Lee v Wickham Freight Lines Pty Ltd

Parties involved

1. It is now 10 years since the accident occurred. Over that time, Mr Lee's legal advisors have clearly faced difficulties, both factual and legal, in determining who, if anyone, was responsible for the injury. The present proceedings, which were commenced in 2008, involved three defendants, namely Woolworths Ltd, Coca-Cola Amatil Ltd and the present respondent, Wickham.
2. Starting chronologically, the pallets containing boxes of soft drink were pre-packaged by Coca-Cola Amatil, before being delivered to Woolworths distribution centre in Warwick, Queensland. However, the claim against Coca-Cola Amatil was abandoned when the second amended statement of claim was filed on 16 December 2013.
3. The trailer was loaded by Woolworths at its distribution centre in Warwick. However, the claim against Woolworths was withdrawn prior to the trial in the Common Law Division. The remaining defendant at trial was Wickham.
4. In 1996, when Woolworths opened its Big W distribution centre in Warwick, a company known as CDM Logistics Pty Ltd obtained a contract for delivery of goods for Big W stores. In September 2004, that contract was taken over by Wickham. The agreement between Woolworths and Wickham permitted subcontracting by Wickham. Wickham in fact subcontracted part of the business to WBH. WBH employed Mr Lee as a driver, with a prime mover and trailer.
5. As his employer, WBH undoubtedly owed Mr Lee a duty of care with respect to the activities involved in his employment. Whether any claim was made against WBH is not known; however, the limits on the circumstances in which damages may be obtained from an employer and on the quantum of those damages, imposed by Pt 5 of the Workers Compensation Act 1987 (NSW), sometimes militate against such a claim, in circumstances where the employee may otherwise be in receipt of workers' compensation payments.
6. No claim being pursued against any party with respect to the manner in which the goods were loaded, the present case was restricted to the unloading of the tautliner at Yennora. The premises at Yennora were owned by CDM. Different parts of the premises were occupied by different transport companies, one of which was Wickham. Another was one of the CDM companies. Each had its own separate depot. Wickham paid CDM a sum described as "rental" for a part of the depot. It may be inferred that Wickham held a lease of that area, although no lease document was in evidence. The unloading took place in a part of the complex occupied and used by CDM. The unloading involved the transfer of the pallets from the WBH tautliner to rigid body vehicles operated by CDM (or CDM Logistics) for delivery to the Big W store at Campsie. No claim was made against CDM or CDM Logistics. (The evidence suggested that, contrary to a statement in the judgment below, CDM did not own and operate its own rigid body trucks, but subcontracted the further transportation.)
7. The area occupied by Wickham at Yennora was capable of accommodating one tautliner. On the morning of Mr Lee's accident, a Wickham tautliner was being unloaded at Yennora, though apparently not in the Wickham area of the depot. The load had suffered the same fate as that in Mr Lee's trailer. The driver of that truck, Mr Shannon Taylor, was engaged in manhandling boxes and reloading pallets, but unlike Mr Lee, he had assistance. That assistance was provided by Mr Michael Jones, who was Wickham's depot manager at Yennora.

Factual basis of duty of care

1. In order to establish a duty of care owed by Wickham to Mr Lee, it was necessary for Mr Lee to identify a set of factual circumstances, creating a relationship from which the law would imply a duty of care. The factors relied upon were not always identified with precision, but appear to have included the following: 1. Woolworths' contractor responsible for the transport of its goods from Warwick to Yennora was Wickham; 2. in subcontracting to WBH, Wickham remained responsible for the final delivery of the goods and, in particular, decided that the damaged pallets should be delivered to Campsie; 3. Wickham was responsible for subcontracting the further delivery from Yennora to Campsie, to be undertaken by CDM; 4. Wickham was responsible for coordinating the activities of its two subcontractors for the purpose of the transshipment at Yennora; 5. Wickham occupied part of the premises at Yennora where the transshipment took place; 6. Wickham's manager at Yennora was aware of the damage which had occurred in transit and the task to be undertaken by Mr Lee as the truck driver, in reloading the pallets, and 7. Mr Lee asked Mr Jones for assistance in restacking the pallets, a request which was refused.

