Penrith City Council v Healey; GIO General Ltd v Healey

Claim against the Council

1. In his Amended Statement of Claim against the Council, Mr Healey made allegations that may be restated as follows: 2. Between February 2000 and May 2005, Mr Healey was employed by Usshers and further and alternatively by Solid Waste. 3. During that period, Usshers and further and alternatively Solid Waste, held a contract with the Council for the emptying of litter bins in the streets of Penrith, St Marys and surrounding areas. 4. The litter bins were the property of the Council. 5. During the said period, the nature and conditions of the work that Mr Healey was performing for Usshers involved him in the heavy and repetitive lifting and handling of the litter bins so as to deposit the contents thereof into a waste collection vehicle. 6-10. Numerous of the said bins had only one handle, had blocked drainage holes, had no handles at all, were deformed and bent and stuck in the bin holders or had broken or stuck locking mechanisms or padlocks that required Mr Healey to strike them with his hand. 11. Regularly, the said bins were filled or partly filled with heavy objects. 11a. The contractual arrangements between the Council and Usshers required two garbage collectors to attend to the duties on the run in which Mr Healey was engaged whereas, to the Council's knowledge, Usshers only employed Mr Healey to perform those duties. 12. Pursuant to the Contract, Mr Healey was required to lift and empty over 530 bins on each of his runs. 13. During the said period, the use of the bins by Mr Healey brought about to him injury, disability, loss and damage. 14. And for a further count, on 29 November 2004, Mr Healey was required to lift and empty a bin located in Station Street, Penrith. 15. The bin in Station Street was owned by the Council and the emptying of the bin was pursuant to the Contract. 16. The bin in Station Street was stuck within the cradle and was heavier than it ought to have been due to its contents. 17. Arising out of the work that Mr Healey did over the said period and in particular the emptying of the bin on 29 November 2004, the Council was under a duty of care to Mr Healey and was in breach of the duty of care and was negligent.
2. The negligence on the part of the Council alleged in the Amended Statement of Claim was as follows: 1. a. Failing to take any or any adequate precautions for Mr Healey's safety; 2. b. Putting Mr Healey in a position of peril in the circumstances; 3. c. Failing to provide Mr Healey with a proper and safe system of work in that it was the Council which dictated to Usshers how Mr Healey's work was to be performed; 4. d. Failing to heed Mr Healey's complaints that the bins were too heavy and were often stuck in their cradles and the locks thereof did not work and the drain holes thereof were blocked; 5. e. Requiring Mr Healey's employer to direct Mr Healey that all bins were to be lifted no matter what their contents and all rubbish surrounding those bins was to be lifted as well or the Contract and Mr Healey's employment would be in jeopardy; 6. f. Requiring Mr Healey to work at an excessive speed; 7. g. Requiring Ussher and therefore Mr Healey to empty far too many bins in the allocated time so that Mr Healey's working hours were necessarily extended; 8. h. Failing to require Usshers to comply with its contractual obligations so as to have two garbage collectors rather than one perform the said run; 9. i. Failing to repair and replace damaged bins particularly those bins that were missing handles or were stuck in their cradles.
3. In the Amended Statement of Claim, Mr Healey alleged that, in the circumstances, the Council's dictation of the work that he had to perform placed the Council in the position of a quasi-employer. That allegation is simply not supported by the evidence before the primary judge.
4. The primary judge found that the Council, through Mr Geoffrey Brown, its Waste Management Coordinator, insisted on all bins being emptied by Usshers each night. His Honour held that the Council insisted that bins were to be emptied however difficult it was, provided it was "physically possible to do so". His Honour also found that Mr Brown knew that bins were being filled by commercial users with rubbish, that could by no means be regarded as litter, of a kind that would probably be very much heavier than would be safe for one person to lift. His Honour found that Mr Brown was aware that, on many occasions, heavy waste was placed in litter bins and that, had he thought about it, that might well have constituted a risk for a worker emptying the bins. His Honour found that Mr Brown expected all bins to be emptied if that was physically possible and did not turn his mind to the issues of what might be safe for a worker undertaking that task. On the other hand, his Honour appears to have found that Mr Brown accepted that bins that were too heavy to be lifted could not be emptied and required Council workers to attend to them.
