtain other documents concerning work done by the defendants, and ultimately legible copies of those documents were not provided until February 2003. A number of invoices were provided, of which the last is dated 5 August 1999.

[9] The plaintiff had delayed seeking to joint the first and second respondents until it was in a position to apply in relation to the third respondent as well. This was to save costs, although it caused some problems because of the expiration of the one year period in s 31(2) of the Limitation of Actions Act. An application to join the first and second respondents, and Gunn Scaffolding Pty Ltd,[6] was filed on 24 January 2003, and came before the Chief Judge on 17 February 2003. It was then adjourned until 27 March, and her Honour gave directions for filing and serving material. I was told by counsel for the first and second respondents that this adjournment was on the basis that no issue would be taken as a result of any delay which occurred after that date, so that in effect I should decide the application as if I were doing so on 17 February 2003. Subsequently an amended application was filed, seeking to join the third respondent rather than the company which had been dissolved.

Proposed claim against the first and second respondents

[10] The proposed amended statement of claim alleges, so far as the first and second respondents in the application are concerned, their incorporation and that they carried on business as a joint venture under a registered business name, and carried on "the business of principal contractors." It alleges that they owed a duty of care as principal contractors to all persons, including the plaintiff, who attended upon the worksite to ensure the worksite was safe for the performance of work. Particulars of this duty are given the following terms:

(i) a duty to have in place a system of quality assurance to ensure that works undertaken by subcontractors are executed in the manner which did not expose workers on the site to unreasonable risk of injury;

(ii) a duty to have in place a system of supervision to ensure that its minimum quality assurance standards were achieved by subcontractors on site so as to ensure other persons on site were not exposed to an unreasonable risk of injury;

(iii) a duty to co-ordinate activity on site to ensure the conduct of one subcontractor does not expose another subcontractor to an unreasonable risk of injury."

[11] The proposed pleading goes on to allege that the plaintiff's injuries were "occasioned by the negligence of the [first and second respondents] particulars of which are as follows:

(a) failing to have in place an appropriate system of quality assurance to ensure that the said scaffolding and/or shoring equipment was erected properly and in such circumstances that it would not dislodge, when a reasonably prudent person would have done so;

(b) failing to have in place an adequate system to check or adequately check the said scaffolding and/or shoring equipment prior to allowing the plaintiff to carry out work from the said scaffolding, when a reasonably prudent person would have done so;

(c) failing to have in place an adequate system of co-ordination to ensure the activity of one subcontractor did not unnecessarily expose another to unreasonable risk of injury."

[12] The plaintiff's counsel disavowed any reliance on the provisions of s 31 of the Workplace Health and Safety Act 1995.[7] It was submitted that the intention of this pleading was to allege a breach of the duty of care identified by the High Court in Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16. In that case the defendant operated a sawmill which was fed with logs cut by independent contractors, and moved to the mill by sniggers and truckers who were also independent contractors. The plaintiff was a contractor engaged to cart logs from a logging area, and he was injured in the course of doing so by the actions of another contractor. It was held that the sawmiller owed a duty of care to the plaintiff.

[13] The basis of this duty appears in the judgment of Mason J at p.31:

"The interdependence of the activities carried out in the forest, the need for co-ordination by Brodribb of those activities and the distinct risk of personal injury to those engaged in the operations, called for the prescription and provision of a safe system by Brodribb. ... If an entrepreneur engages independent contractors to do work which might as readily be done by employees in circumstances where there is a risk to them of injury arising from the nature of the work and where there is a need for him to give directions as to when and where the work is to be done and to co-ordinate the various activities, he has an obligation to prescribe a safe system of work. The fact that they are not employees, or that he does not retain a right to control them in the manner in which they carry out their work, should not affect the existence of an obligation to prescribe a safe system."

