The case against Baden
112In Roads and Traffic Authority of NSW v Dederer [2007] HCA 42; (2007) 234 CLR 330, Gummow J observed at [18]:
"... First, the proper resolution of an action in negligence depends on the existence and scope of the relevant duty of care. Secondly, whatever its scope, a duty of care imposes an obligation to exercise reasonable care; it does not impose a duty to prevent potentially harmful conduct. Thirdly, the assessment of breach depends on the correct identification of the relevant risk of injury. Fourthly, breach must be assessed prospectively and not retrospectively. Fifthly, such an assessment of breach must be made in the manner described by Mason J in Wyong Shire Council v Shirt [(1980) 146 CLR 40 at 47-48.]. "
113In the cases brought against Brambles and Baden the Civil Liability Act applies. Sections 5B and 5C provide:
"5B General principles
(1) A person is not negligent in failing to take precautions against a risk of harm unless:
(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and
(b) the risk was not insignificant, and
(c) in the circumstances, a reasonable person in the person's position would have taken those precautions.
(2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things):
(a) the probability that the harm would occur if care were not taken,
(b) the likely seriousness of the harm,
(c) the burden of taking precautions to avoid the risk of harm,
(d) the social utility of the activity that creates the risk of harm.
5C Other principles
In proceedings relating to liability for negligence:
(a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and
(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and
(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk."
114It has been accepted that the matters set out in s 5B(2) of the Civil Liability Act are, in substance, a reiteration of Mason J's observations in Wyong Shire Council v Shirt [1980] HCA 12; (1980) 146 CLR 40 (see Erwin v Iveco Trucks Australia Ltd [2010] NSWCA 113; (2010) 267 ALR 752 at [82] - [85]). Mason J observed (at 47 - 48):
"[T]he tribunal of fact must first ask itself whether a reasonable man in the defendant's position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man's response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant's position.
The considerations to which I have referred indicate that a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable. But, as we have seen, the existence of a foreseeable risk of injury does not in itself dispose of the question of breach of duty. The magnitude of the risk and its degree of probability remain to be considered with other relevant factors."
115In summary, in my assessment, Mr Smith, as a crane operator, has established that Baden owed him a duty to exercise reasonable care to warn of the risk of collapse which its modifications of the crane had created, so that he would not be exposed to an unreasonable risk of injury.
116Given the risk of cata strophic damage to the crane which Baden had created by its modification, in the event of any failure to activate the dolly switch before the crane was driven and the serious risk of injury which would result to operators and those in the vicinity of the crane, if it collapsed, there can, in my view, be no question about the duty of care which arose and the foreseeability of the risk in question, in the s 5B(1)(a) sense. The magnitude of the risk of injury in question for an operator, or indeed anyone in the vicinity of the collapsing crane, required a reasonable person placed in Baden's position to take precautions to guard against the risk materialising. That the duty was breached, with the result, Mr Smith's injury, has also been established.
117The evidence showed there were various precautions which a reasonable person in Baden's position could have taken in the circumstances. They included p roviding relevant information about the modification made to the crane and the risks thereby created to Brambles and operators of the machine. The obvious and unquestionably available means of doing this, which would have addressed the risk which had been created, was by amendment of the crane's operator's manual. Thereby the necessary information could have been conveyed, to all who required it, including later purchases such as, by Gillespies. There were other simple and inexpensive steps which were later taken, which were other ways in which Baden's duty could have been met. They included the white line painted on the boom, which indicated at a glance if the brake had been released and the installation of various safety features in the crane. Such steps were not burdensome, but still they were not taken. Had they been, the accident would not have occurred.
The duty of care
118In Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 276 ALR 375, French CJ and Gummow J recently emphasised the need to first consider the nature and scope of the duty of care in question (see at [17] - [22]).
