Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Value Constructions Pty Ltd v Badra [2024] NSWCA 181 Hearing dates: 24 April 2024 Date of orders: 31 July 2024 Decision date: 31 July 2024 Before: Leeming JA at [1]; Kirk JA at [2]; Griffiths AJA at [79] Decision: (1) Appeal upheld in part. (2) The orders made by Cavanagh J on 12 December 2023 are varied as follows: (a) In order 1, the judgment sum is $839,869.04; (b) In order 2, the judgment sum is $619,925.00; (c) In order 3, the judgment sum is $309,562.50. (3) If the parties do not agree on appropriate orders as to costs then: (a) The appellant may file and serve written submissions of up to 3 pages on the issue, along with any evidence relied on, by 5pm on 7 August 2024. (b) The respondents may file and serve written submissions of up to 3 pages on the issue, along with any evidence relied on, by 5pm on 13 August 2024. (c) The appellant may file and serve any reply submissions, of no more than 2 pages, by 5pm on 16 August 2024. Catchwords: NEGLIGENCE — Workplace injury — Where worker fell in a stormwater drain on construction site — Whether accident occurred as alleged — Competing testimony of witnesses — Whether director of appellant knew or ought to have know that the drain was uncovered — Director knew the drain was uncovered NEGLIGENCE — Duty of care — Duty of occupier to employee of subcontractor — Whether it was reasonable for occupier to assume that that a competent contractor would have addressed the risk — Occupier owes a duty to use reasonable care to avoid physical injury to individuals on site — Occupier was negligent NEGLIGENCE — CLA s 5D — Whether the negligence was a necessary condition of the occurrence of the harm — Proximate cause irrelevant WORKERS COMPENSATION — Common law remedies — Workers Compensation Act 1987 (NSW) ss 151A and 151Z — Damages payable by a non-employer — Proper operation of s 151Z(2) — Consensual adjustment of figures Legislation Cited: Civil Liability Act 2002 (NSW), s 5D Workers Compensation Act 1987 (NSW) ss 151A, 151Z Workers Compensation Regulation 2016 (NSW), Sch 7 Cases Cited: A V Jennings Ltd v Thomas [2004] NSWCA 309 Amaca Pty Ltd v Booth [2011] HCA 53; (2011) 246 CLR 36 Archer v Hall [1967] 1 NSWR 107 Australian Safeway Stores Pty Ltd v Zaluzna [1987] HCA 7; (1987) 162 CLR 479 Badra v Value Constructions Pty Ltd [2023] NSWSC 1307 Badra v Value Constructions Pty Ltd (No 2) [2023] NSWSC 1655 Christmas v General Cleaning Contractors Ltd [1952] 1 KB 141 Felk Industries Pty Limited v Mallet [2005] NSWCA 111 General Cleaning Contractors Ltd v Christmas [1953] AC 180 Gould v Vaggelas [1984] HCA 68; (1984) 157 CLR 215 Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 Leighton Contractors Pty Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1 Pacific Steel Constructions Pty Ltd v Barahona [2009] NSWCA 406 Papatonakis v Australian Telecommunications Commission [1985] HCA 3; (1985) 156 CLR 7 Roads and Traffic Authority v Dederer [2007] HCA 42; (2007) 234 CLR 330 Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182 Sydney Water Corporation v Abramovic [2007] NSWCA 248 Synergy Scaffolding Services Proprietary Limited v Alelaimat [2023] NSWCA 213; (2023) 326 IR 289 Synergy Scaffolding Services Pty Ltd v Alelaimat (No 2) [2024] NSWCA 11 Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375 Category: Principal judgment Parties: Value Constructions Pty Ltd (Appellant) Mohamad Badra (First Respondent) MMM Cement Rendering 1 Pty Ltd (Second Respondent) Workers Compensation Nominal Insurer (Third Respondent) Representation: Counsel: J Sexton SC with J Sleight (Appellant) I Roberts SC with R Foord (First Respondent) A Combe (Second and Third Respondents) Solicitors: McMahons Lawyers (Appellant) Withstand Lawyers (First Respondent) Hicksons Lawyers (Second and Third Respondents) File Number(s): 2023 / 364755 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: [2023] NSWSC 1307 and [2023] NSWSC 1655 Date of Decision: 3 November 2023 and 12 December 2023 Before: Cavanagh J File Number(s): 2021/213328 [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment] The first respondent, Mohamad Badra, was injured whilst working at a residential construction site. He had fallen when he walked over some black plastic placed over a large open drainage hole in the floor of the garage at the site. He brought proceedings in the Supreme Court against three defendants. The first defendant – the appellant in this matter – was Value Constructions Pty Ltd, which had the management and control of the site as the builder. The second defendant was his employer, MMM Cement Rendering 1 Pty Ltd. MMM did not have the required employer's liability insurance so the Workers Compensation Nominal Insurer was joined in the proceedings below as the third defendant, and represented the second defendant in all respects. It was MMM which had covered the drainage hole with black plastic. The primary judge found that both MMM and Value were liable in negligence. On appeal by Value three issues arose: 1. whether the concealment of the hole was something of which Value knew or ought to have known such as to be in breach of its duty as occupier; 2. whether any breach by Value rendered it liable given an argument that MMM's actions, rather than Value's, were the proximate cause of the harm; 3. whether the orders made by the primary judge correctly gave effect to ss 151A and 151Z of the Workers Compensation Act 1987 (NSW) (WCA) (as to which error was conceded). As to breach 1. The first strand of Value's argument was that it was not did not breach its duty because the evidence did not that establish Mr Mourad, director of Value, knew in fact that the drainage hole was not covered by a steel grill under the black plastic. However, in the trial below Value accepted that the case came down to accepting either Mr Badra's or Mr Mourad's version of events. No plausible intermediate possibility was suggested. In this context it is apparent that his Honour did conclude that Mr Mourad knew that the drain was not covered by the grill on the morning of the accident, whether above or below the black plastic, and that he had sound reasons for so concluding: at [29]-[41]. 2. The second strand of Value's argument was that regardless of whether Mr Mourad in fact knew (or ought to have known) that the drain was uncovered on the morning of the accident, it was reasonable for him to assume that a competent contractor would have addressed the risk, and Value's duty of care as occupier did not extend to ensuring that this had been done. Value, as occupier, and MMM, as employer, did not owe the same duty of care to Mr Badra. An occupier does not, in general, have a duty to employees of an independent contractor to ensure that the contractor has a safe system of work in carrying out its activities at the site. But it is not the case that Value owed no duty of care to Mr Badra simply because he was an employee of a contractor retained by Value. An occupier owes a duty to persons coming onto the site to use reasonable care to avoid physical injury to them: [45]-[60]. Papatonakis v Australian Telecommunications Commission [1985] HCA 3; (1985) 156 CLR 7; Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1; (1986) 160 CLR 16; Archer v Hall [1967] 1 NSWR 107; Felk Industries Pty Limited v Mallet [2005] NSWCA 111; A V Jennings Ltd v Thomas [2004] NSWCA 309; Sydney Water Corporation v Abramovic [2007] NSWCA 248; Pacific Steel Constructions Pty Ltd v Barahona [2009] NSWCA 406; Christmas v General Cleaning Contractors Ltd [1952] 1 KB 141, considered. Leighton Contractors Pty Limited v Fox [2009] HCA 35; (2009) 240 CLR 1, applied. 