McDonalds Australia Limited v Therma Truck Pty Limited

Court of Appeal (NSW)|2002-07-10|Before: Mason P, Stein JA

CITATION : McDonalds Australia Limited v Therma Truck Pty Limited [2002] NSWCA 268 FILE NUMBER(S) : CA 40402/01 HEARING DATE(S) : 10 July 2002 JUDGMENT DATE : 14 August 2002

PARTIES : McDonalds Australia Limited (Appellant/Cross-Respondent) Therma Truck Pty Limited (Respondent/Cross-Appellant) JUDGMENT OF : Mason P at 1; Stein JA at 2; Foster AJA at 94

LOWER COURT JURISDICTION : Supreme Court LOWER COURT SC 20419/98 FILE NUMBER(S) : LOWER COURT Master Harrison JUDICIAL OFFICER :

COUNSEL : B Toomey QC/J S Drummond (Appellant/Cross-Respondent) J E Sexton SC/D P O'Dowd (Respondent/Cross-Appellant) SOLICITORS : Herbert Geer & Rundle (Appellant/Cross-Respondent) Moray & Agnew (Respondent/Cross-Appellant) CATCHWORDS : NEGLIGENCE - plaintiff employed as truck driver and stagehand - seriously injured when stage platform fell upon him - whether Master improperly exercised the discretion involved in apportionment - whether apportionment was unreasonable or plainly unjust - causation - whether claim of breach of s 52 of Trade Practices Act 1974 (Cth) was statute barred - whether s 52 claim made out - costs - D Law Reform (Miscellaneous Provisions) Act, s 5 LEGISLATION CITED : Sale of Goods Act 1923 Trade Practices Act 1974 (Cth), s 52, s 51A Dunnet v Brennan (2000) 31 MVR 362 Fitzgerald v Dansey [2001] NSWCA 339 James Hardie & Coy Pty Ltd v Roberts (1999) 47 NSWLR 425 Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 Oxley County Council v MacDonald [1999] NSWCA 126 CASES CITED: Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Coy Pty Ltd (2001) 53 NSWLR 626 Sousaari v Steinhardt (1989) 2 Qd R 477 Spencer v Balranald Shire Council [2002] NSWCA 102 Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 Wynbergen v Hoyts Corporation Pty Ltd [1997] 72 ALJR 65 DECISION : 1) Appeal dismissed with costs. 2) Cross-Appeal dismissed with costs. 3) Vary the orders for costs numbered (1) and (2) made by the Master on 10 May 2001 by setting them aside. 4) In substitution thereof, order that the respondent pay 80% of the appellant's costs of the cross-claim and order that the appellant pay 20% of the respondent's costs of the cross-claim.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40402/00 SC 20419/98

MASON P STEIN JA FOSTER AJA

Wednesday, 14 August 2002 McDONALDS AUSTRALIA LIMITED v THERMA TRUCK PTY LIMITED

Facts: This is an appeal by McDonalds Australia Limited from a judgment of a Master. The plaintiff in the proceedings, Mr Veli Bicer, was employed by the appellant as a truck driver and stage hand on the mobile 'Ronald McDonald McMagical Circus Show'. He was seriously injured at work in May 1998 when the stage platform fell and struck him, causing him to become paraplegic. He was 22 years old. The plaintiff sued the appellant for damages in negligence. McDonalds cross-claimed against Therma Truck Pty Ltd, the respondent. The proceedings between the plaintiff and McDonalds were settled prior to the hearing before the Master for $2.5 million. Accordingly, the proceedings before the Master concerned the cross-claim. The Master apportioned liability for the plaintiff's damages as to 70% to the appellant and 30% to the respondent. On appeal the appellant argues that the Master was in error in either failing to hold that the respondent wholly indemnify the appellant or, alternatively, in failing to hold that the respondent contribute 75% of the plaintiff's damages. The appellant further submits that the Master erred in finding that its cross-claim against the respondent under s 52 of the Trade Practices Act 1974 (Cth) was statute barred. The appellant also challenges the costs order of the Master, which ordered costs in the same percentages (70/30) as her apportionment. The respondent's cross-appeal contends that the Master was wrong to order it to contribute 30% of the plaintiff's damages. Further, the cross-appeal maintains that the Master erred in finding the respondent guilty of negligence. Held per Stein JA (Mason P and Foster AJA agreeing): 1) The submission that the Master was wrong to find that the appellant was vicariously liable to the plaintiff because there was no evidence that the act of attaching the cables was carried out by an employee of the appellant is rejected. There was no evidence or reasonably available inference that it was the plaintiff who attached the cables to the wrong attachment point. The only conclusion reasonably available on the evidence was that the erroneous attachment was performed by an employee of the appellant and not by the plaintiff, or by any third party. 2) The Master did not improperly exercise the discretion involved in the apportionment, nor was the apportionment unreasonable or plainly unjust.

