New South Wales Court of Appeal M A Partitioning & Ceilings Pty Ltd v Kezic [2005] NSWCA 414 CITATION: This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 8 November 2005 JUDGMENT DATE: 25 November 2005 JUDGMENT OF: Santow JA at 1; Bryson JA at 75; Hoeben J at 78 DECISION: (1) Verdict be entered in favour of the appellant. ; (2) The respondent to pay the appellant's costs at trial and on appeal. CATCHWORDS: LIABILITY - Employee of sub-contractor, a gyprock fixer, injured his back on building worksite where both contractor and sub-contractor were engaged in constructing gyprock partitions and ceilings – whether contractor so involved in injured respondent employee's work, either directly or through his actual employer's supervisor, as to be subject to a non-delegable duty of care to that employee - and whether that duty breached in the circumstances – whether TNT Australia Pty Limited v Christie & Ors [2003] NSWCA 47 distinguishable. - BREACH – challenge to factual findings upon which liability based – whether employee supplied with suitable equipment – whether causation made out. - DAMAGES – whether s151Z(2) Workers Compensation Act 1987 applied to reduce damages – whether, according to statutory formula, damages should be reduced by contribution contractor entitled to obtain from sub-contractor, if both found liable. LEGISLATION CITED: Workers Compensation Act 1987 s151Z(2) Adelaide Stevedoring Co Ltd v Forst (1940) 64 CLR 538 Bennett v Minister of Community Welfare [1992] 176 CLR 408 Chappel v Hart (1998) 195 CLR 232 Purkess v Crittenden (1965) 114 CLR 164 CASES CITED: Samsung Electronics Australia Pty Ltd v Macura [2005] NSWCA 386 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 TNT Australia Pty Limited v Christie & Ors [2003] NSWCA 47 Watts v Rake (1960) 108 CLR 158 M A PARTITIONING & CEILINGS PTY LTD (Appellant) PARTIES: Pero KEZIC (Respondent) FILE NUMBER(S): CA 40447/04 J SIMPKINS, SC/ D A BAKER (Appellant) COUNSEL: G O'L REYNOLDS, SC/ J ANDERSON (Respondent) Phillips Fox (Appellant) SOLICITORS: Martin Bell & Co (Respondent) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 13554/01 LOWER COURT JUDICIAL OFFICER: Robison DCJ IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40447/04 DC 13554/01 SANTOW JA BRYSON JA HOEBEN J 25 NOVEMBER 2005 M A PARTITIONING & CEILINGS PTY LTD v Pero KEZIC Judgment 1 SANTOW JA: INTRODUCTION This appeal is from a decision rendering a contractor (who in this case is sub-contracted to the ultimate contractor) liable in negligence as a quasi-employer for the injury suffered by its sub-contractor's employee. It calls into question yet again the degree to which the contractor must be involved in the work of the sub-contractor before the contractor is rendered liable as a quasi employer for injury suffered by the sub-contractor's employee. 2 Here, the employee of a sub-contractor, a gyprock fixer, injured his back on a building worksite in which both appellant contractor and the sub-contractor were engaged in constructing gyprock partitions and ceilings. Was the appellant contractor so involved in the injured respondent employee's work, either directly or through his actual employer's supervisor, as to be subject to a non-delegable duty of care to that employee? And was that duty breached in the circumstances? 3 The appellant's challenge is both as to liability and breach. As to liability, the contention is that the trial judge, Robison DCJ, was in error in concluding that the appellant, M A Partitioning & Ceilings Pty Ltd ("MAP") was in a position analogous to that of an employer. Relevant factors include MAP's degree of control over the work, its supply of materials and such role if any as it played in the engagement of the employee's supervisor, Mr Pecar. The latter was the principal of the sub-contractor V & B Interiors Pty Ltd ("V & B"). The appellant seeks to distinguish the decision of the New South Wales Court of Appeal in TNT Australia Pty Limited v Christie & Ors [2003] NSWCA 47, applied by the trial judge to render the appellant as if an employer with a non-delegable duty. MAP contends that such duty did not arise in the circumstances. The respondent for its part relies on that decision as the sole basis for attributing quasi employer status to the appellant. 4 On breach, the appellant challenges the factual findings upon which liability was based, in particular whether the respondent was supplied with suitable equipment, and causation made out. 5 Finally, in the event that liability and breach were unsuccessfully challenged, there is an issue whether, having regard to the pleadings and the way the matter was argued at trial, s151Z(2) of the Workers Compensation Act 1987 ("the Act") applied to reduce the damages and if so, by what amount. The appellant's contention is that damages should have been reduced by reference to the contribution that MAP was entitled to obtain from V & B if both were judged liable, in accordance with the statutory formula. SALIENT FACTS 6 MAP conducts the business of constructing gyprock partitions and ceilings, with some of its work being performed by employees and some by subcontractors. Mr Michael Andacic was a director of MAP. 7 V & B was a corporation conducting a subcontracting business. Mr Vladimir Pecar was a director of V & B, and the respondent Mr Pero Kezic was engaged by V & B as a labourer. 8 In much of the evidence Mr Pecar is referred to as 'Vlado' and Mr Andacic is referred to as 'Bozo'. 9 In September 1999, MAP (as intermediate subcontractor) entered into a written subcontract agreement with Consolidated Constructions Pty Ltd ("Consolidated") to supply and install suspended gyprock ceilings at premises in Pyrmont (Darling Harbour), for the "Renaissance Project". 