New South Wales Court of Appeal CITATION : Trevor Howse Associates P/L v Dessmann & Anor Quadrant Research Services P/L v Dessman & Anor [2003] NSWCA 148 HEARING DATE(S) : 26/03/03, 27/03/03 JUDGMENT DATE : 13 June 2003 JUDGMENT OF : Meagher JA at 1; Sheller JA at 2; Einstein AJA at 3 DECISION : 1. That appeal CA 40594 of 2002 (Quadrant Research Services Pty Ltd v Nadia Carol Dessmann & Anor) be dismissed with costs; 2. That Appeal CA 40588 of 2002 (Trevor R Howse & Associates Pty Limited v Dessmann and Anor) be allowed, and that order 2 made by Ainslie-Wallace DCJ on 21 June 2002 against Trevor R Howse & Associates Pty Ltd be set aside; 3. That orders 3 and 4 made by Ainslie-Wallace DCJ on 21 June 2002 against Bianco Constructions Pty Limited be set aside; 4. That leave to appeal be granted from the judgment of Downs ADCJ dated 1 November 1999, and that the appeal be allowed; 5. That the order as to costs made by Downs ADCJ be set aside, and in lieu thereof order that the plaintiff pay the costs thrown away as a consequence of the adjournment; 6. That Quadrant Research Services Pty Ltd pay the costs of Trevor R Howse & Associates Pty Limited in its appeal (CA 40588 of 2002), and of the plaintiff. CATCHWORDS : Apportionment of Damages - Duty of care to supervise building works - When duty of care discharged. Astley v Austrust Ltd (1999) 197 CLR 1 Oxley County Council v Macdonald & Ors [1999] NSWCA 126 Wheat v E Lacon & Co Ltd [1966] AC 552 at 578 NSW v Broune [2000] NSWCA 3 at [69] Australian Safeway Stores Pty Ltd v Zaluzna (1986-1987) 162 CLR 479 CASES CITED : Hackshaw v Shaw (1984) 155 CLR 614 Johnson v Johnson (NSWCA unreported 10/09/91) Drotem Pty Ltd v Manning [2000] NSWCA 320 Jones v Bartlett (2000) 205 CLR 166 at 184 US Surgical Corporation v Hospital Products (1983) 2 NSWLR 157 at 258 Northern Sandblasting Pty Ltd v Harris (1996-1997) 188 CLR 313 Trevor R Howse & Associates Pty Limited v Nadia Carol Dessmann & Quadrant Research Services Pty Ltd PARTIES : Quadrant Research Services Pty Ltd v Nadia Carol Dessman & Anor FILE NUMBER(S) : CA 40588 of 2002; 40594 of 2002 Appellant (Trevor Howse): I Bailey COUNSEL : 1st Respondent (Dessmann): P Menzies QC & Andrews 2nd Respondent (Quadrant): J B Simpkins SC & Terrington Appellant (Trevor Howse): Minter Ellison SOLICITORS : 1st Respondent (Dessmann): McGrath Dicembre & Company 2nd Respondent (Quadrant): Phillips Fox LOWER COURT District Court JURISDICTION : LOWER COURT DC 5678 of 1996 FILE NUMBER(S) : LOWER COURT Ainslie-Wallace DCJ JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40588/02 CA 40594/02 MEAGHER JA SHELLER JA EINSTEIN J Friday, 13 June 2003 TREVOR R HOWSE & ASSOCIATES PTY LTD v NADIA CAROL DESSMANN & ANOR QUADRANT RESEARCH SERVICES PTY LTD v NADIA CAROL DESSMANN & ANOR FACTS The appeals were heard concurrently. The plaintiff had in October 1993 fallen down a flight of stairs in a building at Crows Nest, and had been injured. The trial judge held that the injury was sustained when the plaintiff's foot became caught on the exposed metal of a strip on the stair nosing between the first floor and the ground level foyer. The plaintiff had been visiting a tenant of part of the first floor. The building was occupied by a number of parties as tenants in common. They were also shareholders in Quadrant Research Services Pty Ltd ("Quadrant"), which had been given authority to act on behalf of the joint tenants in relation to the building. Quadrant arranged for Trevor R Howse & Associates Pty Ltd ("Howse") to inspect the property and to prepare a report on the changes necessary to ensure compliance with relevant council regulations. That report included, as well as the work necessary for compliance, items dealing generally with partitioning and refurbishment of the building. In June 1993 Quadrant entered into a project management agreement with Howse to put the proposed building work to tender and to supervise the completion of the works. The agreement required Howse personally to superintend the execution of any works. The plaintiff sued Quadrant, and recovered in that action. Quadrant brought a cross-action against Howse for breach of its contract to effect or oversee the necessary repairs, and was successful in that action. HELD 1. The remedy of apportionment had no application to this case. The plaintiff sued Quadrant, and recovered in that action. The plaintiff could not recover any verdict against the other parties because she had not sued them. Quadrant's success in its cross-action against Howse did not entitle any party to apportion any verdict. It merely meant that Quadrant could recover as damages against Howse the damages it was ordered to pay to the plaintiff. (Astley v Austrust Ltd (1999) 197 CLR 1; Oxley County Council v Macdonald & Ors [1999] NSWCA 126). 2. Whether or not a duty to ensure adequate supervision of particular works arises in a particular occupier will always depend upon particular circumstances. Under ordinary principles of the modern law of negligence, the duty is a duty to take reasonable care to avoid foreseeable risk of injury to the plaintiff, the practical extent of the duty being governed by the circumstances of the case: Jones v Bartlett (2000) 205 CLR 166 at 184 per Gleeson CJ. 3. The particular circumstances before the trial judge were extremely unusual, particularly in relation to Quadrant's engaging a third party to carry out carpet laying works – thus moving outside of its other arrangements to have the general refurbishment works project-managed by Howse. The evidentiary onus to prove the competence of the carpet layer devolved upon Quadrant by reason of the way in which the trial was pleaded and litigated in terms of the facts which arose for determination: once the plaintiff proved the position of the occupier, the defective nosings, the nature of the stairs, and the fact of recent works, the evidentiary onus shifted: cf. U.S. Surgical Corporation v Hospital Products (1983) 2 NSWLR 157 at 258 per Glass JA. 4. A landlord's duty of care to occupants in relation