Rauk v Transtate Pty Ltd; Restile Pty Ltd v Transtate Pty Ltd

Supreme Court of NSW|2000-11-03|Before: O'Keefe J

Reported Decision : (2001) Aust Torts Reports 81-592

CITATION : Rauk v Transtate Pty Ltd; Restile Pty Ltd v Transtate Pty Ltd [2000] NSWSC 1020 FILE NUMBER(S) : SC 21142/95; 20624/96 HEARING DATE(S) : 28/8/00, 29/8/00, 30/8/00, 31/8/00, 4/9/00, 5/9/00, 6/9/00, 7/9/00, 8/9/00, 30/10/00. JUDGMENT DATE : 3 November 2000

PARTIES : Peter Rauk v Transtate Pty Ltd; Restile Pty Ltd v Transtate Pty Ltd JUDGMENT OF : O'Keefe J

For Defendant SOLICITORS : Hunt & Hunt Sydney

For Cross-Defendant Hickson Wisewoulds Sydney CATCHWORDS : Negligence - Statutory duty - Building and construction - Employer and employee - Independent contractor - factors to distinguish - Duty of care to independent contractor - Application of regulations to head contractor - Breach of statutory duty - Contributory negligence - Person who if sued would be liable - Coextensive duties owed to and by company and employee/controller of company and operations - Circuity of action - Action per quod servitum amisit - Measure of damages - Damages Law Reform (Miscellaneous) Provisions Act, 1946 LEGISLATION CITED : Construction Safety Act, 1912 Scaffolding and Lifts Act, 1912 Factories and Shops Act, 1912 Vabu Pty Limited v Commissioner of Taxation (1996) 81 IR 150 at 153 Stevens v Brodribb Sawmilling Co Pty Limited (1985-1986) 160 CLR 16 Vozza v Tooth & Co Ltd (1964) 112 CLR 316 Mummery v Irvings Pty Ltd (1956) CLR 99 McLean v Tedman (1984) 155 CLR 306 Shedlezki v Bronte Bakery Pty Limited (1968-1970) 72 SR (NSW) 378 Eastern Extension, Australasia and China Telegraph Co Ltd v Federal Commissioner of Taxation (1923-24) 33 CLR 426 Andrews v The Nominal Defendant (1963) SR (NSW) 110 Attorney General for NSW v Perpetual trustee Co Ltd (1951-52) 85 CLR 237 Attorney General fo rNSW v Perpetual Trustee Co Ltd (1955) AC 457 at 483 CASES CITED : Hall v Hollander (1825) 4 B&C 660 Hodsoll v Stallebrass (1840) 11 Ad & E1 301 Curran v Young (1965) 112 CLR 99 Inland Revenue commissioner v Hambrook (1956) 2 QB 641 Mallett v Dunn (1949) 2 KB 180 Husher v Husher (1998-1999) 197 CLR 138 Coniglio v Compressed Yeast Co (NSW) Pty Limited (1964) 82 WN (Pt 1) (NSW) 165 Davey v Skinner (1961) SR (NSW) 648 Buckman and Son Pty Ltd v Flanagan (1974-1975) 133 CLR 422 O'Reilly v Commonwealth Hostels Limited (1964-65) NSWR at 686 Hetherington v Mirvac Pty Limited & Ors (1999) NSWSC 443, unreported 12 May 1999 Conley v Minehan (1999) NSWCA 432, unreported 25 November 1999 DECISION : Action No. 21142/95: 1. There will be a verdict for the plaintiff, Peter Rauk, against the defendant, Transtate Pty Ltd, for $1,963,933.00 and judgment accordingly. 2. The defendant is to pay the plaintiff's costs on a party and party basis up to 26 July, 2000 and thereafter on an indemnity basis subject to the plaintiff paying on a party and party basis the costs of the defendant and cross defendant thrown away in consequence of the adjournments on 1 and 4 September, 2000. 3. There will be a verdict for the cross-defendant, Restile Pty Limited, on the cross-claim by the defendant, Transtate Pty Ltd, and judgment accordingly. 4. The defendant is to pay the costs of the cross-defendant incurred after 5 February, 1998 on an indemnity basis and costs prior to that date on a party and party basis. Action No. 20624/96 : 1. There will be a verdict for the defendant, Transtate Pty Ltd, against the plaintiff, Restile Pty Ltd, and judgment accordingly. 2. The plaintiff, Restile Pty Ltd, is to pay the defendant's costs. I indicate that virtually no time was spent at the hearing in evidence in relation to the action No.20624/96 and only a minor amount of time was spent in relation to the argument concerning that action.

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

DATE: 3 November 2000 No: 21142/95 - PETER RAUK v TRANSTATE PTY LTD No: 20624/96 - RESTILE PTY LTD v TRANSTATE PTY LTD

1 HIS HONOUR: INTRODUCTION 2 Peter Rauk (the plaintiff) was injured on 17 October, 1994 when a girder which was then in course of fabrication collapsed and crushed him. The girder was being fabricated at the premises of Transtate Pty Limited (the defendant). When completed it was, together with other girders and components, to be included in ramps that form part of the Glebe Island Road Bridge (now known as the Anzac Bridge), which was being constructed by the Roads and Traffic Authority of New South Wales (RTA). The bridge forms part of a major arterial road from the centre of the City of Sydney to Parramatta. 3 The premises of the defendant consisted of a yard and workshop building. The workshop building was large and a number of girders were being fabricated in it by the defendant for the RTA. There were various operations conducted in the workshop. One of these was concerned with marking out and permanent and tack welding, another with machining and yet another with various aspects of fabrication. The workshop had at least two substantial overhead cranes that were used for lifting heavy component parts of girders and other pieces that were being fabricated and for moving both partly and completely fabricated pieces of work. 4 At various times the defendant had between 50 and 100 people working at the premises, although it would appear that at the time of the plaintiff's injury the work force was roughly 50. These included machinists, boilermakers, welders and crane drivers as well as engineering, design and office staff. At least two supervisors were employed by the defendant as part of the work force. One, Mr Dellafiore, was in the ordinary course of events concerned with supervising fabrication in the area in which the plaintiff was injured. The other, Mr Graham, was usually involved in supervision and other duties, including quality control in other parts of the defendant's workshop.

EMPLOYEE OR SUBCONTRACTOR 5 The plaintiff was a fitter and machinist. He had qualified in 1981 or 1982 as a result of an apprenticeship which involved study at the Wollongong TAFE and practical work on the job. He was neither a boilermaker nor a rigger and had no formal qualifications as such. However, he had picked up some ability to operate a welding machine over the course of the years. 6 The plaintiff commenced employment with the defendant in March 1986 as a fitter and machinist, but in early 1992 an arrangement was made between the plaintiff and Mr Fred Bianco, Managing Director of the defendant, that the plaintiff would continue working at the defendant's premises on the same kind of work as before subject to the following written conditions:

(i) he would be a sub-contractor through a company known as Restile Pty Limited (Restile) which he formed;

(ii) the hourly rates that would be paid to Restile for work would be increased over that which had been paid to the plaintiff as an employee of the defendant;

(iii) copies of Workers Compensation and Public Liability Insurance Polices had to be submitted to the defendant. The public liability cover was to be a minimum of $1 million, with the defendant being noted on the policy;

(iv) invoices had to be submitted once a month with PPS deduction forms correctly filled out - no such invoices, no payment. 7 As a result of this arrangement the plaintiff became an employee of Restile, which then provided his services as a fitter and machinist to the defendant. The defendant ceased to be liable to the plaintiff for any direct payments in respect of his labour, as well as for holiday pay, long service leave and other incidents of the relationship of employer and employee. As far as both the plaintiff and the defendant were concerned the plaintiff ceased to be an employee of the defendant. For the plaintiff the benefit of the change was an increase in the hourly rate paid by the defendant in respect of the his labour - albeit that the money was payable and paid to Restile. 8 Although not stated in the short document given by Mr Bianco to the plaintiff and effective from 1 April, 1991, the hourly rate was initially increased to $22.20. However in about August, 1994 it rose to $24.00. These were the rates paid for each hour of work, whatever the total weekly hours worked may have been. Neither overtime nor penalty rates were payable. The plaintiff could work at the defendant's premises during the hours the plaintiff kept them open, but the plaintiff was expected to be at the defendant's premises at least during ordinary working hours, and to remain in order to maintain and repair equipment and complete different jobs assigned to him. 9 The plaintiff was the sole source of income for Restile. He was a director. His wife was a director too. She did not otherwise engage in remunerative employment. She was occupied in full time domestic duties, including caring for the children of the marriage. However she did perform some minor work for Restile which was described by the plaintiff as "very very minimal". Nonetheless she was paid a wage which varied according to the amount earned for Restile by the plaintiff. The amount paid to her varied, but was between $19,919 for the year ending 30 June, 1993 and $$13,322 for the year ending 30 June, 1995. 10 The amount paid to Mrs Rauk bore no relationship to the value of the services performed by her for Restile. The company structure was a convenient method of splitting the income which the labours of the plaintiff, and those labours alone, were able to produce for Restile. It enabled the plaintiff, while ever he chose so to do, to channel to his wife some of the income generated by him for Restile so as to reduce the incidence of tax on that income. 11 From 1986 until the time of his injury the plaintiff, either directly or through the medium of Restile, performed work provided by the defendant. When Restile contracted to provide his services to the defendant nothing changed in relation to the directions given to him as to the work he was to undertake or the provision by the defendant of major tools, heavy equipment and material necessary for the purposes of the work. Supervision of the work which he was performing or was to perform was carried out by the defendant's employees. So too were the inspection of and quality control measures applied to the work he had completed. The system laid down or practiced in relation to work performed in the yard and workshop of the defendant was devised, put in place and maintained by the defendant. Instructions were given to the plaintiff by supervisors after the formation of Restile as they had been before its formation. Indeed Mr Bianco as "the owner of the (defendant) company" clearly continued to act as if the plaintiff were still subject to Transtate's instructions, notwithstanding the interposition of the legal entity, Restile, and the fundamental change in the mode of payment and conditions of work. However in a reference dated 9 August, 1994 given to the plaintiff by Mr Bianco junior, the changed situation seems to have been recognised. The plaintiff was stated to have : "worked at this company since the 10th of March 1986 as a fitter machinist"(Exhibit AE) (Bold added)

The same document states that: "Mr Rauk is competent on lathes, horizontal bores, planers, millers and radial drills. He has also a vast experience in repairing equipment, assembly and aligning motors, gear boxes etc." "Mr Rauk has also proved to be reliable"

