Lovric & Anor v WorkCover Authority of New South Wales & Ors

Civil Liability Act 2002 Civil Procedure Act 2005 Dangerous Goods Act 1995 Dangerous Goods (General) Regulation 1999 Law Reform (Miscellaneous Provisions) Act 1946 LEGISLATION CITED : Occupational Health and Safety Act 1983 Occupational Health and Safey Act 2000 Occupational Health and Safety Regulation 2001 Scaffolding and Lifts Act 1912 Uniform Civil Procedure Rules 2005 Workplace Injury Management and Workers Compensation Act 1998

Amaca Pty Ltd v State of New South Wales (2004) Aust Torts Reports 81-749 Bayne v Baillieu (1908) 6 CLR 382 Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937 Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Elguzouli-daf v Commissioner of Police of the Metropolis [1995] QB 335 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Gordon v James Hardie and Co Pty Ltd (1987) Aust Torts Reports 80-137 Graham Barclay Oysters Pty Limited v Ryan (2002) 211 CLR 540 Hill v Chief Constable of West Yorkshire [1989] AC 53 Integral Home Loans Pty Ltd v Interstar Wholesale Finance [2006] NSWSC 1464 Kent v Griffiths [2000] 2 WLR 1158 CASES CITED : Lonrho plc v Fayed (No 2) [1991] 4 All ER 961 O'Connor v SP Brady Limited (1937) 56 CLR 464 Optus Networks Pty Ltd v Leighton Contractors Pty Ltd [2002] NSWSC 327 Pyrenees Shire Council v Day (1998) 192 CLR 330 Randwick City Council v T and H Fatouros Pty Ltd [2007] NSWCA 177 Republic of Peru v Peruvian Guano Co Ltd (1887) 36 Ch D 489 Rice v Secretary of State for Trade and Industry [2006] EWHC 1257 Sovar v Henry Lane Pty Limited (1967) 116 CLR 397 State of New South Wales v Ball [2007] NSWCA 71 State of New South Wales v Klein [2006] NSWCA 295 Sullivan v Moody (2001) 207 CLR 562 Tilba Tilba Stud (WA) as Trustee for the Tilba Tilba Stud Trust v The Executive Officer of Agriculture Western Australia (2004) Aust Torts Reports 81-736 Voli v Inglewood Shire Council (1963) 110 CLR 74

Dusan Lovric and Todora Lovric (plaintiffs) WorkCover Authority of New South Wales (first defendant) Foti's International Fireworks (Displays) Pty Ltd (second defendant) Foti Pyrotechnics Corporation Pty Ltd (third defendant) PARTIES : Foti's International Pyrotechnics Pty Ltd (fourth defendant) Foti International Fireworks Pty Ltd (fifth defendant) Salvatore Foti (sixth defendant) Camelia Maria Foti (seventh defendant) International Fireworks Pty Ltd (sixth defendant in 20216 of 2006)

FILE NUMBER(S) : SC 20215 of 2006; 20216 of 2006

D Conti SC with R L Ingram (plaintiffs) COUNSEL : J E Maconachie QC with G J Sarginson (first defendant) A R Davis (sixth defendant in 20216 of 2006)

McClellands (plaintiffs) SOLICITORS : I V Knight, Crown Solicitor (first defendant) Wotton & Kearney (second to seventh defendants in 20215 of 2006) Curwoods Lawyers (sixth defendant in 20216 of 2006)

• 28 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20215 of 2006 DUSAN LOVRIC v WORKCOVER AUTHORITY OF NEW SOUTH WALES & ORS

20216 of 2006 TODORA LOVRIC v WORKCOVER AUTHORITY OF NEW SOUTH WALES & ORS

JUDGMENT 1 HARRISON J: Dusan Lovric ("Mr Lovric") and Todora Lovric ("Mrs Lovric") are married. They have each sued the defendants. Their respective causes of action arise out of the same circumstances, in which Mr Lovric was severely injured in an explosion. Mr Lovric claims damages for those injuries. Mrs Lovric claims damages for psychological injury, which she sustained when she became aware of the extent of her husband's injuries. 2 The first defendant has moved the court by notices of motion in each case seeking to dismiss or to strike out the statements of claim against it on the ground that they disclose no reasonable cause of action or alternatively to strike out specified paragraphs of the statements of claim upon the ground that the paragraphs tend to cause prejudice, embarrassment or delay, or are otherwise an abuse of the process of the court. Background 3 On 10 June 2003 the plaintiff was critically injured in an explosion that occurred at a fireworks factory at Leppington ("the premises"). For many years up to and including that date the second defendant operated a business that manufactured, assembled and stored fireworks at the premises. On the day that he was injured the plaintiff was engaged in the manufacture of fireworks at the premises and was operating a machine known as a Manesty Betapress tablet press that was used for that purpose. 4 Some years earlier, the second defendant had employed Teuira David Maireriki who had worked in the business at the premises. On 3 August 2000 Mr Maireriki was assembling fireworks at the premises when a series of explosions occurred resulting in a fire and his death. 5 Following Mr Mareriki's death the first defendant, through its officers, attended the premises and subsequently carried out an investigation into the circumstances of his death. In due course the first defendant prosecuted the second defendant pursuant to s 15(1) of the Occupational Health and Safety Act 1983 ("the Act"). In that prosecution the first defendant charged that the second defendant had failed to: -

5.1 ensure that a safe system of work was provided to employees whilst preparing fireworks at the premises;

5.2 provide and maintain a safe working environment to its employees without risks to the health of its employees by failing to provide sufficient personal protective clothing for them;

