Todorovic v Moussa

Court of Appeal (NSW)|2005-02-17|Before: Mason P, Tobias JA

CITATION: Todorovic v Moussa [2005] NSWCA 100

JUDGMENT OF: Mason P at 1; Tobias JA at 2; Brownie AJA at 75

DECISION: (1) Appeal allowed; (2) Order that the verdict, judgment and orders made by Taylor DCJ on 8 October 2003 be set aside and in lieu thereof, there be a verdict and judgment for the appellant against the respondents in the amount of $118,529.87 to take effect from 8 October 2003; (3) Order that the respondents pay the appellant's costs of both trials at first instance including all costs associated with the first trial on an indemnity basis; (4) Order that the respondents pay the appellant's costs of the summons for leave to appeal and of the appeal but, if otherwise qualified, to have a certificate under the Suitor's Fund Act 1951.

CATCHWORDS: INDUSTRIAL LAW - Construction safety legislation - Liability of head contractor - Head contractor on construction site delegated to sub-contractor part of construction work - Sub-contractor fell from ladder put into place by head contractor - Whether head contractor owed sub-contractor statutory duty of providing safe means of access to place where sub-contractor required to work - Whether head contractor engaged in "building work", and therefore "construction work", for purposes of statutory duty or whether head contractor had fully delegated this work to sub-contractor - Construction Safety Regulations 1950 Reg 73 - DAMAGES - Whether assessment of general damages manifestly inadequate - Future economic loss - Assessment of loss of earning capacity - COSTS - Whether costs should be awarded on indemnity basis.

Construction Safety Act 1912 LEGISLATION CITED: Construction Safety Regulations 1950

H C Buckman & Son Pty Limited v Flanagan (1974) 133 CLR 422 Maggiotto Building Concepts Pty Limited v Gordon [2001] NSWCA 65 Bhambra v Roet [2003] NSWCA 393 CASES CITED: Kolodziejczyk v Grandview Pty Limited [2002] NSWCA 267 Multiplex Constructions (NSW) Pty Limited v Lopez [2004] NSWCA 319 Moran v McMahon (1985) 3 NSWLR 700 State of New South Wales v Moss (2000) 54 NSWLR 536

Dragan Todorovic PARTIES: Charlie Moussa Charlie Moussa & Sons Constructions Pty Limited

A: B Toomey QC COUNSEL: R: Ian Harrison SC

A: Milena Mijatovich, Fairfield SOLICITORS: R: Riley Gray Spencer Lawyers, Sydney

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40931/03 DC 8419/02

MASON P TOBIAS JA BROWNIE A-JA

Monday 11 April 2005 DRAGAN TODOROVIC v CHARLIE MOUSSA & ANOR Judgment 1 MASON P: I agree with Tobias JA. 2 TOBIAS JA: This appeal primarily involves, and not for the first time, the ticklish issue of whether, when a head contractor on a construction site delegates part of the construction work to a sub-contractor, the former still owes to the latter the statutory duty referred to in Regulation 73 of the Construction Safety Regulations 1950 made under the Construction Safety Act 1912 (the Act). 3 In the present case, the appellant was a gyprocker or dry wall plasterer who had contracted with the second respondent to undertake work on a site at West Pennant Hills owned by the first respondent (Mr Moussa). The latter was a licensed builder and a director of the second respondent. The building work being undertaken upon the site was the construction of three two-storey dwellings. 4 On 16 August 1994, whilst descending a ladder which Mr Moussa had placed within the frame of one of the dwellings being erected to enable access by tradesmen from the ground to the first floor, the appellant was injured when the ladder slipped and he fell some three metres to the concrete floor injuring various parts of his body but particularly his lower back. 5 The appellant sued the respondents in the District Court of New South Wales for damages claiming that the respondents were negligent and/or in breach of their statutory duty under, inter alia, Regulation 73. The primary judge, Taylor DCJ, found that the respondents did not owe a duty of care to the appellant or, if they did, that they were not in breach of that duty. Further, his Honour found that the respondents were not under any statutory duty to the appellant, as they were not relevantly carrying out any "construction work" within the meaning of Regulation 73. He accordingly entered a verdict and judgment in their favour. It is against that decision that the appellant appeals to this Court.