5. The primary judge found that issues such as missing handles or damaged bins were seen only as maintenance problems requiring correction, but not as hazards creating a risk of injury. His Honour was satisfied that Mr Brown was well aware of damaged bins. His Honour considered that the Council had a duty of care towards Mr Healey, as a person who was emptying its bins, to keep the bins in a sufficient state of repair so as not to expose him to foreseeable risk of injury. That, his Honour held, involved repairing the bins and cradles that were so damaged as to impede easy removal of the bins, replacing missing handles and not impeding the removal of bins by attaching signs with screws that caught the bins. His Honour accepted that that duty did not require immediate or daily repair of the bins, but that the Council should have repaired the bins within a reasonable time of becoming aware of the damage. His Honour found that the bins were left damaged with missing handles for lengthy periods.
6. The primary judge held that the risk that a worker in the position of Mr Healey might be injured by litter bins that were too heavy or too damaged to lift safely was one of which the Council knew or ought to have known. His Honour held that there was a significant risk that serious physical injury might well result to a worker required to empty the bins. Accordingly, his Honour held, a reasonable person in the position of the Council would have taken the precaution of ensuring that bins were promptly repaired and would not have agreed with Usshers that the bins must be emptied unless it was physically impossible to do so. His Honour therefore concluded that, since the Council did not ensure that all bins were promptly repaired and insisted on bins being emptied unless it was physically impossible to do so, the Council breached the duty of care that it owed to Mr Healey.
7. The breach of duty so far as heavy bins was concerned, to which the primary judge referred, appears to have been insisting that all bins be emptied if it was physically possible to do so. The requirement that all bins be emptied arose under the Contract. That was the obligation undertaken by Usshers and there was certainly evidence of numerous complaints by the Council that bins had not been emptied. The Council's complaint was that bins were not being emptied that should have been emptied. That, however, is a different matter entirely from requiring that bins be emptied unless they were physically incapable of being lifted.
8. The primary judge considered that the Council's active involvement day by day in the performance of litter removal showed that it had not surrendered its control over that matter. While it was contractually entitled to ensure that the service for which it had bargained was being carried out appropriately, and for that purpose to liaise with Usshers, that also involved the proper maintenance of the bins to ensure that they were safe to handle.
9. The primary judge was satisfied that the injury suffered by Mr Healey was mainly contributed to by deformed and single-handled bins, of which the Council was well aware and which, despite its acceptance of the responsibility to repair, were left unrepaired for lengthy periods. His Honour held that the Council was or should have been aware that its deformed bins, bins without two handles, and bins with internal handles, presented a hazard to any worker whose job it was to lift and empty them. His Honour also held that, since the Council, through Mr Brown, insisted in effect that all bins were to be emptied unless it was physically impossible to do so, in the knowledge that he should have had that that exposed a single worker doing the task to injury, any training about not unloading dangerous weights would have been immaterial.
10. The Council says that the only conclusion that could be drawn on the evidence is that the Council actually took steps to ensure that defective bins that were drawn to its attention were repaired within a reasonable time and that there was no requirement that the bins must be emptied unless it was physically impossible to do so.
11. At the meeting held on 17 February 2005 attended by Mr Brown and other Council officers, and Ms McBurney, several OH&S issues were raised as follows: Handles missing; Bin size too big for cradle; Signs on bins - screws too long catch on bin; Chains too short; Location of chain; Bags around bins. Ms McBurney advised that she had not made the Council aware of those issues before.
12. Following that meeting, Ms McBurney gave a note to Mr Healey asking him to "do every bin tonight". She said that she needed lots of paperwork from Mr Healey about "bins being abused by residents or shopkeepers". She said that the meeting was good, but "we need to do every bin".
13. On 21 February 2005, Ms McBurney wrote to Mr Brown on the letterhead of "Usshers' Waste", a business name registered to Usshers. Ms McBurney said: "We are committed to improving performance issues mentioned and have had active discussions with driving staff to ensure performance issues are addressed". In another letter of the same day, she suggested some "pro-active steps" to provide a deterrent to misusers of street litter bins.
