Elphick v Westfield Shopping Centre Management Company Pty Limited

Introduction - an overview 13In 2006, the appellant ("Mr Elphick") was employed as a cleaner by the second respondent ("ACS") at Westfield Shopping Centre, Tuggerah. This is a large and busy shopping centre on the New South Wales Central Coast. It was managed by the first respondent ("Westfield"). ACS provided cleaning services at the centre for Westfield. Mr Elphick had worked for ACS since September 2004. He was 33 years of age at the time of the accident that is at the centre of this appeal. 14On 21 July 2006, Mr Elphick seriously injured his back while carrying out his duties in the centre. The accident happened in the east loading dock of the centre while Mr Elphick was in the process of removing cardboard refuse from a cage for the purposes of placing it in a compacter. Several days after the accident, he found that he was unable to continue working. He was placed on light duties for a time, but, by November 2006, he was unable to work at all. Effectively, since that time, he has not been able to work or find alternative employment as a consequence of his injury. Eventually, he was operated on and underwent a laminectomy and spinal fusion. His situation, however, remained as before. Broadly speaking, he has been unable to continue work and has become restricted in many of the pursuits of life he had enjoyed prior to the accident. 15As a consequence of the accident, Mr Elphick sued for damages for negligence. The defendants were Westfield as occupier of the shopping centre, and ACS as his employer. Westfield and ACS each denied liability for the accident, but, in the event that either were held liable, each claimed contribution from the other as a joint tortfeasor. In addition, Westfield cross-claimed against ACS on the basis of an indemnity said to arise out of the terms of a cleaning services agreement made between them on 2 nd June 2006 ("the cleaning agreement"). The construction of this document was primarily important, only if Westfield were held to be negligent in the proceedings. There was, however, a subsidiary argument relating to Westfield's costs that arose out of the terms of the cleaning agreement. Potentially, this arose whether or not Westfield were held to be negligent. There were other matters involved in the litigation between the parties, but they are not relevant to the present appeal. 16The trial was heard by his Honour, Acting District Court Judge Hungerford ("the primary judge"). On 30 July 2010, the primary judge determined that Mr Elphick was entitled to a verdict against ACS for $525,658. Westfield was found not to have breached its duty of care as an occupier. There was a further decision given by the primary judge on 13 August 2010. This related to costs issues that are not relevant to this appeal. Following that ruling, the primary judge entered a verdict for Mr Elphick against ACS in the sum mentioned above. He entered a verdict for Westfield against Mr Elphick, dismissed the cross-claim otherwise than as to costs and made costs orders that reflected the Short Minutes of Order prepared and submitted by the parties. 17Because of the costs arguments that arise in this appeal, it is necessary to set out the relevant portion of the orders made by the primary judge, pursuant to the Short Minutes of Order:- On the first cross-claim: (a) Pursuant to its contractual liability the second defendant/first cross-defendant to the first cross-claim to indemnify the first defendant/cross-claimant in respect of any costs incurred by the first defendant/cross-claimant in defending the plaintiff's action against it... ..... (d) Second defendant/first cross-defendant to the first cross-claim to pay the first defendant's/cross-claimant's costs of the first cross-claim so far as these costs related to the claim for contractual indemnity. 18The proceedings were complicated by the fact that ACS has been represented in two capacities. At trial, Mr Catsanos of counsel appeared for ACS in the right of its workers compensation insurer to argue that ACS was not liable to Mr Elphick but that, if it were, it should obtain contribution from Westfield as a joint tortfeasor. Mr Morahan of counsel appeared for ACS in its own right to argue that the indemnity contained in the cleaning agreement did not operate to protect Westfield if it were found to have breached its duty of care to Mr Elphick. As will be seen, this complication continued at the appeal hearing, although ACS' workers compensation insurer was represented in this court by Mr Perry, and Mr Garnsey QC appeared for ACS in its own right. 19Mr Elphick appealed against the findings of the primary judge that had resulted in the verdict in favour of Westfield. Broadly speaking, Mr Elphick maintained upon appeal that his Honour ought to have found that, in the circumstances, Westfield had breached its duty of care to him. 20In turn, Westfield filed a Notice of Contention. This asserted that the decision of the primary judge should be affirmed on the basis that Westfield had discharged any alleged duty of care to Mr Elphick by the engaging of a competent cleaning contractor under a detailed and comprehensive contract. There were other contentions as well, but it is not necessary to specify them. 21Westfield also filed a cross-appeal in relation to its cross-claim against ACS. In this cross-appeal, Westfield argued that, if it were found to be liable to Mr Elphick on the basis that it had breached its duty of care to him, it was entitled to indemnity from ACS against any damages or costs that it might be ordered to pay Mr Elphick. Secondly, the cross-appeal postulated that, whether or not the appeal by Mr Elphick succeeded, Westfield was entitled under the cleaning agreement to an indemnity from ACS for its costs of defending the appeal. As against ACS in the right of its workers compensation insurer, Westfield also maintained that, if it were held liable to Mr Elphick, there should be contribution between Westfield and ACS in the proportions specified by the primary judge in his decision (Hungerford ADCJ had assessed the proportions if, contrary to the findings he made, Westfield was liable to Mr Elphick, and in those regards reached conclusions as to proportionate liability that might then be considered by an appeal court). 22Consistently with the arguments it had urged below, ACS, in its own right, lodged a cross-appeal and a Notice of Contention which raised for this Court's consideration arguments as to the proper construction of the indemnity contained in the cleaning agreement, and related arguments bearing on the issue of the costs of the proceedings both before the primary judge and this appeal. It will be convenient at this stage to set out the three grounds contained in the Notice of Cross-Appeal. These reflect the arguments in this Court relating to the indemnity in the cleaning agreement (Red, 104):- 1 If the appeal by the appellant against the second cross-respondent succeeds, his Honour's conclusion as to the indemnity under clauses 9 and 14 of the agreement between the second cross-appellant and the second cross-respondent is incorrect to the extent that it involves a determination that the second cross-appellant is liable under those clauses to indemnify the second cross-respondent for loss and damage, that loss and damage arising out of acts, omissions or negligence of the second cross-respondent and not of the second cross-appellant, including in respect of any costs incurred in the proceedings which are not otherwise recoverable by the second cross-respondent as part of that loss and damage. 2 Further, or alternatively, his Honour's conclusion in paragraph 104 of the Judgment that the second cross-appellant is liable to indemnify the second cross-respondent against any costs incurred in the proceedings which are not otherwise recoverable by the second cross-respondent is wrong as no concession to the effect stated by his Honour was made. 3 Further, or alternatively, if (which is denied) the second cross-appellant is liable under clauses 9 or 14 of the agreement between the second cross-appellant and the second cross-respondent to indemnify the second cross-respondent in respect of costs, that indemnity is limited to the difference between party/party and solicitor/client costs. 23The compensation insurer for ACS supported Mr Elphick's submissions on appeal that Westfield should be held liable for damages. It maintained that the apportionment should be in the proportion submitted on behalf of Mr Elphick. The central issues in the appeal therefore relate to the suggested liability of Westfield and the contractual position between ACS and Westfield.

