F & D Normoyle Pty Ltd v Transfield Pty Ltd t/as Transfield Bouygues Joint... [2005] NSWCA 193 | Case summary

F & D Normoyle Pty Ltd v Transfield Pty Ltd t/as Transfield Bouygues Joint... [2005] NSWCA 193 | Case summary | Zoe

[37]

The two appeals 2 These reasons concern two appeals against a judgment by Truss DCJ given in an action brought by Mr Zarko Vranjkovic against Transfield Pty Ltd and Bouygues SA ("the Joint Venture") for damages for personal injuries. Mr Vranjkovic was injured on 18 August 1999 while working as a labourer at the construction site of the Sydney Airport domestic terminal railway station. 3 While carrying a bundle of metal tracks along the "upper level" of the construction site, Mr Vranjkovic fell over some pipes lying on the floor. Despite its name, the upper level, misleadingly, was below the ground level. The "lower level" was, in turn, below the upper level. 4 The Joint Venture was the main contractor and occupier of the construction site. Mr Vranjkovic was employed by Chadwick Building Systems Pty Ltd ("Chadwick") which was a subcontractor to the Joint Venture for the supply and installation of gyprock ceilings. 5 F & D Normoyle Pty Ltd ("Normoyle") was also a sub-contractor to the Joint Venture, being responsible for the supply and installation of posts, handrails and glazing for balustrades. Normoyle had brought the pipes on which Mr Vranjkovic fell to the construction site and had stored them in the appropriate storage area on the ground level. There was no evidence as to who had been responsible for removing the pipes from storage on the ground level and placing them on the upper level where Mr Vranjkovic fell. 6 Mr Vranjkovic had collected the tracks from the storage area on the ground level in order to take them to where Chadwick was installing ceilings on the upper level in a part of the domestic terminal outside the railway station. There were about 10 such tracks that he so collected. They were about three metres long and the total load (which Mr Vranjkovic carried on his right shoulder) weighed between 20 and 25 kilograms. 7 Mr Vranjkovic carried the tracks down a stairway ("stairway 9") that led from the ground level to the upper level. In order to take the tracks from the bottom of stairway 9 to Chadwick's place of work he had to walk through a "breakthrough" (an opening in an internal wall) that led from the railway station to that part of the terminal where Chadwick was working. To get to the breakthrough from the bottom of stairway 9 he had to walk past the opening to another stairway ("stairway 13") that led to the lower level. 8 Stairway 13 was more or less in the middle of that part of the upper level which Mr Vranjkovic had to cross to get to the breakthrough. There was no passage through the area to his left of stairway 13 as it had been blocked off completely by tiling sub-contractors working there. Thus, the only way in which Mr Vranjkovic could walk to the breakthrough, and from there to where Chadwick was working, was along the area to his right of stairway 13. That area was 3.7 to 4 metres wide and was described by Truss DCJ as a "passageway". 9 Mr Vranjkovic, accordingly, proceeded to carry the tracks along the area to his right of stairway 13. Some of Normoyle's pipes were lying on the floor, partially across that area. He tripped and fell forwards over those pipes and the tracks fell on top of him. He thereby sustained injuries. 10 Mr Vranjkovic sued the Joint Venture, alleging that it had breached the duties it owed him under regs 73(2) and 73(5) of the Construction Safety Act 1912 (NSW). He also alleged, in the alternative, that the Joint Venture had breached the duty of care that, as occupier of the construction site, it owed him and it had thereby caused his injuries. On these bases he claimed damages from the Joint Venture. 11 The Joint Venture joined Chadwick as a cross-defendant and sought a contribution from it on the grounds that it was a joint tortfeasor. In the alternative, the Joint Venture claimed an indemnity from Chadwick. It alleged that Chadwick, by the sub-contract between it and the Joint Venture, had agreed to indemnify the Joint Venture against claims such as those brought by Mr Vranjkovic. 12 In addition, on similar grounds, the Joint Venture sought a contribution or indemnity from Normoyle. 13 Truss DCJ found that the Joint Venture had breached its duties under regs 73(2) and 73(5) and had also breached the duty of care it owed Mr Vranjkovic as occupier of the site. Her Honour found that, on those grounds, the Joint Venture was liable to Mr Vranjkovic for the injuries that he had sustained. 14 The Joint Venture contended that Mr Vranjkovic was guilty of contributory negligence but her Honour rejected this submission. 15 The judge found that Chadwick was not liable as a joint tortfeasor and was not liable under the contractual indemnity. Thus, the Joint Venture's claim against Chadwick was dismissed. 16 Her Honour upheld the Joint Venture's claim against Normoyle on the ground that Normoyle was liable under the indemnity provisions of the sub-contract. 17 Truss DCJ assessed Mr Vranjkovic's damages at $436,568 and granted a verdict and judgment against the Joint Venture in this amount. Her Honour ordered a verdict and judgment for Chadwick on the cross-claim and ordered a verdict and judgment for the Joint Venture against Normoyle on the cross-claim against it. 18 The Joint Venture appeals against the finding that it breached regs 73(2) and 73(5) of the Construction Safety Act and that it breached any duty of care that it owed Mr Vranjkovic. The Joint Venture also appeals against her Honour's decision that Mr Vranjkovic was not guilty of contributory negligence and against her Honour's assessment of damages. As regards the cross-claim against Chadwick, the Joint Venture appeals against her Honour's dismissal of its claim for contribution and indemnity. Normoyle appeals against the finding that it is obliged to indemnify the Joint Venture.

[39]

