New South Wales Court of Appeal CITATION: Coastwide Fabrication & Erection Pty Ltd v Honeysett [2009] NSWCA 134 HEARING DATE(S): 19 May 2009 JUDGMENT DATE: 12 June 2009 JUDGMENT OF: Ipp JA at 1; Young JA at 2; McDougall J at 3 DECISION: See paragraphs [128] to [130] of the judgment. CATCHWORDS: TORTS - negligence - duty of care - whether employer breached duty of care to employee - causation - whether causal link shown between breach of duty and injury - matter of inference - distinction between inference and speculation. Civil Liability Act 2002 LEGISLATION CITED: Evidence Act 1995 Law Reform (Miscellaneous Provisions) Act 1946 CATEGORY: Principal judgment Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 Chappel v Hart (1998) 195 CLR 232 Flounders v Millar [2007] NSWCA 238 CASES CITED: Jones v Great Western Railway Co (1930) 144 LT 194 Nguyen v Cosmopolitan Homes [2008] NSWCA 246 Ruddock v Taylor (2003) 58 NSWLR 269 Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 Coastwide Fabrication and Erection Pty Ltd (Appellant) PARTIES: Allan James Honeysett (First Respondent) Blue Circle Southern Cement Limited (Second Respondent) FILE NUMBER(S): CA 40260/08 J E Maconachie QC / J B Turnbull (Appellant) COUNSEL: G F Little SC / A Giurtalis (First Respondent) N J Polin (Second Respondent) McCabe Terrill Lawyers (Appellant) SOLICITORS: Russell McLelland Brown Lawyers (First Respondent) Griffin Hilditch Lawyers (Second Respondent) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): DC 97/2006 LOWER COURT JUDICIAL OFFICER: Delaney DCJ LOWER COURT DATE OF DECISION: 17/06/08 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40260/08 DC 97/06 IPP JA YOUNG JA McDOUGALL J 12 June 2009 Coastwide Fabrication & Erection Pty Limited v Allan James Honeysett & Anor Judgment 1 IPP JA: I agree with McDougall J. 2 YOUNG JA: I agree with McDougall J. 3 McDOUGALL J: The first respondent (Mr Honeysett) is a boilermaker by trade. In October 2003, he was employed by a labour hire company, Rhino Constructions Pty Limited (Rhino). Rhino provided Mr Honeysett's services to a number of companies, including the appellant (Coastwide). 4 On 21 October 2003, Mr Honeysett was working, at the direction and under the supervision of Coastwide, at the plant of the second respondent (Blue Circle) at Maldon, near Berrima. Mr Honeysett was injured in an accident that occurred at about 9:00 am that day. He commenced proceedings against Coastwide and Blue Circle, alleging that the accident was caused by their negligence. His claim against Blue Circle was resolved. His claim against Coastwide went to trial. The trial judge found in Mr Honeysett's favour. Coastwide appeals from the judgment of the trial judge. Issues on the appeal 5 The grounds of appeal may be gathered together under four headings: (1) The trial judge erred in finding that Coastwide breached its duty of care to Mr Honeysett. (2) The trial judge erred in finding that there was a causal connection between what he found was a breach of Coastwide's duty of care and the accident that befell Mr Honeysett on 21 October 2003. (3) The trial judge erred in finding that Blue Circle had not breached any duty of care that it owed Mr Honeysett. (Coastwide had brought a cross-claim against Blue Circle for contribution or indemnity, pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946. That cross-claim relied only on the allegations made by Mr Honeysett against Blue Circle.) (4) The trial judge erred in a number of respects in the assessment of damages. The accident 6 Blue Circle's operations at Maldon either comprised or included a plant for the manufacture of cement powder and associated products. In October 2003, part of that plant, known as kiln six, was shut down for repair work. Kiln six was used in the production of cement powder. It was important to Blue Circle that the repairs be completed as quickly as possible, so that the kiln could resume operations. 7 Coastwide had experience in "shutdown" operations. Blue Circle retained Coastwide to carry out the shutdown of kiln six. Coastwide used both its own employees and two casual employees, including Mr Honeysett, whose services were provided to it by Rhino. 8 On the day in question, Mr Honeysett and a number of other workers whom Coastwide was using on the job travelled to the site by bus. They arrived at about 7:00 am. There was a "toolbox meeting", at which they were instructed on the work to be undertaken. Mr Honeysett and four or five other workers went to a basement area beneath kiln six. 9 Located within that basement was a number of pipes. The pipes ranged from about two inches to about four inches in diameter. They, or some of them, were used for the transportation of cement powder. Some of the pipes had to be replaced. The first task to be undertaken was the removal of the pipes that had to be replaced. 10 The pipes had been constructed in sections with a flange at each end. They were joined together by bolting the flanges together. To remove the pipes, it was necessary to remove the bolts from the flanges. Mr Honeysett observed that most of the bolts were corroded, which made it difficult to remove them (more accurately, made it difficult to unscrew the nuts by which the bolts were fastened in place, joining together the flanges of adjacent lengths of pipe). Mr Honeysett said that the process of removal required the use of tools including a hammer, a "jimmy bar" or pinch bar, and spanners. 11 There were a number of different organisations, and a number of different trades, at Blue Circle's plant on the day in question. Blue Circle held daily meetings, at which representatives of those working on site would be made aware of what was to happen during the day or on the following day. It is clear that Blue Circle undertook the responsibility of coordinating the work of the various organisations and trades. 12 On 20 October 2003 (the day before Mr Honeysett's accident), Mr Nolan, a project superintendent employed by Blue Circle, held such a meeting. He said that it was attended by representatives of the various contractors and by Blue Circle's own personnel. One of those who attended was Mr Burke, a boilermaker by trade, who was employed by Coastwide as site supervisor. 13 The trial judge found that the effect of Mr Nolan's evidence (in particular, his evidence interpreting his note of the meeting of 20 October 2003) was that those who attended the meeting were told that there would be a power outage the following day, at about 8:30 am. Mr J E Maconachie of Queens Counsel, who appeared with Mr J B Turnbull of counsel for Coastwide, attacked that finding. However, for reasons that I give at [19] to [27] below, it was a finding that was open to the trial judge on the evidence. 14 The men who were working in the basement under kiln six on 21 October 2003 were informed that there was to be a power outage that day. They were not, however, informed of the time. It would have been important for them to know this, because there was no natural light in the basement. 