[14] It will be immediately apparent that the situation contemplated by the High Court has in the context of this case much more in common with the position of the first defendant than with the position of the first and second respondents. They had contracted with the first defendant to do certain work on the site. Insofar as there was any co-ordination involved between subcontractors, it was co-ordination between subcontractors of the first defendant, and responsibility for them falls naturally upon the first defendant rather than the first and second respondents. The plaintiff was engaged as an independent contractor to do work which might as readily have been done by an employee of the first defendant, not of the first and second respondents. The person responsible in a practical sense for the operation of this worksite, in the same way that Brodribb was responsible for the operation of the worksite where Mr Stevens was injured, was the first defendant, not the first and second respondents.[8] There is nothing in Stevens v Brodribb which has the effect of making someone in the position of first and second respondents, who subcontracted effectively the whole responsibility of a particular worksite, responsible for the provision of a safe system of work there.[9]

[15] It is not to the point that the duty may have been non-delegable, because that does not affect the identity of the particular subcontractor in the chain on whom the duty is imposed because that subcontractor fits the description of the person who is in the position identified by Mason J. The fact that the duty is non-delegable simply means that the duty was not delegated to the plaintiff as an independent contractor, and was not able to be passed down the chain to any contractor lower. It does not have the effect of imposing on the head contractor a duty to ensure that care is taken by all subcontractors down the chain. I do not consider that any such duty exists. The first and second respondents did not meet the description given in Kondis v State Transport Authority [1984] HCA 61; (1984) 154 CLR 672 at 687 of the situation where a non-delegable duty of care arises. They had not in any way undertaken the care supervision or control of the plaintiff, or assumed any particular responsibility for his safety, and he had no reason to expect them to. The existence of a power to intervene does not imply a duty to exercise that power.

[16] Stevens is not an authority which supports the proposition that there was a duty owed by the first and second respondents to the plaintiff in the circumstances of this case. Indeed, the basis upon which the case was mounted against the first and second respondents really sought to equate the position of the overall head contractor (or principal contractor) with an insurer. It was submitted that the first and second respondents must have been in breach of their duty in that capacity to check the work done by various subcontractors, because if they had had the work properly checked the defect which caused the plaintiff to fall would have been discovered and the accident would have been avoided. But this would impose a more severe duty on the head contractor than the duty on the person who actually did the defective work, which was merely to take reasonable care to avoid causing injury. That approach is erroneous: Burnie Port Authority v General Jones Pty Ltd (1994) 129 CLR 520 at 576-7 per Brennan J. Negligence is not proved merely by proof of the fact of the injury.

[17] Once it is appreciated that that is the basis of the allegation advanced against the first and second respondents, it seems to me that it is obvious that the plaintiff is, at least for the moment, not in possession of material facts which show any liability on the part of the first and second respondents to the plaintiff. The plaintiff may never ascertain material facts, either because he just does not find out about them, or (and from what I have been told about this matter in the course of this application, as appears far more likely) because he cannot become aware of material facts because in fact there was no negligence on the part of the first and second respondents. But it is not necessary, for the purposes of considering an application under the Limitation of Actions Act to extend the limitation period, to go so far. It is sufficient to say that I am not persuaded that there was any material fact of a decisive character shown to have come into the possession of the plaintiff after the commencement of the last year of the period of limitation. On the basis of what the plaintiff knows at the moment, it is not worth pursuing an action against the first and second respondents. The plaintiff cannot show that either was negligent in a way which caused or contributed to the plaintiff's injury.

[18] Another way of putting this is to say that the plaintiff cannot satisfy the requirement in s 31(2)(b) of the Limitations of Actions Act, that there be evidence to establish a right of action apart from a defence founded on the expiration of a period of limitation. On the material before me, in my opinion there is not evidence to establish a cause of action for damages against the first and second respondents. Hence I will not extend the limitation period. In these circumstances it is not necessary for me to consider any question of prejudice to these respondents.

