Grima v RFI

Court of Appeal (NSW)|2014-09-02|Before: Meagher JA, Barrett JA, Emmett JA, Harrison J

rties: Carmel Grima (Appellant) RFI (Aust) Pty Ltd t/as Regen Foam ) (First Respondent) Allied Overnight Express Pty Ltd (Second Respondent) Representation: Counsel: E G Romaniuk SC/S J Maybury (Appellant) M T McCulloch SC/J C Chapman (First Respondent) J P Guihot (Second Respondent) Solicitors: Edwards Michael Lawyers (Appellant) Walker Hodges & Co (First Respondent) HWL Ebsworth Lawyers (Second Respondent) File Number(s): CA 2014/46322 Decision under appeal Citation: [2013] NSWSC 1199; [2014] NSWSC 14 Before: Harrison J File Number(s): 2011/201053

The Common Law Division proceedings 3Mr Grima instituted proceedings in the Common Law Division of the Supreme Court. He sued RFI alone. However, RFI filed a cross-claim against Allied on the footing that, if Mr Grima's injury was caused by RFI's negligence, that injury was also caused by negligence on the part of Allied, with the result that RFI was entitled to indemnity or contribution from Allied as a concurrent tortfeasor under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). 4Allied later cross-claimed against RFI. It claimed, by reference to s 5, indemnity or contribution by RFI in respect of any liability in negligence to which Allied might be found to be subject. Allied also made a claim under s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) with a view to recovering out of any damages payable by RFI workers compensation payments made by Allied to Mr Grima. 5RFI and Allied denied liability. Allegations of contributory negligence against Mr Grima were denied by him. 6Mr Grima's case was that RFI was solely responsible for the accident. The primary judge (Harrison J) held that RFI had breached a duty of care owed by it to Mr Grima. He also held, however, that the instructions given and system of work provided by Allied to its employees (including Mr Grima) were deficient. The judge then said (at [143]): "In my view it is not possible to apportion fault differently between RFI and Allied. It was clearly and inexpensively open to RFI to load the vertical rolls within surrounding horizontal rolls further inside the truck and not against the rear doors. RFI was in that way the author of the fundamental problem that confronted Mr Grima when the unloading commenced. Allied's failure to anticipate and provide for the possibility that some loose rolls may not be visible or secured consummated the events that commenced with RFI's failures. Doing the best I can, I consider that RFI and Allied are equally at fault. The causal potency of their respective breaches cannot be further distinguished in anything other than a most artificial way. It is just and reasonable in the circumstances that their responsibility for Mr Grima's injuries be apportioned in the ratio of 50 percent each." 7The primary judge also found that there had been no contributory negligence on Mr Grima's part. 8The parties agreed the quantum of damages. It was accepted by all of them that Mr Grima's damages against RFI assessed under the Civil Liability Act 2002 (NSW) amounted to $5.75 million and that, if he had sued his employer (Allied), Mr Grima's work injury damages under Division 3 of Part 5 of the Workers Compensation Act would have been assessed at $330,000. 9The primary judge published two judgments: Grima v RFI (Aust) Pty Ltd [2013] NSWSC 1199 (2 September 2013) and Grima v RFI (Aust) Pty Ltd [2014] NSWSC 14 (31 January 2014). The first dealt with matters of liability, the second with questions of calculation, interest and costs. His Honour made final orders in chambers on 10 February 2014.

Issues on appeal 10Mr Grima appealed. RFI filed a notice of cross-appeal and a notice of contention. The issues before this Court are: (a) whether Allied was guilty of negligence; (b) whether any negligence of Allied was causative of Mr Grima's injury; (c) whether, if Allied was guilty of negligence, the apportionment of liability between RFI and Allied made by the primary judge should be varied; (d) whether Mr Grima was guilty of contributory negligence; (e) whether, if apportionment of liability between RFI and Allied is required, RFI is entitled to have included in the apportioned sum for which Allied is responsible costs awarded against it and in favour of Mr Grima. 11RFI does not dispute its liability in negligence to Mr Grima. Allied, for its part, does not contest the finding of negligence against it but Mr Grima does contest that finding, his contention being that RFI alone was negligent. As to apportionment of liability between RFI and Allied (assuming that the finding of negligence against Allied stands), Allied seeks to defend the equal apportionment made by the primary judge, while RFI says that a much greater share should be attributed to Allied. RFI also challenges the conclusion that Mr Grima was not guilty of contributory negligence. 12The appeal proceedings are not concerned with the quantum of damages as such. Rather, they are concerned with the way in which the financial burden should be borne among RFI, Allied and Mr Grima (if he was guilty of contributory negligence). 13Part of the underlying economic rationale is the product of Mr Grima's desire to maximise the responsibility of the party the liability of which is not affected by the modified common law damages regime imposed by the Workers Compensation Act (that party being RFI) and to minimise the responsibility of his employer (Allied) the liability of which is, in money terms, limited by that regime. Beyond that, the main motivating factor is RFI's desire to see a greater share of responsibility attributed to Allied so that RFI is required to bear a smaller part of the common law damages of $5.75 million. RFI also seeks further reduction of the financial burden upon it by means of a finding of contributory negligence on the part of Mr Grima.