15 The power went off at about 9:00 am on 21 October 2003. It caused a blackout in the basement below kiln 6. At that time, Mr Honeysett was attempting to remove a bolt from the flanges connecting two lengths of pipe. He used a spanner to shift the nut by which the bolt was held in place. The nut was rusted, or in some other way frozen onto the bolt, and difficult to move. Mr Honeysett had to apply considerable force to the spanner. He said that "precisely on the same time that we had an electrical blackout, the nut cracked and I literally fell against the pipe work and the spanner slipped out of my hand". It was common ground that, when Mr Honeysett said "the nut cracked", he did not mean that it broke, but that whatever was locking it in place was overcome, so that it commenced to move. 16 The trial judge concluded "that when [Mr Honeysett] fell, he sustained an injury to his right shoulder and neck, including a small disc protrusion C6/7 and that this has been the cause of him continuing to have symptoms that have interfered with his capacity to perform his duties as a boilermaker". Those findings were open to the trial judge on the evidence. No one submitted otherwise. 17 Mr Honeysett's case was that the unexpected blackout caused him to become "completely disoriented [sic]", and that this caused or contributed to his falling against the pipe work. When asked what was the connection between the blackout and his falling against the pipe work, he said "I was literally in the dark, I didn't know what was going on". First issue: breach of duty of care (grounds 1 to 6) 18 Mr Maconachie submitted that the evidence did not support the trial judge's finding (referred to at [13] above) that, at the meeting of 20 October 2003, Mr Burke was informed that there would be a power outage at about 8:30 am the next day. In particular, Mr Maconachie, submitted, Mr Nolan's note of the meeting did not support the trial judge's conclusion. 19 So far as it is relevant, Mr Nolan's note reads as follows: ELECTRICAL ISOLATION - Power out – Cooler MCC – power outage - Switching CS3000.08:30. 20 Mr Nolan said that the "cooler MCC" was a motor control centre that, he thought, controlled any drive in the cooler area. He said that the "CS3000" was a "PLC" or "Program Logic Control": some form of control system. It is apparent from Mr Nolan's cross-examination that he was not closely acquainted with the details of the relevant electrical systems, and that his understanding had been derived from speaking to people whom he thought did understand it: "our electrical people". 21 Mr Maconachie submitted that the reference to "08:30" applied to the "switching CS3000" and not to the "power outage". There was some support for this in Mr Nolan's cross-examination. He was asked whether the reference to "switching CS3000" had anything to do with the power outage, or was something separate. He replied "no, it's something, it looks like something separate". If the cross-examiner had stopped there, Mr Maconachie's submission would have had considerable force. 22 However, when questioned further on this topic, Mr Nolan said "… but all that would have been done at the same time. It's part of that, I believe it's part of that isolation". 23 A little later, when asked whether it was possible that the reference to "08:30" did not refer to the time of the power outage, Mr Nolan replied "no, I believe that it refers to the time the power would have been out". 24 As I have said, Mr Burke of Coastwide attended the meeting on 20 October 2003. He said that he could not recall "for sure" anything that was said at the meeting; he had made notes, but those notes had been lost. However, Mr Burke said, if he had been told that there was to be a power outage the following day, he would have passed that information on to the relevant employees of Coastwide; likewise, if he had been told of the time of the outage. 25 Another employee of Coastwide, Mr Jack, was employed on the Blue Circle shutdown as a leading hand. Mr Jack had no recollection of having been told by Mr Burke on 20 or 21 October 2003 that there would be a power outage on the latter date. Nor did he have any recollection of telling his men (including Mr Honeysett) at the toolbox meeting of 21 October 2003 that there would be a power outage later that day. However, Mr Honeysett said that Mr Jack did tell the meeting that morning that there would be a power outage later that day, but that he (Mr Jack) had no idea when that would occur. 26 The trial judge accepted Mr Honeysett as a truthful witness. He was less impressed with Mr Jack, and said that to the extent that there was a conflict between Mr Jack and Mr Honeysett, he preferred the evidence of Mr Honeysett. Mr Maconachie did not submit that the trial judge thereby erred. 27 On the evidence that I have summarised, it was open to the trial judge to conclude that those who attended the meeting of 20 October 2003 (including Mr Burke) were informed that there would be a power outage the next day at about 8:30 am. That is the better view of Mr Nolan's note, once it is accepted that "switching CS3000" refers to a part of the electrical work, for the purposes of which the power outage was necessary. It was a matter for the trial judge as to whether he accepted Mr Nolan's explanation of this (based as it was on information obtained from others). It having been open to the trial judge to accept and rely on that evidence, it cannot be said that he erred in doing so. 28 Even without Mr Nolan's explanation, the format of the note itself suggests that all the matters appearing under the heading "ELECTRICAL ISOLATION" were connected. Reading the relevant entry as a whole, and even without an understanding of the acronyms within it, it clearly refers to a group of activities that required electrical power to be disconnected, and that were programmed to commence at 8:30 am. It is artificial to say that the reference to "08:30" was intended to apply to one aspect or part only of that group of activities. 29 However, Mr Maconachie submitted, there was another piece of evidence that undermined the conclusion of the trial judge. Mr Honeysett said that of the five or six people in the basement on the morning in question, there were "a couple" who had not been on the bus that morning. Mr Honeysett said also that when the lights went out in the basement, everyone who was there expressed surprise. Mr Maconachie submitted that this evidence showed that people other than Coastwide's employees (or casual workers hired out to Coastwide) had not been informed of the timing of the black out. 30 The difficulty with this submission is that it does not follow, from the fact that some of the people in the basement had not been on the bus that transported Mr Honeysett and others to the site early in the morning on 21 October 2003, that they were not employed by or otherwise responsible to Coastwide. It was not shown that there had been only one busload of workers taken to the Blue Circle plant that morning. On the contrary, Mr Jack said that the practice, in connection with the Blue Circle plant shutdown, was that the workers would "normally meet in our yard of a morning and then… board minibuses, normal buses or company vehicles and travel to the job site". If, as Mr Jack's use of the plural suggests, there was more than one vehicle used to transport Coastwide's workers, Mr Honeysett's evidence that some of the people in the basement had not travelled on the particular bus that he had boarded would not mean that those people were working for someone other than Coastwide. 