Coote v S & P Jackson Pty Ltd

Court of Appeal (NSW)|2014-10-03|Before: Macfarlan JA, Barrett JA, Leeming JA

HEADNOTE [This headnote is not to be read as part of the judgment] In 2006 Mr Matthew Coote, the appellant, was employed by Boral Construction Materials Group Ltd ("Boral") as a plant operator at an asphalt batching plant in Coffs Harbour. In about June 2006, Boral contracted with the respondent to provide a 15 tonne Tadano crane and related equipment in order to clear a blocked dust extraction unit located at the plant some 15 metres above ground level. On 17 June 2006 the crane lifted a workbox containing Mr Coote and an employee of the respondent, Mr Currie, to the height of the dust extraction unit. The crane was being operated by another employee of the respondent, Mr French. The workbox had been suspended for between 30 and 45 minutes when Mr Coote requested that the box be lowered by one or two metres. After being raised slightly to enable the lowering to occur, the workbox suddenly fell to the ground while still attached to the crane's fly jib. Mr Coote and Mr Currie suffered serious injuries. On 23 July 2011, Mr Coote commenced proceedings against the respondent in the District Court claiming damages for negligence. Subsequently, he also commenced proceedings against it under the Motor Accidents Compensation Act 1999 (NSW). By judgment of 18 October 2013, Gibson DCJ held that the respondent was not liable in negligence and that Mr Coote's claim under the Motor Accidents Compensation Act failed because his injuries were not sustained in a "motor accident". Her Honour also gave reasons for having rejected an application made by Mr Coote on the third day of the hearing to supplement his particulars of negligence by alleging operator error, as distinct from a failure of the respondent to properly maintain the crane, the latter being the topic with which the reports prepared by Mr Coote's expert had dealt. Mr Coote appealed only against the judgment in the negligence action. Held, dismissing the appeal (Macfarlan JA; Barrett and Leeming JJA agreeing): (1) In examining an issue which provides the foundation for a finding of negligence, it is necessary for the Court to reach "a definite conclusion affirmatively drawn" ([22]). It is not enough if the evidence gives rise only to conflicting inferences of equal degree of probability so that the choice between them is a mere matter of conjecture ([22]). Jones v Dunkel [1959] HCA 8; 101 CLR 198 at 304-5, followed. (2) The primary judge's preference for the theory advanced by the respondent's expert as to the cause of the accident was well-founded ([23]-[30]). Even if it were not, there would not be any basis for the Court to reach "a definite conclusion affirmatively drawn" that the appellant's expert had correctly identified the cause of the accident ([23]). (3) The evidence did not establish that any step that a reasonable person in the respondent's position would have taken would have avoided the accident ([31], [32]). As a result, on neither theory of the cause of the accident was causative negligence proved ([35]). (4) The appellant's challenge to the primary judge's decision to reject his application to amend the particulars of negligence has not succeeded ([46], [51]). An adjournment was inevitable if the amendment were allowed so as to enable the respondent to obtain Mr French's instructions on the new case and to allow for a further exchange of expert reports ([44]-[45]). Further, the proposed new particulars were not supported by the evidence before the primary judge ([50]). (5) (per Leeming JA, Barrett JA agreeing) There was no explanation for the failure to serve evidence about any changed opinion as to the operator's culpability earlier, or for the absence of such a case being pleaded and particularised. In those circumstances, there was no appellable error in holding the plaintiff to the course adopted prior to and during the course of the trial ([56]-[58]).