119The duty which Baden owed was argued for Mr Smith to rest on first principles. Just as in Donoghue v Stevenson [1932] AC 562, a manufacturer of a bottle of ginger beer owed a duty to somebody who might purchase the bottle from a retailer, Baden, who modified the crane to achieve Brambles' purpose, owed a duty of care to operators of the crane such as Mr Smith. It had undertaken modifications to the crane, which had not failed mechanically, but which had the result that they introduced a grave risk, namely, that a failure to activate the dolly switch to release the brake before the crane was driven, could result in damage to the rods, which would lead to catastrophic failure of the machine when operated. In those circumstances, Baden had a duty to alert operators of the crane to that possibility, the risk not otherwise being apparent. It had failed in that duty, having not even modified the crane's operator's manual, to reflect what it had done to the machine.
120Mr Smith argued that any entity which performs work of the kind which Baden had performed by way of modification to the machine, had the duties of a manufacturer, even if the modifications were carried out in accordance with someone else's design. The only evidence as to what Liebherr had specified, was a letter reproduced in a statement made to the WorkCover Inspector. The blank assertion there made could not establish that what Baden had done, was in fact in accordance with Liebherr's specifications.
121The operator's manual, which formed part of the crane, was not modified to reflect the modifications which Baden had made. No steps were taken to amend the manual to include any reference to driving with the dolly. There was a document shown to Mr Smith, which had been referred to in the WorkCover report. Mr Smith said he had never seen it before and it was not tendered. In the circumstances it would be inferred that the modifications had not been carried out in accordance with Liebherr's specification.
122Baden's case was that it owed Mr Smith no duty of care at all in relation to the risk created by the modifications it had made to the machine. It had acted reasonably in going to the manufacturer, Liebherr, for advice in relation to the modification Brambles wanted to have made. It had undertaken the modifications in accordance with its instructions, it being a world class manufacturer, on Mr Gillespie's evidence. If there was any negligence, it was in Liebherr's design. Its contract with Liebherr required it to maintain and repair using Liebherr parts. There were only 10 of these cranes in the world and the correspondence showed that after the accident, everyone looked to Liebherr, not it.
123Baden also argued that it had expertise in repair, but it was not the manufacturer of the crane and had no duties analogous to those of a manufacturer. It stood between the position of manufacturers on the one hand and repairers on the other. There was no authority which had considered a circumstance such as that in which it found itself. Baden accepted that it had duties like those of a mechanic, who owed duties to those who might drive a car which the mechanic had repaired. What also had to be considered, however, was that it was not asserted that the work which it had performed, had failed.
124Baden's case was that in performing its work it had adhered to Liebherr's specifications and had not understood the risk which the modifications it had made gave rise to. There was no evidence that Baden knew or ought to have known that if the dolly switch was not turned on and the driver drove off and turned a corner, the locking pins would snap. The negligence alleged against it was that of omission, namely failing to provide a relevant manual for the new dolly operation, failing to provide adequate training and failing to take steps later taken, after the accident, in accordance with the advice then given by Liebherr. That case was not established by the evidence.
125What Baden ought to have known at the time of the accident had to be considered in two ways. On what was held in McPherson's Ltd v Eaton [2005] NSWCA 435; (2005) 65 NSWLR 187, Mr Smith had to prove that the facts relied on were known. Absent such proof, he had to establish that it ought to have known of those facts. There was not 'one single fact' which established that having undertaken the modification work, Baden was aware of the risk of the dowel rods shearing.
126As to the legal test, the assessment of breach depended on the identification of the relevant risk of injury, in this case, that if the switch were not activated, the locking pins would snap. That was to be determined on the basis of what a reasonable person might know, given the facts. Reliance was placed on what was observed in McPherson's Ltd at [77] - [82]:
"77 In Lanza v Codemo (at [171]), Wood CJ at CL accepted that the mere fact of entry into a contract for the sale of goods did not necessarily establish a duty of care. His Honour relied on Laundess , S W Cavanagh and C S Phegan, Product Liability in Australia (1983) Sydney, Butterworths, at 510, and J G Fleming, The Law of Torts 9th ed (1998) Sydney, Law Book Co, at 457 for this proposition. His Honour went on to say (at [171]):
"[171]... The existence of the duty depends upon the nature of the goods sold, the risk involved and the extent to which that risk was known to, or should have reasonably been known to the supplier."