10 Pursuant to the contract, MAP was required to: (a) Employ suitably qualified and experienced labour, sufficient to enable the works to proceed pursuant to a program; (b) Effect workers compensation insurance with respect to its employees and ensure any of its subcontractors effected workers compensation insurance in relation to the subcontractor's employees; (c) Obtain written consent of Consolidated before subcontracting any part of the works. 11 By oral agreement between Mr Andacic of MAP and Mr Pecar (Vlado) of V & B, V & B agreed to provide labourers to MAP to work on the Renaissance Project. According to MAP, the contract involved subcontracting "some of the work" (to V & B). According to V & B, the contract was limited to the provision of labour (by V & B to MAP). 12 V & B did not effect workers compensation insurance. Although Mr Andacic expected that V & B would obtain it, he took no steps to ascertain whether it was taken out. 13 On 21 February 2000, Mr Kezic sustained injury to his back whilst employed as a labourer at the Renaissance Project site pursuant to the agreement between MAP and V & B. The injury occurred when Mr Kezic attempted manually to raise the level of a rigidly fixed overhead pipe by pushing it upwards whilst standing upon the apex of a frame stepladder. He alleged he had previously requested and been refused assistance and supervision. There is no evidence as to whether or not he succeeded in raising it at all, or by the necessary 10mm needed to reposition it. According to Mr Tozer (the respondent's expert) the latter required a force of 15 kilograms, just below the safe lifting limit. 14 In November 2001, Mr Kezic lodged a Statement of Claim with the District Court commencing proceedings in the alternative against V & B (first defendant), MAP (second defendant) and Mr Andacic (third defendant). 15 The Statement of Claim asserted that each of the defendants was the employer of Mr Kezic. Summary judgment was entered in favour of Mr Kezic against V & B (which did not lodge a defence), and he discontinued proceedings against Mr Andacic. MAP applied for summary judgment on the basis that the action brought against it was solely on the basis that it was the employer, contending that the evidence demonstrated that only V & B was the employer. Garling DCJ dismissed the application, but no amendment was ever made to the pleadings. 16 The matter came before Robison DCJ to determine whether MAP was to be treated as Mr Kezic's employer. Robison DCJ entered judgment for Mr Kezic against MAP in the sum of $473,684.06, The First Instance Judgment 17 The primary judge accepted that Mr Kezic gave evidence in a truthful and honest way and described him as an impressive witness who did not seem to be a person seeking to deceive or deliberately tell untruths (Red, 53G-O). Thus the primary judge concluded that his evidence should be preferred to the evidence of Mr Andacic, at least as to whether Mr Andacic had a direct involvement with Mr Kezic in carrying out of his work and the degree of that involvement. Mr Andacic had denied any direct involvement with Mr Kezic whereas Mr Kezic contended otherwise (Red, 53T-54F). 18 The key findings of fact relating to breach of duty and employment status are set out below: (1) There was no scaffolding provided and Mr Kezic was only provided with a relatively short stepladder with rungs on both sides (Red, 17S, 18F-H). (2) Mr Kezic had used ladders of that kind in the past and had some experience in the area of gyprocking (but of months not years, having only arrived in Australia in 1998 and commenced work with V&B in October 1999) (Red, 18I-U). In particular he had no experience insofar as any question of plumbing was concerned nor should he have been expected to have such experience (Red, 21Q-R). (3) On 21 February 2000, Mr Kezic was required to lift "furring channels" to a uniform height and then fix the gyprock panel to the "furring channels" with screws (Red, 20G-J). In so doing he came across a pipe structure in the ceiling obstructing the procedure, and it was necessary to lift this structure about 10mm in order to enable the gyprocking to be performed (Red, 19J-Q, 20K-T). Mr Kezic raised the matter with Vlado (Mr Pecar), who told him "just go back and fix it and finish the work" (Red, 20U-21E). Mr Kezic then attempted to lift the pipe by standing on the ladder as described and so injured his back (Red, 22F-K). (4) Mr Andacic should be accepted that scaffoldings in the context of the room in which Mr Kezic was working would be impractical, but conceded it was possible to install trestles and planks and that was not done (Red, 51O-T). (5) Although there is no evidence as to whether the pipe in fact moved, it is quite clear that there was some force applied by Mr Kezic in his attempt to move it, and on the balance of probabilities that force was sufficient enough to create a significant injury to his back (Red, 55N-X). (6) Although Mr Kezic used the stepladder which he had used in the past, the real problem was that he did not receive any assistance whatsoever to facilitate the apparent need to move the pipe (Red, 57M-R). (7) Mr Kezic was effectively not supplied with suitable equipment; although scaffolding was inappropriate it would have been preferable for the supply of a trestle-type arrangement which would have to some extent assisted him (Red, 57S-V). (8) There is a real question as to whether there was appropriate supervision in all the circumstances. Mr Kezic exerted himself perhaps unwisely in the way he did, but nevertheless he had asked for assistance and was not provided with any (Red, 57W-58H). 