Peter Richardson v Mirvac Constructions Pty Limited

District Court of NSW|2012-07-11|Before: Mr J, Mr P

Introduction 1Peter Richardson arranged for Mirvac, the project home builder, to build a house for him and his family at Penrith. That was in 1998. Mr Richardson and his family moved in and were living there when in 2006 an accident happened which this case is about. A balustrade on the first floor gave way under Mr Richardson's foot and he fell to the floor injuring his back. Mr Richardson sued Mirvac for damages resulting from his injury. 2It turned out that Mirvac had contracted with a staircase manufacturer and installer called WB Jones so they were joined to the proceedings as well. But it further emerged that although WB Jones had manufactured the balustrade they had contracted with another company, JMKG, to install the balustrade. Mr Richardson made various claims against the three defendants including that each was negligent. 3I have to decide whether Mr Richardson has made out his claims against any or all of the defendants. There are various cross-claims amongst the defendants so if Mr Richardson is successful I will have to decide not only which defendants are liable but to what extent.

Issues and Parties 4All parties were represented by competent counsel, senior counsel in WB Jones' case, which has helped me significantly in my job of making these decisions. They agreed on a list of issues to be determined by me. That became MFI 27 and I will give my reasons by reference to that list. I do not propose to recite the evidence except where it is relevant to my opinions and findings. 5The parties to this case and their representatives are as follows. The plaintiff is Mr Peter Richardson. He was represented by Mr M. G. Gilbert of counsel. The first defendant is Mirvac Constructions Pty Ltd (which I will call Mirvac) and it was represented by Mr J. W. Catsanos of counsel. The second defendant is WB Jones Staircase and Handrail Pty Ltd (which I will call WB Jones) and it was represented by Mr R. A. Cavanagh SC. The third defendant is JMKG Pty Ltd (which I will call JMKG) and it was represented by Mr P. J. Gow of counsel. 6I turn now to the first issue which is listed on MFI 27.

What was the duty of each defendant to the plaintiff? 7Mirvac acknowledged in [4] of Mr Catsanos' written submissions that it had "a duty to take reasonable care in the achieving construction of the subject property". JMKG acknowledged in [12] of Mr Gow's written submissions that it had "a duty to take reasonable care" as "installer of the balustrade in the circumstances of this case". Mr Cavanagh was more circumspect in describing "any duty of care owed" by his client. His written submissions acknowledged a "duty to exercise reasonable care in the performance of the work that it undertook, i.e. the manufacture of the component parts" of the balustrade. 8Both Mirvac and WB Jones denied any vicarious liability for independent contractors retained by them. Mirvac said at [8] of Mr Catsanos' written submissions that there is "no basis for holding Mirvac liable for any negligent acts or omissions perpetrated by his contractors or, as in the case of the third defendant, negligent acts of undisclosed sub-contractors of Mirvac's subcontractors." WB Jones through Mr Cavanagh's written submissions at [14] said that it was "not vicariously liable for the conduct of its subcontractor" adding "not that that allegation is raised in any event". 9Given that Mirvac and WB Jones both retained independent contractors I would find that each had a duty to Mr Richardson and, in WB Jones' case, to Mirvac to retain competent contractors. I do not think that is controversial. 10However Mr Richardson claims that all of the three defendants were in negligent breach of various duties including a failure to conduct a proper safety inspection of the balustrade upon its installation. I will have to decide whether the defendants owed duties which were breached by any such failure. What duties were owed I will come to consider along with the question of any breach which is item 3 of the list of the agreed issues to be determined. 11I turn now to the second item on that list.

Causation of injury 12WB Jones dealt with the issue of causation and Mirvac and JMKG adopted the arguments put forward by Mr Cavanagh. Mr Cavanagh developed his argument over [17] to [26] of his written submissions which became MFI 19A. Mr Cavanagh pointed out the significance of ss 5D and 5E of the Civil Liability Act 2002. 13In [22] of his written submissions Mr Cavanagh identified an issue in these terms: "that which caused the Plaintiff to fall must be the Defendant or Defendant's negligent conduct". That in my opinion must be right. Mr Cavanagh added that "the sequence of events must be that the timber plate started to give way causing the Plaintiff to lose balance, rather than vice versa." 14In terms of findings, Mr Cavanagh argued on behalf of his client as follows - "A finding that the Plaintiff fell into the edge of the balustrade into the supports or onto the timber plate, for reasons not associated with any actual movement of the balustrade or timber plate before he started to fall, must lead to a verdict for the Defendant, as he was already falling before anything happened to the timber balustrade or plate. The injury to his back must have been caused by the fall onto the backside and it is necessary for the Plaintiff to establish that the fall on the backside was caused as a result of the movement of the balustrade or timber plate." 15Mr Cavanagh argues that the timber plate giving way while Mr Richardson had part of his left foot on it, causing him to fall was "an unlikely scenario" for a number of reasons. He argues that Mr Richardson refused to answer simple questions and that must have cast a doubt on his account. He refers to passages from Mr Richardson's evidence. I have re-read all of those passages. There were some difficulties in eliciting evidence from Mr Richardson, both in evidence-in-chief and in cross-examination. My impression is that was the result not of a lack of a clear recollection or coherent account or deliberate concealment but of Mr Richardson being fairly anxious about giving his evidence. It became apparent that there was a good deal of tension in the relationship between Mr Richardson and Mirvac. I do not have to determine the causes of that but it is clear that Mr Richardson regarded Mirvac as not doing a satisfactory job on his house in a number of respects, not just what he saw as its responsibility for a faulty balustrade. I think he had quite a lot of emotion invested in this case. That is not a criticism. In fact it is not unusual for a plaintiff to have an emotional investment in their case but it accounts in some way, I think, for his manner of answering questions. Otherwise I think Mr Richardson is like that. That's the way he answers questions. He also had difficulty in the legal way questions were posed. It was not easy for him to grasp the language of interrogation. 16What does strike me on a re-reading of the transcript is that once the question was clear to him Mr Richardson's answers were also clear and consistent. He had his left foot or part of it on the timber plate. He was "wrestling with his daughter" in the sense of both having their hands on both door knobs on opposite sides of the same door at the same time. He fell downwards onto his backside. The timber plate gave way or collapsed with his foot on it. He did not begin to fall first. 17Mr Cavanagh argues that there are some inconsistencies between Mr Richardson's account in court and notes of an engineer retained on Mr Richardson's behalf, Mr Allsopp, and Mr Allsopp's assistant. Arguably there are but of course those accounts are hearsay and the authors may not have been as interested in the mechanics of the actual fall as in the structure itself. There is also disclosed some inconsistency in Mr Richardson's account to a Mirvac employee at the relevant time. But I accept Mr Richardson's consistent account given both in-chief and in skilled cross-examination. 18I do not regard the fall as inherently unlikely or inconsistent with the photographic evidence or other factors. I accept Mr Richardson's clear account over the forensic dissection of a dynamic event that occurred within seconds. I am satisfied that when Mr Richardson placed weight on the bottom timber plate of the balustrade it gave way under that weight causing his leg to go downwards and his body to follow so that he landed on his bottom on the same floor with what he described as "a giant thud" thereby injuring his back. 19In terms of s 5D of the Civil Liability Act I am satisfied that the negligence of one or more defendants to do with the balustrade was a necessary condition of the occurrence of the back injury and that it is appropriate for the scope of the responsible defendant's liability to extend to that injury. 20I turn now to the third issue identified by counsel.