Legal principles

1. The starting point for any legal analysis must be the basic proposition that the general law does not impose on a principal vicarious liability for the acts of its subcontractor. Nor did the appellant assert that Wickham was in any sense liable for the negligence of WBH. Further, generally, the law does not impose on the principal a duty of care with respect to the employees of its subcontractor. [2] There may, however, be particular circumstances in which the principal does owe a duty of care to an employee of a subcontractor; it is not, however, to be equated with the duty of care owed by the employer. [3] As further explained by the High Court in Stevens, in a passage adopted in Leighton Contractors Pty Ltd v Fox: [4] "The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. But once the activity has been organised and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur."
2. The trial judge adopted in his reasoning a passage from the reasoning of this Court in Bostik Australia Pty Ltd v Liddiard [5] to the following effect: "The fact that an employer may be obliged to take reasonable steps to provide a worker with a safe system of work, does not preclude the existence of a duty owed by others to take reasonable care in their dealings with the worker, whether they be other employees, independent contractors, the occupier of premises which the worker is required to attend in the course of employment or other road users encountered in the course of travel. Where work is undertaken on the premises of a third party, that party may have a duty, which commonly arises from: (a) the degree of control or direction exercised or which the third party is entitled to exercise over the worker; (b) the condition of plant or premises under the control of the third party, or (c) the activities of others on the site, generally for the purposes of the third party's undertaking or business."
3. In Sydney Water Corporation v Abramovic [6] the Court considered the liability of Sydney Water for the injury suffered by an employee of an independent contractor as a result of inhaling silica dust in the course of his work. A number of potentially relevant factors, none of which was necessarily determinative, was identified in that context: [7] "(a) the principal directs the manner of performance of the work; (b) the work requires the coordination of the activities of different contractors; (c) the principal has or ought to have knowledge of the risk and the employer does not and cannot reasonably be expected to have such knowledge; (d) the principal has the means to alleviate the risk and the employer cannot reasonably be expected to do so; (e) although the employer has or should have the relevant knowledge and can be expected reasonably to take steps to alleviate the risk, it does not, to the knowledge of the principal, do so."
4. These and other authorities were discussed by the Court in Wooby v Australian Postal Corporation [8] a case relied upon by the appellant, considered further below.