The relevant facts 6 As I have noted, Mr Moussa was a licensed builder. He carried on business in the name of the second respondent, he and his wife being directors of that company. In May/June 1994, he was developing three blocks of land in West Pennant Hills, which he owned and upon which he intended to erect three two-storey dwelling houses. 7 In evidence given by Mr Moussa at an earlier trial and tendered by the appellant before the primary judge, Mr Moussa agreed that he was the developer and manager of the project, that his role was to supervise the job and that he was on site every day for that purpose. 8 At the time the appellant was engaged as a sub-contractor to fix plasterboard to the walls and ceilings of the proposed buildings, the building works were in their last phase in that the timber frame or structure of the buildings were complete and the bricklayers, electricians, plumbers and roof tilers were in the process of carrying out their respective trades. 9 In late July 1994 the appellant met Mr Moussa and, ultimately, contracted to perform the fixing of plasterboards to the internal walls and ceilings of the structures. The primary judge found that there was no discussion between the appellant and Mr Moussa with respect to the provision of access between the ground floor and the first floor of each structure, it being common ground that that access had been provided by Mr Moussa in placing a four metre high ladder in the area of the proposed stairwell between the ground and first floor. All tradesmen wishing to gain access between the floors used this ladder. So too did Mr Moussa who performed a supervisory role. 10 The appellant and three employees commenced work upon the site. They began working on the first floor of the first structure, fixing plasterboard to walls and ceilings. They gained access to the area where they were working by way of the ladder which had been provided by Mr Moussa. 11 At about 4.00pm on 16 August 1994, the appellant went to the site in order to pick up one of his employees who had requested a lift. He parked his motor vehicle outside the site and observed that his employee was working on the first floor of the structure. He climbed the ladder which was located in the proposed stairwell. His employee asked the appellant to assist him in transporting his tools to the ground floor. At this time, the ladder protruded above the first floor level by approximately 700mm. The appellant turned around and placed his right foot on one of the top rungs of the ladder. He then placed his left foot on one of the rungs when the ladder slipped and he fell approximately three metres to the concrete floor below sustaining a number of injuries. 12 The primary judge found that the appellant was not equipped with ladders as he did not require them for his work - he only used trestles and planks. In any event, he had not been requested by Mr Moussa to provide his own means of access from the ground to the first floor of the structure: this had been provided for him and his employees by Mr Moussa. 13 The evidence also established that Mr Moussa removed the ladder every evening when work finished and replaced it every morning before work commenced. He purported to secure the ladder by jamming it between two pieces of timber. However, he accepted in evidence given by him at the earlier trial and tendered by the appellant in the second trial, that proper practice to prevent the ladder slipping was to tie it off with ropes or chains. Although appreciating that only that form of securing would make the ladder safe from slipping as the rope or chain would hold it in position, Mr Moussa's tendered evidence was that he declined to take that course as he only had one ladder and was moving it between each of the three structures under construction.

The findings of the primary judge on the application of Regulation 73 14 It is convenient to deal with the issue of breach of Regulation 73 before considering any question of common law negligence. 15 It appears to have been accepted before the primary judge, and was certainly common ground before this Court, that if the respondents were under the statutory duty referred to in Regulation 73 that duty was breached. In particular, there was a breach of Regulation 73(2). 16 Regulation 73 was relevantly in the following terms: "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, … (2) provide and maintain safe means of access to every place at which any person has to work at any time." 17 The expression "construction work" is defined in Section 3(1) of the Act to mean, inter alia, "building work" which expression is, in turn, relevantly defined to mean: "(a) work in constructing, erecting, installing, adding to, altering, repairing, equipping, finishing, painting, cleaning, …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, …" 18 The primary judge determined that the appellant's claim based on breach of Regulation 73 failed at the outset as the respondents were not "actually carrying out the gyprocking work". His Honour reached this conclusion applying the well-known statement of Barwick CJ (with whom McTiernan and Stephen JJ agreed in separate judgments) in H C Buckman & Son Pty Limited v Flanagan (1974) 133 CLR 422, where the Chief Justice said (at 427): "For my part, I perceive that the Act and regulations purpose to place particular responsibilities upon the person actually carrying out the particular building work, that is to say, doing it himself personally, or by his servants or by those whose acts are in law his acts. This seems to me an eminently practical and workable scheme of legislation. By imposing obligations on such persons in respect of the several sections of the total building enterprise the safety of all will be secured. I am unable to accept the view that the word 'agents' comprises the independent contractors who are themselves carrying out the building work which they have contracted to do." 19 The Chief Justice further observed (at 428): "I agree with the majority in Davey v Skinner [1961] SR (NSW) 648 at 651 when their Honours said: 'Regulation 73 does not impose its obligations on an employer as such nor does it limit its safety measures to employees as such. Nor does it, for example, refer to a contractor as the person obliged to conform to its provisions. In broad terms it directs its provisions to any person who carries out any building work … The obligation rests on the active person, that is the one who carries out the work in actual fact.' I agree with the majority, and am unable to accept the contrary view of the minority judgment in that case that reg. 73 is directed to the principal contractor or building owner. Building work is so defined that it does not necessarily refer to the total work to be performed in a building, but the definition is suitably worded to enable each section of work being done, eg as 'painting, cleaning and sign writing', being regarded as building work so that the obligation to take the specific safety measures are imposed on that person who is carrying on or carrying out that particular work. It is not consistent, in my opinion, with that conclusion to include independent contractors who are carrying out particular building work as 'agents' of the building owner or contractor so as to impose on him the obligation which clearly will fall upon the independent contractors vis-à-vis the building work they are actually doing." 20 In light of the above passages, the primary judge was not prepared to accept that the respondents relevantly carried out building work or "by the provision of a ladder, [were] relevantly involved in equipping the gyprocking work."