The circumstances in which Mr Grima was injured 14On the day in question, Mr Grima and a co-worker, Mr Tai-Rakena, had the task of unloading the pantechnicon on arrival at Allied's premises. Vehicles of that kind carrying similar loads arrived at the premises several times each week. Such vehicles were unloaded from the rear, through two large doors hinged at each side of the vehicle and secured at the centre. 15The load consisted exclusively of rolls of carpet underlay wrapped in plastic sheeting. There were 315 such rolls in the back of the vehicle. Each roll was 1.83 metres long and had a diameter of 39 to 40 centimetres and a weight of between 19 and 30 kilograms. Most of the rolls were laid on the floor of the vehicle, parallel with its sides and stacked to the ceiling. That method of packing left a space at the back of the compartment that was too small to accommodate further rolls laid on the floor parallel with the sides. That space was utilised in two ways. First, rolls were placed in it standing on end (that is, vertically) in several rows. Second, further rolls were placed on top of the vertical rolls in the space between their upper ends and the ceiling of the compartment. These further rolls were laid horizontally on the upper ends of the vertical rolls, at right angles to the sides of the vehicle and parallel to the back of the vehicle. 16Immediately inside the back doors of the carrying compartment there was provision for five metal bars or braces to be placed horizontally across the opening in order to contain the load. These were spaced evenly from the floor to the ceiling of the compartment. The mechanism was such that the bars or braces were slotted into position by hand after loading and before securing of the rear doors and then removed by hand after opening of the doors at the destination. 17It is uncontroversial that only three of the five bars or braces were in position when Mr Grima and Mr Tai-Rakena opened the doors of the vehicle following its arrival at Allied's premises. Those missing were the topmost and the one second from the top (referred to as the fifth and fourth bars respectively). Nor is it controversial that, after the doors were fully opened, two rolls of underlay lying across the top of several rolls standing vertically fell from the vehicle and that both of them struck Mr Grima and injured him.

The findings of the primary judge 18After a close analysis of the evidence, the primary judge held that both RFI and Allied were guilty of negligence. He found (at [137]) that RFI's failure to provide a restraining brace that would prevent rolls laid above the vertical rolls falling when the doors were opened was "a breach of RFI's duty to load the truck properly", adding (at [137] - [138]): "It was clearly foreseeable that serious injury might follow from events of the type that happened in fact. I accept the case proffered by Mr Grima that in his experience there were never rolls of underlay loaded on top of the vertical rolls unless there was a fifth brace in position to restrain them. I accept that Mr Grima was lulled into a false sense of security by the absence of a brace at that level, telegraphing to him a reasonable expectation that there was no danger present. This is all the more so having regard to the fact that the truck was closed by RFI employees in Melbourne in the knowledge or expectation that it would not be inspected or examined again until it came to be unloaded. RFI's duty and the question of whether or not it was breached has to be analysed in that context. Allied employees were entitled to expect that the load contained nothing that did not conform to their reasonable expectations having regard to the loads that had previously arrived from RFI's premises. It is sufficient to repeat Mr Di Pietro's uncontroversial concession that if the truck left his premises with only three braces supporting the load it would represent a complete failure of proper practice. That failure was a breach of RFI's duty to Mr Grima." 19Then, dealing with RFI's cross-claim against Allied, his Honour noted (at [140]) that Allied was in a position to control and supervise the unloading of trucks "with particular attention to the idiosyncracies of each load" and that this "included the formulation of a system and corresponding instructions that anticipated the possibility of events such as those that actually occurred". The judge's conclusions on the question of negligence by Allied were stated as follows (at [140]-[142]): "On the one hand, RFI was responsible for the loading of the truck and was uniquely placed to perform that task in a way that either eliminated or minimised the risk of injury to Allied employees such as Mr Grima. It failed to do so. On the other hand, Allied was similarly placed to control and supervise the unloading of the trucks with particular attention to the presenting idiosyncrasies of each load. That included the formulation of a system and corresponding instructions that anticipated the possibility of events such as those that actually occurred. Allied's standard instruction to its employees included an instruction to take care when opening the doors to observe whether any freight could fall if the doors were opened. The possibility of a missing top brace, or what to do if that was encountered, was not specifically accommodated by Allied's instructions to its workers or by the system it had formulated. In particular, there does not appear to have been any instruction that required the Allied employees to make an accurate or exhaustive visual inspection of the top of the load, particularly in areas of the truck that could not be entirely or completely seen from the ground. That should have been taken into account in Allied's system for the obvious reason that loose rolls placed horizontally on top of the vertical rolls were a regular feature of the RFI deliveries. The system of checking for loose rolls was casual at best. Mr Tai-Rakena said he did not think it was necessary to look. If there was no top brace Mr Grima and Mr Tai-Rakena operated upon the assumption, based on previous experience, that no rolls were present. The Allied system and instructions to employees should have taken account of the possibility that that assumption could not always or ever safely be made. The presence of a supervisor to oversee the commencement of all unloading tasks would have eliminated or minimised the risks associated with leaving the assessment of the safety of each load to those assigned the job of performing that work."