5.3 take such steps as were necessary to make available adequate information about the use for which plant was designed and about any conditions necessary to ensure that it was safe to use. 6 On 6 and 28 March 2001 the first defendant issued Improvement Notices to the second defendant pursuant to s 91 of the Occupational Health and Safety Act 2000. The notices contained the following terms: " Reasons for Issue

Persons may not be exposed to risk(s) to their health and safety from fire and/or explosion during the preparation of fireworks, such as ground display fireworks and aerial shells as a result of an inadvertent ignition of aerial shells during such preparation or operation at the employer's premises on 3 August 2000." " Measures to be Taken

You shall ensure the health, safety and welfare of persons in the workplace by identifying, assessing and controlling the risks associated with the preparation of fireworks for use in displays. Your attention is drawn to that but not limited to:

(i) limiting the total number of items in assembly area;

(ii) limiting the number of exposed items in assembly areas;

(iii) eliminating the risk of ignition of firework devices from electrical, frictional and impact sources;

(iv) limiting the use of electrical igniters on display fireworks;

(v) ensuring that adequate means of escape exist for persons working on any fireworks assembly area; and

(vi) providing appropriate personal protective equipment to such persons or complying by any other means." 7 On 24 May 2001 the first defendant issued a prohibition notice to the second defendant pursuant to s 93 of the Occupational Health and Safety Act 2000 requiring that activity relating to the preparation of fireworks display items on the premises cease immediately and not be resumed until the matters giving rise to the risk had been remedied. The prohibition notice repeated the measures to be taken listed above. 8 The plaintiffs allege that notwithstanding the issue of the Improvement and Prohibition Notices, the second defendant, in effect, continued to manufacture fireworks at the premises whilst simultaneously and flagrantly disregarding them. The plaintiffs allege that the second defendant failed to implement all the measures that the first defendant required it to take and that this position continued unabated up until the date when the plaintiffs were injured. 9 The plaintiffs allege against the first defendant that it owed them both a duty of care and a statutory duty to ensure that the second defendant complied with the notices that it had issued and that their injuries were caused by breaches of those duties. 10 The first defendant's notices of motion were filed on 5 June 2007 and seek orders in relation to the plaintiffs' statements of claim filed on 8 June 2006. By their own notices of motion filed on 12 June 2007, however, the plaintiffs in each case sought leave to amend their statements of claim and to rely upon amended statements of claim, copies of which are annexed to affidavits of Kathryn Williams sworn 8 June 2007. None of the proposed amendments to the plaintiffs' statements of claim accommodates the complaints made by the first defendant in its notices of motion. In those circumstances, it is convenient to deal with the first defendant's notices of motion upon the basis that they apply to the proposed amended statements of claim and to postpone consideration of the plaintiffs' applications to amend until after that has occurred. 11 The issues raised in each case before me are similar. As a matter of convenience, therefore, I shall hereafter refer only to the case of Mr Lovric. 12 Paragraph 34 of the proposed amended statement of claim alleged that the first defendant owed the following statutory duties to the plaintiff:

"(a) To carry out all inspections, searches and enquiries at the premises as well [as] tests and examinations of the plant and equipment thereat that were reasonably necessary to ensure that the second defendant complied with the workers compensation legislation and the occupation [sic] health and safety legislation including the dangerous goods legislation and regulations in this State;

(b) To ensure that appropriate notices and directions were given to the second defendant and other occupiers of the premises to eliminate or minimise the risks to the health, safety and welfare of the plaintiff engaged in the business conducted at the premises;

(c) To carry out inspections, searches and enquiries at the premises as well as examinations and tests of plant and equipment as were reasonably necessary to ascertain that the measures directed to be carried out by the second defendant in each of the said notices had been properly complied with;

(d) To take all practicable precautions and steps as were reasonably necessary and available so as to promote the prevention of injuries to the plaintiff and the ensure that the second defendant operated a safe workplace;

(e) To issue notices and/or direct the second defendant to initiate a proper assessment of risks to persons at the premises engaged in the business of the second defendant and to identify effective strategies of occupational injury;

(f) To take reasonable and necessary steps to ensure that the risks to the health and safety of the plaintiff in the manufacture and assembly of fireworks at the workplace were identified, assessed, and directions given to the second defendant so as to eliminate, control and minimise such risks materialising;

(g) To issue appropriate notices to the second defendant so as to protect the plaintiff at his place of employment against risks to his health and safety arising out of his undertaking at work including: (i) the manner of conducting the undertaking at work including the operation of the Betapress machine;

(ii) the plant and substances used for the purposes of the undertaking including the operation of the Betapress machine; (iii) the condition of the premises used for the purposes of the said undertaking.

(h) To appoint inspectors for the purposes set out in Parts 5 and 6 of the Occupational Health and Safety Act 2000 and the regulations thereunder;

(i) To ensure that there was a reasonable exercise of those powers and duties provided under Parts 5 and 6 of the Occupational Health and Safety Act 2000 ;

(j) To implement through its inspectors the issuing of: (i) Investigation notices to stop plant or prevent disturbance of premises to allow investigation of the subject premises;

(ii) Improvement notices to remedy the contravention of any provision of this Act or regulations;

(iii) Prohibition notices where there is occurring any activity which would involve an immediate risk to the health or safety of any person.

(k) To make reasonable arrangements and assessments so as to enable an inspector to make inspections, examinations and tests of the use of the Betapress machine pursuant to s 59 of the Occupational Health and Safety Act 2000 . " 13 Paragraph 37 of the proposed amended statement of claim alleged that the first defendant owed the following common law duties to the plaintiff:

"(a) To carry out all inspections, searches and enquiries at the premises as well as examinations and tests of plant and equipment as were reasonably necessary so as to ensure the safety of persons working at the premises who were engaged in the manufacture and assembly of fireworks.