Was the primary judge correct in his conclusion that the respondents did not owe the statutory duty imposed by Regulation 73? 21 The appellant submitted that the primary judge's finding of no statutory duty was due to his finding that the appellant was engaged in a specific construction task (that is, the gyprocking work) as a consequence whereof the respondents did not owe him any statutory duty whilst he was carrying out that work. He submitted that his Honour's approach was far too narrow an application of the opening words of Regulation 73 and was contrary to the decision of this Court in Maggiotto Building Concepts Pty Limited v Gordon [2001] NSWCA 65 which, so it was contended, was indistinguishable from the present case. 22 It was thus submitted that at the time the appellant fell from the ladder supplied and put in place by Mr Moussa, the respondents remained engaged in "building work" and, therefore, "construction work" for the purposes of Regulation 73. Mr Moussa was the "developer and manager of the project" and was on site every day in a supervisory capacity. In providing the ladder for the purpose of the appellant gaining access to the first floor of the structure, the respondents must have assumed the responsibility of discharging the statutory duty of providing and maintaining safe means of access to the place where the appellant was required to work. 23 The respondents maintained that they were not engaged in "building work" as the appellant was carrying out the relevant work (it having been delegated to him by Mr Moussa). Although it was accepted that the Chief Justice in Buckman was not ruling out the possibility that a head contractor could never be doing building work at the same time as a sub-contractor, especially where the former maintained a supervisory or interventionist role in the work of the sub-contractor, it was submitted that in the present case the respondents had delegated the whole of the relevant task to the appellant so that their role was neither interventionist nor active but miniscule. Reliance was placed upon the decision of Santow JA in Bhambra v Roet [2003] NSWCA 393 at [38]-[49]. It was contended that the role of Mr Moussa in the present case was similar to the role of Mr and Mrs Bhambra in that case. 24 In further support of the foregoing contentions, the respondents submitted that all that was required of them was to get tradesmen to the site and that they were not involved in supervising their activities. In particular, there was no requirement to co-ordinate the gyprocking work upon which the appellant was engaged as an independent sub-contractor. In reality, the respondents had nothing to contribute to that task; their task being no more than organising various trades to come to the site from time to time. Their submission was that their role did not encompass an intimate involvement in the work of the appellant but was tangential or incidental thereto. Accordingly, there was no error in the primary judge rejecting the appellant's claim of breach of Regulation 73. 25 There has been some discussion in the authorities as to whether there is any inconsistency between the views expressed by the Chief Justice in the leading majority judgment in Buckman and those of Mason and Jacobs JJ who were in the minority in the same case. In Maggiotto, Ipp A-JA, with whom Meagher and Stein JJA agreed, observed in passages which justify their quotation in full: "20. Mason J explained that the legislation confers no private right upon a sub-contractor against the head contractor 'when the doing of the work which attracts the performance of the duty has been wholly delegated to the sub-contractor so as to impose the same duty on him and he does the work in breach of the duty in the absence of fault on the part of the builder'. Where, however, the head contractor participates in the faulty construction work, a different result will follow. Thus, Mason J said (at 444): 'From this material a jury could conclude that the appellant's breach of par. 17 did not solely arise because the respondent was in breach of the same provision; on the contrary a jury might well conclude that the appellants participated by act or approval in reducing the stability of the column without taking any step prescribed by par. 17'. 21. Jacobs J made the same point. His Honour observed (at 446) that: 'Where the exposure to accident risk occurs … as a result of the employee or sub-contractor having failed to perform the necessary acts performance of which has been properly delegated to him, then the exposure to accident risk of that employee or sub-contractor alone is not a breach of the statutory duty …'

Jacobs J went on to say (at 447): 'It will generally be found in the case of an employee and it will often be found in the case of a sub-contractor that, though performance of the acts necessary to performance of some statutory duties may properly be delegated to them, the performance of other acts and the compliance with other statutory duties will remain the direct obligation of the employer or the head contractor as the case may be. Whether in any particular case this is so will depend upon the circumstances'. 22. Earlier, Jacobs J (at 446) dealt with the situation where a person carrying out building work delegates work to a sub-contractor but still has a statutory duty not to expose that sub-contractor to accident risk. His Honour said:

'When an employee is instructed to do building work in circumstances where the employer has a statutory duty to do acts or things in order to ensure their safety when engaged on the building work there must be more than an implication that they will take any necessary preliminary steps in order to ensure that the work which they are instructed to do is done in conditions where under the statutory duty of the employer is fulfilled. An employee must be particularly directed to do the specific work necessary in order to fulfil the employer's statutory duty and must be provided with all material, assistance and supervision necessary to ensure his ability to comply with the statutory duty. A sub-contractor must be under a particular contractual obligation expressed or necessarily to be implied from the nature of the work to carry out the preliminary work necessary to ensure that when he and those under him are engaged in the building work they will be so engaged in conditions which satisfy the statutory duty'. 23 In my opinion, the reasons for judgment of Mason and Jacobs JJ are not inconsistent with those of Barwick CJ. They can readily be reconciled. 24 The essential point made by Barwick CJ was that whether a person was obliged to comply with the regulation depended upon whether that person was actually carrying out building work: see Hetherington v Mirvac Pty Limited [1999] NSWSC 443 per Wood CJ at CL. 25 Mason J held that where a person participates, whether by act or approval, in the building work carried on by the independent contractor to whom the work has been delegated, that person is duty bound by reg 73. There is nothing in this proposition that departs from anything said by Barwick CJ. 26 Jacobs J pointed out that, where a head contractor instructs some other person to carry out part of the building work, circumstances may arise that require preliminary steps to be taken to ensure that the work which the other person is instructed to do can be done safely. The issue then arises as to the responsibility for those preliminary steps. It must be a question of fact in each case as to whether the other person has been instructed to perform the preliminary steps as well as the work, the subject of the express instructions. 27 According to Jacobs J, the head contractor will only be regarded as having instructed the other person to perform the preliminary steps if that person was particularly directed to do the specific work 'necessary in order to fulfil the [head contractor's] statutory duty'. That is to say, according to his Honour, the head contractor will only avoid having a statutory duty in regard to the preliminary steps if the head contractor particularly directs the other person to take those steps. Additionally, the other person 'must be provided with all material, assistance and supervision necessary' to ensure compliance with reg 73. 28 These remarks have to be seen in the context of the statement by Barwick CJ that under the regulations a head contractor owes no duty thereunder in respect of work delegated by it. Jacobs J was merely saying that a court will be slow to hold that instructions to another person to carry out specific work impliedly include instructions to perform the preliminary steps that may be required to make that work safe. His Honour observed that where the express instructions do not cover the preliminary steps, the head contractor may continue to owe statutory duties in regard to the work involved in those steps. Nothing in this approach departs from that of Barwick CJ. 29 It is not unusual for a head contractor to delegate a specific task to a sub-contractor and to say nothing about the ancillary work or preliminary steps necessary to ensure the safety of those who will be working on the delegated task. In that event, the task of doing the work necessary to complete the ancillary work or preliminary steps may well not be within the work delegated. In such a situation, were the head contractor not to be duty bound to comply with reg 73 in regard to the ancillary work or preliminary steps, there would be a gap in the security net that the regulation is intended to provide. The safety of all involved in the total building enterprise would then not be secured. The strictures expressed by Jacobs J are designed to prevent such a gap from opening. To ensure that the policy of the legislation, as enunciated by Barwick CJ, is fulfilled, the approach of Jacobs J should be adopted." 26 In Kolodziejczyk v Grandview Pty Limited [2002] NSWCA 267, Heydon JA with whom Ipp A-JA agreed, cited with approval the above passages from the judgment of Ipp A-JA in Maggiotto. His Honour also cited (at [71]) the passages of his judgment where Ipp A-JA had found that Maggiotto, the head contractor, had been involved in a great deal of co-ordination and supervision of the different trades required to complete the building work on the site. Further, Maggiotto had supplied the materials necessary for the tradesmen to carry out their work. Consequently, Ipp A-JA had considered that Maggiotto was performing building work within the meaning of the definition in s 3 of the Act. Accordingly, the performance of Maggiotto's duties under Regulation 73 was not "wholly delegated" to the sub-contractor, Gordon. 27 Heydon JA (at [72]) accepted that the explanation by Ipp A-JA in Maggiotto of what was said in Buckman was an essential part of the reasoning which led to his conclusion in that case, and as Meagher and Stein JJA had agreed with him, his Honour's understanding of what the High Court decided was part of the ratio decidendi of Maggiotto that bound this Court. In my opinion it still does. 28 In Kolodziejczyk, Heydon JA rejected the submission of the plaintiff that there were factual similarities between that case and Maggiotto. One of the differences was that in Maggiotto, the head contractor supplied materials where needed by the sub-contractors whereas in Kolodziejczyk, the head contractor did not supply materials until a request was made by the sub-contractor. Accordingly, his Honour considered (at [73]) that in Maggiotto, the head contractor had an absolute obligation to ensure that materials, including the missing stairs (which would have prevented the plaintiff's fall) were in place. On the other hand, in Kolodziejczyk, the head contractor's only obligation was to supply what was asked for but not until it was asked for. 29 Again, in Kolodziejczyk the plaintiff had submitted (at [79]) that as in Maggiotto, there was a delegation by the head contractor only of specific tasks to the sub-contractor but not the ancillary work or preliminary steps necessary to ensure the safety of those working on the delegated task. That analogy was rejected by Heydon JA (at [81]) because the defendant had delegated to the sub-contractors the performance of the totality of the relevant task, namely, erecting cladding, on condition that if they judged it necessary to use scaffolding, they were to request it and the defendant would supply it. His Honour said (at [81]): "While the provision of scaffolding for carrying out part of the work is capable of being analysed as a 'preliminary step' or as 'ancillary work' necessary to ensure the safety of the [sub-contractors], the trial judge found that the actual task in the course of which the plaintiff fell did not require the use of scaffolding, but could be carried out on the ladder actually used provided the [sub-contractors] adopted the simple measures of securing it at the top and bottom."

