Principles applicable to the determination of duty of care
85Bradley Tracey did not admit (on the pleadings) that it owed Mr Perigo a duty of care as his employer. However, in his closing submissions (which were short and to the point) Mr Kelly, who appeared for Bradley Tracey, did not seek to resist a finding that a duty of care was owed. The principal contentions put on behalf of Bradley Tracey were that there was no breach of duty and that, if there was, by far the greater portion of liability rested with Waco.
86Waco denied (on the pleadings) that it owed Mr Perigo any duty of care. In the alternative, it was submitted that, having regard to the relationship between Waco and Bradley Tracey (being one of principal and independent contractor), any duty of care owed by Waco to Mr Perigo was confined in accordance with the principles stated in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, affirmed by the High Court in Leighton Contractors Pty Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1 at [20].
87Relevantly for present purposes, the following principles stated in those decisions arise for consideration in the present case:
(1)in some circumstances a principal [or entrepreneur] will come under a duty to use reasonable care to ensure that a system of work for an independent contractor is safe;
(2)the entrepreneur's duty arises simply because he is creating the risk and is more limited than the duty owed by an employer;
(3)the entrepreneur's duty imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury;
(4)the entrepreneur's duty does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur;
(5)if there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power...the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work ... within his area of responsibility.
88Since Leighton v Fox, the Court of Appeal has emphasized the importance of considering earlier jurisprudence in light of that decision. In that context, Ms Chapman drew my attention to the decision of the Court of Appeal in Pacific Steel Constructions Pty Ltd v Barahona; Jigsaw Property Group Pty Ltd v Barahona [2009] NSWCA 406. That decision was delivered as a judgment of the Court (Allsop P, Beazley and Giles JJA). The Court noted that Brennan J had in Stevens v Brodribb referred to circumstances "which may make it necessary for a principal to retain and exercise a supervisory role, as a matter distinct from prescribing the respective areas of responsibility if confusion about those areas involves a risk of injury." The Court continued (at [87] to [88]):
The basic principle remains, however, that the principal has no duty to retain control of the system of work if it is reasonable to engage the services of an independent contractor who is competent to control the system of work without supervision, and the activity has been organised and has been placed in the hands of the independent contractor.
The circumstances to which Brennan J referred were not elaborated. Subsequent cases have explored the circumstances, but Leighton v Fox stands against arriving at "a general law obligation ... of a more extensive kind than that recognised in Stevens v Brodribb Sawmilling Co Pty Ltd".
89The Court in Barahona proceeded to discuss a series of decisions of the Court of Appeal in which it has been held that a principal owes to an independent contractor a duty beyond the alleviation of risk of injury arising from a need for direction and coordination of activities on a site, including Rockdale Beef Pty Ltd v Carey [2003] NSWCA 132 and Tolhurst v Cleary Brothers (Bombo) Pty Ltd [2008] NSWCA 181. The Court emphasised, however, that to the extent to which factors generally relevant to the existence of a duty of care were regarded as sufficient to find a duty of care owed to an independent contractor in those cases, the principles affirmed in Leighton v Fox must prevail: Barahona at [91]; see also Unilever Australia Ltd v Pahi; Swire Cold Storage Pty Ltd v Pahi [2010] NSWCA 149 at [48] per Beazley JA, Allsop P and Giles JA agreeing at [1] and [82] respectively.
90The decision in Unilever opened with the following additional remarks of the President at [2] to [3]:
The High Court in Leighton Contractors Pty Limited v Fox [2009] HCA 35 has made it clear that the legal and juridical significance of the place of both the employment relationship and the corporate form is to be maintained in the assessment of the existence of any duty of care in a workplace context - whether complex or simple. Bearing this in mind, as Beazley JA says, care needs to be taken in applying authorities which can be seen not to place appropriate regard to that legal and juridical foundation.
That said, the common law does not operate in a fashion that ignores substance in a preference for legal form. Here, ESP Techforce Pty Ltd ("ESP") was the employer. It was responsible for and carried out direct supervision. There was nothing to lead to any conclusion or apprehension in either Swire or Streets that ESP was not willing or able to understand, undertake or fulfil its duties to its employees who were carrying out work within the overall context of Swire's operation for the commercial interests of Streets. The substance was that ESP, alone, carried the duty of care owed to the respondent.
91Mr Wheelahan submitted on behalf of the plaintiff that the party in the position of Leighton in the present case is Axis, not Waco. Nonetheless it remains the case that Waco and Bradley Tracey were in the relationship of principal and subcontractor. As explained by the President in Unilever, the juridical significance of the relationship in which they stood to each other and to Mr Perigo must not be ignored, and is the foundation for an analysis of the content of any duty owed to Mr Perigo by Waco.