Judgment 1MACFARLAN JA: In 2006 Mr Matthew Coote, the appellant, was employed by Boral Construction Materials Group Ltd ("Boral") as a plant operator at an asphalt batching plant in Coffs Harbour. In about June 2006 Boral contracted with the respondent, trading as North Coast Cranes, to provide a 15 tonne Tadano crane and related equipment to facilitate the clearing of a blocked dust extraction unit located at the plant some 15 metres above ground level. 2On 17 June 2006 the crane lifted a workbox containing Mr Coote and an employee of the respondent, Mr Brendan Currie, to the height of the dust extraction unit. The crane was operated by another employee of the respondent, Mr Mark French. After the workbox had been suspended for between 30 and 45 minutes, Mr Coote requested that Mr Currie ask Mr French to lower the box one or two metres. After being raised slightly to enable the lowering to occur, the workbox suddenly fell to the ground while still attached to the crane's fly jib. Mr Coote and Mr Currie suffered serious injuries. 3On 23 July 2011 Mr Coote commenced District Court proceedings against the respondent claiming damages for negligence. Subsequently, he commenced proceedings against it under the Motor Accidents Compensation Act 1999 (NSW). 4By judgment of 18 October 2013 given in both proceedings, Gibson DCJ found that the respondent was not liable in negligence and that Mr Coote's claim under the Motor Accidents Compensation Act failed because his injuries were not sustained in a "motor accident". 5In her judgment, her Honour also gave her reasons for having rejected an application made by Mr Coote on the third day of the hearing before her to supplement his particulars of negligence by alleging operator error, as distinct from a failure of the respondent to properly maintain the crane, this being the topic with which the reports prepared by Mr Coote's expert had dealt. 6Mr Coote appeals only against the judgment in the negligence action. For the reasons that appear below, I have concluded that his appeal should be dismissed.

THE LAY EVIDENCE 7Mr Coote gave evidence that after his request that the workbox be lowered, it commenced to go up. He then heard Mr Currie say to Mr French over the radio "No, we need to go down", to which Mr French was said to have replied "We need to go up to release the brake". Mr Coote said that the box had been held stationary for about 45 minutes before the accident occurred. 8Mr French was not available to give evidence on the dates fixed for the hearing of the proceedings but a signed record of an interview that he gave to WorkCover NSW was admitted into evidence. It recorded that Mr French recalled telling Mr Currie that he would have to go "up a bit to activate the clutch". Mr Coote said that he did raise the workbox and when he "let go of the lever to cable down, it just come down, it was as if in freefall". The interview then proceeded as follows: "Q21. Why did you have to ... winch up to increase the pressure? A21. Because the time they were sitting up there, cause they were up there for about half an hour. If you are working it constantly with no long gaps between lifts you don't have to activate the clutch, but after half an hour you do. Q22. Is that what you have to normally do? A22. In that crane, cranes that don't have accumulators". 9Mr French said that he did not notice anything unusual about the operation of the crane earlier on that day, or on the previous day. He did not indicate that he was aware of any prior relevant problem in the operation of the crane.