The primary judge's decision 24Before examining the detail of the submissions made on the hearing of this appeal, it will be useful to say something about the accident itself, the nature of the relationship between Westfield and ACS and the terms of the cleaning agreement. These matters were all considered by the primary judge. It will be convenient first therefore to address the precise circumstances of the accident. (Mr Elphick's disabilities and the quantum of damages are not in issue in this appeal). 25The primary judge described the circumstances of the July 2006 accident and made findings in that regard (Red, 57 - 60). The general circumstances prior to the accident were stated by his Honour as follows:- 12 The circumstances in which the subject accident occurred may be relatively shortly stated. The ACS cleaning supervisor was Lina Snape; the second-in-charge (known as C1) was Trevor Boyden; and then there was Alison Bailey (known as C2) - the plaintiff was under that supervisory group. The accident took place in the eastern wing of the centre in one of the five undercover loading docks which all had slightly sloping concrete floors to enable cleaning, usually by C1, by using a water hose. The process seemed to be that metal cages owned by Westfield were made available by it to shopkeepers in which to place discarded cardboard boxes for disposal as refuse. The cages when filled were then transported to the dock area by the dockmaster, an employee of ACS, using a golf cart type four-wheel drive vehicle owned by ACS. In the dock area there was a metal bollard near a compactor to enable the dockmaster to place a tie-loop of bailing twine over to hold the cage steady as the cardboard boxes were unloaded by the dockmaster or one of the cleaners, such as the plaintiff, and placed in the nearby compactor for baling. Interestingly, apart from the dock where the accident occurred, the system in the four other docks was to fix the cages before unloading to stop them from tolling other than by the use of twine. The cages themselves were quite sizeable being approximately 2.4 metres long, 1.5 metres wide and 2.0 metres high with steel wire mesh walls; they were open at the top to enable boxes to be thrown into; they had a mesh floor; and a mesh door on one side which fully opened to enable the boxes to be retrieved. Relevantly also, the cages had three wheels - two fixed wheels 200 millimetres in diameter at the rear and a rotating 200 millimetre wheel in the centre front so that the cage sat about 250 millimetres above the floor; none of the wheels had a braking device fitted and there was no other device for securing or chocking the wheels. Thus, the stability of the cage during the unloading process, depended upon the placement of the baling twine over the bollard, otherwise it was free to roll on its unlocked wheels over the sloping floor. It ought be mentioned that the golf cart had a fixed towing ball to attach the cage which, if left connected during the unloading process secured the cage and kept it stable. However, that connection was not maintained once the cage was placed in the dock because, of course, the cart had to be used elsewhere by ACS. Thus, reliance for the stability of the cage was the use of the baling twine over the bollard. 13 The unloading of the boxes from the cage was done manually by simply using the hands to remove them and place in the compactor. Perhaps obviously, this meant stepping into the cage due to its dimensions to get all of the boxes and, sometimes, it was rather difficult to remove those boxes which had become caught in the mesh floor of the cage. Cages had to be unloaded every 20 to 45 minutes during the day. 26Mr Elphick said in his evidence that he had been informed of his duties by the principal supervisor for ACS, Ms Snape. He had not received any training or warning from anyone at ACS about the risks of injury that might potentially arise from climbing into the cage. He had said, "No, none at all. We just got showed how to do it and they walk off and you're just left to your own devices" (Red, 57, R - S). 27He described the method of securing the twine over the bollard. This description included his observation that when he stepped into the cage to retrieve cardboard, the cage would either move laterally, or it would "rock", that is, tip towards him. 28The primary judge then described Mr Elphick's evidence as to what happened to him at about 1:30pm on 21 July 2006. He had been in the loading dock, engaged in the process of removing cardboard boxes from the cage. He followed the usual procedure he had described. When he put his right foot in the cage, it moved laterally, and this caused his right hip to twist away from his legs. The primary judge said:- 17. The mechanics of the accident as described by the plaintiff were accepted by the parties. It need be made clear that ACS employees, usually the dock master, drove the golf cart towing a cage and were responsible for positioning the cage, including putting the loop of twine over the bollard to secure it. On the occasion of the accident, the plaintiff said he was in too much of a hurry to check whether the twine was in place before stepping into the cage but then added, "No, it was in place, yes. It was connected to the bollard." On it being suggested to him that the accident happened because the twine was not in fact over the bollard, he maintained, "It was already over the bollard... no, the twine was over the bollard". He explained that when he stepped into the cage it moved laterally and then rolled on the sloping floor about six inches to one foot - it rolled no further because the baling twine held it. 29After the accident, Mr Elphick reported the incident to the C1 supervisor for ACS, Mr Boyden. It seems that ACS did not report the accident to the centre management. Westfield first became aware of what had occurred on 20 August 2006 when Ms De Haas, the risk management coordinator for Westfield at the centre, saw Mr Elphick walking "awkwardly" in the mall. She asked him what had happened. Thereafter, Ms De Haas approached Mr Tony Dutton of ACS and spoke also to Kayleen Transley, the ACS Human Resources and Occupational Health and Safety Manager. Ms De Haas then went down to the loading dock to view the cause of the plaintiff's injury. His Honour referred to an incident detail report prepared by Westfield, which stated (paragraph 19 of his Honour's judgment):- We then discussed how we could fix the problem. We decided we would make a hook from metal for the cleaners to reach for cardboard in the corners to eliminate the hazard and them stepping into the cage. We also placed a warning sign on the cage door, advising they are not to stand in the cage. I then approached the cleaning supervisor, Lena Snape, to ensure that she reported any incidents in the centre to Centre Management in future. I also raised the point with several cleaners that they are reporting hazards so we can fix any issues, as they operate in our back-of-house area the most and see a lot more behind the scenes than we do. 30Apart from the changes made as stated by Ms De Haas, there were, it seems, other changes made as well. Mr Elphick noticed these when he returned much later to the site with Dr Brian Emerson, a safety engineer, on 30 April 2009. Two extension or drop bolts had been fitted to the front corners of the cage to allow insertion into holes in the concrete floor for stability. In addition, a metal chain had replaced the twine for connection to the bollard and a carpet floor had been inserted into the cage. 31The primary judge summarised the evidence of two witnesses called in Mr Elphick's case. The first was Alison Bailey. She had worked as a cleaner with ACS at the Tuggerah Centre between 2003 and June 2006. During this period, she had been a supervisor with the title, "C2". She was also the dock master and had responsibilities to report to Ms Snape. Part of her duties had involved emptying cardboard boxes from the cage into the compactor. The use of the twine to attach the cage to the bollard for stability was a process that was described by Ms Bailey as carried out by the relevant ACS employee without any involvement of Westfield staff. It was the system in place when she commenced work at the site, and she had said that she "simply continued the system". Ms Bailey, according to the primary judge's summary, noted that the cage could "tip up a little bit", depending on where one stood when reaching for the cardboard boxes. This was because the cage was on three wheels only. It also had a tendency to shift sideways. Ms Bailey said she had experienced the cage moving when being unloaded and had reported this to Ms Snape on two occasions in a 6-month period, but no action was taken. His Honour said (at paragraph 21):- Importantly, she agreed it was the responsibility of ACS, without any involvement of Westfield, to transport the cages, position them in the loading dock and use the twine loop to ensure the cage was secured to the bollard... Ms Bailey agreed that the presence of Westfield staff in the loading dock area was for them to go about their own business, such as maintenance, but with no connection to the work being done by ACS employees. 32The primary judge referred to the evidence of Casimiro Chrul. He had commenced employment in 1999 as a cleaner with ACS at the Westfield centre at Tuggerah, and he remained in that occupation until about June 2009. He had not worked on the day of Mr Elphick's accident, but said that he had quite a bit of experience in unloading the cages. He confirmed the process as it had been described by Mr Elphick and Ms Bailey. When the number of boxes reduced during the loading, a problem arose as the cage would tilt when stepping into it - "the cage used to rock and roll a bit... not very secure". According to this evidence, Mr Chrul told Ms Snape the cage was "very dangerous" because it only had three wheels and the placement of the twine had the potential to stop the cage from moving back and forth, but not from the rocking and rolling as described. His Honour then observed (at paragraph 23):- Interestingly, Mr Chrul said he told maintenance employees at Westfield (known to him as Leo and Glen) who were working in the loading dock area on two occasions before the plaintiff's injury that the cage was not safe, and he demonstrated the problem to them, because of the "rock and roll", even though attached to the bollard, and was informed they would have the problem fixed; but it was not. 33The primary judge made a number of findings which were important to the conclusion he ultimately reached. It will be convenient to set these out in full (Red, 59, R - 60, P):- 24 On the evidence as to the circumstances of the accident and injury to the plaintiff I make the following findings: (1)The accident occurred in the manner described by the plaintiff. (2)The system of work for unloading the cardboard boxes from the cage and their placement in the compactors in the loading dock area was as stated by the plaintiff, Ms Bailey and Mr Chrul; the system had been in place for some years before the incident occurred. (3)Westfield probably owned the cage and the compactor but certainly made them available to ACS for use in the cleaning process. (4)ACS probably owned and supplied the golf cart to tow the cage filled with the cardboard boxes from the retail areas of the centre to the loading dock for unloading and compacting of the boxes into bales. (5)The positioning of the cage in the loading dock and its unloading was performed exclusively by employees of ACS, including the use of baling twine looped over a bollard intended to secure and stabilise the cage during the unloading phase. (6)Even though attached by the twine to the bollard, the cage was unstable and moved laterally and back and forth during unloading, particularly as a person stepped inside it to retrieve cardboard boxes. (7)The plaintiff received no training or instruction in the unloading of the cage, other than being told what had to be achieved, and specifically was not informed of any potential safety risks. (8)The plaintiff was not provided with any tools or other devices to extract the boxes from the cage so that he had to use his bare hands which required stepping into the cage. (9)The plaintiff sustained injury to his lower back in stepping into the cage while unloading boxes from it at about 1:30pm on Friday 21 July 2006. (10)The plaintiff reported the accident and injury to his ACS supervisor the day it occurred. (11)Although his back was not too bad on the day the accident took place, the pain gradually worsened requiring absence from work for about one month before returning on light duties on reduced working hours. (12)After requiring the occasional day off work, the plaintiff's back pain meant he ceased work altogether on 30 November 2006 and has since been unable to resume his normal duties as a cleaner. (13)On learning on 20 August of the accident, Westfield made and provided to the ACS cleaners a metal hook to reach and extract the cardboard boxes in the cage to eliminate the hazard of stepping into the cage. (14)Westfield placed a warning sign in the dock area that cleaners were not to stand in the cage. (15)Other changes were made, namely the fitting of metal drop bolts to secure the cage to the concrete floor, a metal chain to replace the twine loop for placement over the bollard and a carpet placed over the wire mesh floor to avoid boxes becoming stuck - when and by whom such changes were made was not clear but probably Westfield initiated them because they involved modifications to its property. 