Gulic v Boral Transport Ltd

Solicitors: NSW Compensation Lawyers (Appellant) Makinson D'Apice Lawyers (First Respondent/Cross-Respondent) Holman Webb Lawyers (Second Respondent/Cross-Appellant) File Number(s): CA 2015/145228 Decision under appeal Court or tribunal: District Court Jurisdiction: Civil Date of Decision: 11 May 2015 Before: Maiden DCJ File Number(s): DC 2011/307933

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

1. MACFARLAN JA: In February 2010 the appellant, Mr Marinko Gulic, was severely injured in the course of performing cartage work for the first respondent, Boral Transport Ltd (Boral). At that time, he was employed as the driver of a prime mover owned by GMG Transport Pty Ltd (GMG), a company of which he was the sole director and shareholder. As GMG is in liquidation, its workers compensation insurer, the second respondent, stands in its shoes for the purposes of these proceedings.
2. On 4 April 2008 GMG entered into a Cartage Agreement with Boral to perform haulage services as part of Boral's business of supplying bricks and pavers to building sites throughout New South Wales. Under the agreement, Boral was to supply a "serviceable body" and a trailer for installation on GMG's prime mover. The agreement provided for Boral to retain full ownership of the body and trailer and expressly precluded GMG from altering or otherwise modifying their form. Three gates, approximately 3 metres in length and 1.3 metres high, aligned either side of the body's tray. These were separated by removable posts.
3. The gates were hinged horizontally at the level of the tray and could thereby be released down from their upright position to afford access to the tray. The force required to lift one of the gates into an upright position appears to have been in the order of 20-23 kilograms. It was not suggested that this weight exceeded recommended guidelines. To lock the gates in an upright position, it was necessary to align them with the posts on the tray so that pins on the posts would protrude through holes in the gates and could be turned to lock the gates in position.
4. On 4 February 2010 Mr Gulic experienced severe pain in his left shoulder when he lost control of a gate he was attempting to close and lock. The gate fell on him, striking him on his helmeted head and shoulder. An arthroscopy of his left shoulder confirmed he had suffered a partial tear to the upper subscapularis tendon.
5. Mr Gulic subsequently commenced proceedings in the District Court claiming damages for breach by Boral of a duty of care alleged to be owed to him. The negligence alleged related to the design, manufacture and repair of the gates and their locking systems. By a cross-claim, Boral sought damages from GMG for breach of the Cartage Agreement, indemnity under an express provision of the agreement, and indemnity or alternatively contribution pursuant to the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) on the basis that GMG was a joint tortfeasor by reason of its breach of the duty of care owed by it to its employee, Mr Gulic. GMG in turn sought, by cross-claim, indemnity under the Workers Compensation Act 1987 (NSW), s 151Z(1)(b) in respect of workers compensation payments that it had made to Mr Gulic.
6. Following a six day hearing before Maiden DCJ, his Honour, by judgment of 11 May 2015, rejected Mr Gulic's claim and directed entry of judgment for Boral, with the cross-claims to be dismissed. His Honour found against Mr Gulic on the issue of causation, that is, whether his injuries were caused by any negligence in relation to the relevant gate or post.

Mr Gulic's evidence

1. Mr Gulic said that in 2009 Boral had changed the gates and locking system on his vehicle (and on others in Boral's fleet). In describing the new locking system, he said that "you had to push [the latch] in … there's a precise hole you have to push it through … just to close the latch". To close and secure the gate it was necessary for him to use both hands to lift the gate and, once it was upright, hold it with one hand, using the other to close the latch.
2. He described a difficulty with the new system as "bringing [the gate] close to the post and … bringing [the] latch in. Just the sheer weight of the gates were [sic] a problem … the problem is bringing [the gate] up close enough to be able to close the latch normally or comfortably". He said that he told Ms Rose Didivich, Boral's transport fleet manager, about this problem in July 2009.
3. As a result, Ms Didivich arranged for Mr Gulic's truck to be left with Prancer Enterprises Pty Ltd (Prancer) for repairs on 7 August 2009. Prancer was the entity retained by Barker Trailers Pty Ltd (Barker), the designer and installer of the new gates, to undertake repairs under the 12-month warranty provided by Barker in respect of the new system. Barker was described in the evidence as "a large organisation with a strong reputation". Mr Gulic's unchallenged evidence was that Ms Didivich instructed him that he was precluded from conducting any repair work on his truck because, if he did, the warranty might be "voided". This had the effect of relieving GMG of its repair and maintenance obligations under the Cartage Agreement.
4. Within a month of having the truck returned to him, Mr Gulic told Ms Didivich that it was still "hard to bring [the gate] to the post and close the latch" because the "alignment wasn't right". In answer, she said that the problem was "widespread" in the sense that other trucks that had undergone the same structural reconfiguration by Barker were "experiencing similar problems". While the appellant was advised by Ms Didivich that his truck would again be booked in for repairs with Prancer, he was also told that there would be a delay of some months before repairs could be attended to in light of the backlog of trucks also requiring maintenance.
5. The appellant's truck was left with Prancer's workshop from 19 to 21 January 2010. Upon the truck's return to Mr Gulic, the problems were, in his view, "probably worse than before". When asked to specify how, he explained: "In the way that they - the posts were awkward as they were and - and - so what they - what they did they - because their posts were pipes, so what they did, they cut in the bottom and inserted steel rods in the posts and when they welded the posts back on, it's actually bent the posts even more, so - so when they came back, the posts were even more out of - of [alignment] than before and it was even harder to close than - than before going to the workshop."