Negligence of Allied 20The first matter requiring attention in this Court is the finding that Allied was negligent, that being a finding challenged by Mr Grima. 21Mr Grima gave evidence of the way in which rolls were packed in the back of vehicles of the relevant kind, with several rolls sometimes laid horizontally across the top of rolls standing vertically immediately inside the rear doors. He said: "When it's laid down you can tell because there is a thick bar up top to hold it." 22He also explained that when rolls were placed horizontally on top in that way, five bars were installed, whereas if there were no horizontal rolls there were four bars; also, that standard procedure was to open the doors slightly to see how many bars were in position and that "that fifth bar would give you the - in your mind that there is rolls laying this way" - that is, "cross ways" and "on top of the standing ones". Rolls lying on top were often visible because resting against the fifth bar as a result of the vehicle's movement. 23Mr Grima explained the unloading process generally adopted. After the doors had been fully opened and latched back (following initial inspection through partly open doors), the fifth (or top) bar, if present, was removed and any rolls lying on top were removed. Next, the first, second and third bars were removed, leaving the fourth in place. The upright rolls were then removed by being pulled from the bottom, with the top of each roll hard against the fourth bar in such a way as to prevent the top emerging before the bottom. 24Turning to the particular incident, Mr Grima stated that he and Mr Tai-Rakena began by opening the back doors of the vehicle, with Mr Tai-Rakena dealing with the right-hand door and Mr Grima dealing with the left-hand door. They opened the doors slightly ("ajar"). He looked in and could not see anything on top. There was no fifth bar. Nor was there a fourth bar. He formed the opinion that the load was "safe". He and Mr Tai-Rakena opened the doors fully and latched them. He walked back to the rear opening, then: "I looked back up and I said to myself, how am I going to unload this? Because the fourth bar I couldn't see the fourth bar, for safety to myself." 25It was at that point that the two horizontal rolls fell on him. 26Mr Grima's concern about safety did not relate to the possibility that there might be horizontal rolls on top. He was concerned because absence of the fourth bar had implications for safe removal of the vertical rolls. Without the fourth bar against which to steady the top of a vertical roll when the bottom of it was pulled, there was an obvious risk that the unsupported and unrestrained vertical roll would fall on the person pulling it from the bottom. 27Mr Grima gave further explanation in response to a question about when he first noticed that there were only three bars in place: "A. I noticed the three bars when we opened the doors. Opened. Right, I went to unhook one and I saw three. I said, the fourth one's not there to hold the standing upright. That's when I left it there and I walked away. As soon as I walked to the right, the two rolls came from the top and that's how I finished, I didn't remember nothing else." 28And later: "When there was no fourth bar, I stopped and walked away." 29He did this because of a safety concern - safety in unloading the unrestrained vertical rolls, it not being feasible to use the third bar, rather than the fourth, for the purpose of holding back vertical rolls as they were pulled from the bottom. His intention, in stopping and walking away, was to alert his supervisor to the unusual situation. 30Mr Tai-Rakena confirmed that the first step in unloading was to open the doors part-way to see "how it's loaded" and "that all the braces are in and what they're holding up". If there were rolls lying horizontally across the vertical rolls, they were "always like right at the end of the load" and "actually visible". The fifth bar was invariable in place when rolls were laid horizontally above those standing vertically. He agreed that the presence of the fifth bar was a "sign or indication that there are horizontal rolls in place". Mr Tai-Rakena also confirmed Mr Grima's description of the use made of the fourth as a means of restraint when removing vertical rolls by pulling them out at the bottom. 31Dealing with the particular incident, Mr Tai-Rakena referred to opening the doors part-way and looking up to see how the vehicle was loaded. He did not see any horizontal rolls. He saw three bars in position, something he did not think he had experienced before. That confirmed to him that there were no horizontal rolls on board. 32The failing of Allied, as found by the judge, was that the system of work it administered and its instructions to employees did not adequately deal with the risk of loose horizontal rolls falling. On the view the judge took, there was: (a) inadequate instruction about the need to warn to make careful visual inspection to see if loose rolls were present; (b) failure to warn that an assumption based on the absence of the top bar was unreliable and should not be acted upon; (c) failure to require more careful visual inspection; and (d) failure to provide supervision or oversight in the assessment of the safety of a load. 33In short, his Honour was of the opinion that Allied failed to take reasonable precautions by way of a system of inspection and supervision in the course of unloading. 34Mr Grima notes that he was aware of the need to make an inspection to see if unrestrained horizontal rolls were present. Allied, as his employer, may be taken to have incorporated into the system of work a requirement that reasonable inspection be made for that purpose. In accordance with that system, Mr Grima and Mr Tai-Rakena at first opened the doors only slightly and looked to see if horizontal rolls were present. The general expectation may well have been that any such rolls would be resting or pressing against the inside of the doors and therefore readily visible. 35RFI, in advancing additional reasons why the judge's finding of negligence against Allied should be upheld, pointed to the evidence of Mr Biermann, Allied's onsite manager, who said that standard procedure was to open only one door to check whether the load was secure. Also canvassed with Mr Biermann in cross-examination was whether an employee standing in a "man-up cage" attached to a forklift could be lifted so as to be able to see the space on top of the vertical rolls. There was also reference in the evidence to the possibility that an employee might walk back many metres so as to have a better view into that space, with only one door open. In summary, RFI contended that the judge should have found that no pantechnicon from RFI lacking the fifth bar should have been unloaded before an inspection of the load was carried out by leaving one door secured in the closed position and making a thorough visual inspection of the space above the vertical rolls, either by walking backwards or using some means of elevation. 36I am not persuaded that these additional matters to which RFI refers involve any material difference. The judge found that Allied's system of work was deficient because of lack of any adequately communicated and enforced inspection procedure, coupled with lack of supervision. 37Furthermore, that finding was, to my mind correct at least as it relates to inspection procedure (I am not sure that enhanced supervision was indicated or would have achieved anything that a sensible person could achieve without supervision). The employees were aware of the risk that horizontal rolls might fall when both doors were fully opened. It was for that reason that they at first opened the doors only slightly to determine if horizontal rolls were visible. That method of proceeding dealt adequately with the possibility that loose rolls may have rolled to the back so as to be visible from immediately below. It did not deal adequately with the situation that in fact arose, that is, where loose rolls were not visible from immediately below but would have been visible from some higher vantage point - and no fifth bar was in place. 38The absence from Allied's system of work of some element that involved inspection from an improved vantage point must therefore be accepted as absence of a precaution that a reasonable person in Allied's position would have taken against the foreseeable and not insignificant risk of injury when rolls lying horizontally across the top of the load fell to the ground. The judge was therefore correct in his conclusion that Allied was negligent: Civil Liability Act 2002 (NSW) s 5B. 39Mr Grima says that the judge did not make any specific finding of causation as regards Allied's breach of duty of care. RFI's submission, which I consider to be correct, is that such a finding is necessarily implicit in paragraphs [140]-[142] of the judgment set out at [19] above. His Honour there made it clear that, had there been an adequate system of inspection otherwise than from the ground immediately behind the vehicle, the probability was that the loose rolls would have been seen and dealt with in a way that prevented their falling on Mr Grima. 40In summary, therefore, I am of the view that the finding of negligence by Allied (including as to causation) was correctly made.

