Schneider v AMP Capital Investors Ltd; Schneider v Kent Street Pty Ltd

Scope of duty of care

In circumstances where a plaintiff in negligence proceedings identifies a critical element in the cause of action as the failure by the defendant to take a particular action, it is possible to describe the exercise as (a) determining the scope of the defendant's duty of care or (b) determining whether the failure involved a breach of a duty, identified at a level of generality. In the present case, the trial judge dealt with the critical issue under the heading "What the duty of care required". The judge held that the respondent "owed to lift passengers as a class, including the plaintiff, a duty to exercise reasonable care for their safety". [24] The reasoning continued: "For the purpose of determining whether a breach of that duty occurred, the risk of harm to be considered in the present case is the risk that a lift passenger might trip and thereby be injured upon exiting the lift if instead of levelling accurately it should stop in such a manner as to create a step or sill."
In addressing these questions, the trial judge expressly identified the factors to be taken into account under s 5B of the Civil Liability Act 2002 (NSW). [25] The judge then stated his conclusion at [127] in the following terms: "I conclude that [AMP Capital's] duty of care required it to select with reasonable care an appropriately qualified and experienced lift servicing company with thorough knowledge of the type of machinery installed at 20 Loftus Street. Reasonable care required that the service company selected should be engaged to carry out regular periodic inspection and maintenance at a frequency and in a degree of detail approved by the service company itself. It was also necessary that [AMP Capital] should institute both a system of verifying that this regular maintenance was performed and a system of monitoring the operation of the lifts and of calling out the service company in the event of any malfunction."
The appellant did not cavil with the conclusions set out in the last paragraph; rather her submission was that the duty of care extended to an obligation to replace the lift mechanisms, if so advised by the independent contractor which had been engaged to monitor the operation of the lifts. This advice, it was submitted, was given in 2006, but was not implemented. That failure involved the breach of duty on which the appellant relied.
There are three factors which militate against acceptance of this challenge to the reasoning of the trial judge. The first is that the judge did in fact consider whether the failure to replace the lift machinery involved a breach of duty. The second is that the relevant contractor, ThyssenKrupp, did not in terms advise that the machinery needed to be replaced. Thirdly, the judge found that even updated machinery had a levelling tolerance of plus or minus 6mm and, as already explained, the judge did not accept that the appellant had established that the step on which she tripped was greater than 6mm.
While the difficulty for the appellant in establishing that the step was greater than 12mm has been discussed in the preceding section of these reasons, it may be accepted that the appellant had a stronger case in favour of a finding that the step in fact exceeded 6mm. However, this issue can be put to one side for present purposes, because the appellant's case fails on the first and second issues.
The trial judge rejected the proposition that the duty required the replacement of the lift machinery, having regard to a number of considerations. The first was expressed in the following terms: [26] "The precaution which the plaintiff has asserted [AMP Capital] should have taken was to upgrade these lifts, at a cost of $475,000. Even that would not have ensured that the lifts would never stop out of level but would give them a greater consistency of accurate levelling to a tolerance of plus or minus 6mm."
The judge then noted that the lifts were of an appropriate standard at the time of their installation. Although technology had, from about 1983, provided for more precise levelling and with greater consistency, there was no evidence that any regulatory requirement, industry standard or accepted industry practice required the lifts to be upgraded; nor that there was any expectation on the part of the public that lifts in high rise buildings in Sydney would operate to a standard achievable by post-1983 technology. Further, although more reliable levelling could be achieved, the lifts should not be described as dangerous or defective. The judge concluded: [27] "Given the low probability of an out-of-level step being of such a nature as to go unnoticed by a reasonably careful alighting passenger, replacement of the entire lift machinery at a capital cost of $475,000 would be vastly beyond the requirements of [AMP Capital's] duty to exercise reasonable care to protect a passenger such as the plaintiff against the identified risk."
This reasoning was challenged on the basis that ThyssenKrupp had, in October 2006, carried out a "hazard & risk assessment for existing lifts", in accordance with an industry code of practice, which had identified a level of risk requiring the replacement of the operating machinery.
The assessment was undertaken on a standard form prepared by the Australian Elevator Association "for exclusive use of member companies" of which ThyssenKrupp Elevator was one. The form had 83 items of which only one was presently relevant, namely item 5 "stopping/leveling accuracy". The requirement specified under this item was somewhat obscurely stated in the following terms: "Floor levels to be within +/‑ 10mm & leveling accuracy of +/‑ 20mm." The form indicated that the requirement was not fulfilled and that the accompanying level of risk was "high". The proposed "corrective action" was "change to regulated drive".