Accordingly, the plaintiff's case failed as there was a full delegation of the relevant construction work and everything connected with it. 30 In Kolodziejczyk, Davies A-JA dissented. However, his Honour applied the principles expounded by Ipp A-JA in Maggiotto but determined that the defendant did not delegate to the plaintiff and his partner the whole of the task required by the relevant building works. In particular, his Honour (at [120]) said that, "[t]he respondent did not delegate the task specified by Regulation 73(1), the provision of safe and secure scaffolding, but retained that task for itself." 31 In Bhambra v Roet [2003] NSWCA 393, Santow JA (at [42]), with whom McColl JA and Davies A-JA agreed (the latter adding some observations of his own), distinguished Maggiotto on its facts since the appellants, as owners of the relevant site, "had nothing in reality to contribute to that task [of timber laying], his (sic) concerns being apparently more that of an owner worried about paying too much for materials." 32 Furthermore, at [44] and [47] his Honour held that neither Mr Bhambra nor his wife were head contractors but were owners who had delegated the whole task of carrying out the timberwork to the respondent. 33 It is to be noted that (at [48]) Santow JA indicated that he had difficulty reconciling what Jacobs J said in Buckman with the majority judgment of Barwick CJ. His Honour said: "There is a sense in which, with respect, the question is begged as to whether there was already a statutory duty upon the employer to erect guard rails that was then to be delegated. This is particularly when the statutory duty only arises on the occasion when a person actually carries out construction work, and necessarily falls on that person who does so. It does not fall on the person who, as head contractor, engages the sub-contractor to do it." 34 It may be noted that in Multiplex Constructions (NSW) Pty Limited v Lopez [2004] NSWCA 319, Santow JA, with whom Beazley JA agreed, observed (at [60]) that it did not "affect the application of Regulation 73(2) that there be two entities thereby rendered responsible for compliance with Regulation 73(2), namely head contractor and sub-contractor where each carries out the work in accordance with their respective roles." 35 Nevertheless, the misgivings expressed by Santow JA in Bhambra appear at odds with the remarks of Ipp A-JA in Maggiotto which, according to Heydon JA in Kolodziejczyk, bind this Court. However, for the reasons which follow, it is unnecessary to comment further upon the difficulty identified by Santow JA. 36 In the present case, not only was there no delegation by the respondents to the appellant of the task of providing a safe means of access from the ground to the first floor of the structure upon which the appellant was required to carry out the work that was in fact delegated to him, but also the respondent, Mr Moussa, as head contractor actually carried out that work himself. 37 There can be no doubt, and it was not contested, that the provision by Mr Moussa of the ladder to enable tradesmen to gain access from the ground to the first floor of the structure in order to enable them to carry out their delegated tasks, and without which they would not have been able to do so, was "building work" and, therefore, "construction work". As Santow JA pointed out in the passage of his judgment in Bhambra cited in [33] above, the statutory duty only arises on the occasion when a person actually carries out construction work and necessarily falls on that person who does so. In the present case, it was the respondents who actually carried out the work of providing a means of access by the placing of the ladder in the proposed stairwell of the structure. The appellant was never engaged to carry out that task. Accordingly, it must follow that the statutory duty fell upon the respondents, when providing a means of access from the ground to the upper floor of the structure where the appellant was required to work, to do so in a manner which was safe. 38 I thus return to and respectfully adopt and adapt what Ipp A-JA said in Maggiotto in [29] of his judgment recorded above (at [25]). The respondents delegated to the appellant the specific task of fixing plasterboard to the internal walls and ceilings of the structure. They did not delegate to him the ancillary or preliminary steps of providing and maintaining a means of access between the ground and first floor of the structure to enable the appellant to gain access to and from the first floor where he was required to carry out his delegated task. In fact, the respondents undertook the work necessary to perform that ancillary or preliminary step. In so doing they were bound to comply with Regulation 73(2) to ensure that the means of access so provided was safe. In that duty, they failed. 39 Accordingly, in my opinion the primary judge erred when he held that the respondents were not relevantly carrying out building work because the provision of the ladder was not the gyprocking work which only the appellant, and not the respondent, was actually carrying out. What his Honour, with respect, has overlooked is that the erection of the ladder for the purpose of providing a means of access for tradesmen to enable them to perform their delegated tasks was itself building work in respect of which the statutory duty referred to in Regulation 73 applied. It follows that the appellant was entitled to succeed in the proceedings against the respondents on the basis of breach of statutory duty. 40 In view of my conclusion on the Regulation 73 issue, it becomes unnecessary to consider the far more vexing question of whether, in the circumstances, the respondents owed the appellant a common law duty of care and/or if it did, whether that duty was breached.

Assessment of damages 41 In accordance with proper practice, and notwithstanding that he found in favour of the respondents on the issue of liability, the primary judge made various findings on the issue of damages. Relevantly for present purposes, he assessed general damages at $35,000. The appellant submits that that assessment was manifestly inadequate. He also complains about the manner in which his Honour dealt with the issue of future economic loss. In particular, he submits that his Honour erred in assessing the diminution of the appellant's earning capacity as "equivalent to six months as a gyprock installer".

