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[2015] VSC 149
Supreme Court of Victoria
2015-04-24
J FORREST J
Original judgment source is linked above.
ACCIDENT COMPENSATION - Proceeding brought by the Victorian WorkCover Authority for indemnity against a third party - Injury suffered when trades assistant fell from a roof - Third party duty of care under statute and common law - Accident Compensation Act 1985 (Vic) s 138 - Occupational Health and Safety Act 2004 (Vic) - Occupational Health and Safety Act 1985 (Vic) - Wrongs Act 1958 (Vic) s 51 - (Vic) - (Vic) - Codes of practice - - ; - ; - Third party found to be 50 per cent liable.
1 On 30 July 2009, Luke Marwood, a trades assistant, fell from the roof of a house under construction at Strathfieldsaye, near Bendigo. He sustained significant injuries to his lower limbs.
2 Mr Marwood settled his claim against his employer, a roofing sub-contractor Rowville Way Pty Ltd (Rowville Way), and a roofing company Stoddart (Vic) Pty Ltd (Stoddart) at a judicial mediation. However, the recovery claim under s 138 of the Accident Compensation Act 1985 (Vic) by the Victorian WorkCover Authority (VWA) against Stoddart was unresolved. This judgment, hopefully, determines that dispute.
3 The VWA holds Stoddart partly responsible for Mr Marwood's injuries and accordingly, for the payment of compensation - however it concedes that Rowville Way must also carry a share of the responsibility for Mr Marwood's injuries.
4 The parties agreed on a number of issues relevant to the claim.[1] Left outstanding were the following questions:
(a) liability under s 138 - and particularly whether Stoddart owed a duty of care (be it common law or statutory) to Mr Marwood;
(b) if it did owe such a duty, was it breached; and
(c) if so, what percentage responsibility should it bear as required by s 138(3).
5 Central to, but not necessarily determinative of, the issues of duty and breach is the question of the application of regulations and codes made under two iterations of the Victorian Occupational Health and Safety legislation in relation to work carried out from heights and the prevention of falls.
The relevant part of s 138 of the Accident Compensation Act
6 It is only necessary to set out one part of s 138 of the Accident Compensation Act - that dealing with liability and apportionment if the 'third party' is found liable:
138 Indemnity by third party
(1) Where an injury or a death for which compensation has been paid, or is or may be payable, by the Authority, a self-insurer or an employer was caused under circumstances creating a liability in a third party to pay damages or that would have created such a liability if the injury or death had been caused in Victoria or that would, but for section 134A, create such a liability in respect of the injury or death, the Authority, self-insurer or employer is entitled to be indemnified by the third party in accordance with this section.
(2) In determining for the purposes of subsection (1) whether an injury or death was caused under circumstances creating a liability in a third party to pay damages or that would have created such a liability if the injury or death had been caused in Victoria in respect of the injury or death, Divisions 8A and 9 of Part IV must not be taken into account.
(3) The amount which a third party is required to pay as indemnity under subsection (1) is the lesser of -
(a) the amount of compensation paid or payable under this Act in respect of the injury or death; and
(b) the amount calculated, were it not for the provisions of this Act, the Transport Accident Act 1986 and Parts VB, VBA and X of the Wrongs Act 1958, in accordance with the formula -
X is the extent, expressed as a percentage, whereby the third party's act, default or negligence caused or contributed to the injury or death;
A is the amount of damages (disregarding the extent, if any, whereby any other person's act, default or negligence caused or contributed to the injury or death) for pecuniary loss and non pecuniary loss which the third party is or would have been liable to pay in respect of the injury or death;
B is the amount recovered or recoverable by the Authority, the self-insurer or the employer under section 137 from the Transport Accident Commission (otherwise than under a settlement);
C is the amount paid by the third party in respect of the injury or death to the worker or the dependants of the worker under any settlement of, or judgment in, an action by the worker or dependants of the worker against the third party.
7 Evidence was given by several witnesses as to the circumstances surrounding the accident, namely, Luke Marwood (the injured worker), Adam Olssen (the proprietor of Rowville Way), Andre Sardone (the Bendigo manager of Stoddart) and Peter Cameron (the owner/operator of Access Guard, the supplier of the scaffolding).
8 There was little, if any, conflict in their accounts of the events leading up to and surrounding the happening of the accident.
9 In 2009, Otto Worth Pty Ltd (Otto Worth) was a builder/developer in the Bendigo district. One of its projects involved the development of a housing estate at Strathfieldsaye. Part of that project involved the construction of a dwelling at
47 Basset Drive, Strathfieldsaye (the Basset Drive house).
10 Consistent with its usual practice, Otto Worth contracted with Stoddart, a specialist roofing company, to install the roof of the Bassett Drive house.
11 Stoddart carries on business in several states in Australia. In Victoria, its head office is located in Melbourne, with approximately 10 employees. It also has several regional depots, including Bendigo and Shepparton.[2]
12 Mr Sardone was in-charge of the Bassett Drive house job.[3] He described the 'model', under which the company operated: Stoddart would contract with a builder or owner builder to erect a roof and, in some cases, guttering. Stoddart would then supply the materials (in this case Colorbond roofing, guttering and accessories) and engage a specialist sub-contract roofer to fix the roof.[4]
13 There was only a small amount of paperwork associated with Stoddart's arrangement with Otto Worth for the construction of the roof of the Basset Drive house. It comprised a quote and a purchase order. The quote makes provision for the supply and installation, by Stoddart, of the roofing materials (described above) for a total of $12,744.77, including GST.[5] The purchase order, dated 18 June 2009, confirms the supply and installation of the materials in question, with a delivery date to the Bassett Drive house of 29 June 2009.[6]
14 Rowville Way was the corporate vehicle of Mr Olssen, a qualified plumber specialising in sub-contract roofing work. Mr Olssen operated Rowville Way from home and was the sole director of the company. In 2009, roughly 80 per cent of his work was carried out on behalf of Stoddart.[7]
15 In 2009, Rowville Way employed or engaged two or three other employees, apart from Mr Olssen, including Dale Trotter, a third year apprentice.
