When the 151z cable between employers and site operators snaps
Originally Published by Chad Farah on Monday, August 20, 2018 10:04:53 AM
Mr Bosevski was injured during the course of his employment on a site that was operated by a company other than his employer. That company caused Mr Bosevski severe injuries by virtue of its negligence, but to what extent was he (or his employer) responsible? Was the employer's non-delegabale duty found to be absolute?
Author: Chad Farah
Judgment Date: 27 July 2018
Citation: Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146
Jurisdiction: NSW Court of Appeal
The Plaintiff, Mr Bosevski, was employed by Professional Contracting Pty Ltd (the employer) when, on 22 September 2006, he sustained injuries during the course of his employment on a work site operated by Avopiling Pty Ltd (Avopiling).
The uncontested facts are that two Avopiling employees were erecting a mast on a pile driving rig when an auxiliary cable broke under ‘extreme tension’ and caused the Plaintiff to be struck by falling heavy objects that had been attached that cable. The Plaintiff sustained serious injuries.
Proceedings in a claim for damages were commenced by the Plaintiff in 2009 against Avopiling under the Civil Liability Act 2002 (CLA). The employer was not joined to the proceedings as a Second Defendant.
Avopiling alleged contributory negligence in its Defence and alleged that any damages awarded to the Plaintiff as against it ought to be reduced by an amount reflecting the negligence of his employer.1
While these proceedings were on foot, the Workers Compensation Nominal Insurer (on behalf of the employer) commenced separate proceedings against Avopiling for recovery of workers compensation payments made to the Plaintiff.2
The two proceedings were heard together. The primary judge in the Supreme Court of NSW found Avopiling to be negligent and absolved the employer of responsibility. Avopiling did not succeed in its argument for contributory negligence against the Plaintiff, who was awarded over $2.6M in damages without reduction. It followed that the Workers Compensation Nominal Insurer was in turn awarded over $900,000 in recoveries.
Avopiling appealed on three main grounds as to liability:
The award for damages was also challenged.
Of interest is that Avopiling did not dispute that it was negligent, but merely that the plaintiff and his employer were also to blame.
In terms of the risk of harm, Avopiling argued on appeal that the primary judge adopted an overly narrow approach in finding that the risk of harm was that the auxiliary cable in question would snap and cause the objects attached to it (in particular) to fall. It was argued by Avopiling that the risk was broader; that it was the risk of falling objects on the site in a more general sense and that the plaintiff and his employer ought to have been aware of that risk.
The Court of Appeal found that the primary judge correctly formulated the risk of harm for the purposes of determining the liability of the respective parties by identifying where the harm came from and the manner in which that risk materialised.3 The Court said at paragraph 44:
‘To identify the “true source of potential injury” the court must determine the mechanism by which an object might become detached rather than, as Avopiling has formulated the risk of harm, an undefined course of an unexpected hazard falling without identification of a mechanism.’
The Court also found that the Plaintiff had reason to be in the vicinity of the pile driving rig by reason of his employment duties. Further, Avopiling did not discharge its onus in proving that the Plaintiff, or his employer, knew or ought to have known that the auxiliary cable would break and cause the accident. The Court confirmed the primary judge’s findings that the Plaintiff and his employer lacked the requisite knowledge to assess the risk and that such a finding was not exclusive to the primary judge's finding that Avopiling, conversely, knew or ought to have known it.