Regulation 74 is not presently relevant. 20 The Joint Venture submitted that Truss DCJ erred in finding that the Joint Venture was relevantly engaged in building work for the purposes of Regulation 73. 21 The Joint Venture was the head contractor on the site. Mr Bosco, the Joint Venture's site engineer, testified that part of his duties was to monitor the safety of the site and to take steps to make the site safe for workers, generally. In order to discharge these duties, he inspected the site two or three times a day three days a week. 22 One "Primo", another employee of the Joint Venture, assisted Mr Bosco in discharging his duties as regards safety. Primo was regularly at the site and Mr Bosco testified that Primo was his "eyes on site, so indirectly he was also responsible for making sure that people acted safely". 23 The Joint Venture also undertook other measures in an attempt to ensure that the site was safe. It conducted a "site walk" for a safety committee once a week. The safety committee included representatives of each of the major sub-contractors. About twice a month the Joint Venture conducted a "tool box talk" for everyone on site when safety issues, including storage of materials, were discussed. Further, the Joint Venture conducted an induction process during which new sub-contractors and their employees were given instructions about safety, generally, and the handling and storage of materials, in particular. 24 The contracts between the Joint Venture and the sub-contractors provided that the sub-contractors could store materials and equipment on the site only in locations approved by the Joint Venture representative. The Joint Venture gave explicit instructions to each sub-contractor about the storage of materials and Mr Bosco constantly reinforced those instructions. Sub-contractors who needed storage space would have to get permission from him. 25 Truss DCJ found that, whilst sub-contractors performed most of the actual construction work, the Joint Venture was responsible "for the safety of not only its own employees, but also of the employees of sub-contractors on site". There was ample evidence to support her Honour's findings and it has not been shown that she erred in this respect. 26 On the basis of the evidence and findings to which I have referred, the Joint Venture carried out relevant construction work on the upper level of the site where Mr Vranjkovic fell. Accordingly, by the chapeau to reg 73, the Joint Venture was required to "take all measures that appear necessary … to prevent injury to the health of persons engaged in such construction work". 27 It is an open question, it seems to me, whether the duties set out in regs 73(2) and 73(5) are to be read subject to the same qualification as that contained in the chapeau; namely, as being owed only to "persons engaged in such construction work" (or whether those duties are owed to persons more broadly defined, for example, persons who are engaged in work in relation to or in connection with the construction work carried on by the contractor). 28 This question does not have to be resolved as regards the Joint Venture (and, indeed, it was not raised as an issue by Mr Garling SC who, together with Mr Quinlivan, appeared for the Joint Venture). As all workers on the upper level were engaged in keeping the level safe under the overall supervision of the Joint Venture, those workers were engaged in the same construction work as that carried on by the Joint Venture. Thus the "open question" does not arise. 29 The Joint Venture submitted that reg 73(2) did not apply on the ground that the "access" referred to in that regulation was a place separate to the place where the worker was working or intending to work. It was said that, as Mr Vranjkovic was injured in a place where he was working, that place could not constitute "means of access" to his place of work. I am not persuaded by this submission. By reason of the pipes that had been placed on the floor, Mr Vranjkovic was not provided with a safe means of access to the place to which he had to deliver the tracks. It is immaterial that the means of access was also a place where he was working. In my opinion, reg 73(2) was squarely of application. 30 As regards reg 73(5), the Joint Venture submitted that the area where Mr Vranjkovic fell was not a "passageway". The Joint Venture submitted that a passageway had to be physically delineated by a confining structure, whereas the place where Mr Vranjkovic fell was not so confined. 31 I would reject this submission. The term passageway has to be construed in the context of the regulation as a whole, with due regard for its remedial purpose. Without wishing to express any definition of a passageway, where a discernible area is obviously the only means of passing from one point on a construction site (where work is being done) to another point on the site (where other work is being done), that area is a passageway. In those circumstances, whether the area was physically confined is irrelevant. 32 The Joint Venture also argued that the area in question was not a passageway as, by definition, a passageway would be entirely free of obstruction (and not partially obstructed as was the area where Mr Vranjkovic fell). That submission is untenable as such a construction would remove the remedial object of the regulation (being to impose an obligation to "keep all … passageways free from … obstructions of every kind").

[41]

The negligence of the Joint Venture 34 The Joint Venture submitted that Truss DCJ erred in finding that, as occupier of the site, it had negligently caused Mr Vranjkovic loss. The major point on which Mr Garling focussed on this issue was the fact that, according to Mr Vranjkovic's own case, the pipes had been in the passageway for not more than 10 to 12 minutes. Mr Garling submitted, firstly, that the system the Joint Venture had implemented for the safety of workers was reasonable and, secondly, it had not been shown what steps could reasonably have been taken by the Joint Venture that would have prevented the pipes from being in the passageway for the brief period in question. 35 I have set out above, when dealing with the issue whether the Joint Venture was carrying out construction work on the site within the meaning of reg 73, the system implemented by the Joint Venture for the purposes of making the site safe for workers. It was not shown that that was not a reasonable system. 36 In the cross-examination of Mr Bosco, it was suggested that the Joint Venture should have employed a safety officer whose specific task should have been to inspect each floor to ensure that the passageways were not obstructed. Mr Bosco did not agree. No other evidence was led on this issue. The evidence that was adduced does not establish that the employment of such a safety officer would have been a reasonable step or that it would have prevented Mr Vranjkovic's fall. 37 I would add that when the Court informed Mr Reynolds SC, who together with Mr Anderson appeared for Mr Vranjkovic, that it did not wish to hear him in response to the Joint Venture's submissions on the breach of statutory duty issue, Mr Reynolds accepted that it would not be necessary to address the Court on the negligence issue and did not do so. 38 In my view, the Joint Venture's argument that it was not negligent should be upheld. This, however, does not affect the ultimate result of the Joint Venture's appeal against the finding that it is liable to Mr Vranjkovic as, for the reasons I have stated, the finding that it breached the statutory duties it owed him should be upheld.

[48]

The Joint Venture's appeal in relation to the liability of Chadwick: the construction of cl 12 41 As the Joint Venture, in my opinion, has no liability to Mr Vranjkovic in negligence, the Joint Venture has no claim against Chadwick as a joint tortfeasor. 42 The Joint Venture, however, contends that, under the sub-contract between it and Chadwick, Chadwick is obliged to indemnify it in respect of its liability to Mr Vranjkovic for breach of statutory duties. 43 The term of the sub-contract on which the Joint Venture relies forms part of a set of standard conditions. Chadwick does not contend that the sub-contract is not governed by those conditions. Clause 12 of the conditions provides: "The sub-contractor shall indemnify and keep indemnified [the Joint Venture] and their respective officers, employees and agents against all claims, demands, proceedings, liabilities, costs, charges and expenses arising as a result of any act, neglect or default of the sub-contractor, its employees or agents relating to its execution of the Works." 44 "Works" are defined by cl 1.1(f) as the work and services to be provided by the sub-contractor. Clause 8 provides that the sub-contractor shall supervise the Works. 45 The Joint Venture submitted that the act of Mr Vranjkovic, Chadwick's employee, in tripping and falling, the act of Chadwick in instructing Mr Vranjkovic to carry the tracks from the ground floor to Chadwick's place of work on the upper floor (which necessarily involved him passing through the passageway where he fell), and the omission by Chadwick to ensure that the passageway was clear of obstruction, each fell within the meaning of the phrase "any act, neglect or default" in cl 12. The Joint Venture submitted further that the causative requirements of cl 12 were satisfied and, accordingly, Chadwick was obliged in terms thereof to indemnify it. 46 Mr Wynyard, counsel for Chadwick, submitted that cl 12 was ambiguous. He submitted that it was capable of being construed on the basis that "any act, neglect or default" applied only to negligent acts or breaches of contract or statutory duty by the sub-contractor. 47 In Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424 Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ held (at 437 [23]) that the principles adopted in Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 and Chan v Cresdon Pty Ltd (1989) 168 CLR 242 are "relevant to the construction of indemnity clauses". In Ankar Mason ACJ, Wilson, Brennan and Dawson JJ said (at 561): "At law, as in equity, the traditional view is that the liability of the surety is strictissimi juris and that ambiguous contractual provisions should be construed in favour of the surety. The doctrine of strictissimi juris provides a counterpoise to the law's preference for a construction that reads a provision otherwise than as a condition. A doubt as to the status of a provision in a guarantee should therefore be resolved in favour of the surety".