31 The trial judge found that Mr Honeysett's accident took place before 9:00 am. He said (reasons, para 23): "There is no doubt that the accident occurred before 9:00am on twenty-first, as there is a record of the plaintiff being treated before 9:00am." 32 Mr Maconachie attacked that finding. His attack was well-founded. There are two records relating to the accident. One is a "first aid room register of injury" maintained by Blue Circle. That refers to the time of injury as being "09.00" and to the time of "report / treatment" as "09.40". It describes that accident as having occurred in the following fashion: "While undoing bolts to remove valve, spanner slipped off bolt when lights went out in tunnell [sic], causing jarring of neck." 33 The other record was Coastwide's "accident investigation report", also dated 21 October 2003. It too states the time of the accident as 9:00 am. It gives the following account of the accident: "Undoing bolts on valve when a blackout occurred and slipped off bolt head… [h]e was undoing bolt when light went out missing nut with spanner and wrenched forward with shock being disorientated by darkness… causing injury to his neck." 34 Mr Honeysett had signed the first aid record. He said that it had been filled out before he signed it, but did not suggest that it was inaccurate. 35 No one was able to identify the record to which the trial judge referred, and the records that were in evidence are inconsistent both with his finding as to the timing of the accident and with his finding as to the timing of treatment. However, I do not regard this error in his Honour's reasons as undermining the conclusion to which I have referred at [13] above. 36 Mr Maconachie referred also to Mr Honeysett's evidence as to the time of the accident. In his evidence in chief, Mr Honeysett said that the accident happened "between 9:30 and 10:00". In cross-examination, when shown the first aid record, Mr Honeysett agreed that the accident could have happened at about 9:00 am. 37 Mr Maconachie relied on this evidence – specifically, the evidence that the accident happened at about 9:00 am – to support the submission that Coastwide did not know when the blackout was to occur. 38 I do not accept that submission. The evidence is equally consistent with the proposition that Mr Burke did not pass onto Mr Jack the planned time of the outage, or that Mr Jack did not pass it on to the workmen. It can be inferred, from the fact that Coastwide's men were working in the basement under kiln six when the power outage occurred, that they had not been told that the outage was planned for 8:30 am. That is consistent with Mr Honeysett's evidence that Mr Jack told them of the planned outage, but said that he did not know the time. 39 In short, I conclude that it was open to the trial judge to find, as he did, that those who attended the meeting on the morning of 20 October 2003, including Mr Burke, were told that there would be a power outage at about 8:30 am the next day. On Mr Honeysett's evidence, Coastwide's workers were informed that there would be a power outage on 21 October 2003, but were not informed of the time. One of two things follows: (1) Mr Burke did not tell Mr Jack; or (2) Mr Jack, having been told by Mr Burke, did not tell the men working in the basement beneath kiln six. 40 On either approach, Coastwide breached its duty of care to those men. In my view, the trial judge was correct so to conclude. 41 Mr Maconachie submitted also that Mr Honeysett had not proved breach of duty, because he had not proved that there were reasonably practicable means of obviating the risk that someone would be injured if the lights in the basement (which, I repeat, had no natural light) went out suddenly and unexpectedly whilst Coastwide's men were working there. 42 Certainly, there was no evidence, either from the parties' employees or from any independent expert, as to what a prudent employer in Coastwide's position should do when informed that there would be a power outage. However, I do not agree that it was necessary for such evidence to have been given. Coastwide's crew in the basement were performing heavy manual labour, involving the application of substantial hand tools to obstinate pieces of piping. Common sense suggests that a prudent employer in Coastwide's position, knowing that there was to be a power outage at about 8:30 am, would tell its men of that and take steps to ensure that they ceased work shortly before 8:30 am. 43 Mr Maconachie submitted that there was no evidence of the likely duration of the outage. He submitted that it would not have been reasonable for a contractor in Coastwide's position, knowing that it was imperative, from a commercial perspective, for the shutdown to be as short as possible, to cease work at 8:30 and then to wait until the outage occurred and power had been restored before resuming work. It was absurd, he submitted, to say that "[Coastwide] and its work force should down tools and wait for a blackout". I do not see why this is so. On the contrary, I think it would have been, if not absurd at least dangerous, for Coastwide to insist that its men keep working until the lights went out. 44 No doubt, if the outage did not occur when planned or shortly thereafter, a contractor in Coastwide's position might make inquiry as to when it was likely to occur, and its likely duration. But that would be for the purpose of ascertaining whether it was safe for the workers to re-enter the basement. As Mr Maconachie pointed out, there was evidence that the contractors on site could communicate with Blue Circle's project director Mr Nolan through two-way radios. Second issue: causation (grounds seven to twelve) 45 The trial judge concluded that Mr Honeysett slipped and injured his shoulder and neck "when he became disorientated when the lights went out as he was working on the shut down of the area at the plant at Berrima to which he had been allocated" (reasons, para 17). In reaching that conclusion, the trial judge relied on: (1) Mr Honeysett's account of the incident; and (2) what, according to the trial judge, were "relatively consistent" histories given by Mr Honeysett to various medical practitioners, in which, among other things, Mr Honeysett gave an account of the accident. 