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Building site Head contractor: liability to and for the employees of others March 18, 2020

Hallmark Construction Pty Ltd v Brett Harford; Copeland Building Services Pty Ltd v Hallmark Construction Pty Ltd; Hallmark Construction Pty Ltd v Harford Transport Pty Ltd [2020] NSWCA 41

On 24 May 2013, before dawn, Brett Harford was delivering supplies to a building site in Homebush West. On arrival, the builder’s supervisor, Mr Isaia, directed him where to unload. In clearing the ground by removing an empty pallet, Mr Harford fell into a 4 metre deep stormwater retention pit, suffering severe injuries.

The principal contractor on the building site was Hallmark Construction Pty Ltd (“Hallmark”). Hallmark had subcontracted the construction of a group of townhouses to Copeland Building Services Pty Ltd (“Copeland”). Copeland had ordered supplies, which were to be delivered to the site by Harford Transport Pty Ltd. Mr Harford was the principal and sole employee of Harford Transport. Copeland’s supervisor on site, Mr Isaia, was employed by a subcontractor of Copeland, ANM Building Services Pty Ltd, (“ANM”).

Mr Harford sued Hallmark in negligence. Hallmark alleged contributory negligence on the part of Mr Harford and cross-claimed against Harford Transport, Copeland and ANM seeking contribution. ANM had been deregistered and the claim against it was defended by its insurers.

Only liability was at issue at trial, with damages being agreed in an amount of $1.6 million. Prior to obtaining a judgment for damages, Mr Harford had been paid workers’ compensation in an amount of some $750,000. Harford Transport sought to recover that amount as a statutory entitlement under the Worker Compensation Act 1987 (NSW) from Hallmark as a tortfeasor liable for Mr Harford’s injuries. Hallmark also cross-claimed for contribution in respect of this claim.

On 17 April 2019, Fagan J gave judgment for Mr Harford against Hallmark and Copeland, with liability apportioned equally between them. The claims against ANM and Harford Transport were dismissed and Mr Harford was found not to have been contributorily negligent. In the separate proceedings to recover compensation payments Harford Transport obtained judgment against Hallmark, for which Copeland was found to be liable on a cross-claim, liability being equally apportioned.

Both Hallmark and Copeland appealed from these orders in each matter. A total of four appeals were heard together, challenging the primary judge’s findings that:

(i)   Mr Harford was not contributorily negligent;

(ii)   Harford Transport had not breached its duty to Mr Harford to provide a safe system of work;

(iii)   Copeland was directly liable in negligence;

(iv)   Copeland was vicariously liable for the negligence of Mr Isaia;

(v)   ANM was not vicariously liable for the negligence of Mr Isaia, and

(vi)   the equal apportionment of responsibility between Hallmark and Copeland.

The trial judge’s orders were upheld, subject to an adjustment of the apportionment.

The Court (Basten JA; Meagher JA, Emmett AJA agreeing) held:

In relation to (i):

1. The trial judge did not err in applying s 5R of the Civil Liability Act 2002 (NSW) in relation to contributory negligence. This provision requires having regard to the harm in fact suffered in an accident, not a risk of personal injury generally: [27], [110], [120], [122].

2.   Section 5R(2) requires the court to have regard to the care taken by “a reasonable person in the position of” the claimant, knowing what the claimant knew or ought to have known at the time: [30], [110], [122]. There was no basis to conclude that a reasonable person in Mr Harford’s shoes would have known or ought to have known that the wooden pallet was covering a retention pit: [31]-[33], [110], [120], [122].

In relation to (ii):

3.   Pursuant to 5B Civil Liability Act 2002 (NSW) requires standing back from known events and asking, in a prospective, objective way, what a reasonable employer would have done in the circumstances: [39], [110], and [122].

Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28, referred to

4.   The trial judge may have erred by conflating what steps Mr Harford took for his own safety with the steps which should have been taken by a reasonable employer in devising a safe system of work, but applying s 5B the duty to provide a safe system of care was satisfied in this case: [40], [48], [110], [120], [122].

In relation to (iii):

5.   There was no error in finding that Copeland was a joint occupier of the building site with Hallmark and owed a duty of care to take reasonable steps for the safety of persons coming onto the site at its request. A reasonable person in Copeland’s position was required to take precautions against the risk of harm arising from the uncovered penetration into the retention pit: [63]-[65], [110], [119], [122].

Kevan v Commissioner for Railways [1972] 2 NSWLR 710, referred to.

In relation to (iv):

6.   The judge erred in attributing direct liability through agency to Copeland because of Mr Isaia’s conduct, as Mr Isaia did not have authority to bind Copeland: [75], [110]. The trial judge, however, was correct in the alternative finding that Mr Isaia was a part of Copeland’s workforce and under its control, so that Copeland was vicariously liable for Mr Isaia’s conduct: [81], [89]-[90], [110], [119], [122].

Hollis v Vabu Pty Ltd (2001) 207 CLR 21; [2001] HCA 44; Sweeney v Boylan (2006) 226 CLR 161; [2006] HCA 19; Day v The Ocean Beach Hotel Shellharbour Pty Ltd (2013) 85 NSWLR 335; [2013] NSWCA 250; Colonial Mutual Life Assurance Society Ltd v Producers & Citizens Co-operative Assurance Company of Australia Ltd (1931) 46 CLR 41; Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500, applied.

Mersey Docks and Harbour Board v Coggins & Griffith (Liverpool), Ltd [1947] AC 1, distinguished.

In relation to (v):

7.   The trial judge was correct to apply the single attribution of vicariously liability principle, so that if Copeland was vicariously liable for Mr Isaia’s conduct, ANM was not, despite being his employer: [90], [110], [122].

Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626; [1986] HCA 34 applied.

In relation to (vi):

8.   In apportioning liability between Copeland and Hallmark, the immediate level of control available to Copeland and the responsibility of Copeland for the presence of Mr Harford on site near the unguarded retention pit required a greater allocation of responsibility to Copeland than the equal allocation accepted by the trial judge: [93], [110], [121]. Held that Copeland bore 75% of the responsibility for Mr Harford’s injury: [94], [110], [122].

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