to a particular activity is discharged by the landlord's engaging a qualified contractor whose confidence it had no reason to doubt (Northern Sandblasting Pty Ltd v Harris (1996-1997) 188 CLR 313). ORDERS 1. That appeal CA 40594 of 2002 (Quadrant Research Services Pty Ltd v Nadia Carol Dessmann & Anor) be dismissed with costs; 2. That appeal CA 40588 of 2002 (Trevor R Howse & Associates Pty Limited v Dessmann and Anor) be allowed, and that order 2 made by Ainslie-Wallace DCJ on 21 June 2002 against Trevor R Howse & Associates Pty Ltd be set aside; 3. That orders 3 and 4 made by Ainslie-Wallace DCJ on 21 June 2002 against Bianco Constructions Pty Limited be set aside; 4. That leave to appeal be granted from the judgment of Downs ADCJ dated 1 November 1999, and that the appeal be allowed; 5. That the order as to costs made by Downs ADCJ be set aside, and in lieu thereof order that the plaintiff pay the costs thrown away as a consequence of the adjournment; 6. That Quadrant Research Services Pty Ltd pay the costs of Trevor R Howse & Associates Pty Limited in its appeal (CA 40588 of 2002), and of the plaintiff. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40588/02 CA 40594/02 MEAGHER JA SHELLER JA EINSTEIN J Friday, 13 June 2003 TREVOR R HOWSE & ASSOCIATES PTY LTD v NADIA CAROL DESSMANN & ANOR QUADRANT RESEARCH SERVICES PTY LTD v NADIA CAROL DESSMANN & ANOR Judgment 1 MEAGHER JA: I agree with Einstein J. 2 SHELLER JA: I agree with Einstein J. 3 EINSTEIN J: These two appeals were heard together. They arise from proceedings heard in the District Court of New South Wales by her Honour Judge Ainslie-Wallace who delivered the principal judgment on 12 December 2001. The Accident 4 The plaintiff, a woman 54 years of age, had on 26 October 1993 fallen down a flight of stairs in a building at 49-51 Falcon Street, Crows Nest and had sustained injury. The trial judge held that the injury was sustained when the plaintiff's foot became caught on the exposed metal of a strip on the stair nosing between the first floor and the ground level foyer. She had been visiting a tenant of part of the first floor on the occasion in question. 5 The trial judge found that the reason for the fall was that the requisite rubber insert had not been fitted into the grooves in the metal strip provided for that purpose. The building was being refurbished at the time and on the Court's findings, the carpet had recently been laid. Quadrant Research Services – the defendant 6 The building had been purchased in late 1992 by a number of persons and companies as tenants in common. They were also shareholders in Quadrant Research Services Pty Ltd ("Quadrant") which had been given authority to act on behalf of the joint tenants in relation to the building. A power of attorney was executed by the tenants in common on 1 July 1993 in favour of Quadrant giving it the power, inter alia, to execute leases relevant to the property. 7 On 1 July 1993 Quadrant as lessee entered into a commercial lease recording the demised premises as the ground and second floors. The finding was that the first floor was probably included but that nothing turned on the issue. It was common ground that the demised premises included the stairways. The lease was for a period of three years. Trevor R Howse & Associates – the first cross defendant 8 Quadrant arranged for Trevor R Howse & Associates Pty Ltd ("Howse") to inspect the property and to prepare a report on the changes necessary to be made to ensure compliance in respect of those matters where the property, on the occasion of its purchase, did not comply with relevant council regulations. That report was provided in April 1993 and included as well as the work necessary for compliance, items dealing generally with partitioning and refurbishment of the building. 9 On 24 June 1993 Quadrant entered into a project management agreement with Howse to put the proposed building work to tender and to supervise the completion of the works. The agreement required Howse to "personally superintend the execution of any works" (Clause 3.3). Bianco Constructions – the second cross defendant 10 Howse accepted a tender from Bianco Constructions Pty Limited ("Bianco") for the building work here relevant. Bianco commenced work in late August 1993. The Judgment below 11 The trial judge delivered an extensive and carefully reasoned judgment of some 40 pages. The principal findings are set out below. As to liability between the plaintiff and Quadrant 12 The plaintiff's cause of action in negligence was upheld. The matter was litigated in terms of the following issues: · whether the defendant was an occupier of the premises at the relevant time hence owing the plaintiff a duty of care (the holding was that the defendant was an occupier and owed such a duty of care); · whether the defendant's duty as occupier constituted a non-delegable duty of care (the holding was that the occupier could delegate the relevant duty of care to a third party); · whether the delegation discharged the relevant duty of care to the plaintiff (the holding was that Quadrant in its purported delegation to Howse, had failed to discharge its obligation to the plaintiff and had therefore breached its duty of care to her); and · whether the defendant had made out its plea of contributory negligence in that the plaintiff was said to have failed to keep a proper lookout, failed to have regard to her own safety and to have been inattentive. (The trial judge rejected the contributory negligence pleading). As to liability between Quadrant and Howse 13 Quadrant claimed damages against Howse for breach of contract, in negligence and for contribution in the event that it was found to have breached its duty of care owed to the plaintiff. As to liability between Howse and Bianco 14 The building construction agreement called for Bianco to nominate a site representative and required it to perform the necessary work to complete the work specified in the schedule. (The holding was that it was clear from certain memoranda prepared by