Mr Duncan Marshall

1. Mr Marshall was a truck driver doing similar work for Boral to that done by Mr Gulic. He had occasion to drive Mr Gulic's truck in about April or May 2009.
2. In respect of that truck, he said: "[w]hen you're on a site or the ground is uneven, it was hard to get the gates shut because of the aperture that the pin was going through - sometimes it wouldn't line up so you'd have to use a degree of force to get them closed."
3. He later said that when he experienced such difficulty he would give the gate "quite a severe thump and it would generally go in". He said that the problem was not evident when the truck was in a yard or on a reasonably flat surface.

Mr Mervyn Rowlands

1. Mr Rowlands, Boral's fleet engineering manager at the relevant time, managed the project to replace the gates on Boral's fleet of trucks, of which Mr Gulic's truck was one. He had many communications with Barker in relation to the design and supply of the gates. He described the process of design of the gates as a collaborative process between himself and Barker.

Documentary evidence

1. The following provisions of the Cartage Agreement are of potential relevance.
2. GMG agreed to perform the cartage work "in accordance with any written direction, procedure or specifications provided by Boral" (Clause 2.1). If Boral so directed, GMG was to cease using its prime mover "pending the carrying out of any repairs, maintenance, inspection or testing" (Clause 4.5). Boral had similar powers to direct GMG to cease using the trailer or "Body" to be supplied by Boral (Clauses 6.6 and 8.5).
3. Boral was obliged to supply "a serviceable body" for GMG's prime mover (Clause 8.1) but GMG was obliged to "mechanically maintain and repair the body at [its] own cost in accordance with the manufacturer's maintenance schedule for that body" (Clause 8.4). (Although compare the evidence referred to in [12] above).
4. The only documentary evidence that assumed importance in the argument on appeal was a series of minutes of meetings of Boral's "C & C Logistics NSW Transport OH&S Committee" spanning the period February 2009 to April 2010. Whilst not a member of the Committee, Ms Didivich attended most if not all of those meetings.
5. The minutes of 2 February 2009 make reference to an item from previous minutes dated 2 December 2009 as follows: "Use of High trailers - ergonomic issues with the mass and manoeuvrability of the high gates is being experienced by staff."
6. It characterised the risk as "medium" and stated that a risk assessment was "to be organised". Similar references appeared in minutes of 2009 meetings and those of 8 February and 8 March 2010. In most of the minutes there was also a reference to the risk assessment being "in progress" with "Jim and Barry to carry out Audit".

The primary judgment

1. As to duty of care, his Honour said: "The duty of care, effectively, that was owed from the defendant to the plaintiff was effectively, in my mind, one of employer/employee relationship because he was under their direction effectively at all times in terms of how the work was carried out. However, this has to be tempered with the requirements of the contract, which placed upon GMG the responsibility for the repair and maintenance of prime mover and trailer."
2. As noted earlier, his Honour did not make any findings as to breach.
3. His Honour's findings on causation were as follows: "There is no medical evidence which identifies the cause of the pain that the Plaintiff stated he felt in his left shoulder immediately before he dropped/ let go of the gate in its raised position. In the vertical position the plaintiff's left arm/ shoulder would be bearing little or no weight and the plaintiff's right arm and shoulder at that time were being used to secure the gate. The factual question to be determined is what caused the plaintiff to lose control of the gate and/or what caused the pain [to] the left shoulder before he let go of the gate. The dropping of the gate clearly caused injury to his neck, thoracic spine and shoulder. In this regard to prove causal connection as to what caused the gate to fall the Court cannot be satisfied on the balance of probabilities that any difficulty in the closing of the gate caused the pain to the plaintiff's left shoulder which is the precipitating factor for the gate falling to the plaintiff. There were anticipated problems with the gate and at the time of the injury as set out above any fixing of the mechanism to close the gate was already in hand with the first defendant's transport manager. The Court finds that it was whilst the plaintiff had his left arm extended above his head with the gate in a vertical position, that he had let the gate go with that left hand, the right hand not taking any of the weight, causing the gate to hit his head and causing the pain that he has felt."