3. The risk in this case involved the drainage hole being inadequately covered. Value admitted in its defence that it owed a duty of care to take reasonable precautions not to expose Mr Badra and others accessing the premises to a foreseeable risk of suffering not insignificant harm, which harm included falling through an inadequately covered stormwater drain/void, and against which risk a reasonable person could and would have taken precautions: [61]-[65]. The primary judge found that that risk existed, prior to and independently of the drain hole being covered by black plastic by MMM. In these circumstances Value breached its general duty of care as occupier: [66]-[68]. As to causation 4. Value argued that it was the actions taken on behalf of MMM, rather than the actions of Value, which were "the proximate cause of the harm". That is not the relevant legal test for causation in negligence. The issue under s 5D of the Civil Liability Act 2002 (NSW) (CLA) is relevantly whether the negligence was a necessary condition of the occurrence of the harm. That notion has been taken to include where the tortfeasor's negligence materially contributed to the harm even if there were other conjunctive causes, just as under the previous common law. That test was satisfied: [6]. Gould v Vaggelas [1984] HCA 68; (1984) 157 CLR 215; Amaca Pty Ltd v Booth [2011] HCA 53; (2011) 246 CLR 36; Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182; Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613; Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375, followed. As to ss 151A and 151Z 5. The primary judge addressed the specific amounts owing in a second judgment which sought to address the complexities of ss 151A and 151Z of the WCA. His Honour determined the issue prior to this Court's decision in Synergy Scaffolding Services Pty Ltd v Alelaimat (No 2) [2024] NSWCA 11. The parties agreed that in light of that subsequent decision his Honour erred in giving effect to the sections, and agreed to new calculations on this point: [69]-[76]. Synergy Scaffolding Services Proprietary Limited v Alelaimat [2023] NSWCA 213; (2023) 326 IR 289; Synergy Scaffolding Services Pty Ltd v Alelaimat (No 2) [2024] NSWCA 11, applied. JUDGMENT 1. LEEMING JA: I agree with Kirk JA. 2. KIRK JA: On 19 June 2020 the first respondent, Mohamad Badra, was injured whilst working at a residential construction site in Peakhurst, Sydney. He was injured from a fall which occurred when he walked over some black plastic placed over a large open drainage hole in the floor of the garage at the site. He brought proceedings in the Supreme Court against three defendants. The first defendant – the appellant in this matter – was Value Constructions Pty Ltd, which had the management and control of the site as the builder. The second defendant was his employer, MMM Cement Rendering 1 Pty Ltd. MMM did not have the required employer's liability insurance so the Workers Compensation Nominal Insurer (WCNI) was joined in the proceedings below as the third defendant, and represented the second defendant in all respects. These two parties are the second and third respondents in this appeal, and it is convenient simply to refer to them together as MMM. 3. The primary judge, Cavanagh J, noted that the case was not legally complex and was fought on the facts: Badra v Value Constructions Pty Ltd [2023] NSWSC 1307 (J) at [4] and [5]. There were substantially different versions of events given by the two key witnesses, being Mr Badra on the one hand and on the other Mr Mohamed Mourad, the principal of Value. Cavanagh J accepted Mr Badra's version. He found both MMM and Value liable in negligence, the latter on the basis that it (through Mr Mourad) knew or ought to have known of the danger that resulted in Mr Badra's accident. His Honour apportioned liability between Value and MMM on an equal (50%) basis. He rejected an argument of contributory negligence. 4. In a subsequent judgment which sought to take account of the complexities of ss 151A and 151Z of the Workers Compensation Act 1987 (NSW) (WCA), his Honour gave judgment for Mr Badra against Value in the sum of $806,562.50 together with costs, and judgment for Mr Badra against MMM in the sum of $440,864.29 together with costs in accordance with Sch 7 of the Workers Compensation Regulation 2016 (NSW): Badra v Value Constructions Pty Ltd (No 2) [2023] NSWSC 1655 (J2). His Honour also ordered that MMM pay half the judgment amount it owed to Mr Badra to Value on Value's cross-claim (reflecting the equal apportionment), being an amount of $220,432.14. 5. Value now appeals. It has made clear it does not challenge any finding of fact made by the primary judge. It initially had five grounds of appeal. In the end two were abandoned, one was only faintly pressed, and one was agreed between the parties. The three matters in issue were as follows: 1. The primary judge erred in finding that the appellant breached its duty to Mr Badra since the concealment of the hole was not something of which it knew or ought to have known and thus the harm was not reasonably foreseeable (ground 1). 2. The primary judge ought to have found that the conduct of MMM, and not the appellant, caused the risk of harm to eventuate. This ground was barely pressed during the hearing but not formally abandoned (ground 3). 3. The primary judge erred in applying ss 151A and 151Z of the WCA. This ground was conceded and the Court was provided with replacement orders, agreed by all the parties, to be made if the other grounds were dismissed (ground 4). 1. Ground 3 can be dispatched immediately. The nub of the point was captured in Value's written submissions in reply where it was argued that it was the actions taken on behalf of MMM, rather than the actions of Value, which were "the proximate cause of the harm". That is not the relevant legal test for causation in negligence. The issue under s 5D of the Civil Liability Act 2002 (NSW) (CLA) is relevantly whether the negligence was a necessary condition of the occurrence of the harm. That notion has been taken to include where the tortfeasor's negligence materially contributed to the harm even if there were other conjunctive causes, just as under the previous common law: Amaca Pty Ltd v Booth [2011] HCA 53; (2011) 246 CLR 36 at [70]; Strong v Woolworths Ltd [2012] HCA 5; (2012) 246 CLR 182 at [20]-[30]. It is necessary only that the relevant act or omission play some part in contributing to the loss, even if minor: Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd [2013] HCA 10; (2013) 247 CLR 613 at [45]; Gould v Vaggelas [1984] HCA 68; (1984) 157 CLR 215 at 236. It does not require that the cause be characterised as "proximate": note eg Wallace v Kam [2013] HCA 19; (2013) 250 CLR 375 at [11]. Here, if Value was negligent in the manner found by the primary judge then there can be no doubt that its negligence was a materially contributing cause of Mr Badra's injuries. Value made a vague suggestion in its written submissions that an issue "perhaps" arose as to scope of liability under s 5D(1)(b), but the argument was not developed and has no apparent merit. 2. The real matter in dispute on appeal was raised by ground 1, which itself involves two overlapping issues: whether Mr Mourad did know that the hole was uncovered underneath the black plastic; and whether Value should be held liable whether or not he did know. Before addressing those matters it is appropriate to outline the context in which they arise. Background 1. Numerous issues were in dispute below. The primary judge noted "a lack of agreement on almost everything" (J [8]). There was, for example, a substantial contest as to where and how the accident occurred, along with the extent of the harm Mr Badra had suffered. The issues on appeal are much more limited. The context of the dispute can therefore be summarised briefly (much of it taken from J [14]-[36]). 2. Mr Badra was 36 years old at the time of the accident. He was born in Lebanon, arriving in Australia in 2014. He speaks little English. He had been working for MMM, on and off, since 2018. He was employed to do cement rendering and to assist in the rendering process. 3. The construction site was comprised of two residential buildings: one facing Forest Road in Peakhurst and the other facing Iraga Avenue. Mr Mourad was building the houses for his children. At some point before the accident, MMM was engaged by Value to undertake rendering of the Iraga Avenue house. 4. Mr Badra had been working on the site since May 2020. He commonly worked with three others doing the rendering work, and these three had been present at the site on the day of the accident: Imadeddine "Emad" Zod (the owner of MMM), Osman Badour and Khedr Kamal. 