16 There was minimal paperwork involved in the arrangement between Stoddart and Rowville Way. It comprised a set of Period Trade Contract Conditions dated 8 May 2008[8] which provide for the creation of individual trade contracts between the parties under a standard set of conditions. Each trade contract was to set out the scope of the trade works, commencement and completion dates, and the price of the works. The standard conditions are expressed to be incorporated into each trade contract between the parties for a 12-month period from the date of the agreement.[9]
17 In addition, a sub-contract agreement between Stoddart and Rowville Way[10] relates specifically to the Basset Drive house and provides for the installation of Colorbond roofing, guttering and other roofing accessories on 28 and 29 July 2009. Clause 16 of the sub-contract conditions relates to 'Occupational Health and Safety and the Environment' and provides, inter alia, that the sub-contractor will strictly comply with all relevant laws including codes of practice and approved industry standards.[11]
18 Stoddart also provided Rowville Way with 'Safe Work Method Statements' (Statements) relating to 'High Risk Tasks'.[12] The Statements set out appropriate work practices in specified circumstances including, relevantly, the installation of perimeter scaffolding where a fall of more than three metres could take place.[13] Where the potential fall was less than three metres, the Statement provides that the sub-contractor must ensure that a 'clear zone' extending two metres out from the gutter line is free from rubbish, materials or other hazards.[14]
19 Mr Sardone and Mr Olssen dealt with each other regularly. The standard arrangement involved Mr Sardone going to the particular construction site and then forwarding a set of annotated plans to Mr Olssen. This would normally be accompanied by an order form. Mr Olssen said that he had never knocked back an order from Stoddart.
20 Stoddard would then deliver the roofing materials to the particular site on the day prior to Rowville Way commencing work on the roof.[15]
21 For the Bassett Drive house, Stoddart (through Mr Sardone) also arranged the provision of a guardrail for the roofing work. Mr Sardone contacted Mr Cameron of Access Guard, and provided him with a set of the plans with his endorsement as to the location of scaffolding on the roof.[16] Mr Cameron and Mr Sardone agreed that if there was a problem with the plan after Mr Cameron had inspected the site he would contact Mr Sardone to discuss the issue.
22 Both Mr Olssen and Mr Cameron said there were no difficulties associated with getting in touch with Mr Sardone who would, upon request, attend at the site and discuss any issues.[17]
23 The end result was that shortly prior to Rowville Way coming on site, Mr Cameron erected the guardrails at the Basset Drive house pursuant to the plan supplied by Mr Sardone. I will return the actual positioning of the scaffolding in a moment.
24 Mr Cameron said that although he had no contact with, and received no instructions from, Otto Worth, he rendered his invoice to that company at Mr Sardone's request.[18]
25 As will be seen from the two photographs (for whose quality I apologise) below, the guardrails were erected, effectively, on the two front corners of the house facing onto Bassett Drive and did not protect the entire perimeter of the Bassett Drive house. The area where Mr Marwood fell is in the region of the first pillar adjacent to the front doorway.
26 The issue that generated most controversy at the trial (not amongst the witnesses, but amongst the lawyers) was the statutory requirement in relation to the positioning of the guardrails which I will address in a moment.
27 Mr Marwood commenced employment as a trades assistant labourer with Rowville Way in early June 2009. For the first few weeks he worked on ground jobs. The Bassett Drive house job (in late July 2009) was the first time in Mr Marwood's working life that he had attempted roof work.
Roofing work on the Bassett Drive house in late July
28 On 29 July, Mr Olssen, accompanied by a crew of four others including Mr Marwood, commenced fixing the roof.[19] Although guardrails were in place, they were, as noted above, only fixed at the corners of the roof; it being believed by both Mr Olssen and Mr Sardone that a full perimeter railing was only required for roof heights of over three metres.
29 By the end of the day most of the work had been completed and it was left to Mr Marwood and the third year apprentice, Mr Dale Trotter, to finish the job the following day.
30 By midday of 30 July, most of the work on the roof had been completed. Mr Marwood and Mr Trotter were in the process of installing ridge capping and marking out screws,[20] when it started to rain. Mr Trotter instructed Mr Marwood to get off the roof.[21] Mr Marwood then followed 'the screw line' to a point where he was above the area of the front roof which, as noted previously, was unguarded.[22]
31 As Mr Marwood made his way down the roof towards a ladder located in the vicinity of the front door, he slipped and fell down the roof.[23] He then fell about 2.8 metres onto the ground below, sustaining fractures of the left tibia and right ankle.
32 Before I turn to an analysis of the liability of each of the respective parties, it is necessary to resolve the dispute between the parties concerning the application of regulations and codes made under the Occupational Health and Safety legislation to the work carried out at the Basset Drive house. In doing so, it is appropriate to say something of the history of the relevant legislation and the relevant subordinate instruments.
33 Prior to 1 July 2005, the Occupational Health and Safety Act 1985 (Vic) (1985 Act) governed health and safety issues on domestic construction work such as that carried out at Basset Drive. The 1985 Act was repealed on 1 July 2005 by the Occupational Health and Safety Act 2004 (Vic) (2004 Act)[24] which came into force on that day and remains in force.
34 The 1985 Act, not surprisingly, allowed for the making of subordinate legislation in the form of regulations 'for or with respect to the safety, health and welfare of persons at workplaces'.[25] Examples of regulations made under the 1985 Act are those dealing with manual handling,[26] working with machinery and equipment,[27] and, with relevance to this case: Occupational Health and Safety (Prevention of Falls) Regulations 2003 (Vic) (2003 Regulations).
35 The 2003 Regulations set out a scheme for the management of the risk of falls, which can be summarised as follows:
(a) identification of tasks involving a fall hazard;[28]
(b) assessment of the risk of a fall;[29]
(c) an obligation to reduce or eliminate the risk of a fall;[30] and
(d) the use of a passive fall protection device to control the risk.[31]
36 'Fall' means a person's involuntary fall of more than two metres.[32] A passive fall prevention device is defined in reg 104 and is best described as a temporary work platform, roof safety mesh or guardrailing.
37 The Occupational Health and Safety Regulations 2007 (Vic) (2007 Regulations) came into operation on 1 July 2007[33] and was an amalgamation of the different sets of regulations that had been made under the 1985 Act (including the 2003 Regulations).