Oxley County Council v MacDonald [1999] NSWCA 126; - Rolls Royce Industrial Power (Pacific) Ltd v James Hardies & Coy Pty Ltd (2001) 53 NSWLR 626; - James Hardie & Coy Pty Ltd v Roberts (1999) 47 NSWLR 425;
- Fitzgerald v Dansey [2001] NSWCA 339; and
- Dunnet v Brennan (2000) 31 MVR 362 (Considered). 3) The Master did not make any error of fact or come to conclusions on causation which were not available on the evidence. The Master was entitled, and correct to find as she did, in her identification of the causes of the accident. 4) Accordingly, the Master was entitled to identify the primary or main cause of the accident as being the appellant's employee attaching the cables to the wrong attachment point. The Master was correct to find that the appellant was wholly responsible for the principal cause of the accident. 5) The Master was entitled to identify the location of the curtain eyelet attachment in close proximity to the cable attachment point as a second cause of the accident. The Master was correct in finding that the respondent was wholly responsible for this cause of the accident. 6) The third contributing cause of the accident identified by the Master, the location of the locking mechanism, could be properly characterised, having regard to the evidence, to the joint fault of the employer and the manufacturer. 7) The Master's mistake regarding the percentages found in Sousaari v Steinhardt (1989) 2 Qd R 477 did not lead her into any error in the apportionment exercise in which she was engaged. Cross-appeal 8) The appellant has failed to identify how it makes out its claim for a breach of s 52 of the Trade Practices Act 1974 (Cth), even assuming, contrary to the Master's finding, that it was not time barred. The representations identified have not been established. - Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 applied Costs 9) The Master erred in the costs order which she made on the cross-claim. The result should not have led to the respondent being ordered to pay only 30% of the appellant's costs of the cross-claim. Subject to consideration of whether any special costs order was warranted, prima facie the appellant was entitled to a 100% costs order. However, in the circumstances a special costs order is justified. While the appellant obtained a 30% contribution and succeeded on the major factual issue, it lost on most of the other issues. These issues are sufficient to justify a special costs order which would assess the respondent at receiving 20% of the costs of the cross-claim but paying 80% of the appellant's costs of the cross-claim. Orders:

Appeal dismissed with costs. 2) Cross-Appeal dismissed with costs. 3) Vary the orders for costs numbered (1) and (2) made by the Master on 10 May 2001 by setting them aside. 4) In substitution thereof, order that the respondent pay 80% of the appellant's costs of the cross-claim and order that the appellant pay 20% of the respondent's costs of the cross-claim.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40402/00 SC 20419/98

MASON P STEIN JA FOSTER AJA

Wednesday, 14 August 2002 McDONALDS AUSTRALIA LIMITED v THERMA TRUCK PTY LIMITED Judgment

1 MASON P: I agree with Stein JA. 2 STEIN JA: Introduction 3 This is an appeal by McDonalds Australia Limited from a judgment of Master Harrison delivered on 30 March 2001. The plaintiff in the proceedings, Mr Veli Bicer, had been employed by the appellant. He was seriously injured at work on 23 May 1998 and sued the appellant for damages in negligence. The appellant cross-claimed against Therma Truck Pty Ltd, the respondent. The proceedings between the plaintiff and McDonalds were settled prior to the hearing before the Master, which accordingly concerned the cross-claim. 4 The Master apportioned liability for the plaintiff's damages as to 70% to the appellant and 30% to the respondent.

The appeal and cross-appeal 5 The plaintiff was employed by the appellant as a truck driver and stagehand for about one week prior to the accident. On 23 May 1998 he was attempting to lower a platform on the 'Ronald McDonald McMagical Circus Show' truck at the appellant's premises at Goulburn. 6 The truck was a mobile theatre. The stage platform fell and struck Mr Bicer causing him to become paraplegic. He was 22 years old. With the agreement of the respondent, the appellant settled the plaintiff's claim for $2.5 million. 7 On the appeal the appellant argues that the Master was in error in either failing to hold that the respondent wholly indemnify the appellant or, alternatively, in failing to hold that the respondent contribute 75% of the plaintiff's damages. 8 Secondly, the appellant submits that the Master erred in finding that its cross-claim against the respondent under s 52 of the Trade Practices Act 1974 (Cth) was statute barred. It is submitted that the Master should have held that the claim was within time and that the appellant had established that the respondent had engaged in misleading and/or deceptive conduct and was liable to fully indemnify the appellant for the plaintiff's damages. 9 The appellant also challenges the costs order of the Master, which ordered costs in the same percentages (70/30) as her apportionment. 10 The respondent's cross-appeal contends that the Master was wrong to order it to contribute 30% of the plaintiff's damages. It argues that its contribution should have been assessed at nil. Furthermore, the cross-appeal maintains that the Master erred in finding the respondent guilty of negligence.