78 In Elliott v Bali Bungy Company Young CJ in Eq held that the general duty of retail dealers was to warn of dangers of which they knew or had reason to know but not of which they "should have known". As I understand his Honour, "should have known" in this context means duty- bound to know. His Honour referred to a number of text books to this effect. To those to which his Honour referred I would add Clerk & Lindsell on Torts, 18th Ed 531 (at para 9-12) where the learned authors say that retailers may be liable in tort "if they sell goods with reason to know they are likely to be used to harm others". See also the reporter's notes to paragraph 401 of the Restatement of Law of Torts (2nd Ed).
79 In Graham Barclay Oysters Pty Ltd v Ryan the distributors grew and harvested the oysters (that being the additional factor).
80 In Dovuro Pty Limited v Wilkins the distributor also produced the canola seed.
81 We were not referred to any other case in Australia or England, nor have I been able to find one, where a duty of care has been imposed on a retailer merely because a relationship of vendor and purchaser, or vendor and end-consumer, existed.
82 In my opinion the relationship of vendor and purchaser, or vendor and end-consumer, does not automatically give rise to a duty of care. Such relationships do not fall within the familiar categories of cases where, by the mere existence of these relationships, a duty of care arises: cf Vairy v Wyong Shire Council [2005] HCA 62 at paras 25-27 per McHugh J. I agree with Mahoney JA's view that "something more" must exist before a duty of care arises."
127I am not able to accept the case so pressed. Here, there was clearly 'some additional factor', which gave rise to the relevant duty. On the evidence, Baden had expertise in repairing and maintaining Liebherr cranes. In accepting Brambles' brief to modify the crane, it had to exercise the standard of reasonable care and skill required of the ordinary skilled person exercising and professing to have the special skill which it possessed (see Rogers v Whitaker [1992] HCA 58; (1992) 175 CLR 479 at 487).
128Baden's case was that it turned to Liebherr and modified the crane in accordance with its specifications. The evidence did not provide a basis for the submission that Baden had adhered to Liebherr's specifications and in doing so, had not understood the risk which the modifications it made gave rise to. Had such evidence been available, no doubt it would have been led from someone involved in the modification work undertaken, either at Baden or Liebherr. It was argued for Baden that no Jones v Dunkel (1959) 101 CLR 298 point arose against it, unless there was a case to meet on the evidence. In my view there was such a case established, given the modifications made; the failure to modify the operator's manual to reflect those modifications; and the inadequate information given to Mr Smith about safe operation of the modified crane.
129It seems to me unarguable, given the catastrophic damage which resulted from any failure to activate the switch and the absence of any mechanical warnings of the need to release the switch, or of damage caused to the dowel rods, if the switch was not released, that a reasonable person in Baden's position, acting reasonably in the circumstances, would have known that it was not proving adequate information as to the modifications it had made, or what safe operation of the machine required, Given the reasonable foreseeability of the risks created by unsafe operation of the machine, had Baden acted reasonably, it would have supplied Brambles, other owners of the crane and operators like Mr Smith, information about the modifications and what safe operation of the crane required.
130In evidence was the correspondence between Baden and Liebherr and the documents annexed to experts' reports, I earlier referred to. They showed that after the accident, Liebherr's advice was that the crane was safe to operate 'providing that the operator adheres to the instruction in the operator's manual.' There were no relevant instructions in the original crane operator's manual. Liebherr was presumably referring to the document, part of which was annexed to Mr Frost's report. On the evidence, inadequate as that information was, it was not supplied by Baden.
131Mr Smith's evidence was that he used the operator's manual as a reference document. He had never read it in its entirety. There was no suggestion that Mr Hicks had referred him to it. Had Mr Hicks or Mr Smith looked to the original manual provided in the crane, to understand the operation of the dolly switch, it could not have assisted them. To the contrary, it would have told them the switch had to do with air-conditioning.
