Wilke v Astra Pharmaceuticals P/L & Anor

Apellant: S Norton COUNSEL : Respondent 1: T Hale SC / P Sibtain Respondent 2: M Williams SC / W Culkoff Cross Defendant: R Seton Appellant: Warren Webb Solicitor SOLICITORS : Respondent 1: Minter Ellison Respondent 2: Sparke Helmore Cross Defendant: Hunt & Hunt CATCHWORDS : Tort - negligence - injury - where injured party was an independent contractor engaged by another independent contractor to conduct building work - duty of care owed by occupier - duty of care owed by independent contractor - appeal against first respondent dismissed - appeal against second respondent allowed. CASES CITED: Stevens v Brodribb Sawmilling Co Pty Limited (1986) 160 CLR 16 DECISION : 1. Appeal against verdict and judgment in favour of the first defendant dismissed with costs; 2. Appeal against verdict and judgment in favour of the second defendant allowed; 3. In lieu of the verdict and judgment in favour of the second defendant, substitute a verdict and judgment in favour of the plaintiff in the sum of $425,409.00; 4. Order that the second defendant pay the plaintiff's costs below and of the appeal (including the costs enforceable to Order 1), the second defendant to have a Certificate under the Suitors Fund Act; 5. Cross-appeal dismissed with costs.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

Friday, 11 May 2001 WILKE v ASTRA PHARMACEUTICALS PTY LIMITED & ANOR FACTS

The appellant, Mr W, fell from a ceiling onto a concrete floor whilst working at the premises of the first respondent, Astra Pharmaceuticals Pty Limited. He suffered injuries to the left scaphoid. Astra had engaged Rondal Pty Limited, the second respondent, as an independent contractor to conduct building alterations on their factory. Rondal in turn engaged Mr W's private company, again as an independent contractor, to obtain his services as an electrician. The trial judge held that neither of the respondents owed the appellant a duty of care and that in any case, neither of them were negligent in relation to the accident. The appellant appealed both findings against both respondents.

HELD per Meagher JA (Foster AJA & Grove J agreeing): (i) The first respondent was not in breach of its duty of care. Its only duty was to use reasonable skill in engaging an apparently competent contractor, which it did.

(ii) The second respondent had an obligation to provide a safe system of work for the appellant. Its failure to take any steps to see that the appellant was protected from falling constitutes negligence.

Per Grove J: The second respondent's pleadings on contributory negligence and volenti non fit injuria should not be determined in its favour.

Per Meagher JA (Foster AJA agreeing): (iii) Damages for future economic loss should be increased to $193,609.

Per Grove J (dissenting): Damages for future economic loss should be increased, but only to $138,788.

ORDERS 1 Appeal against verdict and judgment in favour of the first respondent dismissed with costs. 2 Appeal against verdict and judgment in favour of the second respondent allowed. 3 In lieu of the verdict and judgment in favour of the second respondent, substitute a verdict and judgment in favour of the appellant in the sum of $425,409. 4 Order that the second respondent pay the plaintiff's costs below and of the appeal (including the costs enforceable to Order 1), the second respondent to have a certificate under the Suitors Fund Act. 5 Cross-appeal dismissed with costs.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MEAGHER JA FOSTER AJA GROVE J Friday, 11 May 2001

