Norman Allan Betts v White Constructions (ACT) Pty Limited; Marr (Contracting) Pty Limited; Superior Rigging and Crane Erection Pty Limited and Austwork Pty Limited [1990] ACTSC 16; (1990) 100 FLR 192 (25 May 1990)

SUPREME COURT OF THE ACT

NORMAN ALLAN BETTS v. WHITE CONSTRUCTIONS (ACT) PTY LIMITED; MARR
(CONTRACTING) PTY LIMITED; SUPERIOR RIGGING and CRANE ERECTION PTY LIMITED and
AUSTWORK PTY LIMITED
S.C. No. 2058 of 1986
Contracts
[1990] ACTSC 16; (1990) 100 FLR 192

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Contracts - Tort - Contract to erect tower crane - Collapse of crane - Owner suing in contract and tort for property damage - Contractor alleging contributory negligence - Trial Judge finding for owner in both contract and tort and negativing contributory negligence - Workman employee of owner injured when tower collapsed suing owner - Owner joining contractor as third party seeking indemnity or contribution - Contractor alleging owner's contributory negligence - Owner pleading estoppel arising out of earlier action for property damage - Third party pleading different heads of negligence from those found in earlier action - Whether third party estopped in respect of claim against it in tort - Whether third party estopped in respect of claim against it in contract

Blair v Curran [1939] HCA 23; (1939) 62 CLR 464

Ramsay v Pigram [1968] HCA 34; (1967) 118 CLR 271

Jackson v Goldsmith [1950] HCA 22; (1950) 81 CLR 446

Cervellone v Besselink Bros Pty Ltd (1984) 55 ACTR 1

Bollen v Hickson (1981) Qd R 249

Fisher v Val de Travers Asphalte Company (1876) 45 LJQB 479

Kiddle v Lovett (1885) 16 QBD 605

Mowbray v Merryweather (1895) 2 QB 640 (CA)

Sims v Foster Wheeler Ltd (1966) 2 All ER 313

Scott v Foley, Aikman, and Co. (1899) 16 TLR 55

Hadley v Droitwich Construction Co., Ltd (1967) 3 All ER 911

Lambert v Lewis (1982) AC 225

Mayo v Florida Hotels Pty Ltd (1964) 65 SR(NSW)

Florida Hotels Pty Ltd v Mayo [1965] HCA 26; (1965) 113 CLR 588

Hadley v Baxendale [1854] EWHC J70 (Exch); (1854) 9 Ex 341; 156 ER 145

HEARING

CANBERRA
25:5:1990

Counsel for Plaintiff Mr A Whitlam, QC

Mr R Williams

Instructing Solicitors Messrs Gary Robb and Associates

Counsel for Defendant Mr M Williams

Instructing Solicitors Messrs A O Ellison and Co
By their Canberra Agents,
Messrs Macphillamy Cummins and Gibson

Counsel for each of the

Third Parties Mr J E Maconachie

Instructing Solicitors Messrs Abbott Tout Russell Kennedy

ORDER

1. There be judgment for the defendant against the first Third Party in the sum of $254,055.00 and for the amount of costs which the defendant is or has been required to pay to the plaintiff pursuant to the judgment for the plaintiff entered herein on 19 December 1989.

2. The first Third Party is to pay the defendant's costs of and incidental to the plaintiff's action and of and incidental to its claim for contribution or indemnity against the first Third Party, those costs to be taxed.

3. The defendant is to have liberty to apply in respect of any interest which it may have been required to pay pursuant to the judgment entered herein on 19 December 1989 in favour of the plaintiff.

DECISION

Norman Allan Betts (the plaintiff) sued White Constructions (ACT) Pty Limited (the defendant), at all relevant times his employer, for damages in respect of an accident which occurred on 2 March 1986. On that day he was operating a crane at London Circuit, Canberra City when suddenly it fell over causing him injury and consequent loss and damage. He sued the defendant in negligence and for breach of statutory duty. Although the possibility of a claim for breach of the contract of employment between the defendant and him arises on the pleadings, the defendant, by its defence, not surprisingly denied negligence and breach of statutory duty only. Senior counsel for the plaintiff opened his case as one in negligence and for breach of statutory duty.

2. The defendant served Third Party claims (subsequently amended) joining Marr (Contracting) Pty Limited (the first Third Party), Superior Rigging and Crane Erection Pty Limited (the second Third Party) and Austwork Pty Limited (the third Third Party). It is convenient to annex a copy of the amended Third Party claim directed to the first Third Party to these Reasons.

3. The third parties delivered what was described as "An Amended Defence to Third Party Claims", really a defence to the Amended Third Party Claim. Again it is convenient to annex a copy of that defence to these Reasons.

4. The defendant then filed a reply to the defence to the Third Party claims in the following terms:-

"The Defendant in Reply to the Amended Defence to
Amended Third Party Notice says:
1. In an action heard in the Supreme Court of
New South Wales before the Honourable
Mr Justice Yeldham wherein inter alia the
Defendant sued the First Third Party issues
were joined between them as described in
paragraphs 4, 5 and 6 as more particularly set
forth in paragraph 8(a) to (u) inclusive.
(Clearly the words "Amended Third Party
Claim" should have been added and the matter
proceeded as if they had in fact. I give
leave to make the appropriate amendment and
any necessary consequential amendment.)
2. On the 17th February 1989 all such issues
were decided in favour of the Defendant
against the First Third Party whereby the
latter is estopped as regards all such issues
and may lead no evidence thereupon.
3. A copy of the said judgement is annexed to
the Reply already filed herein."