19 Turning to the findings concerning Mr Kezic's employment status: (1) Mr Kezic conceded that Vlado was his "boss" and the person to whom he went if he had a problem, and that Vlado was "not always on site, but mostly" (Red, 21F-K). Also if he were unable to do the job, the person most likely to be in a position to sack him would be Vlado (Red, 47C-G). (2) Mr Kezic never received wages from MAP (Red, 47C). (3) It is quite clear that Vlado's organisation (V & B) was engaged to undertake the work and the work was work of a "subcontracting nature" which did tend to bring into play clause 22 of the contract between MAP and Consolidated requiring Consolidated's consent thereto (Red, 48H-N). The fact that Mr Andacic did arrange the undertaking without obtaining the approval of Consolidated (so breaching that contract) without concern indicates that he was a person who expected the work to be done, and done on the basis that MAP would ultimately receive remuneration from Consolidated (Red, 48T-49F). Thus he would have expected the work to be done by V & B so in turn he could be remunerated by Consolidated (Red, 49G-J). (4) Mr Andacic says he paid for the knowledge and experience of Vlado and V & B, and that Vlado was undertaking the same work as his own employees were undertaking and that he left Vlado to supervise the employees in order that the work be undertaken (Red, 50T-Y). (5) It can fairly be assumed that Vlado was effectively a supervisor or foreman and there was a relationship between Vlado and Mr Andacic "in that particular atmosphere" (Red, 51B-F). (6) The work undertaken by V & B coincided with the work undertaken by direct employees of MAP, and indeed MAP supplied the rotating laser beam, other tools, the gyprock components and all other materials necessary to finish the job (Red, 51H-N). (7) The entire relationship between Mr Andacic and Vlado should be considered in the context of the elements of control and direction, and workplace practices (Red, 59J-N), which he described as follows: (a) Mr Andacic had significant involvement in this enterprise, regularly attending the premises, (b) Mr Andacic trusted Vlado and expected Vlado's side of the work to be completed, (c) Mr Andacic had "an umbrella" under which certain persons performed duties such as Vlado and those who worked under him including Mr Kezic (Red, 61B-F), and (d) In the overall circumstances of the relationship, it should be considered that Vlado was in the category of a supervisor or foreman engaged on behalf of MAP (Red, 65E-F), stemming from the relationship he had with Mr Andacic's organisation (Red, 61N-R, 65E-F). (8) Although the statement of claim alleges employment, what is really being alleged is a relationship analogous to employment with the responsibilities thereby entailed (Red, 63E-H). (9) Based on the reasoning in TNT Australia Pty Limited v Christie (supra), MAP's position was analogous to that of an employer, having regard to the elements of control, the supply of materials and the engagement of persons such as Vlado as supervisor (Red, 64L-P). 20 Thus the primary judge concluded not only that MAP had effectively conceded there was a duty of care (Red, 58S-T) but also that the duty of care must be considered in the context of the relationship of those persons engaged in undertaking the work at the time. This was said to constitute a duty to take reasonable care in the context of the work involved and the duties required of those undertaking the work (Red, 58U-Y). Moreover, it was a duty owed in the context of a person who, although he sought assistance, was not provided with any direction other than to attend to the matter himself in circumstances where there was a clear need for assistance, probably of a licensed plumber (Red, 59A-I). 21 Although Mr Kezic was a reasonably experienced gyprocker, it was not his responsibility to undertake work properly in the realm of a licensed plumber (Red, 59V-60S). 22 The primary judge concluded that Mr Pecar had a responsibility to ensure that something was done about the problem which Mr Kezic confronted, commensurate with his relationship as a foreman or supervisor for Mr Andacic. Moreover, MAP was not in a position where it could effectively delegate its duty of care to Mr Pecar as it had a duty to ensure that reasonable care was in fact taken (Red, 63K-U). Moreover, it had a responsibility to ensure that persons in the supervisory role were suitably qualified to carry out that role and in fact carried it out (Red, 63V-Y). 23 Given the serious and significant lack of supervision here and leaving Mr Kezic to his own devices after he asked for assistance, there was held to be a breach of a duty of care, specifically in failing to provide and/or maintain a safe system of work consisting of the following failures: (a) to provide any, or any sufficient, assistance to enable Mr Kezic safely to perform his tasks, (b) to instruct Mr Kezic adequately or at all as to the safe manner of performing the task required of him, (c) to supervise Mr Kezic adequately, and (d) to ensure the safe performance of the tasks of Mr Kezic (Red, 64-5). DISPOSITION 24 On liability, the primary issue is whether MAP was, in the words of the trial judge, in a position analogous to that of an employer vis a vis Mr Kezic; in that sense, a quasi employer. 