132It follows that it is not surprising that when instructed in the operation of the crane by Mr Hicks, Mr Smith was not referred to the manual in relation to the dolly switch operation. The manual did not deal with that switch and could have been of no assistance to anyone who had read it. The instruction he received gave him no understanding of the operation of the switch or how safe operation of the crane depended entirely on him remembering to activate it, before the crane was driven.
133While Baden did lead expert evidence, as did Brambles, no expert expressed the view that on the information available to Baden, given the nature of the work it had undertaken, that Baden could not have been aware of the risk which resulted from the modification it had made. To the contrary, the expert evidence was that the shearing of the rods caused by the failure to release the brake, was an intended feature, designed to protect the crane from certain damage.
134Baden produced the modification Brambles desired, which permitted the crane to be transported by road, without disassembly. In doing so Baden had a duty to warn of any risks its modifications introduced, particularly of the inordinate risk of the crane collapsing, which had been created by those modifications. That it did not have sufficient information from Liebherr to understand the nature of the risk it had created, was, in my view not established. As discussed in McPhersons Ltd , given the work it undertook, Baden had reason to know of the risk and to warn of its creation.
135Baden had a duty to operators of the modified crane, such as Mr Smith, given the modifications it had undertaken. The operational change which those modifications made to this machine was very significant. Baden accepted that new dangers which had not previously existed were thereby created. I am unable to accept that those dangers were not apparent to Baden, from the nature of the work it had undertaken on the crane.
136Baden plainly knew what modifications it had made and how the crane operated, both beforehand and afterwards. This was a very substantial modification, to a very large, sophisticated and expensive piece of equipment, permitting it to be driven on the road, without being disassembled. Baden must have tested the modifications it had made, in order to ensure that they were operating correctly, on its case as Liebherr had designed, so that it could be safely driven and operated.
137There can be no question that Baden was also aware that the modifications it had made did not include any mechanical warning being given to a driver, that the dolly switch had not been activated, before the crane was driven off. There was also no mechanical warning given when the crane was damaged, if driven without the brake first being released. As a matter of logic, in the absence of such warning, as the experts explained, safe operation of the modified crane depended entirely on operator memory, to ensure that the switch was activated, before the crane was driven; there being no technical reminder to activate the switch.
138Having actual knowledge of the modifications made and how the crane thereafter operated, that a duty fell upon Baden to provide information about what safe operation required and to warn of the reliance being placed on operator memory, for safe operation of the crane, plainly follows.
139What was contained in the existing operator's manual, was inaccurate, once the modifications were made. There it was wrongly identified that the switch was concerned with the operation of air-conditioning. Any document which Baden gave Brambles about the operation of the modified crane, was not tendered. The inference is that no adequate information about the risk which flowed from those modifications was thereby provided, particularly in the case of any failure to activate the dolly switch, if the crane was driven even for a short distance. Even if the amended manual had been provided to Brambles, on the basis of the page annexed to Mr Frost's report, that document did not identify the risk or the consequences of a failure to engage the switch, or the reliance placed on operator memory.
140On the evidence it must have been apparent to Baden that adequate information was necessary to be provided to Brambles and operators of the crane, as to the result of the modifications it had undertaken, in order to ensure the safe operation of the crane. If Baden had any doubt that it fully understood what it had done, by its modification of the machine, it ought to have found out from Liebherr, in order to meet its duty to users of the modified crane, and Brambles. On the evidence such information would have been available.
141Support for the case Baden advanced was also said to be found in Erwin , where it was submitted that the Court of Appeal had taken the view that manufacturers were entitled to assume that their vehicles would be properly maintained. By analogy, it was argued that Liebherr and Baden were entitled to assume that an experienced crane operator would turn on the dolly switch, before driving the crane. I am not able to accept the analogy.
142Erwin was a case where proceedings were brought against the manufacturer of a truck, which the appellant had acquired second hand from a dealer in 1999. It had been manufactured in 1989. When acquired it had travelled over one million kilometres. It crashed in 2002, as the result of the failure of the steering mechanism. The appellant had maintained the truck, but had never undertaken preventative maintenance, nor had anyone else serviced, maintained or inspected the steering mechanism.