38 Part 3.3 of the 2007 Regulations deals with prevention of falls:
Fall, is defined as follows in Part 3.3 (Prevention of Falls): a person's involuntary fall of more than 2 metres;
3.3.3 Hazard identification
An employer must, so far as is reasonably practicable, identify any task that an employee is required to undertake at a workplace that involves a fall hazard including -
(a) on any plant or structure being constructed, demolished, inspected, tested, maintained, repaired or cleaned;
(b) on a fragile, slippery or potentially unstable surface;
(c) using equipment to gain access to an elevated level or to undertake the task at an elevated level;
(d) on a sloping surface on which it is difficult to maintain balance;
(e) in close proximity to an unprotected edge;
(f) in close proximity to a hole, shaft or pit that is of sufficient dimensions to allow a person to fall into the hole, shaft or pit.
3.3.4 Control of risk
(1) An employer must ensure that if an employee is required to undertake a task at the workplace that involves a risk of a fall, the risk is controlled, so far as is reasonably practicable, by arranging for the task to be undertaken -
(a) on the ground; or
(b) on a solid construction.
(2) If it is not reasonably practicable to comply with subregulation (1), or only part of a task may be undertaken in accordance with subregulation (1), and a risk of a fall remains, the employer must reduce the risk, so far as is reasonably practicable, by ensuring that a passive fall prevention device is used...[34]
39 'Passive fall prevention device' is defined as follows:
Material or equipment, or a combination of material and equipment, that is designed for the purpose of preventing a fall, and that, after initial installation, does not require any ongoing adjustment, alteration or operation by any person to ensure the integrity of the device to perform its function;
Example
Temporary work platform, roof safety mesh or guardrailing.[35]
40 The requirement, therefore, by Parts 3.3 and 3.4 for work over two metres which could not be undertaken from the ground or by using a solid construction was to utilise a passive fall prevention device - in this case guardrailing.
Practical guidance: codes of practice and compliance codes
41 The 1985 Act, by s 55, provided for the publication of 'codes of practice', which were intended to provide 'practical guidance' to any persons with an obligation under the 1985 Act (eg. employers, companies, manufacturers). A number of codes of practice were approved by the Minister under the 1985 Act. These appear to have been written and published by WorkSafe Victoria. Notice of the approval of a code by the Minister was published in the Government Gazette.[36]
42 A code of practice entitled 'The Prevention of Falls in Housing Construction' (2004 Code), came into effect on 17 March 2004.[37] It applied to domestic building construction.
...practical guidance to builders, contractors and their employees on how to eliminate or reduce the risk of falling from height in the housing construction industry.
The 2004 code, in effect, spells out the manner in which the 2003 Regulations are to be complied with.
44 In Part 2, in dealing with falls of more than two metres, the following appears:
6.9.1 Risk Controls - General
Builders and subcontractors must assess and control the fall risk of people undertaking roofing work.
45 Under the heading 'Work up to 3 metres' the following appears:
Where roof workers are not exposed to the risk of an external fall of greater than 3 metres and the pitch of the roof is not greater than the critical angle, then the primary risk control measure may be the establishment of a cleared area around the perimeter of the building known as a "clear zone".
Where a clear zone is relied on as part of the fall control measures it must:
46 Under the heading 'Critical angle' the following is written:
One of the key risk factors to be considered when determining the type of risk control measures to put in place for roofing works is the pitch of the roof. The critical angle is the roof pitch below which it is considered that roof workers may reasonably be able to work and walk across the roof.
Builders and subcontractors should determine the critical angle as part of their risk assessment in accordance with section 3.3. In no case should the critical angle be taken as greater than the following:
47 As with s 55 of the 1985 Act, s 149 of the 2004 Act enabled the provision of practical guidance notes, referred to as 'compliance codes' (instead of codes of practice). As with the 1985 Act, the Minister may approve a compliance code that takes effect upon publication in the Government Gazette.[38]
48 It is to be noted here that whilst the 2004 Code (made under the 1985 Act) related only to domestic construction,[39] 'The Compliance Code for the Prevention of Falls in General Construction' (2008 Code), which came into effect on 19 September 2008,[40] related to construction generally (ie residential and commercial).
49 Part 12 of the 2004 Act deals with compliance codes. The relevant parts are as follows:
149 Compliance codes
(1) For the purpose of providing practical guidance to persons who have duties or obligations under this Act or the regulations, the Minister may make an order approving a compliance code.
(2) A compliance code may apply, adopt or incorporate any matter contained in a document formulated, issued or published by a person or body whether -
(a) With or without modification, or
(b) As in force at a particular time or from time to time.
50 Section 152 (which is contained in Part 13) reads as follows:
152 Effect of compliance with regulations or compliance code
If -
(a) the regulations or a compliance code make provision for or with respect to a duty or obligation imposed by this Act or the regulations; and
(b) a person complies with the regulations or compliance code to the extent that it makes that provision -
the person is, for the purposes of this Act and the regulations, taken to have complied with this Act or the regulations in relation to that duty or obligation.
51 Under the heading 'Preface' in the 2008 Code, the following appears:
The compliance code provides practical guidance to those who have duties under the Occupational Health and Safety Act 2004 (the OHS Act) or the Occupational Health and Safety Regulations 2007 (the Regulations) on how to comply with those duties or obligations.
It replaces the advice given in the Victorian Code of Practice No. 28 of 31 March 2004 made under the Occupational Health and Safety Act 1985. It was approved by the Hon. Tim Holding MP, Minister for Finance, WorkCover and the Transport Accident Commission on 19 September 2008.
This compliance code was developed by WorkSafe Victoria. Representatives of employers and employees in the construction industry were consulted during its preparation.
This compliance code has adopted the content of the National Code of Practice for the Prevention of Falls in General Construction (2008) to the extent that it is compatible and consistent with the OHS Act and Regulations.
Employers, employees, self-employed persons and those with management and control of workplaces need to use the compliance code in conjunction with the Act and Regulations.
This compliance code is not mandatory. A relevant duty holder who complies with the compliance code will - to the extent the compliance code deals with their duties or obligations under the OHS Act and Regulations - be considered to have complied with their duties and obligations.
52 The relevant parts of the 2008 Code read as follows:
...
What do the OHS Regulations require?
