Leighton Contractors Pty. Ltd. v Fox and Ors - Case Study Example

OHS Law The case of Leighton Contractors Pty. Ltd. v Fox and Ors essentially involved an accident that happened on 7 March 2003 wherein a concrete pipe, while in the process of cleaning such pipe, swung and hit Mr Fox’s head causing significant injury to him (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35). The parties involved in this case include Leighton Contractors Pty Ltd or “Leighton” which is the principal contractor in the project involved and the appellant in the first appeal; Downview Pty Ltd or “Downview” which is a company contracted by Leighton under the ‘Works Contract’, tasked to “carry out the concreting, including the provision of reinforcing and formwork, for certain works”; Quentin Still and Jason Cook who were subcontracted to carry out the concrete pumping; and finally Mr Fox and Warren Stewart who were both engaged by Mr Still and Mr Cook as regards “the concrete pumping for a pour that was scheduled the time” when the incident happened (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35). Initially, in Fox v Leighton Contractors Pty. Ltd. & Ors [2008] NSWCA 23, the Court of Appeals assessed the trial judges conclusion of whether Mr Brian Fox, had contributory negligence, given that he then knew that the pipe was not attached to the waste bin. The trial judge (Gibb DCJ) held that the Mr Fox was liable for contributory negligence “in at least 25% and the evidence may have justified a greater percentage” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008]). The trial judge also concluded that Warren Stewart Pty Ltd, a company subcontracted by Downview Pty Ltd to carry out the concrete pumping, was liable to Mr Fox in the amount of $472,561.95 in damages (Fox v Leighton Contractors Pty. Ltd. & Ors [2008]). The trial court however concluded that Leighton and Downview were not liable. Warren Stewart Pty Ltd did not appeal this decision. However, Mr Fox appealed against the dismissal of his claims against Leighton and Downview. The Court of Appeal allowed the appeal, and essentially upheld the liability of both Leighton and Downview which the Court said “were each subject to a common law duty of care for the benefit of Mr Fox and that each was in breach of that duty” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008]). Hence, judgment was made against Leighton and Downview in the sum of $472,562. In tackling the liability of Leighton as a principal contractor, the Court explained that “the circumstances in which one party will be responsible for the negligent acts of a third party is determined by the law in accordance with principles which are neither precise nor clearly defined in terms of underlying policy” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 32) It explained that “a commercial enterprise may owe a duty of care to a third party directly, or it may be vicariously liable for the acts of persons by whom it undertakes its operations” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 32) The Court then stated that “a building contractor in control of a construction site may owe a duty of care to all those coming onto the site to take reasonable steps to ensure their safety” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 32). The Court explained that Leighton’s liability is based on its failure to “ensure either by training and supervision, that safe work practices were adopted” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 33). The Court cited the Occupational Health and Safety Act 2000 (NSW) or the ‘OH&S Act’ and the Occupational Health and Safety Regulation 2001 or the ‘Regulation’, stating that “Leighton had statutory responsibilities in addition to any duty of care arising under the general law” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 33). The Court of appeal stated that “those duties extended beyond employment relationships” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 33). Under reg 213 “A principal contractor for a construction project must not direct or allow another person to carry out construction work on the construction project unless the principal contractor is satisfied that the person has undergone OHS induction training.” Training was required to “cover the relevant health and safety topics set out in the Code of Practice” (reg 217(a)). The code of practice which the Court of Appeals also cited, provided among others the following: that “line cleaning should only be carried out by experienced and trained pumping personnel; that extreme care should be taken when using compressed air to clean the pipeline; that air pressure will cause anything inside the pipeline to act as a high-velocity projectile” (Code of Practice, cl 3.18). Said provision also mentions safety precautions to be followed. The Court of Appeal also mentioned s 39A of the OH&S Act as “consistent with provisions in relation to the OH&S Act itself” and “which are designed to preclude a separate cause of action for breach of statutory duty” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 37). However, the Court explained that “it does not follow that such provisions are irrelevant when considering the scope of a common law duty” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 37). In its examination, the Court of Appeal said that “Leighton did provide induction training at the site and that it required its principal subcontractor to carry out similar responsibilities in relation to its particular work” ” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 42). It recognized that “Leighton depended on Downview to inform it of the individuals who were coming onto the site to undertake specific works” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 42). However, Downview was unable and failed to set out such obligations. Given these therefore, the Court of Appeal raised the issue of “whether Leighton took all reasonable care to ensure that persons coming onto the site did in fact undergo induction training” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 42). The Court explained that “although Leighton was