Samsung Electronics Australia Pty Ltd v Macura

Court of Appeal (NSW)|2005-11-11|Before: Mason P, Gzell J

Background 5 Samsung was an importer and a distributor of electrical goods. It received goods into its warehouse, held them securely and then distributed them. Samsung entered into an arrangement with Skilled Engineering for it to carry out these warehousing tasks. At the front of the building was Samsung's office. The warehouse was to the rear. There was an office in it at floor level. 6 The only employee of Samsung in the warehouse was a logistics co-ordinator who worked out of the warehouse office that was shared with four employees of Skilled Engineering performing clerical tasks. The logistics co-ordinator at the time of the injury in December 2001 was Tracey Margaret McDonald. 7 Skilled Engineering employed a standard crew of seven workmen to perform the warehouse tasks. It employed an extra two to four workmen if the volume of work required it. A morning supervisor of a crew and an afternoon supervisor of a crew were employed by Skilled Engineering. Ms McDonald provided the morning supervisor with paper work identifying the goods that needed to be obtained from store and placed on the floor of the warehouse to be picked up and loaded onto delivery trucks by transport companies. Ms McDonald also provided the morning supervisor with paper work indicating the number of containers of goods that were due in during the day. If the volume of work to be done on a day required additional workmen, Ms McDonald and the morning supervisor came to an agreement as to the number. 8 Todd Ashley Robert Henderson was the afternoon supervisor at the time Mr Macura sustained his injury. It was he or his team leader who assigned tasks to the crew. Instructions were given to forklift drivers to pick up stock from store and place the goods in designated areas on the warehouse floor to be picked up by the transport companies. It was he or his team leader who assigned forklift drivers and workmen to unload containers. By the time Mr Henderson arrived, any extra staff needed for the day had been employed. 9 Mr Macura had been assigned the task of unloading a container by Mr Henderson when he sustained his injury. The container contained boxed 17 inch computer monitors weighing between 15 and 20 kilograms. The system was that a pallet was placed near the opening of a full container by a forklift driver and Mr Macura and another workman stacked 12 boxes on to the pallet which was then taken away. The men had a break until the forklift driver returned with another pallet. As its contents were unloaded, the pallets were placed within the container close to the remaining goods. Sometimes the forklift driver would deposit two or three pallets in the container and the men would continue to work on loading the second pallet while the first loaded pallet was taken away. In such cases there was a longer break while the forklift driver retrieved another two to three pallets. 10 There was some confusion in the evidence as to rate at which the process took place. Mr Macura said employees were expected to unload a container in an hour to an hour and a half. He said there were 200 to 240 monitors in a container. Without breaks, this would entail two lifts per minute. 11 Mr Macura had given a statement to an investigator that there were 1,000 monitors in the container. To unload 500 monitors in an hour to an hour and half without breaks would involve in excess of five lifts to in excess of eight lifts per minute. 12 The investigator's statement was supplied to Anthony Neil McLean Grieve. Mr Grieve's report was admitted by his Honour over objection that Mr Grieve lacked expertise in ergonomics and his report did not allow for any change in his assumptions. Mr Grieve appears to have made his own estimation of the time taken to unload the monitors and he arrived at an estimate of four lifts per minute. Mr Macura said the rate was three to four per minute. 13 It was in the course of performing these tasks that Mr Macura experienced a sharp pain in his lower back and his earlier injury was exacerbated. 14 Mr Macura was shown a safety video and safe lifting techniques were explained to him on his initial recruitment by Skilled Engineering. Richard Peter Mulvey was employed by Skilled Engineering as the occupational health and safety representative. He attended the warehouse four to five times per week and carried out fortnightly "tool box" safety talks covering any change to roles in the warehouse or any new jobs that came along. 15 Samsung played no part in training employees of Skilled Engineering, nor in directing employees of Skilled Engineering to carry out any tasks, nor in the allocation of tasks to particular workmen. Ms McDonald said that Samsung played no part in monitoring the performances of Skilled Engineering employees. 16 The forklifts were owned by Samsung and driven by employees of Skilled Engineering.