5. The accident occurred on 19 June 2020. Sometime before that Value had arranged for the floor of the garage at the Iraga Avenue house to be tiled. 6. The drain in question was close to the left front corner of the garage. It was a square with sides of about 600mm. Prior to the tiling being done Mr Mourad had covered the hole with a piece of plywood which had been fastened to the floor. The tiler had not finished work around the drain. Some tiles still had to be cut to be flush with the edges of the hole so as to enable a steel collar to be placed into the drainage hole, into which in turn would be placed a steel grill which would cover the drain whilst allowing drainage. The collar and grill had been purchased by Mr Mourad before 19 June 2020 and were onsite. Mr Mourad gave evidence that he had put the grill on top of the hole, sitting on the tiles, before the date of the accident, and said that he did not remove it before the accident. 7. Mr Badra said that he had noticed the drain prior to 19 June 2020, and that it had been covered on a temporary basis by a piece of gyprock. He said that the drain was not covered completely, as he witnessed rubbish being removed from it during the construction process (as explained further below). 8. It was not in dispute that on the morning of the accident one or more of the employees of MMM (other than Mr Badra) placed black plastic sheeting over the tiles closest to the entrance to the garage in order to protect them from falling render. The black plastic covered the drain. Mr Badra said that it was Mr Zod who instructed Mr Kamal to lay the plastic sheeting. Mr Badra did not witness the plastic being put down. 9. Mr Mourad's evidence was that he had arrived on site that morning around 6:30 or 7:00am. At some stage that morning he observed the metal grill was placed on top of the black plastic above the drain. He left the Iraga Avenue site before about 11am. He was not there when the accident occurred. Even so, Mr Mourad disputed that Mr Badra had in fact fallen into the drain, based on what he claimed he had been told after the event. He claimed that if Mr Badra had fallen at all – which he disputed – it was into another hole in the dirt outside the garage. Mr Mourad claimed to know this based on what he said he heard Mr Badra telling others at the scene, what Mr Badra said to him later that day after leaving the hospital, and in light of what was recorded in various documents. Mr Mourad's version of events in that regard was rejected by the primary judge. 10. Sometime between 11:15 and 11:30am Mr Badra walked through the garage over the black plastic, stepped on the drain hole, fell and injured himself. The steel grill was not covering the hole. Mr Zod called Mr Mourad to tell him of the accident at 11:26am. Mr Zod then called an ambulance at 11:29am. Police also attended the scene around 12pm, taking some photos. Mr Mourad claimed to have returned to the site soon after the accident. 11. Two of the police photographs taken later that day show the metal grill sitting on top of the black plastic, covering the drain hole. Someone must have moved the grill into that position after the accident and before the police arrived. Mr Mourad's evidence was that when he returned to the site after the accident he saw the grill in the same position as when he had left the site that morning. 12. Mr Badra gave evidence that after the accident and before any police or ambulance officers arrived he saw Mr Zod talking on the phone to (he believed) Mr Mourad about where the steel grill was. Mr Badra then saw Mr Zod bring the grate from somewhere and place it over the plastic on top of the drain hole. 13. Mr Badra did not assert that even if the steel grill had been in place on top of the drain hole, as asserted by Mr Mourad, such loose placement would have been negligent. Rather, the fulcrum of the dispute on liability was summarised by the primary judge as follows: [31] The case put by [Value] is that the accident could not have occurred as alleged because the drain cover [ie the steel grill] was in place before the accident. The plaintiff accepts that, having regard to the case he has pursued, he cannot win if the cover was in place at the time of his accident. This is the central issue in the case. 1. None of MMM's employees were called to give evidence. Nor was any other witness called who could give evidence in relation to the state of the drainage hole and the placement of the steel grill on the day in question. In substance, the factual issue as to the placement of the grill turned on whether Mr Badra's or Mr Mourad's evidence on the point was believed. The decision of the primary judge 1. The primary judge stated that he had "considerable doubt about Mr Mourad's evidence", giving a list of reasons for why that was so (J [87]). His Honour noted that although there had been inconsistencies in the evidence of Mr Badra, two significant contemporaneous documents – a certificate of incapacity and an injury claim form – belatedly emerged at the end of the hearing which tended to support Mr Badra's version of events (J [73] and [88]-[90]). 2. His Honour relevantly made the following findings: [99] I accept the plaintiff's evidence. He walked across the garage floor, which was covered with black plastic and fell into a drain which had been covered by the plastic. There was no metal grate covering the drain at the time. One of the workers on site covered the drain with the metal grate before the police arrived and inspected the site. [100] He did not fall outside the garage either on the scaffolding or the dirt. He did not fall from the garage onto the dirt. He did not slip on the plastic. [101] The second defendant placed the plastic on the tiles on the morning of the accident. This was observed by Mr Mourad when he attended. Mr Mourad must not be telling the truth about observing the grate on top of the plastic over the drain, even assuming the accuracy of his evidence as to when he was there. [102] The first defendant's case on liability is not based on any evidence from the second defendant's employees (as they were not called) or anything observed by Mr Mourad (as he acknowledged that he was not there at the time of the accident), but on what Mr Mourad said he heard and Mr Mourad's own insistence that this is not a genuine case and he was, in effect, told that by the plaintiff when the plaintiff left the hospital. This seems like a flimsy basis to accuse the plaintiff of fabricating a story to claim compensation. [103] In the circumstances, I accept that the accident occurred as alleged. … [106] In this matter, I accept (as agreed by Mr Mourad) that the first defendant: (1) was in control of the site; (2) was generally responsible for safety on the site; and (3) was required to undertake safety checks to ensure that the condition of the site was safe for all workers, including employees of any sub-contractors. [107] As I have accepted the plaintiff's version of events, I am unable to accept that Mr Mourad is telling the truth about his observations as to the presence of the grate over the drain when he left the site (or his suggestion that everyone else had also left the site). Indeed, having regard to the lack of the usual safety documents which Mr Mourad should have kept and my general reservations about his evidence, I am unable to accept his evidence generally and particularly about his observations and practices and procedures. 1. As regards the legal liability of Value, the primary judge referred to the necessity to apply s 5B of the CLA, and reminded himself that all duties of care may be discharged by the exercise of reasonable care (at J [104]-[105]). At J [108] his Honour stated that Value was not vicariously liable for the conduct of MMM, nor was the duty of care owed by Value discharged simply by relying on MMM to ensure the safety of the work site, citing Leighton Contractors Pty Ltd v Fox [2009] HCA 35; (2009) 240 CLR 1 at [20] and [28], along with Stevens v Brodribb Sawmilling Company Pty Ltd [1986] HCA 1; (1986) 160 CLR 16. 