It is material to note from the document that he was working "at" rather than "for" the defendant and there is no suggestion in it that Mr Rauk was a welder or rigger. His competence was, and was acknowledged as being, that of a fitter and machinist. 12 The plaintiff quite frequently worked 12 hour shifts or more. This was in accordance with instructions given either by Mr Bianco or whoever was in charge of the relevant section of the workshop at the material time. Those persons would tell him the hours he needed to work and remain at the premises to complete the work assigned. At times this involved working through the night in order to comply with his instructions; well outside the requirement of award conditions applicable to an employee. For the purposes of such work not only did the defendant provide heavy equipment, major tools and necessary material, but also safety equipment such as helmets. Furthermore, if work was to be done by the plaintiff on a Transtate job that was away from the workshop, the defendant provided transport to the place at which the work was to be performed. 13 The jobs which were undertaken by the plaintiff were as assigned and directed by the workshop foremen or by Mr Dellafiori or Mr Bianco. The detailing, supervision and set up of the work he was to perform were in the hands of persons other than the plaintiff. These persons included Mr Bianco, Mr Dellafiori and Mr Graham from time to time. 14 Senior counsel for the defendant submitted that notwithstanding the changed arrangements between the plaintiff and the defendant that were effected in 1992 the plaintiff still remained an employee, "a direct employee", of the defendant. If that were the correct situation it would have consequences in relation to the nature of the duty and standard of care owed by the defendant to the plaintiff, the quantum of damages to which the plaintiff may be entitled, the action per quod servitum amisit instituted by Restile against the defendant and the cross action by the defendant against Restile. 15 The argument on behalf of the defendant stressed the extent of control that was de facto exercised by the senior staff of the defendant in respect of the work to be and actually carried out by the plaintiff. Although it was conceded that the question of control was not the sole or necessarily determining factor, it was argued that extent of control combined with supervision, hours of work, provision of a place of work, provision of transportation and provision of equipment, including safety equipment, meant that the correct analysis of the relationship between the plaintiff and the defendant was that of employer and employee. 16 Any consideration as to whether a relationship of employer and employee exists in a given case "starts with the High Court's decision in Stevens v Brodribb Sawmilling Co Pty Limited" as Sheller JA stated in Vabu Pty Limited v Commissioner of Taxation (1996) 81 IR 150 at 153. In Stevens v Brodribb Sawmilling Co Pty Limited (1985-1986) 160 CLR 16 it was said that : "… the existence of control, while significant, is not the sole criterion by which to gauge whether a relationship is one of employment. The approach of the court has been to regard it merely as one of a number indicia which must be considered in the determination of that question … other relevant matters include, but are not limited to, the mode of remuneration, the provision and maintenance of equipment, the obligation to work, the hours of work and provision for holidays, the deduction of income tax and the delegation of work by the putative employee." (supra at 24 per Mason J)

and : "… it is the totality of the relationship between the parties which must be considered" (supra at 29 per Mason J) 17 Wilson and Dawson JJ whilst accepting that it is still appropriate to apply the control test in many cases, said that its application is to be made "in the first instance" (supra at 36) that "it is not now sufficient or even an appropriate test in its traditional form in all cases" (id) in modern conditions of work. They went on to enumerate several other indicia, including the mode of payment of remuneration without deductions for income tax, that were relevant. However, they pointed out that : "None of these (indicia) leads to any necessary inference … and the actual terms and terminology of the contract will always be of considerable importance … the ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance" (supra at 37) 18 Meagher JA in Vabu Pty Limited v Commissioner of Taxation (supra) interpreted this as meaning that the old test of control "is now superseded by something more flexible" (supra at 151). 19 In the present case the extent of control exercised de facto by the defendant combined with supervision and devising the system of work is not inconsistent with the plaintiff being the employee of Restile. The arrangement which was made between Restile and the defendant in 1992 was considered and deliberate. It was entered into with the intention of terminating the relationship of employer and employee between the defendant and the plaintiff. 20 The formation of Restile and the provision by Restile to the defendant of the services of the plaintiff as a fitter and machinist were not shams. They were genuine acts done with the intention of bringing about a change in the relationship that had theretofore existed. Claims for payments were submitted in accordance with the agreement and payments were made in accordance with it. The defendant made no deduction in respect of income tax from the earnings that accrued from the charge-out to it of the plaintiff's services. The defendant ceased to pay superannuation, long service leave, sick pay, holiday pay and overtime in respect of the work done by the plaintiff. Payments in respect of his work were made to Restile, not the plaintiff. It was conceded that the amounts paid to Restile in respect of the work done by the plaintiff were not included as part of the wages paid by the defendant to its employees for the purposes of the Workers Compensation Act. Restile paid the Worker's Compensation Act premiums in respect of the cover required for the plaintiff under that Act. Restile paid wages to the plaintiff and deducted income tax from the amounts it so paid to him. It submitted income tax returns in respect of its trading results. 21 Where two parties have solemnly and formally terminated the relationship of employer and employee and have genuinely sought to substitute a contractual relationship, as in the present case, it would need very unusual circumstances to infer, contrary to the intention and actions of the parties, that the relationship of employer and employee nonetheless continued. In the present case I do not think that it did. In 1992 there was a formal termination of the employment of the plaintiff by the defendant. Thereafter his services in the form of labour were provided to the defendant by Restile, which was paid by the defendant for those services in accordance with the contract which had been entered into between Restile and the defendant. There were mutual benefits arising out of such situation. Some of the benefits for the defendant have already been adverted to. Benefits to the plaintiff included that the company which he controlled received for distribution in accordance with his choice a greater amount than he personally would have received had be remained an employee. The fact that the defendant ceased to be liable to him for wages, for insurance, award compliance and taxation, including payroll tax, purposes confirms the maintenance of the intention of the defendant manifest by the changed arrangements entered into in 1992. Like inferences can and should be drawn in respect of the intention of both Restile and the plaintiff. 22 In the circumstances of the instant case I am satisfied that at times material to the liability of the defendant, the plaintiff was an employee of Restile, that Restile contracted his services to the defendant at an agreed rate, but that the defendant retained the functions of determining, implementing and carrying out the system of work in its yard and workshop, the work on which the plaintiff was to be engaged as well as his and its supervision. It also retained control of and remained responsible for the place in which his work was to be performed. There is nothing unusual about that in the industrial climate prevailing in this State. 23 I am satisfied that at the time of his injury the plaintiff was not an employee of the defendant. He was an employee of Restile which subcontracted his services to the defendant.

DUTY OF CARE 24 The conclusion that the plaintiff was the employee of Restile and that Restile contracted his services by way of labour to the defendant does not mean that the defendant owed no duty of care to the plaintiff. His work place, equipment and circumstances, the system of work and supervision were the creation of the defendant. An unsafe system of work into which the plaintiff was required to insert himself could foreseeably give rise to injury to the plaintiff. The plaintiff was proximate to the defendant. In Stevens v Brodribb Sawmilling Co it was said (supra) : "Although the obligation to provide a safe system of work has been regarded as one attaching to an employer there is no reason why it should be so confined. If an entrepreneur engages independent contractors to do work which might as readily be done by employees in circumstances where there is a risk to them of injury arising from the nature of the work and where there is a need for him to give directions as to when and where the work is to be done and to coordinate the various activities, he has an obligation to prescribe a safe system of work." (supra at 31 per Mason J) 25 The judgment of Brennan J is to a like effect: "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" (supra at 47) 26 The joint judgment of Wilson and Dawson JJ (at 45) approaches the situation of a subcontractor in a similar manner, emphasising however, that the duty owed to a contractor or subcontractor is not co-extensive with that owed to an employee. 27 Although the duty of care owed to the plaintiff was not the same as would have been owed to him had he been an employee, in the circumstances of the present case relevantly it was not very different. 28 There was in the circumstances of the present case a duty of care owed by the defendant to the plaintiff to have in place and maintain a safe system of work and supervision and so to organise its activities as to avoid or minimise risk of injury to the plaintiff.

BREACH OF DUTY OF CARE 29 Shortly before the plaintiff was injured he had been instructed to carry out some trial welding on small sample sections of steel which were being fabricated as test samples of the girders that were to be made. This work was done by the plaintiff and involved his using a welding machine at the direction and under the supervision of the defendant's employees. The quality of the welds which the plaintiff produced was acceptable so, although he was not a qualified welder and although his duties were those of a fitter and machinist, he was instructed to carry out the permanent welding on girders of the kind to which reference has previously been made. 30 The girders were large and heavy. The standard girder on which the plaintiff was instructed to work consisted of a section of flat steel at the base, known as a flange. It was 12 metres long and 1900 mm wide. On either side of this base flange a steel piece known as a web was placed in a vertical position. Each web was 12 metres long, one was 1225 mm high, the other 1150 mm high. Before being placed on the base flange, a flat piece of steel 12 metres long and 600mm wide had been permanently welded to the top of each web plate. These pieces of steel were known as top flanges. The thickness of the metal in each of the elements referred to above was approximately 10 mm and the weight of the whole assembly when completed was in the order of 14 tonnes. 31 The web plates were held in the vertical position on the base flanges by a series of tack welds on one side of the metal. These tack welds were intended to keep the web plates in the position required by the RTA specification, but being limited in extent and very limited in depth, they had little, if any, capacity to resist a turning force or moment that might be applied to the web plates. 32 Some days prior to the date on which the plaintiff was injured the plaintiff says that there was a discussion in the workshop between him and Mr Bianco about the permanent welding of the web plates to the base flange of the girders. In this discussion Mr Bianco instructed the plaintiff that he "wanted to weld the joint in one sweep" using the welding machine. As was said later in evidence by Mr Bianco and others, using a welding machine ensured uniformity of the weld whilst carrying out the whole of the weld in one sweep assisted in assuring the quality and hence the strength of the weld. Furthermore, performing such a weld in one sweep by use of a welding machine was not only of value from a quality assurance point of view but was also more economical, that is cheaper for the defendant as fabricator. 33 The plaintiff says that he had a further conversation with Mr Bianco and that this took place on the morning of the day on which the plaintiff was injured. In that conversation the plaintiff told Mr Bianco that he didn't think that certain bracing which was at each end of the girder on which he was going to work, even in combination with the tack welding that had been performed, would be sufficient to stop the web plates from distorting from the weld. According to the plaintiff Mr Bianco's response was to dismiss the concern expressed by waving the plaintiff off, turning his back on him and walking away. To the plaintiff this response was such as to indicate that the concern expressed by him was without foundation, not a matter about which he should bother himself. 34 I accept this evidence of the plaintiff and prefer his evidence to that of Mr Bianco in this regard. I do not accept that there was no discussion between Mr Bianco and the plaintiff on the morning of his accident as Mr Bianco asserted. Mr Bianco was not a satisfactory witness. Despite several warnings he not infrequently gave non-responsive answers which were, in my opinion, intended to help what he saw as his case. He was anxious not to accept blame and to shed it as and when he could. On the other hand the plaintiff presented as honest and forthright, not seeking to make his case better than the facts supported. 35 The plaintiff says that there was angle iron bracing at each end of the relevant girder prior to and at the time of the collapse of the girder. This bracing was made of light steel bent into an L formation and when assembled formed a K, that is with a long diagonal being the back of the K and a short diagonal piece being another element of a K. On any view it was not substantial. As later events suggest, and the evidence confirms, the bracing on the girder at and prior to the time of the collapse was inadequate to support the weight of the relevant members of the girder when the girder was placed on its side and worked on. To use the words of Mr Bianco, the K bracing was "very very flimsy". 36 On the day on which the plaintiff was injured his usual supervisor, Mr Dellafiori, did not come to work. Apparently this was unexpected and left Mr Graham having to take charge of the lifting, rotating and permanent welding of the girder on which the plaintiff had been instructed to work. With all his other duties these superimposed duties left Mr Graham over- stretched and unable, in my view and his, to give proper attention to the responsibilities which had been thrust upon him at short notice. Supervision of the work suffered, in fact it appears to have been virtually non-existent. 37 The plaintiff's evidence is that on the morning of 17 October 1994 he was told by Mr Graham that there was a need to turn the partly fabricated girder over. At that time it was resting on its base flange. The web plates had been tack welded to the base flange and the temporary bracing was in position. In order to carry out the permanent welding of the web plates to the bottom flange plate it was necessary to rotate the girder from the vertical position on to its side at an angle of 14 degrees. This required the use of a crane and lifting lugs. Mr Graham got these from the workshop and led the plaintiff to them. Each set consisted of two metal lugs that fitted over the top flanges but were able to slide or be slid along the top flanges so as to position them for the lift. Mr Graham then asked the plaintiff to join the lugs that comprised each set by means of some angle iron which, according to the plaintiff, Mr Graham also got for the plaintiff. 38 The purpose of the angle iron being placed between the two lifting lugs in each set was to ensure that they did not move along the top flanges differentially. In short the link between each of the two lifting lugs in each set was to ensure that each set would work as a single unit. 39 The angle iron between the lifting lugs was known as a scissors. Although it may have provided some cross bracing, the extent of any lateral support so given was extremely limited and even to the extent that it existed, depended upon the position of the girder and the rigidity of the scissor members. Its capacity to prevent or assist in preventing the lateral movement of the web plates was so slight as to be ignored by the engineer for the defendant in his calculations. The engineer for the plaintiff likewise did not regard the existence of the cross members between the two sets of lifting lugs as likely to be sufficient to prevent collapse of the members that in fact collapsed. 40 There is a disagreement between the plaintiff and the lay witnesses of the defendant as to the configuration of the K bracing which was at each end of the girder. In the model prepared by the plaintiff for the purposes of the hearing he included a piece of angle iron between the two web plates. It is shown as parallel to the base flange, at right angles to the web plates and with each end of the angle iron being underneath the inside overhang of the upper flanges. Neither Mr Graham nor Mr Bianco observed any such pieces after the accident. Furthermore, Inspector Fraser from the Workcover Authority who attended at the defendant's premises on the day of the plaintiff's injury found no such pieces. The engineer qualified by the defendant stated that had such pieces been in place the collapse would probably not have occurred. 41 The form of bracing depicted by the plaintiff in the model is generally as per Figure 1 below. The more probable form of bracing, is along the general lines of Figure 2. This accords with the observations after the accident by Mr Graham, Mr Bianco and Inspector Fraser, is more consistent with the photographs taken after the accident and with the engineering evidence than is the recollection of the plaintiff.