The mobile road show 11 The McDonalds road show had been operating since at least 1980. When the truck reached a place where a performance would be held, two people would be involved in erecting and disassembling the stage. For a great many years this was done by Mr Peter Wood, who played Ronald McDonald, and Mr Kim Birch, who drove the truck and was the stagehand. Birch left the show (and the appellant's employment) in 1998, shortly before the accident. 12 In 1983 the appellant contracted with the advertising agency DDB Needham Sydney Pty Limited (DDB) for it to take charge of the Ronald McDonald circus programme. Accordingly, DDB became responsible for the truck and the performers. The original truck used in the show was replaced in 1987, although the replacement truck was described in the proceedings as 'the original truck'. This truck was used until 1993. It was then decided that this truck should be replaced. A Mr Tony Mearns was contracted by the appellant to recommend a suitable chassis cab and body for the new truck. Mearns knew Mr Gleb Kondakoff, the managing director of the respondent. Kondakoff inspected the original truck with Mr Mearns and took photographs. 13 On 14 May 1993 the respondent sent a quotation together with a diagram showing the layout of the stage and its components to be included inside the truck body. A brochure was also included. 14 After a further inspection by the respondent a fresh quotation was provided by the respondent to the appellant and, on 10 June 1993, the appellant placed an order in the sum of $26,292. 15 The Master found that all parties involved, that is the appellant, DDB, Mearns and the respondent, understood that the respondent was to customise the new body of the truck (including the stage) so that it was to be identical to the original truck save for a few modifications. 16 One of the modifications was suggested by Birch, who had set up the show since 1983. He suggested that the locking device on the side door be lowered to enable him to reach it without having to stand on a stool. 17 When the bodywork was completed, Birch and Prestoe (from DDB) inspected it and witnessed a demonstration of how the winch worked and the way in which the stage was set up. 18 The truck was subsequently delivered to the appellant in September/October 1993. It was used in a show on 27 November 1993 and afterwards there was a meeting between the respondent, DDB and the performers to discuss modifications. The appellant's consultant, Mearns, also attended. 19 One of the actors raised the issue of the side curtains. They were not secured to the stage and there was a 3 inch gap between the stage and the bottom of the curtains. This was unsatisfactory, especially when it was windy. 20 Apparently the earlier truck had press-studs by which the side curtains were attached to the stage. They could easily be unfastened to allow the actors to exit from the side of the stage. 21 The meeting discussed new means of attaching the side curtains, which was seen as unsatisfactory. The curtain was attached by an aluminium sliding mechanism connected to a rope, rather like a sail to a mast. Birch found this more difficult and time consuming to implement than the old press stud system. 22 The Master found that, on the appellant's side, it was desired that the side curtains come all the way down to the stage and be attached by press studs. Another issue raised by the appellant was the perceived need for the curtains to be lengthened to touch the ground so that the feet of the performers were hidden. 23 As a result, modifications of certain items were sought on behalf of the appellant. On 21 December 1993 the respondent forwarded a quotation to the appellant for the modifications requested. Two of the items listed were to lengthen the side curtains and place 'button' clips to the stage and provide individual press-studs for the stage skirting in lieu of the aluminium slide (items 2 and 4). Subsequent correspondence ensued wherein it seems to have been agreed that there would be no charge for these items. Part of that correspondence includes a letter of 14 January 1994 to Kondakoff which states that the original brief to the respondent was that it virtually copy the original vehicle with one or two upgraded conditions. 24 It appears that the modifications were carried out by the respondent in the early months of 1994, at least by March. However, instead of press-studs as requested, the edges of the curtains were affixed by an eyelet in the curtain with a clip passing through the eyelet. The clip was attached to the stage by a piece of metal secured with a Phillips head screw to the edge of the stage. Photograph 5 to Exhibit C shows this system very clearly and the Master reproduced this in her judgment (at Red AB 55). 25 The eyelet system for the curtain was located in close proximity to the designated lifting attachment, which was a 'D' shackle, bolted and screwed to the stage floor. This is also shown very clearly on the photograph C5. 26 The respondent denied installing the eyelet/hook arrangement for the side curtains. However, the Master did not accept the respondent's case on this aspect and found that the respondent carried out the modifications to the side curtains whereby the curtain eyelet and hook method of attaching the curtains to the stage was implemented. This finding is not contested.