The decision below 17 His Honour concluded that the degree of control exercised over the work of Mr Macura was such as to bring it within the category of cases where an occupier or host employer attracts a duty of care analogous to that of the non-delegable duty of care owed by an employer to an employee. His Honour expressed himself in language reminiscent of a passage from TNT Australia Pty Ltd v Christie [2003] NSWCA 47. He concluded that Mr Macura and Samsung placed themselves in a relationship day in and day out indistinguishable from that of employee and employer. His Honour was of the view that Mr Macura worked for a number of weeks under the daily control of Samsung and its managerial staff at the warehouse. He took the view that Mr Macura was in an identical position to that of Samsung's other employees with whom he worked and, in particular, Ms McDonald. 18 His Honour also took the view that Samsung owed a duty of care to Mr Macura of the type described by Mason J in Stevens v Brodribb Sawmiling Co Pty Ltd (1985-1986) 160 CLR 16.

The legal principles 19 The duty of care analogous to the non-delegable duty of care owed by an employer to an employee was discussed by this court in TNT. Christie was employed by an employment agency. It assigned him to work at a brewery operated by TNT. He was injured when a walk-behind forklift being used to pick up beer orders malfunctioned and moved backwards over his foot. It was held that TNT and Christie were in a position analogous to that of employer and employee giving rise to a non-delegable duty of care upon TNT. Christie reported to the TNT warehouse manager who gave him his daily duties. He worked alongside four permanent employees of TNT whose duties did not differ from his. As Mason P said at [41]: "… It can be seen that the plaintiff and TNT placed themselves in a relationship, day in and day out, indistinguishable from that of employee and employer. I am not saying that every client of an employment bureau will assume such a relationship with the person at whose workplace he or she attends. But here the plaintiff had for months been under the daily control of TNT and its managerial staff at the brewery. He was a relatively unskilled labourer. He reported daily to the brewery and everything that he did there was done under the full control of TNT. TNT's relationship was more than that of an occupier of the factory. In all respects relevant to the imposition of a duty of care the plaintiff was in an identical position to that of the four TNT employees with whom he worked…" 20 TNT is to be contrasted with Boral Roof Tiles v O'Brien, NSWCA, unreported, 15 December 1994. The employer of O'Brien, Lasmine Pty Ltd, contracted with Boral to carry tiles by truck and to unload them by hand at their destination. While unloading the tiles, O'Brien sustained an injury to his back. It was held that it was for the employer to ensure that performance of the contractual obligations did not involve a breach of duty to its employees. Sheller JA observed at 7: "The system of work adopted was that of Lasmine. It had contracted to unload the tiles by hand. If a party contracts to perform a service in a particular way I can see no basis upon which the party, with which it contracts, can be held responsible in negligence for injury done to the employees of the first party in performing that service, absent some undisclosed and unexpected hazard…" 21 The alternative basis for his Honour's finding was founded in Stevens. The sawmilling company engaged sniggers to move felled trees to a loading zone and truckers to carry the trees to its mill. The court held that neither the sniggers nor the truckers were employees of the sawmiller. An employee of the sawmiller had general supervision over operations but exercised no control over the manner in which sniggers and truckers carried out their tasks. While a log was being manoeuvred onto a truck by a snigger, a trucker was injured due to the snigger's negligence. It was held that the sawmiller owed a duty of care to the trucker. Mason J emphasised the need for co-ordination of activities where there was a distinct risk of personal injury to the persons engaged in their activities. At 31 his Honour said: "The interdependence of the activities carried out in the forest, the need for co-ordination by Brodribb of those activities and the distinct risk of personal injury to those engaged in the operations, calls for the prescription and provision of a safe system by Brodribb. Omission to prescribe and provide such a system would expose the workers to an obvious risk of injury. 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 co-ordinate the various activities, he has an obligation to prescribe a safe system of work. The fact that they are not employees, or that he does not retain a right to control them in the manner in which they carry out their work, should not affect the existence of an obligation to prescribe a safe system. Brodribb's ability to prescribe such a system was not affected by its inability to direct the contractors as to how they should operate their machines."