(b) To carry out all inspections, searches and enquiries at the premises as well as examinations and tests of plant and equipment as were reasonably necessary to ensure that each of the measures referred to in the improvement and prohibition notices had been complied with by the second defendant.

(c) To require the second defendant to provide a report from an independent expert in explosives in relation to the occupational hazards of persons engaged in the manufacture and assembly of fireworks arising from the making of fireworks at the premises including a specific analysis of the use and operation of the Betapress machine.

(d) To issue a prohibition notice against the second defendant and occupiers of the premises to ceasing [sic] the manufacture and assembly of fireworks until each of the said improvement and prohibition notices had been complied with.

(e) To issue an investigation notice requiring the use and operation of the Betapress machine for the purpose of manufacturing fireworks to cease until an occupational and safety assessment report was provided by an independent expert in explosives." The first defendant's submissions 14 The essential argument for which the plaintiff contends is that the first defendant, a public authority, had a duty to exercise its statutory powers in a way that would have prevented the incident that occurred on 10 June 2003. A public authority, which is under no statutory obligation to exercise a power generally, owes no common law duty of care to do so. However, an authority may by its conduct attract a duty of care that requires the exercise of a power. See, for example, Graham Barclay Oysters Pty Limited v Ryan (2002) 211 CLR 540. 15 The first defendant emphasised two propositions. First, the common law does not ordinarily establish a liability in a person to protect another from a risk of harm unless the person has created the risk. Public authorities are in no different position. The mere existence of a statutory scheme to empower an authority to protect the public from a particular harm does not by itself give rise to a duty of care: see, for example, McHugh J in Barclay (supra) at [81]. Secondly, merely because it is foreseeable that harm may result if a public authority fails to exercise its powers does not of itself give rise to a duty of care: see Gummow and Hayne JJ in Barclay (supra) at [145]. 16 What is required is a close examination of the statute that empowers the authority to act: see McHugh J at [78], Gummow and Hayne JJ at [146]. The purpose is to examine the relationship between the authority and individual members of the public to determine whether the legislation establishes a duty to specific individuals, as opposed to the public at large: see Gummow and Hayne JJ at [146] and [149]. These judgments referred particularly to the following elements of that relationship (McHugh J at [84], Gummow and Hayne JJ at [149]): 16.1 The degree and nature of control exercised by the authority over the risk of harm that eventuated.

16.2 The degree of vulnerability of those who depend on the proper exercise by the authority of its powers.

16.3 The consistency of the asserted duty of care with the terms, scope and purpose of the relevant statute. 17 The first defendant referred in considerable detail to Amaca Pty Ltd v State of New South Wales (2004) Aust Torts Reports ¶81-749. In that case Amaca sought contribution from the State of New South Wales under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 in respect of the failure of factory inspectors of the New South Wales Department of Labour and Industry to exercise statutory powers under the Scaffolding and Lifts Act 1912 to prevent a power station operating with high levels of asbestos present. The relevant statutory powers are discussed at pars [107] to [119] per Ipp JA. 18 Even adopting the assumption that all relevant times the inspectors knew that exposure to the quantities of dust observed by them might cause harm to workers, the New South Wales Court of Appeal held that no duty of care should be imposed upon the State. In determining whether a duty of care existed, Ipp JA emphasised the relevance of the following factors: -

18.1 Whether the statutory authority had actual, or imputed, knowledge of specific risk.

18.2 Whether the statutory authority was the sole entity with knowledge of the potential dangers (as was the case in Pyrenees Shire Council v Day (1998) 192 CLR 330).

18.3 Whether the authority had "an extraordinary degree of control", or the industry was a "uniquely organised one" (as was the case in Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1).

18.4 Whether the State was empowered to regulate conduct in a situation where the field of endeavour was "populated by self-interested commercial actors who themselves possess some power to avert those risks" (citing the words of Gummow and Hayne JJ in Barclay at [145]).