46 Mr Maconachie submitted that Mr Honeysett's evidence did not establish that the blackout played any relevant part in the accident, and that the histories given to various medical practitioners were "not consistent enough to have been able to satisfy [the trial judge] that [Mr Honeysett] did slip…". Indeed, Mr Maconachie submitted, there were inconsistencies between the various histories given, and at least some of those histories were themselves inconsistent with Mr Honeysett's oral evidence. Mr Maconachie submitted that the trial judge "made no attempt to reconcile" those inconsistencies. 47 For convenience, I set out (with some repetition) Mr Honeysett's oral evidence as to the relationship between the lights going out and his accident: (1) (Black 57J-Q) A. I was literally in the dark, I didn't know what was going on. Q. What part of your body struck what? A. The left shoulder and the bicep struck it. Q. How lightly or heavily? A. No, heavily. Q. Were you stunned? A. Yes. (2) (Black 63(Q-R) Q. And what if anything did the lights going out have to do with your falling into the pipe work? A. Well I became completely disoriented when the lights went out. 48 Mr Honeysett also gave evidence that he had done similar work on other occasions, including that very morning in the basement beneath kiln six, and had not lost his balance or fallen (Black 63E-L): Q. Mr Honeysett the nut that you were removing with the spanner, had you removed similar size nuts with similar sized spanners previously on other sites in your work as a boilermaker? A. Yes. Q. In the course of doing that work had you ever lost your balance and fallen against a wall or adjacent pipe work? A. No. Q. Had you removed other nuts that morning in the basement where the accident happened using a similar size spanner on similar size nuts? A. Yes Q. And when you were moving any of those nuts had you ever lost your balance and fallen hitting the wall or pipe work adjacent to where you were working? A. No. 49 The only other contemporaneous evidence as to the accident is the accounts that are found in the first aid report and the accident investigation report. I have set them out verbatim at [32] and [33] respectively above. 50 In addition, as I have indicated, the trial judge relied on histories given by Mr Honeysett to various medical practitioners: Dr Ledner and Dr Wakefield (reasons, para 9); Dr Ng (paras 11, 12); Dr Searle (para 15); and Dr Machart (para 16). In addition, his Honour referred to a history given to a rehabilitation consultant, Ms Peterson (para 12). 51 For convenience, I set out the relevant paragraphs of his Honour's reasons, noting that Mr Maconachie did not criticise his Honour's summarising of, or extracting from, the relevant reports: 9. After his injury the plaintiff was taken to the first-aid station and then saw his general practitioner, Dr Ledner, at Dapto the next day. The plaintiff told Dr Ledner that he had been using a wrench the previous day undoing a bolt, there had been a blackout causing him to slip and he had immediate symptoms of neck pain. By 2005 the plaintiff's employment had been terminated and he went to live with his family at Grafton. He saw Dr Wakefield, a general practitioner, at Grafton in 2004 and told him that he was working as a boilermaker pushing a large spanner which gave way and he fell and "felt like he had strained his shoulder". 10. He had also seen a general practitioner, Dr Rao, who referred him to Dr Ng. 11. Thereafter, the plaintiff saw a consultant physician in occupation and musculoskeletal medicine (Dr Steven Ng) on 5 May 2005. Dr Ng prepared a report in which he said: "Mr Honeysett told me he had sustained an injury to his left chest wall, left upper arm and neck as a result of a work incident on 21 October 2003. He described that he was doing maintenance work at BCSC at Berrima, and at the time of the injury he was undoing a bolt on a phalange [sic] at about head height with a spanner. There was an electricity blackout and he was pushing down hard with his right hand on the spanner when it slipped off the bolt during the blackout. He stumbled forward and hit his left chest and upper arm against some piping at just below chest height. At the same time he jarred his neck and felt pain on the right side of his neck spreading down to the top of his right shoulder. He recalled that he had bruising to his chest wall on the left side bruising over his left upper arm. He had received first-aid treatment on-site." 12. It was also noted that towards the end of 2003 he had undergone rehabilitation and had told the rehabilitation provider that: "Whilst employed by Rhino Construction restoring pipes in a cellar he suffered an injury when he slipped with a spanner whilst undoing a phalange [sic]. This action was precipitated by a blackout." 15. For example, on 17 September 2007 the plaintiff saw Dr Alan Searle, an orthopaedic surgeon, and told him: "On 21 October 2003 while he was at work he was undoing a bolt when there was an electricity blackout and he has the impression that he cracked his bolt and the spanner moved suddenly and he lost his footing. He fell against a pipeline hitting his left shoulder and left biceps but felt pain on the rights side of his neck." 16. On the other hand, when he saw Dr Machart on 16 June 2007 for the defendant he told Dr Machart that he had been working in a cellar at Berrima changing pipelines and was undoing a bolt using a large spanner when the lights suddenly went out and he slipped. He said that he had strained his right shoulder whilst holding onto the spanner. 52 The following points emerge from the histories: (1) Mr Honeysett told Dr Ledner and Ms Peterson that the accident had been caused (or "precipitated") by the blackout. (2) Mr Honeysett did not mention the blackout as a cause to Dr Wakefield. (3) Mr Honeysett did mention the blackout to Dr Ng, Dr Searle and Dr Machart, but the histories taken by those doctors do not in terms suggest that Mr Honeysett indicated to them that the blackout in someway caused the accident. 53 Further, the account given to Dr Ng suggests that Mr Honeysett was pushing down on the spanner when it slipped off the bolt. However, his oral evidence was that he was pushing up on it. 54 Further, Mr Honeysett told Dr Ledner, Ms Peterson and Dr Machart that he had slipped. His evidence before the trial judge made no mention of slipping. Neither did the first aid report or the accident investigation report say that he had slipped, although it is to be noted that each of them said that the spanner slipped off the nut. That is consistent with many of the histories given and with Mr Honeysett's evidence before the trial judge. 55 Mr G F Little of Senior Counsel, who appeared with Mr A Giurtalis of counsel for Mr Honeysett, submitted that, approaching the question of causation in a commonsense way, there was evidence to support the trial judge's findings (indeed, the written submissions referred to "an abundance" of evidence and "overwhelming evidence" in this respect). 