25 It is important to emphasise that the only basis upon which the respondent contended that MAP was a quasi employer was that delineated in TNT Australia Pty Ltd v Christie. In particular the respondent contended that the circumstances were analogous to those described in relation to TNT by Mason P, where the employee/plaintiff was assigned by a body hire company (Manpower) to TNT to work at work at a brewery operated by it. Mason P described the critical circumstances thus: [41] ….. I would indicate that there is no merit in TNT's attempt to differentiate its position from that of an employer. ….. Judge Delaney was correct to have concluded that TNT was in a position analogous to that of an employer as regards (non-delegable) duty of care to the plaintiff. TNT exercised day-to-day control over the plaintiff's work activities, treating him to all intents the same as its employees as regards work on the factory floor (CB 24-26, 41, 61-62, 65). The relevant findings are set out above. It can be seen that the plaintiff and TNT placed themselves in a relationship, day in and day out, indistinguishable from that of employee and employer. I am not saying that every client of an employment bureau will assume such a relationship with the person at whose workplace he or she attends. But here the plaintiff had for months been under the daily control of TNT and its managerial staff at the brewery. He was a relatively unskilled labourer. He reported daily to the brewery and everything that he did there was done under the full control of TNT. TNT's relationship was more than that of an occupier of the factory. In all respects relevant to the imposition of a duty of care the plaintiff was in an identical position to that of the four TNT employees with whom he worked." 26 It is true that the reasoning of Mason J in Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 31 was drawn upon by Mason P (at [43]) to explain why TNT's duty of care to the plaintiff in relation to a safe system of work was similar to that of an employer. The passage quoted from Mason J is as follows: "The interdependence of the activities carried out in the forest, the need for co-ordination by Brodribb of those activities and the distinct risk of personal injury to those engaged in the operations, called for the prescription and provision of a safe system by Brodribb . Omission to prescribe and provide such a system would expose the workers to an obvious risk of injury. Although the obligation to provide a safe system of work has been regarded as one attaching to an employer, there is no reason why it should be so confined. If an entrepreneur engages independent contractors to do work which might as readily be done by employees in circumstances where there is a risk to them of injury arising from the nature of the work and where there is a need for him to give directions as to when and where the work is to be done and to co-ordinate the various activities, he has an obligation to prescribe a safe system of work. The fact that they are not employees, or that he does not retain a right to control them in the manner in which they carry out their work, should not affect the existence of an obligation to prescribe a safe system. Brodribb's ability to prescribe such a system was not affected by its inability to direct the contractors as to how they should operate their machines." 27 However, it is important to underline that in the present case the respondent eschewed reliance upon that basis of liability in Brodribb; it may be referred to by the shorthand "the co-ordination basis" of liability. That derives from interdependence of activities there carried out and the need for co-ordination by the head contractor in order to avoid the distinct risk of personal injury to those engaged in the operations, so calling for the prescription and provision of a safe system of work by that contractor. Such overall site-co-ordinating role as might have been exercised by MAP was not called in aid by the respondent, no doubt having regard to the way the case was argued at trial, in circumstances where the pleadings themselves fell short of so alleging. Essentially MAP and V & B were both engaged in the gyprocking and plastering, working alongside each other on site, with MAP in the superior position as contractor to V & B as sub-contractor, under arrangements described below. 28 The respondent's case on appeal was based upon circumstances giving rise to a non-delegable duty of care so far as MAP was concerned. Mason P in TNT Australia Pty Limited v Christie described a non-delegable duty of care as being like a duty based on vicarious liability. It was "imposed on categories of persons regardless of personal fault on their part in the circumstances giving rise to the plaintiff's injury" and so that "the plaintiff must prove that damage was caused by lack of reasonable care on the part of someone (but not necessarily the defendant) within the scope of the relevant duty of care" (at [47]). 29 Mason P also referred to the second requirement, "namely that the plaintiff's injury occur within the scope of a special relationship" (at [48]). That issue strictly concerns breach rather than duty and I will deal with it in that context. 30 I need now to look more closely at the evidence bearing upon whether the circumstances are sufficiently close to those in TNT Australia Pty Limited v Christie to justify treating this case as indistinguishable. 