18.5 Whether the recognition of a duty of care would render the State liable to a "massive obligation" (citing Callinan J in Barclay at [665]). 19 According to the first defendant, the plaintiff has not alleged that it had specific knowledge of the Betapress machine prior to the incident on 10 June 2003 or that it made any specific directions with respect to it. The facts are clearly distinguishable from those in Pyrenees Shire Council v Day. On the contrary, the plaintiff's allegations involve the first defendant issuing Improvement Notices pursuant to s 91 of the Occupational Health and Safety Act 2000 on 6 and 28 March 2001, which were specifically directed to the assembly of fireworks, rather than to the operation of the Betapress machine. 20 Even though the first defendant had statutory powers to enter the premises and to issue notices to the employer prohibiting work, or directing the employer to improve the system of work, it was the plaintiff's employer who controlled the system of work, and directed the plaintiff. According to the first defendant, such control is fundamental to the relationship of employer and employee and the plaintiff's attempt to shift the issue of control to the first defendant is impermissible: see Amaca v State of New South Wales at [147]. 21 The first defendant pointed out that the plaintiff made no allegation that he was in a position of special vulnerability. Any vulnerability of the plaintiff arose from his work in the fireworks industry, and his position was no different to other workers employed in industries where there is a high degree of risk or potential for injury. Further, any special vulnerability of the plaintiff arose as a result of the actions of his employer, rather than the actions of the first defendant. 22 The imposition of a duty of care on the first defendant in the circumstances and in the manner alleged by the plaintiff would create the potential for indeterminate liability. Any situation in which the first defendant inspected the premises and issued, or failed to issue, a Prohibition Notice or an Improvement Notice could give rise to potential liability. Such potential liability would render the exercise of the first defendant's statutory functions unreasonably onerous. 23 The statutory powers relied upon by the plaintiff arise under the Occupational Health and Safety Act 2000, the Workplace Injury Management and Workers Compensation Act 1998, the Dangerous Goods (General) Regulation 1999 and the Occupational Health and Safety Regulation 2001. 24 The objects of the Occupational Health and Safety Act 2000 are contained in s 3. The obligations are broad and are not imposed exclusively upon the first defendant. The power to issue Improvement Notices and Prohibition Notices is contained in Part 6 of the Act. The issue of such notices involves the exercise of discretion. Importantly, a failure to comply with an Improvement Notice or a Prohibition Notice, without reasonable excuse, is a criminal offence: see ss 92 and 94. The imposition of a criminal sanction on the unreasonable failure to comply with an Improvement Notice or a Prohibition Notice is consistent with the obligation to comply being imposed on the recipient of the notice - in this case, the plaintiff's employer. 25 Paragraph 15 of the proposed amended statement of claim alleges that the first defendant issued two Improvement Notices. After these notices were issued, the plaintiff's employer was obliged to comply with them. In the first defendant's submission, a failure to comply with the notices could not have been the responsibility of the first defendant. 26 The first defendant also points to the power to prosecute conferred under Part 7 of the 2000 Act. The first defendant submits that this is an important statutory power. It is uncontroversial, and the plaintiff in fact pleads, that the first defendant successfully prosecuted entities associated with the second defendant for the incidents that occurred on 3 August 2000 and 10 June 2003. In the first defendant's submission, its prosecution powers are an important responsibility, and the alleged duty of care is inconsistent with the immunities which the law recognises in respect of investigators and prosecutors: see, for example, Hill v Chief Constable of West Yorkshire [1989] AC 53; Elguzouli-daf v Commissioner of Police of the Metropolis [1995] QB 335; Sullivan v Moody (2001) 207 CLR 562 and State of New South Wales v Klein [2006] NSWCA 295. 27 The first defendant drew attention to ss 22 and 23 of the 2000 Act. These sections were said to refer to the public at large and not to a specific class of persons of which the plaintiff was a member. It was submitted that such broad functions did not create a specific duty of care in the manner alleged by the plaintiff. 28 It is to be observed that the plaintiff did not allege that the first defendant engaged in any positive act that created a risk that materialised on 10 June 2003. A number of English cases, particularly those involving the activities of fire fighting authorities, distinguish situations where there has been a positive act of a statutory authority that created a risk (where a duty of care arose) and those where there has been a failure of the statutory authority to act (where a duty of care did not arise). 29 The plaintiff alleges that the first defendant breached a relevant statutory duty. The first defendant submitted that the plaintiff has not satisfied the principles that relate to the imputing to the legislature of an intention to create a private right of action for the breach of a provision of the legislation. See, for example, Sovar v Henry Lane Pty Limited (1967) 116 CLR 397; O'Connor v S. P. Brady Limited (1937) 56 CLR 464. 30 The first defendant submitted that any imputation of a legislative intention to create a private law duty of care for breach of statutory duty conflicts with the public law duty of a prosecutorial agent of the executive government which is entitled to an absolute immunity in respect of its prosecutorial functions: see Elguzouli-daf v Commissioner of Police of the Metropolis (supra). 31 The first defendant submitted that the plaintiff has not identified any specific breach of statutory duty that does not arise from precisely the same circumstances as those upon the basis of which the plaintiff alleges negligence. Accordingly, so it is submitted, the first defendant owes no statutory duty for the same reasons that it owes no common law duty. 32 The first defendant also relied upon s 42 of the Civil Liability Act 2002. That section is in the following terms: -

" 42 Principles concerning resources, responsibilities etc of public or other authorities

The following principles apply in determining whether a public or other authority has a duty of care or has breached a duty of care in proceedings for civil liability to which this Part applies: (a) the functions required to be exercised by the authority are limited by the financial and other resources that are reasonably available to the authority for the purpose of exercising those functions, (b) the general allocation of those resources by the authority is not open to challenge, (c) the functions required to be exercised by the authority are to be determined by reference to the broad range of its activities (and not merely by reference to the matter to which the proceedings relate), (d) the authority may rely on evidence of its compliance with the general procedures and applicable standards for the exercise of its functions as evidence of the proper exercise of its functions in the matter to which the proceedings relate." 33 Section 42(b) was considered in State of New South Wales v Ball [2007] NSWCA 71. The first defendant submitted that the effect of s 42 on the particulars of negligence in the present case is to put all allegations of a failure to allocate resources beyond challenge in this Court. 34 The first defendant relies upon two provisions of the Uniform Civil Procedure Rules 2005. Rule 13.4 is in the following terms: -

(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:

(b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim.

(2) The court may receive evidence on the hearing of an application for an order under subrule (1)." 35 Rule 14.28 is in the following terms: -

" 14.28 Circumstances in which court may strike out pleadings

(1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c) is otherwise an abuse of the process of the court.