Apportionment 41Because, on the view I consider to be correct, the findings of negligence by both RFI and Allied were justified, it is necessary to address the matter of contribution between tortfeasors under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 and the question of what is "just and equitable" having regard to the respective degrees of "responsibility" for the damage suffered by Mr Grima. The court's task, in that respect, is that identified in Podrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34; 59 ALJR 492 at 494, a case involving apportionment for contributory negligence. The High Court (Gibbs CJ, Mason J, Wilson J, Brennan J and Deane J) there said: "The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, ie of the degree of departure from the standard of care of the reasonable man (Pennington v Norris [1956] HCA 26; (1956) 96 CLR 10 at 16) and of the relative importance of the acts of the parties in causing the damage: Stapley v Gypsum Mines Ltd [1953] UKHL 4; [1953] AC 663 at 682; Smith v McIntyre [1958] Tas SR 36 at 42-49 and Broadhurst v Millman [1976] VicRp 15; [1976] VR 208 at 219, and cases there cited. It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination. The significance of the various elements involved in such an examination will vary from case to case; for example, the circumstances of some cases may be such that a comparison of the relative importance of the acts of the parties in causing the damage will be of little, if any, importance." 42The limitations on appellate intervention indicated by House v The King [1936] HCA 40; 55 CLR 499 at 504-5 operate here. Because the judge entrusted with the task of assessing relative degrees of responsibility has a wide discretion, it has been said that "cases will be rare in which the apportionment made can be successfully challenged": Pennington v Norris [1956] HCA 26; 96 CLR 10 at 16. 43As has been noted, the primary judge held that they were equally at fault. This was because he found any other apportionment impossible. His Honour's statement at [143] of his reasons is set out at [6] above. 44Particularly influential in the assessment of degrees of responsibility, in my view, is the evidence of Mr Di Pietro. He was, at the relevant time, the sole director of RFI. He gave evidence that it was uneconomic to send partly laden vehicles to Sydney. If there was not enough stock, departure would be delayed for a day or two until a full load was assembled. That meant that there was a need to install five bars on every occasion. On all but "the very odd occasion" there were horizontal rolls on top and therefore a need for five bars. He said that "99.9 per cent of times that would be the case". 45Mr Di Pietro confirmed that the fifth bar secured rolls placed horizontally on top but added that it would "probably" be installed even if the load did not include such rolls "just to put it somewhere". Mr Di Pietro said that if a truck left RFI's premises with only the first, second and third bars in place, that would "represent a complete failure of the practice". The judge interpreted this answer as referring to a complete failure of "proper practice". His Honour's interpretation is warranted by the evidence. 46Also of particular importance is the evidence of Mr Sulke, the manager at RFI's premises who supervised the loading of vehicles. It was his job to make sure that the trucks were loaded properly. Although his evidence concentrated mainly on standard procedures, he did have some recollection of the particular consignment. Pertinent evidence in Mr Sulke's witness statement was that: (a) if five bars were supplied as part of a vehicle, RFI "always" attached five; (b) he had, however, seen a truck equipped with five bars leave the premises with only four in place but when that occurred, it was one of the middle bars that was left off; (c) he had never seen a truck leave with only three bars attached; (d) his recollection was that there were four bars on the truck in question. 47The evidence shows clearly that it was RFI's practice to assemble a full load for each departing vehicle including, in virtually all cases, rolls laid horizontally on top; also that the relevant RFI personnel were fully attuned to the need to install the bars to restrain the load, including the fifth or top bar. Despite Mr Sulke's suggestion that four bars were installed in the vehicle in question, the evidence showed conclusively that there were only three, the topmost and second from the top being absent (the judge noted that some suggestion of interference with bars during transit had not been pursued). 48RFI can thus be seen to have been responsible for a very significant departure from standard and safe practice - one that Mr Di Pietro regarded as "a complete failure" of "proper practice". 49RFI must be taken to have been aware that persons meeting and dealing with a vehicle upon its arrival would not only pay attention to but also draw conclusions from the presence and positioning of the bars. RFI's personnel were aware of the particular function of the fifth bar in restraining horizontal rolls apt to move backwards and forwards with the motion of the vehicle. 50Allied's personnel, in the same way, were aware of the function of the fifth bar in relation to horizontal rolls - so much so that, as the evidence of both Mr Grima and Mr Tai-Rakena shows, they took the absence of a fifth bar as an indication that there were no horizontal rolls on board. 51It was not unreasonable for Allied employees to proceed on that footing. But, as the evidence of Mr Grima made clear, they did not rely solely on the positioning of the bars. In accordance with what he understood to be the requirements of his employer, he and Mr Tai-Rakena opened the doors only slightly in the first instance. Any unrestrained rolls lying on top that were resting against the doors and likely to fall if the doors were opened fully would be visible at that point. Allied's system of visual inspection through the partly opened doors was apt and sufficient to deal with that risk. It was not, however, apt and sufficient to deal with the risk that in fact materialised, that is, that unrestrained horizontal rolls that were not resting against the doors or flush with the outer edges of the vertical rolls (and which were therefore not visible from immediately below) might fall when the doors were fully opened. But, of course, horizontal rolls that were not flush with (or, at least, very close to) the outer edges of the vertical rolls must have presented a smaller risk of falling than those that were in such a position. 52Having regard to the whole of the conduct of each negligent party in relation to the circumstances of the accident and comparing both the degrees of departure from the standard of reasonable care and the relative importance of the parties' acts, I am of the opinion that the primary judge's equal apportionment was plainly unreasonable in the sense referred to in House v The King (above). 53RFI's departure from the standard of care of a reasonable man was of a much higher degree than that of Allied; and RFI's act of allowing horizontal rolls to be unrestrained by the fifth bar was of significantly greater importance in causing the damage than was Allied's conduct of requiring inspection only from ground level before the doors were fully opened. Storemen opening the doors of vehicles of the relevant type were entitled to expect that all proper restraints indicated by the nature of the load would be in place. And Allied, in providing a safe system of work, was entitled to expect that RFI would take care to put such restraints in place and that the risk that in fact materialised would be a remote risk. The culpability of RFI and the causal potency of its conduct were of a significantly higher order than those of Allied. 54It was RFI that created the risk of harm by loading the vehicle as it did. In addition, the methodology it used meant that there was a serious but unascertainable risk to anyone who took the generally prudent course of opening the doors at first only slightly to check the items likely to fall out when the doors were fully opened. RFI effectively created a hidden danger that was masked by the creation of the false sense of security engendered by the absence of the fifth bar. 55In my judgment, the appropriate apportionment is 75 per cent to RFI and 25 per cent to Allied.