43 I found the plaintiff to be an open, frank and honest witness. I am satisfied that he genuinely tried to tell the truth. In my opinion, he did tell the truth, but I think that he was mistaken in relation to the configuration of the bracing in place immediately prior to the collapse of the girder on which he was working. In my opinion it is more probable that the form of the bracing in place at the relevant time was along the general lines of Figure 2 above. Importantly, I am satisfied that there was no end horizontal strut in the bracing that was in place on the girder prior to its collapse. 44 On the day of the accident, Mr Graham, who was then a matter of metres to the north of the relevant girder, was asked by the plaintiff "What about the brace in the corner of the girder? How will the welding machine pass through the girder?" To which Mr Graham replied, "Remove the brace from horizontal/diagonal and place (it) vertical". 45 The plaintiff said that Mr Graham then moved away and the plaintiff entered the space created inside the girder by the base flange and the two web plates. Using a 15 inch shifter he began to loosen or "crack" the bolt on the K brace at the intersection between the long and short diagonals. He did this within a matter of five to ten seconds of being instructed by Mr Graham to do so. No sooner had he "cracked the bolt" than the whole girder collapsed hitting him in the face, pushing him to the ground and crushing him. 46 The noise caused by the collapsing of the steel members of the girder caused Mr Bianco to rush out of the office to the scene of the collapse. The noise also brought Mr Graham rushing back to the scene of the accident. When Mr Bianco saw what had happened he blamed Mr Graham for the accident. According to the plaintiff he did so in quite colourful and emphatic language: "You killed him, you bloody murderer" 47 In his evidence Mr Bianco, who as I have said was not a satisfactory witness in a number of ways, said that he did not remember calling Mr Graham a murderer. However, in this regard it is significant to note that Mr Graham remembered words to the effect sworn to by the plaintiff as having been said to him by Mr Bianco shortly after the accident. It is something Mr Graham would be likely to remember. It is the sort of thing that Mr Bianco would probably prefer to forget. 48 I think it probable that Mr Bianco did say words to the effect of those deposed to by the plaintiff and recalled by Mr Graham. He blamed Mr Graham and did so in emphatic terms. Whatever the actual words used at the time of the accident, Mr Bianco thought that the responsibility for the plaintiff's injury was a fault on the part of Mr Graham and this continued up to the time of the hearing, as the following evidence shows: "Q. You considered the accident was caused by Mr Graham failing to carry out your instructions? A. Definitely, yes. Q And those are instructions you gave Mr Graham on the morning of the accident or a few days before. A. The morning." 49 The instruction to which Mr Bianco was referring was an instruction which he says he gave Mr Graham : "To get three channels … the cross pieces … and tell Rauk - Peter we call him - how to put them on and then he can start welding". 50 Unfortunately, whether through pressure of work or otherwise Mr Bianco himself did not repeat these instructions to the plaintiff on the morning of the accident. Furthermore, Mr Graham does not appear to have conveyed any such instructions to the plaintiff either. Indeed, as far as bracing was concerned Mr Graham claimed that he had been told by Mr Bianco a few days before that he, Bianco, : "Wanted to remove the cross strap so that the welding would be carried out in one operation." 51 The defendant had a technical procedure document which it had prepared, the purpose of which was: "to provide the step by step method for the fabrication of steel trough girders for Allen Street via ducts and ramps to Glebe Island Bridge Pyrmont in accordance with the drawings and specifications." (Para 1) 52 This document refers to a number of other documents including the RTA's specification B 200 Clauses B200 .2.1, B200 .3; 4.12, B200 .8, B200 .9, B200 .9.3, B200 9.4; and Quality Procedure No.QP-03, which relates to scissor lifting beams. None of these documents was introduced into evidence. In addition, until the matter had progressed to a stage close to the end of the plaintiff's case no independent engineer had been qualified by either the plaintiff or the defendant. There was therefore at that stage no engineering report available for the court. In a case as serious as the present this was surprising and less than satisfactory especially in the light of the principles discussed in Vozza v Tooth & Co Ltd (1964) 112 CLR 316, and such cases as Mummery v Irvings Pty Ltd (1956) CLR 99. 53 The technical procedure document set out the assembly procedure which included the following: "The bottom flange shall be supported to the correct camber and slope using adequate supports that are braced no more than 3.0m apart and each web is to be assembled and tacked on to the bottom flange. The permanent diagonal bracing can now be installed and fully welded in accordance with the relevant welding procedure to lock the webs in position. The assembled girder is to be tilted over each way approximately 10 degrees to weld the inside of the web to bottom flange joints. The girder is then to be laid on each side adequately supported to weld the outside web - to - bottom flange joints." (Para 2.3) 54 Although there is a later paragraph that deals with diaphrams and stiffeners, if the technical procedure were to be followed as "the step by step method for fabrication", as it was supposed to be, the permanent diagonal bracing would have been in position at the time the girder was rotated to facilitate both the inside and the outside web-to-bottom-flange joint welding. Had it been in place there is no doubt that there would have been no collapse. There was no issue between the experts called by both the plaintiff and the defendant on this. 55 Mr Harrison, the engineer qualified on behalf of the plaintiff, expressed the opinion that the collapse of the girder was caused by one or more of six factors, namely:

Failure to install permanent bracing as specified before rotating the girder.

Tack welding on only one side of each of the web plates.

Inadequacy of the bracing design, including member sizes and configuration.

The failure of the angle iron as part of the K bracing caused in part by the weakening of that member by drilling a hole through it in order to bolt the other member of the K bracing to it.

All of these matters were within the ambit of responsibility of the defendant. 56 In his opinion the process of loosening the nut caused the precise timing of the collapse. The task which the plaintiff was directed to undertake by Mr Graham was, according to Mr Harrison, "inherently dangerous". Conformity to the RTA's and the defendant's own technical procedures would, in Mr Harrison's opinion, have avoided the collapse. I am satisfied that this is correct. 57 Mr McNamara, the engineer qualified on behalf of the defendant, expressed the opinion that the stability of the partially completed girder in its rotated position was dependent on the structural adequacy of the end frame (the K brace) including its proper fixing to the girder. He thought that the collapse mechanism indicated that the K brace clamps had slipped, but whether this was the cause of the collapse or had occurred as a result of the transfer of loads during the collapse was unclear. 58 In a supplementary report prepared by him in which he corrected some erroneous assumptions included in his primary report, he expressed the view that in the presence of an end horizontal strut as part of the K bracing it would have been unlikely that the collapse would have occurred. However, in the absence of the end horizontal strut and with the girder in a rotated position (as was the case) there would have been an overloading of the remaining K brace members, which would probably have given rise to a collapse. 59 It was suggested in argument by senior counsel for the defendant that the plaintiff had of his own motion removed the end horizontal strut. However, there is no evidence that this occurred. Furthermore, the plaintiff said he did only what Mr Graham instructed him to do and I accept his evidence in this regard. As I have already indicated, I do not think that such horizontal strut was there at the material time. If it had been in place the collapse would not have occurred. Yet the collapse did occur and occurred within a matter of seconds of the plaintiff commencing to implement the instruction to change the K bracing which I find as a fact that Mr Graham gave him. If the horizontal member was not in position at that time, inspection by Mr Graham would have revealed the situation. Absent such a strut and given adequate inspection, Mr Graham should and would have known that the bracing provided would be inadequate to sustain the load imposed upon it when the girder was rotated and that interference in any way with the bracing that was in position would be likely to weaken it still further. 60 Thus, even if the case sought to be made by the defendant were to have evidence to support it (which it does not), the defendant would then have to face the difficulty of inadequacy of inspection by Mr Graham. 61 The plain fact is that the girder collapsed. It did so immediately upon the plaintiff commencing to implement the undoing of the bolt that connected the long and short diagonals of the K bracing, as he was instructed to do by Mr Graham. That was the trigger for the collapse and there is ample evidence to support the causal connection between the action of loosening the bolt and the collapse. On this basis the instruction given by Mr Graham, if implemented, was, in the circumstances, such as to be likely to give rise to injury to the plaintiff. 62 Mr Graham claims that Mr Bianco had worked out some kind of alternative method of support, "using channel or something", but Mr Graham informed Mr Bianco some short time before that "it would not work". Mr Bianco nonetheless insisted that it would. Mr Graham claims: "I did not have anything to do with it after that. Fred spoke directly with Peter about what he wanted to do." 63 By his own admission Mr Graham was vague in his recollection of events. Whether this was due to the passage of time, his state of health, a desire to shift blame or a combination of these factors is difficult to determine. However, what is clear is that Mr Graham's recollection of events is quite unfavourable in relation to the adequacy of the system of work. So too is the evidence of Mr Bianco. Each seeks to blame the other for the deficiencies in the system of work, including the giving of adequate instructions, the carrying out of proper inspections and ensuring the safety and stability of the girder on which the plaintiff was required to work. Whoever of them was to blame, the fact remains that the system of work was deficient and such as reasonably forseeably to give rise to the injury to the plaintiff. 64 The engineers called in the case were ad idem that the nature and extent of the bracing provided by the tack welded web plates and superimposed top flanges was inadequate to ensure the lateral stability of those members. Both accepted that the bracing for the girder immediately prior to the plaintiff entering into the interior of the girder in order to remove the bolt from the K bracing was close to failure. The engineer qualified by the defendant calculated that the K bracing "was over stressed and should fail" indeed the over stressing of the long diagonal was "beyond its yield point by a factor of two". His theory as to the timing of the collapse was that the physical exertion involved in cracking the nut , which would involve additional force being applied to or pressure being exerted on the overstressed member, was in metaphorical terms "the straw to break the camel's back". 65 The engineer qualified by the plaintiff was of opinion that the slight movement of the two diagonal braces which was likely to have occurred as a consequence of loosening the bolt and hence reducing friction, may have been "sufficient to tilt the balance". The way in which he looked at the matter was that the cracking of the nut by the plaintiff suggested "the analogy of the straw that broke the camel's back" 66 Thus both engineers were of the view that the situation into which the plaintiff had to go in the course of performing his work, fulfilling the instructions given to him by Mr Bianco to complete the permanent weld on the inside of the girder in one sweep using the welding machine and that given by Mr Graham to remove the portion of the K bracing that would obstruct the entry of the welding machine into the girder, was unsafe. This was because the girder was close to collapse due to inadequate bracing and any work done on the girder or on the bracing was likely to cause the girder to collapse. 67 Mr Bianco and Mr Graham, who by qualification and experience and by position in the defendant should have been in a position to judge the adequacy of the bracing, both thought that the situation was dangerous. As I have said, each sought to blame the other for that. It matters not which of them was to blame. What matters is that the system of work created by the defendant was unsafe and led to the plaintiff sustaining severe injury. 68 I am satisfied that the defendant breached its duty of care to the plaintiff in the following ways:

It failed to institute and maintain a safe system of work. The system provided was seriously flawed.

It failed to comply with its own technical procedures in relevant respects.

It failed to install, or ensure that there was installed, bracing that was of adequate strength to hold the members of the girder in position when the girder was rotated and worked upon.

In instructing the plaintiff to weld, inter alia, the inner welds at the junction of the base flange and web plates in one sweep using an electric welder, without providing beforehand for a means of ensuring that this could be done without compromising the integrity and adequacy of the bracing.

It failed, through Mr Graham, adequately to inspect the girder in its rotated position before instructing the plaintiff to enter the girder.

In instructing the plaintiff to remove the bolt connecting two of the elements of the K bracing in circumstances in which this would be likely to and did trigger a collapse of the girder.

Requiring the plaintiff to work in a place which was unsafe. 69 The breach by the defendant of the duty of care which it owed to the plaintiff led to his injury. That should have been foreseeable by the defendant and indeed both Mr Graham and Mr Bianco believed the situation to be dangerous. 70 I find that the defendant was negligent.