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In Andar , their Honours held at 438 [29] that, to the extent that the indemnity clause considered in that case was ambiguous, "the principles of construction outlined earlier in these reasons require the provisions to be construed in favour of Andar. Accordingly, [the indemnity clause does] not oblige Andar to indemnify Brambles …". 48 Mr Wynyard's submission requires, in effect, construing the words "neglect" and "default" in cl 12 as omissions amounting to breaches of duty (the common law duty of care in the case of "neglect" and a contractual or statutory duty in the case of "default") and construing "act" as eiusdem generis with "neglect or default". 49 The first point to notice, it seems to me, is that the words "neglect" and "default" connote omissions only - not acts. Mr Garling accepted that "neglect" meant a form of negligence but submitted that it could mean a negligent act as well as a negligent omission. I do not accept this argument. The definitions given in the Oxford English Dictionary and the Macquarie Australian Dictionary for the word "neglect" all involve omissions of some kind and none involves the performing of a positive act. In my opinion, these definitions are reflective of the ordinary meaning of the word. "Neglect" involves a failure to act and has no element of actually doing something positive. 50 "Default", similarly, is a particular kind of omission to act. I did not understand Mr Garling to argue to the contrary. 51 Secondly, in my opinion, the ordinary meaning of the words "neglect" and "default" - in a legal context - involves attributing to each some concept of breach of a legal duty. 52 While both the Oxford English Dictionary and the Macquarie Australian Dictionary give several alternative definitions for both "neglect" and "default" that involve omissions not having a breach of duty as an element, they do provide support for the construction I have suggested. According to the Oxford English Dictionary, the meanings of the noun "neglect" include "negligence" and "an instance of negligence". The Macquarie Australian Dictionary defines "neglect", inter alia, as "to omit (doing something), through … carelessness", "to fail to carry out or perform (orders or duties, etc.)", and "negligence". The Oxford English Dictionary defines "default", inter alia, as "spec. in Law, failure to perform some legal requirement or obligation…", "[f]ailure in duty, care, etc.; as the cause of some untoward event; culpable neglect of some duty or obligation", and "[a] failure in duty; a wrong act or deed; a fault, misdeed, offence". It defines the phrase "to be in default" as "to fail in one's duty". One of the meanings given by the Macquarie Australian Dictionary for "default" is "Law failure to perform an act or obligation legally required …". 53 The canons of construction require a different meaning to be given to each of the two words, "neglect" and "default", used in the same phrase. In my view, in context, the meaning of each is indeed different. The word "neglect" - in cl 12 - means an omission that constitutes negligence, that is, the breach of a common law duty of care. The word "default", on the other hand, means a failure to fulfil a duty imposed by contract or statute (it is not a word that is commonly used to describe a breach of a common law duty of care). 54 If "neglect" and "default" are to be construed as a genus involving the breach of a legal duty (and, in my view, they should be), what meaning is to be attributed to "act"? 55 Clause 11 was said by Mr Wynyard to cast some light on the present issue. Clause 11.1(a) provided: "The sub-contractor shall insure its liability (including [its] common law liability) as required under any applicable workers' compensation statute or regulation thereunder to its employees engaged in doing anything for the purpose of executing the sub-contractors' rights or obligations under [the sub-contract]. The common law cover required by the foregoing provisions of this clause shall be for the maximum amount available at law in respect of any one accident to any one employee."

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Clause 11.1(e) provided: "The sub-contractor shall be at liberty but at its own cost to take out and maintain any additional insurances as it may desire so as to be itself covered in respect of any such exclusions, conditions or excesses." 56 The common law liability under the present "common law extension"' to the workers' compensation policy does not cover claims made under contractual indemnity: Multiplex Constructions Pty Ltd v Irving [2004] NSWCA 346; Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd (1994) 8 ANZ Ins Cas 61-235. Clause 11.1(e), however, contemplates that the sub-contractor may take out its own cover in respect of such claims. In the circumstances, I do not see how cl 11 affords any aid to the construction of cl 12. 57 When "neglect" and "default" (to be understood as meaning omissions involving breaches of legal duties) are used in juxtaposition with "act" (in a contractual clause imposing an obligation to indemnify in respect of a certain kind of "act" or "neglect" or "default"), the word "act", in my view, should similarly be understood as meaning an act involving a breach of a legal duty. In my view, the words "any act" in the phrase "any act, neglect or default" are not used entirely separately and independently from the words "neglect or default". For example, "any" governs "act" and "neglect" and "default". The meaning of each word in the phrase has a bearing on the others. 58 A different meaning, in my view, would result in an anomaly. The clause - in the case of an "act" - would then provide for an obligation to indemnify irrespective of whether the sub-contractor committed a breach of tortious or contractual or statutory duty, but - in the case of neglect or default - limit the obligation to indemnify to liabilities arising from breaches of such a duty. In my view, there is neither a rational nor practical reason for the contract to so distinguish between acts and omissions. 59 Mr Garling, in submitting that the word "act" was "fault free", relied on Leighton Contractors Pty Ltd v Smith [2000] NSWCA 55. The clause considered in that case provided: "[B & B] shall indemnify and keep indemnified [Leighton] against all loss or damage resulting from … personal injury arising out of or resulting from any act, error, or omission or neglect of [B & B]."

[51]

B & B was the subcontractor and Leighton was the main contractor. 60 Meagher JA applied Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500, where the High Court held that an exclusion clause in a commercial contract is to be construed according to its natural and ordinary meaning, and contra proferentem in the case of ambiguity. His Honour accepted that the ordinary meaning of the clause was that B & B was obliged to indemnify Leighton in full. The approach so applied, however, must now, in relation to indemnity clauses, yield to what was stated in Andar. 61 Mason P and Fitzgerald JA gave three reasons for agreeing with Meagher JA. These were: "First, the present clause is not directed to the cause of Leighton's "loss or damage", i.e., its liability to [the plaintiff], but to the cause of [the plaintiff's] personal injury. It is irrelevant to the operation of the clause that B & B's 'act, error or omission or neglect' was not the cause of Leighton's liability. It was a cause of [the plaintiff's] personal injury. Second, no implied limitation on Leighton's right to an indemnity can readily be identified. One suggestion made by B & B was that the word 'solely' might be inserted after the words 'personal injury', but there is no reason to suppose that it was not intended that Leighton should have an indemnity from B & B if both B & B and some third party caused a personal injury in loss or damage to Leighton. Third, as Meagher JA has pointed out, the modern approach to the construction of commercial contracts is to give them their natural and ordinary meaning. See, for example, Darlington Futures Ltd v Delco Australia Pty Ltd (1996) 161 CLR 500 …" 62 The first reason given by their Honours does not apply in the present case as the clause in this case (unlike that in Leighton Contractors Pty Ltd v Smith) is directed to the cause of the Joint Venture's liabilities. That is, under cl 12 the indemnity to be given is in respect of liabilities "arising as a result of any act, neglect or default of the sub-contractor …", not (as was the case in Leighton Contractors Pty Ltd v Smith) in respect of "loss or damage resulting from … personal injury arising out of or resulting from any act, error, or omission or neglect [of the sub-contractor]". 63 Secondly, the argument in the present case is not that the indemnity applies to liabilities solely arising as a result of any act, neglect or default of the sub-contractor. Rather, the argument is that the indemnity applies to liabilities arising as a result of any act, neglect or default of the sub-contractor that amounts to a breach of tortious duty, a breach of contract or a breach of statutory duty. 64 Thirdly, by reason of the judgment in Andar, the approach in Darlington Futures Ltd v Delco Australia Pty Ltd can no longer be relied on in regard to indemnity clauses 65 Fourthly, the indemnity clause in Leighton Contractors Pty Ltd v Smith, unlike the clause in the present case, included the words "omission" and "error"; therefore, it was not possible to construe "act" in that clause eiusdem generis with "neglect". 66 Accordingly, I do not think that Leighton Contractors Pty Ltd v Smith assists the Joint Venture. 67 In my opinion, the word "act" in cl 12 must be construed eiusdem generis with "neglect" or "default" (the last two words constituting a genus). The phrase "any act, neglect, or default" in my opinion, does not - as a whole - connote an act (or omission) that is neither a neglect nor a default. At the very least, the clause is ambiguous and, on the authority of Andar, must be construed in favour of Chadwick.