These findings were sufficient to dispose of the case for negligence against the employer and contributory negligence against the plaintiff.4
The Court confirmed the primary judge’s findings in respect of damages for past economic loss, future loss of earning capacity and past gratuitous care. However, it held that the primary judge erred in assessing the damages for future commercial care, gardening, lawn mowing, handyman services and future treatment on the basis that these also fell within the ambit of ‘future economic loss’ as defined by s13 of the CLA. The Court of Appeal applied a discount for vicissitudes to the extent of 25% in respect of these damages (except future treatment expenses which only attracted a 10% discount). The Court said at paragraph 166:
'The medical expenses in the present case are subject to fewer contingencies than other categories of future economic loss. This is because the primary judge had available evidence from the various treating specialists of the treatment given to date and the costs of the various treatment plans indefinitely into the future. There remained a doubt, however, about some of the expenses, in particular the continued use of the nerve stimulator over Mr Bosevski’s lifetime. In conducting the form of speculation guided by knowledge of the plaintiff’s past and expectations, derived from general experience, as to the future, the appropriate reduction is 10 per cent of the sum of $138,380.70 awarded by the primary judge.'
1 Workers Compensation Act 1987, s151Z(2).
2 Workers Compensation Act 1987, s151Z(1)(d).
3 Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA 42; Perisher Blue Pty Ltd v Nair-Smith [2015] NSWCA 90.
4 Joslyn v Berryman (2003) 214 CLR 552; [2003] HCA 34; Ghunaim v Bart [2004] NSWCA 28.
Author: Chad Farah
Judgment Date: 27 July 2018
Citation: Avopiling Pty Ltd v Bosevski; Avopiling Pty Ltd v The Workers Compensation Nominal Insurer [2018] NSWCA 146
Jurisdiction: NSW Court of Appeal
Principles
- The employer's duty of care toward its employees is non-delegable but not absolute. Under circumstances where an employee suffers injury on a site that is controlled by a third party, the employer can escape liability if it cannot be proven that the employer knew or ought to have known about the risk of harm.
- The risk of harm must be formulated with reference to where that risk comes from and how it could materialise; it must be identified with specificity before it can be determined whether the respective parties knew or ought to have known about that particular risk.
- The injured employee must not be penalised with a finding of contributory negligence against them simply by virtue of their proximity to the risk of harm prior to the accident. This is particularly so if their employment duties required them to be in the vicinity of that risk and if they did not know and could not have known about the risk.
- The term 'future economic loss' does not only apply to loss of earnings in future, but also to a Plaintiff's likely expenditure by virtue of future needs. Damages for all future needs can attract a discount for vicissitudes under s13 of the Civil Liability Act 2002, depending on the circumstances of the case.
Background
The Plaintiff, Mr Bosevski, was employed by Professional Contracting Pty Ltd (the employer) when, on 22 September 2006, he sustained injuries during the course of his employment on a work site operated by Avopiling Pty Ltd (Avopiling).
The uncontested facts are that two Avopiling employees were erecting a mast on a pile driving rig when an auxiliary cable broke under ‘extreme tension’ and caused the Plaintiff to be struck by falling heavy objects that had been attached that cable. The Plaintiff sustained serious injuries.
Proceedings in a claim for damages were commenced by the Plaintiff in 2009 against Avopiling under the Civil Liability Act 2002 (CLA). The employer was not joined to the proceedings as a Second Defendant.
Avopiling alleged contributory negligence in its Defence and alleged that any damages awarded to the Plaintiff as against it ought to be reduced by an amount reflecting the negligence of his employer.1
While these proceedings were on foot, the Workers Compensation Nominal Insurer (on behalf of the employer) commenced separate proceedings against Avopiling for recovery of workers compensation payments made to the Plaintiff.2
The two proceedings were heard together. The primary judge in the Supreme Court of NSW found Avopiling to be negligent and absolved the employer of responsibility. Avopiling did not succeed in its argument for contributory negligence against the Plaintiff, who was awarded over $2.6M in damages without reduction. It followed that the Workers Compensation Nominal Insurer was in turn awarded over $900,000 in recoveries.
Court of Appeal
Avopiling appealed on three main grounds as to liability:
- Whether the primary judge’s formulation of the risk of harm under s5B of the CLA was incorrect in so far as determining the culpability of the Plaintiff and his employer;
- Whether the primary judge erred in absolving the employer from any responsibility in relation to the accident; and
- Whether the primary judge erred in finding that contributory negligence did not apply in the circumstances.