56 Mr Little referred to: (1) Mr Honeysett's evidence in chief; he noted, correctly, that this evidence had not been challenged in cross-examination, and that the trial judge had accepted Mr Honeysett as a witness of truth. (2) The account of the accident given in Coastwide's accident investigation report. (3) Mr Honeysett's evidence (again, unchallenged in cross-examination) that he had performed a similar operation on a number of previous occasions, when the lights had not gone out; and that he had not become unbalanced, or fallen, and injured himself when the nut "cracked". 57 Mr Little submitted that, against that background, it was not merely coincidental that the accident happened at the precise (or "pretty precise") time of commencement of the blackout. 58 By s 5E of the Civil Liability Act 2002, when the question of liability for negligence is to be determined, "the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation". The concept of causation is explained in s 5D. One element is "factual causation": a determination "that the negligence was a necessary condition of the occurrence of the harm". 59 For the reasons that I gave in Nguyen v Cosmopolitan Homes [2008] NSWCA 246 (in a judgment with which McColl and Bell JJA agreed), the principles embodied in s 5D of the Civil Liability Act accord with the common law concept of causation: a point earlier made, as I recorded, by Ipp JA in Ruddock v Taylor (2003) 58 NSWLR 269 at 286 [89]. 60 Thus, as Ipp JA pointed in Flounders v Millar [2007] NSWCA 238 at [35], a plaintiff who relies on circumstantial evidence to prove causation must show "that the circumstances raise the more probable inference in favour of what is alleged". It is not sufficient that the circumstances "give rise to conflicting inferences of an equal degree of probability or plausibility" or that the choice between conflicting inferences is no more "than a matter of conjecture". To some extent, this is a circumstantial case. The court is being asked to draw, from the circumstances to which I have referred, an inference of a causal relationship between the blackout and the accident. Mr Honeysett's evidence of the occurrence of the accident does not, of itself, conclude in his favour the question of causation. 61 In dealing with the question of causation, it is necessary to bear in mind the distinction between inference and conjecture. As Spigelman CJ said in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275 [84], "[c]haracterisation of a reasoning process as one or the other occurs on a continuum in which there is no bright line division. Nevertheless, the distinction exists". 62 On the same topic, Lord Macmillan said, in Jones v Great Western Railway Co (1930) 144 LT 194 at 202, that although it was often difficult to find the dividing line between conjecture and inference, there was a clear distinction between them. His Lordship said that a conjecture, even though plausible, is no more than a guess, whereas an inference is a deduction from the evidence. Thus, his Lordship said, if the deduction were reasonable, the inference "may have the validity of legal proof". His Lordship concluded by saying that "[t]he attribution of an occurrence to a cause is… always a matter of inference". 63 Lord Wright put the matter somewhat differently in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169 – 170. His Lordship said, in substance, that there could be no inference unless there were objective facts from which the inference could be drawn; and if there were no such objective facts then inference fails "and what is left is mere speculation or conjecture". 64 Finally, before I return to the facts, I note that the process of inference may involve an intuitive element that is not susceptible to detailed explication: see Hayne J in Chappel v Hart (1998) 195 CLR 232 at 290 [148]; and Spigelman CJ in Seltsam at 268 [30]. 65 In this case, the question of causation is finely balanced; and a resolution of it is not aided by a consideration of the scanty reasons given by the trial judge. His Honour did no more than say that: (1) The accident occurred when Mr Honeysett "became disorientated whilst working on a pipe and fell, injuring himself" (para 2). Of course, this was said in the introductory section of his Honour's reasons, and is to be understood by reference to such reasons in support of the conclusion as he gave later on. (2) "There was ample evidence that some incident occurred during the course of the blackout that took place during the shutdown and that as a consequence the plaintiff suffered injury. There was no other cause for his injury demonstrated on the evidence…" (para 4) (3) "The plaintiff did slip and injure his shoulder and neck… when he became disorientated when the lights went out as he was working in the shutdown of the area at the plant at Berrima to which he had been allocated" (para 17). 66 His Honour's ultimate conclusion, at para 17, follows his reference to Mr Honeysett's evidence that I have set out above, and the histories given by him to medical practitioners and others (which I have also set out above and which, as I have noted, his Honour regarded as "relatively consistent"). It is also clear that his Honour's conclusion relied on his view, expressed at para 19, that Mr Honeysett was "a truthful witness". 67 His Honour did not refer to the first aid report or the accident investigation report. However, in each of those documents (one of which was authenticated by Mr Honeysett's signature, and the other of which, as a matter of inference, reflects an account given either by Mr Honeysett or by a nominated witness, Mr Bridges) the point is made, in one case by inference and in the other expressly, that there was some relationship between the blackout and the accident. 68 It is reasonably clear that the accident occurred because Mr Honeysett lost his balance when the nut cracked. He did not in terms say so, but it is an available and commonsense inference from his evidence. He was applying considerable force to the spanner in an attempt to unlock the nut. The nut resisted for a while, and then yielded. The resistance that had been opposing him was thereby removed or diminished. It is not surprising, in those circumstances, that he would become unbalanced and move forward. That is the logical understanding of his evidence that "the nut cracked and I literally fell against the pipe work…". 69 It is clear that it was the fall against the pipe work that caused Mr Honeysett's injuries. The question is, therefore, whether the simultaneous occurrence of the blackout with the cracking of the nut materially contributed to that fall. Or was it no more than the temporal coincidence of two, causally unrelated, events? 