not vicariously responsible for the negligence of its subcontractors or of persons subcontracted by them, it remained the principal contractor with overall responsibility for the safety of the site, on which, as the evidence showed, a significant number of tradespeople and other workers were present at any one time” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 47). It further stressed that “the continuing obligations of a principal contractor, even where the work to be performed has been largely or totally subcontracted, are reflected in the Occupational Health and Safety Regulation and in the general law” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 47). Citing several cases, the Court of Appeal then stated that “a principal may be liable for the negligence of an independent contractor where the principal has directly authorized the doing of the tortious act” (Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; 188 CLR 313 at 366, McHugh J referring to Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Cooperative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48 (Dixon J). Furthermore, it explained that “the principal may be required to co-ordinate the activities of various subcontractors as part of its obligation to set a safe system of work” (Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 31 (Mason J). In this case, the “occupier having control over the premises, it may be necessary for the principal contractor to identify and provide warnings in relation to dangerous features of a partly constructed building” (Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174 at [47]-[53]). However, the Court of Appeal said that such duty of a principal contractor would still depend on the specific circumstance of each case (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 47). The Court of Appeal further stressed that “the obligation to ensure a reasonable level of safety is now well-recognised” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 48). In addition, it recognized that “the need for induction training” as “part of major construction works” in that, it was even recognised by Leighton in its contract with Downview under cl 32 that although it imposed obligations on Downview, it also acknowledged its continuing obligations (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 48). The Court of Appeals explained that these obligations are part of “Leighton’s general law duty of care to subcontractors and others coming onto a construction site within its control” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 48). It also stated that both the contractual provisions and Regulation did not support Leighton’s claim in delegating such (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 48). Hence, the Court of Appeal stated that “Leighton clearly took upon itself a supervisory role in checking work method statements prepared by Downview and rejecting them where it thought them inadequate” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 49). Taking those steps “indicate the level of control Leighton maintained over the site” which controls were “desirable for the efficient conduct of the construction works, as well as for the safety of those on site” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 49). It also added that even if Downview had the primary responsibility as regards the “safety aspects of the concreting work,” this does not absolve Leighton from such responsibility, taking into consideration the contribution of each (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 49). Hence, according to the Court of Appeal, Leighton was in breach of that duty having owed Mr Fox such a duty of care and permitting both Mr Stewart and Mr Fox to work on the site without “having undergone induction training” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 49). Downview was also found liable by the Court of Appeal in that, “the haphazard manner in which Downview undertook its operations was directly responsible for the failure of Messrs Stewart and Fox to be given induction training” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 68). Downview was said to have ineffectively administered its contractual obligations in terms of ensuring that “safe practices were adopted on the site” as Mr Stewart himself was unaware of “the safety requirements in relation to securing the end of the pumping line prior to cleaning it out” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 68). Downview also had a “general law obligation to those participating in carrying out its contracting work to conduct operations safely and to do what is obliged in the contract, and that to contract with competent and properly trained operators” aside from its contractual obligation to Leighton (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 70). The Court of Appeals stated that “by leaving it to its own subcontractors to engage other labour and equipment, it effectively abandoned its responsibilities in that respect” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 70). The Court of Appeals also stated that Downview’s nature of the duty was similar to that imposed on Leighton as regards its liability on the accident. It stated that “its conduct in breach of the general law duty materially contributed to the accident which occurred on 7 March 2003” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 70). Hence, the Court of Appeals stated that “Mr Fox was entitled to a judgment against Downview and the appeal should accordingly be upheld in respect of Downview as well as in respect of Leighton” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 71). The Court of Appeal also tackled the issue of contributory negligence of the Mr Fox. Basten JA explains that Mr Fox knew that “he should have had induction training on the site in relation to health and safety issues” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 79). Such omission on the part of Mr Fox to make any inquiries on that aspect thus manifests “a degree of failure on his part to take reasonable steps for his own safety” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 