Did any defendant breach its duty to Mr Richardson? 21Was the balustrade a structural component? This question is important because of Part 3.11 of the Building Code of Australia 1996. It specifies in Part 3.11.4 that the "design of...structural elements in a building must be in accordance with" - relevantly to this case - "AS1720.1-Timber Structures Code". 22Mr Richardson claims that the balustrade was not fixed in accordance with that code and there was a good deal of cross-examination of witnesses about their familiarity with that code. The engineer retained on behalf of Mr Richardson, Mr Allsopp, had no doubt that the balustrade was a structural component. At T349 he gave the following evidence when asked questions by Mr Gilbert - "Q. What is meant by the term 'structural component'? A. Structural component would be something that had to resist a specified loading. Q. Is the balustrade subject to these proceedings, is that a structural component? A. It certainly is. Q. What is therefore the standard which is - can I say is the standard that's applicable to the installation of this balustrade? A. That's AS1720.1." 23Mr A Cosentino was another engineer who was called on behalf of Mr Richardson. At T649 he effectively defined a structural connection as one which "will...transmit load". At T643 he identified the relevant code as AS1720.1. 24Mr R Nixon was a qualified builder who gave expert evidence on behalf of Mirvac. Mr Nixon agreed with the proposition that "a balustrade is not a structural component". He also said in ex 9 (D1), his report, at [146] that AS1720.1 is not the applicable code. But in cross-examination by Mr Gilbert at T568, he agreed that "a load-bearing component of the property is a structural component", that the balustrade in this case "was built and installed so it can withstand certain loads" and that "from [his] reading of 1720.1, that there are methods by which it should be fixed". 25Based on the evidence of Mr Allsopp, Mr Cosentino and Mr Nixon, I am of the opinion that the balustrade in this case was a "structural element" in the building and had to be designed in accordance with AS1720.1. I accept the opinions of Messrs Allsopp and Cosentino as qualified engineers in preference to the evidence of Mr Nixon, and I accept the concessions by Mr Nixon in cross-examination. 26But there is a further question about the interpretation of that code. It is illustrated by Mr Gilbert's cross-examination of Mr Nixon at T568. These two questions and answers were exchanged - "Q. Now, where you differ with Allsopp and Cosentino further is that you take the view, don't you, that whilst you agree that the fastenings are inadequate, you are of the view that they can still be applied by a gun if they were adequate? A. Adequate fixings could have been applied by a gun, yes. Q. So you don't agree with the plaintiff's case that gun-driven fastenings are prohibited. You don't agree with that. A. I don't agree with that." 27I also accept that the relevant joint in the balustrade is a type 2 joint. I think that to ask if the gun driven nails are "prohibited" by AS1720.1 is not helpful. The point is there are no allowances for other than nails "driven by hand only". There is a note which is in effect a warning about the use of gun driven nails. Clause 4.2.2.3(b) is prohibitive in terms. Clause 4.2.2.3(a) is not. 28In my opinion what clause 4.2.2.3 means, relative to this case, is that there were no specified withdrawal loads for the design of the joint because gun driven nails were used, but there was a warning that the withdrawal loads could have been "considerably less". The use of gun driven nails should put the installer and anyone else with responsibility for the stability of the joint on notice that there was a considerably increased risk of failure in the joint. 29Who then had responsibility for the stability of the joint? The installer, the third defendant, JMKG, obviously is one. Mirvac and WB Jones delegated the installation to independent contractors. As a general rule, a person is "not vicariously responsible for the negligence of an independent contractor" as Gleeson CJ said in Leichhardt Municipal Council v Montgomery [2007] HCA 6; (2007) 230 CLR 22 at 34 ([23]). 30It seems to be acknowledged that a person is under a duty to delegate to a competent independent contractor and that, to my mind, is consistent with the law. If WB Jones had reason to think that JMKG was not competent, then a breach of duty is acknowledged in [14] of Mr Cavanagh's written submissions "to exercise reasonable care in the performance of the work that it undertook". Mr Cavanagh says that all that WB Jones undertook was the manufacture of the balustrade. But it was also engaged by Mirvac to install the balustrade. WB Jones discharged that duty to an independent contractor JMKG. WB Jones was entitled to do that, but it had to be not just any independent contractor but a competent one. If WB Jones had reason to think that the independent contractor JMKG was not competent, then WB Jones could be in breach of its duty to Mirvac and to Mr Richardson. Similarly, if Mirvac had reason to think that any of its independent contractors was not competent, it could be in breach. I should add here that it appears that Mirvac did not know that WB Jones had subcontracted the installation to JMKG. 31In addition to duties to select competent independent contractors, did Mirvac and WB Jones have duties to inspect the work done to ensure it was competently executed? Mr Nixon's position, developed over T598 to T600, was that Mirvac was entitled to rely on its relationship with WB Jones without inspecting the installation of the balustrade, but he acknowledged at T601 that on the assumption that gun driven nails were prohibited and Mirvac knew they were used, then Mirvac would not have complied with its obligations. 32The cross-examination went further. Mr Nixon agreed (at T604) that "what gives a structural component its integrity is the piece of equipment holding it together". He agreed at the following page that "when Mirvac sent their document to Jones with no mention of the codes or standards, no request for an assurance or warranty, no request for a guarantee, and without any specification of the fastenings to be used, that indicated the builder was totally reliant upon the fact that Jones will get it right". He agreed over T605 - T606, speaking of Mirvac, that in "circumstances where they didn't inspect, if they didn't, or if they did inspect and were wrong about the fastening method, then the only protection that any person had was, Jones would get it right, he knows what to do." Mr Nixon said at T606 that it would be good practice for Mirvac to have specified the applicable building codes in the purchase order. 33Mirvac's senior employee called to give evidence was Craig Spriggs, a construction director. Other witnesses called on behalf of Mirvac were beneath him in the hierarchy. Mr Spriggs agreed with the following propositions in cross-examination by Mr Cavanagh over T820 - 821. A part of Mirvac's quality assurance program is to ensure the work of subcontractors is inspected. It is also to ensure that the work of each individual subcontractor is inspected when the work of that subcontractor is completed. Mirvac would ensure that the work of the specialist trade is inspected when completed. Mirvac has overall responsibility to the home owner to ensure that which it has agreed to give to the home owner is given. A way of doing that is by checking on and inspecting the work of its subcontractors to ensure that the work is performed to the appropriate standard, and that there are no defects or errors in the work of the subcontractor. If on inspection at the end of each trade's work, the work is not fit and done in a way Mirvac wanted it, Mirvac tells the subcontractor to fix it up or do it again. That would occur before Mirvac would allow another subcontractor to come in and, as it were, cover up any defective work. As a matter of almost certainty, if Mirvac was complying with its usual procedures and systems, the floor sheeting on the first level of Mr Richardson's home would have been inspected when it was completed by the floorer and before the gyprock placed in position. Any defects in the floor sheeting would have or should have been picked up by Mirvac. The reference to the floor sheeting is a reference to a gap which had emerged because of the misalignment of some of the structures in the flooring. 34When Mr Spriggs was cross-examined by Mr Gilbert he agreed that it was the total responsibility of Mirvac to ensure that the house was built in accordance with the relevant legislation, standards and codes, and that Mirvac expects subcontractors to maintain the standards. He also agreed that it was very important that subcontractors do everything in accordance with the rules. He agreed that it would be important to him that Mirvac people, as best as possible, ensure compliance with the standards and codes. He agreed that if there was something that Mirvac people were not sure about, they would have access to reference and codes if they needed to or to call the office and someone would reference those codes for them. Mirvac certainly wanted people to know all the Acts and the standards that they had to comply with, and the way that Mirvac satisfies itself about compliance with the code and the standards is by Mirvac's presence on the job monitoring, in so far as possible, the work done by the subcontractors, and as a trade moves on Mirvac wants to make sure that it is ready for the next trade. If a part of a component was covered up, Mirvac would satisfy themselves that what lay beneath was done properly. 35Mr Spriggs did not understand "specifically" the difference between type 1 and type 2 joints. That difference I should add is significant in this case because the reference which I earlier made to no loadings being given was in relation to type 2 joints. He agreed that in fixing a type 2 joint - a structural joint - it had to be properly and securely fixed to the structure and ensuring that that fixing was in accordance with the building code and the related standards was important. He agreed that apart from the noise made by gun installed nails being installed, he could tell from the visual inspection of a piece of timber before it was painted and decorated that a nail gun had been used or that a flat or a round headed nail had been used. He agreed that he would be able to tell from 2 metres away. 36I accept Mr Spriggs' evidence in preference to the evidence of the two other employees of Mirvac, namely Mr Whittaker and Mr Nightingale, on the issue of the appropriate conduct of Mirvac, its responsibilities and its liabilities. Specifically I find that Mirvac should have detected the poor craftsmanship in the laying of the floor on the first level. I find that the laying of the flooring and the fixing of the balustrade should have been inspected following on its completion and before concealment to make sure they were to an appropriate standard and contained no defects or errors. I find that Mirvac should have ensured compliance with relevant codes and standards by either certification or referencing themselves. I find that Mirvac could have seen that the fixture was made by gun driven nails by inspecting it. Whilst it was entirely appropriate for Mirvac to discharge much of its responsibility to Mr Richardson by engaging competent contractors, it is acknowledged by a very senior member of Mirvac's staff that Mirvac should have inspected the work of those contractors. 37I prefer Mr Spriggs' evidence on the question of inspection over Mr Nixon's assertion that an inspection was not needed because "that is what is in the industry". I accept Mr Catsanos' submission that retaining specialists is normal and appropriate for a builder, that the builder is not expected to look over the trades people's shoulders and that so far as Mirvac was concerned WB Jones was an excellent staircase installer. 38Mr Catsanos in his written submissions for Mirvac (at [25]) argued that there is a "dispute between the experts as to whether the balustrade was 'structural' and/or otherwise required the use of hand driven nails or whether, as Mr Nixon felt, it was non-structural and thus amenable to the use of fixings other than hand driven nails." He goes on to argue that it is therefore "hardly realistic to expect the builder to have an intimate knowledge of where and when it is appropriate to use nail hand-driven as opposed to gun-fired nails, particularly when there is controversy between the experts on the point. 39I do not think Mr Spriggs agrees with that. Nor do I. This was a particularly important component of the building so far as its occupants were concerned. Mr Nixon himself acknowledged the limits of his own expertise in interpreting the standard. Mr Allsopp had no doubt about the expertise needed to deal with the code. At T392 when it was suggested that the issue was really a difference of opinion he said the following: "You're saying that minds can differ. I'm a qualified structural engineer, Mr Nixon isn't. And I don't support his opinion at all. I think it's erroneous. It's completely at variance with the purposes of the codes." Mr Spriggs agreed (at T830) that it was "the total responsibility of Mirvac to ensure that that house is build [sic] in accordance with the relevant legislation, standards, codes" and (at T820) that "the way Mirvac "ensures that a home owner gets "a high quality house that is safe for use" is "by checking on and inspecting the work of its subcontractors to ensure that the work is performed to the appropriate standard." 40WB Jones subcontracted the installation to JMKG. I accept that WB Jones regarded JMKG as a competent installer. WB Jones regarded inspection of the final product as important but assumed that Mirvac would do the inspection. If it knew that Mirvac was not inspecting then WB Jones would "make arrangements" to inspect. Mr Jones, a principal of WB Jones, acknowledged that at T762. The arrangements would include "inspections, reports and call backs if necessary" (at T771). WB Jones maintained that "the actual inspections on the job were carried out by Mirvac" and "if I didn't hear anything I would assume that everything was okay". Mr Jones said that at T771. Because it had on site supervision WB Jones "took the view, and I understand your view was that you were alleviated from any further need to do inspections or anything like that". That was said by Mr Jones at T792. Mr Jones was not familiar with AS1720.1. That became apparent at T773. Nor was he familiar with a difference between type 1 and type 2 joints which became apparent at T775. Mr Jones was happy that the correct gun-fired nails had been used. The allegation against WB Jones in Mr Richardson's statement of claim included that it had failed "to conduct a proper safety inspection of the balustrade upon its installation". 41In my opinion WB Jones breached its duty of care in allowing the affixing of the balustrade by gun-driven nails. It was reasonable to delegate to JMKG because it had a basis for regarding it as competent, but WB Jones' wrong understanding regarding type 2 joints and the applicability of the code meant that in fact it failed to maintain a retain a competent contractor. It assumed that Mirvac would inspect. Mr Spriggs confirmed that and past practice with reports and callbacks made that assumption reasonable. Mr Allsopp confirmed that gun-drive fasteners were a deficiency. WB Jones also should have reported the gap, although it shared responsibility with JMKG. Mr Wilkinson, WB Jones' employee, must have seen the gap. Mr Cosentino regarded gun-driven nails as prohibited. 42JMKG as installer must bear primary responsibility for the failure of the joint. MFI 26 was a document which contained agreed facts by the parties. It recorded agreement by all parties that there was "general agreement by the experts" that "the nails used by the Third Defendant to affix the timber base plate were not: (a) of sufficient length; (b) of sufficient gauge". I reject the argument that it was simply a matter of Mr Nixon and WB Jones having a different point of view about the applicability of the relevant standard. 43I turn now to issue number 4.