14. On 22 February 2005, Ms McBurney sent to Mr Brown a schedule of defective bins. Several communications on following days also added to the schedule of defective bins.
15. On 16 March 2005, Mr Brown wrote to Usshers concerning the correspondence of 22 February 2005 "regarding OH&S issues and commercial use of bins". On 18 March 2005, Ms McBurney responded saying that she would arrange for "the driver" to identify properties with a street number and business name where there is suspicion of commercial use of street litter bins. Mr Healey was the driver.
16. The Council accepts that it owed a duty in the terms suggested above. However, it says that there was no breach of that duty because it had in place adequate arrangements for the repair of damaged bins. In any event, the evidence, it says, does not support the conclusion that there was a causal connection between the injuries suffered by Mr Healey and any failure to repair damaged bins.
17. Apart from a conversation that the primary judge found that Mr Healey had on the telephone with Mr Brown in 2001, there was no evidence that Mr Healey ever spoke to or had any dealings with anyone at the Council. The Council had no reason to have dealings with Mr Healey or any other person employed by Usshers or Solid Waste. Mr Healey received his instructions from Usshers up to 30 November 2004 and from Solid Waste thereafter. He accepted that he did what Usshers or Solid Waste required him to do. Further, Mr Healey said that he did not generally complain about problems associated with the litter bins and did not complain about any injuries that he sustained, albeit because he was discouraged from doing so by Usshers. Certainly, he accepted that he did not make any complaint to the Council.
18. It is not possible to find in the terms of the Contract briefly summarised above any obligation on the part of the Council to supervise the employees of the Contractor carrying out the work of emptying litter bins. Nor is it possible to find any entitlement on the part of the Council to interfere in the day-to-day manner in which the emptying of litter bins was to be carried out by the Contractor, through its employees.
19. No obligation was imposed on the Council under the terms of the Contract to supervise or train Mr Healey. To the contrary, under cl 6.1, the Contractor was obliged to train its employees to a standard adequate to enable them to perform properly the services to be performed under the Contract. Any duty of care owed by the Council to Mr Healey could only be a duty to exercise reasonable care in replacing bins when it became aware that a particular bin was damaged such that it ought to have considered that there may be some risk of injury to persons such as Mr Healey employed to empty the bins. That is the extent of the duty found by the primary judge.
20. The Council accepts that it was aware of the fact that bins could be damaged from time to time, since it had a system of repair and replacement in place. Nevertheless, it was incumbent upon Mr Healey to establish that the Council knew or should have known that the fact of particular bins being damaged or bins being damaged in a particular way posed a risk of harm to him.
21. Mr Healey accepted that it was, at least initially, the policy that if a bin was too heavy he was not to lift it. The primary judge interpreted the question and answer as being a suggestion that Mr Healey was merely told not to do the impossible. Mr Healey agreed that there were occasions when he would report back to Usshers that he was unable to empty a particular bin and would give reasons why he could not empty it. He agreed that, after reporting that a bin was too heavy, the next time he went around, the bin had at least, on occasions, been emptied, but not on every occasion.
22. The Council adduced evidence that, when notified by Usshers that a bin was too heavy because it was full of waste, it would send its own staff out to empty the bin. Further, Mr Healey accepted that there was a note from Ms McBurney directly requesting that he tell her about any difficult or inoperable locks on bins or bags left around the bins. He accepted that that was the procedure.
23. Mr Healey became aware during the period December 2004 to May 2005 of increasing complaints from the Council about the Services not being performed properly. That was after Mr Healey claimed that he was injured, on 29 November 2004.
24. The Council adduced evidence concerning the listing of facsimile and email reports from Usshers of defects in bins throughout the period from June 2000 to the end of April 2005. A substantial proportion of the issues identified in that correspondence concerned the dumping of commercial waste, such as builders' rubble or concrete, cleaners leaving waste in bins and the like. There were very few notifications of stuck or jammed bins prior to February 2005. On the other hand, there were records of complaints by the Council to Usshers about litter bins not being emptied.