53 Under the heading 'Managing risks to prevent falls', the following appears:
Level 1: Undertake the work on the ground or from a solid construction.
Level 2: Undertake the work using a passive fall prevention device.
These include:
54 Then, under the heading 'Working at heights above two metres':
Methods of controlling risks for work at heights above two metres
...
Level 2 Controls
Passive fall prevention devices
56 Detailed instructions of perimeter protection, using guardrails on roofs, is set out at [136]-[144]:
57 I point out here that clauses 20-23, when combined with clause 46, effectively required a house such as the Basset Drive house to comply with a Level 2 control measure - in this case - perimeter guardrailing, consistent with the 2007 Regulations. This is because the fall hazard was more than two metres and a Level 2 control measure was required.
58 The VWA case against Stoddart on breach of statutory duty (and to some extent on breach of common law duty), is based on Part 3.3 of the 2007 Regulations, which I have extracted at paragraph [38]. In simple terms, it was said that any roof with a potential fall of above two metres required fencing or guarding - notwithstanding that it was a residential construction. Where Mr Marwood fell was not guarded and therefore it contends there was a breach of the regulations by Stoddart.
59 Stoddart says that it was not bound by the 2007 Regulations, as it did not have sufficient control over the work on 29 and 30 July to be regarded as an employer pursuant to reg 1.1.8 of the 2007 Regulations.
60 As to the application of the 2008 Code, VWA says that by failing to guard the perimeter of the roof, Stoddart also failed to comply with the provisions of the 2008 Code in force at the time of Mr Marwood's accident.
61 Counsel for Stoddart initially argued that notwithstanding the repeal of the 1985 Act and the introduction of the 2008 Code, the 2004 Code was still applicable because it was not explicitly revoked. Not surprisingly, this argument was not pursued in final submissions. Rather, counsel argued that clause 4 of the 2008 Code incorporated by express reference the 2004 Code (which did not mandate perimeter guardrailing for falls of over two metres) and it remained applicable in July 2008.
62 Further, if this be correct, Stoddart says that it is entitled to rely upon a defence under s 152 of the 2004 Act that in relation to any allegation of breach, it complied with the 2008 Code (i.e it complied with the 2004 Code which was adopted by the 2008 Code).
63 It is convenient to commence by setting out some matters of common ground.
64 First, it was not contended by Stoddart that the 2007 Regulations could not give rise to a statutory duty. Although the 2004 Act, by s 32, excludes any statutory duty arising out of a breach of the provisions of the Act it is accepted that regulations made under the Act can give rise to a statutory duty.[42] However, as I mentioned a moment ago, Stoddart contended that the 2007 Regulations, whilst binding on Rowville Way, did not extend to its conduct, as it was not an 'independent contractor' within the meaning of reg 1.1.8.
65 Second, the factual controversy was particularly limited. It was accepted that Mr Marwood fell from a height of about 2.8 metres on to a clear patch of ground. It was also accepted that under the 1985 Act, the 2003 Regulations and the 2004 Code there was no blanket requirement that a domestic construction with a potential fall of less than three metres required the erection of a perimeter guardrail. Rather, for the construction of a domestic house with a potential fall of less than three metres, the 2004 Code mandated that a guardrail was required in two situations - (a) where the pitch of the roof was more than 23 degrees (for metal deck roofing materials) or (b) where the roof was located over areas which were not 'clear' ie. a fence, building materials etc: the underlying theme appears to be that it was permissible for a worker to be at risk of a fall of less than three metres if the potential fall was on to clear ground. This was consistent with the 2003 Regulations.
66 Third, the unanimous evidence of three Bendigonians (Messrs Olssen, Sardone and Cameron) with vast experience in the roofing industry and the use of guardrails was that at the time of the accident the usual practice in the domestic construction industry was that it was not necessary to erect guardrails around the perimeter of the roof unless the requirements I set out at [65] are applicable. As they perceived the situation, it was not until 2011 that a blanket two metre rule was introduced. They all said that only in the limited situations I have referred to was a guardrail required where the potential fall was less than 3 metres.
Did the 2007 Regulations apply to the work carried out by Stoddart at the Basset Drive house?
67 The application of the regulations to independent contractors is dealt with at reg 1.1.8 of the 2007 Regulations.
1.1.8 Independent contractors
(1) A provision of these Regulations that sets out a way that an employer complies with a duty under section 21 or 35 of the Act in relation to employees extends to the employer's duty under that section to an independent contractor engaged by the employer and any employees of the independent contractor.
(2) If the provision of these Regulations (other than subregulation (1)) provides that an employer's duty under another provision of these Regulations extends to an independent contractor -
(a) that other provision applies as if a reference to an employee were a reference to an independent contractor engaged by the employer and any employees of the independent contractor; and
(b) the duty of the employer under that other provision extends to an independent contractor engaged by the employer, and any employees of the independent contractor, in relation to matters over which the employer has control or would have control if not for any agreement purporting to limit or remove that control.[43]
68 Stoddart submitted that it was not covered by the terms of the reg 1.1.8 and therefore no obligation arose under the 2007 Regulations. The substance of Stoddart's submission was that it did not exercise the requisite degree of control over work on the roof carried out by Rowville Way and its employees to be deemed, in effect, an employer of Rowville Way's employees.
69 In Stratton v Van Driel Ltd,[44] Byrne J said the following of a cognate provision to reg 1.1.8 in the 2004 Act:
I approach the task of construing this statute conscious that it is social legislation intended to secure the safety and welfare of persons at work and to protect them against the risks of this: s6. It should, therefore, be construed generously with this object in mind. S 21(1), as exemplified in s 21(2), imposes on employers an extensive duty in relation to the work environment of their employees, including the activities carried on and the things present in that environment. It may be supposed that this duty is imposed upon employers because, traditionally, it is the employer who has the right to control the work practices of its employees; it is the employer which provides plant and machinery for their work; and it is the employer which arranges or provides facilities for storage, handling and transport of plant and other things for use in the workplace. This statutory duty, to some extent, reflects the duty of care imposed by the common law upon employers. See R v Australian Char Pty Ltd (1995) 79 A Crim R 427 at 442 (Vic FC). In that context, too, the relationship between the employer and the worker at risk which gives rise to the statutory as well as the common law duty is the employment relationship, because control over the worker's working environment is generally exercised or exercisable by the employer. But, within a working environment things and activities which may put a worker at risk of harm may be brought or conducted there by persons with whom the worker has no employment relationship. The scheme of the legislation therefore is to impose different duties upon those persons depending upon their relationship with the likely source of risk...[45]
70 In this case, the source of the duty (unlike that in Stratton, which concerned the provisions of the statute) is reg 3.3.4 of the 2007 Regulations. The relevant question is, therefore, whether Stoddart, in a practical sense, had control over the relevant risk or hazard (described as 'matter' in the regulation).