Contract claim plaintiff v first defendant - statute barred? 44Mr Richardson pleads a cause of action against Mirvac both in negligence and contract. So far as the contract claim is concerned Mr Richardson claims that Mirvac breached a clause in connection with the contract or which was part of the contract. Mirvac says that Mr Richardson's claim in contract is out of time. Mirvac, through Mr Catsanos, points to s 14 of the Limitation Act 1969 which provides that a cause of action founded on contract "is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff". 45When did the cause of action first accrue to Mr Richardson in this case? The law seems to be clear on this. Mr Catsanos referred to the decision of the Court of Appeal in Argyropoulos v Layton [2002] NSWCA 183. At [5] Handley JA said that any "cause of action in contract accrues on breach, and time then begins to run for limitation purposes irrespective of the accrual of any damage". Mr Richardson argued, through Mr Gilbert, about the effect of clause 24.2 in annexure "E" to the contract between Mr Richardson and Mirvac referring to "any major structural defect" appearing in the building being notified to Mirvac within 50 years being fixed at Mirvac's own cost within a reasonable time. Mr Gilbert argued that the effect of that clause was to alter the common law referred to by the Court of Appeal because it contemplated a defect appearing at a future time. He argued that the words in that clause operate to vary the point of time at which a breach takes place to provide for the breach occurring when it "appears". 46I do not accept that submission. Generally I accept the submissions of Mr Catsanos on this issue. Clause 24.2 is incorporated into the contract, but specifically deals with a defects warranty. It does not purport to make general provision for a breach of the contract. It is a specific contractual remedy in the form of a warranty to fix any major structural defect. I do not read that warranty provision with its extended period of time as altering the applicability of the common law to general breaches of contract. In fact it ameliorates the common law by providing a specific remedy for breaches of the contract in a specific form that may appear over an extended period of time. In any event, as Mr Catsanos argues, the clause does no more than to impose a contractual obligation on his client to fix such problems at its own costs. Any disagreement about the applicability of the clause is to be referred to an arbitrator. 47In my opinion the contract was breached around about 24 February 1999 when the balustrade was installed. The period of 6 years since that breach expired well before Mr Richardson's statement of claim was filed on 14 October 2009. I accept Mirvac's submission that the claim by Mr Richardson in contract against Mirvac is statute barred. 48I turn now to issue 5.