31 The starting point is the background to the relationship between MAP and V & B including their relationship prior to the Renaissance project and then to look more closely at how Mr Andacic and Mr Pecar interacted, and also Mr Kezic the respondent. It is necessary to do this in order to test the trial judge's findings which underpin his conclusion on the quasi employer status of MAP. It is also necessary to do this in order to identify whether there were indeed significant differences between MAP's degree of involvement in the work carried out and that which was judged necessary or sufficient in TNT Australia Pty Ltd v Christie. Essentially the trial judge concluded that Mr Andacic had such direct and ongoing involvement with Mr Pecar and Mr Kezic in terms of ongoing instructions either directly to Mr Kezic or through Mr Pecar that essentially Mr Kezic was performing the work under the direction and control of MAP, so rendering MAP a quasi employer of Mr Kezic. As emerges from the consideration of the evidence, I conclude that this significantly overstates the position. 32 Beginning with the activities which preceded the Pyrmont or Darling Harbour job, Mr Kezic gave evidence that he had started working originally on an earlier site at Narrabeen as a gyprocker with the next job at Pyrmont or Darling Harbour (Black, 46N-Q). At both these sites, the head contractor was a builder Consolidated Constructions Pty Limited. 33 When Mr Kezic first arrived on the site at Narrabeen, Mr Pecar in some cases told him what was to be done and how he was to do it and in some cases this was not done directly (Black, 47D). In that earlier period, Mr Kezic gained experience also from people who worked for MAP by working alongside them (Black, 47G-J). Thus he obtained proficiency (Black, 47L). 34 MAP in September 1999 had entered into a written subcontract agreement with Consolidated to supply and install suspended gyprock ceilings at premises in Pyrmont for the "Renaissance Project". The written contract required that MAP supply "all labour, materials, plant and equipment to complete ceiling and associated works …" and as subcontractor to be "responsible for all materials, delivery and packaging …". 35 However, the arrangements between MAP and V & B were more informal. In Mr Andacic's sworn statement on 15 October 2003 he describes himself as the sole director of MAP providing gyprocking services to the building trade in Sydney, he being a carpenter by trade. He described how he had met Mr Pecar in approximately 1995 to 1997, Mr Pecar being employed as a gyprocker who set up V & B in June 1999. His company "was to provide labourers for gyprocking work". 36 The first job that Mr Andacic described his having given Mr Pecar and V & B was for gyprocking at the Narrabeen site (Blue, 6). There, due to the large amount of work involved he subcontracted some work to V & B, entering into a verbal agreement for the provision of labour by Mr Pecar through his company V & B at the Narrabeen site (Blue, 7). 37 V & B employed two or three workers for the Narrabeen site one of whom being Mr Kezic. 38 At paragraph 28 of Mr Andacic's statement he says: "Towards the end of the contract for the Narrabeen site, [MAP] was awarded the contract by Consolidated Construction Pty Limited for the provision of gyprocking services at a construction site at Darling Harbour. I again entered into an oral agreement with V & B to provide labour at the Darling Harbour site. I do not recall the exact words of this agreement." 39 He described the method of payment for the Darling Harbour site. V & B invoiced MAP at an agreed rate of which a part was retained by V & B to cover profit including workers' compensation insurance. (I interpose here that V & B regrettably did not in fact effect workers' compensation insurance despite what were said to be assurances that it had.) 40 Mr Andacic's oral evidence as to the overall arrangements with MAP was to similar effect (Black, 164-5). He confirmed that arrangements were the same as for the Narrabeen site with payment based on invoices and with materials supplied by MAP, the work being usually framing and lining with gyprock. The so-called "fine work" which involves actual application of the plaster between the actual joins, called "setting" was done not by V & B but by MAP's workers (Black, 166W-167C). 41 Turning to the other site arrangements at Pyrmont, Mr Andacic gave evidence in chief that in the morning before work started he directed over the phone "what work they were to do, that is V & B", usually speaking to Mr Pecar (Black, 167M-S). 42 Mr Andacic said that there was not anybody else at V & B to whom he spoke (Black, 167T), though other V & B workers were present from time to time (Black, 167V). 43 Mr Andacic denied ever giving Mr Kezic instructions (Black, 168C). 44 I pause here to compare the evidence of Mr Kezic on the daily working arrangements. As noted above, the trial judge considered that Mr Kezic's evidence should be preferred to the evidence of Mr Andacic, at least as to the dispute as to whether Mr Andacic had direct involvement with Mr Kezic, and more of an involvement than he (Mr Andacic) asserted (Red, 53G-54F). 45 Mr Kezic gave evidence in chief that Mr Andacic gave him specific instructions at the Darling Harbour site (Black, 11T-X; 13E-N). Under cross-examination he maintained that Mr Andacic had given him direct instructions and denied that Mr Andacic only spoke to Mr Pecar when he came to the site (Black, 89Q-X; 90G-M). 46 However, Mr Kezic's evidence was also that in terms of his day to day working for V & B, if he had any problems in terms of the job he was doing or the supply of materials or indeed any problem "you would ask Vlado [Pecar], correct?" His answer being "Yes, if he was present at the site." (Black, 46M-P). I have earlier referred to his evidence about initially being inexperienced and working alongside MAP's more experienced partitioners, though it can be taken that by the time he was on the Pyrmont site he would have been considerably more experienced. 