General Damages 42 With respect to the injury to the appellant's lower back, the primary judge concluded that "[t]he medical evidence discloses that the plaintiff did not suffer any fracture but has a soft tissue injury to his spine with some persisting symptoms … The plaintiff complains of continuing back pain. He said in evidence that he is able to shovel dirt into wheelbarrows and carry out similar activities. Physiotherapy has assisted him. I am satisfied that the continuing symptoms that the plaintiff describes are attributable to the accident and preclude him from doing the hard work 'on the tools' described earlier in this judgment. His business is of course doing well and he is not suffering any day to day loss. He has however suffered diminution of his earning capacity." 43 The appellant's evidence was that prior to the accident, he neither drank nor smoked but he liked sport, soccer, basketball, tennis and going out. Although he did not participate in these sports competitively, he did so socially and he enjoyed them. He said that he worked hard and therefore needed something to do for pleasure. His evidence, which I understand was not challenged, was that since the accident he has been unable to pursue those activities. 44 The appellant also gave evidence of continuing lower back pain from the time of the accident to the time of trial. He said that the pain was less in the morning but increased with greater movement, in particular with bending and straightening up. The appellant saw Dr Mark Sheridan, Neurosurgeon, in July 2002 and March 2003. He gave a history of persistent pain since the accident. There was damage to his L4-5 disc which Dr Sheridan considered entirely consistent with his injuries and symptoms. He had persistent lower back and interscapular pain. He felt that physiotherapy was helping and that his condition had stabilised. 45 By mid-2002 the appellant was concerned that his back pain was worse. An MRI scan revealed that the L4-5 disc damage was as per the MRI scan in 1997. The later scan, however, did reveal a 2cm ovoid lesion at the L2 vertebra which had the appearance of a tumour but was unrelated to the injuries sustained in the accident. Dr Sheridan removed the tumour and, on follow up, the wound had healed well and there were no neurological signs. However, his lower back pain persisted. When Dr Sheridan saw him in March 2003 he was of the view that his symptoms relating to his lower back were consistent with the injury sustained in his fall. He concluded that the appellant would have permanent restrictions and be restricted in the nature of work he could do as a consequence of the injury, particularly any work relating to lifting, bending and other heavy physical work. He considered that the appellant had suffered a 30% permanent impairment of his lower back. 46 In my opinion, the appellant sustained a significant injury to his lower back when he fell from the ladder provided for him by the respondents. As at the time of trial, he had suffered significant pain and discomfort for some 8½ years and there was nothing to suggest that, even with physiotherapy and although his back had stabilised, the pain would not continue to a greater or lesser degree. Furthermore, since the accident he has been unable to pursue the types of sporting activities which he enjoyed prior to the accident. 47 I am mindful of the restrictions upon the intervention by an appellate court on an assessment by a judge of general damages. However, this Court is entitled to intervene where it is convinced that the amount awarded was so very small as to make it, in its view, an entirely erroneous estimate of the damages to which the appellant is entitled: Moran v McMahon (1985) 3 NSWLR 700 at 717. In the circumstances, I am of the opinion that the primary judge's assessment of the appellant's general damages in the sum of $35,000 was below the lowest end of the range which ought to have resulted from a proper exercise of his Honour's discretion. In my opinion, therefore, the primary judge's discretion in assessing general damages miscarried and should be set aside. 48 It is appropriate, therefore, that this Court should reassess the appellant's general damages. The appellant submitted at the hearing that the amount assessed by the primary judge should be doubled. However, in his written supplementary submissions dealing with the issue of future economic loss, he seeks general damages in the amount of $55,000. The respondents did not suggest that such a sum was excessive should this Court be of the view that the primary judge's discretion miscarried. In my opinion general damages in the amount of $55,000 is a fair and appropriate assessment of the impact which the appellant's injuries have had on his physical and social well-being. I would substitute that amount for that determined by his Honour.