Is the plaintiff's claim against the third defendant statute barred? 49It was not until the middle of 2011 that Mr Richardson made a claim against JMKG. Mr Richardson filed an amended statement of claim on 13 July 2011. The balustrade had been installed in 1999 and the accident was in 2006. JMKG, through Mr Gow, argues that Mr Richardson needs the Court's leave, because it is being joined after the expiry of the limitation period under the Limitation Act. Although JMKG pleaded that point in its defence, it was overlooked, I think it is fair to say by everyone, and not dealt with at the commencement of the case. I permitted Mr Richardson to file a notice of motion to deal with the question of getting leave under the Limitation Act and I heard that notice of motion on 8 June 2012. The parties involved were only Mr Richardson and JMKG represented respectively by Mr Gilbert and Mr Gow. Although Mr Richardson asked for "leave" to commence proceedings, he relied on s 60C of the Limitation Act which provides for me to make an order to extend the limitation period. JMKG argued through Mr Gow that Mr Richardson had chosen the wrong the section. He said that the relevant sections are ss 50A, 50C and 50D. Section 50C provides that the limitation period does not commence until three years after "the cause of action is discoverable by the plaintiff." 50So I should first determine which are the applicable provisions of the Limitation Act. Section 50A, relied upon by Mr Gow, applies "only to causes of action where the act or omission alleged to have resulted in the injury...with which the claim is concerned occurs on or after" 6 December 2002. The allegation against JMKG is that it negligently installed the balustrade on 24 February 1999. At first glance such circumstances seem to clearly fall outside the provisions of s 50A. But Mr Gow argues that there is a link brought about by the word "resulted" between the "act or omission" and the "injury". He argues that there was no cause of action for the negligent installation until the injury occurred in 2006. The cause of action accrued, he would argue, on 29 October 2006. 51I think that argument is misconceived. The section focuses on "the act or omission." It is only if that "occurs" on or after 6 December 2002 that the section applies. Section 50C and 50D focus on the "cause of action". Section 50A does not refer to "the cause of action accrued" but to "the act or omission...occurs." It is a physical occurrence in time rather than the testing of an entitlement under law which this section focuses on. I do not accept Mr Gow's argument and I regard the appropriate provision as being s 60C. In the event that I am wrong I will consider the merits of the application by reference to both s 60C and s 60D. 52Affidavits and other exhibits were tendered on the notice of motion and both deponents were called for cross-examination. One was Mr Richardson and one was his solicitor Mr Ranson. I have considered all of the evidence and I will make reference to it only in the context of my determination. 53I accept the evidence of Mr Ranson that he did not know of the existence of JMKG until he had a telephone conversation with WB Jones' solicitor on 30 November 2010. I accept the evidence of Mr Richardson that he did not know about the existence of JMKG until the amended statement of claim was filed. 54Mr Gilbert took me to the provisions of s 60E which set out the matters to be considered by me in deciding whether or not to make an order extending the limitation period. He argued that there were good reasons for the delay. Neither Mr Richardson nor his legal advisers had knowledge of JMKG until late in time. It was not until shortly before JMKG was joined as a party to the proceedings that they became aware of its existence and role. Even though a representative of JMKG attended a meeting at the scene of the accident in Mr Richardson's home on 2 November 2006 (see T950), that person signed in as a representative of WB Jones. I accept that there was no mention made of JMKG in Mr Richardson's presence at that meeting. 55Mr Gilbert invited me to look at the annexures to exhibit 11(D2) in the proceedings. Although in annexure C there is a reference to the balustrade being installed by JMKG, JMKG is identified only by the initials "JMKG". Mr Gilbert argued that they could be regarded as initials rather than the name of a third party. There is no reference at all to JMKG in WB Jones' invoice to Mirvac (which is annexure D). In JMKG's invoice, which is annexure D, the references are only to sheeting and nails which could be supplies made available to WB Jones. Those documents had been produced under subpoena issued by Mirvac to WB Jones on 6 May 2010. Mirvac did not issue a subpoena against JMKG. Later that year, on 26 August, Mirvac joined WB Jones, but not JMKG. Mr Richardson properly amended his statement of claim to join WB Jones. It was not until 30 November 2010, a few days before WB Jones made reference in a defence to JMKG, that JMKG was formally acknowledged in the proceedings. Although Mr Richardson's solicitors served a subpoena on JMKG after receiving the cross-claim in which it was named it was not until some four months later, on 4 April 2011, that Mr Richardson was notified that JMKG had no documents. Then documents were produced by WB Jones after the inspection. Mr Richardson joined JMKG on 13 July 2011. 56Mr Gow frankly and fairly acknowledged that there was no evidence of any prejudice to his client in the sense that evidence would be available, which is no longer available, had the proceedings been commenced within time. 57Mr Gilbert argued that conduct by JMKG induced his client's delay in bringing the action. He said that there was a representative of JMKG at the meeting on 2 November 2006. However, Mr Gow argues that I have to be satisfied that there was in fact a representative at that meeting. It seems that the only evidence of that is from Mr Nightingale's statement and his evidence at T950. Mr Nightingale's statement is exhibit 16(D1). 58I am not satisfied on the balance of probabilities that that evidence is sufficient to find that JMKG was represented at that meeting. However, I am satisfied that JMKG's delay in responding to the subpoena induced Mr Richardson's delay in bringing the action. Mr Gow argued that that conduct, in order to amount to an inducement, must be done for the purpose of inducing another party - like an express representation. I do not read s 50E(1) as containing a suggestion that the conduct must be intended to delay the plaintiff. I think the provision is aimed at conduct, intentional or not, which has the effect of inducing a plaintiff to delay. It seems to me that the section focuses on the conduct and the impact of that conduct rather than culpable behaviour. 59A final factor which I take into account is the extent of Mr Richardson's injury. It was a serious back injury which resulted in surgery and ongoing disabilities. JMKG's existence was latent, so far as Mr Richardson was concerned, for some years. Indeed, Mirvac did not sue JMKG for some time. JMKG, I find, suffered no prejudice in being joined at this stage. Mr Richardson acted promptly when information was provided. I am satisfied that by no process of reasoning would the existence of JMKG have become reasonably apparent. Mr Richardson has been seriously injured and JMKG is the person which installed the item which brought about the injury, and the focus of the case is on the faulty installation. In my opinion it is just and reasonable to order that the limitation period for the cause of action be extended to 13 July 2011 and I so order. 60Alternatively, if the relevant provision s 50D of the Limitation Act, then Mr Gow argues, by reference to the Court of Appeal's decision in State of New South Wales v Gillett [2012] NSWCA 83, that when the steps actually taken by Mr Richardson are examined, they fell short of being reasonable in the circumstances of the case. Mr Gow argues that no enquiries were made about who actually installed the balustrade. However I accept Mr Richardson's evidence that when he visited the site he mostly dealt with the site supervisor and did not concern himself with who was who amongst the tradesmen. He knew that a builder such as Mirvac would engage subcontractors. After the meeting on 2 November 2006 he knew that Mirvac did not install the balustrade, but the only information he had was that it was WB Jones who was responsible for the installation. 61Mr Gow argues that a reference in a chronology prepared by Mr Richardson for his solicitor to WB Jones, being only the manufacturer and not the installer, is revealing. However, I do not place much weight on that argument. Although Mr Richardson, in connection with his affidavit, refers to WB Jones as "the manufacturers" later in the same document he refers to WB Jones as being responsible for its re-installation. I do not accept that that reference discloses some knowledge about the existence of another party. 62Mr Gow argues that Mr Richardson proceeded on the assumption that WB Jones was the installer without properly considering that assumption and making reasonable enquiries. But in my opinion there was very little available to Mr Richardson which would lead to a reasonable line of enquiry. The invoice from JMKG was consistent with it being a supplier of materials to WB Jones. When Mirvac issued its first cross-claim it pleaded its case only against WB Jones. I infer that all parties were acting under the incorrect assumption that it was WB Jones who actually installed the balustrade. As soon as Mr Richardson became aware of the existence of JMKG, he acted. I am satisfied that Mr Richardson became aware that his injury was caused by the fault of JMKG shortly after 2 December 2010. I am not satisfied that he "ought" to have known of the relevant existence of JMKG before that date. I would regard the "date on which the cause of action is discoverable by the plaintiff" as being 2 December 2010. Accordingly, if that provision were the applicable one Mr Richardson's proceedings against JMKG have been brought in time. HIS HONOUR: I am just going to take a break for a couple of minutes. We are halfway, perhaps a bit more than halfway through. There are 10 topics, we have done 5 and the remaining ones are a bit shorter you will be pleased to hear. SHORT ADJOURNMENT HIS HONOUR: Mr Gilbert, you can come or stay, whatever you-- GILBERT: I think I was staying. I actually came over, your Honour, because there might a costs argument at some stage. HIS HONOUR: There might be. GILBERT: But I trust my friend here to keep going, but then I'm going to jump in when-- 63We will go to item 6 which is the plaintiff's medical case.