71 In my opinion, the relevant hazard was the prevention of falls by persons working on the construction of the roof of the Basset Drive house, which Stoddart had agreed to construct. To put the question another way - did Stoddart exercise control over the risk of Rowville Way employees falling from the roof?
72 As Byrne J observed in Stratton, the word control is protean and dependent upon context. However, it is useful to repeat his Honour's reference to the Oxford English Dictionary, which defines 'control' as meaning 'the fact of controlling or of checking and directing action, the function or power of directing and regulating, domination, command and sway'.[46] I bear in mind also, as Byrne J noted, that Occupational Health and Safety legislation is social legislation and that such an expression must be interpreted broadly.
73 In my opinion, the evidence clearly demonstrates that Stoddart 'entered the field', so to speak, in its management and direction of the guarding of the roof. It exercised, in a practical sense, control over the risk of a fall which was the hazard facing Rowville Way's employees:
(a) Stoddart knew that Rowville Way's employees (and only Rowville Way employees) would be working on the roof;
(b) Rowville Way's employees were on the roof pursuant to its contract with Stoddart;
(c) Stoddart contracted directly with Access Guard for the provision of the guardrail;
(d) Stoddart personnel (in Mr Sardone) attended the site and marked up the location of the guardrail prior to sending the plans on to Access Guard;
(e) Stoddart directed Access Guard as to the placement of the guardrail;
(f) Stoddart, through Mr Sardone, was the point of contact if Access Guard had any concerns or issues about the guardrail placement;
(g) Stoddart was in charge of the placement of the guardrail throughout the course of construction - Mr Sardone said that even if he had been asked by Mr Olsson to put scaffolding all the way around the roof perimeter, he would have refused if he did not think it to be necessary; and
(h) Stoddart had overall management of the roof construction and was the authority on this aspect of the work on the Basset Drive house.
74 Stoddart relied in particular upon the West Australian decision of Reilly v Devcon Australia,[47] in which Murray J said:
Absent a legal capacity to control, the Court will be concerned with control in the sense of a capacity to exercise control by giving directions which would be obeyed. The fact of control will be found where a means of control could in fact be employed which would be effective in the sense that a direction given, for example, would be obeyed. Control within the meaning of the Act would not be found, in my opinion, if the proper conclusion from the evidence was that the person or entity whose activities were to be controlled, if given a direction concerned to eliminate or control a relevant hazard, would and could simply decline to follow it.
If control in this sense is to be found then, in my opinion, it will be a different question whether the control might or might not in fact have been exercised, and in respect of that question the relative expertise of the deemed employer and the deemed employee will be relevant.[48]
75 Reilly involved a situation in which an independent contractor was entirely responsible for the work methods and setup of equipment on the principal employer's site, the failure of which ultimately led to a fatal accident. That is light years away from the situation in this case and it is distinguishable on that basis.
76 Moreover, I do not accept that the relevant test of control rests simply on the issue of the ability of a principal to give a direction to a sub-contractor's employee which should be obeyed. Such a test is, I suggest, too narrow and inconsistent with the purpose of the regulation. Rather, I think that the test, as Byrne J explained in Stratton, is multi-factorial and depends on a consideration of all the circumstances particularly the enterprise and the relevant hazard. If I am wrong on this point I suggest that the Reilly test is satisfied as Mr Sardone was in a position to give instructions to Mr Cameron as to the erection of perimeter fencing which he could reasonably have expected to be obeyed.
77 It is also to be noted that the regulation does not speak of 'exclusive control over a work site.' There may well be occasions where two or more entities exercise control - in a practical sense - over a particular worksite hazard.
78 I conclude by observing that this case contrasts markedly with the cases cited by counsel for Stoddart, including Reilly and R v ACR Roofing Pty Ltd,[49] in which control of the building operation was handed over to an independent contractor, who in turn engaged a sub-contractor, without any oversight by the principal.
79 The necessary level of control was patently present in this case. It is simply not to the point that Stoddart was not physically present on the day of the accident, exercising hands-on management. The reality is that Stoddart's fingerprints were all over the construction of the roof and the management of the risk of a fall from the roof, such as to amount to 'control' within the meaning of reg 1.1.8.
80 It follows that Part 3.3 of the 2007 Regulations applied to Stoddart.
What provisions of the two Codes applied to the work at the Bassett Drive House?
81 Counsel for Stoddart argued that the 2004 Code (which did not contain a mandatory requirement as to the use of a perimeter guardrail in domestic housing construction for work over two metres in height) was incorporated by clause 4 (see paragraph [52], above) into the 2008 Code. This, it was said, had two relevant consequences: first, that the erection of a partial guardrail in 2009 complied with the 2008 Code, and second, that by reason of s 152, compliance with the provisions of the 2004 Code (as incorporated into the 2008 Code) meant that Stoddart had complied with the requirements of the 2004 Act in relation to any duty or obligation arising out of the placement of the guardrail.
82 At the outset three matters should be noted. First, the 2008 Code was a guide to the industry. It could not, by any norm of statutory construction, prevail over an inconsistent regulation or statute. So, to a large extent, once it is determined (as I have) that the 2007 Regulations apply to the work at the Basset Drive house, it must follow that any application of the 2008 Code cannot relieve Stoddart of its obligation under the Regulations and any breach.
83 Second, the 2008 Code purports to apply to the 'general construction industry.' On its face, and consistent with the regulations, there is no distinction between particular forms of construction and particularly the housing industry.