The accident and its cause 27 The appellant admitted that it had given no written instructions to the plaintiff. It also admitted that insufficient instruction was provided to the plaintiff prior to the accident on 23 May 1998. The first time the plaintiff saw the truck was on 16 May 1998 when he drove it from the appellant's garage to North Ryde for a performance. This was the only performance in which the plaintiff participated prior to the accident. Ms Dimech, an employee of the appellant, gave the plaintiff instructions as they erected the stage. She showed the plaintiff how the switch operated the cables on both sides of the stage. From the cabin, they watched the stage platform being lowered. 28 The plaintiff did not erect the side curtains and was given no instruction as to where the attachment point was located, nor any instruction about the attachment point generally. He did not see or know how the side curtains were attached to the stage. He was given no instruction as to where to attach the cables in order to lift the stage. He was not shown the eyelets, nor told anything about them. Apparently he was inside the truck when the stage was lifted. This manoeuvre was controlled by Ms Dimech. It seems that initially the stage jammed but lifted on the second attempt. 29 On 23 May 1998 the plaintiff drove the truck to Goulburn. The plaintiff got the stool out of the truck to unlock the locking mechanism, which caused the stage to be secured to the side of the truck. The handle to unlock the mechanism was in the centre of the door. He placed the stool directly under the locking device in the middle of the truck. He then stood on the stool to reach the locking mechanism and unlocked it. The platform came down quickly and hit the plaintiff's head, bent him over and crushed him. The stage had a weight of 226 kg. While the plaintiff gave evidence before the Master, Ms Dimech could not be located to give evidence. 30 The Master considered the expert evidence called in the case - Mr Simpson and Mr Ng. While she preferred Mr Simpson's evidence she said that she had arrived at her own decision based on the evidence. The Master stated that there were three negligent acts which materially contributed to the accident. These were: … The first and most important cause of the accident was that an employee of McDonalds connected the cables to the wrong attachment point such that the curtain rings could not hold the weight of the stage. The cables had been connected to the wrong attachment point on a number of prior occasions. The employer had not instructed and trained its employees on how to assemble and disassemble the stage. It was foreseeable that if the cables were connected to the curtain rings instead of the correct attachment point that the curtain rings would not be able to hold the weight of the stage by means of the cables and there was a real risk of injury to the plaintiff. The risk was not far-fetched and fanciful. The employer is vicariously liable for the acts of its employees. The employer did not provide training for the plaintiff. A response to the risk would have been that the defendant provide proper instruction and training to assemble and disassemble the stage. A second cause of the accident was the location of the black eyelet attachment point in close proximity to the cable attachment point . To an untrained person, the eyelet and the attachment point looked similar because they were located very close to each other and could be mistaken for each other. It had crossed Ms Haddon-Wood's mind fleetingly that an untrained person could attach the cables to the wrong attachment point. The manufacturer was responsible for implementing the means of attachment of the side stage curtains to the stage. These modifications were not carried out in accordance with instructions provided by McDonalds. [My added emphasis] 31 The Master said that a person with the most rudimentary mechanical skills should have directed its mind to the danger of placing the curtain eyelet near the attachment point. She said that it was an obvious danger and a cheaper and safer alternative, press-studs, had been previously implemented. Indeed, they were supposed to have been repeated in the modifications carried out by the respondent in early 1994. 32 The Master turned to what she regarded as the third negligent act. She said: A third negligent act which materially contributed to the accident was the positioning of the latch in the middle of the side door so that when a person was unlocking the stage door he or she was standing in a position directly underneath the stage door . If the cables did not hold the stage door firmly in the upright position when it descended that employee had no means of escape. Both the employer and the manufacturer were responsible for deciding on the position of the locking mechanism. It was a McDonalds employee who suggested the height of the mechanism. By that, the manufacturer was entitled to believe that McDonalds was otherwise satisfied with the locking mechanism but as the locking mechanism was drawn to its attention it did have a duty of care to ensure that it was safe for use. [Red AB 69] 33 Accordingly, the Master found that both the appellant and the respondent were negligent.

Contribution 34 In her analysis of the apportionment exercise under s 5 of the Law Reform (Miscellaneous Provisions) Act, the Master referred to what she described as the three causes of the accident. She said: The three causes of the accident were firstly, an employee of the defendant actually attaching the cables to the wrong attachment points. The second cause was the location of the curtain ring attachment which was in close proximity to the proper cable attachment point and the third cause was the location of the locking mechanism. The defendant was wholly responsible for the first negligent act. The manufacturer for the second and both were responsible for the third negligent act . As previously stated it was an employee's act in attaching the cables to the curtain eyelets that was the main cause of the accident . The employer is vicariously responsible for this negligent act. After Mr Birch left the defendant's employ, the employer had not carried out any instructions as to the correct method in assembling and disassembling the stage. This resulted in the cables being attached to the curtain rings on a number of prior occasions without the error being noticed. The modifications had been incorrectly carried out by the cross defendant in 1994. For a number of years the employees of the defendant had been aware that the modifications to the side curtains had not been done properly yet nothing was done by the defendant to rectify this. However the manufacturer took a short cut with the modifications and Mr Kondakoff and Mr Horsley of the cross defendant agreed that the curtain eyelets were totally unsuitable to secure the cables. The danger of putting two similar attachment points of similar appearance in close proximity should have been obvious to the manufacturer. Both McDonalds and the manufacturer decided on the location of the locking mechanism. Taking all these factors into account, I assess the employer/defendant's responsibility at 70% and the manufacturer/cross defendant's responsibility at 30%. [My added emphasis] 35 No complaint is made about the Master's statements of principle relating to the contribution exercise. 36 On behalf of the appellant Mr Toomey QC submits that the apportionment was erroneous because there was:

(a) an erroneous finding that the appellant and respondent were both responsible for the location of the locking mechanism, and

(b) an incorrect assessment of the comparative responsibilities of the parties. 37 Mr Toomey submits that the evidence does not support the finding that both parties decided on the location of the locking mechanism. 38 The appellant's case is that the respondent held itself out as possessing the requisite engineering skill and expertise but Therma failed to identify the risk or design the truck body so as to eliminate the apparent risk. 39 It is submitted by the appellant that if the Master had properly analysed the evidence, the only available conclusion was that the respondent was primarily, if not wholly, responsible. 40 Mr Toomey further submits that the Master was wrong to indicate that the respondent was only required by the appellant to 'replicate' the original truck. On the contrary, it is submitted that the evidence established that the respondent did not replicate the former truck but designed a new truck body. 41 In summary, the appellant contends that the primary and direct cause of the accident was the respondent's negligence in failing to identify the risk and advise the appellant of that risk and of alternatives. The appellant submits that were it not for the respondent's negligence, the accident would not have occurred. It is maintained that it was the respondent who created the situation of danger. Accordingly, the admitted negligence of the appellant in failing to instruct the plaintiff is claimed to have little or no significance because the appellant was not aware of the particular risk.

42 Particular criticism is made of the Master's reliance on Sousaari v Steinhardt (1989) 2 Qd R 477 which, it is submitted, was misplaced and led her into error on the apportionment exercise. Counsel points to the fact that the employer in Sousaari knew of the danger and yet was held to be 40% liable as against 60% apportioned to the manufacturer. Here, there was no evidence that the appellant knew of the danger, only that it should have known. It is submitted that the Master confused the percentage contributions actually found in Sousaari. 43 I should mention that Mr Toomey also submits that the Master was wrong to find that the appellant was vicariously liable to the plaintiff because there was no evidence that the act of attaching the cables was carried out by an employee of the appellant. It could have been done by the plaintiff himself. 44 This submission should be put to bed promptly. There was in fact no evidence or reasonably available inference that it was the plaintiff who attached the cables to the wrong attachment point. I accept the submission of Mr Sexton SC, on behalf of the respondent, that the only conclusion reasonably available on the evidence was that the erroneous attachment was performed by an employee of the appellant and not by the plaintiff, nor by any third party. 45 Apportionment of liability as between joint tortfeasors is a discretionary decision and one which 'is not to be lightly reviewed', Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR 492 at 494. See also Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 at 868, 873 and 877 and more recently, Spencer v Balranald Shire Council [2002] NSWCA 102. 46 To set aside an apportionment under s 5, it must be shown that the failure to properly exercise the discretion involved in the apportionment involved an apportionment which was unreasonable or plainly unjust, Oxley County Council v MacDonald [1999] NSWCA 126 at [55]. 47 As Fitzgerald AJA said in Rolls Royce Industrial Power (Pacific) Ltd v James Hardie & Coy Pty Ltd (2001) 53 NSWLR 626 at 653 [172], an appeal court is not entitled to interfere if the trial judge's apportionment was reasonably open. 48 In Wynbergen v Hoyts Corporation Pty Ltd [1997] 72 ALJR 65 at 58 it was stressed that the task involves a comparison of the relative culpability of the parties and the relative importance of the acts of the parties in causing the damage. 49 An apportionment finding is one of balance and relative emphasis and the weighing of considerations. This, of perforce, involves individual choice and discretion in which minds may well differ, Podrebersek at 493 - 494 and Liftronic at 868 et al. See also James Hardie & Coy Pty Ltd v Roberts (1999) 47 NSWLR 425 at 446, Fitzgerald v Dansey [2001] NSWCA 339 and Dunnet v Brennan (2000) 31 MVR 362. 50 The appellant conceded that it failed to adequately instruct the plaintiff and indeed other employees. The Master was entitled to find that it was the lack of instruction which led to one of the appellant's employees connecting the cables to the wrong attachment point and that this was the most important cause of the accident. Indeed, the evidence of the appellant's expert, Mr Simpson, was that the incorrect connection of the cable by an employee of the appellant was the most important factor, and that the second factor in importance was the failure of the appellant to properly instruct the driver. 51 In my opinion, it was also clearly open to the Master to find that an additional cause of the accident was the location of the eyelet attachment point in close proximity to the cable attachment point. 52 For an 'untrained person', there existed the possibility of confusion and mistake. The respondent was originally responsible for this situation since it had not carried out the modification required by the appellant but had taken a 'short cut'. However, as against this, it is plain that the appellant had known about the situation from around March 1994 (more than 4 years before the accident) but had done nothing to rectify it. One assumes that nothing was done because of Birch's familiarity with the system. However, when Birch left the appellant's employ, nothing was done to train staff or to ensure employee safety. 53 The third cause of the accident identified by the Master was the position of the locking mechanism. As counsel for the respondent observed, this was not an independent cause of the accident, but came into play if the cables did not hold. The appellant challenges the finding of the Master that both parties were responsible for the location of the locking mechanism. 