2. His Honour then held Value liable for the following reasons: [109] The first defendant was both the occupier of the site and the builder which organised the work. As accepted by Mr Mourad, the first defendant was responsible for the safety on site and was required to inspect the site to ensure that it was safe for all workers coming onto the site. This necessarily included the garage. To the extent that Mr Mourad knew or ought to have known that there was a risk of injury arising out of something on the site, then he owed a duty to take reasonable steps to reduce the risk. The first defendant could not discharge that duty by merely relying on its independent contractor to do something to ensure the safety of its employees. [110] The key question is, thus, whether Mr Mourad knew or ought to have known of the risk of injury to the plaintiff at such a time when he could have reasonably done something to eliminate or reduce that risk. The simple answer is that, having regard to Mr Mourad's own evidence, he must be taken to have known that the drain should have been covered by the grate. He was in a position to see whether the drain was covered by the grate. I do not accept his evidence that when he was onsite that morning before the accident, the grate was on the drain. [111] Applying the principles set out in s 5B of the CLA, it follows that: (1) the risk of harm was the risk of the plaintiff stepping into the hole created by the drain, in circumstances in which the hole was obscured by the plastic; (2) that risk was both reasonably foreseeable on the part of the first defendant and not insignificant; and (3) there were reasonable precautions which the first defendant could have taken, including ensuring that the grate was on the drain or placing some form of barricade around the drain or making sure that the plaintiff knew that the plastic was covering the drain. [112] The first defendant says that it is not vicariously liable for the conduct of the second defendant and that the second defendant was in a position to take steps to ensure that the grate was placed back on the plastic. I understand the submission to be that the first defendant was entitled to rely on the second defendant to make sure that the grate was on. The first defendant also says that the plaintiff fails on causation because there has been a novus actus interveniens between any failure by the first defendant and the accident, being the conduct of the second defendant in removing the grate. [113] The fact that the second defendant was also obliged to take measures to ensure the safety of the plaintiff does not lesson the standard of care imposed on the first defendant and does not absolve the first defendant from a failure to take the simple precautions which would have prevented the accident. The negligence of the second defendant did not break the causal nexus between the first defendant's failure and the accident. [114] I do not know when (if at all) the grate was last on the drain prior to the accident but, at the very least, Mr Mourad knew that it should have been. The first defendant was negligent in not ensuring that the drain hole was sufficiently guarded or covered so that workers on the site, such as the plaintiff, could not fall into the hole, whether through inadvertence or otherwise. 1. His Honour went on to also hold MMM breached its duty of care, saying: [117] The plaintiff said [MMM's employees were onsite at the time of the accident] and said that one of them replaced the grate immediately after the accident. Whatever the state of the drain in the garage floor prior to the accident, there is no dispute that the second defendant placed the plastic over the garage floor on the morning of the accident. Mr Mourad said that the plastic was on the garage floor when he arrived that morning. He was not challenged on that by the second or third defendants. When the grate was last covering the drain is not known but having regard to my findings, at the very least, the second defendant placed the plastic on the floor covering the hole and did not ensure that either: (1) the grate was placed back over the hole; (2) something was placed under the plastic (such as the grate) to ensure that no one could fall through the hole; or (3) some sort of barrier or warning sign was put in position. [118] A very simple step which could and should have been taken by the second defendant when placing the plastic over the garage floor and the stormwater drain, was to ensure that the grate was in position, either under or over the plastic. … 1. When dealing with apportionment between the defendants, his Honour said: [130] In my view, [Value and MMM] are equally culpable for the plaintiff's accident. On my findings, and despite [Value's] denials, Mr Mourad must have known that [MMM] covered the drain hole with plastic and that there was no drain cover on top of it. [Value] was responsible for safety on the site and could have taken obvious steps to prevent the accident, such as locating the metal grate and placing it over the top of the drain. [131] [MMM] could have taken the same simple step to prevent the accident. That is, if it was going to cover the drain hole with plastic (as it did) it needed to locate the drain cover and place it over the top to ensure that, in the event that someone was walking in the area, that person did not fall through the hole. As such, I would apportion responsibility equally. Whether Mr Mourad knew of the risk of harm 1. Ground 1 of Value's appeal is that, contrary to the primary judge's finding, it did not breach its duty to Mr Badra as "the concealment of the hole was not something of which the appellant knew or ought to have known and thus the harm was not reasonably foreseeable". In part, thus, Value's case on this ground is that it did not in know in fact that the drain hole was concealed. As developed in oral submissions, this argument seemed to boil down to asserting that "the evidence doesn't establish that Mourad knew in fact that the hole was not covered under the black plastic". It was argued that the fact his Honour rejected Mr Mourad's claim that he saw the grill on top of the black plastic prior to leaving the site that morning did not, of itself, establish that Mr Mourad was aware the hole was uncovered underneath the plastic. 2. Value placed some significance on the point that even allowing for the primary judge's preference of Mr Badra's version of events over Mr Mourad's – which it did not seek to challenge – Mr Mourad had given evidence in his first witness statement that from "the time of its installation, I did not remove the steel grill from the top of the stormwater drain", and this evidence was not challenged in cross-examination. Implicit in this argument was the possibility that it was the employees of MMM who, for some reason, had removed the grill prior to putting down the black plastic sheet on the day in question, and they had not put it back in place either above or below the sheet. 3. His Honour did not state in terms that Mr Mourad in fact knew on the morning of 19 June 2020 that the drain hole was not covered by the grill, whether above or below the plastic. However, reading his Honour's judgment as a whole and in context it is apparent that he was making such a finding. It seems his Honour did not consider it necessary to state that point in terms given the way Value had put its case. 4. At J [21] the judge referred to Mr Badra's evidence that he witnessed rubbish being removed from the drain. That evidence was that the day prior to his accident he saw a Tongan labourer cleaning the drain of rubbish, building material and general debris which had fallen into the drain from the tiling process. He said that the labourer was acting under the direction of Mr Mourad. Mr Mourad denied that he had employed a Tongan labourer or that any labourer had been cleaning the drain or working inside the garage the day before the accident. 