PRITCHARD v TRIUS CONSTRUCTIONS PTY LIMITED & Ors

s Pty Limited - First Defendant Oceanic Coal Australia Pty Ltd - Second Defendant Oceanic Coal Australia Pty Ltd - Cross-Claimant Trius Constructions Pty Limited - Cross-Defendant Representation: Mr J Sleight - Cross-Claimant Mr D Lloyd - Cross-Defendant MRM Lawyers - Cross-Claimant Wotton & Kearney - Cross Defendant File Number(s): 2010/00064178

Judgment 1HIS HONOUR: Nature of proceedings The second defendant, Oceanic Coal Australia Pty Limited (Oceanic) owned and operated "The Macquarie Coal Preparation Plant" (MCPP) at Teralba in New South Wales. The plaintiff brought proceedings against Oceanic in negligence alleging that on 4 January 2007 he suffered injuries when a forklift controlled by an employee of Oceanic drove over his left leg. At the time the plaintiff was an employee of the first defendant, Trius Constructions Pty Limited (Trius). 2The claim by the plaintiff against Oceanic was settled. The plaintiff discontinued his proceedings against Trius. 3Oceanic brought a cross-claim against Trius. The cross-claim seeks contribution up to a full indemnity pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946 and a contractual indemnity. The contractual indemnity is based on an implied term in the contract between them or alternatively, on an express term in the contract in the nature of an indemnity. 4Trius accepts that it has an obligation to contribute pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946 but denies that it has any obligation in contract. It is common ground that any contribution by Trius, pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946 is limited by s151Z of the Workers Compensation Act 1987. 5The matter before the Court is Oceanic's cross-claim against Trius. Factual background 6Except as otherwise indicated, I find the facts to be as follows: 7Oceanic conducted coal mines in the Newcastle area and was engaged in the mining and export of coal. It owned and operated the MCPP site at Teralba in New South Wales. 8Trius was a company primarily involved in the fabrication, construction and installation of steel products in the mining industry. It employed between 35 and 60 people, depending on the workload. Trius had had a commercial relationship with Oceanic since December 1997. Mr Brittain was a director of Trius and had been in that position since Trius was incorporated. 9In June 2006 George Muller, the engineering manager at Oceanic, telephoned Mr Brittain inviting him to quote for the replacement of a number of metal floor beams that had been rusted out at the Teralba plant. Mr Brittain inspected the work that was required to be done and quoted for it. He later typed up the quote and sent it to Mr Muller by email. Shortly after that Mr Muller telephoned and told him that Trius had the job. 10Mr Brittain provided a statement and gave evidence in the proceedings. While he could not remember the precise terms of the conversations which he had with Mr Muller, he said that he was given to understand that having been advised that Trius had the job, it was expected that Trius would commence work on the fabrication of the metal floor beams, even though their installation might not take place for some time. 11Mr Brittain could not remember exactly when Trius received a purchase order for that job from Oceanic but said that it usually took three or four days after notification for such a purchase order to arrive. He did, however, have a clear recollection that work had already commenced on the fabrication of the floor beams at the time when the purchase order arrived. 12There was an issue in the proceedings as to exactly how contracts were entered into between Oceanic and Trius. On that issue, Steven Claridge gave evidence. The evidence was in the form of a statement, which Mr Claridge adopted in the witness box. He was not cross-examined. Mr Claridge at the time he gave the statement was a commercial manager in the employ of Oceanic and had been employed in that capacity since October 1999. 13Mr Claridge's responsibility in Oceanic was for contracts and methods of contracting with contractors and subcontractors. In respect of large value contracts, Oceanic generated or negotiated a specific written contract. These were usually lengthy and complex documents and an example was annexed to his statement. 14In respect of "small contracts" Mr Claridge's evidence was as follows:- "5. For all small contracts and procurements, Oceanic Coal operates a purchase order system known as PULSE. Each purchase order details the name of the contractor, the services or goods to be procured, the purchase order number and (if necessary) the due date for delivery. 6. Each purchase order is then provided to the relevant contractor or subcontractor before work is commenced. The contractor or subcontractor then provides Oceanic Coal with a tax invoice for payment. The purchase order number is vital to the procurement and payment system of Oceanic Coal as it allows Oceanic Coal to track accounts and pay such accounts in a timely manner. It is Oceanic Coal's general practice not to pay invoices without a purchase order. 8. Since its inception in or about 2001, all purchase orders generated by Oceanic Coal using this system have contained a reference to terms and conditions in the bottom left hand corner. 9. The records maintained for the purpose of Oceanic Coal's business record that on about 21 June 2006 a purchase order was generated and issued to the first defendant for the fabrication and installation of L3CD67 metal beams at the Macquarie Coal Preparation Plant at Oceanic Coal. The purchase order number was PP319522. Attached and marked "B" is a true copy of that purchase order. 10. The records maintained for the purpose of Oceanic Coal's business record that this purchase order was generated in relation to certain shutdown maintenance operations being conducted by the first defendant at and around the preparation plant. 11. For the purposes of purchase orders Oceanic Coal and Xstrata Coal Australia Pty Limited (and its other subsidiaries) had developed general purchase order standard terms and conditions. 12. Attached and marked "C" is a true copy of the general purchase order standard terms and conditions in effect as at 21 June 2006. These general purchase order standard terms and conditions were also in effect as at 4 January 2007. 13. A copy of the general purchase order standard terms and conditions is available on request to contractors ... 16. The records maintained for the purpose of Oceanic Coal's business record that Trius had been receiving purchase orders from at least 23 June 2003. 17. Attached and marked "D" are true copies of all purchase orders sent to the first defendant since 23 June 2003 to 21 June 2006. ... 20. The terms and conditions in effect as at 21 June 2006 and 4 January 2007 were first introduced in 2003 and remained unchanged until 24 November 2008 when new terms and conditions were drafted." 15It was common ground that the following was set out in the bottom left hand corner of purchase order PP319533: " Terms and Conditions