Future economic loss 49 Relevant to this issue are the following further facts. The appellant was aged 29 at the date of the accident and, at the time of trial was aged 38. He was born in the former Yugoslavia and completed high school in or about 1984. After a year of compulsory military service he commenced the study of electrical engineering. He ceased those studies after approximately one year due to economic problems in Yugoslavia at the time. 50 The appellant migrated to Australia in 1988 and began working in his uncle's business as a gyprock fixer. After visiting Yugoslavia in July 1989 and returning to Australia in November, he continued as an employee engaging in the same type of work as he had performed for his uncle. In 1990 he again worked for his uncle fixing suspended ceilings and partitions. In 1992-3 he passed a trade examination and underwent a business management course as a result of which he obtained a licence as a drywall plasterer. In February 1993 he set up his own business "Tosho Ceilings" in partnership with his wife. She did the administrative work associated with the business and he worked on site with two or three others as well as undertaking quotations for jobs. He incorporated the business in September 1994. 51 The site work undertaken by the appellant was heavy and involved lifting panels for walls above his head and shoulders and then screwing them to a wall or ceiling. The panels weighed from 20-60 kilos. 52 Some weeks after the accident the appellant returned to his business but had continuing problems with his back which caused him to change the way he worked. Instead of carrying out the work of a tradesman with tools, he restricted himself as much as he could to quoting for work and the supervision and organisation of jobs. 53 Over the ensuing years the appellant has continued to have back problems, the nature of which I have detailed above. He has avoided doing the heavier work associated with gyprocking and dry wall plastering. Fortunately, the turnover of the business has increased significantly with time. However, the primary judge found that the company has not always been busy and the appellant has been restricted by the condition of his back from looking for work for himself as a tradesman "on the tools". 54 As the primary judge concluded in the passage from his reasons which I have quoted in [42] above, the appellant's business is not suffering any day to day loss but the fact that he cannot partake in work "on the tools" has resulted in him suffering a diminution of his earning capacity. Doing the best he could on the material before him, his Honour assessed that diminution as equivalent to six months earnings as a gyprock installer. Regrettably his Honour did not quantify that loss. Although the parties had, at the time of the hearing of the appeal, assumed that they would reach agreement on this issue, that has not occurred with the consequence that supplementary written submissions have been filed and the Court now requested to resolve the issue for itself. 55 The appellant submits that the primary judge fell into error in assessing his loss or diminution of his earning capacity as the equivalent of six months earnings as a gyprock installer especially as there was no evidence before him of those earnings. It is conceded by the appellant that his personal and company tax returns from 1993/94 to 2001/02 provide no assistance in this regard as they do not establish the income that the appellant would have earned had he not been injured. Accordingly, it is submitted that this Court should make its own assessment of the damages to which the appellant is entitled for loss of earning capacity: State of New South Wales v Moss (2000) 54 NSWLR 536. In that case Heydon JA, with whom, on this issue, Mason P and Handley JA agreed, observed (at 559 [87]): "In short, where earning capacity has unquestionably been reduced but its extent is difficult to assess, even though no precise evidence of relevant earning rates is tendered, it is not open to the court to abandon the task and the want of evidence does not necessarily result in non-recovery of damages…The task of the trier of fact is to form a discretionary judgment by reference to not wholly determinate criteria within fairly wide parameters. Though the trier of fact in arriving at the discretionary judgment must achieve satisfaction that a fair award is being made, since what is involved is not the finding of historical facts on a balance of probabilities, but the assessment of the value of a chance, it is appropriate to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility." 56 The appellant submits that it is clear that he will suffer some continuing loss of income as a result of the diminution in his earning capacity. There is a real risk, so it is submitted, that in the future he will lose income because he cannot work "on the tools" as a tradesman when his company is not so busy as to require his services in the performance of that work. Furthermore, in the event that the appellant's company was unable to continue in business whether because of the inability of the appellant to carry out heavy work or for other reasons, the appellant would, so it is submitted, be in an extremely vulnerable position so far as being able to obtain work on the open labour market given the restrictions on his activities which the injury to his lower back has caused. 57 Accordingly, it is submitted that damages in the order of $50,000 would "be no more than modest compensation for the appellant's permanent diminution in earning capacity". 58 The respondents draw attention to the following. Firstly, in his Further Amended Part 9 rule 27 Statement of Particulars filed in court on 15 May 1999, the appellant claimed future loss of income estimated at $300 per week net after tax. Although he also claimed in those particulars that he was unable to earn the average adult weekly earnings as identified by the Australian Bureau of Statistics, it was submitted that the appellant should be confined to an estimated loss of $300 net per week. 59 Secondly, as I have already noted, the primary judge assessed the appellant's diminution in earning capacity as equivalent to six months earnings as a gyprock installer. The respondents observe that Ground 3 of the Notice of Appeal only asserts that his Honour erred in failing to calculate the damages in respect of the diminution of the appellant's earning capacity. They contend that that ground does not purport to challenge the finding of his Honour that the appellant's loss was the equivalent of six months earnings as a gyprock installer. Accordingly, it is submitted that it is not now open to the appellant to do so as a consequence whereof his claim should be determined at the rate of $300 per week for a period of six months, a total of $7,800. 60 Thirdly, the respondents submit that the appellant's claim in the sum of $50,000 is not only inconsistent with his claim as particularised in his Part 9 rule 27 particulars, but also with the schedule of damages which was provided by him to the primary judge and which claimed diminution in earning capacity in the sum of $45,000. 61 In his written submissions in the Orange Book, the appellant referred to the primary judge's finding that the appellant had suffered a diminution of earning capacity equivalent to six months earnings as a gyprock installer but had not quantified that loss. "Hopefully", the appellant suggested, "the parties can agree on a number". The respondent concurred with this sentiment. However, the parties were unable to reach agreement as a consequence whereof supplementary written submissions were filed and, as I have observed, the Court was requested to make its own assessment of the appellant's loss under this head of damage. 62 I would not accede to the respondents' submission that the appellant is limited to a claim for $7,800 being $300 per week for six months. In the first place the appellant's Part 9 rule 27 particularisation of his future loss of income (estimated at $300 per week net after tax) was not limited to a period of six months. The assumption in the particulars is that that was a net loss per week for the rest of the appellant's working life subject, of course, to the usual vicissitudes. Furthermore, the appellant claimed that he was unable to earn average adult weekly earnings as identified by the Australian Bureau of Statistics. It is not clear whether that was advanced as an alternative to the $300 per week but in any event there is no suggestion that there was evidence as to what those earnings were. 63 In the second place, although it is true that Ground of Appeal 3 only challenges the primary judge's failure to "calculate" damages, the ground seems to me to be wide enough to include an inferential challenge to his Honour's finding that that diminution was equivalent to six months earnings as a gyprock installer. 64 In the third place, as the respondents themselves point out in their supplementary written submissions, at the trial the appellant claimed damages under this head in the sum of $45,000 which makes it clear that the appellant was not limiting his loss to $300 per week for six months. Finally, there is no suggestion by the respondents that they would be prejudiced by the appellant now seeking to depart from his particulars or a literal reading of Ground of Appeal 3, if departure there be. 65 The primary judge gives no reasons as to why he assessed the diminution in the appellant's earning capacity as equivalent to six months earnings as a gyprock installer. Immediately prior to that finding he had assessed the appellant's general damages in the sum of $35,000 based upon the same injuries and their sequelae as those which he must have taken into account in assessing diminution in earning capacity. I have found that his Honour's assessment of general damages was manifestly inadequate. For the same reasons, I consider that his Honour's assessment of the appellant's diminution in earning capacity as equivalent to six months earnings as a gyprock installer (which, as the respondents submit amounts to $7,800) as equally inadequate and erroneous. 66 In the foregoing circumstances, this Court must assess for itself an amount by which the appellant's earning capacity has been diminished by his injuries and which is, as Heydon JA pointed out in Moss, an assessment of the value of a chance which may or may not come to fruition. There are clearly a number of possible events which could result in the appellant's business failing so that he is required to seek work outside the building industry. Those events may well be outside the appellant's control, for example, an economic recession in the building industry or the inability to obtain appropriately skilled labour. 67 Given that the appellant was only 38 at the time of trial and therefore has a further working life of approximately 27 years before him subject to the usual vicissitudes, I see no reason to differ from the amount of $45,000 claimed by the appellant under this head of damage before the primary judge. In all the circumstances, that figure seems to me to be a fair estimate of the value of the chance that over the next 27 years the appellant will be unable (because of his injuries) to earn what he might have earned had he not been subjected to the injuries he sustained as a result of the respondents' breach of statutory duty.