5. The primary judge referred to Mr Mourad's evidence about not removing the grill after installation at J [44], noting that Mr Mourad indicated he did not believe there was ever any need to remove the grill, including because of a need to remove rubbish or debris from the drain. His Honour then noted that if that evidence was accepted then it must have been MMM that removed the grill to place the plastic underneath it (a point reiterated at J [47]). But he then expressed some scepticism about why MMM would have removed the grill, although noting that there had been a suggestion that it was used to keep the plastic in place (at J [45]). 6. That scepticism about MMM moving the grill was then echoed at J [87]. In listing reasons for doubting Mr Mourad's evidence, his Honour gave this as his twelfth reason: Mr Mourad said that he installed the metal grate some time before the day of the accident and could think of no reason why anyone would move it. Yet, on his evidence, not only did the second defendant lay plastic without him knowing about it until shortly before the accident, but someone thought it was necessary to lift up the heavy grate and put the plastic underneath the grate, rather than laying the plastic over it. No explanation has been offered as to why that would have occurred. 1. It is evident from this subparagraph itself, from its inclusion in the list of reasons to doubt Mr Mourad, and from what had earlier been said at J [44]-[47], that his Honour did not accept that someone would have removed the steel grill (which was heavy) without reason and without Mr Mourad's knowledge. Although his Honour did not express any conclusion about Mr Badra's evidence about the labourer cleaning the drain, it may be implicit in the rejection of Mr Mourad's account that he accepted this version of events, although it is not necessary to decide that point. 2. Next, his Honour comes close to making a finding that Mr Mourad knew the drain was uncovered at J [110]. He said there that Mr Mourad "must be taken to have known that the drain should have been covered by the grate", adding that he "was in a position to see whether the drain was covered by the grate", and concluding that "I do not accept his evidence that when he was onsite that morning before the accident, the grate was on the drain". And at J [114] his Honour said that "I do not know when (if at all) the grate was last on the drain prior to the accident but, at the very least, Mr Mourad knew that it should have been". 3. At J [117], when addressing the liability of MMM, the primary judge said that "[w]hen the grate was last covering the drain is not known but … at the very least, [MMM] placed the plastic on the floor covering the hole and did not ensure that … the grate was placed back over the hole" (emphasis added). It is implicit in this passage that the hole was in fact uncovered prior to MMM putting down the black plastic. Senior counsel accepted in argument that that "may very well be the case". This passage, taken together with his Honour's earlier scepticism about why anyone from MMM would have moved the grill (at [45] and [87]), suggests that he concluded that MMM had not removed it from on top of the drain. 4. At J [130] his Honour said that "[o]n my findings … Mr Mourad must have known that [MMM] covered the drain hole with plastic and that there was no drain cover on top of it", and he "could have taken obvious steps to prevent the accident, such as locating the metal grate and placing it over the top of the drain" (emphasis added). Again, implicit in the finding that it was necessary to locate the metal grate was a conclusion that the grate was not covering the hole prior to and separately from MMM putting the black plastic down. 5. The absence of an express finding that Mr Mourad knew the drain was uncovered can be explained by a key exchange between counsel for Value and the primary judge in closing submissions: SLEIGHT: Your Honour understand what I mean. It's just a void disguised or concealed by the black plastic. And that was created by MMM. HIS HONOUR: It's just going back to what your case is, so I understand it, it is that there's really only two alternatives. Either the grate was never there and was put there after the event, that's the plaintiff's case, or MMM lifted up the grate from its position when they're putting down the plastic and put the grate on top of the plastic to anchor it. But, are there any other alternatives here? SLEIGHT: Well, only one, which I discount. And that's that after MMM did that, some third party came along and just removed the grate. HIS HONOUR: Well there's only three MMM workers on site, and your client said he'd left. SLEIGHT: I don't suggest that's - no, I accept what your Honour says, yes. There is another version, but I think it's too incredible. And your Honour, I will - … 1. Submissions then moved on to another topic. What the exchange indicates is that Value accepted that the case came down to accepting either Mr Badra's or Mr Mourad's versions. No plausible intermediate possibility was suggested. In particular, Value did not argue that there was a reasonable case that even if Mr Mourad's evidence about seeing the grill on top of the black plastic on the morning of the accident was rejected, it was still open to find that he had reason to understand the grill was covering the drain underneath the plastic. Mr Badra had said that the grill was not there from at least the day before. Mr Mourad said that he had seen the grill on top of the black plastic that morning, although little plausible explanation had been offered for why it should have been moved to that position. His Honour accepted Mr Badra's version and rejected Mr Mourad's. As he said at J [99], "I accept the plaintiff's evidence". 2. In this context it is apparent that his Honour did conclude that Mr Mourad knew that the drain was not covered by the grill on the morning of the accident, whether above or below the black plastic, and that he had sound reasons for so concluding. He no doubt considered he did not have to spell that out in express terms given that Value had accepted that the factual case came down to accepting one version or the other, and he gave ample reasons for accepting Mr Badra's evidence over Mr Mourad's. As noted, it is implicit in his Honour's findings that it was not MMM which was responsible for moving the grill. And there is no evidence to suggest that anyone other than Mr Mourad would have caused that to occur. Mr Mourad was the builder and in control of the site. There is no suggestion the tiler – the only other plausible candidate – had returned. It seems unlikely that the tiler would have done so, as if it had been the tiler clearing the drain then that would presumably have been in order to finish cutting the tiles around the drain to enable the collar and grill to be inserted. Yet that had not occurred by the time of the accident. 3. Insofar as ground 1 asserts that the primary judge erred in finding that Value in fact knew of the risk of harm, the ground is not made out. Whether Value is liable in negligence 1. The second strand of Value's argument on ground 1 is that regardless of whether Mr Mourad in fact knew (or ought to have known) that the drain was uncovered on the morning of the accident, it was reasonable for him to assume that that a competent contractor would have addressed the risk, and Value's duty of care as occupier did not extend to ensuring that this had been done. 2. The nub of Value's argument was put pithily by its senior counsel as follows: The critical point I'm making is that it was not incumbent on Mr Mourad to go and lift up the black plastic to ensure that a competent independent contractor had put something under the black plastic, over a hole that everybody knew was there. That's what this case boils down to down to. … You would assume, as the plaintiff did, that when Mr Khedr put the black plastic that there was something underneath it. Everybody on the site knew there was a hole there. Why do you assume that somebody would be so stupid as to lay black plastic over a void without anything supporting it? … [T]he independent contractor is not some sort of failsafe insurer for acts or omissions of independent contractors on a site. Even if the principal knows that there's something wrong with what an independent contractor has done in relation to the safety of his employees, it doesn't follow that the principal is liable any more than somebody walking past in the street might be liable. … It would be different if Mr Mourad had been asked questions and had accepted that he should have looked under the black plastic – assuming the grate was not there – or something along those lines, if there was some admission, but there wasn't. 1. Senior counsel made clear that the complaint about Mr Mourad not being asked questions was not a Browne v Dunn argument. Rather, it was that "the evidence didn't go far enough, it wasn't teased out – there was no suggestion that, applying the principles that I've identified … Mr Mourad should have … picked up the plastic to see what was under it". 