Who is the boss? In what circumstances will a principal owe a duty of care to a subcontractor's employee? – Lee v Wickham Freight Lines Pty Ltd [2016] NSWCA 209
Originally Published by Emma Roberts on Wednesday, August 24, 2016 12:00:00 AM
Author: Emma Roberts
Judgment Date: 15th August, 2016
Citation: Lee v Wickham Freight Lines Pty Ltd [2016] NSWCA 209
Jurisdiction: New South Wales Court of Appeal1
- The general law does not impose on a principal vicarious liability for the acts of its subcontractor.
- A principal will not be found to owe a duty of care to an employee of its subcontractor unless circumstances arise whereby a duty will be imposed, such as from the degree of control or direction exercised or which the principal is entitled to exercise over the employee of its subcontractor, the condition of the plant or premises under the control of the principal or the activities of others on the site.
Background
Mr Mark Lee (the plaintiff) was employed by Williams Bulk Haulage Pty Ltd (WBH) as a driver with a prime mover and trailer. WBH was a subcontractor of Wickham Freight Lines Pty Ltd (the defendant). The defendant had contracted with Woolworths Ltd (Woolworths) to transport goods to a Woolworths Big W store located in Campsie, New South Wales. The goods being transported, whilst owned by Woolworths, were pre-packaged boxes of soft drinks manufactured by Coca-Cola Amatil Ltd (Coca-Cola) (weighing approximately 24 kg per box). The plaintiff loaded the goods, on pallets wrapped in plastic, onto his prime mover at the Woolworths Big W distribution centre in Warwick, Queensland. The goods were then driven to Sydney and were required to be unloaded at a depot owned by Combined Distribution Management Pty Ltd (CDM), onto smaller, rigid body trucks as the Campsie premises could not accommodate a prime mover.
Different sections of the depot were occupied by different transport companies, including the defendant. Whilst the defendant paid CDM rental for a part of the depot, relevantly the unloading of the plaintiff's prime mover took place in a part of the depot occupied by CDM, some 80 m from the defendant's area. The unloading of the goods was the responsibility of the plaintiff. Whilst unloading the goods, the plaintiff noticed several boxes of soft drinks had broken free in the course of the trip and needed to be manipulated by hand and re-stacked onto pallets. To that end four empty pallets (weighing approximately 45 kg each) were loaded onto the back of the plaintiff's prime mover by Mr Zantidis, a forklift driver employed by CDM, to allow for the restacking process to take place. The plaintiff alleged that he had requested assistance with the restacking process from both Mr Zantidis and Mr Jones, the defendant's depot manager, and both had refused. It was further alleged that the restacking had to take place that day or else the plaintiff would not be paid and that the direction to restack and have the pallets delivered came from Mr Jones. It was through the restacking process that the plaintiff injured his back on 14 March 2005.
Different sections of the depot were occupied by different transport companies, including the defendant. Whilst the defendant paid CDM rental for a part of the depot, relevantly the unloading of the plaintiff's prime mover took place in a part of the depot occupied by CDM, some 80 m from the defendant's area. The unloading of the goods was the responsibility of the plaintiff. Whilst unloading the goods, the plaintiff noticed several boxes of soft drinks had broken free in the course of the trip and needed to be manipulated by hand and re-stacked onto pallets. To that end four empty pallets (weighing approximately 45 kg each) were loaded onto the back of the plaintiff's prime mover by Mr Zantidis, a forklift driver employed by CDM, to allow for the restacking process to take place. The plaintiff alleged that he had requested assistance with the restacking process from both Mr Zantidis and Mr Jones, the defendant's depot manager, and both had refused. It was further alleged that the restacking had to take place that day or else the plaintiff would not be paid and that the direction to restack and have the pallets delivered came from Mr Jones. It was through the restacking process that the plaintiff injured his back on 14 March 2005.
Decision
Supreme Court of New South Wales
The plaintiff initially brought proceedings against Woolworths, Coca-Cola and the defendant. The claims against Coca-Cola and Woolworths were subsequently abandoned. The plaintiff pleaded a number of particulars of negligence relating to what occurred or should have occurred at the CDM depot. In short he alleged he should not have been left without assistance on his prime mover in the depot to restack the goods and that the defendant was under an obligation to provide him with assistance.
There was evidence that on the day of the accident one of the defendant's prime movers, driven by Mr Shannon, had suffered the same fate as the plaintiff's goods and was being unloaded at the depot, though not in the defendant's section. Mr Shannon was restocking the goods with the assistance of Mr Jones. The plaintiff argued that he should have been afforded the same assistance.
It was not disputed that in the course of the restacking operation the plaintiff injured his back and that the system of work carried with it a foreseeable risk of injury. What was in dispute was whether or not the defendant was responsible for the system of work and whether or not the defendant owed the plaintiff a duty of care. The plaintiff acknowledged he was solely responsible for the unloading of goods from his prime mover that could not be accessed via a forklift at the depot.
The trial judge, Harrison J, found there were a number of controversial facts and inconsistencies in the matter which led him to find no factual basis to accept the plaintiff had sought assistance from either Mr Zantidis or Mr Jones. In any event, Harrison J found it made no difference if assistance was sought and refused or not asked for at all as neither CDM nor the defendant was under any legal obligation to assist the plaintiff in circumstances where it was the responsibility of the driver to facilitate the unloading process for pallets that were beyond the reach of a forklift. No part of the restacking process was performed by forklift drivers unless they volunteered. In all other cases this task was the responsibility of the driver. It was found that the system of work was devised by the plaintiff's employer and that the defendant exercised no control over the plaintiff.