34The primary judge then referred to two expert reports that were in evidence. These had been prepared on behalf of Mr Elphick. The first was from Dr Brian Emerson and the second from Mr David Dubos. Unfortunately, Dr Emerson had passed away before the hearing, so he was unavailable to be questioned on his report. His report was admitted into evidence over strenuous objection by Westfield, as was the report from Mr Dubos who was, however, cross-examined. Mr Dubos did not inspect the site, but he had the benefit of a conference with Mr Elphick and he had had access to Dr Emerson's report. Mr Dubos focused on the condition of the cage and the fact that it had been provided by Westfield, as he understood it, for use as part of the system of work in disposing of the cardboard boxes. He expressed an opinion that the cage constituted "a clear safety hazard, particularly when manual handling is being carried out" (Red, 63, Q). In cross-examination by Westfield's counsel, he agreed that it appeared that the accident occurred, not because of the cage's predilection for "rocking and rolling" but rather because the twine looped around the bollard had too much play in it. This, he agreed, had allowed the cage to move laterally about eight inches at the time of the accident. Counsel for ACS also cross-examined Mr Dubos, and the witness stated, during this cross-examination, that, in his opinion, Westfield should have done more to make the cage safe. He thought it was Westfield's responsibility. In his view, the cage was inherently unstable because of the three wheels. The use of twine to fix the cage to a bollard represented an unacceptable risk with the potential for injury. 35The primary judge examined in some detail the terms of the cleaning agreement between Westfield and ACS. At the outset, he noted that the shopping complex was very large. It was, in fact, about 1km in length and had three levels of retail shops, service areas, administration and car parking facilities. The cleaning agreement, he observed, was a valuable one. It ensued for a period of three years with a contract price of nearly $5,000,000 plus annual storeroom rental in excess of $20,000. There is no need for me to repeat here his Honour's detailed summary of the various provisions of the cleaning agreement. It will be necessary to consider its terms at a later point in these reasons. However, his Honour noted that ACS was obliged to supply the service specified in the agreement, and to do so in accordance with the specifications contained in it. Part of the task allocated to ACS, as might be expected, was the removal of refuse. This carried the obligation to arrange its placement in the compactus systems. Having examined the terms of the contract, the primary judge concluded:- 51. It is plain that the agreement imposed on ACS quite comprehensive and stringent conditions in the carrying out of its contract in respect of workplace safety, including the utilisation of equipment (such as the wire mesh cage here) supplied by Westfield. Westfield, as will appear, relied on those provisions to wholly impose liability on ACS for what occurred to the plaintiff, and, in any event, to provide indemnity to Westfield for any losses it incurred by reason of ACS' negligent conduct towards the plaintiff. Whether that is the true effect of the provisions concerned or a matter going only to apportionment to any liability to the plaintiff as between Westfield and ACS is an issue which arises for determination. 36The next relevant section of the primary judge's decision related to his findings regarding duty of care. His Honour noted that Westfield did not resist a finding that it had a duty of care to Mr Elphick to take reasonable care to avoid a foreseeable risk of injury. This was on the basis that Westfield was the occupier of the shopping centre, and that, as such, it owed a duty to persons coming upon the centre. His Honour also noted that Mr Parker, senior counsel for Westfield, placed reliance, however, upon the following passage in Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16 at 48 per Brennan J:- ... the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility. His Honour also set out in full a further passage appearing in the judgment of Brennan J at 47 - 48 (see below at [47]):- The duty to use reasonable care in organizing an activity does not import a duty to avoid any risk of injury; it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimize other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. But once the activity has been organized and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. 37His Honour noted that counsel for ACS in right of the worker's compensation insurer did not argue against the proposition that ACS owed a duty of care to Mr Elphick of a non-delegable nature, being an independent obligation of a comprehensive kind to ensure that reasonable care is taken. His Honour described this duty as that of "a reasonably prudent employer to take reasonable care to avoid exposing the employee to unnecessary risk of injury." 38His Honour referred to two submissions made by Mr Gross QC, who appeared with Mr Jurisich of counsel, for Mr Elphick. The first was that Westfield owed a duty of care to his client which did not differ in any relevant respect from that owed by an employer to an employee. His Honour, however, rejected that submission, relying upon Leighton Contractors Pty Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1, as applied by this court in Pacific Steel Constructions Pty Ltd v Barahona; Jigsaw Property Group Pty Ltd v Barahona [2009] NSWCA 406. (Mr Gross now accepts that the primary judge was correct in rejecting this submission). 39Senior counsel's second submission at trial was that Westfield's duty arose because it was the occupier and controller of the centre and because it owned the cage which was provided to ACS for use by Mr Elphick and other cleaners. As a consequence, senior counsel had submitted, the duty extended to ensuring that the cage so provided was safe and reasonably fit for its intended use. In this context, Mr Gross argued that the system of work had been devised by Westfield and the equipment being used by ACS was equipment supplied and installed by Westfield. He suggested, in addition, that Westfield "virtually" supervised ACS, notwithstanding the contractual obligations imposed on ACS in that regard. 40Further, Mr Gross placed reliance upon certain provisions of the Occupational Health and Safety Regulation 2001 as to risk management in workplaces, and the general duties placed upon "controllers of premises" in Division 1 of Part 4.2 of Chapter 4. His Honour remarked, however, that there was no separate count relied on by Mr Elphick in his case alleging breach of statutory duty. In relation to the second submission, his Honour said:- 65. It is plain, it seems to me, that the approach by Mr Gross to Westfield's liability depended upon it as the owner of the cage providing the cage to ACS for use as part of the system of work in retrieving the cardboard boxes from retailers, transporting them to the loading dock and the involvement of Westfield in the process of then emptying the cage by placing the boxes in the compactor. In that respect, it was put that thereby Westfield assumed a responsibility to see that the cage was suitable for the purpose and was safe to use. However, beyond providing the cage there was no evidence that connected Westfield to the work system followed in the dock area of unloading the boxes from the cage - that was a system performed exclusively by employees of ACS, like the plaintiff, and subject to oversight by the ACS supervisory team such as the dock master, the cleaning supervisor and C1 and C2. It is true, as the agreement in para 1.1 of schedule 5 stated, that Westfield had the responsibility to coordinate the overall activities at the centre, but ACS had responsibility for formulating and implementing a safe system of work, including the equipment it utilised, as set out in clause 14 and in schedule 5 to the agreement. The primary judge concluded that the condition of the cage was a matter for ACS to address, having in mind the manner in which it proposed that the boxes be unloaded. The method of stepping into the cage to unload the boxes was something Mr Elphick did because he had been told by ACS supervisors to do it that way. His Honour said (at paragraph 66, I):- I do not see any involvement of Westfield in that as it left it to ACS to perform as part of its contractual obligations. That was a reasonable course to adopt. For instance, it was well open for ACS to provide a rake to pull the boxes from the cage thus avoiding the need to step into the cage and to provide a metal chain or other satisfactory device to attach the cage to the bollard for stability. Up to that point, of course, there was no question the cage provided by Westfield was unsuitable or in some way unsafe as the means to collect the boxes and transport them to the dock area. It was the unloading process itself where the vice was created - as I have said, that process was reasonably within ACS' responsibility and not as involving Westfield. 