1 MEAGHER JA: This is an appeal by a disappointed plaintiff who failed to obtain a verdict in a trial before Master Harrison. The plaintiff was a skilled electrician. 2 The plaintiff fell about 4 metres from a ceiling onto a concrete floor whilst working at the premises of the first respondent, Astra Pharmaceuticals Pty Limited (Astra), at 10 Khartoum Road, North Ryde (which we were informed is a suburb of Sydney). He was working at great speed, as Christmas was approaching, although on reduced hours (only 12 hours a day). 3 Astra is a company which manufactures pills. Each year at Christmas time its factory would close for a number of weeks to enable building alterations to take place. These alterations were often significant, and this was the case in December 1992. The alterations in that year involved the removal of walls and doors and the re-routing of air conditioning. These alterations necessarily resulted in alterations to the ceiling of the building. 4 On 24 December 1992 the plaintiff, Mr Wilke, was working on the ceiling. He was installing cabling around an air conditioning duct. The ceiling normally had joists running from wall to wall, about 2 feet apart. Perpendicularly to these ran trimmers, lengths of wood whose function it was to join the joists to each other. Both the trimmers and the joists were two inches across and four inches in depth. Above the maze of joists and trimmers were flat sheets of plywood, on which it was usually safe to walk. Sometimes - indeed often - the joists had to be cut, in which event each cut part would be nailed to a new trimmer. 5 Exactly how Mr Wilke met his fate is unclear. Nobody observed the cause of the fall. But either he was kneeling on a joist, and his foot slipped off it, or, alternatively he was kneeling on a trimmer which could not take his weight (although that was hardly possible). In any event, a co-worker, Mr Baldwin, opined that for Mr Wilke to be safe he should have used a plank to kneel on, or lie on. Nobody suggested this was impossible, but it was contended that it would have added to the time of the job. Instead of a plank, the re-instalment of part of the plywood, which had been removed, would have sufficed. 6 Mr Wilke's injuries were to the left scaphoid, but, whilst serious enough, were not as catastrophic as they might have been. No thanks to the defendants, his back was not broken. 7 Both defendants, the two respondents to this appeal, argued strenuously that neither of them were in any way negligent, and indeed that neither owed Mr Wilke any duty. The Master acceded to their submissions. She held that Mr Wilke had nobody but himself to blame for his misfortune. I must say that, at first blanch, this strikes me as more than a little odd. For a manager (to use a neutral term) to expect a workman to do his job on a narrow beam twelve feet above a concrete floor in a hurry and for extended hours without having some obligation to see that the workman is in some way protected from falling is to indulge in an extreme form of Gradgrindism. 8 I say that "manager" is a neutral term, because this is no employer-employee relationship at any point. Astra was the occupier of the premises; it did not employ Rondal Pty Limited (Rondal); it as principal engaged Rondal, the second defendant and second respondent, as an independent contractor; Rondal described itself as a specialist in "Construction Management Factory Maintenance"; Rondal in turn engaged, but did not employ, Mr Wilke's private company in order to obtain his services as an electrician. One gains the impression that in the building game one always uses independent contractors, not employees, in the (I hope, vain) belief that the statutory safeguards relating to work safety will no longer apply. 9 There was no written contract between Astra and Rondal. The contract between these parties consisted of a simple oral acceptance by Astra of a quotation from Rondal "for the demolition, building works and services to carry out the alteration work to the Khartoum Road address as per recent discussion". There were no plans drawn up. The plaintiff described the operation as "organised chaos". 10 Rondal, soi-disant experts in "construction management", was controlled by two gentlemen called Ron and Dale. They employed a manager, called Norm Fritter. They also employed an innominate engineer. None of these four gentlemen seem to have been in evidence on the day of the accident, and none of them gave testimony before Master Harrison. 11 In these circumstances, I cannot imagine a clearer case of negligence against Rondal Pty Limited. It was in precisely the same situation as the principal in Stevens v Brodribb Sawmilling Co Pty Limited (1986) 160 CLR 16. In that case, Mason J at 21 said: "While individual fellers, sniggers and truck drivers may have been responsible for their own safety with regard to carrying out their own functions, they had little choice but to rely on the care and skill of Brodribb in the arrangements which it made for the disposition of the work, and on the care and skill of the persons engaged by Brodribb in the execution of the work. The interdependence of the activities carried out in the forest, the need for co-ordination by Brodribb of those activities and the distinct risk of personal injury to those engaged in the operations, called for the prescription and provision of a safe system by Brodribb. Omission to prescribe and provide such a system would expose the workers to an obvious risk of injury. Although the obligation to provide a safe system of work has been regarded as one attaching to an employer, there is no reason why it should be so confined. If an entrepreneur engages independent contractors to do work which might as readily be done by employees in circumstances where there is a risk to them of injury arising from the nature of the work and where there is a need for him to give directions as to when and where the work is to be done and to co-ordinate the various activities, he has an obligation to prescribe a safe system of work. The fact that they are not employees, or that he does not retain a right to control them in the manner in which they carry out their work, should not affect the existence of an obligation to prescribe a safe system. Brodribb's ability to prescribe such a system was not affected by its inability to direct the contractors as to how they should operate their machines."

These words, substituting "Rondal" for "Brodribb", apply precisely to the present case. Thus, I think Mr Wilke's appeal against Rondal should succeed. 12 The same does not apply to the appeal against Astra. Astra submitted, and I think the submission should be accepted, that its only duty was to use reasonable skill in engaging an apparently competent contractor. This it did. 13 As to damages, Miss Norton expressed satisfaction with the Master's quantification of damage (a course which the Master undertook in case her findings on liability were disturbed) except on the question of future economic loss. The Master found that Mr Wilke, but for the accident, would have in the future earned $800 to $900 per week. His Group Certificate shows that his wage for the year ended 30 June 1999 showed him earning the sum of $571 net per week. On these figures the future loss component of his damages should be, Miss Norton correctly submitted, $193,609 - not $69,394 as found by Master Harrison. Interest should be paid on past loss of wages. 14 The amount of damages, therefore, to which Mr Wilke is entitled is $425,409, made up of: General Damages $ 80,000 Interest Thereon $ 5,200 Past Loss of Wages $ 97,855 Interest on past wages $ 27,138 Out of Pocket Expenses $ 19,807 Future Treatment $ 1,800 Future Economic Loss $193,609