Mr Dwyer that from time to time he directed Bianco to effect rectification work and that, notwithstanding directions to rectify the stair nosings, it was not done. The finding was that Bianco had failed properly to fit the nosings, that the building construction agreement contained an implied term that the work be conducted using reasonable care and that in breach of this term Bianco had failed to fit the nosings properly using reasonable care). Breach of contract 15 Insofar as the breach of contract causes of action were concerned the judgment focused upon the role of Howse as project manager and in particular, upon whether the contract could be satisfied by periodical inspections by the project manager. Further focus was placed upon the issue of whether the conduct of Howse by Mr Dwyer (the project manager for this job) in relation to the stair nosing was reasonable and amounted to a proper discharge of Howse's obligations under the project management agreement. (The finding was that had Howse performed its obligations under the contract, the defective nosing would have been rectified more promptly and the plaintiff's accident would not have occurred. In particular the findings were that Bianco had failed to completely fix the nosings; that this defect was observed by Mr Dwyer on 20 October; that he did not ensure that it was remedied. These matters were held to constitute a breach of the project management agreement. A further finding was that Howse had also breached the project management agreement by failing to obtain all relevant details of insurance and indemnity cover from the trade contractors on the site and in particular by failing to obtain evidence of insurance held by Bianco). 16 In short Howse was found to have breached the project management agreement: · by failing to supervise in accordance with the agreement; · by failing to ensure that the defective nosings were promptly remedied; and · by failing to obtain evidence of insurance held by Bianco. Negligence and contribution 17 The finding was that Quadrant knew, at the time that the work was being performed, that the project manager was not personally supervising the work by being present on the site at all times and took no steps to ensure that the obligation to be present was fulfilled. The finding was that by that failure, Quadrant breached its duty of care to the plaintiff and that it was therefore appropriate to apportion the damages awarded to the plaintiff between Quadrant and Howse. Apportionment of damages 18 The trial judge in determining what apportionment was just and equitable as between the tortfeasors, found the appropriate apportionment to be 30 percent to Quadrant, 50 percent to Howse and 20 percent to Bianco. 19 Howse had sought damages for breach of contract and indemnity as a joint tortfeasor as against Bianco. The trial judge's finding was that notwithstanding that Howse had succeeded on the cross-claim against Bianco, no further apportionment of contribution was appropriate in relation to the negligence and that the damage for breach of the building work agreement was reflected in the apportionment referred to above. 20 The trial judge's conclusion that the remedy of apportionment had some room to operate was misconceived. 21 The plaintiff, Mrs Dessmann, sued Quadrant, and only Quadrant; that action was an action in tort. She recovered in that action. That action was based on Quadrant's breach of its duty of care by leaving the staircase in a defective condition. Quadrant could not escape that conclusion by successfully pleading it had employed an apparently qualified person to repair the defects. 22 The plaintiff could not recover any verdict against Howse or Bianco, because she had sued neither of them. 23 Quadrant, however, had a cross-action against Howse for breach of its contract to effect or oversee the necessary repairs. It was successful in that action. That did not entitle any party to apportion any verdict. It merely meant that Quadrant could recover as damages against Howse the damages it was ordered to pay to the plaintiff. That is the result of Astley v Austrust Ltd (1999) 197 CLR 1, and Oxley County Council v Macdonald & Ors [1999] NSWCA 126, the two most recent cases in this area of the law. The Appeals 24 Quadrant is the appellant in proceedings 40594/02. 25 Howse is the appellant in proceedings 40588/02. Notice of Contention 26 The plaintiff has filed a Notice of Contention asserting that if the trial judge erred in her determination as to the breach of duty of care owed by Quadrant to the plaintiff then such determination is supported by the evidence adduced during the course of the proceedings. 27 The contentions are: · that the evidence established that Quadrant arranged and/or engaged parties to replace the carpet on the stairs of the subject premises; · that the accident occurred as a result of the negligent manner in which the agents of Quadrant engaged in the fixing of the nose capping to the stairs and/or that Quadrant failed to supervise the said work and/or caused the defect to be rectified in the said work at the time when they ought to have been aware of such defects; · the knowledge by Quadrant of the use of the premises, being commercial, and the fact that the stairs were the primary means of access and/or egress from this premises established for breach of the duty which Quadrant owed to the plaintiff; · that no evidence was offered by Quadrant as to the qualifications of the persons who were affixing the nose capping to the stairs and/or replacing the subject carpet. 28 The convenient course seems to me to deal initially with each of the appeals in terms of liability and then to turn to questions of apportionment, contribution and the like. Quadrant's appeal Breach of duty of care 29 The first two grounds of appeal are against the findings of breaches of duty of care. It is convenient to deal with both grounds together. 