25. Mr Healey did not ever report any problems that he may have had to the Council, other than the conversation that his Honour found that he had with Mr Brown in 2001. There was no evidence of any other employee of Usshers reporting problems directly to the Council. Mr Healey's assertion that, during his employment, he saw no bins ever replaced, thus meaning that six witnesses called to give evidence on behalf of the Council, should not be believed as to the system of repair and replacement adopted by the Council. The primary judge should not have accepted Mr Healey's responses to his Honour's own questions on that issue.
26. The primary judge did not identify any evidence that could be regarded as notice to the Council that it was failing to repair bins on a regular basis and that, as a result of some failure to repair bins, persons such as Mr Healey were being exposed to injury. His Honour did not address the content of statements made by Council officers that were contrary to Mr Healey's assertions that bins were not repaired.
27. A distinction should be drawn between damaged litter bins, on the one hand, and bins that were too heavy because members of the public had placed refuse in them that should not have been placed there, on the other. The primary judge made no finding as to what steps or actions the Council failed to take in order to overcome the problem of extra-heavy bins. The only evidence was that, when the Council was notified that a bin was too heavy, because prohibited garbage had been placed in it, the Council sent its own staff to empty the bins. The Council could not be under a duty to Mr Healey to ensure that members of the public do not put unauthorised garbage into litter bins in public places.
28. While Mr Healey complained of numerous injuries during the time of his employment, he did not draw specific distinctions between injuries suffered because of damaged bins, on the one hand, and injuries suffered by trying to lift bins that were too heavy because of unauthorised garbage contained in them, on the other.
29. I am not persuaded that there was any breach by the Council of the limited duty that it owed to Mr Healey to ensure that bins were promptly repaired. There is no basis for a finding that the Council required that bins must be emptied unless it was physically impossible to do so.

Claim against GIO

1. GIO relied on two answers to Mr Healey's claim against it. First, it said, Usshers did not owe a duty of care to Mr Healey, after he had ceased to be an employee of Usshers and had become an employee of Solid Waste. While Usshers may well have owed him a duty of care while he was its employee, and Solid Waste owed him a duty of care after he became its employee, Usshers ceased to owe any duty of care after 30 November 2004.
2. The second answer advanced by GIO was that, even if Usshers owed a duty of care to Mr Healey such that a liability on the part of Usshers arose from breach of that duty, that liability was not covered by the Policy. Rather, GIO said, any such liability was the subject of exclusions contained in the Policy.
3. Section 7 of the Policy dealt with public liability cover. By s 7, GIO agreed to insure Usshers for any amount that it might become legally liable to pay as compensation for personal injury during the period of insurance and caused by an occurrence connected with Usshers' business. Section 7 did not insure liability arising directly or indirectly out of or caused by, through, or in connection with, or for employers' liability or contractors and supplied labour.
4. Thus, exclusion 3, dealing with employers' liability, excluded liability for personal injury to any of Usshers' employees arising out of or in the course of their employment in Usshers' business and liability for personal injury to any person deemed to be an employee of Usshers or in respect of which Usshers is entitled to seek indemnity under any policy of insurance required to be taken out pursuant to any statute relating to workers compensation. Clearly, any liability of Usshers to Mr Healey for personal injury caused by an occurrence before 1 December 2004 would be excluded by that provision.
5. Exclusion 13, dealing with contractors and supplied labour, excluded liability for personal injury to any person who is not Usshers' employee, but has been engaged to perform work on behalf of Usshers or for Usshers' benefit, where the contract price or value of the total works relating to the engagement of the person exceeds $20,000 during the period of insurance. The contract price or value of the total works relating to the work performed by Mr Healey in 2004 and 2005 exceeded $20,000. However, the first question is whether it can be said that Mr Healey was engaged to perform work on behalf of Usshers or for Usshers' benefit, within the meaning of exclusion 13. That is to say, it is clear that, after 30 November 2004, Mr Healey was not engaged by Usshers but was employed by Solid Waste. The question is whether, in those circumstances, his engagement by Solid Waste to perform work in discharge of the obligations of Usshers under the Contract is sufficient to attract the exclusion.