As such, Harrison J found that the defendant did not owe the plaintiff a duty of care and that any such duty was undoubtedly owed to the plaintiff by the plaintiff's employer.
New South Wales Court of Appeal (Court of Appeal)
The Court of Appeal was asked to determine whether the trial judge was correct in holding that the defendant was not responsible for the system of work and owed no duty of care to the plaintiff.
The Court of Appeal considered the decision of Wooby v Australian Postal Corporation2 (Wooby) and the decisions discussed therein. In a unanimous decision, it was found that none of the factors which may give rise to liability on the part of a principal existed in the present case: the unloading did not take place on premises under the control of the defendant; the plaintiff's reliance on the defendant having occupation of the premises was misconceived; the accident did not occur due to any lack of coordination of subcontractors, nor was it a case in which the defendant exercised day-to-day control over the activities of the subcontractors or its employees.
The two factual elements relied upon by the plaintiff that the defendant had control. Firstly that Mr Jones directed that broken boxes be delivered to the Big W store was dismissed on the basis of inconsistencies in the plaintiff's evidence and earlier evidentiary statements. Secondly, the allegation that the defendant knew of the potentially dangerous situation whereas his employer did not, was found by the Court of Appeal to misunderstand the circumstances in which such issues can arise. Basten J found that:
The plaintiff initially brought proceedings against Woolworths, Coca-Cola and the defendant. The claims against Coca-Cola and Woolworths were subsequently abandoned. The plaintiff pleaded a number of particulars of negligence relating to what occurred or should have occurred at the CDM depot. In short he alleged he should not have been left without assistance on his prime mover in the depot to restack the goods and that the defendant was under an obligation to provide him with assistance.
There was evidence that on the day of the accident one of the defendant's prime movers, driven by Mr Shannon, had suffered the same fate as the plaintiff's goods and was being unloaded at the depot, though not in the defendant's section. Mr Shannon was restocking the goods with the assistance of Mr Jones. The plaintiff argued that he should have been afforded the same assistance.
It was not disputed that in the course of the restacking operation the plaintiff injured his back and that the system of work carried with it a foreseeable risk of injury. What was in dispute was whether or not the defendant was responsible for the system of work and whether or not the defendant owed the plaintiff a duty of care. The plaintiff acknowledged he was solely responsible for the unloading of goods from his prime mover that could not be accessed via a forklift at the depot.
The trial judge, Harrison J, found there were a number of controversial facts and inconsistencies in the matter which led him to find no factual basis to accept the plaintiff had sought assistance from either Mr Zantidis or Mr Jones. In any event, Harrison J found it made no difference if assistance was sought and refused or not asked for at all as neither CDM nor the defendant was under any legal obligation to assist the plaintiff in circumstances where it was the responsibility of the driver to facilitate the unloading process for pallets that were beyond the reach of a forklift. No part of the restacking process was performed by forklift drivers unless they volunteered. In all other cases this task was the responsibility of the driver. It was found that the system of work was devised by the plaintiff's employer and that the defendant exercised no control over the plaintiff.
As such, Harrison J found that the defendant did not owe the plaintiff a duty of care and that any such duty was undoubtedly owed to the plaintiff by the plaintiff's employer.
New South Wales Court of Appeal (Court of Appeal)
The Court of Appeal was asked to determine whether the trial judge was correct in holding that the defendant was not responsible for the system of work and owed no duty of care to the plaintiff.
The Court of Appeal considered the decision of Wooby v Australian Postal Corporation2 (Wooby) and the decisions discussed therein. In a unanimous decision, it was found that none of the factors which may give rise to liability on the part of a principal existed in the present case: the unloading did not take place on premises under the control of the defendant; the plaintiff's reliance on the defendant having occupation of the premises was misconceived; the accident did not occur due to any lack of coordination of subcontractors, nor was it a case in which the defendant exercised day-to-day control over the activities of the subcontractors or its employees.
The two factual elements relied upon by the plaintiff that the defendant had control. Firstly that Mr Jones directed that broken boxes be delivered to the Big W store was dismissed on the basis of inconsistencies in the plaintiff's evidence and earlier evidentiary statements. Secondly, the allegation that the defendant knew of the potentially dangerous situation whereas his employer did not, was found by the Court of Appeal to misunderstand the circumstances in which such issues can arise. Basten J found that:
"Where the principal does not control the work environment, the fact that it or its employee knows of a particular situation involving the employee of a subcontractor is likely to be of little weight in creating a duty of care."3
Basten J distinguished the factual circumstances of this matter from those of Thompson v Woolworths (Q'land) Pty Ltd4 and Wooby. The Court of Appeal upheld the trial judge's decision and the appeal was dismissed.
Why this case is important
This case reiterates that the law does not in general impose on a principal a duty of care with respect to subcontractors or employees of its subcontractors. Whilst there may be particular circumstances where such a duty may arise, the duty is not however to be equated to that owed by an employer.
Where a plaintiff does not exceed the threshold requirements under the Workers Compensation Act 1987 (NSW) to claim work injury damages, in order to succeed in a claim against a principal, they must identify a set of factual circumstances creating a relationship from which the law will imply a duty of care.
Where a plaintiff does not exceed the threshold requirements under the Workers Compensation Act 1987 (NSW) to claim work injury damages, in order to succeed in a claim against a principal, they must identify a set of factual circumstances creating a relationship from which the law will imply a duty of care.
- Basten and Simpson JJA, Sackville AJA.
- [2013] NSWCA 183.
- at [25].
- (2005) 221 CLR 234; [2005] HCA 19.