ENSEC PTY. LIMITED (In liquidation) . HAWKINS & ANOR. [2004] NSWCA 243

12 The appellant contends that the trial judge erred in finding in favour of the plaintiff and further erred in finding that it was liable to the Club. It also contends, that his Honour failed to give adequate reasons for his decision. As I have already indicated, the Club also contends that his Honour erred in finding that it was negligent.

Claim against the Club 13 In dealing with the plaintiff's claim against the Club, the trial judge said at [38]: [The Club was] aware of the manner in which the system was being undertaken. [It] provided inadequate supervision of the training and inadequate instruction to persons in the position of Mr Rivado…There was a risk of an injury from a fall which the [Club] could have avoided by placing mats on the floor where the training was being conducted. 14 His Honour continued at [45]: "Although Ensec was engaged as an independent contractor to provide security training, the defendant owed the plaintiff a non-delegable duty to take reasonable care. This duty required the defendant to implement, maintain and enforce a safe system of work. In this case this extended to the provision of a safe place and method for the training. In my opinion the defendant breached its duty. The obligation was to provide an appropriate regime in which instructions could be provided safely and in my opinion the defendant failed to do so. It was foreseeable that an employee could fall and suffer injury on a hard surface, which in this case was thin carpet. A mat or other suitable floor covering should have been provided. The failure to do so was a breach of duty causative of the injury to the plaintiff. The plaintiff is entitled to a verdict against the defendant." 15 It is apparent from these passages that his Honour found the Club liable because it had failed to provide both adequate instructions to the trainees and adequate supervision of the training and because it has failed to provide matting or some other suitable surface upon which the training was carried out. Failure to provide matting or other suitable flooring 16 It is convenient to deal first with the question of the provision of matting or other suitable floor surface. Both the appellant and the Club contend that that there was no basis upon which his Honour could have reached this conclusion. It was submitted that not only was there no evidence to support such a finding but that, to the extent there was evidence about the provision of a mat, it was to the effect that it would be unsafe to carry out the exercise on a temporarily matted surface 17 The only evidence as to whether it was possible or reasonable to have some soft surface upon which to train was given by the appellant. The plaintiff did not call any evidence as to whether a mat or floor covering could or should have been provided or whether there was an increased risk of injury in failing to provide a mat. Her evidence only established that there was no such surface provided. To that extent, the submission that there was no evidence that such a surface could have been provided is correct, although one would have thought as a matter of common knowledge that gym mats or other similar material might be readily available. However, the availability of matting is only one part of the equation and does not resolve the legal question as to whether the failure to provide a mat was negligent. 18 The appellant gave direct evidence that the mat could have increased the risk of injury. Mr. Lewis said that in his experience, which extended over 30 years, safety mats could impede footwork and he had actually had injuries from that type of situation. His Honour rejected this evidence on the basis that it was "a matter of ordinary experience that a soft landing area should be provided for an activity when a fall is likely to occur". In making that finding, his Honour failed to analyse the type of activity that was being undertaken, the types of matting that might be available, the type of footwear that was being or should have been worn and whether the provision of matting might have added to the risk of injury, by, for example, creating an edge upon which a trainee might trip. Other competing safety and non-safety features or scenarios could be postulated. 19 In my opinion, such considerations were relevant to a determination as to whether the failure to provide matting demonstrated a want of reasonable care. It is just as feasible that when account is taken of such matters, that the use of matting could, as Mr. Lewis asserted, be dangerous. Given the variety of questions properly involved in a consideration of whether the provision of matting would have been likely to reduce the risk, I am of the opinion that it was not open to the trial judge to make a finding of negligence based upon "common experience" and that this is a matter where evidence was required to support the plaintiff's contention. There was no such evidence.

20 Accordingly, I am of the opinion that his Honour erred in relying upon "ordinary experience" to make a finding in this matter in the absence of evidence. Accordingly, I would uphold this aspect of the appeal and cross-appeal.