Contributory negligence 56The primary judge found no contributory negligence of Mr Grima. RFI challenges that conclusion. Under s 5R of the Civil Liability Act, the principles applicable in determining negligence also apply in determining contributory negligence of a plaintiff; the standard of care required of that plaintiff is that of a reasonable person in the plaintiff's position; and the matter is to be determined on the basis of what the plaintiff knew or ought to have known at the time. 57RFI says that Mr Grima failed to take reasonable care for himself in not checking sufficiently for the presence of horizontal rolls. That submission should not be accepted. As I have said, RFI effectively created a hidden danger. In addition, Mr Grima followed procedures consistent with both the system of work laid down by his employer and the method of unloading that had been employed without incident on earlier occasions. He did not fail to meet the standard of reasonable care to which he was required to conform for his own protection. 58The finding of absence of contributory negligence should stand.

Contribution in respect of costs 59Remaining for consideration is an issue between RFI and Allied concerning costs. 60A costs order was made in the ordinary course against RFI and in favour of Mr Grima. RFI contended that Allied should be ordered to pay that proportion of the costs so ordered against RFI that corresponded with the proportion of responsibility ascribed to Allied (on the judge's finding, 50 per cent). The primary judge declined to make such an order. RFI challenges that decision on appeal. 61In doing so, RFI relies on the decision of this Court in James Hardie & Coy Pty Ltd v Wyong Shire Council [2000] NSWCA 107; 48 NSWLR 679 where it was held that the right of a defendant tortfeasor to recover contribution from a concurrent tortfeasor under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) extends to and includes any costs recoverable by the plaintiff. 62The reasoning of the primary judge proceeded by the following steps:

Mr Grima sued RFI but did not sue Allied.
Allied was entitled to recover from RFI pursuant to the Workers Compensation Act 1987 (NSW) workers compensation payments made by it to Mr Grima to the extent that those payments exceeded the amount that could be recovered from Allied as a joint tortfeasor.
As to costs, however, regulation 106 of the Workers Compensation Regulation 2010 (NSW) would have applied to any proceedings that Mr Grima brought against Allied.
Regulation 106, as it applied to those (hypothetical) proceedings, would have required that Mr Grima and Allied each bear their own costs.
Because there would have been no order as to costs in the hypothetical action by Mr Grima against Allied, there was no "just and equitable" basis for sheeting home to Allied any part of the liability for costs that RFI had to Mr Grima. 63In contending that the primary judge erred in this respect, RFI acknowledges that it needs to deal with several decisions of this Court subsequent to James Hardie & Coy Pty Ltd v Wyong Shire Council. It is to the subsequent cases that I now turn. 64A provision relatively indistinguishable from regulation 106 was contained in the now superseded regulations of 2003. That provision played a part in the reasoning in Estate of the late MT Mutton v Howard Haulage Pty Ltd [2007] NSWCA 340. There, as here, the plaintiff (Kelman) sued a concurrent tortfeasor (the appellant) but not his employer (the respondent) and the concurrent tortfeasor sought contribution from the employer. Ipp JA (with the concurrence of Spigelman CJ), after noting that the regulation then in force would have precluded any costs order if the plaintiff had successfully sued his employer, said (at [262] - [263]: "The point the respondent made is that, unlike the situation in James Hardie and Company Pty Ltd v Wyong Shire Council, if Mr Kelman had sued the respondent instead of, or as well as, the appellants, the respondent would not have been ordered to pay the costs. Unlike the situation described by Giles JA in James Hardie and Company v Wyong Shire Council, it would then, on the respondent's argument, not be just and equitable that the burden of Mr Kelman's costs should be shared between the appellants and the respondent as tortfeasors. In other words, had Mr Kelman sued the respondent, it would not have been ordered to pay Mr Kelman's costs; therefore, there is no reason why it should contribute towards the costs the appellants are required to pay Mr Kelman. In my opinion, these submissions have cogency and were I to have upheld the appeal, I would have upheld the respondent's arguments in this regard." 65These observations were approved in Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Ltd [2009] NSWCA 381. That was a case in which a worker (Miles) sued a concurrent tortfeasor (referred to as "Zurich") but did not sue his employer (Ace). After referring to the clauses of the relevant regulation precluding costs orders, Hodgson JA said (at [29] - [33]: "The effect of these clauses was considered in Estate of the late M T Mutton v Howard Haulage Pty Limited [2007] NSWCA 340 at [251]-[263], where Ipp JA (Spigelman CJ agreeing) expressed the view that it would not be just and equitable for the employer to be ordered to pay some part of the plaintiff's costs against the other tortfeasor if, in hypothetical proceedings against the employer, no costs would have been ordered against the employer. In my opinion, the chance that, in such hypothetical proceedings, costs would have been ordered against Zurich by reason of cl 89 (whether with or without assistance from cl 92) must be considered remote and speculative; and in my opinion, such a remote and speculative chance could not be a sound basis for ordering Zurich to pay some part of Miles' costs as a just and equitable contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act. I do not think this is altered by cl 93: even if the contribution proceedings were to be regarded as ancillary proceedings, the question being addressed is not what order for costs should be made in the contribution proceedings, but rather what contribution is to be recovered under s 5. I would follow the dicta in Mutton; and in accordance with those dicta, I think there should be no contribution recovered in respect of costs. Although Mutton was not referred to the primary judge, in my opinion error by the primary judge is shown, because the primary judge made the order that he did as an exercise of the costs discretion, not as part of the recovery of contribution. I would allow the appeal on this aspect only." 66Basten JA said (at [66]): "In Estate of the late M T Mutton t/as Mutton Bros v Howard Haulage Pty Ltd [2007] NSWCA 340, Ipp JA (Spigelman CJ agreeing) accepted that it would not be just and equitable for the employer to be ordered to pay some part of the plaintiff's costs against the other tortfeasor, if in hypothetical proceedings against the employer, no costs would have been ordered to be payable by it: at [261]-[263]." 67Basten JA continued (at [72]): "It should be added that neither party sought to put before this Court any material indicating the way in which the issue was raised and addressed below. Given the circumstances discussed above, and despite the prima facie principle established in James Hardie, it will probably be a rare case in which an independent tortfeasor would have any practical right to recover costs against an employer in circumstances where the worker had not sued his or her employer. Without further information, the Court should assume that the orders made by the trial judge accurately reflected the manner in which the issue was raised below, namely as a matter of costs, and not as a matter of contribution." 68The most recent case is Australian Winch and Haulage Co Pty Ltd v Collins [2013] NSWCA 327. It was there held that, having regard to regulation 106, it was not "just and equitable" for the purposes of s 5(2) that the employer should have to contributed to any part of the costs ordered against the third-party tortfeasor and in favour of the plaintiff. Sackville AJA (with whom Emmett and Leeming JJA agreed) said (at [175] - [176]): "Ordinarily, the right to contribution conferred by s 5 of the 1946 Act extends to the costs payable to the plaintiff in addition to damages: James Hardie and Company Pty Ltd v Wyong Shire Council [2000] NSWCA 107; 48 NSWLR 679, at [23], per Handley JA; at [36], [40], per Giles JA; at [46], per Heydon JA. However, where a provision such as reg 106 of the WC Regulation prevents a plaintiff from recovering costs against one of two defendants, the view has been expressed that s 5 does not permit the court to order that defendant to contribute to the costs payable by the other defendant to the plaintiff: Estate of the Late M T Mutton by its Executors trading as Mutton Bros v Howard Haulage Pty Ltd [2007] NSWCA 340, at [262]-[263], per Ipp JA (with whom Spigelman CJ and Hodgson JA relevantly agreed); Ace-Semi Trailer Sales Pty Ltd v Zurich Australia Insurance Ltd [2009] NSWCA 381, at [29]-[33], per Hodgson JA; at [66]-[67], per Basten JA. No good reason has been advanced why the view expressed in those cases should not be followed. In particular, no attempt has been made to persuade this Court that the decision in Ace-Semi v Zurich was plainly or clearly wrong in the sense identified in Gett v Tabet [2009] NSWCA 76; 254 ALR 504, at [294]-[295], per curiam. Accordingly, the primary Judge was in error in ordering Ports to pay 65 per cent of the costs AWH was required to pay to Mr Collins." 69The point emphasised by RFI is that, as a matter of statutory construction, there is no reason to think that the legislature intended that regulations made under the Workers Compensation Act and dealing with the situation of employer and employee should work injustice on persons in the position of RFI. The Law Reform (Miscellaneous Provisions) Act is concerned to ensure such contribution as is "just and equitable". The relevant regulations are intended to operate only between employer and employee and say nothing about the position as between the employer and a concurrent tortfeasor. 70The problem for RFI is that these very matters were aired before this Court in 2007, 2009 and 2013, yet the approach that commended itself to the Court in the Mutton case was adhered to in both Ace-Semi Trailer and Australian Winch and Haulage. No matter of factual or legal difference has been put forward as a reason for departing from that approach. Nor can it be said that the approach is plainly wrong in the sense discussed in Donnellan v Woodland [2012] NSWCA 455 (at [192]). 71Accordingly, the decision of the primary judge on this aspect should be upheld.