30 Quadrant claims that the trial judge erred: · in finding that Quadrant knew that the supervision by Howse of the trade work of Bianco was not adequate because it was aware that the supervision of the work was not constant (Ground of Appeal 1); · in finding that Quadrant breached any duty of care that Quadrant owed to the plaintiff by reason of such awareness (Ground of Appeal 2). 31 Quadrant claims that the plaintiff made no allegation that Quadrant was vicariously liable for the negligence of either Bianco or Howse. Quadrant asserts that the claim advanced at trial of the plaintiff was that Quadrant had breached a duty of care that it personally owed to her, principally a suggested duty to: · ensure that the premises were safe; and · inspect the stairs. 32 Quadrant then claims that the trial judge held that Quadrant owed a duty to the plaintiff to ensure that the refurbishment work to the stairs was not carried out in the absence of Howse as supervisor, grounding this holding upon the following propositions: · that Quadrant knew what type of work was being undertaken; and in particular, knew that the work extended to include work to the stairs; and · that Quadrant knew that the premises were open to the public whilst the work was in progress. 33 Clearly the trial judge held that Quadrant knew "that the supervision was not adequate to ensure that the building would not be left in a condition which would create a risk of injury to a visitor of the class of persons of which the plaintiff was a member". 34 Quadrant submits that this conclusion turned on the following two inferences: · the inference that Quadrant was aware that Howse was not on site supervising all of the time; and · the inference that Quadrant knew that this conduct on the part of Howse was in breach of the Agreement. Holding as to Grounds of Appeal 1 and 2 Duty of care 35 The trial judge embarked upon a careful examination of the nature of the duties of care owed by an occupier, examining the authorities dealing with the content of duties of care imposed upon occupiers of commercial premises as compared with occupiers of residential premises. As her Honour held, the touchstone of occupation that is likely to impose a duty of care upon a defendant who happens not to be in full time occupation of a site is "the immediate supervision and control and the power of permitting or prohibiting the entry of other persons": cf. Wheat v E Lacon & Co Ltd [1966] AC 552 at 578 (cited by Mason P in NSW v Broune [2000] NSWCA 3 at [69]). 36 In Australian Safeway Stores Pty Ltd v Zaluzna (1986-1987) 162 CLR 479, Mason, Wilson, Deane and Dawson JJ, cited the following passage from Hackshaw v Shaw (1984) 155 CLR 614: "All that is necessary is to determine whether, in all the relevant circumstances including the fact of the defendants' occupation of premises and the manner of the plaintiff's entry upon them, the defendant owed a duty of care under the ordinary principles of negligence to the plaintiff… The touchstone of its existence is that there be reasonable foreseeability of a real risk of injury to the visitor or to the class of person of which the visitor is a member . The measure of the discharge of the duty is what a reasonable man would, in the circumstances, do by way of response to the foreseeable risk". [ per Deane J at 662 – 663] [emphasis added] 37 Kirby P in Johnson v Johnson (an unreported decision of this Court of 10 September 1991), put the matter as follows in a further passage cited by her Honour: "… the common law imposes a duty on the occupier of premises, the requirements of which will vary with the circumstance. In the circumstances of a private dwelling with relatively few visitors, the scope of what might reasonably be expected will be much more circumscribed. In the case of a public facility, such as a shopping mall, with many visitors of all ages, including some who are immature and impetuous or old and frail, the requirements of the duty will be more substantial… It is in the specification of what the occupier will be deemed reasonably to have known and what precautions the occupier will be required reasonably to have taken, that scope is provided for the sensible adjustment of reasonable expectations to the particular facts of each case." 38 Her Honour cited the decision of this Court in Drotem Pty Ltd v Manning, [2000] NSWCA 320 where Powell JA cited the following passage: "It is obvious that a more stringent duty of care will be imposed upon the occupiers of premises to which the general public are invited…": per Kirby P in Johnson supra at page 11. 39 No error of appreciation of the relevant principles by the trial judge has been demonstrated. The real question before this Court concerns the application of those principles to the particular circumstances before the Court at first instance. 40 It is particularly important to note that extensive submissions were addressed from the bar table during the appeal to the basic fabric of the evidence which had been adduced before the trial judge, in terms of the following structural integers of the respective cases litigated at first instance: Question 1 What precisely was the evidence before the trial judge as to what had been the state of the subject stairs on which the accident occurred: (a) on 20 October 1993 (the date of the last inspection by Mr Dwyer of Howse); (b) on the day of the accident. Question 2 What precisely was the evidence before the trial judge as to which company had actually laid the new carpet; as to when it had been laid and as to what steps, if any, had been taken by which persons at the time of laying the new carpet, in terms of the fitting of the metal strip and the failure to insert the requisite rubber insert. Question 3 What precisely was the evidence before the trial judge as to the contractual obligations, if any, imposed as at the date of the accident, upon: (a) Bianco with respect to the carrying out of work of any type concerning the stair nosing; (b) Howse with respect to supervision of the carrying out of work of any type concerning the stair nosing. Question 4 What precisely was the evidence before the trial judge as to