CONTRIBUTORY NEGLIGENCE 71 As I have found above, the system of work instituted and maintained by the defendant was seriously flawed. Nevertheless, it has been submitted on behalf of the defendant that there is an issue of contributory negligence. 72 In its written submissions the defendant argued that : "Contributory negligence on behalf of Rauk does not really enter into the question …unless … the only inference that can be drawn is that the plaintiff did something contrary to the instructions of Mr Graham and removed probably the horizontal bracing that was not present after the time the collapse occurred."(para 22) 73 I have already held that the plaintiff complied with an instruction given to him by Mr Graham and that such compliance was the trigger of the collapse. In addition, I have held that the plaintiff did not disobey any instruction given by Mr Graham. In view of these findings, the basis on which the defendant put its case on contributory negligence is not made out. 74 In the course of oral argument senior counsel for the defendant appeared to expand the ambit of the submission in relation to contributory negligence. It is therefore appropriate to consider the issue somewhat more fully. 75 In McLean v Tedman (1984) 155 CLR 306, the High Court considered the principles applicable to contributory negligence in the context of the relationship of employer and employee where the employer had the responsibility of providing a safe system of work. Mason, Wilson, Brennan and Dawson JJ said: "The issue of contributory negligence has … to be approached on the footing that (the employer) failed to discharge its obligation to provide a safe system, that is, to take appropriate precautions against the risk of injury arising from the motorists negligence and the employee's failure to observe an oncoming vehicle as he carried out his allotted task. The question is whether that failure should be characterised as mere inattention or inadvertence or whether it amounts to negligence, there being a well recognised distinction between the two. It is accepted that in considering whether there was contributory negligence in a case in which the employer has failed to provide a safe system of work the circumstances and conditions in which he had to do his work must be taken into account. And the issue of contributory negligence is a question of fact. As Windeyer J observed in Sungravure (1964) 110 CLR 24 at 37, where an employee … sustains an injury, the jury in considering contributory negligence may have regard to 'inattention bred of familiarity and repetition, the urgency of the task, the man's preoccupation with the matter in hand, and other prevailing conditions'. It is then for the tribunal of fact to determine whether any of these things caused some temporary inadvertence, some inattention or some taking of a risk, 'excusable in the circumstances because not incompatible with the conduct of a prudent and reasonable man'" (supra at 315) 76 In the instant case any concerns that the plaintiff may have had about the safety of the situation into which he was instructed to go had been dismissed out of hand by Mr Bianco. He was the man on whom the plaintiff was entitled to rely and who, being the boss, would be expected by a person in the position of the plaintiff to know what he was doing. In addition, Mr Graham's actions in instructing the plaintiff not only to enter the space within the girder but also to change the then existing form of bracing would operate as a confirmation of Mr Bianco's approach. It would also convey to the plaintiff that as such an instruction was being given he should comply with it and that it would be safe to do so. 77 The plaintiff was not an engineer or a boilermaker. Nor was he a rigger. He was a fitter and machinist . He was entitled to rely upon the expertise of his superiors. He did this. In these circumstances, I do not think that it can be said that he failed to take proper care for his own safety. 78 Furthermore, although the relationship between the plaintiff and the defendant was not that of employer and employee, the defendant had the function of devising, instituting and maintaining the system of work. It therefore had an obligation to provide a system of work for the plaintiff that was safe. That being so the observations in McLean v Tedman (supra) are apposite to the situation between the plaintiff and the defendant. The circumstances and conditions in which the plaintiff had to work, the actions of Mr Bianco and Mr Graham referred to above, the need to get the job done and the fact that the plaintiff had been instructed to carry out work that was outside his area of particular expertise, are relevant, indeed dominant, factors in relation to the partial defence of contributory negligence raised by the defendant. Given the situation of the plaintiff and the circumstances on and shortly prior to the day of the accident, I do not think that the actions of the plaintiff should be characterised as constituting contributory negligence. Put at their highest against the plaintiff they might be characterised as mere inattention or inadvertence but such a characteristation (which I think would not be fair to the plaintiff or appropriate) would still lead to the conclusion that there was no contributory negligence on the part of the plaintiff. 79 In my opinion the negligence of the defendant was the sole cause of the collapse of the girder and consequent injury to the plaintiff. The partial defence of contributory negligence fails.

CROSS CLAIM 80 The defendant has joined Restile as a cross defendant seeking indemnity and/or contribution in the event of it being liable to the plaintiff for damages. 81 The defendant has submitted that if the plaintiff was a direct employee of Restile, Restile owed a duty of care to the plaintiff and also had contractual obligations to the defendant. These included an obligation that the person whose services were contracted to the defendant would carry out the tasks assigned to him by the defendant in a safe and proper manner, that a safe and proper system of carrying out the work would be used and that Restile would provide competent and properly trained persons for the purposes of the work. The claim of the defendant is that Restile failed to provide a safe system of work, did not provide a person who was properly trained to carry out the work and failed to ensure that the work was carried out in a safe manner. 82 I have already held that the devising, instituting and maintaining of the system of work was the function of the defendant. Restile took no part in that and was not required or able to do so. Furthermore, the actual mode of carrying out the task in question was determined by the defendant alone and was the subject of express instructions to the plaintiff. Again, Restile had nothing to do with those matters and was not required or able to. Finally, the person provided to the defendant pursuant to the arrangement made between the defendant and Restile, namely the plaintiff, was, as Mr Bianco junior stated in the reference which he gave to the plaintiff: "competent on lathes, horizontal bores, planers, millers and radial drills. He has also a vast experience in repairing equipment, assembly and aligning motors, gearboxes, etc." 83 In short the defendant clearly recognised, as was the fact, that the plaintiff was competent and properly trained to carry out the tasks that fell within the ambit of expertise of a fitter and machinist. That is what his contracted services were. The defendant cannot be heard to claim that Restile is liable to it because the training and competence of the person whose services it provided were not those of an engineer, or a boilermaker, or a rigger or other person who had experience in relation to the stability of structures and/or design of construction of adequate temporary bracing for structures. On the facts, therefore, there was no breach by Restile and the cross-claim by the defendant must fail. 84 There are additional reasons why it should fail.

First, the cross claim by the defendant, to the extent that it is based in negligence, must fail because Restile is not a person who would, if sued by the plaintiff, have been liable. The plaintiff was, in effect and for all operational purposes, the company. He was the person in Restile who was responsible not only for the performance of services on behalf of the company, but also for the fulfilling of any obligations to employees of the company that might exist. Had the plaintiff sued Restile he would have been met by a defence based on Shedlezki v Bronte Bakery Pty Limited (1968-1970) 72 SR (NSW) 378. In that case the plaintiff as managing director of Bronte Bakery supervised the management and operation of its business in every respect. He was the boss of the company and made all ultimate decisions. Since the defendant was able to show that Mr Shedlezki was the alter ego of Bronte Bakery and since it was able to show that, whether de jure or de facto, he undertook the management of the company's affairs in all its ramifications, default of Mr Shedlezki himself and the failure of Bronte Bakery to perform its duties to its employees were completely co-extensive and the action by him against his company must fail. 85 In my opinion even it were able to be shown, as I am satisfied has not been shown, that negligence on the part of the plaintiff was the cause of or contributed to his accident, the plaintiff could not successfully sue Restile. His action in tort would fail. 86 Second, insofar as the claim of the defendant against Restile is based in contract and depends upon implying terms as set out above, it still must fail. Not only should terms of the kind referred to above (other than providing a safe system and place of work) be implied qua Restile, but like terms, mutatis mutandis, should be also implied qua the defendant. One of these would, in the circumstances of the instant case, be an implied term that the defendant would devise, institute and maintain a safe system of work for employees of Restile whose services were contracted by Restile to the defendant. In addition, a term would be implied requiring the defendant to provide a safe place of work for such employees since it determined the place at which, circumstances in which and system under which, the plaintiff's services would be utilised, and it was only his labour that was being contracted. The defendant was in the circumstance of the work in question solely responsible for the safety of the place of work and for the system of work. Restile had no role or right in those matters. 87 These implied terms have, as I have found above, been breached by the defendant, but not by Restile. So, again the cross claim against Restile must fail. 88 It was argued on behalf of Restile that even if Restile had breached a relevant implied term of its contract with the defendant, as in my opinion was not the case, the result would be that both Restile and the defendant would be entitled to sue for a complete indemnity against the other party. That, so the argument ran, would involve a circuity of action. 89 The refusal of the law to countenance circuity of action is emphatically stated in Eastern Extension, Australasia and China Telegraph Co Ltd v Federal Commissioner of Taxation (1923-24) 33 CLR 426 in which Isaacs and Rich JJ said: "There has been for centuries deeply embedded in the common law of England, a principle known as preventing circuity and multiplicity of suits. It is a principle which we are persuaded cannot be ignored. It is expressed in the maxim Circuitus est evitandus. … In Walmesley v Cooper (1839) 11A&E 216 at 221 - 222; 113ER 39, Lord Denman CJ speaks of 'the principle … of avoiding circuity of action, i.e., the scandal and absurdity of allowing A to recover against B in one action, the identical sum which B has the right to recover in another against A. The law, when it clearly detects the possibility of such a waste of the suitor's money and its own process, as well as the public time, will interpose to prevent it happening' … We see no reason why … we are not bound to adhere to the high considerations which are at the root of this principle of the common law, and which are so powerfully expressed by Lord Denman." (at 441) 90 The principles of circuity of action are applicable to a claim for indemnity made under the Law Reform (Miscellaneous) Provisions Act, 1946 (Andrews v The Nominal Defendant (1963) SR (NSW) 110). 91 Circuity of action occurs: "when the rights of the litigants are such that the defendants would be entitled to recover back from the plaintiffs the same amount of damages which the plaintiffs sought to recover from the defendants. ( The Kafiristan (1937) P 63 at 69 per Bucknill J) 92 This statement was approved in Andrews v The Nominal Defendant (1963) SR (NSW) 110 at 113 (per Sugerman, McClemens and Manning JJ). 93 The claim for indemnity by the defendant against Restile seeks to recover the damages which are awarded to the plaintiff. These include damages under a number of heads that are non-economic or non-pecuniary, e.g. general damages. The claim by Restile is, a claim per quod servitum amisit. As can be seen from the discussion below, the damages recoverable in such an action are strictly linked to pecuniary loss. They would not be the same in amount as those awarded to the plaintiff. The principle of circuity of action would therefore not be applicable to defeat the defendant's action in the present case. 94 In my opinion for the foregoing reasons, both on the facts and as a matter of law, the defendant's cross claim against Restile fails.