THE EXPERT EVIDENCE 10Mr Jonathan O'Brien, Mr Coote's expert, opined that the most likely cause of the freefall of the workbox was the failure of the clutch selector valve (or check valve), resulting in a catastrophic loss of hydraulic pressure in the clutch. He attributed this to wear affecting the poppet and valve seat which allowed hydraulic fluid to leak back through the valve, effectively draining hydraulic fluid away from the clutch. 11The clutch selector valve controls the inwards and outwards movement of hydraulic fluid within the crane's hydraulic control system which operates the crane's winch clutch. Contained within the clutch selector valve assembly is the one-way check valve which is intended to prevent a backflow of fluid to the main supply circuit when the latter is depressurised. 12Mr O'Brien considered that the need to raise the workbox before lowering it was consistent with the existence of this wear. He said that the wear was identified when the clutch unit was dismantled and inspected some time after the accident. 13He said in his reports that the respondent did not have in place a proper system of maintenance and repair and that if it had implemented such a system, the wear would have been observed and the accident likely avoided. In cross-examination, however, he made concessions to which I later refer. 14Mr Paul Kiem, the respondent's expert, opined that there must have been some hydraulic pressure within the clutch mechanism that enabled the workbox to be raised even for a short distance and that raising the workbox must have increased that pressure. The fact that the workbox fell very rapidly indicated to him that the hydraulic pressure fell catastrophically within a second or less. 15He considered that this could only have occurred if most of the hydraulic fluid in the clutch mechanism had suddenly flowed back through the clutch selector valve. In his view, something must have caused the valve to remain open. The only explanation he could give was that this may have been caused by a tiny piece of contaminant (the size of a grain of sand or pinhead) lodging itself between the poppet and the valve seat. He did not consider that it was inconsistent with this theory that no contaminant was present three days later when he conducted a test of the crane or when Hydraulics Hotline subsequently conducted further tests. 16He did not consider that the accident was the result of wear affecting the poppet and/or valve seat because the clutch operated normally when he tested it and because Mr French was able to raise the winch before the workbox's freefall. 17Also in evidence was a 2007 report by Safe Cranes Pty Ltd of a full "strip down" inspection of all major components of the crane. As recorded by the primary judge, "[i]t is common ground that the report ... identified no defect capable of causing the accident, that the crane was reassembled, and that it has continued to work well without any further incident since that time" (Judgment [30]), although I add that the crane was fitted by this time with an accumulator which assists in maintaining hydraulic pressure in the clutch. Nevertheless, the components of the clutch in use at the time of the accident were re-installed and continue to be used.

THE JUDGMENT AT FIRST INSTANCE 18The primary judge accepted that Mr Kiem's explanation was the most likely cause of the accident, concluding: "78 All of the evidence points to the crane operating normally and displaying sufficient hydraulic clutch pressure to be able to carry out its operation up until the accident, which occurred in a matter of seconds. The crane was inspected by Mr Kiem when it operated normally, and the relevant hydraulics were then stripped down, examined and tested, in circumstances where no problems with the components accounting for the accident were identified. Nor did the report state that fluid leakage was abnormal or constituted a fault or problem. In addition, the components were put back into the clutch assembly and the crane operated thereafter without incident. 79 All of the evidence demonstrates that the malfunction of the crane was a momentary transient failing which never repeated itself. This is consistent with the evidence of Mr Kiem, and I note the concession by Mr O'Brien (albeit that it was a 'theoretical' possibility) that Mr Kiem's explanation was possible." 19Her Honour then concluded that the failure of the clutch selector valve was not foreseeable and that, in the absence of any indication of prior malfunction, the respondent was not under any obligation to strip down the clutch components and identify any parts needing replacement. This conclusion answered Mr Coote's case even if Mr O'Brien's hypothesis were to be accepted. Moreover, on Mr Kiem's theory, which her Honour favoured, the contaminant that caused the accident "would not have been discoverable on any program of service and maintenance of the crane, stringent or otherwise" (Judgment [96]). 20Her Honour indicated that her findings on liability dictated the entry of judgment in favour of the respondent. Inadvertently, no formal order for entry of judgment was made in the District Court but on appeal the parties undertook to have that oversight rectified.