The accompanying letter, addressed to Mr Ray at Resolve FM, the predecessor to the contractor ISS, stated that the assessment had been carried out at "your request" and noted relevant areas of non-compliance by reference to "Passenger Lift No's 1, 2 & 3". The assessment related specifically to the building at 20 Loftus Street, which only had two lifts. Item 5 was one of the items said to require attention. The letter contained the statement: "Whilst there are areas of non-compliance when compared to the current lift code AS 1735 2001, this by no means affects the day to day operation of your lifts." The letter was sent over the name of Mr Daniel Lewin, whose position with ThyssenKrupp Elevator was described as "business development manager".
Mr Ray was asked about the request for the assessment, his receipt of the document and what he did with it, and whether a meeting was held to discuss its contents. Nine years after the event, he was unable to recall the assessment or any of the surrounding circumstances. However, the records show that on 8 November 2006 Mr Lewin wrote again to Mr Ray with a quotation for certain items of work. Those items were identified by reference to the assessment; they did not include item 5.
Mr Lewin gave evidence at the trial. Mr Lewin was asked in chief to explain the two different figures in item 5; his answer appeared to indicate that the first figure of 10mm tolerance related to the lift stopping at a particular level, whereas the 20mm measure related to any change in weight which might occur when persons enter or leave the lift. Whether he in fact tested the individual lifts was unclear, particularly in circumstances where his letter referred to three lifts on premises in which there were only two. The trial judge said of Mr Lewin: [28] "In 2006 ThyssenKrupp had a practice of sending out an annual letter to its customers offering to carry out a Hazard and Risk Assessment of the kind that was done in October 2006 for 20 Loftus Street. Mr Lewin did 'hundreds' of these reports in the course of his business development work …. The reports were done for a small fee. Their evident purpose was to encourage building owners to make substantial capital investments in new lift equipment or significant upgrades."
The judge also referred to answers indicating that the failure of the lifts to comply with the requirement of item 5 was based upon the technology available in lifts of that age, and was not necessarily based on any measurement of a particular lift on a particular day. (Mr Thomson had described the expected levelling errors as occurring randomly.)
For the purpose of determining whether there was a breach of duty on the part of the respondent, the trial judge held that the knowledge of its management agent (which in 2006 was Resolve FM) and in particular the agent's employee (Mr Ray) was the knowledge of the principal. There was no challenge to that finding and there is no need to consider whether the principles derived from cases dealing with the state of mind of an agent acting in accordance with its authority require that the relevant knowledge of the agent is to be ascribed to the principal in determining whether the principal was liable in tort for a breach of its own duty of care. [29]
In any event, nothing turned on this finding because the judge was satisfied that the respondent ought in any event to have known of the limitations on the accuracy of the levelling mechanism in the lift. [30] The judge stated: "It ought reasonably to have made enquiry of appropriately qualified people as to whether the lifts installed at 20 Loftus Street were adequately reliable with respect to levelling and with respect to the minimisation of hazard to passengers."
The judge further concluded: [31] "A reasonable occupier in the position of [AMP Capital] would, 30 to 35 years after installation, have made periodic enquiries of its service provider regarding whether the performance of the lifts was deteriorating and how their performance compared with that of more recent installations." The judge expressly held, however, that the possibility of levelling inaccuracy, of which the respondent ought to have known, did not include knowledge that "this would necessarily be dangerous to passengers irrespective of the degree of the levelling inaccuracy", contrary to the terms of item 5 in the ThyssenKrupp assessment, which automatically classified the risk arising from non-compliance with its levelling standard as "high". [32] Further, the judge accepted Mr Thomson's evidence as to the inherent limitations of the equipment, which was consistent with that of Mr Lewin, to the effect that the lift mechanism was not capable of achieving levelling within a tolerance of plus or minus 10mm on all occasions.
It follows that the trial judge did not disregard any obligation of the respondent extending beyond the appointment of reliable contractors; nor did he disregard the "advice" given by its own contractor, ThyssenKrupp, with respect to the levelling mechanism. On appeal, the appellant contended that the respondent ought reasonably to have acted upon that advice and replaced the lift mechanism in 2006. However, as the trial judge held, properly understood item 5 did not convey any such advice, nor did it contain information which went beyond a general understanding of the limitations on the lift mechanism. The judge gave detailed reasons why that knowledge, assessed in the context of industry practice in relation to an older generation of lifts, did not demonstrate a breach of duty on the part of the respondent. That reasoning was not shown to be erroneous on the evidence. This ground must be rejected.

At a glance

Court

Decision date

Before

Source

Judgment (8 paragraphs)

Legislation Cited (2)

Cases Cited (6)