ACTION PER QUOD SERVITUM AMISIT 95 Restile sued the defendant in a separate action (S20624/96) claiming damages "per quod servitum amissat" (sic) for the loss occasioned to it as a consequence of the injuries sustained by the plaintiff through the negligence of the defendant, which resulted in the plaintiff being unable to perform his contract of service with Restile. 96 It is a tort actionable at the suit of an employer to cause bodily harm to his employee if the act or omission causing such harm is a tort against the employee and if the employer is thereby deprived of his employee's services (Salmond on the Law of Torts, 17th Ed. para 129; Clerk and Lindsell on Torts 13th Ed. para 822); Street, The Law of Torts 3rd Ed. pp 361-362.) 97 In Attorney General for NSW v Perpetual Trustee Co Ltd (1951-52) 85 CLR 237 Dixon J (as he then was) examined the historical origin of the cause of action and his examination was adopted by the Privy Council in Attorney General for NSW v Perpetual Trustee Co Ltd (1955) AC 457 at 483. The cause of action dates from a very early stage in the evolution of the common law. It is referred to in the Year Books. The essential elements of the action were loss of services de facto (Dicey on Parties in an Action (1870) p.326 as a result, inter alia, of negligence on the part of the person sued (Attorney General for NSW v Perpetual Trustee Co (supra at 244)) resulting in damage to the employer. Damage is and always has been the gist of the action (Hall v Hollander (1825) 4 B&C 660). Fleming The Law of Torts 5th Ed. p.674; Clerk and Lindsell on Torts 13th Ed para 827; Street, The Law of Torts 3rd Ed. 361-362). 98 The damages recoverable in a case based on negligence are the value to the employer of the services lost, whether past or future (Hodsoll v Stallebrass (1840) 11Ad & El 301) They are : "… strictly limited to pecuniary loss actually sustained through the loss of services of the servant and (so far as it was not included in the estimate of that loss) expenditure necessarily incurred in consequence of the injury to the servant." ( Attorney General for NSW v Perpetual Trustee Co Limited supra at 290 per Fullagar J) 99 In Australia. as in England, the damages recoverable by the employer are not to be reduced as a consequence of contributory negligence on the part of the employee (Fleming the Law of Torts 5th Ed 676), in the same way as the damages recoverable by a husband in an action per quod on account of the loss of services of his wife are not to be reduced (Curran v Young (1965) 112 CLR 99; Inland Revenue Commissioner v Hambrook (1956) 2QB 641; Mallett v Dunn (1949) 2 KB 180). 100 In order for the action per quod by Restile against the defendant to succeed it would be necessary for Restile to show that it suffered damage. The damages sought by Restile in its action are based upon the loss of the profits which it sustained as a consequence of the plaintiff being injured and unable to work. However, the whole of the amount which was earned by Restile was the result of the efforts of the plaintiff and was a consequence of his capacity to expend those efforts. The loss of the plaintiff's capacity to work will be compensated for in full in his action on the basis that he was able to redirect the product of his efforts at any time (Husher v Husher (1998-1999) 197 CLR 138. Re-direction of the product of the plaintiff's efforts would result in Restile having no income and hence no profit. The fact that the plaintiff has claimed and will be compensated on the basis that his working capacity should be valued without reduction due to the interposition of Restile is the equivalent of such a redirection. As a consequence, there is no damage ultra suffered by Restile. 101 It was recognised by the plaintiff and Restile that in these circumstances the appropriate outcome would be that Restile not succeed in its action. 102 In his submissions senior counsel for the plaintiff stated that: "This claim is based on a 'fall back' position in so far as the Court reduces the plaintiff's earning capacity as a result of the interposition of the company Restile Pty Limited." 103 In view of the above concession and the fact that the plaintiff is to be compensated without reduction due to the interposition of Restile, it is unnecessary to consider Restile's action further. In my opinion it fails.

PLAINTIFF'S CLAIM UNDER THE CONSTRUCTION SAFETY ACT 104 When the case was called on for hearing, counsel for the plaintiff indicated in the course of his opening that he would seek an amendment of the Statement of Claim so as to include claims under regulations 73(16) and 73(17) of the regulations made under the Construction Safety Act, 1912 , as amended. That amendment was allowed. It is therefore necessary to deal with the claim which arises under those regulations, notwithstanding that the plaintiff has already succeeded on the basis of common law negligence, with a finding of no contributory negligence on the part of the plaintiff. 105 Regulation 73(16) and (17) provide: "Any person who directly or by his servants or agents carries out any construction work shall take all measures that appear necessary or advisable to minimise accident risk and to prevent injury to the health of persons engaged in such construction work and for this purpose without limiting the generality of the foregoing, he shall, subject to Regulation 74 … (16) take all practical precautions by the use of adequate temporary guys, stays, supports and fixings or otherwise to prevent danger to any person through the collapse of any part of a building or structure or any part before the building or structure is completed, (17) where any construction work is carried out which is likely to reduce, so as to endanger any person, the security or stability of any part of an existing building or structure or a building or structure in course of construction, take all practical precautions by shoring or otherwise to prevent danger to any person from the collapse of the building or structure or the fall of any part thereof." 106 Construction work is defined to mean, inter alia,: "(a) building work, excavation work, compressed air work and diving work; (b) work in or in connection with construction or maintenance of roads, air fields or air strips or the permanent way of a railway or tramway." 107 Building work is, in turn defined as meaning: "Work in constructing, erecting, installing, adding to, altering, repairing, equipping, finishing, painting, cleaning, sign writing, sheathing, spraying, dismantling or demolishing or any other prescribed operation that - (i) is done in relation to a building or structure at or adjacent to the site thereof." 108 The defendant raised a fundamental argument against the plaintiff succeeding in his claim founded on regulations 73(16) and (17). His argument was based upon the decision in Coniglio v Compressed Yeast Co (NSW) Pty Limited (1964) 82 WN (Pt 1) (NSW) 165. That case was concerned with the application of regulations 73(2) and 80(3) to a situation in which a plaintiff was employed by a defendant as a labourer in a factory in which manufacturing processes were carried out and produced a waste described as mash. Together with other labourers he was required to clean out a large filter tank. In the course of so doing the plaintiff fell and injured himself. He sued on the basis that the defendant had failed to provide a safe place of work and a safe means of access to his place of work. The trial judge rejected the tender of regulation 73. On appeal this decision was held to be correct. There were different reasons for this conclusion given by the various members of the Court. Maguire J arrived at his conclusion on the basis that the regulations operated only in relation to building work in the ordinary sense and not to a routine step in a manufacturing process such as that on which the plaintiff was engaged at the time he was injured. 109 Maguire J compared the provisions of the Scaffolding and Lifts Act, 1912 (as the Construction Safety Act 1912 was then called) with the provisions of the Factories and Shops Act 1912 and determined that it was not the intention of the legislature to have provisions in both acts applying to the same circumstance. He expressed the view that: "The two sets of legislation and regulations were intended to apply to different spheres of activity. In any event, the statutory definition of 'building work' contained in s.3 of the Scaffolding and Lifts Act 1912-16 and called in aid by the appellant only applied where the context and subject matter did not otherwise require and the whole subject matter of the statute including the terms of the definition of self with its reference to 'site' and particularly the terms of the relevant regulation making power - 'building work, excavation work, compressed air work, … cranes, hoists, lifts, plant, scaffolding or gear' - lead me to conclude that the legislature did not intend that regulations made under the (Scaffolding and Lifts) Act were to be applicable to manufacturing processes in factories such as the premises in which the plaintiff was employed ." (supra at 170); (bold added) 110 Else-Mitchell J took a view of the regulations which was different and not such as to render the two sets of regulations mutually exclusive. Expressly he said that he did not agree with the reasons of Maguire J "in their entirety". He said: "… there are, I think, sound grounds for saying that the regulations in question were properly excluded from evidence by the learned trial judge. Maguire J has set out in his judgment reasons for saying that the regulations were inapplicable to the defendant's factory because they were confined to building work in the ordinary sense. I am not disposed to agree with those reasons in their entirety because the Scaffolding and Lifts Act and Regulations seem to me to be directed at the use of "gear", "plant" and "scaffolding" as defined in s.3 of the Act in many situations other than building work … and: I should at least be prepared to say that the two regulations here in question, namely, Regs 73(2) and 80(3) can have no valid application to static equipment or plant of the type used by the defendant for ordinary repetitive of industrial processes of a type which do not come within the scope or intent of any of the substantive provisions of the (Scaffolding and Lifts) Act (Ss 6 - 17A inclusive)." (at 175-176) 111 Nagle J having considered the definition concluded that it would be: " inappropriate to give to the word 'cleaning' as used in the definition a meaning which is indicative of a concept totally unconnected with building work. It seems to be it should be given a connotation which has some reference to 'building work'. (supra at 179) 112 The decision in Coniglio v Compressed Yeast Co (NSW) Pty Limited (supra) was concerned with regulations 73(2) and 80(3). Although the decision of Maguire J is expressed in such a way as to be applicable to the whole of regulation 73, perhaps the whole of the regulations, Else-Mitchell J does not agree with the generality of the approach adopted by Maguire J. He limits his decision by stating that the regulations there in question had : "no valid application to static equipment or plant used for ordinary repetitive industrial processes of a type which do not normally come within the scope or intent of the substantive provisions of the (Scaffolding and Lifts) Act". (Supra at 196) 113 Nagle J expressed his "hesitation" about limiting the breadth of the definitions of cleaning work and structure. He did not adopt the approach of Maguire J and said: "I do not attempt to set forth precise limits as to the meaning to be given to the term 'cleaning' in the definition of 'building work', but it is sufficient for the present purposes to say that I do not think it can be applied to the oft repeated operation of removing mash from the tank, the operation on which the plaintiff was engaged before he suffered his injuries." (Supra at 179). 114 No reference appears to have been made to that part of the decision in Davey v Skinner (supra) which adverts to not limiting the breadth of the definition then in the legislation. 115 In Davey v Skinner (1961) SR (NSW) 648 it was held (Evatt CJ and Herron J, Sugerman J dissenting) that the ordinary meaning of the words in the introductory portion of Regulation 73 should not be read down. Accordingly, the employer of a plaintiff who was carrying out building work on a defective scaffold erected and maintained by a building owner who had let a contract to the plaintiff's employer was held to be carrying out building work within the meaning of regulation 73. Sugerman J disagreed. In his strong dissenting judgment Sugerman J said: "The subject of the duties and the objects of the rights conferred by reg 73 R, respectively, "any person who directly or by his servants or agents carries out any building work" and "persons engaged in such building work. The relationship envisaged is not necessarily, or limited to, that of master and servant or employer and employee, which relationship in any event involves a common law duty of the master or employer to use due care for the safety of his servant or employee. The contemplated relationship is, rather, one of proximity in the wider sense, based on control of a situation, on the one hand, and exposure to risk in that situation, on the other. The "persons engaged in such building work" may include employees, independent contractors working on the job, independent contractors who work on the job along with their own employees, and employees of independent contractors. To treat the words "any person who … building work" as related to individual operations such as bricklaying, carpentry, plumbing, tiling, electrical work and so on would introduce great complexity. It would make it difficult to discover any rational distinction between the subjects and the objects of the duties imposed and the content of the expression which describes them - between the person who "carries out" any building work and the person who is "engaged in" such building work - or to stop short of regarding the first of these expressions as comprehending everybody who, whether as employer or employee, works on the job. "Carries out building work" and "engaged in building work" would thus mean the same thing". (at 657)

and "It must be remembered, also, that the regulations are primarily penal in their character, an aspect of them to which attention was directed in Australian Iron & Steel Limited v Ryan (1956) 56 SR NSW 329. It is only secondarily that some of them may be availed of in civil proceedings as sources of duties whose breach gives rise to an action for damages. If an individual is to be found to be subject to a duty of this character, it must also be found that he is subjected to a penal sanction for breach of the regulation which is in question. That I am unable to find with sufficient clarity …" (at 658) 116 As can be seen below in the discussion concerning Buckman and Son Pty Ltd v Flanagan (1974-1975) 133 CLR 422 the views expressed by Sugerman J were not accepted by the High Court. 117 In the present case the activities being carried out by the defendant at its premises involved putting together components to form a girder which, together with other such girders, was to form part of a road bridge. In ordinary parlance the putting together of component parts so as form an entirety can properly be said to be the act of constructing. Furthermore, that into which the component is to go is itself undoubtedly a structure, are intended to be part of a roadway. That work, indeed the whole operation in relation to the fabrication of the girder, was very different from the daily routine maintenance task of cleaning out of a wheat, barley and chemicals mash residue from a filter tank that was a consequence of the manufacturing process carried out in a factory. The cleaning was a routine step in, and part of, a manufacturing process, to use the words of Maguire J. It had nothing to do with construction or construction work. 118 In O'Reilly v Commonwealth Hostels Limited (1964-5) NSWR at 686, Else-Mitchell J referred to the need to limit the ambit of regulation 132 under the Factories and Shops Act 1912. In doing so he compared the situation with that dealt with in Coniglio v Compressed Yeast Co (supra) and held that a kitchen in an accommodation hostel for migrants was not a factory. 119 The putting together or fabrication is work in connection with the construction of a road, since the phrase "in connection with" is one of wide connective significance. When regard is had to the essential determination in Coniglio v Compressed Yeast Co (supra), namely that expressed by Else-Mitchell J and Nagle J (see paragraphs 110, 112 and 113 above) and echoed by Maguire J (see paragraph 109 above), I do not think that the decision is a bar to the plaintiff's success in his claim based on regulations 73 (16) and (17). 120 However, the defendant raised a second argument in relation to the claim by the plaintiff based on breach of regulations, regulations 73(16) and (17), namely that those regulations did not in the circumstances apply to the defendant. In this regard the defendant relied on Buckman and Son Pty Limited v Flanagan (1974-75) 133 CLR 422 in which the High Court considered the scope and application of regulation 73 and the decision in Davey v Skinner (supra). Barwick CJ, with whom Stephen J agreed, said : "I am unable to accept the view expressed by the majority in Davey v Skinner when they said: 'In some circumstances such an expression' (servants or agents) 'could extend to independent contractors, as Williams J held in Ryan's Case' But I do agree that : 'The use of the familiar phrase 'servants or agents', from the subject matter of the Regulations, is intended to embrace those employed under a contract of services, that is, not merely servants properly so called, but also the agents, whom, though not strictly servants, the person carrying out building work employs to do for him what he has engaged to do', that is to say persons whose acts are in law the acts of a principal, but this description does not include independent contractors." (supra at 429) 121 Barwick CJ therefore held that although the plaintiff employee (Flanagan) was carrying out the relevant building work, namely the erection of the steelwork, neither the head contractor (Buckman) nor the sub-contractor (Shaw), who had contracted to supply and erect the scaffolding, was carrying out the relevant building work within the meaning of the regulation. In the course of doing so he expressly rejected the view expressed by the majority in Davey v Skinner (supra at 653) that the words of regulation 73 "could extend to independent contractors". (at 429) 122 Barwick CJ (at 428) also adverted to and rejected the views expressed by Sugerman J in Davey v Skinner (supra), as did Mason J (at 441). 123 McTiernan J was also of opinion that neither the head contractor nor the sub-contractor was liable since the plaintiff was not carrying out the work on which he was engaged as agent of either of them within the meaning of the regulation (at 433). 124 Mason J, with whom Jacobs J agreed, took a somewhat different view. He approached the determination of the matter: "on the footing that the regulation (73) imposes duties on builder and sub contractor and that the duties extend to building work done by a person through a sub contractor." (at 441)