70 For Mr Honeysett to have fallen forward, against the pipe work, the diminution in the opposing resistance must have been both sudden and substantial. That is to say, when the nut cracked, the bond caused by the corrosion or whatever it was that had caused the nut to bind on the bolt must have given way completely. If the nut had continued to offer substantial resistance, it is unlikely that Mr Honeysett would have lost his balance and unlikely that the spanner would have slipped off the nut or out of his hand. (I refer to these alternative explanations of what was meant by "slipping" not to suggest that one or other account is unreliable, but simply to accommodate the various accounts given.) 71 If, as I think is likely, there had been a sudden and substantial diminution in the resistance opposing Mr Honeysett's efforts, the loss of balance would have occurred quickly; likewise, according to ordinary human experience, the fall against the pipe. 72 It is also likely that Mr Honeysett had been standing close to the pipe when he was trying to undo the nut. He was seeking to apply maximum force (although using only his right hand) to the spanner. Human experience suggests that this would have required him to sand alongside the end of the spanner, thereby maximising both the leverage effect obtained by its length and the power that he could apply to his end of that lever. Unfortunately, the evidence does not indicate how long the spanner was; nor was there any investigation of the actual distance between Mr Honeysett and the pipe in question at the time he was trying to undo the nut. 73 Mr Honeysett said that when he attempted to remove the bolt, "[I]t would've been very close to the middle of my chest… above waist…". The passage of his evidence I chief from which I have taken that is as follows (Black 56R –57D): Q. So you're wanting to release the nut from the bolt? A. Yes. Q. As you stood, the spanner, obviously, is at right angles to the bolt? A. Yes. Q. And was the bolt, the line of the bolt, parallel with your chest, at an angle to your chest, what was the alignment of your body with the bolt? A. It would've been very close to the middle of my chest, yes. Q. At about what height? A. Probably about – well say one and a half -- Q. On your body? A. About one and a half metres, maybe-- Q. Just say waist, above waist? A. Yeah, above waist. Q. And below shoulders? A. Yes. Q. And was it difficult to get the nut to move? A. Yes. 74 That evidence is I think consistent with the proposition that Mr Honeysett had been standing close to the pipe when he was trying to undo the nut. 75 In those circumstances, is there any room for the coincident blackout to have contributed materially to the accident? Or was it no more than coincident? 76 I accept that, as Mr Honeysett said, the effect of the blackout was to disorientate him. That is consistent with ordinary human experience. I accept further that the ordinary consequences of disorientation may include some loss of balance. 77 The accident occurred when Mr Honeysett lost his balance and fell against the pipework. It is within everyday human experience that a person, standing in a confined space, who is plunged unexpectedly and without warning into total darkness will be disorientated, and may stumble. Equally, it is everyday human experience that a person who is pushing against substantial resistance may lose balance and stumble if that resistance is suddenly removed. 78 On that basis, I think, it is legitimate to infer that there were two causes at work when Mr Honeysett lost his balance and fell against the pipework. One was the sudden cracking of the nut. The other was the disorientation produced by the blackout. It is also legitimate to infer that each of those contributed in a material way to the loss of balance and fall, and thus to the injuries sustained by Mr Honeysett. That, I think, is what Mr Honeysett was trying to say in both his oral evidence and the account recorded in Coastwide's accident investigation form (see at [33] above). 79 Those considerations suggest that there was more than coincidence at work. That proposition is supported by the matters of history to which I have referred. Mr Honeysett had undertaken a similar operation on a number of previous occasions, when there had been no loss of vision at the same time as the nut cracked, and had not lost his balance or fallen. Indeed, his evidence was that he had removed similar nuts, using a similar spanner, in the basement that very morning without falling (see at [48] above). 80 If the lights had remained on, so that Mr Honeysett could see what was happening, he might have had some ability to attempt to avert, or at least diminish the severity of, the impact. For example, he could have put out his left hand to check his fall. However, disorientated by darkness, and not being able to see what was happening, was unable to do so. 81 In my view, when the evidence – sparse as it is – is considered as a whole, it speaks against the contemporaneous occurrence of the two events being merely coincidence, and in favour of a causal connection between them. 82 Finally, in this context, I note that neither Coastwide nor Blue Circle challenged Mr Honeysett's evidence of the causal relationship between the blackout and the accident. Nor did they challenge the accounts given in the accident investigation report or to the various doctors. (As to the latter, it may be noted that the reports were admitted without objection and without any restriction under s 136 of the Evidence Act 1995. It was open to the trial judge to draw on those histories as he did, to the extent that they assisted in the determination of the question of causation.) 83 Thus, although the question is finely balanced, I think that the evidence was sufficient to justify the conclusion of the trial judge that the power outage – more accurately, the consequent blackout – did materially contribute to Mr Honeysett's accident. 84 Accordingly, I conclude, Coastwide's challenge to the finding of causation fails. Third issue: Blue Circle's liability (grounds 13 to 15) 85 The trial judge found that Blue Circle (through Mr Nolan) had communicated to contractors, including Coastwide (through Mr Burke), the fact and proposed timing of the outage. He found further that the fact, but not the timing, of that outage had been communicated to Coastwide's workers in the basement under kiln six on 21 October 2003. For the reasons I have given, those findings were open to him and this Court should not disturb them. 86 Thus, to the extent that Coastwide's case against Blue Circle depends on the proposition that Blue Circle failed to warn Coastwide of the proposed occurrence and timing of the outage, it must fail. 87 Mr Maconachie submitted, however, that "the blackout occurred at a time no one suggests was ever communicated" to Coastwide or Mr Honeysett. That submission depends on the lapse of time between the communicated proposed time – 8:30 am – and the actual time – 9:00 am). In my view, that is of no significance. A reasonable employer in Coastwide's position would have taken its men out of the basement before 8:30 am. If the outage had not occurred within a reasonable time thereafter, that reasonable employer, aware of the urgency of the works and the need to complete them speedily, would have made inquiry of Blue Circle to see when the outage was likely to occur. 