His Honour's reasoning 22 His Honour was influenced by certain aspects of the evidence. 23 Mr Mulvey said that when Skilled Engineering asked Samsung for additional workers, Samsung agreed in 75% of cases but disagreed in 25% of cases. Ms McDonald said she recalled no occasion when she disagreed with a request for additional workers. His Honour preferred Mr Mulvey's evidence. 24 But Mr Henderson made no complaint that the morning supervisor was denied additional workmen and the proposition was not put to him in cross examination. Mr Mulvey could not recall a single occasion that Ms McDonald refused a request for additional workers prior to Christmas 2001. He remained in his position for approximately a year after Ms McDonald ceased to work as logistics co-ordinator for Samsung. If requests were refused, the likelihood is that this happened after Ms McDonald left Samsung or, at the least, after Mr Macura sustained his injury. 25 Mr Macura said there were two or three management people from upstairs who constantly monitored the work. He was told that he had to work quickly or he would not have a job the next day. He said he was told this by another woman who worked with Mr Henderson. He could not remember her name. 26 His Honour drew the inference that the woman could not be other than Ms McDonald. But the evidence did not identify her as distinct from the four employees of Skilled Engineering who worked in the office. There was no upstairs office. If there were two or three management people on the floor, the likelihood is that they were employees of Skilled Engineering because Ms McDonald was the only Samsung employee in the warehouse. Ms McDonald spent most of her time in the office rather than on the floor of the warehouse and both she and Mr Henderson said they never told Mr Macura to hurry his work. 27 In any event, if it was Ms McDonald who made the remark there was no evidence that this affected the rate at which Mr Macura worked nor that it was other than a casual remark. It was Mr Henderson who allocated tasks to Mr Macura and he gave no evidence of Ms McDonald performing any role other than indicating the work to be done in a day and discussing with the morning supervisor the number of extra employees needed to perform the work of the day. 28 Furthermore, if Mr Macura's reference to management people from upstairs was a reference to Samsung managerial staff generally, there was no evidence from Mr Henderson or Ms McDonald that any such staff visited the warehouse or took part in any warehouse activities. If any monitoring was done, there was nothing to suggest that it was other than to ascertain the rate of clearance of containers in order to determine the availability of items for distribution. 29 Mr Mulvey was asked the question: "Who ultimately had the say about how what was to be done got done?" He replied: "Samsung". There followed a series of questions in which he was asked who ultimately had the say about the speed with which the work was done, the way in which the work was done and the number of extra employees to be engaged. In each case he said it was Samsung. Then the following exchange took place: "Q: And Skilled was simply in the position that whatever Samsung decided had to be done or the way had to be done, you had to accept it, didn't you? A: They were our customer, yeah. Q: They were in control, weren't they? A: Yes."