Costs 68 I have already referred to the fact that there was a prior trial of this matter. It occurred in 2000. In those proceedings the then trial judge found for the respondents on the basis of an adverse finding in respect of the appellant's credit and upon his acceptance of an account of the accident given by Mr Moussa which amounted to fraud on the appellant's part. This Court ([2001] NSWCA 419) unanimously held that the trial judge's adverse finding in respect of the appellant's credit was not supported by the evidence and, by majority, that Mr Moussa's account of the accident accepted by the trial judge was glaringly improbable. The Court ordered that the matter be remitted to the District Court for rehearing and that the costs of the first trial abide the result of the second trial. 69 As I have observed, Mr Moussa's case in the first trial was that the appellant had never been injured, that the ladder had not slipped and that, in effect, his injuries were fraudulent. As the trial judge accepted Mr Moussa's evidence, it not only followed that there was no common law duty of care but also that there was no breach of statutory duty as the appellant would, with respect to that head of liability, fail on the issue of causation. 70 At the second trial, Mr Moussa did not give evidence. No suggestion was made to the appellant that his claim was in any way fraudulent. In fact, it is fair to say that his credit was not attacked. In these circumstances, the appellant submits that not only should he have the general costs of both trials but that he should have the costs of the first trial on an indemnity basis. I agree. It is plain that the whole basis of the defence to the appellant's claim in the first trial and upon which the respondents succeeded was properly abandoned at the second trial. If the matter had been conducted at the first trial as it was at the second trial, then of course there would only have been one trial. The result is that the costs of the first trial have been wasted. The appellant should have his costs of that trial on an indemnity basis. 71 The appellant also submitted that he should have his costs of the second trial on an indemnity basis. He sought to justify this submission by contending that the issue upon which he has succeeded on this appeal, namely, that the respondents were under the statutory duty imposed by Regulation 73, could have been raised by notice of contention in the first trial and/or the appeal but was not. 72 I would not accede to this submission. Even if the statutory duty issue had been successfully raised by notice of contention before this Court on the first appeal, there was still the outstanding causation issue based on the appellant's alleged fraudulent conduct to be determined (and which was not abandoned until the second trial) with the consequence that that trial could not have been avoided.

Conclusion 73 Past out of pocket expenses have been agreed at $3,468 and the primary judge found that damages for future out of pocket expenses should be assessed at $5,000 and there is no challenge to that figure. The appellant is also entitled to interest on general damages in the amount of $55,000 at the rate of 2% per annum from 16 August 1994 to the date of the primary judge's judgment on 8 October 2003. This amounts to $10,061.87. 74 Accordingly, I would propose the following orders: (1) Appeal allowed; (2) Order that the verdict, judgment and orders made by Taylor DCJ on 8 October 2003 be set aside and in lieu thereof, there be a verdict and judgment for the appellant against the respondents in the amount of $118,529.87 to take effect from 8 October 2003; (3) Order that the respondents pay the appellant's costs of both trials at first instance including all costs associated with the first trial on an indemnity basis; (4) Order that the respondents pay the appellant's costs of the summons for leave to appeal and of the appeal but, if otherwise qualified, to have a certificate under the Suitor's Fund Act 1951. 75 BROWNIE A-JA: I agree with Tobias JA.

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Cases Cited (9)