54 In my view, the Master was entitled on the evidence to so find. The evidence satisfies me that the respondent was not retained by the appellant to advise it on the adequacy of the design. The respondent was engaged to customise a new body for the truck so as to be, with minor modifications, identical to the original. It was reasonably open to the Master to find that the respondent was instructed to 'virtually copy' the existing truck. All of the modifications required to the existing truck emanated from the appellant, or its agent, not from the respondent. 55 It does not follow simply because the respondent was the manufacturer that it is to be affixed with complete responsibility for the inappropriate location of the locking mechanism. The respondent conceded that, as manufacturer, it owed a duty of care to the plaintiff with regard to any design defects. However, as a matter of contract with the appellant, it does not appear that the respondent was retained to design the locking mechanism, or for that matter, any other component of the truck body. The Master was entitled to find on the evidence that the appellant was satisfied with the locking mechanism and also to find that it was the appellant who had suggested the height of the locking mechanism. 56 The appellant seeks to make much of the submission that the respondent had a responsibility to identify and advise the appellant of any risk and of alternatives available. Leaving aside whether the respondent has such a responsibility under contract or otherwise, it is obvious that employees of the appellant were aware of the situation. Any employee of the appellant who had anything to do with setting up the truck knew of the existence of eyelets. That is, except the plaintiff, who was never told or instructed. Birch was clearly aware of the situation but he left the employ of the appellant shortly before the plaintiff started. In any event, the eyelets were obvious and it was foreseeable, as the Master found, that the cables could be erroneously attached to the eyelets by an untrained person. One did not need to be an engineer to appreciate that the eyelets were not there to be used to attach the cables. While whoever attached the cables before the accident was very inattentive or stupid, it was a risk which the appellant should have appreciated without an engineer's inspection or advice. And if the appellant was in fact ignorant of the risk, it is plain from the evidence of Mr Simpson, its own expert, that it should have been so aware. 57 In approaching the apportionment exercise, I am unable to conclude that the Master made any error of fact or came to conclusions on causation which were not available on the evidence. It is simply not to the point to say that were it not for the respondent's breach, the accident would not have happened. One could extend such examples manifold but be none the wiser in order to carry out an exercise in the apportionment of blame under s 5 of the statute. 58 In my opinion, the Master was entitled, indeed correct, to find as she did in her identification of the causes of the accident. She was also entitled, and I would agree, to identify the primary or main cause as being the appellant's employee attaching the cables to the wrong attachment point. Concerning the principal cause, it is plain that the appellant was wholly responsible. 59 Another cause of the accident was the location of the curtain eyelet attachment in close proximity to the cable attachment point. On this, I agree with the Master that the respondent was wholly responsible. 60 The third contributing cause identified, the location of the locking mechanism, was properly able to be characterised, having regard to the evidence, to the joint fault of the employer and the manufacturer. 61 The Master, having identified the causes of the accident, and the respective negligence of the parties within those factual contexts, had to balance them against one another and indeed, within each cause, particularly the third. 62 Accepting that the Master was correct in her attribution of the primary cause, as I am, it is very difficult to successfully attack the discretionary exercise in apportionment. A moment's reflection will reveal why this is so. If, for example, one assumes the primary cause as constituting 60%, it is reasonable to apportion this entirely to the appellant. If one then fixes the other two subsidiary causes at 20% each, and applies the Master's approach to blameworthiness, then it is easy to see how she arrived at a 70/30 apportionment. Making some adjustments to these percentages, used for the purpose of illustration only, leads to little different result. 63 I am unable to see how it can be said that the apportionment was not well within the discretion of the judicial officer and I am unpersuaded that a case has been made out for intervention by the court. 64 I should mention Sousaari because of the appellant's reliance upon it and the Master's error in relation to it, as conceded by the respondent. The Master considered it to be an instructive authority. Indeed, it is. However, in considering the case she erroneously stated that the employer was ordered to contribute 60% and the manufacturer was liable for 40%. In fact it was the other way around. However, I do not think that this mistake led the Master into further error or tainted her approach to assessing a just apportionment. 65 There are obvious distinguishing features between Sousaari and this case. The most important is that in Sousaari the employer gave instructions to its employee not to do what the worker did. So there was an attempt, albeit imperfect, to discharge the employer's duty. In this case, the appellant made no attempt at all to give instructions to any employee, including the plaintiff, as to how to attach the cables. 66 Furthermore, a reading of Sousaari makes it clear that the confusion generated by the design was much greater than in this case. It was not surprising that the plaintiff in Sousaari was confused whereas that was not necessarily the case here. 67 Bearing in mind these distinctions, I do not see that the Master's mistake with the percentages in Sousaari led her into any error in the apportionment exercise in which she was engaged. 68 In my opinion, the appellant has not shown that the apportionment of the Master was not a just and equitable one having regard to the respective parties' responsibility for the damage. This aspect of the appeal should therefore be dismissed. Likewise, it follows from my discussion of the respective negligence of the parties and the Master's approach to the contribution exercise, that the cross-appeal should be dismissed. It is fair to say that Mr Sexton regarded the cross-appeal as essentially a defensive one.