the knowledge as at the date of the accident, of: (a) Quadrant as to what arrangements it had made, and when, in relation to the laying and/or installation of a new carpet by an outside firm of carpet sellers (importantly including when such carpet was to be laid and how it was to be installed?); (b) Howse as to what arrangements Quadrant had made, and when, in relation to the laying and/or installation of a new carpet by an outside firm of carpet sellers, (importantly including when such carpet was to be laid and how it was to be installed?); (c) Bianco as to what arrangements Quadrant and/or Howse had made, and when, in relation to the laying and/or installation of a new carpet by an outside firm of carpet sellers, (importantly including when such carpet was to be laid and how it was to be installed?); Question 5 How precisely was the trial litigated before the trial judge in terms of all or some of these questions? Question 6 What were the findings of the trial judge in terms of all or some of these questions? Question 7 Were those findings shown to have been reached by reference to a sufficiently solid evidentiary foundation or were the findings such as required to be overturned applying conventional appellate principle? Question 8 To the extent that the trial judge applied the principles earlier set out, has either appellant been able to show relevant error in an application of principle? 41 In many ways the answers to these eight questions are critical to the determination of each of the appeals. Quadrant's case 42 A convenient way in which to view the submissions by Quadrant on the appeal is by reference to the submission that in the particular circumstances which obtained at the material time, namely, the date of the accident, Quadrant had acted with no more and no less than the reasonable care to be expected of a company in its position by way of taking the relevant precautions one could reasonably require an occupier who was not in physical occupation of the premises to take. In short the submission was that Quadrant was faced as lessee of the whole of the building, with the task of refurbishing the building and went about that task: · by appointing a company which it had reasonable grounds for assuming was a competent project manager; · by making that appointment by a written contract which imposed sufficient obligations upon the project manager for Quadrant to be in a position to assume with confidence that compliance with that contract would and should, in the ordinary course of things, see the refurbishment completed with due regard to care and safety of those persons who may, during the course of the works, seek access to the still tenanted building (as here happened with the plaintiff). 43 The adjudication of whether or not Quadrant acted reasonably in all of the circumstances in terms of taking proper precautions not to expose those who may enter the building to the risk of injury requires enquiry into an important factual arena covering the history of the contractual and other arrangements between Quadrant, Howse and Bianco concerning work to be carried out to the subject stairs. At least, insofar as that issue concerns where the carpet, which was actually laid, came from, and how, and by whom it was laid, and at whose instructions, the issue was the subject of intense submissions in this Court and at least in part before the trial judge in the contentions of Howse on the cross-claim. That same issue is pervasive in relation to a number of the above described and enumerated questions. 44 Without travelling into all of the precise evidence in this regard it seems reasonably clear that: Negotiations/Communications re Carpet · The original quotation from Bianco of 2 August 1993 does not include carpet. Its revised quotation of 18 August 1993 also did not include any amount for carpet; · The possible inclusion of carpet was first raised on 19 August 1993. Bianco indicated that it was prepared to look at a budgetary figure of $3300 for carpet; · The building agreement with Bianco did not include carpet, which was allowed for separately in the Cost Plan as a PC item; · Hence, prior to 13 September 1993 there had simply been a contractual obligation imposed by the project management agreement upon Howse to install new rubber nosings on the old carpet (see Finishes Schedule to Agreement); · Variations to the Cost Plan appear to have first been mooted by Howse in a letter of 13 September 1993 to Quadrant; · Bianco provided a quotation on 15 September 1993 in respect of new carpet to Howse; · Howse passed on those quotations to Quadrant on 15 September 1993, at the same time seeking written approval from Quadrant for variations prior to giving instructions to the various contractors; · On 16 September 1993 Quadrant wrote to Howse expressing dissatisfaction with the quotes for carpet and indicating that Quadrant intended to obtain quickly alternative quotes for carpets; · On 20 September 1993 Howse wrote to Quadrant indicating that Bianco had revised their recent quotations and including reference to a final cost Plan as a figure of $12,300 for carpets; · The allowance in the Cost Plan for carpet was short-lived: On 20 September 1993 Quadrant sent a facsimile to Howse effectively advising that Quadrant was not proceeding with the variation and requiring the amount of $12,300 which had previously been proposed in relation to carpets to be removed; · On 21 September 1993 Bianco wrote to Howse making a claim for an extension to its contract completion date and referring to the fact that as Howse well knew, Bianco had had problems regarding decisions being made, inter alia, in relation to carpets; · A new carpet was purchased on 28 September 1993 from Auction Centre Pty Ltd which appeared to have given a receipt for purchase and installation. Laying of the carpet · A major issue raised during the appeal concerned what the evidence was in relation to when the new carpet had been laid. The proposition for which Quadrant contended was that on the evidence it