143It was concluded that no negligence had been established. The cause of the failure of the mechanism was the result of a later serious mistake made by a specialist dealer in trucks, in adjusting a bolt to the required torque and then the appellant's egregious failure over a period of three and a half years, to undertake basic maintenance in defiance of the manufacturer's direction. It was observed at [111] - [112]:
"111 When the warning of McHugh J in Dovuro v Wilkins about the dangers of using hindsight to find negligence is borne in mind, it is difficult to disagree with the primary Judge's assessment that the risk was not shown to be otherwise than insignificant and that the appellant had not established that a reasonable manufacturer/designer in the respondent's position would have taken one or more of the precautions identified by the appellant when designing the steering system for the Truck. Manufacturers are not necessarily entitled to assume that purchasers or users of their products will invariably follow instructions or act in a prudent and sensible manner. But for this failure of the steering system to occur, there had to be two independent and serious departures from the standards of conduct reasonably to be expected by the manufacturer of the Truck. The first was the failure to adjust the pinch bolt to the prescribed torque in 1999. This was an apparently serious mistake committed not by an owner-operator attempting his or her own maintenance, but by a specialist dealer in trucks. The second consisted of the appellant's egregious failure, over a period of three and a half years and hundreds of thousands of kilometres of driving the Truck, to undertake basic maintenance of the steering system in defiance of the manufacturer's directions.
112 In these circumstances, it cannot be said that the primary Judge was wrong in concluding that the respondent did not breach the duty of care it owed to the plaintiff."
144It is apparent that this is an entirely different case. Baden was not entitled to assume that all operators of the crane would invariably follow instructions to activate the switch before the crane was driven, particularly when the operator's manual provided no relevant information about the modifications made to the crane, the risk which they had created, or that safe operation of the crane depended on operator memory. Catastrophic failure of this machine could result from inadvertent failure to release the brake mechanism for even a short distance, at a slight turn. Mr Smith's oversight on the morning of the accident simply cannot be perceived as an 'egregious failure', of the kind dealt with in Erwin. To the contrary, it was an oversight easily made by even a careful experienced operator, one swiftly identified and remedied. Absent any knowledge that catastrophic damage had already occurred to the machine, that the crane was operated without Mr Smith first checking that it had not been damaged, was not failure of a kind with which Erwin was concerned.
145The crane was not a piece of equipment intended to be driven by any operator, like an ordinary person drives a car. It was a highly specialised piece of equipment, which was only intended to be driven and operated by trained crane operators, in order to drive on the road to a job and then to operate it, in order to lift massive weights at building construction sites and other places, throughout industry. The design of the crane was such that a failure to engage the dolly switch before the crane was driven even a short distance, was likely to cause catastrophic failure of the crane when operated.
146Unquestionably, Baden was entitled to assume that Brambles or the owners of the crane would properly maintain the machine and would employ competent, properly trained operators. The problem which emerged with the crane's operation had nothing to do with maintenance, or a failure to employ a competent operator, but with inadequate training of the operators, in part as the result of Baden's failure to warn of the reliance being placed on operator memory, to ensure safe operation of the crane.
147Given the modifications Baden had made, which resulted in safe operation of the machine resting entirely on operator memory, it is unquestionable that adequate information had to be given to operators, to alert them to what safe operation required and the risks which flowed from inadvertent failure to engage the dolly switch. In the absence of any mechanical warning mechanism in the crane, account had to be taken by Baden of the possibility that an operator might inadvertently forget to activate the switch, before the crane was driven. Operators had to be trained to ensure, in that eventuality, that the dowel rods were checked for damage, before operating the machine.
148In the circumstances, Baden could not assume that the crane would never be damaged, as the result of inadvertent failure to activate the switch. There was unquestionably a duty to warn Brambles, other owners of the crane and operators such as Mr Smith of the risk which its modifications had created and to provide adequate information about what safe operation of the modified crane required.