84 Third, the 2008 Code applied to the work carried out (absent clause 4 incorporating the 2004 Code) as there was the potential of a fall greater than two metres.[5]
85 It is apparent, by virtue of s 149(2) of the 2004 Act (set out at [49]) that the legislature intended to give the drafters of the code the ability to draw other matters into the 2008 Code. However, the only basis upon which a provision of the 2004 Code could form part of the 2008 Code, is by compliance with the subsection which enables a code to 'apply or adopt or incorporate' part of another document.
86 Accordingly, and particularly in light of the unambiguous terms of the 2007 Regulations, it was necessary for the 2008 Code to use clear and unequivocal words to include any part of the 2004 Code. It did not do so. The wording of clause 4 does not, either in terms or by implication, incorporate the 2004 Code.
87 It is far more likely that clause 4 of the 2008 Code was intended to be advisory and not to mandate compliance with the 2004 Code. Moreover, it is quite unclear as to what the clause means when it refers to the use of 'current WorkSafe guidance in the first instance.' Assuming that the reference to current WorkSafe guidance is a reference to the 2004 Code, it is unclear and imprecise as to what the qualifying words 'in the first instance' mean. I, for one, have no idea what the draftsman was getting at.
88 Further, the clause does not suggest that the inconsistent provisions of the balance of the 2008 Code relating to fall prevention (and consistent with the 2007 Regulations) are in some way trumped by this recommendation.
89 This conclusion disposes of this argument. However, I should go on to deal briefly with the suggestion that clause 4 might be a 'guideline' for compliance with the 2008 Code.
12 Power to make guidelines
(1) The Authority may, in accordance with this Division, make guidelines on the way in which -
(a) a provision of this Act or of a regulation made under this Act would, in the Authority's opinion, apply to a class of persons or to a set of circumstances; or
(b) a discretion of the Authority under a provision of, or regulation made under, this Act would be exercised.
91 A guideline can only be legally effective if it deals with the way in which a particular regulation made under the 2004 Act (in this case, the 2007 Regulations) may apply in a given set of circumstances. Clause 4 does not deal with how the 2007 Regulations are to be applied.
92 Moreover, a guideline can only be effective (and within power) if it is consistent with the provision of the Act or the regulation which it endeavours to interpret. Here, as has been discussed, the 2007 Regulations were clear and unequivocal in their terms: perimeter fencing was necessary on the Bassett Road house.
93 In summary, Stoddart's statutory obligations were governed by the 2004 Act and the 2007 Regulations. The 2008 Code did not incorporate the provisions of the 2004 Code relating to the prevention of falls. In any event, it could not be read in such a way as to suggest that compliance with it prevailed over the clear wording of the 2007 Regulations. One final remark. It is extraordinary that Worksafe Victoria permitted clause 4 of the 2008 code to be published. The 2007 regulations were crystal clear: a housing construction with a potential fall of over two metres required the use of a passive fall device. Reference in the clause to current Worksafe practice was misleading and unclear. The VWA proffered no explanation for the errors contained in clause 4.
Would Stoddart have been liable to pay damages in relation to Mr Marwood's injuries occasioned by its breach of statutory duty (s 138(1) and (2))?
Did Stoddart owe a statutory duty to Mr Marwood?
94 As I mentioned earlier, Stoddart did not dispute that the 2007 Regulations could give rise to a statutory duty. This was not surprising as it is settled law that specific regulations made for the safety of a class of employees may give rise to a statutory duty.[50] I am satisfied that the 2007 Regulations relating to fall prevention gave rise to such a duty.
Did Stoddart breach its statutory duty and if so, was it a cause of Mr Marwood's injuries?
95 Once it is accepted, as I have, that the 2007 Regulations applied to Stoddart, then the case on breach of statutory duty is made out. The application of the 2007 Regulations means that a passive fall prevention device (in this case, perimeter fencing) was required to be installed to control the risk of a fall of over two metres. At the point where Mr Marwood fell, the potential fall was 2.8 metres.
96 By failing to erect a guardrail around the perimeter, and particularly at the point where Mr Marwood fell, Stoddart was in breach of its statutory duty; as was Rowville Way.
97 Finally, I should briefly mention s 152 (set out at [50]), which was relied upon by Stoddart. Given that Stoddart did not comply with either the 2007 Regulations or the provisions of the 2008 Code, no defence is available to it under s 152.
98 The failure to erect a perimeter guard was cause of Mr Marwood's injuries, within the meaning of s 51(1)(a) of the Wrongs Act 1958 (Vic).[51] There was no question of the engagement of s 51(1)(b) - the scope of liability provision.
99 In summary, I am satisfied that the VWA has made out its case in relation to breach of statutory duty. Stoddart is liable under s 138(1) of the Accident Compensation Act.
Would Stoddart have been liable to pay damages in relation to Mr Marwood's injuries occasioned by its breach of common law duty?
100 The question of whether a duty of care is owed by contractors on a building, or worksite to employees of other organisations working on that site has been the subject of considerable judicial discussion over many years. The two leading High Court decisions are those of Stevens v Brodribb Sawmilling Co Pty Ltd[52] and Leighton Contractors Pty Ltd v Fox.[53]
101 In Leighton Contractors, the High Court said as follows of the duty of a principal to an independent contractor:
The duty of principals to independent contractors. The common law does not impose a duty of care on principals for the benefit of independent contractors engaged by them of the kind which they owe to their employees. However, it is recognised that 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. The principles were explained by Brennan J in Stevens v Brodribb Sawmilling Co Pty Ltd:
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, and that duty is imposed whether or not the entrepreneur is under a further duty of care to servants employed by him to carry out that activity. The entrepreneur's duty arises simply because he is creating the 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; 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. The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. But 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 contractors' respective areas of responsibility, the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility.[54]
102 In Bostik Australia Pty Ltd v Liddiard,[55] the New South Wales Court of Appeal said as follows:
The fact that an employer may be obliged to take reasonable steps to provide a worker with a safe system of work, does not preclude the existence of a duty owed by others to take reasonable care in their dealings with the worker, whether they be other employees, independent contractors, the occupier of premises which the worker is required to attend in the course of employment or other road users encountered in the course of travel. Where work is undertaken on the premises of a third party, that party may have a duty, which commonly arises from:
(a) The degree of control or direction exercised or which the third party is entitled to exercise over the worker;
(b) The condition of plant or premises under the control of the third party, or
(c) The activities of others on the site, generally for the purposes of the third party's undertaking or business.[56]
103 The submission of Stoddart was beguilingly simple: it was accepted that Stoddart had arranged for both the fixing of the roof by Rowville Way and the erection of the guardrail by Access Guard. However, it was then contended that once that arrangement had been put in place, any duty owed by Stoddart ceased as it had no further involvement in how the work was carried out by Rowville Way or, for that matter, Access Guard. In effect, it was said that the only duty of care owed to workers at that site was by Rowville Way to its employees.