However, he held that the plaintiff could not succeed because, even assuming a breach of the regulation by the head contractor and sub-contractor, it was a breach which was brought about by the plaintiff's own failure to comply with the requirements of the regulation. But where the claim was made on the basis that the action or inaction of the head contractor was responsible for the relevant accident, the plaintiff's action could be maintained. 125 The decision of the majority (Barwick CJ, McTiernan and Stephen JJ) in Buckman v Flanagan (supra) has not been reviewed by the High Court, is binding on me and has been applied consistently up to the present time (see for example Hetherington v Mirvac Pty Limited & Ors (1999) NSWSC 443, unreported 12 May, 1999 per Wood CJ at CL). 126 I have already held that the plaintiff was not an employee of the defendant. Applying Buckman v Flanagan (supra) to the circumstances of the present case results in neither the plaintiff nor Restile being an agent of the defendant for the performance of the work on which the plaintiff was engaged at the time of his injury. As a consequence the plaintiff's claim against the defendant based on regulation 73 must fail.

DAMAGES 127 The object of an award of damages in a case such as the present is to give to the plaintiff a sum of money which adequately, fairly and reasonably compensates him for the adverse effects, both economic and personal, which he has suffered, is suffering and is likely to suffer in the future as a consequence of the injuries sustained by him as a result of the negligence of the defendant. 128 There are certain recognised categories or heads of damage some of which involve an assessment that has a mathematical dimension. As there is a time interval between the date of the event giving rise to the right to recover damages and the award of the damages, a multiplier reflecting that interval will form part of the process of assessing some elements of the damages. Since this is a time certain, the multiplier is certain. However, it is still necessary to determine the multiplicand in the relevant categories. This involves an assessment of the evidence and the making of judgments in relation to the determination of the quantum of the multiplicand or the different multiplicands that may be appropriate. 129 When consideration is given to matters in the future then not merely is there a question of judgment involved in relation to the determination of the multiplicand, but in addition, since there is no certainty as to the life expectancy, probable working life, etc., of the plaintiff there is also a question of judgment involved in the determination of the multiplier. 130 Although the exercise which an award of damages calls up may tend to have an appearance of mathematical precision, an award of damages is not a mere mathematical calculation or computation. The process can never be exact or perfect. It involves judgments being made. The assessment of loss of earning capacity for example requires close attention to the facts of the particular case and care in identifying as accurately as possible the net income the plaintiff would have had at his disposal but for the accident. The taxation consequences of different arrangements are therefore material. Thus where the plaintiff has enjoyed the benefit of income splitting, but regard is to be had to the total income produced by his efforts, the allowance for income tax in determining the net earnings "should approximate the amount which he might have paid on the gross earnings if they had been brought to account by him "rather than by" the entity which was the vehicle for income splitting. 131 It is with such considerations in mind that I approach the determination of damages. 132 The parties have agreed that the damages that should be awarded to the plaintiff should include amounts that are related to certain heads of damage. Those heads of damage, as advanced and agreed by the parties to be appropriate to the present case, are as follows:

(a) in respect of the past (b) in respect of the future

(xiv) Interest on general damages in respect of the past. 133 There has been agreement between the plaintiff and the defendant as to the quantum of damages to be awarded in respect of a number of these headings. They are as follows:

(iii) Past out-of-pocket expenses $86,368.00 (iv) Past domestic assistance $86,520.00

(v) Interest on past domestic assistance $30,847.00

(viii) Griffith v Kirkmeyer damages(past) $57,680.00

(ix) Interest on past Griffith v Kirkmeyer damages $20,565.00

$304,598.00 134 In order to assess the damages in respect of other of the agreed heads or categories of damage it is necessary to determine the nature, extent and effects of the plaintiff's injuries, to examine the plaintiff's history, economic, social and personal and to try to gauge the future of the plaintiff as a person and as an economic unit.

The Plaintiff's Injuries 135 When he was crushed by the collapsing girder the plaintiff sustained severe physical injury and was subjected to very considerable psychological trauma as well. He was in pain in many parts of his body. It was severe. In his evidence he said "the pain could not have been possibly worse". He hurt everywhere; legs, back, head, etcetera. He was conscious and aware of the fact that he was unable to feel or move his legs. He could not breathe because he was swallowing blood. He was absolutely terrified and thought he was dying. He then thought of his wife and family and that he was going to die there on the factory floor and never see them again. 136 The arrival of the paramedics and the administration of morphine did not help until he had been given a second dose. Even then he remembers screaming with pain as he was put on a stretcher and placed in the ambulance. He heard the paramedics express concern about the need to stabilise him and then arriving at the hospital and the doctors realigning his left foot, which despite the pain killing effect of morphine was still sufficiently painful to cause him to scream. 137 He was diagnosed as having suffered fractures to his face, fractures of the right and left orbits, lower ribs, transverse processes of both the lumbar and the thoracic spine, crush fractures of lumbar vertebrae L3 and L4, sub-capital fracture of the left femur, grossly comminuted bicondylar fracture of the right tibial plateau, comminuted bicondylar fracture of the right fibula, fracture of the right ankle, fracture of the third finger of the right hand, injury to his right wrist, fractures of the face involving both maxilla and teeth, lacerations to his nose, swelling of the abdomen and clinical ileus due to the presence of retroperitoneal blood as well as difficulties in breathing. In short his injuries were wide spread, serious and extremely painful. 138 He was taken by ambulance to Wollongong Hospital. On admission he was treated in the Emergency Ward and then taken quickly to surgery. He underwent open reductions and internal fixations of his left femur, right ankle and right tibia. Bone grafts were undertaken, the donor site for the grafts being the right iliac crest. 139 He remained in Wollongong Hospital until 20 October, 1994 when he was transferred to Port Kembla Hospital, although his condition was then such that he has no recollection until he was in Port Kembla Hospital. 140 Thereafter he underwent at least six further operative procedures between the end of October, 1994 and mid December, 1995. Whilst some of these involved removal of fixing screws and other internal support mechanisms, others involved open reduction and plating and reconstruction of the floors of the right and left orbits. The operative findings at, and procedures undertaken in the course of, surgery on 24 October, 1994 were: "1. Comminuted fracture of the lower end of the fibula with disruption of the tibio-fibular syndesmosis. There was a transverse fracture of the medial malleolus of the ankle. The fibular fracture was reduced and internally fixed with plate and screws. A diastasis screw was inserted across the tibio-fibular syndesmosis. The medial malleolus was not fixed because of significant fracture blisters and skin damage in the area. 2. Grossly comminuted by bicondylar fracture of the proximal tibia. The medial condyle was in many fragments and the articular surface was depressed. There was marked damage to the articular cartilage of the medial femoral and to a greater extent, the medial tibial condyle. The tibial tubercle was avulsed. Through a midline straight anterior right knee incision the patellar tendon with attached bone was reflected superiorly. The menisco- femoral ligaments were divided laterally and medially and the menisci reflected superiorly for exposure. The medial condyle was elevated and bone graft inserted. The bone graft was harvested from the right iliac crest. Two "T" shaped plates were inserted to act as butress plates and multiple screws were inserted. The tibial tubercle was internally fixed. …" 141 During this initial phase of his treatment the plaintiff undoubtedly suffered a great deal of pain and was substantially immobile. 142 By early 1995 he was experiencing increasing back pain which mirrored his increase in mobility and activity. An MRI scan performed on 13 March 1995 revealed significant damage to his spine. There was a disc protrusion at C5/6, another at T11/12, yet another at L5/S1 and a canal stenosis at L3/4. Thus his neck, thoracic spine and lumbo sacral spine were all damaged in such a way as not only to cause pain and restriction of movement, but also such as to be likely to produce increasing symptoms and even the prospect of surgical intervention. 143 In mid-February, 1995 he returned to work on limited duties, working on only three days a week and effectively half time on such days. That he persisted with such work for some time is, in my opinion, the mark of the man. He was determined to get back to work even if doing so meant a great deal of pain, as proved to be the case. His attempted return to work proved unsatisfactory. He could not maintain even the limited duties over a shortened week of three days with only four hours per day being worked. Persistent pain, swelling and stiffness meant that he had to cease his light, part-time duties in June 1995. 144 Since that time the plaintiff has not been able to return to gainful employment and it was not contended that he was able to do either his former job (as was obviously the case), or cope with a real, as opposed to a made, job. 145 On one occasion he attempted a computer course. However, this was an unsuccessful experiment since, as he said and I accept, he is essentially a physical person, whose life has been one of working with his hands and using the strength of his body, a person who liked working outdoors and disliked office work. His educational qualifications, industrial experience and age do not engender confidence that he will ever be able to return to full time gainful employment. That he will not is supported by the medical evidence. I am satisfied that he will not. 146 In February 1999 he underwent a total left hip replacement; in August 1999 a total right knee replacement. It is virtually certain that further replacements will be necessary. The details of these will be considered under the particular headings relating to future operative treatment and care. His injuries have already produced crepitus in his shoulder. The injuries to his neck have left him with a substantial permanent impairment at that level and an even greater permanent impairment to his back at lower levels. His prognosis is poor. There is permanent loss of efficient use of the right leg as well as of the left leg. The prognosis is for gradual worsening of symptoms in the knee, back, hip and ankle. He experiences difficulty with any task that is physically demanding and his walking tolerance is limited to between 20 to 30 minutes; his sitting tolerance to between one and two hours. Pain in the neck, thoracic spine and lower back is of a reasonably high order. He also experiences intermittent pain in the right ankle and in the right wrist and hand. His sleep is fairly often disturbed by pain. In his daily life he is significantly impaired. For example he e is unable even to lift his children out of the bath. This makes him angry and no doubt contributes to feelings of depression. His injuries have led to his drinking, at time to excess, and the need to take analgesics fairly regularly. There are many barriers to his leading a normal life and to returning to paid employment. The view expressed by Dr Patrick, which I think is well founded in fact, sensible and probable, is that the plaintiff "may be regarded as being essentially incapacitated for all work." Because of the nature and extent of his injuries and the intervention of osteoarthritis he can only deteriorate. 147 Dr Dodd, an orthopaedic surgeon, not only negates his ability to return to his former occupation, but is of opinion that he "would have difficulty in performing many activities required of him around the house, such as lawn mowing, gardening and domestic maintenance. He could do light lifting of up to about 5 kilograms". 148 He is left with a limp, recurrent pain, a bad back and dramatically diminished endurance. Were he to apply for a job it is unlikely that he would be successful in obtaining it. His limp would undoubtedly raise questions in the mind of a prospective employer. Were he to reveal his accident and its sequelae, he would be likely to be seen as inappropriate for virtually any work, other than a made job or in sheltered environment. Dr Lewington, a rehabilitation physician thought that he was not even physically capable of working as a car park attendant. In my opinion the extremely limited physical capacity of the plaintiff to work is rendered even more significant by his background and the economic realities of the Australian workplace. His history, training and natural inclinations make him unsuited for clerical type activities and even if he wished to engage in such activities, his inability to sit for any real length of time would be a barrier to obtaining employment and an impediment to retaining it even in the unlikely event that he should get it. At most I assess him as being able to do light odd jobs on an intermittent basis and not predictable frequency, perhaps some light gardening, but not to do so on a regular or consistent basis. Were he able to earn on average $100 per week, I think he would be doing well. Although no submission was put on behalf of the defendant that the plaintiff had a working capacity that was measurable in economic terms, I think that it is appropriate to make a minor deduction of $100 per week for, say, the next 10 years, because of the likely effects in the future of the osteoarthritis he has.