The Trade Practices Act claim 69 The Master found that the s 52 claim by the appellant under the Trade Practices Act was statute barred since it was not commenced by 31 March 1997, that is 3 years after the completion of the modifications to the truck by the respondent. 70 The submission of the appellant is that the prospective loss did not crystallise until the commencement of the plaintiff's proceedings against it on 30 October 1998. Because of the view I take on the claim of breach of s 52, it is unnecessary to explore the appellant's contention that the s 52 claim was not statute barred. 71 It is relevant to mention that the Master also found that the claim by the appellant against the respondent for breach of contract was also found to be statute barred and that no appeal is brought from that ruling. 72 The appellant's Amended Cross Claim against Therma specifies four representations said to have been made by the respondent which were misleading or deceptive conduct contrary to s 51A and s 52 of the Trade Practices Act. They are as follows:

(a) That Therma possessed the requisite skill, knowledge and expertise to design the truck in accordance with the requirements of McDonalds.

(b) That Therma possessed the requisite skill, knowledge and experience to manufacture and thereby modify the body of the truck so as to enable McDonalds and its staff to use the truck as a portable stage for the Ronald McDonald Show.

(d) That the modifications to the Truck including all components and machinery would be safe for use by McDonalds, its servants and agents. 73 In his oral submissions Mr Toomey re-cast the representations. He said that they were that the respondent was highly skilled in designing trucks and would design the truck for the appellant applying those attributes, viz engineering expertise and qualifications. He also said that the respondent misrepresented its level of expertise and qualifications, and accordingly, did not have the capacity to foresee the risk that it was creating. Mr Toomey submitted that the breach was that the respondent had no engineering qualifications and did no risk assessment. 74 So far as concerns representations (a) and (b) in the pleading, and the way in which they were re-cast as a representation as to expertise and qualifications, an examination of the evidence reveals that no such representations were made by the respondent. Nowhere in the discussions which took place, in the correspondence or the brochure, is there any representation that the respondent had engineering qualifications. Certainly the reference in the brochure to having been engaged in building and designing truck bodies for 18 years does not of itself bespeak of any engineering qualifications. 75 Nor was there any evidence from the appellant to the effect that it was induced to enter into the contract on a representation such as (a) or (b) or as re-cast by its counsel. In addition, there was no evidence that if the appellant had been told that the respondent had no engineering qualifications, it would not have entered into the agreement. 76 The position is the same with regard to the alleged representation by the respondent that it had the capacity to foresee the risk or to carry out a risk assessment. Again, there was no such evidence from the respondent, nor evidence from the appellant that if it had known that the respondent had no such capacity, it would not have entered into the agreement. 77 As to representations (c) and (d) in the pleading (which were not, in so many words, included in Mr Toomey's oral re-casting of the representations) there was no evidence that they were expressly made. They are not to be found in the documentation, including the brochure. So far as I understand the appellant's submission, it is not submitted that these representations should be implied. But even if it were, it is unclear whether (or how) it is suggested that such terms (as in para (c) and (d)) should have been implied into the contract. 78 I agree with the submission of Mr Sexton that the appellant has simply failed to identify how it makes out its claim, as pleaded or as reframed, for a breach of s 52. Such breaches of duty as committed by the respondent (to the plaintiff) are relevant to its tort liability but I am unable to understand how they can be said to be a breach of s 52 as between the appellant and respondent. 79 It must be kept steadily in mind that the Master held (and the appellant does not challenge) that the appellant was out of time in its claim for breach of contract and also concerning its claim under the Sale of Goods Act 1923. 80 Given these conclusions (that the representations were not made or if they were, there was neither reliance nor breach) it is unnecessary to explore the question of when the loss or damages was suffered by the appellant in consequence of the misleading and deceptive conduct of the respondent. 81 It is apparent that, given that the appellant's case in contract is statute barred, it now seeks to rely on more or less the same claim and breach under s 52 of the Trade Practices Act. This is the very same attempt which was not permitted by the court in Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679. The court by majority (Mahoney and Clarke JJA) held that a worker had no claim for damages for a breach of s 52 because, although there was implied in a contract of employment that the employer would take reasonable care to provide a safe system of work, the entry into the contract was not the engaging in misleading or deceptive conduct unless the employer expressly did something which could be construed as a representation capable of misleading. See eg at 691, 698 and 700 of Wright. Thus, assuming that the representations claimed by the appellant are said to be implied, rather than express, the appellant runs into Wright. It seems to me that you cannot seek to convert an implied contractual term, breach of which is statute barred, into an additional cause of action under s 52. To do so subverts the contractual limitation period. 82 It follows, in my view, that the s 52 claim fails, even assuming, contrary to the Master's finding, that it was not time barred.