Grounds of appeal

1. In summary, the grounds pressed on appeal by Mr Barry QC, who appeared for Mr Gulic, were as follows:

• Ground 1-2: the primary judge erred in finding that there was no medical evidence that identified the cause of the pain the appellant felt in his left shoulder immediately before he lost control of the gate.
• Ground 3-6: the primary judge erred in finding that at the time of the incident the appellant's left arm or shoulder would have been "bearing little or no weight" because the gate was vertically upright. Relevantly, this finding provided the basis for his Honour's ultimate conclusion that causation was not established.

Duty of care

1. On appeal, Boral conceded that it owed to Mr Gulic "a duty to take reasonable care to provide gates that would not subject experienced, adult users, taking reasonable care for their own safety, to an unreasonable risk of injury when using the gates". Its position at first instance was substantially to the same effect. On both occasions it cited this Court's decision in Coregas Pty Ltd v Penfold Australia Pty Ltd [2012] NSWCA 350 at [81].
2. Mr Gulic's unchallenged evidence was that his accident was caused by the bent character of the post to which the relevant gate was to be locked (see [14], [16] and [18] above). Boral's contractual obligation was to supply both the gates and the posts and, by reason of its dealings with Mr Gulic (and therefore GMG), it had assumed an obligation to maintain them, notwithstanding the terms of the Cartage Agreement (see [12] above). There was therefore relevantly no difference between Boral's obligations concerning the gates and the posts and its concession as to the duty it owed should be understood as extending to both.
3. In contrast to Boral's position, the primary judge found that Mr Gulic and Boral were effectively in "an employer/employee relationship because [Mr Gulic] was under [Boral's] direction effectively at all times in terms of how the work was carried out". Whilst Mr Gulic, at least initially, sought to support this finding on appeal, he conceded that Boral's duty was delegable, a characteristic not forming part of an employer's duty to its employee, this being non-delegable (Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61 at 688), and that the primary judge's view was thus erroneous. Nevertheless, his Honour's emphasis on Boral's power to direct was appropriate. Its existence would no doubt have been central to Boral's decision to concede that it owed a duty of care.
4. Whilst Mr Gulic contended for a broader "system of work" duty of care (see Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; [1986] HCA 1 per Mason J (at 31)), that conceded by Boral was appropriately tailored to the circumstances of this case and was not any less onerous or otherwise relevantly different. In these instances, my view is that Boral's formulation should be accepted.

Breach of duty

1. The question of breach of duty is governed by the terms of s 5B of the Civil Liability Act 2002 (NSW) (CLA). This section is primarily concerned with the question of whether a person who owes a duty to another would, acting reasonably, have taken precautions against a foreseeable risk of harm to the other which has come to pass. In considering the application of the section it is thus important at the outset to identify the relevant risk of harm: see Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA 42 at [18], [59]; Perisher Blue Pty Ltd v Nair-Smith (2015) 90 NSWLR 1; [2015] NSWCA 90 at [92]. It is relevant in this context that neither the general law nor s 5B require "the plaintiff to show that the precise manner in which his injuries were sustained was reasonably foreseeable": Shaw v Thomas [2010] NSWCA 169 citing Chapman v Hearse (1961) 106 CLR 112; [1961] HCA 46 at 120-1 and other authorities.
2. In the present case it could be argued that the relevant risk was of a driver losing control of a gate whilst attempting to open or close it and being injured when the gate fell on him. This approach would render issues such as the weight and manoeuvrability of the gates relevant.
3. However, in my view, the risk should be defined more narrowly. The immediate cause of Mr Gulic losing control of the subject gate was, according to his unchallenged evidence, his effort in slamming the gate to bring it close to the upright post and thus into a position to enable the locking mechanism to be operated (see [18] above). The need to do this resulted, again on his unchallenged evidence, from the bent character of the post (see [14], [16] and [18] above). This action was quite distinct from the action of raising the gate to its upright position, this having already occurred. Issues of weight and manoeuvrability would have assumed relevance if the injury had occurred in the course of Mr Gulic lifting the gate.
4. In these circumstances, the relevant risk of harm was that of injury to a driver arising in the course of attempting to close and lock a gate with a distorted post.
5. The prospect of a post becoming distorted in the course of cartage operations may not have been foreseeable, at least not as a significant risk, because the posts were removable and, according to Mr Gulic's evidence, were in fact removed before loading and unloading operations occurred (see [19] above).