2. Value noted that the duty owed by a head contractor to employees of subcontractors was considered in Leighton, where the following was said: [21] It is common in the construction industry for the principal contractor to arrange for the works to be carried out by subcontractors rather than by employing its own labour force. Among the advantages that accrue to the principal contractor in adopting this model for its undertaking is that it does not incur the obligations that the law imposes on employers. An employer owes a personal, non-delegable, duty of care to its employees requiring that reasonable care is taken. This is a more stringent obligation than a duty to take reasonable care to avoid foreseeable risk of injury to a person to whom the duty is owed. 1. Consistently with the latter statement, the Court went on to say that "Leighton, as the occupier of the site, owed a duty to persons coming onto it to use reasonable care to avoid physical injury to them" (at [48]). The Court approved (at [49]) the statement of Gummow J in Roads and Traffic Authority v Dederer [2007] HCA 42; (2007) 234 CLR 330 at [43] that "whatever their scope, all duties of care are to be discharged by the exercise of reasonable care". In the context of claims subject to the CLA, that involves the taking of reasonable care in the sense of taking reasonable precautions to avoid a risk of harm identified pursuant to s 5B of that Act. 2. Thus Value and MMM did not owe the same duty of care to Mr Badra. But it is not the case that Value owed no duty of care to Mr Badra simply because he was an employee of a contractor retained by Value. 3. In Leighton the plaintiff had been injured on building site controlled by Leighton in the course of a concrete pumping operation in which that company had no direct role. It was not the employer of the plaintiff. The injury occurred when the plaintiff and others (also not employed by Leighton) were cleaning concrete pumping pipes. The case is not like this one, where the injury occurred from a risk which already existed. 4. In Leighton the Court (at [20]) quoted approvingly the following statement of principle by Brennan J in Stevens (at 47-48): An entrepreneur who organises an activity involving a risk of injury to those engaged in it is under a duty to use reasonable care in organising the activity to avoid or minimise that risk, and that duty is imposed whether or not the entrepreneur is under a further duty of care to servants employed by him to carry out that activity. The entrepreneur's duty arises simply because he is creating the risk and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organising an activity does not import a duty to avoid any risk of injury; it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. The circumstances may make it necessary for the entrepreneur to retain and exercise a supervisory power or to prescribe the respective areas of responsibility of independent contractors if confusion about those areas involves a risk of injury. But once the activity has been organised and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. 1. The injury in Stevens occurred during the loading of logs by one contractor retained by the company onto the truck of another contractor retained by the company. The company had organised the activities of felling and moving the logs, including loading them onto the trucks. The High Court accepted that the company owed some general duty of care in relation to the organisation of the activities (see eg Mason J at 31). That acceptance was the context of the discussion by Brennan J, as manifested in the first sentence quoted above. His Honour went on to state (at 48): If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power or in leaving undefined the contractors' respective areas of responsibility, the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility. 1. The word "merely" in this sentence is significant. It illustrates that his Honour was addressing situations where the cause of the injury was something done or not done by the independent contractor, responding to an argument that, even so, the occupier bore some liability for ensuring that the contractor adopted and followed a safe system of work. Brennan J was not addressing where the risk of injury arose from a state of affairs which pre-existed the involvement of the contractor or the contractor carrying out its activity. That was not the context, nor the type of duty, being considered in Stevens. 2. More directed to that issue was another statement Value invoked, being that of Brennan and Dawson JJ in Papatonakis v Australian Telecommunications Commission [1985] HCA 3; (1985) 156 CLR 7 at 30: where an independent contractor carrying on a particular trade is engaged by an occupier to work on his premises, the occupier is not under a duty to give warning of a defect in the premises if tradesmen of that class are accustomed to meeting and safeguarding themselves against defects of that kind. 1. This statement has subsequently been approved and applied by this Court: eg Felk Industries Pty Limited v Mallet [2005] NSWCA 111 at [18]. Their Honours were addressing specific defects or risks of a kind to which tradespeople "are accustomed to meeting and safeguarding themselves", not general or unusual risks. Consistently with that understanding, one of the cases their Honours cited in support of the principle was a decision of the English Court of Appeal in Christmas v General Cleaning Contractors Ltd [1952] 1 KB 141. The Court there held an occupier was not liable for injury to a window cleaner caused by the movement of a sash window the cleaner was working on. The window was "ill-balanced" but "was safe enough for all ordinary purposes" (at 147 per Denning LJ). The defect in the window was, for a window cleaner, one of the "common recognizable dangers of everyday experience and cannot be classed as 'unusual'" (ibid at 148). The case was not one in which there was already a general risk of harm to persons other than window cleaners. The Court of Appeal did uphold the liability of the employer, a conclusion which was in turn upheld in the House of Lords: General Cleaning Contractors Ltd v Christmas [1953] AC 180. 2. Another of the cases referred to by Brennan and Dawson JJ was Archer v Hall [1967] 1 NSWR 107, in which an independent contractor sued a builder-occupier. The contractor had been working on the roof of the building in question. He threw a steel rod down to the ground for collection, and in so doing came into contact with an electrical wire next to the building, electrocuting himself. This Court held the builder was not liable. Herron CJ noted that the builder had not created the danger from the electrical wires, which were part of the ordinary services of the local council (at 111). Again, there was no general duty which had been breached by the builder. Both Christmas and Archer were decided in the then common law context where occupier's liability varied depending on the category of entrant, an approach rejected in 1987 in Australia in Australian Safeway Stores Pty Ltd v Zaluzna [1987] HCA 7; (1987) 162 CLR 479. However, the cases are distinguishable from the current matter in any event. 