41In his concluding remarks, the primary judge said (at paragraph 68):- It has long been the settled position that in determining the existence of a duty of care the content is to be identified by reference to the circumstances of the injury... in the present case my view is that those circumstances concerned the unloading process itself and as to which it was reasonable for Westfield to have engaged ACS to perform. Once organised and placed in the hands of ACS to operate, Westfield bore no liability for the negligence of ACS in it carrying out its responsibilities under the agreement. Certainly I do not consider that any of the guides as to a duty of care in Westfield as formulated by Basten JA in Sydney Water v Abramovic at [98] were engaged. (This was a reference by the primary judge to "guides" expressed by Basten JA in Abramovic , the details of which the primary judge had set out earlier in his decision. Those criteria had been expressed by Basten JA in these terms:- [98] However, the principal may also owe a duty to a worker who is an employee of an independent contractor. The legal question is to identify the criteria which must be satisfied to give rise to such a duty of care. The cases suggest that satisfaction of one of the following criteria may give rise to such a duty: (a)the principal directs the manner of performance of the work; (b)the work requires the coordination of the activities of different contractors; (c)the principal has or ought to have knowledge of the risk and the employer does not and cannot reasonably be expected to have such knowledge; (d)the principal has the means to alleviate the risk and the employer cannot reasonably be expected to do so; (e)although the employer has or should have the relevant knowledge and can be expected reasonably to take steps to alleviate the risk, it does not, to the knowledge of the principal, do so.) 42For these reasons, the primary judge concluded that "Westfield owed no relevant duty of care to the plaintiff". (By this expression, I take his Honour to mean that no relevant duty of the kind asserted by Mr Gross had been owed by Westfield to Mr Elphick). Consequently, his Honour found that there was no breach of the alleged duty and no breach by Westfield of its duty of care as an occupier. By contrast, his Honour then determined that ACS had been in breach of its duty to Mr Elphick. His Honour found that the system of work adopted by ACS was unsafe and provided a foreseeable risk of injury in that the cage, whether because the dock master failed to place the twine loop over the bollard or inadequately had done so, was unstable. His Honour found that there were failures in the system of work because ACS did not provide a rake to avoid stepping into the cage, and that it did not take appropriate measures to stabilise the cage as it was being unloaded. His Honour thought it was particularly significant that the risk to safety was "manifest", and must have been so to ACS, since it used "a crude device" in the form of twine to steady a heavy metal cage. Consequently, ACS had been in breach of its duty of care to Mr Elphick. 43His Honour then considered the issue of contributory negligence, but dismissed it in the circumstances of the case. Next, his Honour, in the event that his finding on Westfield's liability were overturned, discussed apportionment. He determined that, on his analysis, ACS should bear the major responsibility for what had occurred. He determined that, if his finding on liability were wrong and if Westfield were held liable, he would assess 25 per cent for Westfield and 75 per cent for ACS. 44Finally, his Honour turned to the issue of the indemnity contained in the cleaning agreement. He noted that the claimed indemnity arose out of the proper construction of clauses 9 and 14.2(b) of the cleaning agreement. He said (at paragraph 99):- In view of the finding in favour of Westfield that it had no liability to the plaintiff in the absence of a relevant duty of care, the cross-claim for indemnity as to damages does not arise and neither does the claim for contribution. Although those aspects were fully argued, as they involve a question of law only as to the proper construction of the agreement I do not consider it appropriate, or of any utility, to deal with them. Any view of mine would be advisory only and, in the event they require later determination, that could readily be done without my consideration of the law... However, what does remain of the cross-claim is the question of Westfield being indemnified for any non-recoverable costs and the liability of ACS... to do so. 45The primary judge then suggested that Mr Morahan, counsel for ACS in its own right, had conceded a liability in ACS under clause 9 of the cleaning agreement to indemnify Westfield for costs if Westfield were found not negligent. This concession was said to have been given on the assumption that ACS were found liable to the plaintiff. His Honour said (at paragraph 101):- I accept the correctness of this concession. Plainly, in my view, the terms of clause 9... support the concession made.... Such an indemnity provision, I am satisfied, is wide enough to cover Westfield's costs incurred in this action either as "claims" or "costs" arising from ACS' negligence: see State of NSW v Tempo Services Ltd [2004] NSWCA 4. 46The primary judge expressed his conclusions, insofar as they are relevant to the present appeal, as follows:- For the foregoing reasons, I reach the following conclusions - (1) The plaintiff is entitled to a verdict against ACS on the claim in the amount of $525,658. (2) Westfield is entitled to a verdict against the plaintiff on the claim. (3) Westfield is entitled to a verdict against ACS on the first cross-claim for indemnity against any loss of costs incurred in defending the plaintiff's action against it; otherwise as against ACS the first cross-claim is to be dismissed. 47His Honour directed the parties to confer on the form of orders to give effect to his decision and to bring in Short Minutes of Order at a future time. As I have said earlier, that is what happened and his Honour ultimately made orders in accordance with the Short Minutes presented to him by the parties.

Submissions on appeal 48It is convenient at this stage to set out briefly a summary of the arguments relating to the liability issue as between Westfield and ACS. The written submissions, especially those provided on Mr Elphick's behalf, are quite lengthy. They include an extensive section containing challenges to the factual findings by the primary judge. However, Mr Elphick's arguments were refined during the oral submissions. There were three propositions ultimately advanced by Mr Gross. The first two are, as will be seen, interrelated. 49Mr Gross argued, first, that on the totality of the evidence, Westfield and ACS had a shared responsibility for the system of work adopted by ACS in that aspect of its cleaning operations in relation to the use of the cage as a means of removing and unloading cardboard boxes to the compactor in the dock area. Secondly, Westfield had a primary responsibility for the manner in which the cage was used, principally because it owned the cage and ultimately bore the responsibility for its inherent instability and unsuitability for use as part of the unloading process. 50In the context of these arguments, Mr Gross submitted that the shared responsibility for the system of work, and the primary responsibility for equipment such as the cage arose from Westfield's position as the occupier and manager of the centre, its obligation as controller to coordinate activities within the centre, its general knowledge (through observations by its employees), its ownership of the cage, and finally, as a consequence of specific complaints made to two maintenance men employed by Westfield ("the Chrul evidence"). 51Thirdly, Mr Gross submitted that regulations 34 to 38 made pursuant to the Occupational Health and Safety Act 2000 gave content to the scope of Westfield's duty of care as an occupier. Although there was no breach of a statutory duty count relied on at the hearing, nonetheless Westfield, as controller of the centre, was in breach (as was ACS as Mr Elphick's employer) of a number of the regulations. Those said to be relevant to Westfield related to its obligation as controller of the centre to identify hazards, to assess risks and eliminate or control them. The duty of Westfield as occupier, it was argued, incorporated an obligation, in exercising reasonable care, to comply with the Occupational Health and Safety Regulation , including regulation 34. Mr Gross argued that the "industrial setting" reflected by these statutory and regulatory obligations imposed on a controller of premises gave additional content to Westfield's duty of care in the present proceedings, and that his Honour failed to give appropriate recognition to this important matter. 52In support of each of the three arguments, Mr Gross placed particular emphasis on the steps that had been taken by Westfield after the accident to prevent injury to ACS employees in the dock area. These included the provision of a hook, the placement of a warning sign and the provision of a chain provided to replace the baling twine. In addition, at a later stage the cage had been modified so as to equip it with bolts to enable it to be fixed in position and carpet had been placed on the floor of the cage. 53Mr Gross submitted that the primary judge had fallen into error in finding that the unloading process was wholly under the control of ACS and that responsibility for its implementation did not attach to Westfield. 54Mr Parker SC took issue with each of Mr Gross' principal submissions. He submitted that ACS was wholly responsible as the cleaning contractor of the centre for the removal of waste cardboard used for packaging of goods delivered to shops in the centre. Part of this responsibility extended to devising, implementing and supervising the placement of cardboard refuse into the compactor. Westfield, it was submitted, played no part in relation to any of these matters. The entire process was carried out by ACS personnel under the supervision of ACS staff, such as the dockmaster or C2 under the overall supervision of Ms Snape. Mr Parker submitted that the primary judge's findings in this regard were fully supported both by the contractual provisions operative between the parties and the evidence of the manner in which the day-to-day cleaning operations were carried out. 55Secondly, Mr Parker argued that there was no requirement imposed by Westfield that the cage should be used by ACS. Under the contractual provisions, ACS was obliged to provide its own equipment. If it chose to use Westfield's cage, it was a matter for ACS to determine how the cage should be incorporated in its system of work. Mr Parker argued that the injury had been caused precisely by the lateral movement of the cage. This had occurred because of the manner in which the cage had been secured to the bollard. The injury was a consequence of ACS requiring or permitting Mr Elphick to step into the cage without ensuring that it had been properly secured. There was nothing inherently unsuitable about the cage. Rather, the risk arose from the way in which ACS handled the cage in undertaking its functions under the cleaning agreement. 56In relation to the changes made by Westfield after the accident, Mr Parker submitted that these actions proved no more than that Westfield had the capacity to make the alterations that were subsequently carried out. They said nothing as to Westfield's obligation to do so prior to the accident. Mr Parker relied in this regard on the provisions of section 5C of the Civil Liability Act . The taking of subsequent action did not, he submitted, "affect liability". 57In relation to the Chrul evidence, Mr Parker argued that the evidence had not in fact been accepted by the primary judge and that, in any event, taken at its highest, it did not, in the circumstances of this case, impinge upon the contractual and de facto arrangements between Westfield and ACS for the implementation and supervision of the relevant cleaning task. 58In relation to the Occupational Health and Safety arguments, Mr Parker submitted that the position was covered by the observations of the High Court in Leighton Contractors Pty Ltd v Fox . Westfield's duty as occupier was to exercise reasonable care. Counsel submitted that it was wrong to translate a statutory demand into the language of reasonableness. He referred also to the stringent requirements of the cleaning agreement which placed detailed obligations on ACS to be responsible to carry out its tasks as cleaning contractor safely and, in the process, to keep its workers safe. 59Mr Parker's overall submission was that the primary judge had correctly analysed the situation as between ACS and Westfield. He submitted that, if the appellant were right in his arguments, this would convert the occupier's duty into an obligation to act as a second employer. Indeed, he submitted that Mr Gross had presented the case before the primary judge on that basis, although it was now accepted between the parties that such an approach had been incorrect.