The plaintiff's medical case 64Mr Richardson's medical case, in my opinion, is strong. He gets support from Mirvac's and WB Jones's doctors as well. One weakness in his case is that there is only one report from his treating surgeon; it predates the surgery and says nothing about the accident. Also, there are no up to date reports from his treating general practitioner. I infer that further reports from the treating surgeon were not tendered by Mr Gilbert because they would not be helpful. Mr Gilbert acknowledged as much. 65Mr Richardson received active and invasive treatment, including surgery, on his spine. Apart from early x-rays, the radiological evidence demonstrated pathology. It was clear enough to operate. Alternative therapies such as steroid injections in his spine and physiotherapy had not been successful. All the doctors, Mr Richardson's and Mirvac's and WB Jones's, attributed Mr Richardson's condition to the accident. One of the defendants' doctors, Dr Machart, said Mr Richardson should attend a pain clinic instead of relying upon the Panadeine Forte and Endone which the doctor described as "narcotic type analgesics". All the doctors accepted that Mr Richardson continued to experience symptoms. None of the doctors suggested any doubts about the credibility of Mr Richardson's claims. Dr Ellis, qualified on Mr Richardson's behalf, said that there "is no evidence of psychosomatic illness". All the doctors said, either directly or by necessary implication, that Mr Richardson's pain and disability would continue into the indefinite future. All the doctors regarded Mr Richardson's employability and his contribution to household tasks as being affected, except Dr Stenning, who did not comment on the domestic impact. 66Mr Cavanagh, Mr Catsanos and Mr Gow pointed to the significance of the absence of the treating reports. They are right, and I draw the inference which I have already mentioned. They also emphasise the lack of treatment Mr Richardson has been receiving. But I accept that Mr Richardson's reason for not attending for physiotherapy is financial. It is for him to decide what he spends his money on. He obviously elects to treat his condition with painkillers. But the opposing argument is really overwhelmed by the medical reports. I have already set out what they say. 67In my opinion, the absence of medical support from Mr Richardson's treating doctors is made up for by the defendants' doctors' opinions. I find that as a result of the accident Mr Richardson suffered, in the words of Dr Stenning, a "disc derangement of the L3/4 disc producing a bulge into the intervertebral foramen causing irritation of his left L3 nerve root". The other doctors' opinions are consistent with Dr Stenning's. The effects of this condition are the continuing of low level back pain and, as Dr Ellis said, "secondary effects in his left leg, referred pain and neurological deficit". 68I turn now to the next issue identified by the parties.