Disposition 72By the final orders made in chambers on 10 February 2014, the primary judge ordered verdict and judgment for Mr Grima against RFI in the sum of $3,040,000 ("Judgment Sum"), verdict and judgment for RFI against Allied for $165,000 and verdict and judgment for Allied against RFI in the sum of $2,022,803.65 ("Recovery Sum"). His Honour also ordered that RFI was entitled to deduct $165,000 from the Recovery Sum in satisfaction of the judgment in its favour against Allied. There were also orders relating to interest and costs. 73On the basis of my conclusion that the decision of the primary judge should stand but with a revised apportionment as between RFI and Allied, there will be a need to adjust the figures in the judge's orders to reflect the revised apportionment. Apart from such adjustment, his Honour's orders will be unchanged. The desirable course is that the parties agree the necessary calculations and bring in short minutes of orders. 74As to the costs in this Court, the fact that Mr Grima has had a measure of success in his appeal falling short of complete success indicates, to my mind, that the matter of costs of the appeal should be reserved for future consideration and that there should be directions for the filing of written submissions on those costs. As to the cross-appeal brought by RFI against Mr Grima and Allied, however, lack of success by RFI means that RFI should be ordered to pay the costs of the other parties. 75I propose orders as follows:

Appeal allowed in part.
Cross-appeal dismissed.
Direct that the parties within fourteen days bring in agreed short minutes of orders varying the orders made in the Common Law Division on 10 February 2014 in such manner as is necessary to reflect a 75 per cent / 25 per cent apportionment of responsibility between the first respondent and the second respondent consistently with the reasons of this Court
Costs of the appeal brought by notice of appeal filed on 13 February 2014 are reserved for future decision.
Direct that the parties promptly exchange written submissions (limited, in each case, to three pages) on the orders that should be made with respect to the costs of the appeal brought by notice of appeal filed on 13 February 2014 and that all such submissions be filed within fourteen days.
The cross-respondents' costs of the cross-appeal brought by notice of cross-appeal filed on 26 May 2014 be paid by the cross-appellant. 76EMMETT JA: The appellant, Mr Carmel Grima, was seriously injured in the course of unloading rolls of underlay from a pantechnicon owned and operated by Wits Holdings Pty Ltd, which traded as Wadley's Interstate Transport Services (Wadley). The pantechnicon had originally been loaded at the premises of the first respondent, RFI (Aust) Pty Ltd, which traded as Regen Foam (RFI). Mr Grima sued RFI in the Common Law Division. Although the amended statement of claim named Wadley as a second defendant, it did not ultimately participate in the proceedings before the primary judge. Cross-claims were filed by RFI, Wadley and Mr Grima's employer, Allied Overnight Express Pty Ltd (Allied) against each other. 77A judge of the Common Law Division found that RFI had breached the duty that it owed to a person in the position of Mr Grima and found that Mr Grima was entitled to a verdict against RFI. It was common ground that Mr Grima's damages against RFI assessed under the Civil Liability Act 2002 (NSW) would be $5,750,000. While Mr Grima did not sue Allied, it was common ground that, had he done so, his work injury damages under the Workers Compensation Act 1987 (NSW) would have been assessed at $330,000. 78The primary judge proceeded to assess the appropriate rate of contribution as between RFI and Allied under the Law Reform (Miscellaneous Provisions) Act 1946 (NSW). His Honour concluded that RFI and Allied were equally at fault. 79As a consequence, the primary judge made orders as follows: (1) Verdict and judgment for the plaintiff against the defendant in the sum of $3,040,000 ("Judgment Sum"). (2) The defendant to pay the plaintiff's costs as agreed or assessed. (3) Verdict and judgment for the defendant on the first cross-claim against the cross-defendant, Allied Overnight Express Pty Limited ("Allied"), in the sum of $165,000. (4) The defendant to bear its own costs of the first cross claim. (5) Verdict and judgment for Allied (second cross-claimant) on the second cross-claim against the defendant in the sum of $2,022,803.65 ("Recovery Sum"). (6) The defendant to pay Allied the sum of $312,443.43, being the interest accrued on the Recovery Sum. (7) The defendant to pay Allied its costs thrown away, on a party-party basis, as incurred on 20 and 21 August 2013, as agreed or assessed, and otherwise, Allied to bear its own costs of the second cross claim. (8) The defendant is entitled to deduct the sum of $165,000 from the Recovery Sum, in satisfaction of the judgment in its favour against Allied. (9) Payment of the Judgment Sum and the Recovery Sum are payable within 28 days from the date these Consent Orders are entered, after which time interest on any outstanding amounts yet to be paid will begin to accrue, and calculated pursuant to section 101 of the Civil Procedure Act 2005 (NSW). 80Mr Grima now appeals from those orders. He says that the primary judge erred in finding that Allied was in breach of its duty of care to him and in finding that any breach of duty was causative of his injury, and erred in his apportionment of liability between RFI and Allied. 81RFI has filed a cross-appeal in which it says that the primary judge erred in his apportionment of liability as between RFI and Allied and also erred in failing to find that Mr Grima was guilty of contributory negligence. RFI also complains about orders made by the primary judge in determining the question of costs as between RFI and Allied. 