Analysis and resolution 60There have been many cases, especially in recent times, where an employee injured in a workplace or industrial situation, has sought to include within the ambit of liability persons and corporations beyond his immediate employer. This is understandable in the light of contemporary legislation, part of the cycle of tort reform, which has sought to restrict significantly the damages payable by an employer to his worker. Moreover, especially in the building industry, the immediate employer may turn out to be a 'man of straw'. For that reason, also, the injured worker often looks to find and impose liability upon a more substantial defendant. 61Against this background, decided cases have shown at times an uncertainty of approach. This uncertainty has, in a number of respects, been resolved by recent decisions of the High Court of Australia. The primary judge referred to several of these in his reasons for decision. However, it may be convenient to summarise in very brief form the principles I see as being relevant to the resolution of the issues here. This is not intended to be an exhaustive summary, or, for that matter, a comprehensive analysis. The relevant principles in the present matter are, as I see them, as follows: (a) The duty of care owed by Westfield to Mr Elphick was that of an occupier. This duty was succinctly stated in Australian Safeways Stores Pty Limited v Zaluzna (1987) 162 CLR 479 at 488:- ... the fact that [injured person] was a lawful entrant upon the land of the [occupier] establishes a relationship between them which of itself suffices to give rise to a duty on the part of the [occupier] to take reasonable care to avoid a foreseeable risk of injury to the [injured party]. (b) This duty, in circumstances where the occupier engages an independent contractor to carry out aspects of its enterprise, does not give rise to a duty of care towards an employee of the independent contractor akin to the duty of an employer to his employee (see Leighton Contractors v Fox at [48]:- The relationship between principal and independent contractor is not one which, of itself, gives rise to a common law duty of care, much less to the special duty resting on employers to ensure that care is taken.) (c) In certain circumstances, the duty to take reasonable care will, however, extend to responsibilities involved in the system of work utilised by the independent contractor. Whether this is so or not will depend on a fact-intensive investigation to determine whether there is the necessary interdependence of the activities carried out in the enterprise under consideration. As Mason J said in Brodribb at 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. Omission to prescribe and provide such a system would expose the workers to an obvious risk of injury. Although the obligation to provide a safe system of work has been regarded as one attaching to an employer, there is no reason why it should be so confined. 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. Brodribb's ability to prescribe such a system was not affected by its inability to direct the contractors as to how they should operate their machines. (d) Where, however, the occupier has engaged the services of an independent contractor whose task it is to control its employee's systems of work without supervision by the occupier, there may, depending once again on a fact-sensitive enquiry, be no liability imposed on the occupier for a failure by the independent contractor to control its own system of work. As Brennan J said in Brodribb at 47 - 48:- The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. But once the activity has been organized and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power or in leaving undefined the contractors' respective areas of responsibility, the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility. 62I turn now to apply these principles to the issues in this appeal. In the present case, the contractual arrangements between Westfield and ACS demonstrate clearly that ACS was responsible for maintaining the safety of its system of work and the safety of its employees. The primary judge examined the provisions of the cleaning agreement in considerable detail. There is no need for me to repeat the detail in its entirety, but I will highlight some of the more significant conditions. The cleaning agreement operated for a term of three years, commencing on 1 June 2006. It provided that ACS would provide cleaning contract services for the manager (Westfield) on behalf of the owner. These services were to relate to the whole of the shopping centre known as Westfield Tuggerah. The contractor was obliged "to furnish all labour, materials, supplies, equipment, services, machinery, tools and other facilities required for the prompt and efficient supply of the cleaning contract services" (clause 3.3). In addition, where the contractor was required to provide or utilise equipment, it was to be "maintained by the contractor in good and safe working conditions in accordance with the highest industry standards". 63In relation to its staff, the contractor warranted (in clause 3.5) that its employees "had received all necessary training required to provide the service to the highest industry standards". 64Clause 14.1 of the cleaning agreement provided that, in carrying out the contractor's activities, "the contractor must ensure that there is no risk to the environment or the health, safety and welfare of all persons employed in connection with the contractor's activities at the centre". In particular, without limiting this requirement, the contractor "must ensure that no person is exposed to a risk to his or her safety or health arising out of or in connection with the carrying out of the contractor's activity at the centre, and must comply with the schedule of environmental health and safety ("EH&S") requirements for shopping centre management in the Fifth Schedule of the cleaning agreement". 65Clause 14.2 of the cleaning agreement provided that "the contractor is responsible to provide all necessary supervision and coordination to ensure that the contractor's activities are carried out safely and in accordance with its EH&S management system". 66Clause 15.3 of the cleaning agreement states that "nothing contained herein shall constitute the relationship of partnership or employer and employee between the parties... and it is the intention of the parties that any such relationships are denied". 67The cleaning obligations in the Second Schedule of the cleaning agreement extended to duties in the loading dock areas, the service corridors and waste rooms. The tasks required included "emptying and removing rubbish from containers, from bins and any other refuse containers" (Second Schedule, Item 1.2(f)). 68Refuse removal obligations were set out in Item 1.54 of the Second Schedule - "All mall bins are to be emptied by the contractor only into the compacters". The cleaning contractor "will oversee the waste removal process and be responsible for keeping the loading docks and compacters clean and free from excess rubbish". 69The Westfield Shopping Centre Management EH&S Management Plan (attached to the cleaning agreement) placed specific obligations on the contractor in relation to the loading dock areas. For example:- Ensure your personnel are made aware of the risks associated with loading dock areas and are instructed in your safe work practices (including all signage and instructions) regarding such practices. The schedule of EH&S requirements placed onerous obligations on the contractor "to coordinate its own works and to ensure compliance with all relevant requirements". It required the contractor to ensure that any plant or equipment used complies with the relevant requirements "and is fit for the intended use in accordance with your EH&S procedures". The "Safe Work Practices" section states:- You must ensure that your personnel do not, are not directed to, or expected to undertake work activities which might be detrimental to the environment or create a risk to the health, safety or welfare of themselves or others (4.1) and... Westfield relies at all times on your expertise to ensure your EH&S procedures provide systems that are safe and without risk (3.5). 70There is an obligation for the contractor to provide a suitably qualified supervisor who is competent in all EH&S matters pertaining to the services and who is responsible for recording and reporting to Westfield any EH&S information it requires (7.1). There is a reporting and recording requirement imposed upon the contractor to report immediately to the Centre Manager any "actual or potential Class 1 or Class 2 event" (8.1). The contractor is required to ensure that its personnel complete training in relation to "the safe and correct use, handling and operation of materials and equipment relevant to the tasks" they perform (10.1). 71Mr Gross referred to several provisions of the contract that he suggested might indicate that Westfield had some control over, or at least some interest in, preserving safety standards and that the subject was not left entirely to ACS. For example, he referred to clause 7.8 - "where any breach of this agreement by the contractor threatens the health or safety of any person... the manager may take all action reasonably necessary to rectify the breach at the contractor's cost". 