had been laid before the attendance on the site by Mr Dwyer on 20 October 1993 and that the trial judge's finding was to this effect and was justified by the evidence. The proposition for which Howse contended was that on the evidence it had been laid on the very day of the accident and that the evidence of the plaintiff was clear in relation to this matter (both as to her statement and oral evidence during the trial and as to her subsequent statements to medical advisers and the like). Hence Howse contended that the trial judge seriously erred in having failed to so hold; · Mr Dwyer attended the site on Wednesday 20 October 1993 and prepared a memorandum on that date while he was at the building site which included the words "stair nosings" under the heading "building works". Very importantly in the course of his giving evidence in chief, he was asked and answered as follows: "Q. How do you consistent with your ticking process, did you in fact at some-or can you recall when you first saw stair nosings in place, not the date, you recall the event? A. As far as I recall it was after the contractor for whoever it was had put in the carpet for them had gone through and laid the inserts ." [Transcript 311] · Mr Dwyer then advised the Bianco representative on site of the fact that the rubber inserts were not installed in the metal strips. A handwritten note of his discussions with Mr Hawkins of Bianco of Friday 22 October 1993 includes the words "rubber inserts to stair". Mr Dwyer gave evidence that the effect of what he had said was that the inserts were not installed and Mr Hawkins was told that they were not installed and consequently to have them installed. Accident takes place · The accident took place on Tuesday 26 October 1993 (2 working days after Mr Dwyer had inspected the works on 22 October). 45 Howse's contention is that the trial judge ought to have held on the evidence that no new carpet had been laid at the time of Mr Dwyer's inspection of 20 October 1993 at which time the missing rubber strip from the nosing was simply a reference to the situation on the old stairs. The contention is that between that occasion and Tuesday 26 October 1993, and probably on 26 October 1993, before the arrival of the plaintiff, the new carpet had been laid by Auction Centre Pty Ltd, who failed to complete the installation of the nosing in question by the insertion of the rubber strip. 46 Howse's further contention is that it bears no responsibility for the curious circumstance that no one appears to have elicited from Mr Dwyer any evidence that he had not seen any new carpet at his inspection of 20 October 1993 and was quite unaware as to when the new carpet would be installed or by whom and under what instructions from Quadrant. Howse contends that it was up to the plaintiff or Quadrant to cross-examine Mr Dwyer if it wished to prove that Mr Dwyer had seen new carpet at his inspection of 20 October and that neither cross-examiner did so. 47 In my view there is no substance whatsoever in these contentions by Howse. The evidence given by Mr Dwyer makes this patently clear. And as the plaintiff, whose credit was accepted by the trial judge, said under cross-examination, on the day in question she did not really take that much notice of what the workmen were doing. 48 The trial judge recorded that there was no evidence from Quadrant as to how it arranged for the carpet to be laid and made clear that "[n]onetheless there was no dispute that the carpet, which was laid at the time of the plaintiff's accident, was that purchased by [Quadrant] independently of [Howse]". The findings were that the carpet was purchased directly by Quadrant on 28 September 1993. 49 With this general background of a deal of the evidence and of the approach taken by the parties during the appeal in mind, it is convenient to return to the respective appeals. Quadrant's Appeal 50 Quadrant of course has an abiding interest in the answer to question 4 (a) above. 51 The trial judge clearly proceeded upon the basis that Quadrant's failure to act reasonably in the circumstances was because: (i) it knew that the project manager was only attending the site at most twice per week; and (ii) it also knew what type of work was to be undertaken in the building:– so that it could not have been satisfied that it was appropriate to leave it to the project manager to ensure that the building would not be left in a condition which might create a real risk of injury to a visitor of the class of persons of which the plaintiff was ultimately a member. 52 For my part, all other things being equal, I would have difficulty in accepting that an occupier of these premises who was not physically present at the premises and who wished to have refurbishment work of the type here involved carried out, would have failed to act reasonably if it did no more than to appoint a company which appeared to be competent as project manager of the works. Whilst there was still one tenant remaining in the building and certainly the probability that members of the public might visit that tenant, the subject works are not shown to have been inherently dangerous. Dealing with the particular facts which ultimately occasioned the plaintiff's accident and injuries, this was no more than replacement of carpet on stairs. Conventionally this operation ought not occasion any particular risk if carried out with care. 53 There are two problems with this proposition in terms of the current proceedings on appeal. 54 The first is that expert evidence was called before the trial judge on the duties of a project manager including the matter of the adequacy of periodic inspections by a project manager. The trial judge dealt with this evidence. Quadrant had called Mr Lowry who under cross-examination was asked whether (leaving aside the terms of the agreement) the project manager could ascertain that the work was being properly carried out by periodic inspections. His evidence had been that the project manager could ascertain that the work was being properly carried out provided the project manager was doing what was required of him under the contract. Generally his evidence was that the project manager should carry out his duties in accordance with the terms of the contract. 