[55]

(c) Provided another employee to walk with Mr Vranjkovic so as to warn him about possible obstructions ahead. 70 Mr Wynyard submitted that the last two submissions relating to the employment of an extra worker were not put at trial and not investigated. On my reading of the material, it was not put that another worker should have assisted Mr Vranjkovic in carrying the tracks. In any event, Mr Vranjkovic did not assert that the tracks prevented him from seeing the obstructing pipes, and he was not cross-examined on the basis that the fall occurred because his vision was obscured by the tracks. 71 There was no evidence to support the proposition that Chadwick should, reasonably, have provided an additional worker to warn or guide Mr Vranjkovic as he walked through the site carrying the tracks. On its face, the suggestion lacks practicality; it seems to involve the idea that whenever a worker carried tracks within the site he or she should have had the help or guidance of another worker. Had such a proposal been implemented, it is inevitable that increased expense would have resulted and profitability would have been affected. These matters were not the subject of evidence and I am not persuaded that the provision of an extra worker, as submitted, was a reasonable step that Chadwick should have taken. 72 There was also no evidence of steps that Chadwick reasonably could have taken, in the brief period of not more than 10 to 12 minutes involved, to ascertain that there was an obstruction in the passageway or, otherwise, to prevent such an obstruction arising. 73 Accordingly, I would not uphold the argument that Chadwick breached its common law duty of care as Mr Vranjkovic's employer. 74 At trial the Joint Venture argued that Chadwick had breached its sub-contract with the Joint Venture but this proposition was rejected by the trial judge and not raised again on appeal. No submission was made that Chadwick had breached its statutory duty to the Joint Venture. 75 In the circumstances, Mr Vranjkovic's injuries were not caused by an act or omission by Chadwick that amounted to negligence or breach of contract or breach of statutory duty by it. Accordingly, I would dismiss the appeal by the Joint Venture against the finding that Chadwick was not obliged to indemnify it.

[56]

Normoyle's appeal against the finding that it was obliged to indemnify the Joint Venture under cl 12 76 Truss DCJ found that Normoyle had breached regs 73(2) and 73(5) "in that it failed to maintain safe means of access to every place at which any person on the site had to work and failed to keep the passageway free from materials and supplies". Her Honour held that "Normoyle was also in breach of cl 2.12 of the contract by virtue of its failure to store its materials in such a manner as not to impede the work of others". It is by no means clear what consequences her Honour intended should flow from these findings as Mr Vranjkovic made no claim against Normoyle and she did not hold that Normoyle was liable to the Joint Venture for damages for breach of contract. Truss DCJ did, however, find that Normoyle was liable to indemnify the Joint Venture under cl 12 for the damages it was obliged, by the judgment, to pay Mr Vranjkovic. 77 As, in my view, the Joint Venture did not commit a breach of any duty of care it might have owed Mr Vranjkovic, Normoyle cannot be held liable to the Joint Venture as a joint tortfeasor. Mr Garling accepted that, on that basis, the only liability that Normoyle had to the Joint Venture was to indemnify it under cl 12. Normoyle's appeal challenged the finding that it was so liable. 78 Mr Harrison, for Normoyle, submitted: (a) Normoyle was not relevantly carrying out construction work on the building site. (b) The Joint Venture's liability to Mr Vranjkovic did not arise as a result of any "act, neglect or default" on the part of Normoyle. (c) Any relevant act or omission on the part of Normoyle was too remote from Mr Vranjkovic's injuries to fall within the causative element required by cl 12. 79 Mr Harrison submitted that Normoyle was not relevantly carrying out construction work on the building site as the judge had found that Normoyle had no "presence" on the upper level on the day of the injury. Normoyle was not working on the upper level at that time. It was working elsewhere on the building site. Moreover, the judge found that there was no evidence to the effect that Normoyle had brought the obstructing pipes on to the upper level, although it had made the pipes and brought them on to the ground floor of the site where, in accordance with the Joint Venture's instructions, it had stored them. There was no evidence as to how the pipes had been brought from the ground level to the upper level and who had brought them there. 80 The judge found that Normoyle had breached regs 73(2) and 73(5) "by failing to ensure that the [tracks] were stored in a safe place away from where other sub-contractors, for example the tilers, were working" and "by failing to store the [tracks] so that they would not be moved by other contractors". But there was no evidence that supported these findings. 81 Firstly, there was no evidence to the effect that Normoyle had not stored the tracks in a safe place in a safe and properly secured manner. Secondly, there was no evidence that, by allowing the tracks to come into the possession of some other person, Normoyle failed to "provide and maintain safe means of access to every place at which any person has to work at any time" (within the meaning of reg 73(2)) and failed to "keep all stairways, corridors and passageways free from loose materials and debris, building materials, supplies and obstructions of every kind" (within the meaning of reg 73(5)). 82 It is necessary to reiterate that, by the chapeau of reg 73, Normoyle's obligation was limited to the taking of measures, when "directly", or by its servants or agents, carrying out any construction work, that appeared necessary "to prevent injury to the health of persons engaged in such construction work". I have referred above to what I have described as an "open question" in this regard, namely, whether regs 73(2) and 73(5) are to be read as imposing the duties stipulated therein only in regard to "persons engaged in such construction work" (that is, the construction work being carried on by the contractor concerned) or whether those duties are owed to persons more broadly construed. 83 Again, as regards Normoyle, the question does not require resolution. Had Normoyle been shown to have brought the pipes on to the upper level where Mr Vranjkovic fell over them, or in some way to have contributed materially to the placing of the pipes in the passageway on the upper level, it might have been arguable that, particularly on some broad construction, Normoyle owed statutory duties to him under regs 73(2) and 73(5). 84 But, as it was not shown that Normoyle was carrying out any form of construction work on the upper level, or that it materially contributed in any way to the placing of the pipes in the passageway there, I consider that the construction work it was carrying out elsewhere is too remote for reg 73 in general and regs 73(2) and 73(5) to have imposed any relevant obligations on it. 85 The next proposition Normoyle advanced was that the Joint Venture's liability to Mr Vranjkovic did not arise as a result of any "act, neglect or default", within the meaning of cl 12, on its part. 86 Truss DCJ did not find that Normoyle breached any duty of care to any person and I have expressed the opinion that reg 73 did not impose any relevant duties on Normoyle. Thus, the only way in which the Joint Venture could establish that there was any fault on the part of Normoyle was by proving that it, in some way, breached the sub-contract. This, as I have noted, is what Truss DCJ in fact held. 87 The breach of contract found by the judge was based on a clause (cl 2.12) contained in a set of conditions forming part of the sub-contract between the Joint Venture and Normoyle. Clause 2.12 provided: "Materials and equipment may be stored on the sites at the sub-contractors' risk only in locations approved in writing by the [Joint Venture Representative] and only in such a manner as will not impede the work of others and the operation of any existing installations." 88 I reiterate that there was no evidence that Normoyle did not store the materials and equipment in locations and in a manner approved by the Joint Venture. The Joint Venture did not rely on the fact that the approval was not in writing. There was no evidence that Normoyle stored the pipes in a manner that impeded the work of others or impeded the operation "of any existing installations". In my opinion, the finding by the judge that Normoyle breached cl 2.12 was erroneous. 89 As Normoyle, in my opinion, was not negligent, did not commit a breach of contract and was not guilty of any breach of statutory duty, the indemnity clause, cl 12, did not oblige it to indemnify the Joint Venture. 90 Further, in my view, while the phrase "arising as a result of", in cl 12, is a particularly broad expression of the notion of causation, it is not open ended. The clause plainly does not connote "proximate cause" or "direct cause", but it could not be construed so as to import an unlimited concept of causation. The clause does involve some causal or consequential relationship (cf Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 at 505). Remoteness must form an element of the meaning of "arising as a result of"; more is required than the mere existence of connecting links between an act, neglect or default of the sub-contractor and the liability incurred by the Joint Venture. 91 In my opinion, the acts of Normoyle in bringing the pipes on to the ground level of the construction site and storing them in their proper place are so remote from the accident which caused Mr Vranjkovic's injuries that the liability which the Joint Venture incurred in consequence of those injuries could not be said to arise as a result of those acts. 92 Accordingly, in my opinion, Truss DCJ erred in finding that Normoyle was obliged to indemnify the Joint Venture under cl 12.