72This clause, however, does no more than preserve to Westfield the right to take action to rectify ACS' breach, ie: it applies when ACS does not comply with its primary responsibilities. Similarly, the requirement that ACS will ensure that its employees attend Westfield's induction program (clause 11.5) does not detract from ACS' responsibilities. Finally, the "ad hoc checking" of loading dock areas by Westfield nominated staff (Schedule 2, clause 3(3)) did not impose any obligation on Westfield to be responsible for the systems operated in the loading docks by ACS. These are checks simply to ensure that the cleaning work is being done efficiently. 73As I have said, the contractual arrangements between Westfield and ACS make it perfectly clear that ACS was responsible for maintaining the safety of its systems and employees. It was responsible for devising those systems, implementing them and ensuring that they worked correctly. Any complaints were to be made to ACS. This was so both in contractual terms and, as other evidence indicated, in practical terms as well. 74Mr Gross argued that ACS' system of work in the centre was the product of collaboration and agreement between the two companies. The terms of the contract, however, make it clear that this is simply not correct. There is no other evidence to suggest that it was so. Moreover, the evidence of the day-to-day working of the cleaning arrangements fully supported the contractual position. ACS had its own OH&S staff and its own management structure. The refuse cage in question was taken by ACS staff to the dock area using its own transport equipment. Once there, it was attached to the bollard by ACS staff and subject to the observations of its own supervisor. The system that permitted a worker such as Mr Elphick to step into the cage to collect cardboard was a system of its own devising. Employees at ACS complained to their supervisor about the unsteadiness of the cage in connection with the manner in which it was attached to the bollard. ACS did nothing about this complaint, and did not bring it to the attention of Westfield. In any event, it was ACS' obligation to attend to it. Westfield carried no responsibility in that regard. 75Mr Gross, faced with these problems, centred his submissions on the physical features of the cage itself. He argued it was inherently unstable and, accordingly, could not constitute safe plant and equipment for ACS to provide to its employees such as Mr Elphick. Mr Gross argued that the cage was part-and-parcel of the equipment handed over by Westfield to ACS for the purposes of its work under the cleaning agreement. 76These submissions are not supported by the terms of the cleaning agreement, nor are they supported by the evidence of witnesses. It is true that the cage appeared to be the property of Westfield, but there was no evidence to suggest that Westfield required it to be used for the purpose of transferring rubbish into the compacters. It simply owned it. ACS obviously had an obligation to collect the cage and remove rubbish from it, but how it did so was a matter for its own determination. Indeed, the contractual provisions, as I have pointed out, obliged ACS to use its own equipment. It had no obligation to use any equipment or plant supplied by Westfield. 77Moreover, there was nothing inherently faulty in the cage. ACS employees, including Mr Chrul, described the cage as having a capacity to "rock and roll" - meaning that it moved vertically. In that regard, there was a clear potentiality for one corner of the cage to go down when weight was imposed on it, because there were only three wheels. It was perfectly safe to move around otherwise. The "rock and roll" problem only eventuated if ACS' system of work required its employees to step into the cage. In any event, that was not the cause of Mr Elphick's injury. The problem he encountered on the day of the accident was that the cage moved laterally, presumably because it had not been adequately tied to the bollard by ACS staff. It is clear that the potential for lateral movement did not arise out of any inherent instability or unsuitability in the cage. It arose simply out of the fact that the system devised by ACS of attaching it to the bollard could create a problem if the attachment were misapplied or not sufficient. 78In my opinion, viewing the evidence as a whole, it should be correctly concluded (as the primary judge did) that this was a case in which the responsibility for the system of work and its implementation, including concepts of safety towards its employees, fell squarely upon ACS. There was no residual obligation cast upon Westfield to exercise any supervisory power over matters of that kind. 79Mr Gross, in his written submissions, argued that the primary judge had erred in finding that there was "no evidence that connected Westfield to the work system followed in the dock area of unloading the boxes from the cage". Further, he maintained that the primary judge erred in saying that the "unloading process itself was where the vice was created". Mr Gross maintained that there was "an unreasonable elision" between the contractual responsibility as between Westfield and ACS, and the responsibility of Westfield to Mr Elphick. 80In my opinion, no error has been shown. His Honour was correct in the conclusions he reached in each of these matters. Moreover, the contractual position was highly relevant to an understanding of the organisation and structure of ACS' duties as cleaning contractor for the centre. It was also instructive as to the obligations cast upon ACS in relation to the safety of its employees as those persons undertook the tasks imposed by the cleaning agreement upon the contractor. The duty of care owed by Westfield to Mr Elphick remained at all times that of an occupier, namely to take reasonable care for his safety as an entrant upon the premises. There was nothing in the circumstances of the accident to suggest Westfield was in breach of that duty. 81Mr Gross' arguments based on the nature of the steps taken by Westfield after the accident do not alter the situation. In particular, they cannot lead to a conclusion that, prior to the accident, Westfield had assumed responsibility for the safety of ACS employees. Mr Gross' argument is a classic example of the application of "hindsight" reasoning. Westfield relied on the provisions of section 5C of the Civil Liability Act as it was entitled to do. The subsequent action did not, of itself, constitute an admission of liability in connection with the risk (section 5C(c)). It did not of itself give rise to or affect liability in respect of the risk. The fact that Westfield took the initiative in quickly improving the situation in the dock area, in the circumstances of this matter, could not alter the proper assessment of where responsibility for the safety of ACS' employees lay. 82As is often the case where there is an issue as to the correct allocation of responsibility in an industrial or workplace accident, this matter fell to be determined on its facts. The contractual arrangements and the day-to-day implementation of those arrangements powerfully supported the correctness of the primary judge's conclusions. There was, indeed, only one matter that might have altered that situation. This was the evidence of Mr Chrul. Before assessing his evidence and its place in the conduct of the trial, it is necessary to examine Mr Elphick's case as pleaded. There was only one particular pleaded which may have suggested that Mr Elphick had notified Westfield (as distinct from ACS) about a safety problem relating to the cage. This was particular (xvi) which was pleaded indiscriminately against the two defendants:- Failed to take heed of the plaintiff's complaints of the system of work. In fact, the plaintiff gave no evidence-in-chief that he had complained to ACS about the problems with the cage. He gave no evidence to suggest that he had made any complaint to Westfield. His evidence in cross-examination was that he had been directed to make any complaints to ACS and that he had never complained to Westfield. The fact is that ACS did know about the problem, as other evidence indicated, but they did nothing about it prior to the accident. 83Mr Gross, however, called during the trial two former employees of ACS. Each had worked at the Tuggerah shopping centre. Alison Bailey, it will be recalled, worked there for a little over three years, finishing in June 2006, about a month before Mr Elphick was injured. Mr Chrul was employed by ACS at the time of the accident, although he was not working there on the day when Mr Elphick was injured. Ms Bailey confirmed in cross-examination that the securing of the cage with a loop of baling twine to the bollard was exclusively the province of ACS, and that no one from Westfield had anything to do with it. She told Mr Parker that from time to time she saw maintenance people from Westfield in the dock area, fixing the drains or work of that nature, but that their business "had nothing to do with the tasks that ACS were undertaking in the dock" (transcript, 152). She did not recall anyone from Westfield, whether a maintenance person or not, watching ACS staff doing their work in relation to the baling machine. She said as far as she was concerned, it was not their business, "it was our job". 84In a portent, perhaps, of what was to come, Mr Catsanos (who, it will be recalled, appeared for ACS' workers compensation insurer) endeavoured in his cross-examination to entice Ms Bailey into agreeing that Westfield people such as the environmental health and safety officer, and the Centre Manager, were to be seen from time to time in the dock area. However, the witness maintained that she had never seen them down there, "like, looking at any of that when I was there". She had seen "Jason Knott and Heidi walk through there on the odd occasion". They would simply "greet her and keep going". 