55 Howse called expert evidence from Mr Farmer. His evidence was that he was confident that anyone entering into the project management agreement would have understood that there would be full-time supervision for the relevant fee. His evidence was that in his view Mr Dwyer, on noting that the nosings were incomplete and in bringing that to the attention of the representative of Bianco on site, had discharged his obligation to supervise. For reasons explained in the judgment the trial judge formed the view that Mr Farmer had become an advocate for Howse and was not prepared to accept his opinion where it was in conflict with that expressed by Mr Lowry. 56 The second and critical problem with this proposition holding good in this case concerns the circumstance that Quadrant had itself, on the evidence, made side arrangements with an outside carpet company to supply and install the carpet in question. There was no evidence at all given to the effect that Quadrant had properly or at all apprised either Howse or Bianco of these arrangements or as to when they would be effected or of the extent, if any, to which the extant contractual obligations of Howse or Bianco were to be regarded as now extended to embrace obligations to supervise or to participate in any way at all in the matter of the installation of the new carpet by the outside carpet contractor. Once this parameter of the facts is taken into account, there can be seen to be a very grave problem for Quadrant in its attempt to ground its reasonable conduct upon its appointment of a competent project manager. 57 By definition Quadrant is now required to adopt some fallback position, as by a contention that its arrangements with the outside carpet contractor were sufficient to justify its assumption that the carpet laying works would be carried out competently and carefully. Its problem in this regard is that it did not call any evidence at all on the subject. 58 Although the trial judge did not approach the matter in this fashion, to my mind the evidence on this basis would clearly have justified a finding that Quadrant, as a matter of the sensible adjustment of reasonable expectations, had not taken the precautions which it could be reasonably required to have taken in the circumstances. Its negligence in this regard is shown up by the circumstance that the new carpet when laid was incomplete because the rubber inserts had not been fixed into the grooves. This satisfies the plaintiff's onus of proof of negligence in the matter. Quadrant's negligence in this regard is shown up by a combination of: · the duty of the occupier here to appoint a competent person to supervise the laying and installation of the new carpet; · the failure of the occupier here to coordinate on the one hand, the operations of the duly appointed project manager and/or the operations of the company appointed by the project manager to carry out the building works, and on the other hand, the operations of the outside carpet contractor with which the occupier had made its own entirely private arrangements; · the inability of the court to infer that proper arrangements with that outside carpet contractor (which were not put into evidence), must have been made. 59 Counsel for Quadrant submitted that the plaintiff at trial had not pleaded that Quadrant was vicariously liable for its agents and had not suggested at the trial that Quadrant improperly retained a third party contractor. The submission although literally true is one without substance when faced with the manner in which the trial at first instance was conducted, taking into account the several modes in which particulars were furnished of the allegation of negligence. Quadrant either carried out the work itself or arranged for the work to be carried out by others. It seeks and sought to assert that it had employed a competent carpet layer to carry out the work. Quadrant face at least an evidentiary onus to prove that Auction Centre Ltd was a competent carpet layer. 60 Counsel for Quadrant sought to take issue with the proposition that Quadrant bore such an evidentiary onus, submitting that this turned upon whether: · a prima facie duty to supervise must be said to exist unless Quadrant could show that it had appointed a competent contractor; or · prima facie no duty of supervision can be said to exist unless Quadrant suspected that the contractor it had approved was incompetent. 61 There is no substance in Quadrant's submissions in this regard. Whether or not a duty to ensure adequate supervision of particular works arises in a particular occupier will always depend upon the particular circumstances. Indeed under ordinary principles of the modern law of negligence, the duty is a duty to take reasonable care to avoid foreseeable risk of injury to the plaintiff, the practical extent of the duty being governed by the circumstances of the case: Jones v Bartlett (2000) 205 CLR 166 at 184 per Gleeson CJ. The particular circumstances before the trial judge were extremely unusual, particularly in relation to Quadrant by side arrangement, moving outside of its other arrangements to have the general refurbishment works project-managed by Howse. The evidentiary onus referred to above devolved upon Quadrant by reason of the way in which the trial was pleaded and litigated in terms of the whole of the facts which arose for determination: once the plaintiff proved the position of the occupier, the defective nosings, the nature of the stairs, and the fact of recent works, the evidentiary onus shifted: cf. U.S. Surgical Corporation v Hospital Products (1983) 2 NSWLR 157 at 258 per Glass JA. In this regard I note the acceptance by Brennan CJ, Dawson, Gaudron, Gummow and Kirby JJ in Northern Sandblasting Pty Ltd v Harris (1996-1997) 188 CLR 313 of the proposition that the landlord had discharged its duty of care to the occupants in relation to a particular repair activity by engaging a qualified contractor whose confidence it had no reason to doubt. 