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The assessment of damages 93 The judge assessed Mr Vranjkovic's damages in the aggregate sum of $436,568. This sum included $90,000 in respect of general damages and $95,946 in respect of out-of-pocket expenses. 94 Initially, the Joint Venture challenged only the awards in respect of general damages and out-of-pocket expenses. During the course of the hearing on appeal, however, the Joint Venture sought to challenge the entire award on the ground that the judge had failed to give adequate reasons in arriving at her assessment of damages. The notice of appeal was amended to include the following ground: "Her Honour the learned trial judge failed to make adequate findings on the evidence relating to damages and failed to give adequate reasons for her conclusions relating to damages." 95 The Joint Venture, in summary, submitted: "[T]he findings on damages and the awards which her Honour made were on their face inconsistent, ie she apparently rejected the cases of both the plaintiff and the defendants. Her rejection of the plaintiff's case is in part dependent upon credibility based findings. As well, her reasoning does not satisfactorily (or at all) expose why she was able to award the plaintiff in excess of $400,000." 96 I accept that the findings made by the judge and the reasons for those findings have not been expressed with clarity and this enabled Mr Garling to mount a persuasive argument that the judge's reasons did not comply with the standards laid down in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127 and Hume v Walton [2005] NSWCA 148. I have, however, come to the conclusion that this is a borderline case and sufficient explanation appears from her Honour's reasons to ascertain the relevant findings that were made and the reasons for those findings. 97 At trial, Mr Vranjkovic contended that he sustained injuries to his right shoulder, neck and back. Truss DCJ noted that the reports of Mr Vranjkovic's treating doctors "suggest on-going and significant disabilities affecting the head, neck, back, both arms and both legs resulting from the fall". There was evidence, particularly from Mr Vranjkovic himself, that his disabilities at the time of the trial were more or less the same as those at the time of the accident. Mr Vranjkovic was then consulting specialist medical practitioners on a regular basis. He received massage therapy three times per week and hydrotherapy twice per week. The most incapacitating feature of his injuries was his injury to the neck with consequent headaches. He was taking a variety of drugs relating to his physical condition as well as medication for sleeping. In essence, his case was that, as a result of the injuries he sustained in his fall, he was unable to work again. 98 The judge observed: "The MRI findings in relation to the plaintiff's spine are quite significant and reveal disc protrusions at C4-5, C5-6 and C6-7, most pronounced at C6-7 with indentation of the thecal sac as well as protrusions at T1-2 and L5-S1." 99 She commented that Mr Vranjkovic had placed considerable reliance upon the opinion of Dr Anthony Lowy, a consultant physician in occupational medicine, who had examined him at the request of an insurance company for the purposes of a claim for insurance in conjunction with a motor vehicle finance contract. Her Honour noted that Dr Lowy had expressed reservations as to Mr Vranjkovic's clinical presentation but observed that, "nevertheless", Dr Lowy had expressed the following opinion: "Despite the passage of time and notwithstanding Mr Vranjkovic's exaggerated clinical status, it is consistent [sic] he is experiencing chronic multi-level back pain with left sided radiculopathy (symptoms and absent ankle reflex - L5-S1 dermatome). In other words Mr Vranjkovic has chronic back pain arising out of multi-level degenerative disease; it is likely that this degenerative disease (spondylosis) has been permanently aggravated by the fall at work in August 1999; lumbar surgery is not indicated in this case." 100 The judge observed further that Dr Lowy had considered Mr Vranjkovic permanently unfit for his pre-injury work as a gyprock fixer and had concluded his report by saying: "On consideration of all the information available in this case, and notwithstanding his unimpressive clinical presentation and his doubtful veracity, my conclusion is that on the balance of probabilities, Mr Vranjkovic is experiencing total and continuous inability to engage in or attend to any gainful occupation; poor whole person prognosis." 101 The judge noted that a consultant neurologist, Dr Milder, had referred to the protrusions of the L5-S1, C4-5, C5-6, C6-7 and T1-2 invertebral discs. The judge said: "He considered the prognosis to be uncertain but that long standing tendencies to lumbar and cervical pain and headache may remain ."

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The emphasis given by the judge to the italicised words is indicative of the importance that she attached to them. 102 The principal expert called on behalf of the Joint Venture was Dr Mellick, a neurologist. The judge recorded: "Dr Mellick's evidence was that there is no physical explanation for the plaintiff's continuing symptoms and that the radiographically demonstrated lesions in his spine are attributable to his age. He found no physical impediment related to the fall which renders the plaintiff unfit for normal and restricted function in keeping with his age, constitution and training. He considered that psychological processes are a primary cause of his clinical presentation." 103 Her Honour noted that the Joint Venture had contended that Mr Vranjkovic's injury should be assessed as minimal "in that he has failed to establish satisfactorily any injury other than a soft tissue type injury to the right shoulder of short duration, say 10 days, being the period of incapacity suggested by Dr Mellick". 104 Normoyle had supported the submissions of the Joint Venture in relation to the assessment of damages and had submitted to Truss DCJ that Mr Vranjkovic was exaggerating the consequences of his injury, that he suffered a minor soft tissue injury only and no other pathology. Normoyle, too, submitted that the judge should rely on the evidence of Dr Mellick. 105 The judge, however, made it plain that she rejected these contentions. 106 The parties also were at issue as to the psychological effects of the injury sustained by Mr Vranjkovic. 107 Truss DCJ referred to the opinion of Dr Zepinic, a consultant in psychological medicine. She noted that Dr Zepinic had diagnosed Mr Vranjkovic to be suffering from "an adjustment disorder with mixed emotional features (anxiety, depressed mood, anger and irritability) secondary to his chronic neck and low back pain, physical disability and drastic changes in lifestyle". Her Honour commented that Dr Zepinic considered it to be very unlikely that Mr Vranjkovic would be able to return to his pre-injury work. According to Dr Zepinic, Mr Vranjkovic had minimal prospects of re-employment considering his condition, his education and his knowledge of English. 108 The judge observed that Mr Vranjkovic had been seen by Dr Champion, a psychiatrist, on behalf of the Joint Venture. Her Honour noted that Dr Champion had expressed the opinion that Mr Vranjkovic may have suffered an adjustment disorder with depressed mood as a result of pain and disability associated with the accident. Dr Champion was of the view that by June 2002 Mr Vranjkovic's condition had resolved considerably, if not completely, and that from the psychiatric viewpoint Mr Vranjkovic was fully fit to return "to any form of work consistent with the spinal problems described". 109 Having discussed the evidence in the terms I have described, Truss DCJ proceeded to make her findings. 110 She found that Mr Vranjkovic was not "as incapacitated as he perceives himself to be". She accepted that his evidence warranted "close scrutiny". 111 The judge said: "I am unable to accept that a fall of the nature of which he gave evidence could be productive of damage to five levels of his spine."