85Mr Gross next called Mr Chrul, who spoke of the problems he had experienced with the cage. I have earlier referred to the primary judge's treatment of this evidence. I will examine it, however, in a little more detail. Mr Chrul described the cage moving vertically - "she used to rock and roll a bit". He complained to Ms Snape, who was his supervisor, "quite a few times". He told Ms Snape it wasn't safe, "it was very dangerous". These complaints appeared to be based on the fact that, because there were only three wheels, the cage could move vertically - "that was why she was rock and rolling". 86At the end of the evidence-in-chief, the position was clear. There was no evidence from Mr Chrul to suggest that he had complained to Westfield. Of course, the pleading did not allege complaints by employees other than Mr Elphick. Mr Parker then cross-examined the witness. Mr Chrul agreed that his view that the cage was unsafe related to the fact that it moved vertically. It did not appear that he had made a complaint about the cage moving laterally, although he accepted that there was a potential for that to happen. He said, however, that the cage's capacity for lateral movement depended entirely upon the fixing of the baling twine to the bollard. He agreed that ACS personnel were responsible for putting the twine over the bollard, and holding the trailer cage in position before unloading commenced. ACS employees moved the cages around, he said, "never Westfield employees". 87Mr Catsanos then cross-examined Mr Chrul. Almost immediately, counsel endeavoured to draw Westfield staff into the picture. Mr Chrul readily agreed that there were maintenance employees of Westfield in the dock area from time to time. He could not remember if other people from Westfield walked through there, but he could remember the maintenance people. He said he spoke to the maintenance employees. He told them he had an issue with the wheels of the cage (see transcript 180 - 181). As soon as he realised there was something wrong, he told the Westfield maintenance people, "It's not safe". He knew they worked for Westfield, and he said, "It needs to be fixed". Specifically, he told them about "the rock and rolls" and they said, "We'll get it fixed". Despite the two conversations with the maintenance people, the cage kept "rock and rolling" until after Mr Elphick's accident. Mr Chrul did not demonstrate the movement to the maintenance employees (whose names, he said, were "Leo" and "Glen") but he told them, "that it rock and rolled each time you went inside it". The witness then described the changes that were made to the system after Mr Elphick had his accident. 88Mr Parker did not take any objection to the cross-examination conducted by Mr Catsanos, even though on this issue (whether Westfield had been warned) Mr Elphick and ACS clearly had a substantial common interest. Had objection been taken, this "friendly" cross-examination may have been curtailed, at least to the extent of prohibiting leading questions (section 42 of the Evidence Act 1995 ). Although complaints made by other ACS employees to Westfield did not form part of the pleaded case, Mr Parker did not object to the content of the cross-examination on the ground of relevance. 89In final submissions at trial, Mr Gross suggested to the primary judge (albeit briefly) that Mr Chrul's evidence supported a finding of breach of duty of care by Westfield (Black, 260, 266). Mr Parker responded in his oral submissions (Black, 303) that Mr Chrul's evidence should not be accepted or relied upon. He submitted that no prior allegation of this kind had been made by Mr Chrul in the statements he had provided to Mr Elphick's experts. He pointed out that the topic had not been opened by Mr Gross and that it was not led in chief by Mr Gross. It simply emerged "in the course of an extremely friendly cross-examination by Mr Catsanos". Mr Parker submitted that the very way in which the evidence had emerged would give the court pause before accepting either its credibility or reliability. The witness, he said, had been "notably vague on being able to remember anything". By contrast, he had been able to suddenly "remember back five years to these discussions, something he had apparently never told anyone else about until that point". 90More significantly, Mr Parker correctly identified that the complaint made by Mr Chrul, whether it was reliable or not, did not amount to a complaint about the lateral movement of the cage. Ultimately, he asked the primary judge to find that no complaint had been made, even to the Westfield maintenance employees. 91The primary judge referred to Mr Chrul's evidence, but made no finding either way. This may have been because his Honour perhaps accepted (sub silentio) that no case based on Mr Chrul's evidence had ever been pleaded, particularised or referred to in the plaintiff's opening. 92Leaving to one side the problems with the uncertain origins of Mr Chrul's evidence, there is nevertheless the difficulty for the appellant that his complaint related to the vertical movement of the cage - "rocking and rolling". He did not make any complaint to the maintenance employees about lateral movement of the cage, which was the cause of the accident. Mr Chrul agreed that this was "a completely different problem" from lateral movement (Black, 175). 93In my view, Chrul's evidence, even if accepted, does not take this case out of the Brodribb category described by Brennan J at [48]. First, the complaint made by Mr Chrul to the two maintenance men related to a different problem (vertical movement) than the one that caused the accident (lateral movement). Secondly, ACS, whose responsibility it was to devise and supervise its own system of work, was perfectly aware of complaints made about both aspects of the refuse removal problem. Yet it did nothing about either of them. Thirdly, there is no evidence to indicate that the maintenance men passed on the complaint to Westfield's EH&S officers or to the Centre Manager. (Although Ms De Haas and Mr Knott were not called by Westfield, Jones v Dunkel [1959] 101 CLR 298 should be given a limited application in a case where the evidence emerged in the manner it did here). Fourthly, even if there had been evidence that the message had been "passed up" the chain to senior management at Westfield (and there was not), the contractual arrangement between the parties would have entitled Westfield to require ACS to do something about the problem. It had no immediate obligation to act in its own right to address the risk the subject of the complaints, even if it had been made aware of them, whereas ACS had every obligation to do so. 94Quite apart from Mr Chrul's evidence, Mr Gross submitted that the "sheer visibility" of the nature of the operation in the dock area should have alerted Westfield to the risks involved for ACS employees. It was suggested that Westfield staff, even if simply passing through or past the dock area, would have appreciated that there was a risk involved for ACS employees. The evidence on this issue, however, was very scant indeed. No doubt, the Centre Manager and Ms De Haas may have been in the dock area on occasions, but their mere presence in that area would not have been sufficient to raise some type of extended duty beyond Westfield's general duty to take reasonable care. If, in passing through the dock area, a particular problem about the cage had been drawn to Ms De Haas' attention, she would no doubt have been perfectly entitled to point out to ACS that, under the cleaning contract, it was their job to do something about it. However, the evidence did not by any means reach this level. It fell well below it. Mr Elphick's evidence on this point suggested that he would see Mr Knott or Ms De Haas in the centre from time to time, and perhaps on occasions in the dock area, but it was otherwise quite non-specific. 95The final argument relied on by Mr Gross related to the alleged breach of the Regulation under the Occupational Health and Safety Act . Westfield's obligation as an occupier, however, was simply to take reasonable care to avoid harm to Mr Elphick. This did not require Westfield to comply with the requirements of the Act and the Regulation. The obligations under the legislation, it may be accepted, could be relevant in determining the scope of any duty (subject to a provision such as section 32 of the Occupational Health and Safety Act ). In that regard, Mr Gross sought to draw a distinction between a breach of the Act and a breach of the Regulation. However, the case as ultimately relied on at trial did not include a breach of either the statute or the Regulation. That part of the pleaded case was abandoned. Contrary to Mr Gross' submissions, it must be the situation that the statutory or regulatory duties (which apply regardless of fault) are not simply transposed into the duty to exercise reasonable care. As the High Court observed in Leighton Contractors Pty Ltd v Fox at [49]:- While it is true that obligations under statutory or other enactments have relevance to determining the existence and scope of a duty, it is necessary to exercise caution in translating the obligations imposed on employers, principal contractors and others under the OHS Act and the Regulation into a duty of care at common law. This is because, as Gummow J explained in Roads and Traffic Authority (NSW) v Dederer , "whatever their scope, all duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden." 96For these reasons, I am not satisfied that the primary judge erred in relation to his findings concerning the liability issue as between Westfield and ACS.