The cause of the accident 21Logically, and consistent with the primary judge's approach, examination of the issue of negligence must be preceded by a consideration of what caused the accident. 22In examining an issue which provides the foundation for a finding of negligence, it is necessary for the Court to reach "a definite conclusion affirmatively drawn" (Jones v Dunkel [1959] HCA 8; 101 CLR 298 at 305). It is not enough if the evidence gives rise only to "conflicting inferences of equal degree of probability so that the choice between them is [a] mere matter of conjecture" (Jones v Dunkel at 304-5 citing Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5; see also Luxton v Vines [1952] HCA 19; 85 CLR 352 at 359-360; Condos v Clycut Pty Ltd [2009] NSWCA 200 at [68]; and Minogue v Rudd [2013] NSWCA 345 at [66]). 23For reasons given below, I consider that the primary judge's preference for Mr Kiem's theory was well-founded but that even if it were not there would not be any basis for the Court to reach "a definite conclusion affirmatively drawn" that Mr O'Brien had correctly identified the cause of the accident. 24The principal matters that justified the primary judge in favouring Mr Kiem's hypothesis, or at least in not being affirmatively persuaded that that of Mr O'Brien was to be preferred, were as follows. 25First, in his report of 6 August 2013, Mr O'Brien accepted that the occurrence hypothesised by Mr Kiem was "a theoretical possibility" (at [11]). 26Secondly, in making that concession Mr O'Brien noted, inferentially by way of criticism of the respondent, that subsequent testing indicated that the clutch selector valve lost pressure over time and that Mr French's reported comments demonstrated that he was aware of that prior to the accident. However in cross-examination, Mr O'Brien conceded that it was common for cranes that held a load static for a period of time to lose hydraulic pressure, with the rate of loss depending on the age of the crane - the older the crane, the greater the loss (Transcript p 103). He accepted that the subject crane was old, being close to reaching the time for its 25 year service (ibid). Consistent with these concessions was Mr Kiem's opinion that leakage as observed in relation to the subject crane was "quite normal and acceptable" (Report dated 12 July 2013, [25(I)]). 27Thirdly, Mr O'Brien did not, whilst Mr Kiem did, explain why there was a sudden freefall of the workbox. Mr O'Brien emphasised the slow leakage that was known to occur with this and other old cranes but did not explain how the hydraulic pressure suddenly came to fail completely. It was a sudden failure that caused the accident because moments before it there had been sufficient pressure for the crane to raise the workbox. On the other hand, Mr Kiem explained the "unpredictable, unfor[e]seen, momentary failure" of the valve by hypothesising that a contaminant may have prevented the valve from closing when Mr French attempted to have the crane lower the workbox. He said that this may have enabled the hydraulic fluid to move back rapidly and to a significant extent through the valve, suddenly causing a complete loss of pressure. 28Fourthly, it is difficult to understand how the loss of hydraulic fluid could have been the result of wear when the clutch operated normally when Mr Kiem tested it three days after the accident, albeit that Mr Kiem did not test the clutch for as long as the 30 to 45 minutes for which the crane held the workbox stationary immediately prior to the accident. 29Fifthly, Mr O'Brien referred to the existence of a filter in the hydraulic system that would likely have prevented contaminants from interfering with the operation of the clutch, but he conceded in cross-examination that it was possible, as Mr Kiem said, that the contaminant was a piece of the filter that had broken off (Transcript pp 98-99). 30Finally, Mr O'Brien suggested that if any operative contaminant was present it would likely have been evident on the subsequent inspections that occurred. Mr Kiem's response that the contaminant may have worked through the clutch mechanism, and not have been detectable subsequently, makes sense as a possible answer, particularly as the valve in question was not dismantled until Safe Cranes' detailed inspection on 24 September 2007, over 12 months after the accident.

Negligence and causation 31On Mr Kiem's theory, the occurrence was a rare, unforeseeable event. Neither expert suggested that any step the respondent could reasonably have taken would have avoided the accident occurring if it was caused as Mr Kiem described. 32On Mr O'Brien's theory, the risk of malfunction due to wear was foreseeable. However, the evidence did not establish that any step that a reasonable person in the respondent's position would have taken would have detected the wear prior to the accident. Mr O'Brien accepted in cross-examination that in the absence of knowledge of a problem with the operation of the clutch, ordinary maintenance services, other than the 10 year and 25 year major services, would not have identified the wear to which he referred (Transcript p 103). Only in those services would the clutch valve be removed and checked. 33As the subject crane was 24 years old, it had not yet reached the time for its 25 year service. Although Mr O'Brien was not able to find any record that the crane had undergone a 10 year service, that is not a sufficient basis for inferring that it had not, particularly in light of the change of ownership which occurred in the meantime. In any event, Mr O'Brien accepted in cross-examination that the wear in the valve that he thought was significant may well not have been present or visible at the time of the 10 year service (Transcript p 107). 34As to any knowledge of the respondent that the crane was not operating normally, I refer to [8] and [9] above concerning Mr French's interview and the evidence at [26] above that slow leakage is commonplace with old cranes. 35As a result, on neither theory of the cause of the accident was causative negligence proved.

