Hole in one – Contractor escapes liability for risk of harm arising from plumbing job

 

Author: Chad Farah
Judgment Date: 25 June 2019
Citation: Lloyd v Thornbury [2019] NSWCA 154
Jurisdiction: NSW Court of Appeal¹

Principles

1. The common law duty of care owed by a landlord to a tenant and other members of the tenant’s household is to take reasonable care to avoid foreseeable risk of harm to those persons having regard to all the circumstances of the case.
   It is well established that the correct identification of the risk of harm is necessary before 'one can assess what a reasonable response to that risk would be': Roads and Traffic Authority (NSW) v Dederer (2007) 234 CLR 330; [2007] HCA 42 (Dederer) at [59] (Gummow J).
   In considering whether there has been a failure to take reasonable precautions against a risk of harm, the starting point is that breach must be assessed prospectively not retrospectively with the wisdom of hindsight.
   
   
2. In assessing the plaintiff's damages, the Court must have regard to all the evidence including matters that are likely to affect the plaintiff's capacity and needs in the future irrespective of the accident. The Court must also reach conclusions that are consistent with one another and must provide adequate reasons for quantifying the damages in a certain way, otherwise it may fall into appealable error.

Background

Dustin Thornbury (the plaintiff) was a tenant in residential premises owned by Gerard Lloyd (the landlord) when, on Monday 16 April 2012 at about 2 am in the morning, he slipped and fell into a hole in his back yard thereby sustaining injury.

The plaintiff had been awakened by his two dogs as they were fighting with a third intruder dog in his backyard. He hurried outside to break them apart. The hole in which the plaintiff mis-stepped was one of four 600 mm x 600 mm x 300 mm holes that had recently been dug up at the direction of the landlord, in the plaintiff's presence, to enable an examination of the area by a geotechnical engineer. This was due to a drainage problem. The plaintiff's accident occurred following the engineer's examination but before the holes were back-filled.

It was not in dispute that the landlord had attended a hardware store to purchase equipment on Friday, 13 April 2012. With the plaintiff's assistance, he attempted to erect poles with safety barrier mesh around the holes but ran out of materials to cover two of those holes (one of which eventually caused this accident). It was also not in dispute that the plaintiff advised the landlord on Sunday, 15 April 2012, being the day before the accident, that the holes had not yet been back-filled.

Proceedings in a claim for damages were commenced in the District Court of New South Wales against Jeffrey Treuer (the contractor) who was contracted to perform plumbing work on the premises as well as the landlord as the second defendant. There was a dispute as to who bore the responsibility for back-filling or barricading the holes and the defendants subsequently cross-claimed against each other.

Those proceedings culminated in a five-day trial in August 2015, but it was not until three years later that Maiden SC DCJ delivered an oral judgment in which the following orders were made:

1. Judgment for the plaintiff against the landlord in the amount of $345,043.17 following a 40% deduction for contributory negligence;
   
   
2. Judgment for the contractor against the plaintiff;
   
   
3. Judgment for the contractor against the landlord in the cross-claim.
   
   

His Honour found that the responsibility of back-filling or barricading the holes rested with the landlord on the basis that he was 'in charge of what was happening' and that the contractor was not, on balance, directed by the landlord to back-fill or barricade the holes prior to the accident. His Honour also accepted the contractor's evidence of his conversation with the landlord following the accident, in which the landlord conceded that he should have back-filled the holes.

The landlord appealed the whole of the decision, while the plaintiff cross-appealed on the finding of contributory negligence and the judgment against him in favour of the contractor.

Court of Appeal

The landlord argued that there was merely a two-day delay in back-filling the holes before the accident occurred and that this did not constitute a breach of his duty of care towards the plaintiff because the plaintiff was 'an adult fully aware of the risk'.

Furthermore, the landlord argued that he had already 'set in motion' the proposed repairs by contacting the contractor on Friday, 13 April 2012 to request that the holes be back-filled (which was denied by the contractor). The landlord contended that the primary judge erred in failing to determine whether that conversation ever took place.

Gleeson JA held that, 'on a fair reading of his Honour's reasons', the primary judge appropriately identified the risk of harm in question as being the risk that one might fall into an open hole in the absence of any barricading. The Court then turned to the various limbs of Section 5B of the Civil Liability Act and found:

1. that the risk of harm was reasonably foreseeable;
   
   
2. that there was a 'realistic possibility' of the harm occurring at night time if the tenants needed to traverse the backyard when visibility was poor;
   
   
3. that it was plain that a severe injury could result from a fall into one of the holes;
   
   
4. that the landlord, on balance, had not taken reasonable steps to minimise the risk of harm when he became aware of it because his evidence as to the alleged steps that he took was 'so vague and imprecise…that his Honour was correct in [making that finding]'.

It was also noted that the plaintiff, on cross-examination, accepted that he entered his poorly lit backyard while 'chasing' the dogs without a torch and knowing there were holes in which he could fall. His Honour reasoned that the plaintiff was acting in an emergency to prevent injury to the dogs where time was of the essence; hence, the plaintiff was only partially at fault. His Honour therefore dismissed the appeal against the trial judge's finding of 40% contributory negligence.

The Court ultimately held that any deficiencies in the primary judge's findings did not warrant a re-hearing as to liability, but rather a re-hearing as to quantum. The reasons were that the primary judge erred by finding:

1. that the plaintiff's injuries gave rise to 30% of a most extreme case without articulating the nature of the ongoing injuries and their effects on the plaintiff's life, and in the absence of any consideration of the plaintiff's pre-existing problems and co-morbidities;
   
   
2. that the plaintiff had suffered a diminution in earning capacity to the extent of 20 hours per week following the accident when the evidence of his post-injury employment showed otherwise;
   
   
3. that the award for future economic loss should also be based on the above diminution in earning capacity and based on the likely earnings of a farm labourer (when there was an inconsistent finding that the plaintiff would most likely work as a furniture removalist). The Court of Appeal also found that His Honour 'failed to grapple with the medical evidence' concerning the vicissitudes of life arising from the plaintiff's congenital diseases and pre-existing pathologies; and
   
   
4. that the award for future medical expenses should amount to $20,000 in the absence of any clear reasoning, or consideration of the plaintiff's pre-existing problems and co-morbidities, or a clear calculation of that total amount with reference to the actual weekly cost of treatment.

The plaintiff's cross-appeal was dismissed, meaning the finding of 40% contributory negligence was upheld as was the judgment in favour of the contractor.

The matter was re-mitted to the District Court for a re-hearing on quantum.

Why this case is important

The case reaffirms the principles governing landlord's liability in circumstances where the landlord is aware of the risk of harm and fails to take adequate precautions to minimise the risk.

A landlord cannot discharge the duty owed to a tenant by engaging an independent contractor to perform work on the premises unless there has been a clear delegation of the duty to that contractor.

A trial judge's findings will be overturned on appeal where there has been a failure to provide adequate reasons. Depending on the findings of fact, the Court of Appeal has a discretion to order a new trial.

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¹ Meagher JA, Gleeson JA and White JA.