Ruling on Evidence 21 Mr. Lewis also gave evidence that he had never had this type of injury in 23 years of conducting that particular training scenario. That evidence was given during the course of re-examination, as follows: "Q. I'm sorry. You said the plaintiff, the exercise the plaintiff was engaged in when she was injured was carried out always on hard surface (sic)? A. Yes. Q. Is there a reason for that? A. Well my experience over 30 years sir is that sometimes so called safety mats can actually impede footwork because of the softness and thickness of, and I've actually had injuries from hat type of situation. [STRIKEOUT BEGINS] The other thing is that I've never in 23 years had from this particular training incident, anybody fall to the ground. [STRIKEOUT ENDS]" 22 As indicated, portion of the answer was struck out by his Honour as not being responsive to the question asked. There is an appeal against his Honour's ruling. I agree with his Honour's determination that the answer was not responsive to the question asked. It would have been open to the appellant to ask a question to which that evidence would have been relevant and to which that answer would have been responsive. However, the appropriate question was never asked. It follows in my opinion that that ground of appeal fails. Failure to provide proper supervision or instruction 23 The appellant contends however that neither this conclusion, nor any other part of his Honour's reasons, adequately exposes the basis upon which his Honour found negligence, on any basis other than the failure to provide matting. That challenge necessitates a closer look at his Honour's reasons dealing with negligence. 24 At [38], dealing directly with the liability of the Club, his Honour said: "38. In my opinion the submission that the [Club] was not liable to the plaintiff cannot be supported. Whilst it is true that the defendant's non-delegable duty is a duty to take reasonable care, the evidence from Mr. Lewis and the plaintiff indicates that the [Club], its servants or agents were aware of the manner in which the system was being undertaken. They provided inadequate supervision of the training and inadequate instruction to persons in the position of Mr. Rivado about the response to the training where such actions might impact adversely on other employees. …" 25 At [48], in dealing with the cross-claim, his Honour said: "… the overall operation … devised and conducted by the [appellant] was negligently performed. The [Club] knew or ought to have known that the system of instruction was flawed, exposing the [first respondent] to a risk of injury". 26 These two passages involve a direct finding that the Club was negligent in failing to provide adequate supervision of the training in circumstances where it was aware of the manner in which the training was being undertaken. There was no evidence to support this finding other than that on some occasions an officer of the Club would "look in" on the training. Nor was there any evidence that any person from the Club in a supervisory or managerial role was in attendance on the occasion of the accident. 27 The occasional attendance of a supervisor who observed some of the training does not mean that the Club thereby had any role in the supervision of the training session or did, or even could have, engaged in any role in giving instructions to the participants. The evidence established that the Club had engaged an independent contractor, expert in the field, to conduct the training sessions. It goes no higher than that. It follows, in my opinion that there was no evidence upon which the Club could have been liable to the plaintiff on the basis found by his Honour in this paragraph. I am of the opinion, therefore, that his Honour's finding of negligence cannot be supported on the evidence.

Adequacy of reasons 28 Given my conclusion that his Honour's finding of negligence against the Club cannot be supported it is not necessary to separately consider whether there is an inadequacy of reasons in relation to that finding of liability, although if it were necessary to decide that question I consider the reasons were sufficient. However, that leaves the challenge to the adequacy of his Honour's reasoning in relation to the appellant. 29 At [46] his Honour makes the following comment in relation to the appellant: "At the same time [the appellant] failed in its obligations both contractually and at common law and would have been liable to compensate the plaintiff had the plaintiff chosen to commence proceedings against it in negligence." 30 Standing on its own, there is nothing in [46] that exposes his Honour's reasoning process as to why the appellant was negligent. However, his Honour's conclusion should be read in conjunction with what follows under the heading: "The contractual arrangement between the [Club] and the [appellant]", especially at [47] and [48]. 31 At [47], in dealing directly with the Club's cross-claim against the appellant his Honour found that the appellant breached its contract with the Club because Mr. Lewis "did not properly control the class to avoid injury to the trainees". His Honour then found at [48] that the overall training, by which, it would appear, his Honour clearly meant both the programme and the particular training session in which the plaintiff was injured, was devised and conducted by the appellant. I pause to note that this finding reinforces what I have already stated above - that there was no evidence that the Club had any role in the manner in which the training was conducted. However, his Honour then continued in the same passage: "… The [Club] knew or ought to have known that the system of instruction was flawed exposing the plaintiff to a risk of injury. The [Club] retained the capacity to alter the system of training to protect the employee." 32 Earlier at [45] in the passage I have already set out, his Honour had referred to the Club's "non-delegable duty to take reasonable care" upon which he found the Club directly liable to the plaintiff for failure to provide matting. The relevance of an employer's non-delegable duty of care to an employee is to ground liability in circumstances where there is no independent negligence on its part. This typically occurs where the employer has engaged an independent contractor as was the case here. It is therefore unclear and somewhat confusing when his Honour refers to the non-delegability of the Club's duty in conjunction with a finding of direct negligence. Be that as it may, as I have concluded that there was no basis upon which the Club was itself negligent, the question for consideration is whether his Honour's finding that the appellant was negligent can stand and whether his Honour gave adequate reasons for that finding. 33 The duty of a judge to give reasons and the extent of the obligation to do so is well-travelled territory; see Soulemezis v. Dudley (Holdings) Pty. Limited (1987) 10 NSWLR 247. As Meagher JA said in Beale v. G.I.O (1997) 48 NSWLR 430 at 441-442: "It is well-settled that a judge or magistrate at first instance in particular cases has an obligation to provide reasons for the judgment given: Pettit v Dunkley [1971] 1 NSWLR 376. That obligation arises as a matter of judicial duty: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 386 … A failure to provide sufficient reasons can and often does lead to a real sense of grievance that a party does not know or understand why the decision was made: Re Poyser and Mills' Arbitration [1964] 2 QB 467 at 478. This Court has previously accepted the proposition that a judge is bound to expose his reasoning in sufficient detail to enable a losing party to understand why they lost: Clutha Ltd v Risby (Court of Appeal, 26 March 1996, unreported)." 34 At p.443, his Honour reviewed the content of reasons necessary to expose the reasoning process as required. His Honour said whilst no "mechanical formula" could be given there were three fundamental elements: "First, a judge should refer to relevant evidence. … Secondly, a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached. … Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found." 35 Senior counsel for the plaintiff submitted that overall, it was possible to discern from the reasons why his Honour had found that the appellant was liable; but that in any event, the evidence accepted by his Honour (such acceptance not being challenged on the appeal) was that Mr. Lewis had failed to give the trainees adequate instructions, and in particular had failed to instruct against over-aggressive actions, and had failed to intervene when Mr. Rivado became over-aggressive; and that this was sufficient to support his Honour's finding of negligence against the appellant. I agree that these were the two matters in the evidence sufficient to support a finding of negligence on the part of Mr. Lewis and therefore of the appellant. Unfortunately, they were not referred to in that way in his Honour's reasons. Thus, while there was evidence to support his Honour's conclusion, his reasons do not fulfil the obligation to give adequate reasons for decision. 36 In usual circumstances, a failure to give adequate reasons leads to a new trial. However, the evidence accepted by the trial judge supported the trial judge's conclusion of negligence against the appellant and in my opinion is sufficient to justify a conclusion of negligence by this Court; and accordingly, I am of the opinion that this Court ought to make the necessary orders to give effect to that conclusion: see SCA s 75A. 37 It also follows from the finding that the appellant was negligent that the Club was in breach of its non-delegable duty of care to the plaintiff so that the verdict against it must stand.