PAST LOSS OF INCOME 149 The plaintiff was born on 20 September, 1961. He was thus 39 years old at the time of the trial of the action. His qualifications and experience as a fitter and machinist meant that he had been able to command good money in the work place. Even before the formation of Restile (see para 6 above) the plaintiff had been in continuous employment. From the time he began working at the defendant's premises in March, 1986 he was in continuous employment there, first as an employee and later with his services contracted to the defendant by Restile. As from early 1992, when Restile was formed, the plaintiff's work produced for Restile an amount of $22.20 per hour. This rose to $24.00 per hour in August, 1994. 150 Prior to his injury the plaintiff was a healthy man who worked hard and was in constant employment. He had a family to which he was obviously devoted. His marital relationship was stable and has remained so. It is probable that but for his injury he would have continued to work and earn substantial income either for himself directly or through the medium of Restile. Having regard to his history in both his work and family life, I am of opinion that it is probable that he would have continued to work at his trade at least until the age of 65. This of course is subject to the exigencies of life to which I shall return later in this judgment. It was common ground that he was not able to work productively up to the date of trial. 151 The determination of his loss of income since 17 October 1994 has to be effected against the background of the existence of Restile and the income splitting which that company was used to effect. The situation of the plaintiff in relation to income splitting is not very different from that considered in Husher v Husher (1998-1999) 197 CLR 138. In that case the husband's physical labour and expertise generated the entire income of a partnership of which he and his wife were the members, however, unlike the present case there was no company interposed between the payer of the income and the ultimate recipients of the benefit of that income. 152 The first account from Restile for the higher hourly rate of $24.00 for the plaintiff's work was submitted on 6 September, 1994 in respect of work done between 8 and 20 August, 1994. This account shows that the plaintiff was not infrequently working 12 hours a day. The last invoice submitted by Restile to the defendant in respect of the plaintiff's work for the period from 6 September to 1 October, 1994 confirms the long hours worked by the plaintiff. In the period from 6 September to 1 October 1994 the plaintiff worked a total of 251 hours in 23 days or on average almost 11 hours per day. 153 The amounts paid by Transtate to Restile in respect of work performed by the plaintiff, as revealed in a document provided by the defendant in respect of the period from March 1992 to the end of September 1994, were high indeed, demonstrating that the plaintiff had a good capacity for work and the will or motivation to exercise that capacity. 154 The payments made by the defendant to Restile between 30 March 1992 and 5 October 1994 in respect of the work of the plaintiff total $174,768. Those payments relate to a period of 135 weeks and give an average weekly payment of approximately $1,300 gross. 155 The tax payable on such an amount under the tax deduction regime introduced on 1 July, 2000 would be just under $400 per week, giving a net weekly amount payable to Restile of between $900 and $950. 156 In Husher v Husher (supra), Gleeson CJ, Gummow, Kirby and Haynes JJ said: "The financial loss occasioned by impairment of earning capacity is the loss of what (if there had been no accident) the injured plaintiff would (as opposed to could) have expected to have had under his or her control and at his or her disposal by exercising that capacity. We refer to 'control' and 'disposal' because what the plaintiff has lost are the financial rewards from work that are rewards the plaintiff would have been able to direct to whatever purpose or destination he or she chose. … "There are two critical elements. First, the whole of the income of the partnership came from the efforts of the appellant and the exploitation of his earning capacity. As a matter of practical reality, his wife's contribution to the income was negligible. Secondly, the partnership was a partnership at will. The appellant would very probably have chosen to maintain those arrangements but that was his choice. If he chose to make some other arrangement concerning the fruits of his labour, effect would be given to that choice, whatever view his wife may have held. What the appellant would have had under his control and at his disposal but for the accident was, therefore, the whole o f the fruits of his skill and labour. It is, then, the whole of those fruits that he has lost. In this regard the case is no different from the injured plaintiff who would probably have devoted some or all of the income earned in the future to charity." (at 147) 157 The principles in Husher v Husher (supra) require an inquiry to be made about the plaintiff's working capacity, but for the accident and then what sum of money the plaintiff would have had or have expected to have at his disposal as a consequence of the exercise of his earning capacity. As was pointed out in Husher v Husher (supra): "Only when those inquiries are pursued can a judgment be made about what capital sum to allow as damages for the impairment of the plaintiff's earning capacity. In doing so, regard must be had, of course, to all those contingencies of life that might reasonably be expected to affect the course of events in the future." (at 149) 158 The approach adopted by the High Court in Husher v Husher (supra) is not restricted to partnerships, trading trusts and the like (at 148 per Gleeson CJ, Gummow, Kirby and Hayne JJ); indeed, in this regard Callinan J expressly adverted to and equated the position of a partner in a partnership and an employee of a company which a plaintiff controls or in which he has a substantial proprietary interest (at 159). 159 In Conley v Minehan ((1999) NSWCA 432, unreported 25 November, 1999)Mason P, Powell and Beazley JJA said that: "The principles enunciated in Husher are capable of application to business structures other than partnership." (para 43)

and applied those principles to a situation in which the income splitting was effected through a company. 160 In the present case the whole of the income of Restile was produced as a result of the efforts of the plaintiff. The contribution by his wife to the activities of the company was small to negligible. Valuing them at 4 hours per month and $10 per hour would be not unrealistically low. Indeed, in my opinion, it is about as close as the evidence permits. However, applying the principles enunciated in Husher v Husher (supra) no deduction should be made from the damages by reference to such amount. 161 Putting to one side the amounts paid by Restile by way of wages to the plaintiff and his wife, the expenses incurred in producing the gross income for Restile included Workers Compensation Insurance, amounts paid for superannuation and some other minor amounts. There needs to be an adjustment made in respect of at least some of these items. The amounts paid for superannuation are not available for each of the years of operation of Restile prior to the plaintiff's accident. They were not tendered. Doing the best I can from the sparse material produced in this regard, it appears that Restile was paying about $2000 per annum on average towards the plaintiff's superannuation. Restile's tax returns do not reveal how much was paid in respect of workers compensation. However, fortunately for the plaintiff, the insurance file tendered by the defendant shows the premium as at March 1993 to be $225.45 per month or $2,705 per annum. In addition there were some minor amounts payable in respect of maintenance of tools. On the material available it would appear that the cost of producing the gross income for Restile was about $5,000 per annum or just under $100 per week, remembering that the superannuation component of this is a form of compulsory saving, the enjoyment of the benefit of which is deferred. 162 Taking the gross amount paid to Restile by the defendant as $174,768 in respect of a period of a little over 2½ years and deducting the expenses to produce such income at the rate of $5,000 per annum, the net average taxable income would be approximately $1,200 per week. The tax payable on this amount in the hands of an individual under the current tax regime would be $343 per week leaving a net amount of some $858 per week on average over that period. The loss of income for the plaintiff therefore for the period from the time of his injury until the present is $264,264. However, the figure of $858 per week includes payments made in respect of superannuation which, whilst an expense to the company giving rise to some tax benefit, results in a compulsory saving by the plaintiff. Thus the figure of $264,264 is somewhat disadvantageous to the plaintiff and needs to be adjusted in respect of the allowance of approximately $2,000 per annum made for superannuation. A minor adjustment in favour of the defendant needs to be made as well. This relates to the amount earned during the plaintiff's short period of light duties referred to above. The amount appears to be $4,776 gross. From this tax has to be deducted. When such adjustments are made I am of opinion that a figure of $275,000 would be an appropriate amount to include in the damages to the awarded to the plaintiff in respect of past loss of income. 163 Interest on this amount (i.e. the whole amount) should, it is agreed between the plaintiff and the defendant, be calculated for a period of three years (i.e. half the total period) at the rate of 6%. This calculation produces a result of $49,500. In my opinion that amount should be awarded in respect of interest on past economic loss.

FUTURE ECONOMIC LOSS 164 Senior counsel for the plaintiff contended that the average weekly earnings of the plaintiff should be assessed as $1,223 and that when the appropriate actuarial factor was applied to this and a deduction of 15% made in respect of the vicissitudes of life, the plaintiff should be awarded $981,141 under this head of damage. The defendant on the other hand contended that the amount that should be awarded in respect of this head of damage should be $540,272 based upon net weekly earnings of $677. 165 The net weekly income referred to under the heading Past Loss of Income is an average over a period of a little over 2½ years. During all but three months of this time the hourly rate applicable to the plaintiff's efforts was $22.20. However that rose to $24, an increase of just over 8%. Whilst the average net weekly figure referred to above is appropriate as a measure for the plaintiff's loss of earnings during the period up to the date of trial, it probably does not adequately reflect the value of the plaintiff's working capacity for the future. In the financial year commencing on 1 July 1994 up to the time of his injury, Restile was paid $23,417 or an average of $1,345 gross per week for the work done by the plaintiff. In the three months prior to his injury Restile was paid $17,245 or an average of $1,326 gross per week. Thus a gross figure of between $1,325 and approximately $1,350 appears to be a fairer indicator of the earning capacity of the plaintiff's labours in the period immediately prior to his injury. When regard is had to the costs of producing this gross figure and the incidence of income tax, the resultant net figure is approximately $890 per week. But that is the figure as at 1994. As the evidence shows, wages in the relevant industrial category have advanced since that time. This is at least in part a consequence of inflation in the six years that have elapsed since the accident. The net average is now $713 per week. However, the plaintiff was, and would be expected for the future to be, well in excess of the average. Inflation over the relevant period was low. To take as the inflationary escalator figure of 2.5% on average would not be over generous, especially when it is remembered that the plaintiff's hourly rate increased by some 8% between April 1992 and August 1994. If a fair adjustment is made to the figure on such a basis, the increase would be 15%, even on a non-compounding basis. This takes the gross figures of between $1,325 and $1,350 to $1,523 and $1,552 respectively From the gross amount tax must be deducted, resulting in a figure of $1,030 per week net. From the amount calculated by using this figure must be deducted the amount of $100 per week which I have already assessed as being an amount which the plaintiff may be able to earn in the future for a period of about 10 years. These are the multiplicands I propose to use for determining the loss. 166 It has been agreed between the parties that the multiplier that is to be used for 26 years to take the plaintiff to age 65 is 946.7. The result of the multiplication is $975,100. From this amount two deductions are to be made. First, one which relates to the $100 per week for 10 years to which I have referred. The multiplier for this period is 451.7 and the resultant is $45,170. But that figure needs to be reduced because of the vicissitudes of life. In my judgment a reduction to $40,000 would be appropriate. From the amount remaining after deduction of this figure, namely $935,100, there must be deducted a further an amount of 15% ($140,265) in respect of the vicissitudes of life giving an ultimate figure in respect of this head of damages of $794,835. This is the amount awarded in respect of loss of earning capacity for the future.

