South Sydney Junior Rugby League Club Ltd v Gazis [2016] NSWCA 8

In this Alert, Special Counsel Brooke Jacobs considers the scope of duty owed by employer and occupier and the necessity for workers to prove that any breach of duty was causative of harm. Consideration is also given to the narrow interpretation of an insurance exclusion for injury to employees of subcontractors.

The facts

The plaintiff was employed by MPS Security Pty Ltd (MPS) as a security officer. South Sydney Rugby League Club (theClub) contracted Semacs Australia Pty Ltd (Semacs) to provide security at the Club premises. Semacs obtained the services of the plaintiff from MPS and the plaintiff was deployed to the Club to act as a security officer.

The Plaintiff suffered injuries when he was moving a large trolley used to transport the poker machine takings at the Club. He lost his grip and fell backwards, injuring his back.

Relevantly, the evidence demonstrated that moving the trolley did not form part of the plaintiff’s employment duties and MPS, Semacs and the Club were unaware that the plaintiff engaged in moving the trolley. The trolley had six swivel wheels and when laden (which it was not at the time), weighed at least 90kg.

The plaintiff commenced proceedings seeking damages for personal injuries against MPS (employer), Semacs (host) and the Club (occupier).

The decision at first instance

The plaintiff settled the case against Semacs on the first day of trial, however, MPS and the Club maintained cross claims against Semacs.

Interestingly, the trial judge did not accept that Semacs acquired the services of the plaintiff from MPS under a contract of labour hire.

The was relevant to Semacs’ insurer HCC, which sought to rely on an exclusion in its policy with respect to claims for injury “to employees of subcontractors arising out of or in the course of his/her employment in your (Semacs’) business.”

The trial judge rejected that HCC was entitled to rely upon the exclusion.

At first instance, the trial judge found in favour of the plaintiff and apportioned liability 25% to MPS and 75% to the Club.

MPS and the Club appealed against the finding that they were liable, arguing that Semacs should be liable to contribute and/or that the assessment of damages was in error. HCC challenged the finding that it was not able to rely upon the exclusion by way of notice of contention.

The decision on appeal

The New South Wales Court of Appeal upheld the appeal by MPS and the Club as it related to primary liability.

Justice Basten (at pp22) found that the arrangement between MPS and Semacs was clearly a contract for labour hire.  However, in circumstances where the plaintiff was provided under a contract for labour hire (as opposed to being a person working as an employee of a contractor), HCC was not entitled to rely upon the policy exclusion.

In relation to the Club, whilst the court accepted that the Club owed a duty, it found that the exercise of reasonable care did not require the Club to direct the plaintiff to desist in moving the laden trolley in circumstances where it was unaware that the plaintiff was doing so and any risks posed were obvious, but remote.

In relation to the awareness of the Club that the plaintiff was moving the trolley, the court noted that “it is not correct that the knowledge of every employee of the company, particularly as to the activities of independent contractors having different functions on the company’s premises, becomes the knowledge of the company” and referred to Nationwide News Pty Ltd v Naidu [2007] 71 NSWLR, where the court found that the whether the knowledge of a particular person should be imputed to the corporation depends on the scope of that person’s employment.

In relation to MPS, the court accepted that, as the employer, it owed a non delegable duty of care and was in breach of it by virtue of its failure to inspect the environment the plaintiff was working in.  However, the court held that the breach was not causative of the accident, because even on reasonable inspection by the employer, any risk posed by the trolley would not have been identified.

Key take away points

  • Employers owe a non delegable duty of care to workers deployed to work at sites controlled by others
  • For a claim to succeed against an employer, a breach of its non delegable duty (for instance, for failing to inspect the workplace) must cause the harm
  • The scope of an occupier’s duty is lesser and the courts will look to what the occupier knew or ought to have known about the risk that manifested and caused the harm
  • Courts continue to make narrow distinctions to avoid giving effect to insurance exclusions – in this case, it distinguished between an employee provided under a contract of labour hire and a subcontractor’s employee.