88 The problem in this case was not that Blue Circle communicated what proved to be an incorrect time for the outage to Coastwide, or did not communicate what proved to be the correct time, but that Coastwide did not take its men out of the basement at the communicated time. Had it done so, Mr Honeysett would not have suffered his accident; and the delay in the outage would have been of no effect. 89 Coastwide is not entitled to contribution or indemnity from Blue Circle, and the trial judge's finding in favour of Blue Circle on Coastwide's cross-claim should not be disturbed. Fourth issue: damages (grounds 66 to 78) 90 The trial judge awarded damages totalling $727,972.63. The components of that award were: Non-economic loss: $132,500.00 Past out-of-pocket expenses: $18,665.00 Future out-of-pocket expenses: $25,000.00 Past economic loss: $188,000.00 Past superannuation $20,000.00 Future economic loss $290,900.00 Future superannuation: $32,000.00 Future domestic assistance: $17,300.00 Fox v Wood component: $3,607.63 91 Past out-of-pocket expenses and the Fox v Wood component were agreed. Coastwide did not challenge the trial judge's assessment of non-economic loss, future out-of-pocket expenses or future domestic assistance. The challenges were limited to past economic loss and future economic loss. If those figures are varied then the allowance for past and future superannuation will vary. The trial judge assessed the value of the lost superannuation benefits at 11% of the wage loss (which of course was calculated on an after tax basis). Coastwide accepted that this was an appropriate formula. Past economic loss 92 The trial judge assessed past economic loss by reference to three discrete but consecutive periods: 21 October 2003 to 31 May 2005 (84 weeks); 1 June 2005 to 16 November 2007 (128 weeks) and 17 November 2007 to 17 June 2008 (30 weeks). It is convenient to refer to these respectively as "the first period", "the second period", and "the third period". The first period 93 Mr Honeysett was unemployed during the first period. The trial judge found that, but for the injury, Mr Honeysett would have continued to work for "his employer" – presumably, Rhino. The trial judge allowed wage loss at $1,200.00 net per week. 94 The trial judge gave no reasons for selecting the figure of $1,200.00 per week, and it was not supported by any evidence. Mr Little accepted that he could not support it. 95 Mr Maconachie submitted that the appropriate yardstick for calculation of past economic loss was Mr Honeysett's average net weekly earnings for the year ended 30 June 2003, as appearing from his income tax return for that year: $678.00. Mr Little submitted that the appropriate yardstick was $1,050.00 per week: the net weekly amount paid to Mr Honeysett immediately prior to the accident. 96 The trial judge found that Mr Honeysett "was a capable worker with transferable skills of significance" (reasons, para 35) and that, even after the accident, "he was capable of working very hard doing heavy work" (para 51). There was evidence (including from Mr Burke of Coastwide) that qualified, capable and willing boilermakers, such as Mr Honeysett had been prior to the accident, were always in demand in the years following the accident: particularly given competition for such tradesmen from the resource industries in Queensland and Western Australia. 97 On the evidence, I think that the appropriate yardstick for assessment of past economic loss is the amount of $1,050.00 net per week. That was the amount that Mr Honeysett had earned immediately prior to the accident. There was no suggestion that it was exceptional or aberrant. Use of the lower figure for which Mr Maconachie contended, derived from earnings more remote from the date of the accident, would not give due recognition to the evidence that, in the months and years following the accident, workers of Mr Honeysett's calibre and with his qualifications were in demand. 98 It follows that the trial judge's assessment of $100,000.00 for the first period should be set aside, and for it there should be substituted the figure of $88,200.00 (84 weeks at $1,050.00 net per week). The second period 99 During the second period, Mr Honeysett was living in Grafton and working on a casual basis for a company known as Grafton Hydraulics Pty Limited (Grafton Hydraulics). He worked as a trades assistant, assisting tradesmen in metal fabrication and repair work. 100 Mr Baker, a director of Grafton Hydraulics, said that Mr Honeysett was a good and capable worker, and "very competent". Mr Baker said further that Mr Honeysett had the ability to learn new skills and apply them in his work for Grafton Hydraulics. 101 The wage records produced by Grafton Hydraulics showed that Mr Honeysett earned up to about $1,000.00 net per week in October and November 2005. 102 As I have said, Mr Honeysett's employment during the second period was on a casual basis. There were periods when he was off work. His evidence (which in this respect was corroborated to some extent by Mr Baker's evidence) was that the periods when he was off work coincided with occasions where the work that would have been required of him was heavy, and by inference beyond his physical capabilities. Further, at that time, Mr Honeysett's relationship with his partner was under stress, and Mr Honeysett wished to return to the Illawarra region to see their son. 103 The trial judge, again using his yardstick of $1,200.00 net per week, assessed loss for the second period at the rate of $400.00 per week. His Honour reasoned that Mr Honeysett "would have had the opportunity of working as a boilermaker earning on average $1,200.00 net per week but would not necessarily have done so every week, despite his good work record." 104 Mr Maconachie again contended for his preferred yardstick of $678.00 per week. Accordingly, he said, since Mr Honeysett was capable of earning up to $1,000.00 per week during the second period, he had not shown that he suffered any loss. 105 Mr Little submitted that the trial judge's assessment should stand. He pointed, among other things, to the fact that by the time of trial, the wages paid to boilermakers on the eastern seaboard of New South Wales were substantially higher than those that had been paid to Mr Honeysett immediately before 21 October 2003. 106 In my view, the trial judge's methodology should be applied, but should be corrected by using the yardstick of $1,050.00, not $1,200.00. The effect of that is to reduce the net weekly loss to $250.00. For the reasons that I have already given, I do not think that it is appropriate to take the figure of $678.00 per week and say, accordingly, that no loss has been proved. 107 Equally, I do not think that it is appropriate to take the figure of $1,050.00, compare it to the figure of $1,000.00 per week that from time to time Mr Honeysett in fact earned, and assess loss at $50.00 per week. This approach has two defects. First, it does not take account of the fact that there were periods when Mr Honeysett was unable to work for Grafton Hydraulics because the work was too heavy. Secondly, it does not take account of the likely increase in wage rates over the period. 