47 Mr Kezic in cross-examination agreed that Mr Andacic would only come to the site for a short period of time each day (Black, 48Y-49B). Problems otherwise were sorted out on the phone (Black, 49D). 48 Mr Kezic then responded to the following questions in a passage to which I attribute some significance: "Q. This particular task you told us about in February 2000 you, I think, told us was given to you to be performed by Vlado, is that right? A. Yes. Q. You don't know who had put the bolts in the ceiling or the clips in place but someone had done it before you got there, is that right? A. Yes. Q. and you have told us this morning that when you got up there and attempted to continue with the job, that, having seen that the level was too low, that you actually raised that with Mr – With Vlado, is that right? A. Yes. Q. And the reason that you did that was because, as usual, if you had a problem Vlado's the man you turn to? A. Yes ." (Black, 49E-L) [emphasis added] 49 There was a significant passage of cross-examination in which Mr Kezic agreed that Mr Pecar told him which site to go to and what time to be there (Black, 97D-H). 50 Then follows this question and answer of some significance: "Q. And when you got to work as we have already discussed he told you what to do and the like? A. Most of the times, yes." (Black, 97I-J) 51 Mr Kezic confirmed that Mr Pecar provided tools needed, whose tools they were he didn't know, and also acknowledged that "if you didn't do the job as Vlado asked you to do it, he could sack you, is that right?" His answer being "Most likely" (Black, 97X-Y). 52 Moreover, he was paid only by V & B, never by MAP (Black, 98B-E). 53 It was only when Mr Pecar was not on site, and he was mostly on site, that if he needed to ask some questions he turned to Mr Andacic or several people working for him (Black, 99F-H). In answer to the question what he would do if Mr Andacic was not present, he stated "I used to call Mr Andrijic's [sic] office or him personally in case I needed something or I needed some explanation and someone had to come to give that explanation to me regarding materials and other problems." (Black, 99M-O). 54 Even accepting Mr Kezic's evidence that Mr Andacic gave him direct instructions on some occasions, when Mr Andacic's evidence is put alongside Mr Kezic's, it indicates that such involvement that Mr Andacic had with Mr Kezic on any direct basis was relatively minimal. That however leaves the question of whether it could be said that Mr Andacic directed the work done by Mr Kezic through instructions given by Mr Andacic to Mr Pecar and it is to that I now turn in more detail. 55 Mr Andacic gave evidence in cross-examination that he was not just paying V & B for labour but also "I paid his knowledge" meaning Mr Pecar's knowledge (Black, 185F-I and see also Black, 185V-X). I pause to interpolate that this is a distinguishing feature from Manpower's limited role as a manpower supply company to TNT in TNT Australia Pty Limited v Christie where TNT was in no way dependent upon Manpower for expertise. 56 There then followed the following significant cross-examination of Mr Andacic: "Q. And the reason for that ["Vlado was important, actually his company, his knowledge"] was that by employing Vlado and getting him to bring his men it was the same to you as having another foreman and some men under him, correct? A. He's not like foreman you know. Q. You were giving Vlado the instruction -- A. In your context you can take it like that, but in my head it's not like that. Q. Well, you had your own foreman on site? A. Yes. Q. And you had Vlado on site? A. Yes I had Vlado on site." (Black 185Y to 186G) 57 Mr Andacic then explained that Mr Pecar was not equivalent to his foreman: "Q. You didn't tell his Honour that? A. You have two [sic] separate these two things. My foreman, I instruct my foreman to do the works. I haven't instructed Vlado what to do. Vlado got his own set of plans. If he finish one part he continue without asking me. Only if he got some problems then I come on site to instruct him or help him how to solve his problems. My foreman, I instruct my foreman basically every day what to do. I haven't instructed Vlado. Vlado was skilled enough to read the paperwork, to read the plans and instruct his own workers what to do. That was the purpose I hired Vlado." 58 In earlier evidence, Mr Andacic sought to distinguish Mr Pecar from the labourers that he controlled in the following question and answer: "Q. The people that you got from V & B, with the exception of Vlado were people who were generally unskilled labourers, correct? A. I don't know what people, I hire V & B Interiors and Vlado is a skilled carpenter and one skilled carpenter as you know he can easily control another two, three or four. Labourers are labourers, that is not important for me, Vlado was important, actually his company, his knowledge." 59 To similar effect is the following cross-examination of Mr Andacic: "Q. You engaged V & B because you knew Vlado could fulfil the role as a supervisor on site, correct? A. OK, yes. Q. And you trusted his discretion to employ labourers under his supervision? A. Alright, if you put it like that, yes." (Black, 195G-I) [emphasis added] 60 The position is therefore far from that described by Mason P in TNT Australia Pty Limited v Christie. Whereas TNT "exercised day to day control over the plaintiff's work activities, treating him to all intents the same as its employees as regards work on the factory floor" MAP gave few if any directions to V & B's employee Mr Kezic, but rather relied upon Mr Pecar of V & B to supervise Mr Kezic's work. Nor can it be said that in issuing instructions to Mr Pecar as to where work was to be done or even, as to some specific aspects of how the work was done, MAP controlled Mr Kezic's performance of his tasks via instructions to Mr Pecar. In these respects, the circumstances of the present case are analogous to those in Samsung Electronics Australia Pty Ltd v Macura [2005] NSWCA 386. 