The New South Wales Court Appeal recently considered this issue in Central Darling Shire Council v Greeney  NSWCA 51.
In this matter, the council, as principal contractor, at first instance was found liable to the employee of the sub-contractor.
The council appealed against that decision arguing primarily that in accordance withLeighton v Fox and Stevens v Brodribb it was not responsible for the negligent system of work of an independent contractor.
The Claimant had been injured whilst attempting to couple a fuel tanker to the rear of a caravan after uncoupling it from the rear of a four-wheel drive vehicle. The evidence against the council there was that the Claimant had asked his supervisor, a council worker, for a new jockey wheel on several occasions. The council employee’s response was however that it was up to his employer to replace it. Further, the court accepted that both the Claimant’s employer and the council had made it clear that the Claimant would lose his job if, despite the absence of the jockey wheel, he did not comply with their instructions.
The court accepted expert evidence that the absence of a jockey wheel increased the manual handling involved and thereby increased the risk of injury.
The court discussed the relevant legal issues and provided the following useful summary:
“If [the Claimant] had been a council employee, the council would have owed him a non-delegable duty to take reasonable care to avoid exposing him to unnecessary risks of injury, including an obligation to take reasonable care to avoid real risks of injury by “devising a method of operation for the performance of the task that eliminate[d] the rick, or by the provision of adequate safeguards.1
“The law does not however impose a duty of that type upon a principal in favour of independent contractors, or employees of independent contractors such as [the Claimant]. In Leighton Contractors Pty Ltd v Fox  HCA 35; 240 CLR 1 at 20], the High Court approved the following observations of Brennan J in Stevens v Brodribb Sawmilling Co Pty Ltd  HCA1; 160 CLR 16 (at 47-48) as to a circumstance that may impose a duty of care on the principal, albeit a more limited one than that owed by an employer to its employee:
“… 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 entrepreneur’s duty arises simply because he is creating the risk (Sutherland Shire Council v Heyman… and his duty 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” (citation omitted).
In Stevens v Brodribb a saw miller engaged contractors to fell and transport trees. Whilst the saw miller’s employee had general supervision over the operations, he exercised no control over the manner in which the contractors carried out their tasks. Nevertheless, the contractors’ tasks were independent and required coordination and the saw miller therefore owed them a duty of care to prescribe a safe work system. That is not the present case but there is no reason to read Stevens v Brodribb as exhaustively stating the circumstances in which a duty of care more limited than that owed by an employer to an employee may arise.
In Sydney Water Corporation v Abramovic  NSWCA 248; 5 DDCR 570 at , Basten JA (with the concurrence of Mason P) identified the following factors as potentially relevant to the determination of whether a principal owed a relevant duty of care to an employee of a subcontractor:
“(a) the principal directs the manner of performance of the work;
(b) the work requires the coordination of the activities of different contractors;
(c) the principal has or ought to have knowledge of the risk and the employer does not and cannot reasonably be expected to have such knowledge;
(d) the principal has the means to alleviate the risk and the employer cannot reasonably be expected to do so;
(e) although the employer has or should have the relevant knowledge and can be expected reasonably to take steps to alleviate the risk, it does not, to the knowledge of the principal, do so.”
In Wooby v Australian Postal Corporation  NSWCA 183; 233 IR 471 at , Basten JA emphasised the non-exhaustive nature of this list. So far as the principal’s control of the work was concerned, his Honour observed that what had been important in Sydney Water Corporation v Abramovic was the “degree of control in fact exercised by the principal”, as distinct from the mere existence of a right to exercise a degree of control (at ). This reflected the approach taken in Plexvon Pty Ltd (in liq) v Brophy  NSWCA 304; 158 IR 221 at  in reliance upon R v Foster; Ex parte Commonwealth Life (Amalgamated) Assurance Ltd  HCA 10; 85 CLR 138 at 151.
Basten JA’s observations are consistent with the “multifactorial” approach of Allsop P (with Basten JA and Simpson J concurring) in Caltex Refineries (Qld) Pty Ltd v Stavar  NSWCA 258; 75 NSWLR 649. Whilst this case did not concern the relationship of principals to subcontractors or their employees, Allsop P stated principles of general application to the identification of duties of care. In particular, his Honour identified many features of potential relevance, of which only the following need be mentioned here:
“(a) the foreseeability of harm;
(b) the nature of the harm alleged;
(c) the degree and nature of control able to be exercised by the defendant to avoid harm;
(d) the degree of vulnerability of the plaintiff to harm from the defendant’s conduct, including the capacity and reasonable expectation of a plaintiff to take steps to protect itself;
(e) the degree of reliance by the plaintiff upon the defendant;
(f) any assumption of responsibility by the defendant …” (at ).”
Ultimately the New South Wales Court of Appeal held that the council representative was negligent in giving a direction to the Claimant to move camp knowing the jockey wheel was not there. The court noted of course that the precise mechanism of the accident need not be foreseen.
Further, they noted that:
- The council’s representative was in a position where he was able to, and did, exercise relevant control over the Claimant. They said therefore this was not a Stevens v Brodribb situation where the principal had to coordinate the activities of a subcontractor, but instead a case where the principal actively created the risk by its representative giving a positive direction to utilise unsafe equipment.
- The Claimant was vulnerable because he had no choice but to obey Mr Hocking’s direction.
- It was reasonably foreseeable that if the foreseeable risk eventuated, the Claimant may suffer serious injury.
- The method employed of moving camp was to the council’s financial advantage because it was quicker.
On the issue of breach, despite it not being council’s equipment, it was said that the council could have required the employer to supply a jockey wheel which rendered the fuel tank as safe to be used in the manner intended by its designers. The council argued they had no contractual rights in that regard however the court said at paragraph 48 “In the absence of the council (which must have known of the details) leading evidence of the contract’s content, it can be inferred as a matter of common sense that [the employer] was obliged under it, either expressly or impliedly, to supply a road roller and ancillary equipment (including a fuel tanker) that was fit for safe use in remote areas.”
As to causation, the courts said that the council’s negligence was in the giving of the unsafe direction not a failure to give any warnings.
Liability was ultimately apportioned 60% to the council and 40% to the employer. The Court of Appeal commented that was at the “very border” of the range given the relatively high culpability of the employer but the apportionment was not interfered with on appeal.
This case further illustrates that Leighton v Fox will not give “carte blanche” to a principal contractor to ignore safety concerns or issue unsafe instructions just because those instructions are issued to non-employees.