6. In any event, exclusion 13 only applies, relevantly for present purposes, to personal injury to persons: 1. Who are employed by an employment or placement agency, labour hire company or any other organisation, government body or person whose business is, or includes, the supply of labour; and 1. Whose work is performed in whole or part under Usshers' care, control, direction or supervision; or 2. Personal injury arises out of or in connection with any defect or deficiency in any fitting or plant used by Usshers in connection with Usshers' business; or 1. … 2. Engaged to perform work in connection with any structure, machinery or plant "at the situation". In the Policy, the term "situation" is defined as meaning the places listed in the schedule at which and from which Usshers operates its business, and includes buildings and land within the legal boundaries. The only place listed in the schedule is an address in Berkshire Park, NSW, from which Usshers operated its businesses.
7. Thus, GIO must demonstrate that the personal injury suffered by Mr Healey fell within (a) or (c) summarised above. The first question is whether Mr Healey was employed by an organisation whose business included the supply of labour. That is to say, the question is whether Solid Waste was an organisation whose business included the supply of labour. Secondly, it must be shown that Mr Healey's work was performed in whole or in part under the care, control, direction or supervision of Usshers or that his injury arose out of a defect or deficiency in any structure, fixture, fitting, machinery or plant used by Usshers in connection with its business. The primary judge found that Mr Healey's work was not performed under the care, control, direction or supervision of Usshers. Further, although Mr Healey's injury arose out of or in connection with defects or deficiencies in the litter bins or their cradles, it could not be said that the litter bins or cradles were used by Usshers in connection with its business. The litter bins belonged to the Council. Usshers simply provided the service of emptying the litter bins. It did not in any sense use the litter bins. Further, it could not be said that the litter bins constituted structure, machinery or plant at any place where Usshers carried on business. It did not carry on its business in the streets of the Council's area.
8. It follows that GIO is not entitled to rely on any of the exclusions in the Policy. The primary question, however, is whether Usshers had any liability to Mr Healey that arose after 30 November 2004. Any liability that arose before 1 December 2004 would be the subject of exclusion 3, dealing with employer's liability.
9. The primary judge found that, while Mr Healey's employment changed from Usshers to Solid Waste, it was clear that nothing changed so far as his work was concerned. Thus, his Honour held, Ms McBurney became general manager of Solid Waste, but remained in her previous role of general manager of Usshers. Usshers continued to be the party to the Contract and continued to have its obligations to the Council in respect of the emptying of litter bins. His Honour found that Solid Waste fulfilled the responsibilities of Usshers under the Contract, but by arrangements with Usshers and not with the Council. Curiously, his Honour considered it was clear that "the two companies undertook the run" and that the emptying of the litter bins was "the joint enterprise of the two companies". His Honour held that from 1 December 2004, Usshers was undertaking the work of emptying the Council's bin "jointly with Solid Waste".
10. The primary judge held that Ms McBurney managed Solid Waste alongside her responsibilities to Usshers to ensure that its contractual obligations, in respect of the litter bins, were satisfied. His Honour held that the Council was well aware of that situation, although it was indifferent to it, provided the litter bins continued to be emptied in accordance with the Contract. His Honour considered that the Council's interactions over the Contract were with Ms McBurney "wearing, as it were, both her hats".
11. The primary judge found that, after 30 November 2004, Mr Healey was no longer under the care, control, direction or supervision of Usshers. Rather, his Honour held, after that date, Ms McBurney controlled and directed his work, acting as general manager of Solid Waste, although, at the same time, she was responsible to Usshers for ensuring that Solid Waste performed the obligations of Usshers under the Contract. His Honour found that the arrangement between Usshers and Solid Waste was "a commercial arrangement", one of the features of which was that Usshers paid Solid Waste sufficient to pay the wages of its workers, including Mr Healey. The primary judge held that the obligation of Solid Waste to Usshers was to undertake such work in relation to the litter bins as was specified in the Contract. Mr Healey was employed by Solid Waste to enable it to fulfil its obligations to Usshers. Usshers was, for its part, obliged to have the litter bins emptied in accordance with the Contract.
12. In his Further Amended Statement of Claim against GIO, Mr Healey made allegations that may be restated as follows:
13. In October 1996, the Council entered into an agreement with RW Ussher & Sons with respect to the undertaking of street litter bin waste collection services in the area of the Council.