(2) The court may receive evidence on the hearing of an application for an order under subrule (1)." 36 The first defendant carries a significant burden successfully to invoke these rules: see generally General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. The Court must look to the substance of the pleading and not merely whether it has defective wording: Republic of Peru v Peruvian Guano Co Ltd (1887) 36 Ch D 489 at 496. The Court must assume that the allegations in the pleadings are true: Lonrho plc v Fayed (No 2) [1991] 4 All ER 961 at 965. No evidence on the merits is admissible: Peruvian Guano (supra) at 494. The General Steel formula is variously described as "so obviously untenable that it cannot succeed", "manifestly groundless" and "discloses a case which the court is satisfied cannot succeed". 37 The circumstances where a Court will dismiss proceedings or strike out pleadings will necessarily be rare but it will do so in appropriate circumstances: for example, Sullivan v Moody (supra). Moreover, there is authority for the proposition that the General Steel test should be modified to take into account the principles which underpin the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules 2005: see Kent v Griffiths [2000] 2 WLR 1158, referred to by Brereton J in Integral Home Loans Pty Ltd v Interstar Wholesale Finance [2006] NSWSC 1464. This should be contrasted with the remarks of Young CJ in Eq in State of New South Wales v Klein (supra) at [44] that until the General Steel test is overruled by the High Court, it remains the law. The plaintiff's submissions 38 The legal principles were not in dispute. The plaintiff submitted that his pleaded claims in negligence and breach of statutory duty were tenable causes of action. It was submitted that if a claim raises an arguable point of law, a court at first instance, in the exercise of its discretion, should not make an order for summary dismissal. In any event, the first defendant's reliance upon Rule 14.28 was misguided for the reason that no defect in the pleading has been identified. Rather, the significant thrust of the first defendant's submissions was that the proposed amended statement of claim disclosed no reasonable cause of action. 39 In summary, the case pleaded against the first defendant is that it was under a duty of care in the exercise of its statutory functions and powers to take reasonable care to avoid foreseeable risk of injury to the plaintiff. That duty also encompassed a claim against the first defendant in respect of negligently exercising its statutory power. The principal allegation relates to the first defendant's failure to take affirmative action to ensure the safety of the plaintiff in the workplace such as directing the cessation of work activities until the measures that the first defendant required the second defendant to undertake had been performed. 40 The plaintiff emphasised that the first defendant is a statutory corporation constituted pursuant to s 14 of the Workplace Injury Management and Workers Compensation Act 1998. It has a board of directors. The first defendant may delegate any of its functions to an authorised person such as an inspector. 41 According to the plaintiff, these functions relevantly include ensuring compliance with the workers compensation legislation and the occupational health and safety legislation, as well as the investigation of workplace incidents. In exercising its functions, the first defendant is empowered to promote the development of safe places of work. 42 The first defendant also performs an important function in monitoring compliance with relevant legislation. In doing so, its authorised inspectors are directly involved with compliance activities in the workplace. The power to issue Improvement Notices and Prohibition Notices are two of the enforcement procedures available to inspectors. 43 The plaintiff submitted that, when inspectors from the first defendant investigated the death of Mr Maireriki, it was clear on the face of the improvement and prohibition notices, which were issued that those inspectors had knowledge of serious risks of injury to workers including the plaintiff at the premises. The plaintiff submitted that, in such a situation, the first defendant was in a position to take reasonable steps to control or minimise those risks. In the case of the improvement notices, each notice required a potential risk to the safety of workers, including the plaintiff, to be rectified within a specific timeframe. The notices identified particular hazards that required rectification. The records show that those inspectors returned to the workplace following the issue of those notices. However, the plaintiff alleges that the first defendant failed reasonably to ensure that the second defendant complied with them. 44 Inspectors on behalf of the first defendant subsequently issued a Prohibition Notice. Again, the plaintiff alleges that work continued at the premises notwithstanding that the measures called for had not been complied with and that there remained a potential risk of serious injury to workers such as the plaintiff engaged in the manufacture of fireworks. In these circumstances, the plaintiff contended that the powers, duties and functions conferred on the first defendant were compatible with the exercise of a duty of care. According to the plaintiff's submission, the legislation under which the first defendant operates is not inconsistent with the existence of such a duty. 45 The plaintiff pointed out that the relevant legislation contains no blanket immunity from suit. It was open for the legislature totally to exclude liability for otherwise negligent acts. No such immunity has been formulated. 46 The plaintiff submitted that at the relevant time the first defendant was vested with statutory powers and obligations conferring upon it certain functions in relation to the occupational health and safety of workers such as the plaintiff at the premises. Those statutory powers and obligations allegedly arose from the following: -

46.1 Sections 22 and 23 of the Workplace Injury Management and Workers Compensation Act 1998 ;

46.2 Parts 4, 5 and 6 of the Occupational Health and Safety Act 2000 and Occupational Health and Safety Regulation 2001 ;

46.3 Parts 2, 3 and 4 of the Dangerous Goods Act 1995 and the Dangerous Goods (General) Regulation 1999 . 47 In summary, the plaintiff contended that the pleaded facts are capable of establishing a duty of care owed by the first defendant to the plaintiff arising out of the prior investigation carried out by its inspectors at the premises and its failure reasonably to ensure that the safety measures called for in the improvement and prohibition notices had been complied with by the second defendant so that the plaintiff was not exposed to the risk of injury. The failure by the second defendant to comply with each of the measures called for in the notices demanded a response from the first defendant directing the immediate cessation of any manufacturing of fireworks that would endanger the safety of the plaintiff. It should have included an order that the direction remain in force until all rectification measures had been effected. 48 The plaintiff also submitted that if the court were satisfied that the pleadings raised an arguable point of law that they could not be struck out. The plaintiff is entitled to a trial of his case and should only be deprived of that right if he has no reasonably arguable cause of action: Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937. 49 The plaintiff referred to the cases relied upon by the first defendant. The plaintiff emphasised the following propositions said to arise from them: -

49.1 A public authority which enters upon the exercise of statutory powers in respect of a particular subject matter may place itself in a relationship to others which imports a common law duty to take care which is to be discharged by the continuation or conditional exercise of those powers: Pyrennees per Brennan CJ at [24] to [27]; Barclay per McHugh J at [78] and Gummow J at pars [166] to [178]; Crimmins .