79). Aside from this, the Court explained that there was no evidence which would show that Mr Fox knew about the arrangements for the second attempt in cleaning the pipe, and that is “with the cement bag filled with Dacron insulating material which required an increase in the use of pressurised air to force it through”, which if Mr Fox knew, would have “given rise to an appreciation of greater risk of injury” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 80). The evidence, as pointed out by Basten JA, “does not establish that Mr Fox knew of the steps to be adopted which led to the accident” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 80). Hence, the Court stated that the figure suggested by the trial judge of about 25%, was too high and suggests a just and equitable attribution of responsibility to Mr Fox in that, to reduce the damages on account of contributory negligence by 15% (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 81). Finally, the Court tackled the contribution between respondents. It stated that, “although Leighton owed a duty to Mr Fox to provide appropriate induction training before he commenced work on the site, its failure to do so was substantially a result of Downview’s failure to organise its subcontractors in a manner which was required by its contract with Leighton” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 86). Hence, it stated that “in all the circumstances, it is just and equitable that Downview should be liable for a contribution in the proportion of 80% of the damages payable to the appellant by both respondents” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 86). With these reasons, both Leighton and Downview appealed to the High Court reasoning that “the imposition on each of them of a common law duty of care owed to Mr Fox, an independent contractor, involves an unwarranted extension of the liability of principals for the negligent acts of other independent contractors engaged by them” Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 5). The High Court provided a different explanation than that made by the Court of Appeal. It explained that “the common law does not impose a duty of care on principals for the benefit of independent contractors engaged by them of the kind which they owe to their employees” (Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16). However, it stated that “it is recognised that in some circumstances a principal will come under a duty to use reasonable care to ensure that a system of work for one or more independent contractors is safe” (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 20). The High Court cited Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 47-48, which it primarily relies on for dismissing the liability of Leighton, thus: “An entrepreneur who organises an activity involving a risk of injury to those engaged in it is under a duty to use reasonable care in organising the activity to avoid or minimise that risk, and that duty is imposed whether or not the entrepreneur is under a further duty of care to servants employed by him to carry out that activity. The entrepreneurs duty arises simply because he is creating the risk and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organising an activity does not import a duty to avoid any risk of injury; it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. Xxx But once the activity has been organised and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power or in leaving undefined the contractors respective areas of responsibility, the entrepreneur is not liable for damage caused merely by a negligent failure of an independent contractor to adopt or follow a safe system of work either within his area of responsibility or in an area of shared responsibility.” (Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 47-48). The High Court using Brodribb Sawmilling Co Pty Ltd (1986), explained that “the relevant obligation of Leighton would require only that it be satisfied that the person had completed OHS induction training in general health and safety topics and work activity based health and safety topics, or that the person had carried out relevant construction work in the course of employment within the period of two years immediately preceding 1 April 1999, and completion of the site specific OHS induction training” (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 36). The High Court further stated that “it is necessary to exercise caution in translating the obligations imposed on employers, principal contractors and others under the OHS Act and the Regulation into a duty of care at common law” (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 49). Citing Gummow J in Roads and Traffic Authority (NSW) v Dederer , such case provided that “whatever their scope, all duties of care are to be discharged by the exercise of reasonable care. They do not impose a more stringent or onerous burden.” The High Court then criticised the Court of Appeal’s not having looked into the aspect of “whether Leighton had implemented a reasonable system for ensuring that workers coming onto the site were identified, were required to undergo site induction and were required to show evidence of completion of general and work activity based OHS induction training” (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 50). Hence, the High Court sated that the Court of Appeal “intended to impose a special or strict duty supported by its peremptory treatment of breach” and only considered “the relevant omission in taking steps to ensure that Messrs Stewart and Fox undertook the relevant induction training” (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 50). The High Court went on is stating that “if Leighton owed a duty to Mr Fox and Mr Stewart to provide induction training to them in the safe method of line cleaning,” then “it owed a duty to provide training in the safe method of carrying on every trade and conducting every specialised activity carried out on the site to every worker on the site” (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 