30 Mr Mulvey also agreed that Ms McDonald supervised the supervisors. But Mr Mulvey's evidence was based on his observation of the interrelationship between Ms McDonald and Mr Henderson on his visits to the warehouse and neither of them gave evidence that supported this contention. Mr Mulvey's answers are to be understood in light of his statement that Samsung controlled because it was the client. The evidence was no more than a statement that the client must be served and has the final say. 31 His Honour concluded that Ms McDonald allocated tasks to the Skilled Engineering supervisor in the sense that she provided the list of containers and passed it on to the morning supervisor. His Honour referred to Ms McDonald's evidence that if she did not give the list of work to the supervisor, the Skilled Engineering employees would have nothing to do. His Honour said: "She conceded that, through her, the defendant controlled the volume of work and that she would also discuss with SE the number of workers required from SE." 32 Ms McDonald agreed that Samsung controlled the volume of work in the sense that it determined the number of containers to arrive and the electrical goods to be dispatched in a day. 33 But while the work varied day by day depending upon the amount of goods in and the amount of goods out and that was determined by Samsung, that did not constitute control of the tasks performed by the employees of Skilled Engineering. Once the daily volumes were determined and passed on by Ms McDonald to the morning supervisor and the number of any additional workmen was agreed, Samsung's involvement in the warehouse labour activities ceased. Thereafter it was the supervisors who allocated tasks to be performed by the Skilled Engineering workmen. 34 His Honour referred to Ms McDonald's statement that Samsung had control over the number of forklift machines available. But there was no suggestion that there was a dearth of forklifts available to the employees of Skilled Engineering or that their number was critical to any duty of care owed by Samsung to Mr Macura.

Duty of care 35 In my view it was not open to his Honour to conclude that the degree of control exercised over the work by Samsung was such as to attract a duty of care analogous to that of the non-delegable duty of care owed by an employer to an employee. 36 The evidence does not support his Honour's view that Mr Macura and Samsung placed themselves in a relationship, day in and day out, indistinguishable from that of employee and employer, that Mr Macura worked for a number of weeks under the daily control of Samsung and its managerial staff at the warehouse, and that Mr Macura was in an identical position to that of Samsung's own employees with whom he worked and, in particular, Ms McDonald. 37 Mr Macura was not in an identical position to Ms McDonald. Among those who worked in the warehouse, her position was unique. She was a logistics co-ordinator and not a manual worker. 38 Nor did Samsung and Mr Macura place themselves in a relationship indistinguishable from that of an employer and an employee. The evidence was that Samsung took no part in the allocation of tasks to the Skilled Engineering workmen. Nor did Samsung have anything to do with the training of employees or their occupational health and safety. Those tasks were performed by Skilled Engineering. The daily control that Samsung exercised was limited to the establishment of the volume of work for the day and agreement on any additional workmen to be employed by Skilled Engineering. Mr Mulvey's concept of the customer being in control did not alter the basic facts. 39 The evidence of the physical activity carried out in the warehouse leads inevitably to the conclusion that Samsung contracted with Skilled Engineering for it to perform the labour content of the warehousing activities and that it did by employing and controlling its own workmen. 40 As to his Honour's alternative conclusion that a duty of care was owed by Samsung in terms of the analysis of Mason J in Stevens, there was no need to co-ordinate various activities that lies at the heart of the rationale for that duty of care.

Conclusion 41 In my view his Honour erred in finding that Samsung owed a duty of care to Mr Macura. It is unnecessary to consider the other issues raised for the consideration of the court. 42 In my view the court should make the following orders:

Subject to filing a notice of appeal, grant Samsung leave to appeal. Appeal allowed. Verdict and judgement for Mr Macura set aside. In lieu thereof, verdict and judgment for Samsung. Mr Macura to give restitution of any moneys paid by Samsung in respect of the verdict and judgment together with interest thereon at Supreme Court rates. Mr Macura to pay the costs of the appeal and in the court below. Mr Macura to have a certificate under the Suitors' Fund Act 1951 in respect of the costs of the appeal if qualified.

14/11/2005 - Wrong date in the body of the judgment. - Paragraph(s) In the beginning of the judgment

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Samsung Electronics Australia Pty Ltd v Macura [2005] NSWCA 386 CITATION: This decision has been amended. Please see the end of the judgment for a list of the amendments.

TNT Australia Pty Ltd v Christie [2003] NSWCA 47 CASES CITED: Stevens v Brodribb Sawmiling Co Pty Ltd (1985-1986) 160 CLR 16 Boral Roof Tiles v O'Brien, NSWCA, unreported, 15 December 1994

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