61 Other differences between these circumstances and TNT Australia Pty Limited v Christie include in Christie (at [4]) that the plaintiff (a) was the sole casual working alongside four of TNT's employees whose duties were identical to his, (b) reported to the TNT warehouse manager to obtain his daily duties, (c) was directed by TNT as to (i) what time to come to work, (ii) what work he had to do each day, (iii) what hours he worked, and (iv) what specific jobs he had to do. (d) If he had any problems, he reported them to a TNT employee, and (e) The Manpower representative was on site once a week only, primarily to deal with administrative matters. 62 Turning to the trial judge's findings which underpin his conclusion on duty, they include that MAP through Mr Andacic provided various materials and equipment to V & B and that Mr Pecar undertook the same work as some of Mr Andacic's own employees with there being a basic coincidence of the work done by each group. He also sets out conclusions of some generality which needed to be tested against the evidence. These I have summarised below: (a) At various times Mr Andacic had a direct involvement with Mr Kezic (Red, 53V). (b) Mr Kezic received instructions from Mr Pecar on a daily basis but also from time to time received instructions from Mr Andacic (Red, 57L). (c) Mr Andacic had a significant involvement in the enterprise and regularly attended the premises (Red, 59P). (d) Mr Andacic had "an umbrella" under which certain persons performed duties (such as Mr Pecar and those who worked under him including Mr Kezic) (Red, 61D). (e) Mr Andacic had a direct and ongoing involvement with persons such as Mr Kezic in a concurrent course of activity undertaken by both Mr Pecar and Mr Andacic (Red, 61H). (f) Mr Pecar was in the category of a supervisor or foreman stemming from the relationship that he had with Mr Andacic's organisation (Red, 61P and also 62P and 65E). (g) Mr Pecar was a person who was effectively "under the umbrella of overall control and responsibility" of MAP (Red, 63T). Conclusion 63 Those conclusions even on their terms fall short in my respectful opinion of the kind of precise findings that would be necessary to hold MAP to be in a position analogous to the employer of Mr Kezic. I take those conclusions to imply that Mr Pecar at least and through him Mr Kezic were subject to the continued direction of MAP. But there are no precise findings as to the extent that power of direction was exercised. Expressions such as "umbrella" do not really advance the matter. To describe Mr Pecar as a supervisor or foreman for MAP goes further than the evidence justifies, if it implies that Mr Pecar was a mere conduit for instructions for how Mr Kezic was to carry out his work on site, beyond broad matters of the order (in the sense of priority) in which the work was to be done. Such a conclusion would be unjustified, given the level of Mr Pecar's skill and the discretionary responsibility conferred on him by Mr Andacic. What emerges from a closer consideration of the evidence is that though MAP did have some involvement through Mr Andacic in the work carried out on the site, that involvement fell short of the degree of involvement in Mr Kezic's work as would be needed to establish that MAP was to all intents and purposes his employer. The evidence falls significantly short of that. BREACH 64 Given the conclusion I have reached that there was no duty of care analogous to that of an employer and certainly not a non-delegable one, it is not strictly necessary that I deal with the further issue of breach in the context of causation, though I will make some brief observations upon that. 65 The protrusion of the pipe clearly called for a plumber's intervention if it could not readily be corrected in a safe manner. When Mr Kezic sought assistance from Mr Pecar his supervisor, he was told to deal with the pipe himself. 66 It was argued by the appellant that causation had not been established in the absence of any evidence (a) as to the force of Mr Kezic "pushing" of the pipe, (b) as to that force, placing an inappropriate strain on his back, (c) as to whether the pipe was in fact successfully pushed back 10mm. 67 This was in circumstances where the evidence of the respondent's expert, Mr Tozer, was that the force required to remove the obstruction was 15 kilograms (Black, 112C) a force below the safe vertical pushing force of 16 kilograms (Black, 105R). The primary judge did not address that evidence. 68 The appellant's argument is summed up as follows: "What was required to be demonstrated by the respondent (but was not) was not merely that he was left to attend to a task for which he was unsuited by training or experience but further that his incompetence (by, for example, applying an excessive force) produced his injury. All that was demonstrated was that the task was the occasion of injury, not its cause." See written submissions 19 September 2005 at paragraph 42. 