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This was a clear rejection of Dr Mellick's testimony. 114 It is implicit from her Honour's reasons as a whole that she accepted that Mr Vranjkovic had sustained an exacerbation or aggravation of his pre-existing spinal injuries and that these had given rise to a psychological disorder as described by Dr Zepinic. 115 Mr Garling submitted that the judge's findings were inconsistent as she apparently "rejected the cases of both the plaintiff and the defendants". I do not accept this submission. While her Honour did not accept the entirety of the argument advanced on behalf of Mr Vranjkovic (she found only an exacerbation of his injuries), she rejected the case of the Joint Venture and Normoyle (when she found that he had sustained more than a mere soft tissue injury). These findings are not inconsistent and were open to the judge. 116 Mr Garling pointed to the fact that the medical opinions in the reports tendered by Mr Vranjkovic "largely contained and were based on an inaccurate history". He referred particularly to Dr Zepinic who had been given an incorrect history of what had happened on the day of the accident, particularly in regard to the degree of the injuries he sustained. The judge, however, appears to have been well aware of these problems. She referred expressly to Mr Vranjkovic's exaggeration or embellishment and warned herself that his evidence and complaints to the doctors warranted close scrutiny. 117 Her Honour gave reasons for preferring Dr Zepinic to Dr Champion, namely, that Dr Zepinic had been the treating doctor, and he had expressed his opinion in moderate terms. It must be remembered that neither of these medical practitioners gave oral evidence. In these circumstances, the task of the trial judge in deciding which expert to prefer is particularly difficult. I do not think that her Honour's reasons for preferring Dr Zepinic are unsound. 118 It is also apparent, I think, from the form of her Honour's reasons that her Honour accepted Dr Lowy's views. The weight of the evidence, as recounted by her Honour, supported Dr Lowy and it does not come as a surprise, when one reads her Honour's reasons, that she did not accept Dr Mellick's opinion. 119 Mr Garling submitted that at least the following findings were necessary, and were not made:

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(f) Where the medical opinions are in conflict, the reasons why one opinion is to be preferred over another. 120 In the particular circumstances of this case I do not think that findings of the precision referred to in sub-paragraphs (a), (b) and (c) above were necessary. If it is accepted (as my view it should be) that the judge preferred the opinions of Dr Lowy (that Mr Vranjkovic's injuries sustained in the fall caused him to be permanently unfit for work) and Dr Zepinic (that it was very unlikely that Mr Vranjkovic would be able to return to work), the degree to which his spinal injuries were exacerbated become irrelevant. It is enough, according to the doctors concerned, that whatever injuries Mr Vranjkovic did sustain in his fall, they were sufficient to result in the probability that he would not again return to work. 121 Similarly, in the present case, the views expressed by the judge concerning the psychological component of Mr Vranjkovic's injuries rendered it unnecessary for her to say anything more on this issue. Dr Zepinic diagnosed the adjustment disorder with mixed emotional features as being "secondary" to his physical degeneration. Once it was found that the physical degeneration had been caused by the fall, it follows, according to Dr Zepinic's opinion, that the injuries caused by the fall materially contributed to Mr Vranjkovic's psychological state. 122 I have not been able to discern, in the material before the Court, that it was ever suggested that the resolution of the litigation would assist Mr Vranjkovic's mental condition. Accordingly, I do not think that it was an error on her Honour's part to omit to make any finding in this respect. 123 As regards the conflict between the medical opinions, I think it is apparent from the reasons as a whole that the judge preferred Dr Lowy because he was, in a sense, a disinterested witness, his evidence was consistent with the broad weight of the expert testimony, and it was borne out, to a degree, by the evidence that Mr Vranjkovic's physical and mental state had deteriorated substantially since the fall. The evidence that he suffered merely a soft tissue injury that had healed was inconsistent with the realities of the situation as found by her Honour. 124 In the circumstances, I would not uphold the ground of appeal relating to inadequacy of reasons. 125 In the light of the injuries found by her Honour, and Mr Vranjkovic's general prognosis, I am not persuaded that the award of $90,000 for general damages was beyond the judge's discretion. 126 I turn finally to the award of $95,946 in respect of out-of-pocket expenses. The parties agreed at the trial that "the total out-of-pocket expenses are $95,946". In supplementary reasons, Truss DCJ said that it was common ground that this figure "represented the totality of the plaintiff's out-of-pocket expenses to date being those paid by the workers compensation insurer and otherwise" and that "whether or not the plaintiff would ultimately be awarded such expenses was dependent upon the Court's findings in relation to his injuries and their sequelae". 127 Her Honour said that had she found, in accordance with the argument of the Joint Venture, that Mr Vranjkovic had sustained a minor soft tissue injury which incapacitated him for no more than 10 days, then "the award for out-of-pocket expenses would have been minimal". Her Honour then went on to make it plain that her intention was to award Mr Vranjkovic "the totality of his out-of-pocket expenses to date". As I understand her Honour, that is by reason of a finding on her part that those expenses were caused by the injuries he suffered. On my reading of the transcript, the Joint Venture did not submit that, had the injuries not been sustained, the agreed expenses would not have been incurred. 128 Her Honour made it clear that she was aware that it was open to her not allow all the agreed out-of-pocket expenses. I am not persuaded that her Honour was in error in her award under this head and I would not uphold the appeal in this respect.