Breach
149It was finally conceded for Baden that if the evidence established that it knew, or ought to have known, that if the brake was not released, the rods would shear if the crane was driven, it had to take that into consideration in the steps which it took, given the catastrophic harm which could result. It was argued to be relevant, however, that no evidence had been called, as to what a reasonable repairer in its position would have known about the risk of the dowel rods shearing. The plaintiff bore the onus of proof.
150It was not accepted that as a matter of logic, given the nature of the crane and what the modifications achieved, that it was obvious that the rods would shear, from the force applied to them, if the brake was not released before the crane was driven. The question had to be determined on the basis of what was known before the accident occurred, not with the benefit of hindsight. There was no suggestion that the rods, while thin, were not fit for their intended purpose. They had been tested by WorkCover. Further, the evidence of Mr Williams in his report was that:
"Q27 On average, how often did the plaintiff transport the crane between the date in the answer to the above question and the date of the accident?
A. The plaintiff was the main driver of the crane from about early 2002 the date of the accident 3 November 2003.
He would have driven the crane at least a hundred times.
COMMENT. In my opinion any operator who had driven a particular crane at least a hundred times would be extremely familiar with its characteristics and its operation and I would consider and expect him/her to be quite capable of operating it in a proper and safe manner in accordance with the manufacturers instructions."
151Mr Williams assumed that the operator's manual was deficient, but was still of the view that Mr Smith had been given adequate instructions from Mr Hicks. I am unable to accept that opinion, or the submissions advanced for Baden. On the evidence, given the modification work it had undertaken, it seems to me, that a reasonable person in the position of Baden ought to have warned that if the brake was not released, the rods would shear if the crane was driven. At the least, it had to warn that safe operation of the crane depended entirely on operator memory. Baden breached this duty knowing that there was no mechanical warning given with the operation of the crane, of either the need to release the brake, or what would occur if the brake was not released.
152Such information was not provided by the operator's manual being amended, or otherwise. The failure to either provide such information, or some mechanical reminder that the switch had to be engaged before the crane was driven, leads inevitably to the conclusion that Baden breached the duty it owed to Mr Smith.
153As a result of Baden's breach of its duty, the instructions given to Mr Smith in operation of the crane, were entirely inadequate. The instructions were consistent with Baden having failed to provide essential information and warning about the risks it had created when it modified the crane; which ought reasonably to have been provided. Given the work it had undertaken on the crane, in failing to convey the information necessary to ensure safe operation of the modified machine, to Brambles, other owners of the crane and those who had to operate it, Baden breached its duty of care.
154No-one has sought to join Liebherr, an obvious party to the proceedings. Having in mind the correspondence from Liebherr after the accident in relation to the operating instructions it had provided and the evidence that no such instructions were supplied by Baden, that it failed to provide operators with necessary information, must be accepted. The necessary inference from the case Baden advanced, was that it must have tested the modifications it had made, in order to ensure that they had been undertaken in accordance with Liebherr's specifications and that they worked as intended, permitting safe operation of the crane. Baden must have conducted its tests in the context of whatever instructions and information Liebherr had supplied it, however, it called no evidence to explain what it knew about the modifications it had undertaken or the instructions and information it had received.
155There can be no question that it was reasonably foreseeable that a failure to warn of the risks created by the modifications, particularly of the consequences of failing to activate the toggle switch to release the brake, before the crane was driven, might put the operator and others at serious risk of injury. Inadvertent failure to activate the switch could not be excluded, in the absence of any mechanical warning of the need to do so. In that event, absent any information or warning of the need to check that the crane had not been damaged, so that a catastrophic collapse would result, if it was operated, without activating the switch, the risk of serious injury to which operators such as Mr Smith were exposed, was foreseeable and indeed obvious. By failing to provide such information and warning, Baden breached its duty to Mr Smith and the owners of the crane.