49.2 The control that a statutory authority has over of the safety of people or their property may contribute to the existence of a duty of care to exercise statutory powers, particularly in a situation that contains within it a risk of harm to others: Crimmins per Gaudron J at pars [22] to [25]; Barclay per Gummow and Hayne JJ at pars [149] to [152].

49.3 The reasonable foreseeability that the statutory authority's act or omission would result in harm to the plaintiff is a relevant consideration: Crimmins per McHugh J at [103].

49.4 The statutory authority's power to protect a specific class of persons (including the plaintiff) because of its statutory or assumed obligations is a relevant factor: Barclay per McHugh J at [90] and Gummow and Hayne JJ at pars [149] to [152].

49.5 The plaintiff's vulnerability to injury because of the hazardous nature of his employment and the fact that the safety measures required to be taken by the second defendant were not carried out is a relevant consideration: Crimmins per McHugh J at pars [113] to [115].

49.6 The statutory authority's knowledge of the risk of harm to the specific class of persons including the plaintiff should be taken into account: Pyrenees per McHugh J at pars [113] to [115].

49.7 Whether there are any policy reasons to deny the existence of a duty, such as the legislation under which the statutory authority operated, which are not consistent with the recognition of such a duty: Crimmins per Gaudron J at pars [27] to [32]. 50 The plaintiff emphasised the approach adopted by McHugh J, who formed part of the majority in Crimmins, and in particular his Honour's view at [93] that the issue of duty should be determined by reference to the following questions: -

50.1 Was it reasonably foreseeable that an act or omission of the defendant, including the failure to exercise its statutory powers, would result in injury to the plaintiff or his or her interests? If not, then there is no duty.

50.2 By reason of the defendant's statutory or assumed obligations or control, did the defendant have the power to protect a specific class, including the plaintiff (rather than the public at large) from a risk of harm? If no, then there is no duty.

50.3 Was the plaintiff or were the plaintiff's interests vulnerable in the sense that the plaintiff could not reasonably be expected adequately to safeguard himself or herself or those interests from harm? If no, then there is no duty.

50.4 Did the defendant know, or ought the defendant to have known, of the risk of harm to the specific class including the plaintiff if it did not exercise its powers? If no, then there is no duty.

50.5 Would such a duty impose a liability in respect of the defendant's exercise of "core policy-making" or quasi-legislative functions? If yes, then there is no duty.

50.6 Are there any other supervening reasons in policy to deny the existence of a duty of care (e.g. the imposition of a duty is inconsistent with the statutory scheme, or the cases concerning pure economic loss and the application of the principles in that field deny the existence of a duty)? If yes, then there is no duty. 51 The plaintiff emphasised cases in which it had been held a common law duty of care arose from the failure of the statutory authority to ascertain that the relevant statutory requirements had been satisfied. The plaintiff relied upon Voli v Inglewood Shire Council (1963) 110 CLR 74 where the High Court held that there was a breach by the Council of the common law duty arising from the failure of council officers who examined the plans and specifications of a building to ascertain that its by-laws relating to public buildings had complied with statutory requirements. 52 Rice v Secretary of State for Trade and Industry [2006] EWHC 1257 decided as a preliminary issue that a statutory authority owed a duty of care to workers to take reasonable steps to protect their safety as registered dock workers pursuant to certain statutory powers. 53 In Tilba Tilba Stud (WA) as Trustee for the Tilba Tilba Stud Trust v The Executive Officer of Agriculture Western Australia (2004) Aust Torts Reports ¶81-736, the Supreme Court of Western Australia held that the stock inspector and officials within the Department of Agriculture owed the plaintiff, the proprietor of a farming property, a duty to exercise both the power to issue a quarantine order and the power to release land and sheep from a quarantine order, with due care, skill and diligence. 54 In Gordon v James Hardie and Co Pty Ltd (1987) Aust Torts Reports ¶80-137, McInerney J refused to strike out a statement of claim in which it was alleged that the State of New South Wales had been negligent, because inspectors had warned the owners of a mine of impending inspections, giving the mine owners the advantage of being able to clean up asbestos dust and slow down the operation of the mine so as to reduce the level of dust before the inspection took place. His Honour held that if the plaintiff's allegations were established, the inspectors would clearly have been negligent in the manner in which they carried out their inspection and that the injuries suffered by the plaintiff, who was a miner at the asbestos mine, could be regarded as having been materially contributed to by the State. 55 The plaintiff submitted that the first defendant owed him a common law duty to take reasonable care to avoid causing injury in the ways identified in the pleadings summarised at par [12] above. 56 The plaintiff also pleaded breaches of statutory duty. The plaintiff submitted that such an action might lie even though the conduct of the first defendant was neither intentional nor negligent. Once it were found that the statutory provision was intended to protect a class of persons, it would only be necessary to show that the first defendant's conduct was contrary to that legislative command or proscription, without further classification of that conduct as either intentional or negligent. The plaintiff submitted that the relevant statutory provisions might be read as protecting persons at the premises, including the plaintiff, so that breaches of the statutory provisions provided a second cause of action in tort for the plaintiff. Consideration 57 In Amaca (supra) at [19], Ipp J said this: -

" [19] A clear and universal test for determining whether a duty of care rises has not been laid down. Each case depends on its own circumstances and the totality of the circumstances must be weighed in the balance. Depending on the facts, different factors have different degrees of significance. Nevertheless, Pyrenees, Crimmins and Graham Barclay Oysters point to and delineate the path that is to be followed." 58 In my opinion, accepting for present purposes the truth of the facts alleged in the proposed amended statement of claim, the following matters are plain in the present case: -

58.1 First, the first defendant did not create the danger. The exercise by the first defendant of its power to issue notices to the second defendant did not create or increase the risk of harm to the plaintiff. The question of whether or not its conduct could be characterised as a prior ineffective or ineffectual intervention to eliminate the risk is less clear.