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(a) site control of its work; and (b) protection of its work until completion; and (c) co-ordination with other subcontractors on the site; and (d) keeping the Works in a clean and tidy condition; and (e) providing as built drawings before completion of the Works; and (f) (i) removing its plan and equipment; and (ii) leaving the Works ready for immediate use or occupation, on completion. If the Subcontractor fails to comply with this clause, TBJV may do whatever may be required for the proper compliance thereof and the cost incurred may be deducted from any money due or becoming due to the Subcontractor. 135 Clause 9 deals with Variations and cl 10 with Quantities. Clause 11 deals with insurance and provides as follows: (Blue Book 3/458, 459). 11.1(a) The Subcontractor shall insure its liability (including this Common Law Liability) as required under any applicable Workers' Compensation Statue or Regulation thereunder to its employees engaged in doing anything for the purpose of executing the Subcontractor's rights or obligations under this Works Order. The Common Law cover required by the foregoing provisions of this Clause shall be for the maximum amount available at law in respect of any one accident to any one employee. If allowable by law, this insurance shall be endorsed to indemnify the Principal and TBJV against any liability which he may incur under any applicable Workers' Compensation Statue or Regulation thereunder in relation to the said employees engaged as aforesaid. The Subcontractor shall ensure that ancillary insurance (ie Top Up Cover) is in place to help alleviate any hardship and/or loss of benefits that might emanate from an interruption of employment (other than the provisions of normal Sick Leave, Bereavement Leave and the like) resulting from a work associated incident whilst engaged on this Project. 11.1(c) TBJV will provide and maintain for the Subcontractor the following insurances: (i) Contract works Insurance: for an amount equal to the Works Order Price; until the expiration of the Warranty Period (ii) Third Party Public Liability Insurance; to a limit of $150 million per occurrence until the expiration of the Warranty Period. 11.1(d) The Subcontractor acknowledges and agrees that it has sighted a copy of the insurance policies taken out by or on behalf of TBJV and is satisfied as to the provisions, terms, conditions, exclusions and excesses of the policies for the insurances referred to in Clause 11.1(c) (i) and (ii) as have been taken out and that it accepts the same in full satisfaction of TBJV's obligations to insure as imposed by Clauses 11.1(c) (i) and (ii). The Subcontractor shall ensure that all sub-sub-contractors employed pursuant to the provisions of the Works Order shall, before entering into their respective sub-contracts, have satisfied themselves as to the provisions of those policies. 11.1(e) The policies for the insurances referred to in Clauses 11.1(c) (i) and (ii) are subject to such exclusions, conditions and excesses (if any) as noted therein and/0r thereupon. Such excesses as are set out in the policies are to be borne by the Subcontractor. The Subcontractor shall be at liberty but at its own cost to take out and maintain any additional insurances as it may desire so as to be itself covered in respect of any such exclusions, conditions or excesses. 11.2 The Subcontractor shall lodge with TBJV evidence that the insurance required under 11.1(a) and (b) above has been effected and is current from time to time. 11.3 Any failure on the part of the Subcontractor to so insure or to s inform TBJV of that insurance will entitle TBJV to effect insurance on behalf of the Subcontractor and deduct any cost so incurred from any money due to or becoming due to the Subcontractor. 11.4 The Subcontractor shall also ensure that each of its sub-subcontractors effects similar insurances as described in 11.1(a) and (b). 11.5 The Subcontractor shall ensure that each policy of insurance under Clauses 11.1(a) and (b) contains provisions acceptable to TBJV that will require the insurer, whenever the insurer gives the Subcontractor a notice of cancellation or other notice concerning the policy at the same time to inform TBJV in writing that the notice has been given. 136 Clause 12 is in these terms: The Subcontractor shall indemnify and keep indemnified TBJV, the SRA and ALC and their respective officers, employees and agents against all claims, demands, proceedings, liabilities, costs, charges and expenses arising as a result of any act, neglect or default of the Subcontractor, its employees or agents related to its execution of the Works. 137 The remaining Clauses 13 to 32 deal with further subjects commonly dealt with in building construction contracts, with no observably close relation to cl 12. These include cl. 13, obligation of the sub-contractor to give notices, pay fees, hold licences and related matters, cl 14 against assignment, cl 15 relating to the date for completion, cl 17 relating to inspection by the Joint Venture. There are provisions relating to bankruptcy and insolvency (cl 18), co-operation (cl 19), industrial relations and identification of persons employed on site (cl 20), working hours (cl 21) and site safety (cl 23). Clause 23(4) (Blue 3/462 provides): 23.4 The Subcontractor shall ensure that, whilst on any of TBJV's sites, it shall be responsible for the safety of its own equipment and personnel and comply in all respects with any site safety instructions and its statutory obligations regarding occupational health and safety.

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There are also provisions dealing with maintaining records (cl 24) and compliance with environmental standards (cl 25), disputes and arbitration (cl 26) governing law (cl 27) reckoning days for notices (cl 20) appointment of representatives (cl 29) entire agreement (cl 32) and waiver and amendment (cll 30 and 31). 138 The indemnity provisions in cl 12 are not set in any controlling context which presents an analogy with the context of contractual provisions under consideration in Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424, where a contractual provision (set out at 910 [12]) brought about presentation of the contractor to outsiders as part of the principal's organisation and provided context for contractual provisions for indemnity of the principal by the contractor (set out at 910-911 [15]) in a way that showed that a claim by an employee of the contractor against the principal, which was not based on vicarious liability, was not intended to fall within the indemnity. 139 In Andar Transport v Brambles the principal judgment (Gleeson CJ and McHugh, Gummow, Hayne and Heydon JJ) shows (at 911) that the settled principle governing the interpretation of contracts of guarantee applies to contracts of indemnity; the settled principle was authoritatively established by Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 at 561 and by observations in Chan v Cresdon Pty Ltd (1989) 168 CLR 242 at 256. The passage in Andar at 561 which has twice had approval by High Court majorities is set out in Ankar at 911 [17] where their Honours said: [17] The proper construction of cll 8.2.2 and 8.2.3 cannot be undertaken without reference to the principles of construction applicable to contractual indemnities. The starting-point is the decision of this Court in Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [(1987) 162 CLR 549] . In that case, the Court considered whether two clauses of a guarantee operated as conditions the breach of which would discharge the surety from liability. In answering that question in the affirmative, Mason ACJ, Wilson, Brennan and Dawson JJ said [(1987) 162 CLR 549 at 561 ] :