TOTAL $425,409 15 The orders which I propose are as follows: 1. Appeal against verdict and judgment in favour of the first defendant dismissed with costs. 2. Appeal against verdict and judgment in favour of the second defendant allowed. 3. In lieu of the verdict and judgment in favour of the second defendant, substitute a verdict and judgment in favour of the plaintiff in the sum of $425,409. 4. Order that the second defendant pay the plaintiff's costs below and of the appeal (including the costs enforceable to Order 1), the second defendant to have a Certificate under the Suitors Fund Act. 5. Cross-appeal dismissed with costs. 16 FOSTER AJA: I agree with Meagher JA. 17 GROVE J: I have had the opportunity to read the judgment of Meagher JA in draft form. I agree with the conclusion on the issue of liability but I have a slightly different view on some minor detail and an aspect of damage and I can express it briefly, gratefully adopting his Honour's analysis of the essential issues. 18 My understanding of the evidence is that the first respondent's (Astra) manufacturing operations were shut down for a workforce vacation as is commonly the case in many industries near the end of the year. The cessation of manufacture presented an opportunity for structural changes to the premises including building works such as those in which the appellant participated. The extravagant daily hours and pressure for speed was inferentially provoked by a desire to resume manufacture as soon as the shutdown period expired and thus avoid any inconvenience in trying to operate during the works or perhaps have the workforce relatively idle whilst they were being completed. 19 Of course, urgency would presumably reflect the desires of Astra but the second respondent (Rondal) - self described specialists in "Construction Management Factory Maintenance" - were the coordinators of activity and should have fulfilled the need to give directions as to when and where the work was actually to be done. To engage in disposition of work to subcontractors, without plans, the presence of supervisors, engineers or the like for work at height on insecure foothold, was so plainly lacking in due care on the part of Rondal towards those engaged in the work that elaboration would be surplusage. 20 I do not share the impression that the frequent use of independent contractors to do tasks traditionally performed by employees is inspired by hope to avoid responsibility to comply with statutory safeguards but my impression is rather that it derives from a fashionable belief that it is "economically rational" management practice so to do. Any view of mine as to the validity of such a belief is irrelevant. 21 However, as Meagher JA has concluded and I respectfully agree, Astra has discharged its relevant duty by using reasonable care and skill in engaging Rondal. The evidence overwhelmingly demonstrates the negligence of the latter. Contributory negligence and volenti non fit injuria were pleaded. In the light of the evidence, although these issues were not required to be dealt with by the learned Master following her determination on liability, neither should be determined in favour of Rondal. The cross appeal by Astra should also be dismissed. It was observed by counsel that Rondal did not appeal against the dismissal of the cross claim brought by it. 22 I turn to damages. The items of general damages ($80,000); interest on portion thereof ($5,200); out of pocket expenses ($19,807); and future treatment ($1,800) have ceased to be controversial. It is also agreed that the appellant has received subvention by way of worker's compensation benefit totalling $38,135. 23 Economic loss to date of trial in accordance with the Master's provisional findings can be calculated at $97,855, but she also indicated that "interest due" would be awarded. The only relevant amelioration of the differential loss which the lastmentioned figure represents appears to be the worker's compensation payments. Assuming that the out of pockets are within the agreed sum interest would accrue on $79,527. This figure is calculated as follows: ($97,855 - ($38,135 - $19,807) = $79,527). The guide rates in Schedule J to the Rules have fluctuated during the period of six and half years between tort and assessment but they average approximately 10.5 percent. This should be halved to allow for the gradual accrual of loss during that period and hence $27,138 can be calculated as the appropriate award for interest on the particular item. 24 The Master selected $100 per week as an estimate of ongoing loss of earning capacity for guidance purposes. Meagher JA accepted a submission on behalf of the appellant which capitalized in the conventional fashion the difference between projected earnings by the appellant and his current earnings. In my opinion that differential does not reflect aspects of the evidence to which the appellant himself testified. Included were his intentions to alter his business or trade activity. I would also pay heed to the unlikelihood that he would continue in the long term to work at the extremely pressured rate which he was undertaking at the time of the accident and which no doubt was reflected in his earnings. For those reasons I consider that the adopted guide factor of $279 per week was too high, whilst on the other hand I consider the figure of $100 selected by the Master as manifestly too low. However the loss of ability to conduct business as a contract electrician should not be ignored and I would select a figure of $200 per week as a guide and apply the same method as used in the submission accepted by Meagher JA ($200 x 816.4 less 15%). I would therefore include $138,788 in the award for future economic loss. 25 The ingredients of damages which I would award are: General damages $80,000 Interest on part thereof $5,200 Past Economic Loss $97,855 Interest on past Economic Loss $27,138 Out of pocket expenses $19,807 Future treatment $1,800 Future economic loss $138,788 Total: $370,588

I agree with the orders proposed by Meagher JA save that I would order judgment for the plaintiff for $370,588 in lieu of $425,409 which he has proposed. ******

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