FUTURE OUT-OF POCKET EXPENSES 167 It is common ground that the plaintiff will require surgical intervention in the future, both in respect of his left hip and right knee. The operations will involve joint replacements. The plaintiff contends that the amount that should be awarded in respect of this head of damage is $76,724, of which $53,679 relates to a future operation. The defendant on the other hand contends that the amount should be $38,559, of which $19,260 relates to future operations. The difference has a twofold basis. First, the plaintiff, relying on the evidence of Dr Elliott, contends that the plaintiff will require replacement of his hip and knee every 15 years and that based upon his life expectancy that is an equivalent of $44.44 per week. The defendant on the other hand bases its submission on a report of Dr Peter Dodds which suggests that there will be only one revision of the plaintiff's left hip and right knee and that these will occur in about 20 years time. 168 The second point of departure is the extent of physiotherapy that will be required by the plaintiff during the course of his life. The plaintiff, relying on the report of Dr Lewington, claims that the correct approach is to take an average of two to three sessions per annum each consisting of four to five attendances, with each attendance being at a cost of $50. This will be a cost of $10.80 per week over the course of the plaintiff's life. The defendant on the other hand contends that the figure must be discounted because the event or events are deferred. Its approach produces a figure of $13,299. 169 It is common ground between the plaintiff and the defendant that the multiplier that should be used is 1207.9. Each counsel used that figure in his calculation, but each had a different weekly figure as the multiplicand. 170 It is very difficult to choose on a rational basis between competing assessments of the future made by medical practitioners in relation to treatment and its cost, when there has been no testing of the views expressed in the written reports which were just bundled up and tendered, as appears to be the norm in cases such as the present. That is very unsatisfactory and leaves a situation for a trial judge which is difficult. However, that is the state of the evidence in the present case by choice of the parties and it is on that evidence that I must make a determination. 171 Just as the vicissitudes of life are not all adverse so it is in relation to the future generally. It is possible that medical break-throughs will lead to further improvement in the durability of the materials used in prostheses. That is the history of prosthetic material to date. However, medical improvements tend, again as history teaches, to come at an ever increasing cost. 172 For a worst case scenario on the evidence presented, that is with knee and hip replacements every 15 years and three sessions each of five attendances, the total weekly cost would be approximately $55, yielding a figure of $66,724. A best case scenario presented on the evidence, namely only one hip replacement ($30,000) and two sessions each of four attendances per annum for physiotherapy, results in a cost of $39,180. 173 Life tends not to produce the best scenario for the average individual nor the worst. Somewhere in between best and worst is more likely. On such an approach I think it would be appropriate to award $50,000 as the present sum appropriate to cover future surgical intervention on his hip and physiotherapy consequent upon such intervention. 174 Furthermore, there is a prospect that the plaintiff may require surgery on his back, more particularly on his cervical spine. Whether such an operation will be performed, and if it is, when it will be performed, are matters on which no definite finding can be made. There is, however, a prospect in this regard and it should be recognised in the award under this heading. Since it is a prospect that is to be valued, and since the event, if it occurs, will be in the future, i.e. deferred, an amount of $5,000 should be included in the damages to compensate for this prospect. 175 An additional factor to be taken into account is future non-specialist medical and pharmaceutical expenses. The plaintiff submits that an allowance of $10,000 should be made in respect of this. The defendant on the other hand suggests that "a more appropriate sum is $5,000 equating to approximately $5 per week for his future life". The approach to this item should, in my opinion, be to select a conventional sum which is reasonable. The plaintiff is now 39 years old and it is common ground that his statistically calculated life expectancy is 39 years. That is a long time and the nature and extent of the injuries sustained by the plaintiff strongly indicate that in the future he will not improve, rather he will deteriorate with age. That being so I am of opinion that a reasonable, not over generous and not niggardly, sum to award in respect of future non-specialist medical and pharmaceutical expenses is $10,000. 176 As a consequence I am of opinion that the amount that should be included in the plaintiff's verdict in respect of future surgical intervention, physiotherapy treatment and general medical and pharmaceutical expenses should be $65,000.

FUTURE DOMESTIC ASSISTANCE 177 It is clear that the plaintiff will require domestic assistance in the future since he will not be able to undertake domestic duties of the nature and to the extent that he had done in the past. There is a very significant gap between the amount contended for by the plaintiff and that contended for by the defendant in respect of this head of damage. The plaintiff's figure is $372,933; the defendant's $132,689, that is a separation by a factor of almost three. The approach contended for by the plaintiff is that there will be an increase in need in the future as pain levels increase. That this is likely is well supported by the evidence. The claim on behalf of the plaintiff is that there will be two hours of assistance required for each day of the week and that it should be costed at $22 per hour for a handy man to carry out gardening, and at $15.57 per week day rising to $31.14 for Sundays for a domestic carer. These are the figures supplied by Macquarie Nursing. The defendant contends that the hours per week are too high and that the hourly rate is also too high because the rate used by the plaintiff is a New South Wales rate, whereas the plaintiff lives in Queensland. The rate for the same attendances in Queensland is less, namely $20.50 per hour on week days, rising to $28.00 per hour on Sundays. 178 Whilst it is true that the plaintiff is now living in Queensland he is only doing so because he was unable to maintain the mortgage payments on his house on the diminished income which he received by way of workers compensation after he was injured. His place of residence of choice is the Illawarra area. He was raised and educated there. He was married there. His children were born there. He set up his home there. His family, friends and interests are there. His move to Queensland was forced upon him and I think it highly probable that once the litigation is resolved he will use part of the proceeds to return to his area of choice. These considerations lead me to the conclusion that it is appropriate to apply New South Wales rates in respect of this head of damage, but to allow a minor discount for the fact that it may take a little time for the plaintiff to move back to the place to which I am confident he will move, namely the Illawarra region of New South Wales. On that basis I am of opinion that it is appropriate to allow as the hourly cost $15 for a domestic carer for week days, $30.00 per hour for weekends and $22.00 per hour for a handy man. 179 The number of hours to be allowed raises different considerations. Two hours per day, as contended for by the plaintiff, seems to me to be too high. However, five hours per week as contended for by the defendant is, in my opinion, inadequate. Doing the best I can on the material available and in the absence of any testing by cross-examination of the medical experts concerning future probability or of the care providers in relation to cost escalation or alternative means of providing care, I think that ten hours per week would be appropriate; eight during the week, two at weekends at a total cost of $150 per week. 180 In addition there should be a minor allowance for a handy man. The number of hours per week will, at least to some extent, depend upon the age, condition and other requirements of the premises in which the plaintiff resides or will reside in the future. He is presently able to cut his own lawn on a ride on mower at his home in Queensland. He is likely to be able to continue to do this for some time, until the arthritis which he has progresses. Clearly he cannot carry out a number of the external activities in relation to his house that he formerly carried out and would, but for the accident, have continued to carry out. It is difficult to select a number of hours per week. It would be unlikely that a person in the position of the plaintiff would spend less than an hour per week and may spend considerably more if he was, for example painting the inside and outside of his house or repairing a fence or gate. Likewise there may be times at which cleaning of gutters, downpipes and drains would be required. To some extent this depends upon unknowns such as the proximity of trees to the house and their species. However, it is clear that the plaintiff would not be able to do this kind of work. Having regard to ones knowledge of life, I think it appropriate to allow two hours per week for a handy man who would perform activities in relation to the maintenance and repair of premises occupied by the plaintiff that he would, but for the accident, have done himself. This should, in my opinion, be allowed at a slightly discounted rate of $20 per hour on the bases that:

(a) some time may elapse before the plaintiff returns to the Illawarra region;

(b) there is a possibility, albeit slight, that the plaintiff may not return to the Illawarra region. 181 For these reasons, I am of opinion that the amount to be included in the plaintiff's damages in respect of future care in the nature of domestic assistance should be $190 per week which would give a total of $185,000 when allowance is made for the vicissitudes of life, including the possibility that notwithstanding the plaintiff's statistically determined life expectancy he may die at a younger age or be subjected to another debilitating injury.

Future - Griffith v Kirkmeyer damages 182 The plaintiff will certainly have to undergo surgical intervention in the future. This is probable in respect of his knee and hip and there is a prospect of localised spinal fusion. He will, as a consequence of such surgical intervention, require additional attention and services from his wife. There is a dispute between the plaintiff and the defendant as to the value to be placed on these services. The plaintiff contends that each operative intervention will require 1918 hours of such attendances and services. The defendant does not dispute this figure. The plaintiff costs each of these hours at $22.68. Again the defendant does not dispute this. However, whilst the plaintiff contends that, as the plaintiff has a life expectancy of 39 years, an allowance should be made for 2.6 operations on the hip and 2.6 on the knees each 15 years, the defendant says that there will only be one such intervention required. As a consequence, whilst the plaintiff contends that the amount to be allowed should be $67,364, the figure for which the defendant contends is $27,927. In this regard the defendant points out that the plaintiff has not taken account of the fact that the expenditure will be deferred. 183 As I have already indicated, I am of opinion that allowance should be made for two surgical interventions in respect of each of the plaintiff's knee and hip, that in addition there should be some recognition in the amount awarded of the prospect that a third operation may be needed; further that there could be a need for surgical intervention on the spine, particularly the cervical spine. 184 Since all these matters are in the future there is no way in which there can be mathematical precision of the kind suggested by both the plaintiff and defendant. The best that can be done is to consider the present value of the cost of attendances, deferred for one operation for a period of fifteen years and for the second, deferred for a period of thirty years, then to add to the sum of these two figures a conventional amount to reflect the prospect of additional operative treatment on his right knee and left hip and on his spine. 185 On the agreed multiplier and multiplicand each surgical intervention for the hip and the knee would be valued at $43,500 on present day costs payable today. If such an amount is deferred for fifteen years, the deferment factor is .642 giving a present value of the first set of operations of $27,927. The second set of operations, being in thirty years time, requires the application of a factor of .412, producing a present value of $17,922. This gives a total of $45,849. When regard is had to the prospects in the future of additional operative treatment not comprehended by this amount, I am of opinion that a global figure of $50,000 would be appropriate to allow under this heading.

GENERAL DAMAGES 186 The plaintiff has undoubtedly undergone a fundamental change in his physical, mental and social condition. His interests in life are now severely curtailed. His ability to enjoy himself has been seriously reduced. His capability as a tradesman has been taken from him and with it the personal satisfaction that comes from being a good tradesman and from a job well done. He is diminished as a father and husband. His self esteem has been adversely affected. Drink has become more dominant in his life and he is conscious of it as a problem. 187 The circumstances in which he was injured were quite terrifying, and he was rightly in fear for his life. Following his accident he experienced excruciating pain. He was subjected to numerous surgical interventions. His mobility was severely reduced and has remained significantly restricted. The excruciating pain of the accident and its immediate aftermath has been replaced by less severe pain which is with him at most times and is likely to get worse as he ages and the osteoarthritis brought on by the accident progresses. 188 In my opinion the general damages called for in such a case are substantial. An amount of $225,000 would be appropriate. This should be apportioned as to $125,000 in respect of the period from the accident to date and the residue for the future.

INTEREST ON PAST GENERAL DAMAGES 189 A period of six years has elapsed since the plaintiff was injured. He is entitled to interest at 2% on the amount of general damages awarded in respect of the period to date. That is an amount of $15,000.

SUMMARY 190 For the foregoing reasons I am of opinion that there should be a verdict for the plaintiff for $1,963,933 made up as follows:

(v) Interest on past domestic assistance $ 30,847.00

(viii) Griffith v Kirkmeyer damages (past) $ 57,680.00

(ix) Interest on past Griffith v Kirkmeyer damages $ 20,565.00

(x) Future Griffith v Kirkmeyer damages $ 50,000.00

(a) In respect of past $125,000 (b) In respect of future $100,000

There will be a verdict for the plaintiff, Peter Rauk, against the defendant, Transtate Pty Ltd, for $1,963,933.00 and judgment accordingly.

The defendant is to pay the plaintiff's costs on a party and party basis up to 26 July, 2000 and thereafter on an indemnity basis subject to the plaintiff paying on a party and party basis the costs of the defendant and cross defendant, thrown away in consequence of the adjournments on 1 and 4 September, 2000.

There will be a verdict for the cross-defendant, Restile Pty Limited, on the cross-claim by the defendant, Transtate Pty Ltd, and judgment accordingly.

The defendant is to pay the costs of the cross-defendant incurred after 5 February, 1998 on an indemnity basis and costs prior to that date on a party and party basis.

There will be a verdict for the defendant, Transtate Pty Ltd, against the plaintiff, Restile Pty Ltd, and judgment accordingly.

The plaintiff, Restile Pty Ltd, is to pay the defendant's costs. I indicate that virtually no time was spent at the hearing in evidence in relation to the action number 20624/96 and only a minor amount of time was spent in relation to the argument concerning that action. **********

Last Modified: 11/13/2000 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.

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Judgment (71 paragraphs)

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