69 However, as Gaudron J observed in Bennett v Minister of Community Welfare [1992] 176 CLR 408 at 420-1 (as subsequently adopted in Chappel v Hart (1998) 195 CLR 232): "And although it is sometimes necessary for a plaintiff to lead evidence as to what would or would not have happened if a particular common law duty had been performed, generally speaking, if an injury occurs within an area of foreseeable risk, then, in the absence of evidence that the breach had no effect, or that the injury would have occurred even if the duty had been performed 24, it will be taken that the breach of the common law duty caused or materially contributed to the injury. However, the question whether some supervening event broke a chain of causation which began with or which relates back to an omission or a failure to perform a positive duty, is one that can only be answered by having regard to what would or would not have happened if the duty had been performed. It is only by undertaking that exercise that it is possible to say whether the breach was "still operating, or, continued to be causally significant when the harm was suffered." [omitting footnotes] 70 Here, indubitably, Mr Kezic's employer exposed him to the risk in question by requiring him to carry out a task that was inherently dangerous, namely pushing upwards a fixed pipe in circumstances where there must have been a risk that he would suffer back injury. Moreover, the risk came home in the sense that he did injure his back and there is no causal candidate other than a possible pre-existing condition. As to that, it was for the appellant in terms of an evidentiary onus to demonstrate the effect of that pre-existing condition in untangling causality (Watts v Rake (1960) 108 CLR 158 and Purkess v Crittenden (1965) 114 CLR 164) and the appellant made no attempt to do this. 71 Moreover, a plaintiff's inability to call lay or expert evidence that shows the precise way in which something has happened is not fatal: see Adelaide Stevedoring Co Ltd v Forst (1940) 64 CLR 538 at 563-4, 569. Here we simply do not know whether Mr Kezic's effort to push the pipe back into the ceiling by 10 millimetres was unsuccessful. He may have pushed at below the safe maximum of 16 kilograms. Equally the evidence is consistent with his having pushed above the safe limit. What we do know is he injured his back on site, making the second proposition more likely. In the nature of a case such as this one would not expect definitive evidence of whether the pipe was in fact pushed in. Any evidentiary onus to advance it should properly fall on the defendant rather than the plaintiff. 72 Accordingly were it necessary so to decide, I consider that the issue of causation was correctly resolved by the trial judge in favour of the respondent. Thus breach would have followed in the case of an employer or quasi employer. But MAP was neither of those. DAMAGES 73 It is clear enough that s151Z(2) of the Act should have been applied to reduce damages in accordance with its formula, subject only to the respondent's contention, factually correct, that the point was not taken below. However, as I have concluded that damages do not arise, there is no further need to enter into that issue. OVERALL CONCLUSION AND ORDERS 74 The appellant has been successful overall on the principal matter in contention, namely the employment status of the appellant vis a vis Mr Kezic. In those circumstances I would propose orders as follows: (1) Verdict be entered in favour of the appellant. (2) The respondent to pay the appellant's costs at trial and on appeal. 75 BRYSON JA: Upon the facts found by Robison DCJ it was in my opinion wrong to conclude that the appellant incurred a duty of care in tort to the respondent analogous to the duty of care owed in contract and in tort by an employer to its employee. The appellant did not assume and also did not exercise control over the respondent and over what he did in any detailed manner, or in any manner at all except that it contracted with the respondent's contractual employer for the performance of part of the gyprock fixing work: the appellant's control and direction were exercised over the respondent's employer and not over the respondent himself. This is so whether attention is directed to the general organisation of the work on the site, or to the particular operation in which Mr Kezic was left without instruction to perform a work operation according to his own devices: the respondent was not in fact integrated into the appellant's work organisation and was not in fact controlled or directed in detail or in any way in the operation he was attempting when injured. The appellant's representative rarely spoke to him, and the infrequency of such events illustrates that there was no relationship in any way like an employment relationship. The facts in TNT Australia Pty Ltd v Christie & Ors [2003] NSWCA 47 illustrate how far removed the appellant and respondent were from such a relationship. 76 I respectfully agree with Santow JA's account of the facts and reasons for disposition of the appeal, but do not join in his Honour's observations on causation with which it is not necessary to deal. I am particularly concerned that observations in Watts v Rake (1960) 108 CLR 158 and in Purkess v Crittenden (1965) 114 CLR 164 should not be accorded undue significance and should not be thought of as authority for rules of law about movement of the evidentiary onus, inherently a subject for reasoning about fact finding and not for the operation of legal rules. 77 I agree with the Orders proposed by Santow JA. 78 HOEBEN J: I respectfully agree with the conclusions of Santow JA and Bryson JA on the duty of care question. As the analysis by Santow JA illustrates, the facts in TNT Australia Pty Limited v Christie & Ors [2003] NSWCA 47 were quite different to those under consideration here. 79 I agree with the orders proposed by Santow JA. ********** 07/12/2005 - - Paragraph(s) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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