The amendment application 36The particulars of negligence contained in Mr Coote's Amended Statement of Claim included two that were expressed in general terms and alleged fault on the part of Mr French as operator of the crane (Particulars (r) and (s)). However, none of the expert reports of Mr O'Brien served by Mr Coote prior to the hearing which commenced on 12 August 2013 attributed the accident to fault on the part of Mr French. Indeed, in the report dated 26 March 2010, served well over three years prior to the hearing, Mr O'Brien expressly stated that the "writer does not consider that operator error was causal to this accident" (at [72]; see also [34] and [36]). 37On appeal, Mr Coote's counsel accepted, as was inevitable, that the respondent was entitled to proceed at the District Court hearing upon the basis that the ambit of Mr Coote's case in negligence was limited to the complaints made in his expert's reports. 38On 13 August 2013, the second day of the hearing in the District Court, the following exchange occurred during the course of Mr O'Brien's cross-examination: "Q. The astute operator of a 24 year old crane would ensure that if asked to lower the load or the work box he first lifted the load or the work box to raise the hydraulic pressure, knowing that in a crane of that age leakage was an inevitable part of the wear and tear of the crane and its components. Isn't that right? A. It was the strategy adopted by the man at the time. Q. It was an astute strategy, wasn't it? HER HONOUR Q. How about, can we just have was it a good strategy, was it a bad strategy, or what? A. I think it was a bad strategy. Q. Why? A. Because if he had engaged the winch brake and engaged the uplift of the - the lever to move the thing up, he could have pressurised the clutch cylinder without the possibility of it falling." 39When Mr Coote's counsel attempted the next day, in re-examination of Mr O'Brien, to explore further what Mr O'Brien had said about a "bad strategy", an objection was taken on the ground that the issue was outside Mr Coote's particulars. Mr Coote's counsel then sought leave to add the following two particulars of the respondent's negligence: "(t) By its employee French disengaging the winch brake without first activating the winch-lever to recharge the hydraulic circuit which controlled the winch clutches. (u) By its employee French disengaging the winch brake without first confirming that the hydraulic circuit controlling the operation of the winch clutches had reached safe operating pressure". 40After receiving submissions, her Honour rejected the application and indicated that she would, as she subsequently did, give her reasons in her final judgment. 41In her judgment of 18 October 2013, her Honour referred to the length of time since the accident and its subsequent investigation, as well as to Mr Coote's provision of a series of expert reports between 2010 and 2013, as factors militating against the amendment application. Her Honour also said that both experts had been cross-examined and excused, that an adjournment would be inevitable if the amendment were allowed and that no explanation had been provided for the delay in seeking the amendment. Her Honour then said, without elaborating, that "the most compelling reason for refusal to grant leave to amend is the hopelessness of each of the two particulars" (Judgment [86]). 42On appeal Mr Coote recognised that the primary judge's decision was discretionary but contended that her Honour's exercise of discretion miscarried because of "several significant mistakes as to the facts". 43First, Mr Coote pointed out that her Honour was mistaken in saying that both expert witnesses had completed their evidence. In fact Mr O'Brien was still in re-examination when the application was made and Mr Kiem had not yet given his evidence. 44Nevertheless, I do not consider this mistake to have been of any significance. The important point sought to be made by her Honour was that expert reports had been exchanged over a long period and that the parties and their experts had attended the hearing for the purpose of litigating the issues to which those reports gave rise. As her Honour said, an adjournment was inevitable if the amendment were allowed. There would have had to have been at least a further exchange of expert reports, with Mr O'Brien identifying precisely how the new case was to be put and then Mr Kiem providing a response, followed by a reply from Mr O'Brien. 45Moreover, the respondent embarked upon the hearing at a time when Mr French was unavailable, reasonably understanding, as a result of the terms of Mr O'Brien's reports, that there was no allegation of negligence on his part. Inevitably, an adjournment would have been required to enable the respondent to obtain Mr French's instructions on the new case. 46In light of the years that had passed since the accident in 2006, and since service in March 2010 of the first of Mr Coote's expert reports, the primary judge's decision to refuse to grant leave to amend was entirely reasonable, particularly as no explanation for the delay in seeking the amendment was provided (see generally Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175). 47Mr Coote's next contention was that the primary judge erred in saying that she did not accept that the new particulars arose from concessions or other admissions made by Mr Kiem in his evidence. It was a mistake on her Honour's part to infer that Mr Coote had suggested this but it was not a mistake of any consequence. Her Honour was correct to say, as she proceeded to do, that the application for leave to amend arose because of concessions said to have been made by Mr O'Brien. 48So far as the merits of the proposed new particulars are concerned, Mr Coote submitted that Mr O'Brien's evidence (see [38] above) was "at least prima facie evidence that [Mr] French had been at fault in the manner suggested in the proposed amended particulars". However this is not the case in relation to proposed Particular (t) because Mr O'Brien's evidence assumed that Mr French had not engaged the winch brake prior to raising the workbox but there was no evidence that Mr French did not have the winch brake engaged at this time. To the contrary, Mr Kiem gave evidence of a conversation with Mr French in which Mr French said "as I went up, I passed the lever through neutral, disengaged the brake, and the hook fell" (Transcript pp 159, 165). 49Furthermore Mr O'Brien's evidence did not, at least as far as it went, provide support for proposed Particular (u) which would have required further expert opinion to support it. 50It seems to me that in saying that the proposed new particulars were hopeless, her Honour was in substance saying no more than that they were not supported by the evidence (at least as it stood before her). She was not in error in doing so. 51In these circumstances, I consider that Mr Coote's challenge to the exercise of the primary judge's discretion has not succeeded.