The plaintiff's post accident domestic, personal and social activities 69The evidence given on these issues was given by Mr Richardson, by his wife and by one of his daughters. I will deal first with the evidence concerning his recreational activities. 70Mr Richardson said that he led a very active life, engaging in golf, water sports, time spent with his wife riding and walking. They were always active as a couple. Mrs Richardson added that they went camping a lot, that they used to go beach body surfing. They had a canoe which they used. She said that they did these things together throughout the course of the children's lives and their marriage, and they were still doing them up until the time the accident happened. They would do things during the school holidays, at Christmas and Easter and over long weekends. She summarised the situation in words suggested to her by Mr Gilbert as "life" being "pretty good in the Richardson household". Kayla Richardson, one of Mr Richardson's children, gave evidence about going bike riding and swimming, and even more active things such as surfing and jet skiing before the accident. They always went out together. 71After the accident, Mr Richardson said that he was not able to continue to do the recreational activities which he had earlier referred to. It was because of the pain that he was in, which restricted him, and even the drugs could not help him. He does not play golf any more or participate in the other activities they used to do together. Kayla Richardson added that she had definitely noticed a change since the accident. After the accident her father, she noticed, was "like, always on medication, zombied out on the lounge. Weekends, we didn't really interact. He couldn't do anything. His mood always was changing. He was very, like, angry and stuff before he was on the medication. When he got on the medication he was better in his mood, but he was zombied out". Mrs Richardson said that they do not do the sporting activities any more. They tried camping and pitching a tent, but she found that Mr Richardson was not able to do that. Mr Richardson's mother was ill and dying, and Mrs Richardson said that her husband would "be on painkillers and miss quality time with his mum". They bought a popup caravan but it was too difficult to manipulate and they had to sell that. 72Mr Richardson also gave evidence about the activities which he used to engage in around the house. The jobs which fell to him were maintaining the yard on the outside and putting the bins out. In the house he would put out washing and cook every so often. His job was to vacuum which involved all the wet areas upstairs and downstairs, meaning the bathroom and the laundry. Outside the house he maintained the garden and the lawns, used the whipper snipper and undertook general maintenance of the property. That would include painting and the gardens and initially establishing the gardens. 73Before the accident Mrs Richardson said that the housework was divided up amongst the family. She said that they as a family "all very equal". She said that Mr Richardson "would put in a lot of work at home. He was great". She said that he "mowed the lawn, he would whipper-snip, he would sweep down all the cement paths. He would wash the bins, bring the bins in, take them out and always clean them every week, roll up the side. Then inside, the dog - he used to help - we used to walk our dog...He would always vacuum the house. We had a two-storey house. So he would do upstairs, or if the case, he would vacuum the whole carpet area and I would mop, he would do the bathrooms, vacuum the bathrooms." Kayla Richardson said that before the accident her father definitely did his share around the house. 74This changed after the accident. Kayla Richardson said that they had to pick up a lot on his behalf and the person who was primarily responsible for picking up those tasks was her mother. She said that she picked up jobs such as yard work outside and making the bed in the morning and doing the dishwasher. She said that she had picked up more now that her father could not. She would not be mowing lawns which she or her sister might do them now. Mrs Richardson notice that there were restrictions on her husband doing the housework after the accident, even pulling the cord on the mower would hurt him, vacuuming was stressful and he does not do it any more. He does not bend down to work the dishwasher, although occasionally he might help with the wiping up. He did not go back to the work he used to do around the house. Her daughter helped her but it is mainly Mrs Richardson who takes up the work which Mr Richardson is not able to do. She even has to tie up his shoelaces now and then. 75I accept the evidence which these witnesses have given. I did not regard them as being seriously challenged in cross-examination. I did not regard them as exaggerating or being untruthful. Mr Cavanagh argued that Mr Richardson "appears to lead a normal social life" referring to his visits to the Penrith Panthers Club for "$10 roasts", a holiday and swimming in pools and beaches with "not particularly strong waves". On one view it may be accurate to describe his evidence as a normal social life, but the real question is how his social and recreational life has changed since the accident. 76I accept the evidence of Mr Richardson, Mrs Richardson and his daughter Kayla about the impact which the injury has had on Mr Richardson's recreational, social, personal and domestic life. Neither Kayla Richardson nor Mrs Kim Richardson gave any impression of exaggeration or lack of candour. Their evidence is broadly consistence with the medical evidence about the impact of the back injury on Mr Richardson. For reasons I have already given, I also accept Mr Richardson's evidence on those topics. 77I find that the injury has had a very significant impact on Mr Richardson's recreational, social, personal and domestic life. That aspect of his life has been destroyed or deprived of much of its enjoyment. I accept Mr Gilbert's submission that the accident has had a devastating effect on these aspects of his client's life. 78I now turn to the next issue identified by the parties.