3. A more analogous case to the present is this Court's decision in A V Jennings Ltd v Thomas [2004] NSWCA 309, a decision referred to in Felk. The plaintiff there succeeded in his claim. He was a carpet cleaner who slipped on the first of some muddy steps, landing in a hole dug for a footing below the steps. Bryson JA explained that although the plaintiff "was a skilled tradesman, his skill had no particular relation to the use of the means of access, as he was in no different position to another ordinary person" (at [32]). 4. The subsequent decision in Felk concerned circumstances in which the plaintiff had come to the occupier's premises to service fire extinguishers. Access to one extinguisher was impeded by a work bench and a heavy bin full of metal offcuts. The plaintiff hurt his back in lifting that extinguisher off the wall. The Court held that the occupier was not liable as it "was entitled to assume that the plaintiff would be able to safeguard himself" with respect to the metal bin (at [19]). Hunt AJA distinguished A V Jennings as follows: [21] The injury in that case arose in an entirely different context to that which obtains in the present case. The independent contractor in that case was on his way to the place where he was to carry out his specialised work. He was not involved in that specialised work at the time he was attempting to gain access to the premises in accordance with the instructions the occupier had given him. 1. Thus the injury was seen to occur because of the way in which the employee of the independent contractor was carrying out his specialist responsibilities, as opposed to where the risk that came home was a general one. 2. Value referred in its list of authorities to Sydney Water Corporation v Abramovic [2007] NSWCA 248. A majority of this Court overturned a finding that an occupier owed a duty to employees of an independent contractor to ensure that the contractor's work was carried out in a particular way. That is not the type of duty at issue here. Further, Basten JA (speaking for the majority) noted that in some circumstances "a general duty may arise because elements of control and knowledge of risk remain with the principal and, in relative terms, the worker is vulnerable" (at [71]). 3. Value also referred to Pacific Steel Constructions Pty Ltd v Barahona [2009] NSWCA 406. That was another case in which this Court rejected the suggestion that an occupier-builder owed a duty to supervise work being undertaken by the employee of an independent contractor. 4. The cases cited by Value do not establish that a builder-occupier owes no duty of care to the employee of a competent independent contractor that it has retained to work on the site. On the contrary, the High Court made clear in Leighton that such an occupier does owe a duty to persons coming onto the site "to use reasonable care to avoid physical injury to them" (at [48]). This Court's earlier decision in A V Jennings, and Basten JA's statement in Sydney Water at [71], are consistent with that understanding. The statement by Brennan and Dawson JJ in Papatonakis, approved and applied in Felk, addresses situations where the risk in question is not one that the occupier had a general duty to take reasonable care to avoid, but rather is a risk that arises from the carrying out of the particular work that the independent contractor is retained to undertake. For such risks, cases such as Christmas, Archer, Sydney Water and Pacific Steel illustrate that, in general, the occupier does not have a duty to employees of an independent contractor to ensure that the contractor has a safe system of work in carrying out its activities at the site (subject always to all of the circumstances, including where for example there is a need for coordination, as arose in Stevens). 5. Here, Mr Badra's injury occurred simply when he "walked across the garage floor" (J [99]). It is not entirely clear why he was walking into the garage. The primary judge recorded that immediately prior to the accident Mr Badra had been "assisting with the rendering process" by "wiping down the wall beside the garage door opening, which was close to the stormwater drain" (at [23]). There is no suggestion, however, that he was injured when undertaking the rendering process itself. He was simply doing what any worker on the site may have done, that is, walking across part of the site. 6. As noted, the primary judge stated that "the risk of harm was the risk of the plaintiff stepping into the hole created by the drain, in circumstances in which the hole was obscured by the plastic" (J [111(1)]). In its written submissions Value treated this statement as though the hole being obscured by the plastic was part of the relevant risk of harm. But it is not clear that the reference to the circumstance of the hole being obscured by the plastic is part of his Honour's identification of risk. As shall be shown in a moment, the risk of harm identified and admitted in the pleadings did not involve the drainage hole being obscured by black plastic, but rather the fact that the hole was inadequately covered. When the disparity of the wording between the pleadings and J [111(1)] was raised in the course of argument, senior counsel for Value said that "it doesn't really matter whether one approaches it in the way pleaded, or one approaches it in the way that his Honour identified the risk of harm". In the circumstances, it is the pleaded and admitted risk which is the appropriate focus of analysis. 7. What was in issue in the proceedings was, of course, determined by the pleadings. In its further amended defence Value denied the allegation that as the builder it owed a duty to institute and maintain a safe system of work. It did not admit that it owed a duty adequately to assess safety hazards to which the plaintiff and other lawful entrants to the premises who had to work there might be subjected to in the course of their employment duties. But it did admit the following propositions: 1. At all material times Value owed a duty of care to the plaintiff and others accessing the premises to take reasonable precautions not to expose such persons to a foreseeable risk of suffering not insignificant harm. 2. Such risk of harm included the risk resulting from stepping onto an inadequately covered stormwater drain/void and falling through it. 3. The risk of harm of in not covering the stormwater drain/void adequately and leaving it with no adequate covering to prevent workers from falling through it was not insignificant. 4. A reasonable person in the defendant's position would have taken precautions against the aforementioned risk of harm. 5. The probability of harm in not covering the stormwater drain/void adequately was likely to occur if care and precautions were not taken, although Value denied that care and precautions were not taken. 6. The burden of taking such precautions was not incommensurate to the risk of harm as they were relatively inexpensive and not inconvenient. 7. The social utility of the activity that created the risk of harm did not outweigh the taking of precautions. 1. Value denied that Mr Badra's injury and damage was caused by a breach of duty by it. The gravamen of its pleaded case relevantly lay in its allegations that "the stormwater drain was completely covered by a grate over a black plastic sheet"; that Mr Badra had not injured himself falling into the drain but rather by falling into a trench outside the garage; and in any event it denied that he was injured because a covering over the drainage hole gave way. This pleaded case reflected the version of events maintained by Mr Mourad, which the primary judge rejected. 2. Otherwise, Value admitted that it owed a duty of care to take reasonable precautions not to expose Mr Badra and others accessing the premises to a foreseeable risk of suffering not insignificant harm, which harm included falling through an inadequately covered stormwater drain/void, and which risk a reasonable person could and would have taken precautions against. The primary judge found that that risk had existed. The risk existed prior to and independently of the drain hole being covered by black plastic by MMM. And, as explained above, it is implicit in his Honour's findings that Mr Mourad was aware of that risk of harm before the accident. 