52). The High Court then explained that there is no justification nor reason “in principle to impose a duty having this scope on a principal contractor” as “it is unlikely to possess detailed knowledge of safe work methods across the spectrum of trades involved in construction work” (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 52). The High Court explained that such a duty in providing “training in the safe method of carrying out the contractors specialised task is inconsistent with maintenance of the distinction that the common law draws between the obligations of employers to their employees and of principals to independent contractors” (Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; Hollis v Vabu Pty Ltd (2001) 207 CLR 21; Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161). Hence, the High Court stated that “the Court of Appeals conclusion that Leighton was negligent by reason of an assumed failure to provide OHS induction training to Mr Fox and Mr Stewart cannot be sustained nor is it possible to sustain the Court of Appeals finding of liability by accepting the narrower case advanced by Mr Fox, that Leighton was negligent by its failure to take reasonable steps to ensure that Mr Fox and Mr Stewart had completed OHS induction training” (Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, par 57). Analysis and Comments I disagree with the decision of the High Court and find that the Court of Appeals decision more reasonable and justifiable given the evidence and the circumstances presented. First, being the principal contractor, it had control and supervision over the premises. As stated in the Court of Appeals decision, “an occupier having control over the premises, it may be necessary for the principal contractor to identify and provide warnings in relation to dangerous features of a partly constructed building” (Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174 at [47]-[53]). Even under the “Works Contract” itself, under cl 32 Leighton recognized that although it imposed obligations on Downview, it also acknowledged its continuing obligations (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 48). This was neither taken into consideration by the High Court in tackling the liability of Leighton. Neither was it stated in the contract itself that any breach of such duty by the subcontractor in providing reasonable safety measures would exonerate the principal contractor from liability. In fact, “Leighton clearly took upon itself a supervisory role in checking work method statements prepared by Downview and rejecting them where it thought them inadequate” (Fox v Leighton Contractors Pty. Ltd. & Ors [2008], par 49). Leighton therefore had such control of the premises, that it cannot absolve itself from responsibility just because the victim was an independent contractor. It cannot escape its liability under the Regulation which clearly provides for the principal contractor to direct or allow another person to carry out construction work on the construction project unless the principal contractor is satisfied that the person has undergone OHS induction training. Second, although what is required under the law is only to ensure that reasonable safety measures are adopted, and not a greater or more onerous obligation for the principal contractor, it has assumed responsibility in checking the work method done by Downview which reflects a supervisory role on the part of Leighton. Although, as explained by Christian Witting that “A ‘special’ responsibility or duty to ‘see’ or ‘ensure’ that reasonable care is taken by an independent contractor, and the contractors employees, goes beyond a duty to act reasonably in exercising prudent oversight of what the contractor does” (Witting, 2008), in this case, such a duty can be fulfilled as it in fact checks on how its subcontractors work methods are. And even if Mr Still had in fact attended induction training, it still does not appear that such training was reasonable and sufficient enough to cover the subject matter involving the safety measures adopted in cleaning of pipes as Mr Still who contracted Mr Fox in this case admitted that he himself was not familiar with the Code of Practice in the appropriate methods to be adopted in the line cleaning. Finally, if the reasoning of the High Court would be adopted, a principal contractor can easily exonerate itself from responsibility by getting independent contractors and later on state that it is impossible to control and to see to it that the independent contractors were not reckless or careless in their work methods. The principal contractor in this case still has the obligation of workplace management to provide a safe system of work, regardless of whether or not “workers themselves have the ability to implement such a system and to avoid causing injury” as such company has control over the premises (Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388, 426 (Viscount Simonds). Works Cited Code of Practice, cl 3.18. Fox v Leighton Contractors Pty. Ltd. & Ors [2008] NSWCA 23 Fox v Leighton Contractors Pty. Ltd. & Ors [2008] NSWCA 23 paragraphs, 32, 33, 37, 42, 47, 48, 49, 68, 70, 71, 79, 80, 81 and 86. Hollis v Vabu Pty Ltd (2001) 207 CLR 21 Leighton Contractors Pty Ltd v Fox, [2009] HCA 35. Leighton Contractors Pty Ltd v Fox, [2009] HCA 35, paragraphs, 5, 20, 36, 50, 52 and 57. Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174 at [47]-[53]). Northern Sandblasting Pty Ltd v Harris [1997] HCA 39 Occupational Health and Safety Act 2000 (NSW) Occupational Health and Safety Regulation 2001. Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd [1961] AC 388, 426 (Viscount Simonds). Roads and Traffic Authority (NSW) v Dederer [2007] HCA 42. Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 at 31 (Mason J). Sweeney v Boylan Nominees Pty Ltd (2006) 226 CLR 161. Witting, Christian (2008). Melbourne University Law Review, Volume, 32, p. 332. 188 CLR 313 at 366, McHugh J referring to Colonial Mutual Life Assurance Society Ltd v Producers and Citizens Cooperative Assurance Co of Australia Ltd (1931) 46 CLR 41 at 48 (Dixon J). Read More