Application of general principles

1. Subject to the specific claim relating to the actual involvement of Mr Jones during the unloading at Yennora, none of the factors which may give rise to liability on the part of a principal existed in the present case. Thus, the activity of unloading did not take place on premises under the control of Wickham. That Wickham operated a depot from part of the complex at Yennora and may be treated as the occupier of that part of the premises does not assist the appellant. His truck was being unloaded in a part of the complex under the control of CDM, for the purpose of transshipping the pallets to trucks operated by or on behalf of CDM. The complex was large and Mr Lee's truck was parked some distance from the area occupied by Wickham and, indeed, 80 metres from the Wickham's vehicle being unloaded by Mr Taylor. The appellant's reliance on Wickham's asserted occupation of the premises where the appellant suffered his injury was based on a misconception.
2. The fact that the exercise of unloading involved a transshipment from the truck of one subcontractor to vehicles operated by another subcontractor did not involve any active coordination of the activities by Wickham. The concept of coordination in this context envisages a need to ensure that the activities of one subcontractor do not inadvertently cause risk for others. Obvious examples include the delivery, cutting and removal of timber at a mill, and the installation and activation of electricity supply on a building site. Similarly, there will be a need to supervise traffic and pedestrians on a work site. No such issue arose in the present case. The accident did not arise because of a lack of coordination of subcontractors.
3. Nor was this a case in which the principal exercised day-to-day control over the activities of the subcontractor or its employee. A typical example of such a circumstance is to be found in the pure labour hire cases where a worker is obtained by the principal from an independent contractor, and then performs work as part of the principal's workforce. Of course, there may be matters of degree involved; however, the circumstances were very close to those identified in Leighton Contractors, where the areas of responsibility are determined by the contract but the carrying out of the necessary activity lay within the control of the independent contractor. No duty of care was established in Leighton Contractors.
4. There were two factual elements relied upon by the appellant to establish control by Wickham. The first involved a direction by Mr Jones that the broken boxes be delivered to the Big W store so that the store manager could decide whether to accept or reject them. That submission relied upon a virtually contemporaneous statement made by Michael Jones (dated 17 March 2005) in the course of which he stated: "On Monday the 14th March Shannon Taylor was unloading Blacktown freight in CDM's area of the shed. Shannon came to get me to show me the state of the pallets in his front box. I observed two pallets leaning forward into the next two pallets. All of these pallets contained cans of coca-cola in packs of 24. The pallets had been stacked poorly i.e. not inter locked and gaps left between stacks, so individual packs of coke could move in the confines of the pallet, resulting in the bottom layers getting squashed and rupturing. Upon moving the pallets they completely fell over and had to be re-stacked. This happened to a total of three pallets out of the twelve on the front box. I rang Darryl Dwan [Wickham's manager in Warwick] and informed him of this problem. He said he had numerous calls from stores/drivers about these pallets on other trucks that morning. We concurred we would have to deliver the freight even though it was damaged so the store could reject it. A short while later, Troy, a forklift driver for CDM, approached me and stated that two pallets of coke had fallen over on a truck he was unloading containing Campsie freight. I asked Troy what truck it was on and he said he didn't know but it wasn't a Wickhams truck, it was a subbie. At that time I was busy loading trucks, and was unable to go down and sight the freight, but, because of my earlier experience with the same type of pallets (on Shannon's truck) and my phone call with Darryl, I told Troy they would have to re-stack the pallets and deliver them to Campsie. I continued what I was doing, but did notice, from a distance of about 80 metres, that the pallets were on the back of a WBH truck and Mark was on the back re-stacking them by himself. At no time on Monday did I have any contact with or speak to Mark from WBH."
5. It was clear that both the appellant and other witnesses who gave evidence at the trial accepted that where there had been dislodgement of boxes on a pallet during a journey, it was the responsibility of the driver to re-stack the pallets so that they could be unloaded. In his evidence at trial, Mr Lee asserted that he had been present when Mr Jones spoke to the forklift driver, Troy Zantidis. However, there were inconsistencies between his evidence and earlier evidentiary statements made by Mr Lee and also between his statements and the records as to the size of the load on the occasion in question. The judge rejected Mr Lee's evidence of his conversation with Mr Jones, including asking for assistance. [9] As the trial judge explained: "[72] Mr Lee was employed by Williams as a truck driver. He was in that capacity responsible for delivering his load to destinations nominated by his employer. In the circumstances of this case, that was a load marked for trans-shipment following delivery to the Combined Distribution depot at Yennora. It was not a load that he was required to deliver to Wickham, the corporation to which his employer was subcontracted. Even if it had been a load destined for delivery to the discrete section of the Yennora depot leased by Wickham, the position would in my view have been no different. … [74] Drivers like Mr Lee were required to facilitate the unloading process for pallets that were beyond the reach of a forklift. Pallet jacks were utilised for that purpose. Loads that had broken or come away from pallets could not be handled by forklift. Such loads had to be restacked on pallets before that could be done. The pallets for that procedure were supplied by Combined Distribution to drivers such as Mr Lee for restacking before they could be manhandled by pallet jack to the rear of the trailer by a driver. [75] No part of the restacking process was done by forklift drivers unless they volunteered when other work commitments permitted them to do so. In all other cases the task was performed by the driver without assistance. That work was part of a driver's responsibility. Mr Colvin and Mr Jones confirmed that fact. Mr Lee was injured in the course of performing that very task."
6. The appellant also submitted that Wickham, through Mr Jones, knew of the potentially dangerous situation which had arisen on the morning of 4 March 2005, whereas the employer did not. Further, had he thought about it, Mr Jones must have realised that WBH would not have known about the circumstances and would therefore not have been in a position to give directions.
7. To reason in this way is to misunderstand the circumstances in which such issues can arise. The actual state of knowledge of the parties will be relevant primarily in the circumstances of a pure labour hire contract. Where the principal does not control the work environment, the fact that it or its employee knows of a particular situation involving the employee of a subcontractor is likely to be of little weight in creating a duty of care. Furthermore, the question would only arise in relation to unexpected and unforeseen circumstances. The situation where a load has come adrift from a pallet did not fall into that category: such a risk was well understood and, as the evidence established, it was the responsibility of the driver to re-stack the pallets. This was not a situation of which it should be inferred that the subcontractor, being a trucking company, was ignorant.
8. Absence of knowledge on the part of the subcontractor is unlikely to be of any relevance in circumstances where, an unexpected situation having arisen, the employee is able to contact his or her employer and obtain instructions. There was no evidence that this could not have been done in the present case, if the appellant thought it necessary. Mr Jones contacted his superior to check that the damaged goods should be delivered to the stores. In terms of the principle identified in Leighton Contractors, [10] the injury occurred during the operational stage, for which the principal was not responsible.
9. The final aspect of the relationship relied on by the appellant arose from the agreement between Woolworths and Wickham. In particular, reference was made to part of clause 20, headed "Subcontracting", which included the following requirement: "20.2 Carrier's obligations Before engaging or entering into an agreement with a Subcontractor, in addition to obtaining BIG W's consent pursuant to clause 20.1 the Carrier must ensure: … (e) that the following Subcontractor guidelines are established and maintained: (i) specific occupational health and safety policy and related programmes; … (iv) a hazard identification and workplace assessment process …."
10. The trial judge dealt with this submission in the following terms: "[96] The precise way in which Mr Lee asserts that these provisions support his case is not entirely clear. The terms of the agreement are not pleaded or referred to in the second amended statement of claim. The provisions do not in terms specify that Wickham should have done any of the things, or conformed to any of the particulars of negligence, pleaded against Wickham in the second amended statement of claim. Perhaps more fundamentally, Mr Lee has not by evidence established any failure by Wickham to comply with the terms of clause 20.2(e) of the Transport Agreement. [97] There is also a difficulty for Mr Lee in terms of causation. Mr Lee has not established either that compliance by Wickham with the terms of the Transport Agreement would have resulted in Wickham adopting a regime or system for unloading trucks at the Yennora depot that would have extended to or included any of the matters particularised as breaches of the duty for which Mr Lee contends, or that it would have prevented the injuries that Mr Lee sustained if it had."
11. The submissions on appeal did not demonstrate any error in this reasoning. This was not a situation where Woolworths owed a duty of care which it was seeking to fulfil by imposing an obligation on its contractor. As between Woolworths and Wickham, there may have been a contractual obligation on Wickham to establish "guidelines" for its subcontractor, but it does not follow that Woolworths had created, or Wickham had accepted, a legal responsibility which Wickham would not otherwise have had with respect to employees of its subcontractor. The agreement did not provide a basis for imposing a duty of care on Wickham with respect to Mr Lee's employment with WBH.