14. In 1999, the said Contract was assigned from RW Ussher & Sons to Usshers by way of Deed of Assignment.
15. From about 1999 until 30 November 2004, Mr Healey was employed by Usshers.
16. Commencing on 1 December 2004 and ending on 29 April 2005, Mr Healey did not work for Usshers but was instead employed by Solid Waste.
17. During that period, Mr Healey, employed as aforesaid, worked in the collection of street litter bin waste in the local government area of the Council.
18. In doing so, Mr Healey was under the direction and control of Usshers, although he was employed by Solid Waste.
19. From 1 December 2004 until 29 April 2005, and thereafter, Usshers continued, pursuant to its contractual obligation, to carry out street litter bin waste collection services for the Council.
20. During that period in 2004 and 2005, Usshers owed to Mr Healey a duty of care either the same as or analogous to the duty of care of an employer.
21. During the period, the nature and conditions of the work that Mr Healey was performing involved him in the heavy and repetitive lifting and handling of litter bins so as to deposit the contents thereof into a waste collection vehicle. 15-19. Numerous of the bins had only one handle, had blocked drainage holes, had no handles at all, were deformed and bent and stuck in their bin holders, or had broken or stuck locking mechanisms of padlocks that required Mr Healey to strike them with his hand.
22. Regularly, the litter bins were filled or partly filled with heavy objects.
23. During the period, Mr Healey was required to lift and empty over 530 bins on each of his runs.
24. During the period, the use of the litter bins by Mr Healey as aforesaid and in the condition of the bins aforesaid brought about to him injury, disability, loss and damage.
25. On or about 29 November 2004, Mr Healey was required to lift and empty a bin located in Station Street, Penrith.
26. The litter bin was owned by the Council and the emptying of that bin was part of Mr Healey's job.
27. The litter bin was stuck within its cradle and heavier than it ought to have been due to its contents.
28. Arising out the work that Mr Healey did over the said period and in particular the emptying of the bin on 29 November 2004, Usshers was under a duty of care to Mr Healey as aforesaid and was in breach thereof and was negligent.
29. The particulars of negligence alleged against Usshers were as follows: 1. a. Failing to take any or any adequate precautions for Mr Healey's safety; 2. b. Putting Mr Healey in a position of peril in the circumstances; 3. c. Failing to provide Mr Healey with a proper and safe system of work; 4. d. Failing to provide Mr Healey with a proper and safe system of work in that Usshers allowed the Council to dictate to them how that work was to be performed; 5. e. Failing to heed Mr Healey's complaints that the bins were too heavy and were often stuck in their cradles and the locks thereof did not work and the drain holes thereof were blocked; 6. f. Requiring Mr Healey to lift and empty the litter bins no matter what their contents, as well as requiring Mr Healey to remove all rubbish surrounding those bins on the basis that, if he did not, arrangements with the Council would be in jeopardy; 7. g. Requiring Mr Healey to work at an excessive speed; 8. h. Requiring Mr Healey to empty far too many bins in the allocated time so that his working hours were necessarily extended; 9. i. Failing to carry out any or any adequate risk assessment in respect of the litter bins; 10. j. Failing to refuse to collect bins that were damaged or broken or in respect of which handles were missing or which contained objects that were far too heavy and in respect of which the bins were stuck in their cradles; 11. k. Failing to direct Mr Healey not to empty bins that posed a risk of injury to him.
30. The primary judge found, in effect, that Usshers owed a duty of care to Mr Healey during the currency of the Policy and in particular from 1 December 2004 to 29 April 2005, as regards the nature and conditions of his work. His Honour found that Usshers was in breach of its duty of care to Mr Healey in exposing him to an unreasonable risk of injury by the nature and conditions of the work. His Honour found that there were two causes of Mr Healey being unable to work after April 2005. The first was the injury suffered on 29 November 2004. The second was the aggravation of an underlying degenerative condition for the whole of the period of his employment.
31. However, the primary judge made no express finding that Usshers owed a duty of care to Mr Healey during the period after 29 November 2004. For his Honour to find a duty, it would have been necessary to find that Usshers retained some residual power of care, control and supervision over Mr Healey. However, his Honour expressly found that Mr Healey was not at the relevant time under the care, control, direction or supervision of Usshers. GIO contends that, unless that finding is set aside, the claim in negligence against Usshers must fail.