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In Chan v Cresdon Pty Ltd [(1989) 168 CLR 242 at 256] , Mason CJ, Brennan, Deane and McHugh JJ described the statement in Ankar set out above as evidencing a "settled principle governing the interpretation of contracts of guarantee". 140 After a historical review of decisions and opinion from the 18th century onwards in England, United States and in Australia, the principal judgment expressed the view at 913 [23] that: The principles adopted in Ankar , and applied in Chan , are therefore relevant to the construction of indemnity clauses. With some observations about possible future developments in the law, Kirby J approved of the disposition in the principal judgment - see p 923 [70] and [74]. Callinan J dissented. 141 I respectfully observe, in relation to the passage I have set out from Andar at 911 [17], that the view that the liability of the surety is strictissimi juris and the view that ambiguous contractual provisions should be construed in favour of the surety are not the same views. The present case raises no need to consider the operation of a preference for a construction that reads a provision otherwise than as a condition, which is the subject which their Honours treated as strictissmi juris. The arguments related to the other aspect of their Honours' observation, the construction of ambiguous contractual provisions. I respectfully observe that what their Honours said relates to the resolution of questions of construction arising on ambiguity, and that their Honours said nothing which could promote readiness to detect ambiguity, or which might tend to create perceptions of ambiguity which would otherwise not be perceived. In my opinion there is no special rule for contracts of indemnity about what constitutes an ambiguity, or about how ambiguity is discovered, and there is no rule which favours the discovery of ambiguity. 142 There is no special or easy path to the detection of ambiguity, and an indemnity clause, like any other contractual provision, should be construed according to its natural and ordinary meaning read in the light of the contract as a whole. The ambiguity to which their Honours refer in Ankar is ambiguity of which the contractual language is fairly susceptible without placing a strained construction on it: and it is always necessary to construe the language an indemnity clause, as of any contractual clause, in the context of the entire contract of which it forms part. See Darlington Futures Ltd v. Delco Australia Pty Ltd (1986) 161 CLR 500 at 507-510, particularly (at 510): [T]he interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity. See too the passage quoted in Darlington at 508 from Photo Production Ltd v. Securicor Ltd [1980] AC 827 at 851 (Lord Diplock): In commercial contracts negotiated between business-men capable of looking after their own interests and of deciding how risks inherent in the performance of various kinds of contract can be most economically borne (generally by insurance), it is, in my view, wrong to place a strained construction upon words in an exclusion clause which are clear and fairly susceptible of one meaning only even after due allowance has been made for the presumption in favour of the implied primary and secondary obligations. 143 The Joint Venture, as the profferor of the contract documents including cl 12, is in an adverse position with respect to the resolution of any ambiguity for a further reason than the reason that Andar establishes. I would think too that while resolution of ambiguity in favour of the surety would, conforming with Andar, usually be found to be the correct resolution, there may be cases in which, although ambiguity can literally be detected in that more than one meaning can reasonably be attributed to some expression, context may require a construction adverse to the surety. 144 Courts have when applying indemnity clauses sometimes found it difficult to suppose and difficult to conclude that one party to a contract should intend to indemnify the other party from the consequences of the indemnified party's own negligence: for an example, based on an indemnity clause which was not in the same terms as cl 12, see Canberra Formwork Pty Ltd v Civil & Civic Ltd (1982) 41 ACTR 1 23 - 24 (Blackburn CJ, citing Gillespie Bros & Co Ltd v Roy Bowles Transport Ltd [1973] 1 QB 400 at 419 (Buckley LJ) and Davis v The Commissioner of Main Roads (1988) 117 CLR 529 at 524 (Kitto J, dissenting)). This passage from Canberra Formwork was referred to in Leighton Contractors Pty Ltd v Smith [2000] NSWCA 55 at [5] where Mason P and Fitzgerald JA disapproved of Blackburn CJ's approach: see [9]. Their Honours said "….the modern approach to construction of commercial contracts is to give them their literal and ordinary meaning" and referred to Darlington Futures. Meagher JA reached the same conclusion: see [26]. The decision supporting entitlement to indemnity related, of course, only to the indemnity clause then under consideration. In my understanding the Court of Appeal in Leighton Contractors v Smith disapproved of the approach to the construction of indemnity contracts to in Canberra Formwork v Civil & Civic and other authorities there referred to, and showed that it is incorrect to approach an indemnity clause with any such predisposition. 145 Parenthetically I add that the Joint Venture's claim for indemnity against Chadwick and Normoyle is not based on circumstances in which the Joint Venture was negligent; the Joint Venture was at fault only in the sense that it was in breach of its statutory duty. 146 Counsel for Chadwick submitted that cl 12 is ambiguous in that it is capable of the construction that "any act, neglect or default" applies only to a negligent act or to a breach of contract or statutory duty. In this submission "neglect" and "default" have connotations of omission and of fault with respect to some duty or obligation under contract, statute law or negligence law; and "act" appearing as it does in a collocation with them should be taken to fall within the same connotation. The argument places "act" in a genus with "neglect" and "default" and requires "act" to be construed ejusdem generis. This submission led to references to dictionary definitions of these expressions or some of them; and I find no real assistance in the dictionary references, which of course cannot give effect to any influences of context and collocation. 147 It is correct, in my view, that "neglect" and "default" connote omission, failure and breach of duty, but in my opinion this connotation does not carry any implication for the meaning of "act", which in its ordinary and natural meaning is neutral as to fault or breach of duty, and free of any connotation which might place it in a genus into which "neglect" and "default" also fall, in any way which would colour the meaning of "act". Quite otherwise, "act" in its ordinary and natural meaning is distinct from "neglect" and from "default" in this respect, and its presence in the collocation is an indication that the person drafting cl 12, and the parties to the contract used it for its neutrality of any connotation of failure. The parties should be taken to have used the word "act" to contribute some additional meaning and not to have included the word to no purpose. To my reading of the whole of cl 12, the word "act" is strikingly distinct from "neglect" and from "default" and conveys in what I must respectfully say is to my mind an altogether clear way the intention of the parties to give a right of indemnity in situations of which fault was not an aspect. 148 Counsel for Chadwick referred in detail to the provisions of cl 11 relating to insurance. I have set out the whole of cl 11 to show that cll 11 and 12 deal with different subjects. In my opinion there is no interaction between cl 11 and cl 12 and the obligations which it creates. Liberty to insure is especially reserved to Chadwick by cl 11.1(e). Clause 12 does not relate to or refer to insurance, and imposes on Chadwick an obligation outside the ordinary range of insurances which it is compulsory for employers to have. Indeed it is not usual for insurance to extend to obligations such as indemnities undertaken contractually, although such insurances are not unknown and are matters for negotiation within the insurance market. 149 In my opinion the words of cl 12 yield no ambiguity with respect to the meaning of "act" and give no ground for the operation of the principles of construction referred to in Anker and approved in Andar. 150 There is nothing unreasonable about a contractual provision which allocates the risk of liability in an operation to one party involved in the operation or to the other: that is something which the parties can make an arrangement about if they choose to, in the exercise of their economic liberty. There is no unreasonableness calling for the Court to be convinced of what the parties intended by use of language of abundant clarity: cf L. Schuler v Wickman [1974] AC 235 at 251 (Ld Reid). 151 An element which these words have in common is the specificity with which an act, a neglect or a default as a result of which the Joint Venture incurred liability must be identified. For a right of indemnity to exist the right must be related to an identifiable act, to an identifiable neglect or to an identifiable default. In short it cannot be based on a non-specific relation between the Joint Venture's incurring liability and the presence of the sub-contractor on the site. It is not enough to say that if the sub-contractor had not been on site the accident would not have happened. 152 Of the matters which are put forward against Chadwicks on behalf of Joint Venture as "any act … of the subcontractor, its employees or agents …." the one which in my opinion requires consideration is the act of Mr Vranjkovic in walking in the passageway, tripping and falling. It was also suggested that instructing Mr Vranjkovic to carry the tracks from the ground floor to the place of work on the upper floor was such an act; there is little in the evidence or findings about whether there ever was an instruction of that kind, it is far less clearly available for consideration as causative of the Joint Venture's liability, and further consideration of it is not necessary. 153 In my finding Mr Vranjkovic's successful claim for damages against the Joint Venture is a claim arising as a result of an act of an employee of Chadwick, namely of Mr Vranjkovic himself, and the act was related to Chadwick's execution of the works. The causal connexion between Mr Vranjkovic's act in walking in the passageway, tripping and falling while carrying tracks to Chadwick's place of work and his claim against the Joint Venture is close and direct, and a finding that the claim arose as a result of his act is the only finding reasonably available. For this reason the Joint Venture has a contractual right under cl 12 to be indemnified, and should succeed in its appeal against Chadwick, with the costs of the first cross claim and of the appeal. 154 There is no evidence establishing an act in which anyone directed or arranged for Mr Vranjkovic to carry loads along the passageway. He may have acted on his own initiative. There is no finding and the Court of Appeal was not told why there should be a finding that any person representing Chadwick directed Mr Vranjkovic to act as he did. 155 The only connection of Mr Vranjkovic's accident with Normoyle is that Normoyle brought railings or pipes on to the site. Normoyle stored its pipes elsewhere, on a different level to that where Mr Vranjkovic's accident occurred, and no evidence establishes that Normoyle had any part in getting the railings to the area where Mr Vranjkovic tripped, still less that Normoyle had anything to do with their being strewn on the floor in Mr Vranjkovic's path. No relevant act, neglect or default by Normoyle has been identified. For this reason Normoyle is in my opinion entitled to succeed in its appeal against the judgment awarded to the Joint Venture against Normoyle, on the basis of enforcement of the indemnity in cl 12. Normoyle should obtain an order for its costs of the third cross claim and of its appeal. 156 There is no ground for basing a claim for an indemnity on breach of cl 8(a) relating to site control because there is no basis for a finding that there was such a breach. *************

F & D Normoyle Pty Ltd v Transfield Pty Ltd t/as Transfield Bouygues Joint Venture & 1 Or; Transfield Pty Ltd t/as Transfield Bouygues Joint Venture & 1 Or v Z Vranjkovic & 2 Ors

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Judgment (76 paragraphs)

Legislation Cited (8)

Cases Cited (12)

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