Causation

1. The primary judge's findings on causation (see [32] above) proceeded upon the basis that once the gate was in a vertical position, the plaintiff's left arm and shoulder would have been bearing little or no weight. This accorded with the evidence of Mr Grant Johnston, a consulting engineer called by Boral to give expert evidence, that when the gate was upright, no lifting force was required because the gate's weight would be taken by the hinges. His Honour then appeared to conclude that there was therefore no connection between the sudden pain in Mr Gulic's left shoulder and the steps he took to close and lock the gate, with the result that Mr Gulic had not proved that his injuries were caused by any relevant breach of duty.
2. This approach did not take account of Mr Gulic's evidence of the way in which his injury occurred. He did not say that the injury resulted from him lifting the hinged gate up. Rather, he said that once the gate was upright (which is a position he achieved without apparent difficulty) it was necessary "to kind of slam it" to achieve alignment between gate and the post to which the locking pin was affixed. He said that "as I pushed it in I felt a sharp pain in my shoulder". This led to his left arm collapsing and the gate falling because his right arm was reaching for the latch and not holding the gate up.
3. This evidence was not challenged. Moreover, it accorded with the unchallenged evidence of Mr Marshall that it was necessary to use "a degree of force" to line up the pin with the aperture on the gate and that when he used Mr Gulic's truck he "would give it a severe thump and it would usually go in" (see [21]-[22] above).
4. On Mr Gulic's description of what occurred, a clear inference arose that his final exertion in slamming or forcefully pushing the gate to overcome the lack of alignment of the aperture with the pin caused his shoulder injury. The sequence of events involving the slamming of the gate and the sudden and immediate suffering of an injury is consistent with its causation by that action: see Adelaide Stevedoring Company Ltd v Forst (1940) 64 CLR 538; [1940] HCA 45 at 563-4 and 570; Military Rehabilitation and Compensation Commission v May (2016) 90 ALJR 626; [2016] HCA 19 at [62].
5. The medical evidence indicated that Mr Gulic's injury was consistent with it being caused in this way. For example, an MRI scan and a clinical examination satisfied Dr Clarence Foo that Mr Gulic's injuries resulted from the accident of which he was told. Likewise, the Medical Assessment Certificate of Dr John Harrison accepted that Mr Gulic's injuries resulted from him exerting "some abnormal force".

Damages and cross-claims

1. It is not appropriate to address the question of damages as it is an issue that does not arise in light of Mr Gulic's failure on liability and this Court does not have the benefit of any findings of the primary judge on the issue. Moreover, questions of credit would likely be involved in a damages assessment. This Court cannot determine such questions as it did not see and hear the witnesses give their evidence.
2. For similar reasons (other than that concerning credit findings), it is inappropriate to deal with the cross-claims. The primary judge was correct to dismiss them in light of the failure of Mr Gulic's claim.
3. The second respondent filed a notice of cross-appeal against Boral on 24 August 2015. As it was said to arise only if Mr Gulic's claim against Boral was successful, this should be dismissed. In the course of the hearing in this Court, Boral obtained leave to file a notice of cross appeal against the second respondent. As it was said to be defensive only and Mr Gulic's claim against Boral has failed, this should also be dismissed. No significant hearing time was occupied in relation to either cross-appeal, with the result that no order for the costs of the cross-appeals should be made.

Orders

1. For the reasons given above, the appeal should be dismissed with costs. Each of the cross-appeals should be dismissed with no order as to costs.
2. GLEESON JA: I agree with Macfarlan JA.
3. GARLING J: As the reasons for judgment of Macfarlan JA show, the particular facts which arise in this appeal are unusual. Thus the question of the existence and content of the duty of care, and the issues surrounding the alleged breaches of duty are quite idiosyncratic. However, what is plain is that there are dangers in assuming that a non-delegable duty of care owed by an employer to an employee can, or ought to, be readily imposed on parties to a contractual arrangement which is not an employer/employee relationship.
4. The High Court of Australia in Leichhardt Municipal Council v Montgomery (2007) 230 CLR 22; [2007] HCA 6 declined to extend the existing categories of non-delegable duty to road authorities. As Kirby J said, in a somewhat analogous circumstance to the present, at [98]: "The use of non-employee contractors has greatly expanded in Australia in recent times, due to … the resulting 'out-sourcing' of functions to independent contractors that operate for their own profit. The general rule is that the principal is not liable for the wrongs done by an independent contractor or its employees. It is not easy to see why an exception should be specifically carved out allowing the person injured to recover … in addition to the normal rights that the person enjoys against the independent contractor posited as the effective cause of the wrong. In particular, it is difficult to see why the general policy of the law that the economic cost of the wrong should be borne by the legal entity immediately responsible for it should not be enforced in this case given the strong reasons of economic principle and social policy that lie behind that rule."
5. I agree with the judgment and reasons of Macfarlan JA. I agree with the orders which he proposes.

Amendments 10 October 2016 - COURTS AND JUDGES added to catchwords field. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 October 2016