[19] It was then submitted that the first and second respondents should be joined notwithstanding the expiration of the limitation period pursuant to r 69(2)(g) of the Uniform Civil Procedure Rules, on the ground that it was just to do so. It was submitted that the effect of that rule was to give the court an unfettered discretion to join a defendant notwithstanding the expiration of the limitation period. There is however authority that the expiration of the limitation period is a relevant factor in deciding whether to join a defendant, because the effect of joinder is to deprive the added defendant of a defence which that defendant would otherwise have under the Limitation Act.[10] Depriving a party of a limitation defence is a serious matter, and there has to be some good reason why the public policy manifested in the Limitation of Actions Act should be subverted.[11] In the present case it seems to me that there can be no good reason for joining these proposed defendants in circumstances where it does not seem to me that the plaintiff has any cause of action against them. They are not necessary parties for the determination of the present action, either in the technical sense or in the (erroneous) popular sense. In my opinion they will be no more than an unnecessary complication. Accordingly the application so far as it concerns the first and second respondents is dismissed.

[20] The position of the third respondent is different. The third respondent was the insurer of Gunn Scaffolding Pty Ltd, at least at some stage, and the plaintiff sought to join it for the purpose of pleading a cause of action under s 601AG of the Corporations Act 2001 (Cth). That section provides:

"A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:

(b) the insurance contract covered that liability immediately before deregistration."

[21] If Gunn Scaffolding Pty Ltd erected the scaffolding from which the plaintiff fell, and that fall was caused by some defect in the way in which the scaffolding had been erected, and if there was a failure on the part of that company to take reasonable care in erecting the scaffolding, that company became liable to the plaintiff as soon as the plaintiff suffered the injury. That was before the company was deregistered. It is not disputed that at some point the third respondent had an insurance contract with that company. It was however argued that on the material presently available the insurance contract did not cover that liability immediately before deregistration.

[22] The contract of insurance was not still current at the time of deregistration, or indeed at the time the plaintiff suffered his injury. The contract was cancelled on 11 August 1999, apparently on the ground that the company had ceased to trade.[12] That was apparently after the scaffolding had been erected by it, but before the plaintiff's accident. It was submitted on behalf of the plaintiff however that the contract contained runoff cover which would have applied in the circumstances of the present case. Clause 7.4 of the conditions of contract, which I was told represented the conditions of the policy, provided as follows:

"In the event of this Policy being cancelled or not renewed, Public Liability coverage shall continue subject to the same terms and conditions in respect of all works commenced prior to the date of such cancellation or non-renewal and shall remain in force until:

(a) expiry of the Construction Period for such works and all maintenance and/or defects liabilities are discharged; or

(b) the Named Insured effects insurance with another insurer;

[23] It was submitted on behalf of the third respondent that this clause had ceased to operate because the construction period for the works had come to an end prior to the time when the plaintiff was injured. The difficulty I have with that submission is that one would expect the term "construction period" in clause 7.4 to be defined somewhere, but I cannot find a definition in the general conditions provided to me. It may be that the term would be defined in the schedule to the conditions by which cover was provided in a particular case; these are standard form conditions. A copy of what may well have been the schedule may be part of Exhibit R to the affidavit of Banks filed 24 January 2003, p.65, but the copy of that document on the exhibit is a very poor copy and is quite unintelligible. It does however appear to be a different document from the one exhibited to the affidavit of Bell filed 3 April 2003. That document does not define this term.

[24] In circumstances where I do not know what the "construction period" was supposed to be I cannot know whether it has expired. But there are more fundamental difficulties in dealing with this question. I cannot be sure whether the policy was on a claims made basis, or on an events basis, and if so whether the relevant event was defined under the policy in terms of the injury to the plaintiff (that is, when the cause of action arose) or the negligence of the insured, that is when the insured did the act or ought to have done the act, as a result of which act or omission the plaintiff was injured.[13] Depending on what the contract actually provided, it may be sufficient if the contract was in place at the time when the insured did the work which was ultimately shown to have been done negligently. Alternatively, it may be sufficient if the contract, including the runoff cover, was in place at the time when the plaintiff was injured. If the insurance contract was on a "claims made" basis, I think it unlikely that an indemnity would be available because presumably a claim was never made on the insured in respect of this incident, and the insured may well have always been entirely ignorant of it.