Apportionment of liability 38 The verdict in favour of the plaintiff against the Club leads directly to the question of apportionment as between the Club and the appellant. The trial judge found the appellant and the Club equally liable for the plaintiff's injury. I have concluded that the Club was not liable other than by way of breach of its non-delegable duty of care due to the negligence of its independent contractor, the appellant. The Law Reform (Miscellaneous Provisions) Act 1946 permits a complete indemnity from one tortfeasor to another: see s.5(c) although the proportion of contribution or an order for indemnity is a matter of discretion for the Court. See Rolls Royce v. James Hardie (2001) 53 NSWLR 626. 39 In this case where the negligence was entirely that of the appellant, I am of the opinion that the appropriate order is that the appellant indemnify the Club for the amount of the verdict. As I understood the appellant's position, it did not contend otherwise if the only available finding was that there was no independent fault on the part of the Club. In those circumstances it is not necessary to deal with the question whether there was an implied indemnity in the contract of engagement between the Club and the appellant nor with the questions of contribution which arise under the amendments to the Law Reform (Miscellaneous Provisions) Act 1965. 40 Accordingly, I propose the following Orders:

1. Appeal allowed in part and dismissed in part.

2. Cross-Appeal allowed in part and dismissed in part.

3. Set aside orders 1, 5 and 7 made by the trial judge. 4. Verdict and judgment for the plaintiff/first respondent against the defendant/second respondent in the sum of $259,318.82. 5. Order the cross-defendant/appellant to indemnify the cross-claimant/second respondent in respect of the verdict in favour of the plaintiff/first respondent against the cross-appellant/second respondent. 6. Order the cross-defendant/appellant to pay to the cross-defendant/second respondent the costs which the cross-defendant/second respondent is to pay to the plaintiff/first respondent pursuant to order 2 made by the trial judge. 7. The appellant is to pay the first and second respondent's costs of the appeal and of the cross-appeal. 41 HODGSON JA: I agree with the orders proposed by Beazley JA, and subject to what I say below, with her reasons. 42 On the ruling on evidence, I do not think the matter struck out was unresponsive to the question asked: I think an experience of 23 years without anyone falling in the particular training procedure can properly be considered part of the witness's reason for not using mats. Accordingly, I think this evidence should have been admitted. However, my disagreement on this ruling does not affect the result in relation to the issue of whether there was negligence in not using mats, because Beazley JA has found that in any event there was no such negligence. On the other issues, I do not think this evidence has a material bearing. 43 IPP JA: I agree with Beazley JA subject to the comments of Hodgson JA.

Last Modified: 07/26/2004 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.