The plaintiff's post accident work 79After leaving school, Mr Richardson had a fairly steady work history up to when he became employed by Innovators Precasters Group Pty Ltd as a Logistics Manager in 2001. He was working in that job when the accident happened. As a result of the injury, Mr Richardson at various times lost 18 days of work then a further 3 weeks following his back surgery. I do not accept that that time off work indicated that the injury was not very serious. I find that Mr Richardson was a diligent and well-regarded employee who worked within his reduced capacity and took time off work only when it was necessary. 80His employment came to an end at Innovators in circumstances which were controversial in this case. There is evidence of correspondence between Innovator's provisional liquidator and Mr Richardson. Mr Richardson did not take up an offer of re-employment for various reasons which he set out in his letter which was exhibit 4(D3). There was no mention of his injuries. It had, I accept, more to do with tension within the ownership of the employer. But on the other hand, Mr Richardson's physical capacity was clearly reduced. 81I accept the evidence of Mr Nassar, his former employer, and the medical evidence. What happened was an example of a contingency unrelated to his injuries which threw him onto the open labour market where his reduced earning capacity impinged on his income. Mr Richardson was resourceful on the open labour market. Using a private company he had set up as part of his own professional development, he secured a contract with a "company just down the road that required trainers". He secured that before formally leaving Innovative, but the provisional liquidator had been appointed and developments in ownership were in the offing the previous month. Since leaving Innovators he has been contracting himself out through his company and he does more or less up till now 30 hours a week. 82I need to now assess in terms of damages the impact of the accident negligently caused by all defendants on Mr Richardson.