3. In these circumstances Value has no cause for complaint about being found liable in negligence. As noted above, Value's core argument was that "it was not incumbent on Mr Mourad to go and lift up the black plastic to ensure that a competent independent contractor had put something under the black plastic, over a hole that everybody knew was there". That argument ignores the fact that the pleaded and admitted risk was the existence of an inadequately covered stormwater drain, which was a risk for anyone entering the site and which pre-existed the drain being covered over by black plastic. It was a risk which Value had created and was aware of prior to the hole being covered. The same answer applies to Value's argument that it should not be a failsafe insurer for the acts or omissions of an independent contractor which does not take care of the safety of its employees. Value argued that it "would be different … if there was some admission". There was some admission, in the pleadings. 4. Value asked why it should have assumed "that somebody would be so stupid as to lay black plastic over a void without anything supporting it". Again, that argument implicitly mistakes the risk at issue. The argument also hints at Value not bearing primary causal responsibility, being the argument rejected above with respect to ground 3 (and there was no challenge per se to the 50:50 apportionment). The argument may also hint at Mr Badra bearing some responsibility for his own injury, but there was no challenge to the primary judge's rejection of the allegation of contributory negligence. 5. This is a case where Value breached its general duty of care to entrants to the site which it occupied. Once Mr Mourad's version of events was rejected and Mr Badra's version accepted, and given the way that Value had pleaded and argued its case, Value was bound to fail in its claim that it had not breached that duty of care. Ground 1 is not made out. Ground 4 and appropriate orders 1. As noted above at [4], his Honour addressed the specific amounts owing in a second judgment which sought to address the complexities of ss 151A and 151Z of the WCA. The parties now agree that his Honour erred in giving effect to these sections, taking account of this Court's judgments in Synergy Scaffolding Services Proprietary Limited v Alelaimat [2023] NSWCA 213; (2023) 326 IR 289 (Synergy No 1) and Synergy Scaffolding Services Pty Ltd v Alelaimat (No 2) [2024] NSWCA 11 (Synergy No 2). Significantly, his Honour's judgment on point was delivered prior to Synergy No 2 being handed down. 2. In Synergy No 1 Simpson AJA, speaking for the Court, explained the effect of s 151Z(2) of the WCA in calculating the damages payable by a third party (ie non-employer) tortfeasor as follows (at [140], paraphrasing slightly): D = T – (C – X), where: D = the sum of damages ultimately recoverable by the plaintiff worker from the third party tortfeasor; T = the sum of damages which would be recoverable by the plaintiff worker from the third party tortfeasor but for the operation of s 151Z(2); C = the sum that the third party tortfeasor would be entitled to recover from the employer tortfeasor as contribution under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (the 1946 Act) but for the operation of s 151Z(2)(d); and X = the amount of contribution that is actually recoverable under s 5 of the 1946 Act once s 151Z(2)(d) is taken into account. 1. Here, Value is the third party tortfeasor, MMM is the employer, and the primary judge apportioned responsibility between them on a 50:50 basis for the purposes of the 1946 Act. The parties now agree that the relevant integers here are as follows: T = $1,059,813.07. C = 50% x $1,059,813.07 = $529,906.53 X = 50% x $619,925 = $309,962.50 Therefore D = $1,059,813.07 – ($529,906.53 – $309,962.50) = $839,869.04 To explain further that last step: $529,906.53 – $309,962.50 = $219,944.03. $1,059,813.07 – $219,944.03 = $839,869.04. 1. The figure for T is higher than the amount allowed for by the primary judge by $66,613.07 (cf J2 [20(1)]). That is an amount which has previously been paid by MMM to Mr Badra under the WCA for out of pocket expenses. In light of the decision in Synergy No 2 (see at [18]-[29]), the parties accept that that amount would not be deducted from the amount Value is liable to pay Mr Badra. The third party tortfeasor is liable in damages for such an amount, even though in due course Mr Badra will be liable to repay it to MMM. The adjustment in turn affects the C figure. 2. The X figure, being the amount actually recoverable by Value from MMM, has not changed (see J2 [20(2) and (4)]). That figure is $309,962.50, being half the damages payable by MMM to Mr Badra (ie $619,925). The amount payable to Mr Badra by MMM is lower than the amount payable by Value to Mr Badra because of the limits imposed under the WCA regime on claims against employers (as noted at J2 [7], and see Synergy No 2 at [16]). 3. However, the primary judge ordered judgment for Mr Badra against MMM in the sum of $440,864.29 rather than $619,925. That was so because his Honour reduced the latter amount by an amount of $179,060.71 representing workers compensation payments made by MMM (J2 [31]). The parties now agree in light of Synergy No 2 that this deduction would not be made in the order, as Mr Badra's liability to repay those amounts under the WCA only arises if and when he sought to enforce a judgment against MMM (which in practical terms he is unlikely to do, given the higher award of damages made against Value). If and when that did occur, MMM (through WCNI) could make the deduction at that stage. 4. Given that the judgment sum against MMM should increase to $619,925, and Value is entitled to succeed as to half that amount on its cross-claim against MMM, that has a knock-on effect on the judgment sum on the cross-claim, which will now be $309,962.50. 5. As MMM noted in its helpful submissions on this issue, if and when Mr Badra accepts payment of the judgment sum against Value (as he will likely do) then he will become liable to repay to MMM relevant workers compensation amounts he has received. One point should be made in this regard. It would have been open to Mr Badra to agree to orders requiring him in form or effect to make that repayment, in the interests of simplicity. The Court indicated as much in Synergy No 2 at [59]. The Court will not make such an order absent agreement of the claimant, but that does not preclude parties seeking, sensibly, to cut to the chase. 6. Finally, in relation to costs, the only ground on which Value has succeeded is ground 4, which involved consensual adjustment of figures. It was MMM which filed the written submissions which led to the outbreak of consensus. The appropriate provision for costs would thus appear to be that Value should pay the costs of all respondents on the appeal. However, little was said in the course of the hearing about costs, although the Court noted that there were various possible outcomes of the appeal. In the circumstances the parties should have the opportunity to address on costs if they cannot agree on the appropriate order. The issue will then be determined on the papers unless any party establishes good reason to the contrary. 7. The orders of the Court should be as follows: 1. Appeal upheld in part. 2. The orders made by Cavanagh J on 12 December 2023 are varied as follows: 1. In order 1, the judgment sum is $839,869.04; 2. In order 2, the judgment sum is $619,925.00; 3. In order 3, the judgment sum is $309,562.50. 1. If the parties do not agree on appropriate orders as to costs then: 1. The appellant may file and serve written submissions of up to 3 pages on the issue, along with any evidence relied on, by 5pm on 7 August 2024. 2. The respondents may file and serve written submissions of up to 3 pages on the issue, along with any evidence relied on, by 5pm on 13 August 2024. 3. The appellant may file and serve any reply submissions, of no more than 2 pages, by 5pm on 16 August 2024. 1. GRIFFITHS AJA: I agree with Kirk JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 July 2024