Causation
156Causation must also be proven by Mr Smith. It is to be considered in light of the provisions of s 5D of the Civil Liability Act , which provides:
"5D General principles
(1) A determination that negligence caused particular harm comprises the following elements:
(a) that the negligence was a necessary condition of the occurrence of the harm ( factual causation ), and
(b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused ( scope of liability ).
(2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.
(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent:
(a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and
(b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest.
(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party."
157In Woolworths Ltd v Strong [2010] NSWCA 282 it was observed at [48]:
"Now, apart from the "exceptional case" that section 5D(2) recognises, section 5D(1) sets out what must be established to conclude that negligence caused particular harm. That emerges from the words "comprises the following elements" in the chapeau to section 5D(1). "Material contribution", and notions of increase in risk, have no role to play in section 5D(1). It well may be that many actions or omissions that the common law would have recognised as making a material contribution to the harm that a plaintiff suffered will fall within section 5D(1), but that does not alter the fact that the concepts of material contribution and increase in risk have no role to play in deciding whether section 5D(1) is satisfied in any particular case."
158In Zanner v Zanner [2010] NSWCA 343, Allsop P observed at [11]:
"The requirement to follow s 5D is clear. What its statutory content is and the extent of any continuity with developing common law concepts awaits judicial elucidation. In Woolworth's Limited v Strong [2010] NSWCA 282 at [48] Campbell JA (with whom Handley AJA and Harrison J agreed) said that s 5D(1) excluded notions of "material contribution" and increase in risk. To the extent that his Honour was referring only to factors or circumstances from which a negative "but for" answer was given, so much is clear. However, the notion of cause at common law can incorporate "materially contributed to" in a way which would satisfy the "but for" test. Some factors which are only contributing factors can give a positive "but for" answer. Both the driver who goes through the red light and the driver with whom he collides who is not paying attention contribute to the accident. If either episode of neglect had not occurred the accident would not have occurred. The facts of Henville v Walker [2001] HCA 52; 206 CLR 459 provide another example. However, material contributions that have been taken to be causes in the past (notwithstanding failure to pass the "but for" test) such as in Bonnington Castings Ltd v Wardlaw [1956] AC 613 are taken up by s 5D(2) which, though referring to "an exceptional case", is to be assessed "in accordance with established principle"."
159The evidence I have referred to does not leave room for doubt that factual causation was established against Baden. It made the modifications which resulted in the risk that the crane would collapse, if driven without the switch first being activated. It did not warn of the risk, or provide information either as to how safe operation of the crane depended on operator memory, that is remembering to activate the switch, before driving the crane; or that failure to do so could result in catastrophic damage to the crane. That risk materialised on the day of the accident.
160It follows that the 'factual causation' discussed in Adeels Palace Pty Ltd v Moubarak; Adeels Palace Pty Ltd v Bou Najem [2009] HCA 48; (2009) 239 CLR 420 was here established (see at [41] - [57]). On the evidence it was more probable than not, that but for Baden's failures, the crane would not have collapsed as it did on the day of the accident and that Mr Smith would not have been injured. It is also apparent that Baden's failures were ' a necessary condition of the occurrence of the harm' which Mr Smith suffered, in circumstances where it is appropriate for the scope of its liability to extend to the harm it so clearly caused. That harm was entirely foreseeable. The damage to the crane was the direct result of Mr Smith's failure to activate the switch, in circumstances where he had not been given any warning that such a failure, even during the brief period that he drove the crane, would cause this massive crane to collapse without warning, when operated. The circumstances are such that it can only be concluded that a reasonable person in Baden's position, would have given the information and warning necessary about the risks its modification to the machine had created.
161Given the evidence of Mr Smith's capacity, skills and experience as a crane driver and his attitude to safety requirements, about which he was extensively cross-examined, I am satisfied that had Baden supplied the necessary information about the modifications it had made to the crane, what its safe operation required and how operator memory to activate the switch was relied on, to avoid catastrophic damage to the crane, the accident would not have occurred.
162In the circumstances, responsibility for the harm its actions and failures caused Mr Smith, must rest with Baden. It is appropriate for the scope of its liability to extend to the harm it caused by its acts and omissions.