58.2 Secondly, the first defendant was not the sole repository of actual knowledge of the risk of serious harm to a group of identifiable individuals of which the plaintiff was a member. The second defendant was another.

58.3 Thirdly, the powers vested by statute in the first defendant did not give it such a significant or special measure of control over the safety of the person or property of the plaintiff as to oblige it to exercise its powers to avert danger or to bring the danger to the knowledge of the plaintiff. Once again, the second defendant had a more significant or special measure of control over the plaintiff's safety.

58.4 Fourthly, even though the first defendant was armed with statutory powers to compel, prevent or punish conduct by the second defendant, its power to regulate conduct was related to or had an impact upon a risk-laden field of endeavour that was populated by a self-interested commercial actor [the second defendant], which possessed some - indeed considerable - power to avert the relevant risks.

58.5 Fifthly, the duty contended for is manifestly a duty to control the conduct of a third party. 59 Ipp J approached his enquiry in Amaca in the following way at [140]: -

" [140] I start the enquiry from the standpoint that, generally, a public authority, which is under no statutory obligation to exercise a power, owes no common law duty of care to do so. A common law duty of care will, however, arise when an authority, by its conduct, acts in a manner that requires the exercise of the power. The totality of the relationship between the parties has to be taken into account in determining whether a duty of care is to be recognised. The mere fact that statutory powers are provided and the authority concerned knows that harm may result from a failure to take affirmative action is insufficient to create an affirmative duty of care." 60 As far as I am aware, the most recent relevant authority on the existence, or otherwise, of a duty of care allegedly owed by a statutory authority is Randwick City Council v T and H Fatouros Pty Ltd [2007] NSWCA 177. That case involved an appeal from a decision of her Honour Simpson J in which she found that the Council owed the plaintiff a duty as alleged. In allowing the appeal, Ipp JA, with whom Giles and Tobias JJ A agreed, referred at par [8] to his own remarks in Amaca (supra) at par [65] as follows: -

" [8] In Amaca Pty Ltd v The State of New South Wales (2004) 132 LGERA 309, I drew (at 325, [64]) the following propositions from Pyrenees , Crimmins and Graham Barclay Oysters :

(a) The totality of the relationship between the parties is the proper basis for the determination of a duty of care.

(b) The category of control that may contribute to the existence of a duty of care to exercise statutory powers includes control, generally, of any situation that contains within it a risk of harm to others.

(c) A duty of care does not arise merely because an authority has statutory powers, the exercise of which might prevent harm to others.

(d) The existence of statutory powers and the mere prior exercise of those powers from time to time do not, without more, create a duty to exercise those powers in the future.

(e) Knowledge that harm may result from a failure to exercise statutory powers is not itself sufficient to create a duty of care." 61 Although not referred to by either party in the proceedings before me, the decision in Fatouros is largely supportive of the arguments of the first defendant. The same could be said of the decision of Hunter J in Optus Networks Pty Ltd v Leighton Contractors Pty Ltd [2002] NSWSC 327. In that case, at par [697] his Honour said the following: -

" [697] However, I am firmly of the view that WorkCover had no duty of care to protect MEF or Tyco from their own negligence or contractual failures. For those reasons I see nothing in the relevant statutory provisions nor in the relationships between WorkCover and the parties to these proceedings which would give rise to a duty of care to require a hydrostatic testing of the Heat Exchanger, not as designed, but as required by Optus, or calling upon WorkCover to warn any of the parties of the divergence of the design from Optus' requirements." 62 In Integral Home Loans Pty Ltd v Interstar Wholesale Finance Pty Ltd (supra) Brereton J said this at par [6]: -

" [6] While much has been said against the resolution of separate questions in Courts of high authority, nonetheless, since the (NSW) Civil Procedure Act 2005, it is my view that the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously." 63 It has been urged upon me by the first defendant that I should take a similar approach in dealing with the present application. That was a case in which the court had been asked to make an order under Rule 28.2 for the determination of two issues as preliminary questions. However, not only was that case not one in which a party was seeking summary disposal, but it was also a case in which a strong case had been made out for prompt judicial intervention. This is revealed in the following paragraphs from his Honour's judgment: -

" [4] Resolution of the proposed separate questions will not determine the whole of the case, but they will determine whether the plaintiff is entitled to a significant ongoing source of revenue. If the plaintiff is right on that point, quite apart from the merits on the allegation of fraud, then it is being kept out of a source of revenue on account of what, at this stage, seems to be a single allegation of one particularised allegedly fraudulent application.

[5] In those circumstances, I think that the interests of justice are better served by proceeding to determine the separate questions. In particular, I do not see that any prejudice is occasioned to the defendants by that course, whereas some considerable prejudice might be occasioned to the plaintiff by deferring until a final hearing of the whole suit the proposed separate issue." 64 I do not consider that case to be of particular assistance in the present circumstances. 65 Moreover, it is undoubted that the approach enunciated in General Steel remains binding upon me. In State of New South Wales v Klein (supra) the Court of Appeal dealt with an appeal from Hidden J who had declined to strike out and dismiss a plaintiff's claim pleaded, relevantly, as follows: -

" [24] In all the circumstances set out above the police owed a duty of care to the plaintiffs to avoid negligently inflicting psychiatric harm on the plaintiffs by reason of the manner in which Paul Klein met with his death.