Other cases

1. The appellant either sought support from or sought to distinguish other cases involving claims against principals by subcontractors or their employees. Such decisions do not constitute precedents which this Court must follow, but they may illustrate the true scope of a legal principle by reference to particular applications.
2. If there were no directions given by Wickham or its manager at Yennora, the situation faced by the appellant was little different from that which he might have faced had the circumstances arisen upon unloading at a Woolworths' outlet by direct delivery, rather than as a result of a transshipment. That situation invited comparison with the case of Thompson v Woolworths (Q'land) Pty Ltd. [11] In that case, a contractor delivering bread to a Woolworths' supermarket injured her back while moving an industrial waste bin which obstructed her access to the delivery bay. Woolworths was held liable in circumstances were it: 1. established a delivery system including the times and place of delivery; [12] 2. controlled the placement and removal of the waste bins; 3. knew that there was a risk in the claimant moving the bins, and 4. knew that the claimant on occasion did move the bins.
3. The critical distinction between that case, where a duty of care to the claimant was upheld, and the present case is that the positioning of the waste bins was the responsibility of Woolworths, not the claimant. The re-stacking on the back of the WBH truck was the responsibility of its driver and not of Woolworths (or Wickham).
4. In Wooby [13] the claimant had subcontracted to undertake a mail delivery run for Australia Post. She suffered an injury whilst lifting a parcel on Australia Post premises in order to place it in her van. The critical factor supporting a duty of care owed by Australia Post to its subcontractor was that the collection of parcels took place pursuant to a system devised by Australia Post, including the provision of large cages with partly collapsible sides from which the subcontractor was required to lift the parcels. Australia Post knew of the precise risk which materialised, namely that a contractor could suffer an injury through lifting a heavy parcel unassisted. [14] Australia Post placed a limit on the weight of parcels contractors were allowed to handle (30kg), requiring that heavier parcels be dealt with by Australia Post staff. Australia Post was held to owe a duty of care to its subcontractor.
5. Again, the case is clearly distinguishable from the present. The activity which gave rise to the appellant's injury occurred in the trailer of the truck provided by the appellant's employer. The system of work was not devised by Wickham, nor did it take place on Wickham's premises. Wickham exercised no control over how the work was undertaken.
6. The appellant did not identify any case involving facts directly comparable with the present in which a duty of care had been upheld.

Conclusion

1. No error was demonstrated in the judgment of the trial judge rejecting the claim that Wickham owed the appellant a duty of care. Accordingly, the appeal must be dismissed. The appellant must pay the respondent's costs in this Court.
2. SIMPSON JA: I agree with Basten JA.
3. SACKVILLE AJA: I agree with Basten JA.

Endnotes

1. Lee v Woolworths Ltd [2015] NSWSC 1789.
2. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 47-48; Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1; [2009] HCA 35 at [20].
3. Fox v Leighton Contractors Pty Ltd [2008] NSWCA 23 at [51]; Leighton Contractors at [21].
4. Leighton Contractors at [20].
5. [2009] NSWCA 167 at [139]; Lee at [81].
6. [2007] NSWCA 248.
7. Abramovic at [98].
8. [2013] NSWCA 183; 233 IR 471 at [16]-[30].
9. Judgment at [70] and [76].
10. At [14] above.
11. (2005) 221 CLR 234; [2005] HCA 19.
12. Thompson at [26].
13. See fn 6 above.
14. Wooby at [33]. 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: 15 August 2016