[25] The question of whether there was between Gunn Scaffolding Pty Ltd and the first respondent an insurance contract which covered the liability of that company to the plaintiff immediately before deregistration of that company is therefore a matter of some difficulty.[14] In my opinion however it is not a matter that I need to decide now. Where there is a statutory substitution of a defendant in circumstances such as this the Limitation Act does not run, in relation to the substituted defendant, until three years from the date when a cause of action was first available against that substituted defendant: Pagnon v WorkCover Queensland [2000] QCA 421; [2001] 2 Qd R 492. The plaintiff only obtained a cause of action under s 601AG against the third respondent (assuming the plaintiff has one) at the time when Gunn Scaffolding Pty Ltd was deregistered, that is on 13 October 2001. The limitation period has not yet run from that date, and so far as the third respondent is concerned therefore the application is one to join an additional defendant inside the limitation period.

[26] If the application were refused, the plaintiff could issue a separate proceeding against the third respondent, and therefore the practical issue becomes whether it is more convenient for this claim to be included as part of the present action or whether it should be a separate action. It is not necessary for the plaintiff to show at this stage either that he has a good cause of action against the additional defendant, or even that he has a prima facie case against the proposed party. He need only show what a plaintiff in filing a claim and statement of claim has to show, the pleading of a good cause of action against the defendant. In my opinion, where there is no issue arising about the limitation period, the plaintiff does not need to show more for the purposes of an application under r 69(1)(b)(ii), in terms of proving his case. He does need to show that the proposed defendant comes within the terms of that subrule, but the contrary was not argued by the third respondent.

[27] It follows therefore that in my opinion it is not necessary for me to determine either finally or on a prima facie basis, that the plaintiff has a good cause of action against the third respondent. It is sufficient for the plaintiff to seek to plead a good cause of action against the third respondent. There is no doubt that it is possible for the plaintiff to have a good cause of action, depending on whether the plaintiff can prove the factual basis necessary to satisfy the requirements of s 601AG. The plaintiff should therefore be able to proceed to do so in the ordinary way. I will therefore order that the third respondent be joined as a defendant in the proceeding. I will make the appropriate consequential orders, details of which can be worked out with counsel, when delivering this judgment.

[28] I also propose to list the matter and hear all parties with a view to determining what to do with this action, both procedurally and in terms of the resolution of the substantive matters in dispute between the parties. Procedurally there are some unsatisfactory features about the action as it stands: the same individual appears to be a party twice, as both first and second defendants, and that needs to be regularised. The title of the action refers to an individual with the addition of a trading name, which is inappropriate.[15] It seems to me that this is an action which might benefit from some case management.

[1] It appears from the notice of intention to defend filed by the first and second defendants on 10 January 2002 that they are the one person. I shall refer only to the first defendant, but that term will cover the second defendant if this assumption is incorrect.

[2] That the plaintiff fell at some stage is confirmed by the site foreman of the first defendant, who witnessed the plaintiff fall: affidavit of O'Brien filed 11 February 2003.

[3] Exhibits to affidavit of Banks filed 24 January 2003.

[4] A joint venture of the first and second respondents.

[5] It is not clear from the terms of these invoices that all such invoices are included.

[6] An application to reinstate that company was foreshadowed: affidavit of Banks filed 24 January 2003, para 29.

[7] This position is consistent with the decision in O'Brien v T F Woollam & Son Pty Ltd [2001] QSC 217; [2002] 1 Qd R 622.

[8] As to the scope of the decision in Stevens, see Kolodziejczyk v Grandview Pty Ltd [2002] NSWCA 267 at [53] per Heydon JA.

[9] cf Dettmer v K L McCracken Pty Ltd [2002] NSWCA 199.

[11] Draney v Barry [1999] QCA 491.

[12] See affidavit of Randell filed 7 March 2003 para 4; affidavit of Bell filed 3 April 2003 para 4.

[13] The assertion about the basis of the policy in the affidavit of Bell filed 3 April 2003 para 5 was not, so far as I know, common ground, nor was it demonstrated conclusively by evidence. It does seem consistent with clause 5.3 of the document I was handed.

[14] There are other issues raised in the affidavit of Bell filed 3 April 2003 paras 8, 9. It is not necessary to deal with these.

[15] Srbecky v Bess [2001] QDC 42.