ORDERS 52As Mr Coote's various challenges to the primary judge's decision have failed, his appeal should be dismissed with costs. 53BARRETT JA: For the reasons stated by Macfarlan JA and supplemented by Leeming JA, this appeal must be dismissed with costs. 54LEEMING JA: I agree with Macfarlan JA's reasons and conclusion that this appeal must be dismissed. In relation to Mr Coote's challenge to the primary judge's refusal to permit the case to be expanded, either in cross-examination or by supplementing the particulars, I wish to add the following matters of detail, which provide further support for the dismissal of this part of the appeal. 55The interview given by the crane's operator, Mr French, to WorkCover had been supplied to both sides' experts years beforehand. As Macfarlan JA points out, in March 2010, more than three years before the trial, Mr O'Brien's report squarely stated that there was no causal operator error. 56The trial was conducted in the absence of Mr French. At the outset, senior counsel for the respondent made it plain that he took the view that that paragraph of Mr O'Brien's report was an essential aspect of Mr O'Brien's reasoning. This arose when counsel for the motor accident insurer objected to it, the plaintiff withdrew the paragraph, and counsel for the respondent insisted that it be admitted into evidence, which it was. 57There was no explanation for the failure to serve evidence about any changed opinion as to the operator's culpability earlier. Mr O'Brien had served no fewer than five reports and one supplementary report in advance of the hearing. Still less was there an explanation for the absence of such a case being pleaded and particularised. Indeed, there was no attempt made to reconcile what Mr O'Brien said in cross-examination and the unequivocal statements in his reports. 58In those circumstances, in addition to the matters mentioned by Macfarlan JA, there was no appellable error in holding the plaintiff to the course adopted prior to and during the course of the trial.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 November 2014

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