Indemnity 97The issue of the indemnity in favour of Westfield under clauses 9 and 14 of the cleaning agreement arose only if Westfield were found liable to Mr Elphick. In view of the findings the primary judge made, he thought it unnecessary to determine this issue. For the same reason, having regard to the findings I have made, there is no need for this court to embark upon that issue. 98There remains, however, the issue as to costs. It will be recalled that the primary judge made orders that carried into effect the Short Minutes of Order the parties had provided to him. I have set out the two relevant orders at the commencement of these reasons (see [6] above). The ultimate order was that ACS was to pay Westfield's costs of the first cross-claim, so far as those costs related to the claim for the contractual indemnity. Further, ACS was to indemnify Westfield in respect of any costs incurred by it in defending Mr Elphick's action against it. 99It is necessary to trace the path which led to the making of these orders. One complicating factor (not relevant to this appeal) is that another identity, Atlantic, had been involved in the original proceedings on the basis that it may have been an assignee from ACS. This issue was resolved at trial and is not involved in the appeal. 100At paragraphs 100 and 101 of the primary judge's reasons, the following appears:- 100 However, what does remain of the cross-claim is the question of Westfield being indemnified for any non-recoverable costs and the liability of ACS and Atlantic to do so... 101 Mr TJ Morahan of counsel, for ACS and Atlantic, conceded a liability in ACS under clause 9 of the agreement to indemnify Westfield for costs if Westfield be found not negligent but provided ACS be found liable to the plaintiff (the position found here). I accept the correctness of this concession. Plainly, in my view, the terms of clause 9, earlier cited, support the concession made. In relevant respects the clause indemnifies Westfield "against all claims... costs... which... (Westfield)... may suffer or incur in relation to any... personal injury... arising from or out of any act, omission or negligence of (ACS)..." Such an indemnity provision, I am satisfied, is wide enough to cover Westfield's costs incurred in this action either as "claims" or "costs" arising from ACS' negligence: see State of NSW v Tempo Services Ltd [2004] NSWCA 4. 101It was in those circumstances that his Honour, in his conclusions stated that "Westfield is entitled to a verdict against ACS on the first cross-claim for indemnity against any loss of costs incurred in defending the plaintiff's claim action against it; otherwise as against ACS the first cross-claim is to be dismissed". 102Mr Parker's submissions on appeal suggested that Westfield was entitled to an order for indemnity costs under both clauses 9 and 14 of the cleaning agreement. Clause 9 provided that:- (ACS) indemnifies (Westfield) and keeps (Westfield) indemnified from and against all claims, demands, writs, summons, actions, suits, proceedings, judgments, orders, decrees, costs , losses and expenses of any nature which (Westfield) may suffer or incur in relation to any personal injury arising out of any act, omission or negligence of (ACS), or any of its employees... including any breach of this agreement... (emphasis added) Mr Parker argued that this clause entitled Westfield to the defence costs incurred by it from the very beginning of the proceedings, whether or not there was any liability on Westfield's part. 103Mr Parker then argued that in addition to clause 9, Westfield was also entitled to rely on clause 14(2)(b), which provided:- (ACS) (insofar as is permitted by law) will indemnify (Westfield) against all costs, losses, damages or penalties which (Westfield) may suffer or incur, whether as a result of a civil claim or a criminal prosecution arising out of or in connection with a breach by (ACS) of any of its obligations under clause 14. 104Mr Parker submitted that this clause was engaged by the circumstances of this case. ACS had plainly failed to provide a safe system of work for Mr Elphick. Accordingly, ACS had breached its obligations under clause 14. Westfield's defence costs, he submitted, answered the description of "costs... suffered or incurred as a result of" Mr Elphick's claim. That claim in turn was one "arising out of or in connection with" ACS' breach. 105Finally, Mr Parker argued that, irrespective of the outcome of Mr Elphick's appeal, Westfield should be held entitled to a contractual indemnity for its costs in defending the appeal. He reminded this court that the primary judge, rather than directing some type of subsequent account or inquiry, gave effect to Westfield's entitlement to indemnity for its defence costs at first instance by ordering that ACS pay Westfield's costs of the proceedings on an indemnity basis. Mr Parker suggested that a similar approach should be followed by this court in relation to the costs of the appeal proceedings. In other words, counsel submitted, it should order ACS to pay indemnity costs in respect of the appeal. 106Mr Garnsey QC submitted that the primary judge had been wrong to order indemnity costs on the basis that counsel for ACS had conceded that Westfield were entitled to indemnity costs. Mr Garnsey argued that Mr Morahan had made no such concession. He referred to counsel's statement (Black 384, C - G) that if the indemnity clauses applied, they would "probably apply to the difference between party/party and indemnity costs". His Honour's conclusion at (Red, 73, T) was, Mr Garnsey argued, inconsistent with Order 5A. In other words, in his reasons, the primary judge had referred to "loss of costs" but, in the order he made, the indemnity was "in respect of any costs incurred by the first defendant... in defending the plaintiff's action against it". 107Thirdly, Mr Garnsey argued that, on the true construction of clauses 9 and 14, "costs" meant costs ordered to be ordered on a party/party basis unless there were a provision in the clause itself that costs on another specific basis, such as on an indemnity basis, should be recoverable. Finally, Mr Garnsey submitted that, on the true construction of clause 9 and 14, costs cannot be said to be "suffered or incurred" until orders are made. This required, he submitted, a construction that costs including disbursements would have to be assessed before any residual loss or damage within the indemnity could be ascertained. 108Mr Parker responded to these arguments. Counsel accepted that when the concession was first made by Mr Morahan, it was limited to the concession recorded in the transcript and identified by Mr Garnsey. It was clear from further passages in the transcript, however, that counsel for ACS had later accepted an unconditional and unequivocal concession. Mr Parker referred to the submissions he had made in the court below at Black, 390, J - L and 391, H - K. In the first of those passages, Mr Parker had said:- The second point I wanted to make is this. My friend has conceded that if Westfield is not negligent then the defence costs would be covered by one or other of those indemnities. (This was a reference to clause 9 and 14). That's a very significant concession because defence costs weren't really the subject of any of the debate in any of the Court of Appeal decisions to which reference has been made... 109And in the second passage, Mr Parker said:- Hopefully, this might be overcome by what has just been said... Clearly under clause 9, and we would submit equally under clause 14, the indemnity does not have to wait until you're actually found liable in court. The defence costs answer the description in the indemnity as soon as they are incurred. So as soon as you are sued, before you've even been found liable or not liable, you've incurred costs... My friend's concession is that if you're ultimately found not liable, you get those costs. Counsel for ACS did not demur to these statements when they were made. 110Mr Parker argued that, at trial, Westfield had never accepted the limited indemnity initially proposed on behalf of ACS. Indeed, it had argued that such a limitation would have been "quite illogical". Westfield's submissions recognised that, if recovery could be made from Mr Elphick under the party/party order for costs made in favour of Westfield, ACS would be subrogated to the benefit of that recovery, and ultimately would only bear the difference between party/party and indemnity costs. However, counsel argued, that consideration could not effect the scope of the indemnity as between ACS and Westfield. Westfield's submissions at trial, counsel said, had always treated ACS' concession as one which extended to all of the defence costs. Mr Parker reminded the court that importantly counsel for ACS had consented to the indemnity order in the form ultimately when agreed Short Minutes were submitted to his Honour. The orders in those Short Minutes were not limited to the difference between party/party and indemnity costs. 111Finally, Mr Parker submitted that, in any event, on the proper construction of clauses 9 and 14 of the cleaning agreement, Westfield was entitled to an order that it be indemnified for its costs of defending the action brought by Mr Elphick. The same argument, if accepted, would mean that ACS was obliged to indemnify Westfield for the costs of defending Mr Elphick's appeal in the present circumstances.

Resolution of costs issue 112This rather complicated aspect of the proceedings involves three simple questions: first, whether the contractual indemnity required ACS to reimburse Westfield for its costs in defending the action brought by Mr Elphick; secondly, whether ACS should have been required to pay the balance over and above Westfield's entitlement to recover party/party costs from Mr Elphick, or whether Westfield was entitled to an outright order for indemnity costs directly against ACS; and thirdly, whether an indemnity order for costs in defending Mr Elphick's appeal should be made against ACS in these proceedings. 113As to the first question, the provisions of clause 14(2)(b) clearly create an indemnity in favour of Westfield for its costs (or losses) in the present circumstances. The costs had been incurred as a result of Mr Elphick's "civil claim" against Westfield and the claim itself arose "out of or in connection with the breach by the contractor (ACS) of its obligations under clause 14". In my opinion, this sub-clause clearly applies to create an indemnity in favour of Westfield in respect of the costs incurred in defending Mr Elphick's claim against it. There is no ambiguity involved. 114Secondly, I accept that, while Mr Moraham had made a limited concession at first, this was not the position at the conclusion of the trial. Whether I be right about this or not, I consider that the primary judge was correct in concluding that the indemnity clause justified the making of an order in the terms ultimately imposed. Moreover, the Short Minutes of Order reflected the parties' understanding of the ultimate situation as between them. The Short Minutes of Order required the primary judge to make the orders in the terms he did. Whatever hesitation Mr Morahan may have had at the outset of the argument, it is quite clear from the Short Minutes of Order that the correct position had been agreed upon by the time the final orders were made. 115Thirdly, I can see no justification for leaving Westfield to pursue the costs aspect of its contractual claim in separate proceedings. To take such a course would not be consistent with the "overriding purpose" stated in s 56(1) of the Civil Procedure Act 2005 . The primary judge sensibly concluded that an indemnity order should be made in relation to Westfield's costs of the proceedings. I consider that a similar approach should be followed by this court in relation to the costs of the appeal proceedings, although it is noted that Westfield seeks an order in the second cross-appeal that ACS pay its cost of that appeal on a party/party basis. 116I propose the following orders: ON THE APPEAL

1. Appeal dismissed.
2. The appellant pay the first respondent's costs of the appeal
3. The second respondent pay to the first respondent the difference between the first respondent's costs of the appeal assessed on an indemnity basis and the costs, to the extent that they are recoverable, payable by the appellant pursuant to Order 2. ON THE FIRST CROSS-APPEAL
4. Save for Order 3 above, the first cross-appeal dismissed.
5. The respondent to the first cross-appeal pay the cross-appellant's costs of the first cross-appeal. ON THE SECOND CROSS-APPEAL
6. The second cross appeal is dismissed.
7. The cross-appellant pay the costs of the respondent to the second cross-appeal of the second cross-appeal. 117SACKVILLE AJA: I agree with Whealy JA.

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: 25 November 2011