The award for damages was also challenged.
Of interest is that Avopiling did not dispute that it was negligent, but merely that the plaintiff and his employer were also to blame.
In terms of the risk of harm, Avopiling argued on appeal that the primary judge adopted an overly narrow approach in finding that the risk of harm was that the auxiliary cable in question would snap and cause the objects attached to it (in particular) to fall. It was argued by Avopiling that the risk was broader; that it was the risk of falling objects on the site in a more general sense and that the plaintiff and his employer ought to have been aware of that risk.
The Court of Appeal found that the primary judge correctly formulated the risk of harm for the purposes of determining the liability of the respective parties by identifying where the harm came from and the manner in which that risk materialised.3 The Court said at paragraph 44:
‘To identify the “true source of potential injury” the court must determine the mechanism by which an object might become detached rather than, as Avopiling has formulated the risk of harm, an undefined course of an unexpected hazard falling without identification of a mechanism.’
The Court also found that the Plaintiff had reason to be in the vicinity of the pile driving rig by reason of his employment duties. Further, Avopiling did not discharge its onus in proving that the Plaintiff, or his employer, knew or ought to have known that the auxiliary cable would break and cause the accident. The Court confirmed the primary judge’s findings that the Plaintiff and his employer lacked the requisite knowledge to assess the risk and that such a finding was not exclusive to the primary judge's finding that Avopiling, conversely, knew or ought to have known it.
These findings were sufficient to dispose of the case for negligence against the employer and contributory negligence against the plaintiff.4
The Court confirmed the primary judge’s findings in respect of damages for past economic loss, future loss of earning capacity and past gratuitous care. However, it held that the primary judge erred in assessing the damages for future commercial care, gardening, lawn mowing, handyman services and future treatment on the basis that these also fell within the ambit of ‘future economic loss’ as defined by s13 of the CLA. The Court of Appeal applied a discount for vicissitudes to the extent of 25% in respect of these damages (except future treatment expenses which only attracted a 10% discount). The Court said at paragraph 166:
'The medical expenses in the present case are subject to fewer contingencies than other categories of future economic loss. This is because the primary judge had available evidence from the various treating specialists of the treatment given to date and the costs of the various treatment plans indefinitely into the future. There remained a doubt, however, about some of the expenses, in particular the continued use of the nerve stimulator over Mr Bosevski’s lifetime. In conducting the form of speculation guided by knowledge of the plaintiff’s past and expectations, derived from general experience, as to the future, the appropriate reduction is 10 per cent of the sum of $138,380.70 awarded by the primary judge.'
Why this case is important
- For Plaintiffs: Because their damages as against a third party will not necessarily be reduced by virtue of their employment status at the time of the injury. It must be remembered that liability can solely rest with that third party, depending on the circumstances.
- For employers: Because this case is a reminder that employers must take reasonable care for the safety of their employees, but must not be under the false impression that their non-delegable duty to their employees will automatically translate to a finding of negligence against them irrespective of the circumstances.
- For non-employer Defendants: Because this case is a stark warning to Defendants who take the application of s151Z for granted and fail to properly assess the culpability of the employer and whether the employer's duty of care was in fact breached.
- For Defendants, generally: Because this case serves as authority for applying a discount for vicissitudes on damages for future needs (not just future loss of earnings) in settlement negotiations or in making submissions for same at trial. These discounts can be substantial in multi-million dollar cases.
1 Workers Compensation Act 1987, s151Z(2).
2 Workers Compensation Act 1987, s151Z(1)(d).
3 Roads and Traffic Authority of NSW v Dederer (2007) 234 CLR 330; [2007] HCA 42; Perisher Blue Pty Ltd v Nair-Smith [2015] NSWCA 90.
4 Joslyn v Berryman (2003) 214 CLR 552; [2003] HCA 34; Ghunaim v Bart [2004] NSWCA 28.