108 If there were evidence of actual wage rates during the second period, a different approach might be justified. In the absence of those records, the approach to be taken is that used by the trial judge, modified in the way that I have stated. 109 For the second period, in lieu of the amount of $51,200.00 allowed by the trial judge, there should be allowed the figure of $32,000.00 (128 weeks at $250.00 per week net). The third period 110 For the third period, the trial judge assessed loss at $400.00 per week (effectively, using the methodology that he had selected for the second period). In addition, his Honour allowed a "cushion" of $25,000.00. 111 Mr Maconachie submitted that Mr Honeysett could not have both the assessed weekly loss and the cushion, and Mr Little accepted (although with some reluctance) that this was so. 112 As to the assessment of the weekly loss, Mr Maconachie repeated the submissions that he had made in respect of the second period, as did Mr Little. 113 In my view, the trial judge's assessment of loss for the third period should be varied by taking away the allowance of $25,000.00 for the "cushion". However, the allowance of $400.00 net per week for the 30 weeks in question should not be disturbed. That is because the evidence of actual wage rates fully supports loss of at least this amount for the third period, even when compared to pre-trial earnings of $1,050.00 per week rather than $1,200.00 per week. 114 The trial judge's assessment of $37,000.00, should be set aside, and in its place there should be allowed the sum of $12,000.00. Summary 115 On that basis, the total for past loss of wages for the first, second and third periods is $132,200.00. 116 The allowance for superannuation on this past loss, using the agreed figure of 11%, is $14,542.00. Future economic loss 117 The trial judge assessed future economic loss on the basis that Mr Honeysett, but for his injuries, would have continued to work until age 65. His Honour found that, because of the injuries, Mr Honeysett could no longer work as a boilermaker and had lost his capacity to earn in the performance of that trade. Nonetheless, as I have indicated, the trial judge found that Mr Honeysett "has significant transferable skills and residual capacity for work". 118 The trial judge concluded that Mr Honeysett's earning capacity at the date of trial was "something in the order of $1,400.00 net per week, uninjured. He said that this capacity was reduced by $400.00 net per week because of the injuries. Accordingly, his Honour allowed $400.00 per week at 5%, reduced by 15% for vicissitudes, together with superannuation at 11%. His Honour computed $290,900.00 for future economic loss (net wages) and $32,000.00 for future superannuation loss. 119 Mr Maconachie submitted that the trial judge's starting figure of $1,400.00 per week was not supported by the evidence. He submitted that the appropriate yardstick was no more than $1,050.00 per week. Thus, Mr Maconachie submitted, because the evidence showed that Mr Honeysett had the capacity to earn $1,000.00 per week, future economic loss should be assessed at no more than $50.00 per week until age 65 at 5%, reduced by 15% for vicissitudes. 120 I do not agree. The evidence of wage rates for boilermakers on the eastern seaboard amply justified the trial judge's finding of an earning capacity of at least $1,400.00 net per week, uninjured. Such evidence as there was of Mr Honeysett's actual earning capacity in the period between his accident and the trial suggested that it did not exceed $1,000.00 net per week. On that basis, the trial judge was entitled to assess future economic loss as he did. 121 The allowance for future economic loss and superannuation on that loss should not be disturbed. Conclusion on damages 122 In the result, the trial judge's assessment of damages should be reduced from $727,972.63 to $666,714.63. Costs 123 Coastwide's appeal on the issue of liability has failed, both against Mr Honeysett and against Blue Circle. Its appeal against the assessment of damages has succeeded to an extent, but the basic premise of its challenge to the trial judge's assessment of damages has not succeeded. 124 In those circumstances, there is no basis for varying the costs orders made by the trial judge. 125 As to the costs of the appeal as between Coastwide and Mr Honeysett: my tentative view is that, given that the great bulk of Coastwide's challenges (both as to liability and as to quantum) fail and that the extent to which it succeeded in its challenge to quantum was basically uncontested, Coastwide should pay 90% of Mr Honeysett's costs of the appeal. 126 Coastwide should pay Blue Circle's costs of the appeal. 127 However, I would reserve to any party seeking a different order as to the costs of the appeal liberty to do so, by filing and serving written submissions setting out the orders sought to be made and the reasons for those orders; and giving the parties against whom such variation is sought a further period to reply. I would propose that any such application be dealt with on the papers. Conclusions and orders 128 As between Coastwide and Mr Honeysett, the challenge to the trial judge's finding that Coastwide was liable fails. The challenge to the trial judge's assessment of damages succeeds to the extent that I have indicated: a reduction of $61,258.00. 129 As between Coastwide and Blue Circle: the challenge to the trial judge's dismissal of the cross-claim fails. 130 The orders that I propose are: (1) Appeal allowed in part. (2) Set aside judgment entered in favour of the first respondent against the appellant in the sum of $727,972.63. (3) In lieu thereof direct entry of judgment for the first respondent against the appellant in the sum of $666,714.63. (4) Direct that the judgment so entered take effect from 17 June 2008. (5) Appeal otherwise dismissed. (6) Subject to orders 7, 8 and 9, appellant to pay: (a) 90% of the first respondents costs of the appeal; and (b) the second respondent's costs of the appeal. (7) Grant leave to any party wishing to vary or discharge order 6 liberty to apply to do so by filing and serving written submissions within 14 days of the date of delivery of judgment. Any such written submissions are to set out both the orders sought in lieu of order 6 and the reasons why those orders are sought. (8) Reserve to any party affected by an application under the previous order liberty to file and serve written submissions in reply within 14 days after service on it of the written submissions contemplated by the previous order. (9) Note that the court will determine any such application on the papers. ********** 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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