62 In the result the plaintiff succeeds on its notice of contention in that: · the evidence established that Quadrant arranged and engaged an outside entity (whether or not Auction Centre Pty Ltd was itself a carpet company or contractor or merely a middle-man does not appear from the evidence) to replace the carpet on the stairs of the premises; · the accident on the evidence is shown to have occurred as a result of the negligent manner in which the outside agent did its work . 63 This should suffice to deal with all of the issues on both appeals in terms of liability. 64 In deference however to the trial judge's careful reasoning it is convenient to revisit her findings which were, inter alia: - that there was no challenge to the evidence given by Mr Dwyer of the frequency with which he attended the site, that is, once per fortnight in the initial stages of the work and twice per week as the work was concluding; - that there was no challenge to the evidence even by Mr Dwyer that he contacted Quadrant after each site inspection he carried out; - that Quadrant well knew that the project manager was only attending the site at most twice per week; - that Quadrant knew what type of work was to be undertaken in the building and that it involved, inter alia , work to the stairs; - that Quadrant knew that the building was open to the public while the work was in progress; - that in the circumstances, Quadrant knew that the supervision was inadequate to ensure that the building would not be left in a condition which would create a real risk of injury to a visitor of the class of persons of which the plaintiff was ultimately a member; - that by reason of these matters the risk of the plaintiff being injured on the stairs was entirely foreseeable. 65 Clearly enough the burden of these findings rests upon the proposition that Quadrant could not reasonably in the circumstances have relied upon this project manager who had been shown only to attend the site at most twice per week. There is no reference to the outside carpet contractor and an assumption that on the evidence, the matter of supervision of the requisite nosings upon the stairs formed part of the obligations under the contract between Quadrant and Howse. 66 But for the manner in which the appeals on liability have been dealt with above, this would have raised the question of the evidentiary basis for any inference or finding of any such obligation under the project management agreement. There is certainly evidence that following the Dwyer inspection of 22 October, Quadrant, as well as Bianco, acted as if: · the original project management contract obligation of Howse to install new rubber nosings on the old carpet extended to an obligation to install new rubber nosings on the new carpet; · the original contractual obligations of Bianco were likewise extended. ( vide the instructions to Mr Hawkins to attend to the nosing problem). 67 The trial judge does not appear to have embarked upon an examination of this issue of contract. In my view the evidence, such as it is, fell well short of proving that either or both of the project management agreement or the building works agreement were varied to extend to cover the works of the third party carpet contractor, whatever may have been the contractual obligations of that contractor. Leave to appeal from the decision of Acting Judge Downs 68 The only question remaining concerns the application for leave to appeal from the decision of Acting Judge Downs of 1 November 1999 in ordering that the plaintiff pay the costs of the action of both Quadrant and Howse up to 1 November 1999. That order was plainly misconceived in the circumstances which obtained at the time. When the matter for hearing came before Acting Judge Downs on 1 November 1999, counsel for Quadrant produced a lease which identified parties other than Quadrant as the occupier of the premises at the time of the accident. Counsel then appearing for the plaintiff informed Acting Judge Downs that this was the first time such a lease had been produced and that a request for particulars of the defence which had been sought by the plaintiff in February and April 1998, had never been answered. Ownership and/or occupation had been pleaded by Quadrant in its July 1999 cross-claim. On the plaintiff's application for an adjournment Acting Judge Downs made the above-described order. The proper course was to order that the plaintiff pay the costs thrown away as a consequence of the adjournment. 69 Leave to appeal from the judgment of Acting Judge Downs should be granted. The appeal should be allowed. Orders should be made discharging the order of Acting Judge Downs and in its place an order should be made that the plaintiff pay the costs thrown away as a consequence of the adjournment. Orders 70 Accordingly, I propose the following orders: i. That appeal CA 40594 of 2002 (Quadrant Research Services Pty Ltd v Nadia Carol Dessmann & Anor) be dismissed with costs; ii. That appeal CA 40588 of 2002 (Trevor R Howse & Associates Pty Limited v Dessmann and Anor) be allowed, and that order 2 made by Ainslie-Wallace DCJ on 21 June 2002 against Trevor R Howse & Associates Pty Ltd be set aside; iii. That orders 3 and 4 made by Ainslie-Wallace DCJ on 21 June 2002 against Bianco Constructions Pty Limited be set aside; iv. That leave to appeal be granted from the judgment of Downs ADCJ dated 1 November 1999, and that the appeal be allowed; v. That the order as to costs made by Downs ADCJ be set aside, and in lieu thereof order that the plaintiff pay the costs thrown away as a consequence of the adjournment; vi. That Quadrant Research Services Pty Ltd pay the costs of Trevor R Howse & Associates Pty Limited in its appeal (CA 40588 of 2002), and of the plaintiff. ******************************* Last Modified: 06/17/2003 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.