82The pantechnicon was loaded at RFI's Melbourne premises by employees of RFI in accordance with its agreement with Allied. The circumstances in which Mr Grima was injured, when two rolls of underlay fell from the pantechnicon after its doors were opened, are dealt with in detail by Barrett JA at [14]-[17] and [21]-[31]. 83The primary judge found that the failure to provide a restraining brace that would prevent the fall of the rolls of underlay from above the vertical rolls was a breach of RFI's duty to load the pantechnicon properly. His Honour found that it was clearly foreseeable that serious injury might follow from events of the type that happened in fact. His Honour accepted that Mr Grima was lulled into a false sense of security by the absence of a brace above the top of the vertical rolls. His Honour found that Allied's employees were entitled to expect that the load contained nothing that did not conform to their reasonable expectations, having regard to the loads that had previously arrived from RFI's premises. A senior employee of RFI conceded that, if the pantechnicon left his premises with only three braces supporting the load, it would represent a complete failure of proper practice. 84In relation to the cross-claims between RFI and Allied, the primary judge found that RFI was responsible for the loading of the truck and was uniquely placed to perform that task in a way that either eliminated or minimised the risk of injury to employees of Allied such as Mr Grima. His Honour also found that Allied was similarly placed to control and supervise the unloading of the pantechnicon, with particular attention to presenting the idiosyncrasies of each load. That included the formulation of a system and corresponding instructions that anticipated the possibility of such events as those that actually occurred. 85His Honour found that Allied's standard instruction to its employees included an instruction to take care when opening the doors to observe whether any freight could fall if the doors were opened. The possibility of a missing top brace, however, was not specifically accommodated by Allied's instructions. His Honour found that there did not appear to have been any instruction that required Allied's employees to make an accurate or exhaustive visual inspection of the top of the load, particularly in areas of the pantechnicon that could not be entirely or completely seen from the ground. His Honour found that that should have been taken into account in an adequate system, for the obvious reason that loose rolls placed horizontally on top of the vertical rolls were a regular feature of deliveries from RFI. Instead, his Honour found, the system of checking for loose rolls as it existed at the time was "casual at best". 86The primary judge did not consider that it was possible to apportion fault differently between RFI and Allied. It was inexpensively open to RFI to load the vertical rolls within the surrounding horizontal rolls further inside the truck and not against the rear doors. In that way, RFI was the author of the fundamental problem that confronted Mr Grima when the unloading commenced. However, Allied's failure to anticipate and provide for the possibility that some loose rolls may not be visible or secured consummated the events that commenced with RFI's failures. His Honour considered that the causal potency of the respective breaches of RFI and Allied could not be further distinguished in anything other than a most artificial way. His Honour concluded that it was just and reasonable in the circumstances that their responsibility for Mr Grima's injuries be apportioned in the ratio of 50 percent each. 87In relation to contributory negligence, the primary judge found that, even if Mr Grima had complied with Allied's instructions to the letter, it would not have altered the outcome. There were no rolls pressing against the door, which was what Allied's instructions warned against. His Honour considered that the only scope for contributory negligence was that Mr Grima should have looked more closely for loose horizontal rolls. He said that he did look, but could not see them and that he was in effect falsely reassured of their absence by the fact that there was no brace above the vertical rolls. 88In circumstances where, on the one hand, RFI was at fault for loading the pantechnicon without a brace above the vertical rolls and, on the other hand, Allied was at fault for not putting in place a system that permitted and required Mr Grima to view the top of the load where loose horizontal rolls might have been located or that had warned him not to proceed with the unloading until the top section had been directly observed and cleared, the primary judge found that nothing that Mr Grima otherwise did or failed to do could amount to negligence on his behalf that contributed to his injuries. When he was struck by the falling rolls, he was in the course of unhooking the lowest brace in compliance with the system that Allied had negligently put in place. As his Honour found, Mr Grima had no reason in the circumstances to expect or to anticipate other than that he was proceeding with the task in perfect safety. 89I have had the advantage of reading in draft form the proposed reasons of Barrett JA. I agree with his Honour's conclusions, for the reasons proposed by him, that the finding of negligence on the part of Allied should stand and that the finding that there was no contributory negligence on the part of Mr Grima should also stand. With some reservation, I agree with his Honour's conclusion that the apportionment of liability between RFI and Allied should be adjusted to 75 percent and 25 percent respectively. I agree with the orders proposed by Barrett 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: 14 October 2014

Workers Compensation Regulation 2010(NSW)

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