32. Further, in order to establish some residual power of control on the part of Usshers so as to found a duty to Mr Healey, it would be necessary to make findings as to the arrangements on foot between Usshers and Solid Waste. Whether a head contractor continues to owe a duty to employees of a sub-contractor will depend upon the particular circumstances of each case. A principal will not generally be vicariously liable for the negligence of its independent contractor. The common law does not impose a duty of care on principals for the benefit of independent contractors engaged by them of the kind that they owe to their employees. However, in some circumstances, a principal will come under a duty to use reasonable care to ensure that a system of work for one or more independent contractors is safe. An entrepreneur who organises an activity involving a risk of injury to those engaged in it is under a duty to use reasonable care in organising the activity to avoid or minimise that risk. The entrepreneur's duty arises because he is creating a risk and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organising an activity does not import a duty to avoid any risk of injury. Rather, it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury. It 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. Once the activity has been organised and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. 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, or in leaving undefined the contractor's respective areas of responsibility, the entrepreneur is not liable for damage caused merely by the negligent failure of an independent contractor to adopt or follow a safe system of work (Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [20]).
33. It is clear enough that there was no direct arrangement made between the Council and Solid Waste concerning the performance of the Contract. The arrangements between the Council and Usshers continued in force after 30 November 2004. His Honour found that Usshers remained contracted to the Council to continue to empty litter bins. However, Solid Waste performed the obligations of Usshers under the Contract by agreement between Usshers and Solid Waste. It fulfilled the responsibilities of Usshers under the Contract by arrangement with Usshers.
34. The primary judge expressly found that Mr Healey was not under the care, control, direction or supervision of Usshers after 30 November 2004. There is no notice of contention in relation to that finding. His Honour found that Mr Healey's work was not performed to any degree, whether in whole or in part, under the care, control, direction or supervision of Usshers. There was no finding by the primary judge that Usshers retained a residual right of control and direction over the nature and conditions of the work performed by Mr Healey after 30 November 2004. There is every reason to conclude that the fact that Usshers was making payments to Solid Waste to enable it to pay its employees and that Ms McBurney continued in her role as general manager of both companies, indicates that it was the intention of Usshers and Solid Waste, through the guiding mind of Ms McBurney that the whole of the responsibility for the performance of the Contract, and as to the nature and conditions of Mr Healey's work, be passed to Solid Waste, as his employer.
35. The primary judge simply did not make any finding as to the basis upon which a duty was owed to Mr Healey by Usshers after 30 November 2004. A fortiori, his Honour made no finding as to what the content of that duty might be. In the light of his Honour's finding that Usshers ceased to exercise any care, control, direction or supervision of Mr Healey, it is not possible to glean the content of any duty that might have been owed to Mr Healey by Usshers, as distinct from his employer, Solid Waste.
36. Further, the primary judge did not make any finding of any breach on the part of Usshers of any duty said to be owed by it to Mr Healey. In order to do so, it would be necessary for his Honour to specify the responsibilities on the part of Usshers that continued after 30 November 2004 as regards the nature and conditions of Mr Healey's work. His Honour made no finding as to any steps or action that Usshers' should have taken in order to discharge any duty of care owed by it. Indeed, his finding that Mr Healey was no longer under the care, control, direction or supervision of Usshers is inconsistent with the finding of a breach of duty on the part of Usshers.
37. It is difficult to see why Usshers, once it had parted with its business to Solid Waste, would owe a duty analogous to that of an employer to its former employees, who had become employees of Solid Waste.

Conclusion

1. It follows that each of the appeals should be allowed. The orders made by the primary judge in each of the proceedings at first instance should be set aside. In lieu of the orders made against the Council, there should be an order directing a verdict for the Council. In the proceedings against GIO, there should be an order directing judgment for GIO.
2. I agree with the orders proposed by Basten JA.

Endnotes

1. Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd [2014] NSWSC 723. References to paragraphs in the judgment accord with the numbering of the version on Caselaw and not the hard copy handed down in court.
2. Judgment at [75].
3. Judgment at [85].
4. Judgment at [86].
5. Judgment at [75]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 July 2016