[25] In the said circumstances it was foreseeable that negligence by the police might cause the plaintiffs to suffer psychiatric damage by reason of nervous shock.

[26] By reason of the events pleaded above the police breached the duty of care owed to the plaintiffs. 66 The facts of the case was set out by Young CJ in Eq in the course of his judgment as follows: -

" [5] Taking the facts from Hidden J's judgment [2005] NSWSC 1341 at [3] et seq and referring to Paul Klein as the deceased, the facts appear to be that the police in the area knew that the deceased had previously exhibited signs of mental illness. He was at his grandmother's home on the night in question and in a disturbed state of mind. He had a number of knives on the floor next to him, became increasingly agitated and behaved aggressively towards his mother who was also in the house.

[6] The mother contacted police and asked them to attend. The police officers were told that the deceased was armed with a knife, was under the influence of drugs and was acting irrationally. They arrived about 9.10 pm but the deceased continued to be disturbed. He refused to comply with directions given by the police officers and set a fire in the house. He was in possession of two knives and was inflicting injury to himself.

[7] It is not in dispute that the Fire Brigade arrived at the premises but because the deceased remained in and about the house with the knives the firemen could not gain access to the premises to extinguish the fire.

[8] A little before 11.00pm two police shot the deceased and he died." 67 In the circumstances of the case, Young CJ in Eq, with whom Beazley and Santow JJA agreed, allowed the appeal and dismissed the plaintiff's claim. In doing so, his Honour had the following to say about the applicability of the test in General Steel: -

" [43] The cases I have cited make it clear, to my mind, that there is no duty of care on a police officer to people such as the plaintiffs/respondents in the present situation unless they can fit themselves within either a case of express or implied assumption of responsibility or one of the possible extraordinary situations. The pleadings and the facts show neither.

[44] What has troubled me is whether the matter is so clear that there should be striking out of the plaintiffs' claim. As I have noted, in Brooks' case the House of Lords had no compunction about striking out a similar claim. However, the rules and culture as to striking out of claims in England after the Wolff Report appear to me to be somewhat broader than the law in Australia as laid down by Barwick CJ sitting as a single Justice of the High Court in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. That case has been followed on many occasions since and I must take it as binding on me. It is, of course, now 42 years old and the culture of litigation has changed, but it seems to me that it is probably only the High Court which can change the culture and liberalise to at least the same extent as they exist in England the rules about striking out claims.

[45] However, applying the test in the General Steel case it seems to me in the instant case that the matter is so plain that there is no duty of care that the Court must strike out the present claim." 68 This case has not come before me for adjudication on the merits. Whatever view I may hold about the ultimate likelihood of success of the plaintiff's claim against the first defendant is, strictly speaking, irrelevant, unless my view were that the plaintiff's claim is so obviously untenable that it could not succeed, or that it was manifestly groundless, or that it disclosed a case that I am satisfied could not succeed. My own view is that the plaintiff will face a significant task in establishing the existence of the duty for which he contends. As far as I can determine, this is a novel case in the sense that that expression was used by his Honour McHugh J in par [93] of Crimmins. It is difficult to see how the plaintiff could expect to receive favourable answers to all, and possibly any, of the questions posed by his Honour in that paragraph. However, the test that I am required to apply is directed not to whether the plaintiff has no cause of action but to whether he has no reasonably arguable cause of action. 69 It seems to me that the plaintiff's contentions support the existence of a reasonably arguable, even if only a very weak, case. For example, it is not possible to say with certainty that the questions posed by McHugh J at par [93] in Crimmins (supra at par [50]), or the views I have expressed at par [58] above, or the application of the principles outlined by Ipp JA at par [8] in Fatouros (supra at par [60]) would not, upon closer examination by others, produce a conclusion on the duty point favourable to the plaintiff. 70 In Bayne v Baillieu (1908) 6 CLR 382 at 387, Griffith CJ suggested that:

"The defendant must show that under no possibility could there be a good cause of action consistently with the pleadings and the facts." 71 Later, in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91, Dixon J, as he then was, formulated his now famous passage on the topic as follows: -

"The application is really made to the inherent jurisdiction of the court to stop the abuse of its process when it is employed for groundless claims. The principles upon which that jurisdiction is exercisable are well settled. A case must be very clear indeed to justify the summary intervention of the court to prevent the plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process." 72 In Brimson v Rocla Concrete Pipes Ltd (supra) Cross J had this to say at 944: -

"Where the court is asked to reject a plaintiff's case, either under its statutory rules or its inherent jurisdiction, the fundamental principle is that prima facie a plaintiff is entitled to have his case come to trial; and applications to deprive him of that right will succeed only in the clearest of cases. True, the court will not look merely at the suggested weakness of the plaintiff's case but - though to a less extent - at the suggested strength of the defendant's case; and, true, forensic argument and subsequent judicial reflection are not necessarily inconsistent with a firm conclusion that the cause of action should not be allowed to proceed. But fatal defects in the plaintiff's case must be very clear before the court will intervene in this fashion." 73 These tests are difficult to satisfy, as the first defendant has properly conceded. The first defendant has not satisfied me that the plaintiff could not possibly succeed or that he has no reasonably arguable case. In my opinion, this is not an appropriate case for summary relief. Orders 74 In the circumstances, I make the following orders in each matter: -

1. I grant leave to the plaintiff to file an amended statement of claim in the form of the document annexed to the affidavit of Kathryn Williams sworn 8 June 2007. 2. I dismiss the first defendant's notice of motion with costs.

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