The plaintiff's claim for non-economic loss, domestic assistance (past and future), economic loss (past and future) and out of pocket expenses (past and future) 83I will deal with out of pocket expenses first. I accept that Mr Richardson incurred the expenses by way of out of pocket expenses which are the subject of exhibit W. The agreed figure is $4,113 and I would award Mr Richardson that amount for his past out of pocket expenses. I should add at this point that a schedule of damages prepared by Mr Gilbert as at 4 May 2012 was handed up in Court on that day and I marked it MFI 27 in chambers. 84I note the calculations contained in MFI 27 item 3 regarding future out of pocket expenses. The evidence suggests that Mr Richardson does not see his orthopaedic surgeon and does not see his general practitioner up to six times a year which is anticipated in MFI 27. I think a reasonably weekly amount to allow for ongoing out of pocket expenses into the future is $30 per week. Using the discount table referred to in MFI 27, I would make an allowance for future out of pocket expenses of $27,000. HIS HONOUR: Gentlemen at the bar table, you should be adding up these figures. I'll announce a total at the end and we need to make sure the sums are right. 85I turn to non-economic loss which I calculate in accordance with s 16 of the Civil Liability Act. I refer to the findings which I have made about the impact which the accident has had on Mr Richardson's domestic, personal and social life. MFI 23 contains an argument by Mr Catsanos that the non-economic loss should be calculated at 25 per cent of a most extreme case. Mr Gilbert argues in MFI 27 that it ranges somewhere between 37 and 40 per cent of a most extreme case. I think Mr Gilbert's range is more accurate, given the findings which I have made about the impact of this injury on Mr Richardson. I think that an appropriate figure to allow would be 38 per cent and my calculation by reference to s 16 is that the amount in damages represented by that percentage would be $197,500.00. 86I turn now to damages for gratuitous attendant care services provided for by the Civil Liability Act. As at the date 4 May 2012 when MFI 27 was given to me, Mr Gilbert calculated that the period since the accident was 287 weeks. By my calculation it has now been 297 weeks since the accident. I note that Mr Richardson estimated at T59 that the gratuitous attendant care services amounted to some 10 hours a week. Dr Ellis thought that a reasonable allowance was 8 hours a week. I would accept the lower estimate and would allow for gratuitous attendant care services up to the present an amount of $24.25 per hour for 8 hours a week for 297 weeks, which by my calculations is $57,618.00. So far as the future is concerned, Dr Ellis' opinion was that Mr Richardson's "need will continue". Mr Gilbert calculated that need in item 6 of MFI 27 and I accept his calculations, and would allow the figure of $185,460 for attendant care services into the future. 87I turn now to loss of earning capacity up to the present time. In MFI 27, Mr Gilbert argues for an allowance of about $101,000 based on the calculations referred to in item 4 of MFI 27. Mr Catsanos on the other hand argues that an amount of about $28,000 would be appropriate. This figure is not open to precise calculation, but because I am estimating a loss in earning capacity and there are various contingencies which need to be taken into account, I would regard an appropriate figure to represent Mr Richardson's loss in earning capacity up to the present time as being $70,000. 88Mr Gilbert has calculated the loss of earning capacity for the future for his client, also in item 4 of MFI 27. He shows that the figures on one view could demonstrate a weekly loss of almost $1300 but in order to reasonably reflect the uncertainty of this figure, he has discounted the claim to some $500 per week. I think that is a reasonable discount to make. He calculates a figure - using the discount of a 5 per cent multiplier referred to in MFI 27 for the period until a proposed retirement at the age of 67 - of $283,220. I would discount that somewhat more, even though there is already discounted the weekly wage loss and an allowance of some 15 per cent for contingencies. I would regard an appropriate figure for future economic loss as being $250,000. HIS HONOUR: I will just depart from my reasons for judgment. I can see that what I have not done is to include an amount for loss in superannuation, which Mr Gilbert has argued, and I should just hear the parties on it-- GILBERT: It's 11 per cent-- HIS HONOUR: Past and future? So it's 11 per cent of $70,000 and 11 per cent of $250,000. GILBERT: 11 per cent of $70,000 is $7,700, and 11 per cent of $250,000 is $27,500. Mr Catsanos and I think Mr Gow agree with that. HIS HONOUR: I get $7,700 for the past and what was yours for the future? GILBERT: $27,500, your Honour. HIS HONOUR: Yes, I get that. 89I would allow amounts for lost superannuation on the figures I have calculated for the past and ongoing loss in earning capacity at 11 per cent, which is the figure proposed in MFI 27 by Mr Gilbert. I would allow an amount of $7,700 to represent the past loss and an amount of $27,500 to represent the future loss. HIS HONOUR: I'll just depart from my Judgment here. My total is $826,891. Do you want me to give you the figures again? Past OPs $4,113. Future OPs $27,000. Non-economic loss $197,500. Domestic assistance to date $57,618. Domestic assistance ongoing $185,460. Past economic loss $70,000. Future economic loss $250,000. Superannuation on past economic loss $7,700. Superannuation on future economic loss $27,500. My total is $826,891. You're okay with that figure Mr Gilbert. GILBERT: Yes. HIS HONOUR: Mr Oag, just the mathematics. OAG: Mathematically agree your Honour. HIS HONOUR: Mr Angus. ANGUS: Yes. HIS HONOUR: Mr Gow, mathematics. GOW: So do I your Honour. HIS HONOUR: That's all I need. What I do now and tell me, I'll hear you - all of you - enter a verdict and judgment for the plaintiff against all defendants, is that right? GILBERT: That's right. HIS HONOUR: For that figure. GILBERT: $750,000, the jurisdiction of the Court is $750,000. I said at the time if my damages schedule went over I have to abandon that. HIS HONOUR: I'll return to my reasons and give the responsibility. 90I would enter a verdict for the plaintiff against all three defendants in the sum of $826,891. The jurisdictional limit of this Court is $750,000. Accordingly, I enter a verdict and judgment for the plaintiff against all three defendants in the sum of $750,000. 91I turn now to the last item on the agreed issues to be determined.

Apportionment of any liability amongst the three defendants 92Mirvac was on site practically all of the time and in my opinion should have inspected the site. It had overall control and it was in the closest relationship with Mr Richardson. It had an acknowledged duty to inspect the work of the contractors and to deliver a safety component. It should have seen the gap and recognised the nails were not hand driven. WB Jones was not on site all of the time, although Mr Wilkinson, an employee, was and should have seen the gap, which in my opinion diminished the effectiveness of gun driven nails. WB Jones had undertaken to Mirvac that it would install the balustrade. WB Jones also agreed with the use of gun driven nails, which in my opinion was contrary to the standard. JMKG installed the balustrade negligently and used gun driven nails when it ought not to have. It must have also seen the gap. 93I would regard it appropriate that JMKG accept 40 per cent of the liability and Mirvac and WB Jones share the remaining 60 per cent, half each. Namely 30 per cent Mirvac and 30 per cent WB Jones.

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 November 2012

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Judgment (13 paragraphs)

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Cases Cited (4)