104 I do not accept this argument and, contrary to the submissions of Stoddart's counsel, the contention is inconsistent with what was said in Stevens or Leighton Contractors.
105 Applying the principles set out in Stevens and Leighton, I am satisfied that Stoddart owed a common law duty to Mr Marwood. I have set out the manner in which Stoddart exercised control over the site work and managed the risk of an employee of Rowville Way falling from the roof. I repeat that it is not to the point that Stoddart was not exercising direct control on the day. Stoddart devised and implemented the fall protection system for Rowville Way's employees knowing that they would work on the roof and were at the risk of serious injury if there was a fall. It organised the guardrail that was in place. It assumed the responsibility of providing adequate guarding of the roof's perimeter. It exercised a supervisory power over the prevention of falls from the roof. There was no action on the part of Access Guard or Rowville Way that negated or was inconsistent with the role assumed by Stoddart. Stoddart owed a duty of care to Mr Marwood in relation to the erection of a reasonably safe system to protect workers from a fall from the roof.
Did Stoddart breach its common law duty of care and if so, was it a cause of Mr Marwood's injuries?
106 I accept the evidence of each of the witnesses with experience in the roofing industry that the practice in this regional town in 2009 was to exclude construction such as the Basset Drive house from full perimeter guarding. I also accept that the industry practice in Bendigo was to supply guardrails around the entire perimeter only if the potential fall was more than three metres (unless the angle of the roof was outside the prescribed limits, or if the area below was not a clear zone).
107 However it is well settled that industry practice alone cannot be determinative of liability. This is particularly so where the industry practice is confined to a regional city and is inconsistent with the terms of a statutory instrument designed to protect those working at heights. In Lindsay-Field v Three Chimneys Farm Pty Ltd,[57] I considered this issue at some length, and concluded:
In summary, the position in this country in relation to accidents involving an alleged breach of an employer's duty of care and the relevance of industry practice where there is a significant risk of injury in the carrying out of the particular task is as follows:
(a) The primary rule is that the evidence of industry practice is not determinative - the test remains: what is a reasonable response to the identified risk in all the circumstances.
(b) However, industry practice is relevant in assessing the adequacy of the response of the employer to the perceived risk. In this context it assists in determining whether the employer, being aware of the risk and being aware of industry practice, acted reasonably in not responding to the risk.
(c) In determining the adequacy of the employer's response, it is necessary to pay particular regard to the potential danger posed by the work activity. A risk of minor injury may mean industry practice is an acceptable response; however, the greater the risk of significant injury then the greater the need to consider, closely, whether industry practice represents a reasonable response to that risk.[58]
108 The potential for injury is inherent in a fall from a height of more than two metres, as demonstrated by the nature of injuries suffered by Mr Marwood in this case. Indeed a fall from 2.8 metres may, in certain circumstances, be fatal - even if onto clear ground. The absence of any dangerous object at ground level does not correlate with a safe fall (if there be such a thing from 2.8 metres). Much turns upon the velocity of the person involved in the fall, the angle of the body to the ground when the person hits the ground and the nature of the surface onto which the person falls. So much is common sense.
109 Stoddart's (and for that matter Rowville Way's) reliance upon industry practice as a justification for its safety practices was unsatisfactory. Whilst there is no question that both Stoddart and Rowville Way believed that there was no blanket requirement to erect guardrails around the entire perimeter of the roof unless the drop was over three metres, that is not a satisfactory answer, even if they were misled as to the statutory requirements by the contents of clause 4 the 2008 Code. A cursory perusal of the 2007 Regulations would have revealed the need to erect perimeter fencing if the potential fall exceeded two metres. Notwithstanding this mutual belief as to the statutory requirements, there was an inadequate response to the risk of a potentially life-threatening fall. The potential dangers presented by not guarding the whole perimeter were both substantial and evident, as the legislature recognised in promulgating the 2007 Regulations.
110 Inadequate industry practice cannot prevent a finding of breach being made against Stoddart.
111 For these reasons I am satisfied that Stoddart breached the duty it owed to Mr Marwood. The requirements of s 49 of the Wrongs Act as to foreseeability and prevention are comfortably satisfied. The risk of injury was patently foreseeable - the obvious precaution was to erect a guardrail around the perimeter of the roof. The failure to do so was a cause of Mr Marwood's injuries, as required by s 51 of the Wrongs Act.
112 Accordingly, I conclude that Stoddart is liable in respect of Mr Marwood's injury as required by s 138(1) of the Accident Compensation Act.
Factor X - What is the extent of Stoddart's responsibility?
113 Factor X of the formula set out in s 138(3)(a) of the Accident Compensation Act requires the Court to determine the extent of the responsibility of the third party, which has caused or contributed to the injury of the worker.
114 In practical terms, this has been understood and applied to mean that a court investigates the circumstances surrounding the accident, identifies those parties whose act or omission had a causal relationship to the injury of the worker, and then determines the level of responsibility of each (including the worker).
115 It is also accepted that in reaching this conclusion a court applies the test utilised in a claim for contribution under Part 4 of the Wrongs Act, namely:
(a) the degree to which each of the parties has departed from the standard of conduct required of that party; and
(b) the relative causal potency of each of the party's acts in relation to the injuries sustained by the worker.[59]
116 The only relevant parties responsible for Mr Marwood's injuries are Stoddart and Rowville Way. It was not suggested that Otto Worth bore any responsibility for Mr Marwood's injuries. Nor was any allegation made against Mr Marwood on the basis that he failed to protect himself.