Costs 83 On the cross-claim, the Master ordered the respondent to pay 30% of the appellant's costs and ordered the appellant to pay 70% of the respondent's costs. She also ordered the respondent to pay 30% of the appellant's costs of defending the plaintiff's claim. The costs orders reflected the apportionment which the Master had made. The Master also noted that the appellant had been unsuccessful on a number of issues, although acknowledging that much of the evidence related to the issue of contribution. 84 Counsel for the appellant submits that the costs order produces a perverse result. He points out that the respondent maintained to the very end that it had not carried out the modification in question. The issue was resolved in favour of the appellant and the evidence concerning it took up an appreciable time at the trial. 85 Mr Toomey submits that the appellant had to run its case to get any contribution from the respondent. The position taken by the respondent was that it should not be liable to contribute one cent. The appellant started from nothing and ended up with a 30% contribution. It follows, in his submission, that the appellant should have obtained a favourable costs order (100%) on the cross-claim. In Mr Toomey's submission, the issues on which the appellant failed should make no difference. 86 The Master's finding that the major factual dispute at the trial was who carried out the modifications, supports the appellant's contention. 87 On behalf of the respondent, Mr Sexton points out that the appellant had maintained that it was entitled to a complete indemnity. He submits that the factual issue below was far more than simply who carried out the modification. Additionally, the appellant failed on the issues of contract, Sales of Goods Act and s 52. 88 In my opinion, the Master erred in the costs order which she made. Put simply, the appellant sought an apportionment or indemnity. The respondent contested the appellant's claim, maintaining that it was not liable to make any contribution. A significant proportion of the 5 hearing days concerned the determination of the issue of who installed the eyelets, the respondent denying that it did. 89 This issue was found against the respondent and the Master apportioned the plaintiff's damages, the respondent being ordered to pay 30%. 90 This result should not in my opinion have led to the respondent being ordered to pay only 30% of the appellant's costs of the cross-claim. 91 In effect, the appellant won the cross-claim although its success was partial. It did not obtain a complete indemnity but it did obtain a 30% contribution from the respondent to the plaintiff's damages. Subject to consideration of whether any special costs order was warranted, prima facie the appellant was entitled to a 100% costs order. 92 However, it seems to me that there is reason to make a special costs order. While the appellant obtained a 30% contribution and succeeded on the major factual issue, it lost on just about all of the other issues. These issues are sufficient, in my view, to justify a special costs order which I would assess at the respondent receiving 20% of the costs of the cross-claim but paying 80% of the appellant's costs of the cross-claim. I would not interfere with the order which the Master made in relation to the costs which the respondent should contribute to the appellant in respect of its defence of the plaintiff's claim. Orders 93 I would propose the following orders;

Vary the orders for costs numbered (1) and (2) made by the Master on 10 May 2001 by setting them aside.

In substitution thereof, order that the respondent pay 80% of the appellant's costs of the cross-claim and order that the appellant pay 20% of the respondent's costs of the cross-claim. 94 FOSTER AJA: I agree with Stein JA. **********

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Trade Practices Act 1974(Cth)

At a glance

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Before

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Judgment (30 paragraphs)

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Legislation Cited (1)

Cases Cited (10)

Cited By (1)