92Mr Wheelahan acknowledged that the duty owed by Waco was "probably not" co-extensive with the duty owed by an employer to an employee but submitted that "where there is this level of intermeddling or the exercise of control by the head contractor at the site, it is akin to that duty" (T369.2). He noted that the duty of the employer is a duty to take reasonable care to avoid exposing employees to unnecessary risks of injury: Hamilton v Nuroof (WA) Pty Ltd (1956) 96 CLR 18 at 25.7 per Dixon CJ and Kitto J.
93Mr Wheelahan sought support for the case against Waco in the decision of the Court of Appeal in Roche Mining Pty Ltd v Jeffs [2011] NSWCA 184, decided after Leighton v Fox. As submitted by Mr Wheelahan, that case has some elements in common with the present case. Unsurprisingly, however, there are also differences. The plaintiff in Roche was injured when he fell 2.5 metres while climbing into a "Cat 785B" dump truck at Wambo Coal Mine. He was employed by a company that provided skilled employees to Roche. Roche was in charge of running the mine and owned the plant and equipment used at the mine, which included the Cat 785B from which the respondent fell: Court of Appeal judgment at [3].
94As first instance, Hoeben J (as his Honour then was) held that Roche breached its duty of care to the plaintiff "essentially because it failed to provide a safe means of access to the cabin of the Cat 785B": Court of Appeal judgment at [4].
95It may be doubted whether the decision in Roche dictates the conclusion that the duty owed by Waco to Mr Perigo was "akin to" the duty owed by an employer to an employee, as I understood Mr Wheelahan to submit. However, the decision does provide some support for Mr Wheelahan's case.
96Hoeben J held at first instance that the plaintiff had correctly formulated the duty owed to him by Roche as a duty "to use reasonable care to avoid unnecessary risks of injury to the plaintiff and to minimise other risks of injury": Jeffs v Rio Tinto Ltd & Anor [2010] NSWSC 1046 at [81]-[84]. That formulation was drawn in terms from the passage in Stevens v Brodribb approved in Leighton v Fox.
97His Honour also held, uncontroversially, that the content of that duty was to be determined by reference to the facts of the case and, in particular, those relating to the relationship between the plaintiff and Roche: at [85]. His Honour held that, whilst not co-extensive with that of an employer and employee, the relationship between Roche and the plaintiff was significantly closer than that between a principal and an independent contractor: at [86].
98The Court of Appeal expressly endorsed those determinations: per McColl JA at [62] to [63]; Basten JA agreeing at [93]; Tobias AJA agreeing at [108]. McColl JA said:
[62]I would record, however, that insofar as the content of Roche's duty of care is concerned the primary judge was correct, in my view, in adopting Brennan J's formulation in Stevens v Brodribb Sawmilling Co Pty Ltd (at 47-48) (at [84]) in terms of a duty "to take reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury". This is a less stringent duty than that owed by an employer to employees: Leighton Contractors Pty Ltd v Fox; Calliden Insurance Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1 (at [21]); see generally, Pacific Steel Constructions Pty Ltd v Barahona; Jigsaw Property Group Pty Ltd v Barahona [2009] NSWCA 406 (at [76] ff). It recognises, among other matters, Roche's role in operating Wambo, its responsibilities under the [Coalmines Regulation] Act, its control of the system of work and its ownership of the plant the respondent was required by Roche to operate.
[63]Further, his Honour stated (at [85]), correctly my respectful view, that the content of the duty of care had to be determined by reference to the facts: see Modbury Triangle Shopping Centre Pty Ltd v Anzil [2005] HCA 61; (2005) 205 CLR 254 (at [103]) per Hayne J. It is necessary, of course, to guard against the danger of allowing the cause of the injury to determine the content of the duty without focussing on all relevant circumstances, including the relationship between the parties: see Kuhl v Financial Services Australia Ltd [2011] HCA 11; (2011) 276 ALR 375 (at [19]-[22]) per French CJ and Gummow J and the cases their Honours cited. Bearing those principles in mind, in my view the primary judge did not err in formulating (at [97]) the content of Roche's duty of care as being to provide the respondent with a safe system of work and safe plant with which to carry out his work.
[emphasis added]
99Mr Wheelahan also relied upon paragraph [77] of the judgment, where her Honour said:
[77]As to Roche's contention that the respondent's experience, training or the obviousness of the risk militated against precautions (other than those in place) being taken, I agree with the primary judge's conclusion (at [117]) that a person in Roche's position is required, when devising a system of work, to take into account inadvertence or miscalculation on the part of those who have to implement that system, especially when it is known, or ought to be known, by that party that the system as designed involves a real risk of injury involving a fall from a distance in excess of two metres where serious injury could result. Although McLean v Tedman [1984] HCA 60; (1984) 155 CLR 306, to which his Honour referred in reaching this conclusion, was an employer-employee case, the content of the duty of care the primary judge found (at [97]) that Roche owed the respondent did not differ in any relevant respect from that being applied in that case: see McLean v Tedman (at 311, 311).