117 In terms of causal potency, I see nothing to distinguish between Stoddart and Rowville Way. Each could have insisted upon the erection of a perimeter guardrail. Stoddart, through Mr Sardone, could have specified the use of a guardrail around the perimeter of the house. Equally so, Rowville Way could, in its dealings with Stoddart, have required the provision of a guardrail for the whole of the roof. Each breached its statutory obligation to provide adequate perimeter fencing.
118 On the question of culpability, I consider that both were equally responsible. Each breached its statutory and common law duty.
119 Rowville Way was directly responsible, as Mr Marwood's employer, for his safety. It owed a non-delegable duty to ensure that his work was carried out in a safe working environment. It is well recognised that the law places a greater emphasis upon an employer's duty to its employee than that of a third party (such as a contracting principal) to such an employee. The power of the employer to control and dictate the terms and conditions upon which an employee works carries with it the corollary that in doing so it is required to ensure as safe a workplace as is reasonably practicable. In this case it was ensuring a guardrail surrounded the perimeter of the house whilst the roof was being constructed.
120 On the other hand, for the reasons I have set out Stoddart effectively assumed responsibility for adequately guarding the roof. It instructed Mr Cameron as to the installation of an inadequate guardrail. It was in charge of managing the very risk which ultimately transpired and led to Mr Marwood's injuries.
121 I can see no good reason to distinguish the causal potency or culpability of one above the other.
122 This means that Stoddart's responsibility should be assessed at 50 per cent.
123 Subject to any submissions from the parties I propose to make a declaration(and any consequential orders) to give effect to the conclusion:
(a) the Victorian WorkCover Authority is entitled to be indemnified by Stoddart in relation to payments of compensation by it in respect of Mr Marwood's injuries; and
(b) that Factor X of the formula prescribed by s 138(3)(b) is 50 per cent.
[1] Factors A and C of the s 138(3)(b)formula - set out at [6].
[2] Transcript of Proceedings, Victorian WorkCover Authority v Stoddart (Vic) Pty Ltd (Supreme Court of Victoria, J Forrest J, 4, 5, 10 February 2015) 113 (Transcript).
[9] The agreement tendered as Exhibit P6 expired on 8 May 2009. However it was not suggested that its terms were inapplicable to the arrangements between Stoddart and Rowville Way for the Basset Drive house.
[12] 'High Risk Tasks' included installing fascia and guttering from a work platform higher than two metres, working on a roof where a person could fall more than three metres or working on a metal roof with a pitch of more than 23 degrees, regardless of height.
[14] Ibid. The Statements covered an earlier period but the evidence of Mr Sardone and Mr Olssen made it clear that both regarded this part of the statements as applicable in July 2009.
[25] Occupational Health and Safety Act 1985 (Vic) s 59.
[26] Occupational Health and Safety (Manual Handling) Regulations 1999 (Vic).
[27] Occupational Health and Safety (Plant) Regulations 1995 (Vic).
[33] Victorian Government Gazette, No G25, 21 June 2007, 1292.
[36] Occupational Health and Safety Act 1985 (Vic) s 55(4).
[37] Occupational Health and Safety Act 1985 (Vic) s 55 and Victorian Government Gazette, No S62.
[39] It is expressed as applying to 'buildings and structures of three habitable stories or less, based on classes 1, 2 and 10 of the Building Code of Australia'. Class 1 refers to single dwellings, either detached or attached (e.g. row houses, terrace houses etc), or boarding houses, guest houses and hostels with a total floor area not exceeding 300m squared and where not more than twelve reside. Class 2 is a building containing 2 or more sole-occupancy units, each being a separate dwelling. Class 10 is a non-habitable building or structure - e.g private garages, carports, shed, or fences, masts, swimming pools .
[40] Section 149(4) of the Occupational Health and Safety Act 2004 (Vic) and Victorian Government Gazette No S258, 19 September 2008 (Exhibit D7).
[42] See generally O'Connor v SP Bray Ltd [1937] HCA 18; (1937) 56 CLR 464, 478; Sovar v Henry Lane Pty Ltd [1967] HCA 31; (1967) 116 CLR 397, 404. In relation to Occupational Health and Safety legislation in this state: see McCallion v UR Machinery Pty Ltd [1999] VSC 543; Li v Toyota Motor Corporation [2010] VSC 458; Lindsay-Field v Three Chimneys Farm Pty Ltd [2010] VSC 436; Papadopoulos v MC Labour Hire Services Pty Ltd (Ruling No 1) [2009] VSC 175; Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410.
[44] [1998] VSC 75 (Stratton).
[47] [2007] WASC 106 (Reilly).
[50] See generally O'Connor v SP Bray Ltd [1937] HCA 18; (1937) 56 CLR 464, 478; Sovar v Henry Lane Pty Ltd [1967] HCA 31; (1967) 116 CLR 397, 404; Byrne & Frew v Australian Airlines Ltd (1995) 185 CLR 410. In relation to Occupational Health and Safety legislation in this state: see McCallion v UR Machinery Pty Ltd [1999] VSC 543; Li v Toyota Motor Corporation [2010] VSC 458; Lindsay-Field v Three Chimneys Farm Pty Ltd [2010] VSC 436; Papadopoulos v MC Labour Hire Services Pty Ltd (Ruling No 1) [2009] VSC 175.
[51] Part X of the Wrongs Act applies to any claim for damages "resulting from negligence...regardless of whether the claim is brought...under statute or otherwise". Although not free from doubt, I propose to assume that s 51 applies to a claim in respect of breach of a statutory duty. In any event, in this case any difference between the common law test and that in s 51 is immaterial.
[52] [1986] HCA 1; (1986) 160 CLR 16 (Stevens).
[53] [2009] HCA 35; (2009) 240 CLR 1 (Leighton Contractors).
[54] Stevens [1986] HCA 1; (1986) 160 CLR 16, 11-12 [20].
[58] Ibid [71]-[73] [Citations omitted].
[59] See Papadopoulos v MC Labour & Anor [2009] VSC 193; (2009) 24 VR 665; (2000) 1 VR 246.
Victorian Workcover Authority
Stoddart
(1986) 160 CLR 16
(2009) 240 CLR 1
(1937) 56 CLR 464
(1967) 116 CLR 397
(1995) 185 CLR 410
(2004) 11 VR 187
(2009) 24 VR 665
(2000) 1 VR 246