5. On those pleadings, the matter proceeded to trial.

6. During the course of the trial, it quickly became obvious that there was really no defence to the claim by the plaintiff against the defendant and the parties very sensibly, if I may say so, agreed that the further hearing of the Third Party claim by the defendant against the third parties might be adjourned subject to an order being made that the plaintiff should attend for further cross-examination on being given appropriate notice. An order was made in those terms and for abundance of caution the question of whether the estoppel referred to in the reply dated 18 December 1989 was made out was reserved. No order for costs of the Third Party action was made at that time.

7. The matter proceeded and was adjourned, part heard, to 19 December 1989 when, at the conclusion of the case for the plaintiff, judgment in his favour for the sum of $254,055.00 plus costs, including costs reserved, was ordered.

8. The question which I am now required to decide is whether, as a matter of law, the first Third Party is estopped by virtue of the judgment of Yeldham J from alleging those matters which the defendant has pleaded by its reply to the defence to the amended Third Party Claim that it may not. If I find that estoppel operates, it is agreed that I should give judgment forthwith for the defendant against the first Third Party in respect of the moneys it has been ordered to pay to the plaintiff pursuant to the judgment of 19 December 1989.

9. In Blair v Curran [1939] HCA 23; (1939) 62 CLR 464 at pp 531-2 Dixon J (as he then was) said:-

"A judicial determination directly involving an
issue of fact or of law disposes once for all of
the issue, so that it cannot afterwards be raised
between the same parties or their privies. The
estoppel covers only those matters which the
prior judgment, decree or order necessarily
established as the legal foundation or
justification of its conclusion, whether that
conclusion is that a money sum be recovered or
that the doing of an act be commanded or be
restrained or that rights be declared. The
distinction between res judicata and issue-estoppel
is that in the first the very right or
cause of action claimed or put in suit has in the
former proceedings passed into judgment, so that
it is merged and has no longer an independent
existence, while in the second, for the purpose
of some other claim or cause of action, a state
of fact or law is alleged or denied the existence
of which is a matter necessarily decided by the
prior judgment, decree or order.
Nothing but what is legally indispensable to the
conclusion is thus finally closed or precluded.
In matters of fact the issue-estoppel is confined
to those ultimate facts which form the
ingredients in the cause of action, that is, the
title to the right established. Where the
conclusion is against the existence of a right or
claim which in point of law depends upon a number
of ingredients or ultimate facts the absence of
any one of which would be enough to defeat the
claim, the estoppel covers only the actual ground
upon which the existence of the right was
negatived. But in neither case is the estoppel
confined to the final legal conclusion expressed
in the judgment, decree or order. In the
phraseology of Coleridge J. in R. Inhabitants of
the Township of Hartington Middle Quarter ((1855)
4 E and B 780, at p 794 (119 ER 288, at p 293)),
the judicial determination concludes, not merely
as to the point actually decided, but as to a
matter which it was necessary to decide and which
was actually decided as the groundwork of the
decision itself, though not then directly the
point at issue. Matters cardinal to the latter
claim or contention cannot be raised if to raise
them is necessarily to assert that the former
decision was erroneous."

10. I am concerned, therefore, with establishing what were the states of fact or law which were legally indispensable to the judgment of Yeldham J in the Supreme Court of New South Wales to which reference was made in the pleadings and which was handed down on 17 February 1989.

11. In Ramsay v Pigram [1968] HCA 34; (1967) 118 CLR 271 Barwick CJ said at p 276:-

"Long standing authorities, in my opinion,
warrant the statement that, as a mechanism in the
process of accumulating material for the
determination of issues in a proceeding between
parties, an estoppel is available to prevent the
assertion in those proceedings of a matter of
fact or of law in a sense contrary to that in
which that precise matter has already been
necessarily and directly decided by a competent
tribunal in resolving rights or obligations
between the same parties in the same respective
interests or capacities, or between a privy of
each, or between one of them and a privy of the
other in each instance in the same interest or
capacity. The issue thus determined, as distinct
from the cause of action in relation to which it
arose, must have been identical in each case. Of
its nature such an estoppel must be available to
and operative in respect of each party; or, as
it is said, estoppels must be mutual."

12. In Jackson v Goldsmith [1950] HCA 22; (1950) 81 CLR 446 the High Court dealt with a matter arising out of an accident in which the respondent Goldsmith, driving his car, had collided with a motor cycle owned and ridden by the appellant, Jackson, on which one White was a passenger. Goldsmith brought an action in the District Court against Jackson for damage to his car, alleging that that damage was caused by Jackson's negligence, and recovered a verdict. White subsequently brought an action against Jackson for damages for personal injuries sustained by him in the accident. Jackson pleaded not guilty and under s.5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) joined Goldsmith as third party, claiming contribution or complete indemnity from him as third party in respect of any sum which White might recover in his action. Goldsmith pleaded the general issue. He pleaded further that Jackson "ought not be to admitted to say" that he was entitled to contribution or indemnity because earlier

(a) he, Goldsmith, had sued Jackson in the
District Court at Sydney for recovery of
damages from Jackson alleging negligence in
respect of his riding his motor cycle,
(b) Jackson denied negligence and alleged
contributory negligence on the part of
Goldsmith, and
(c) the District Court had adjudged Jackson
guilty of negligence causing Goldsmith the
damages claimed and further adjudged
Goldsmith not guilty of contributory
negligence.

13. Jackson demurred, alleging, inter alia,

(a) that the District Court judgment was not in
respect of the same cause or causes of action
as those set out in his declaration of Third
Party claim;
(b) that the negligence he charged against
Goldsmith in that declaration was not the
same as that negligence which was alleged by
him against Goldsmith in the District Court
proceedings;
(c) that Jackson could not have recovered and did
not have the opportunity of recovering
against Goldsmith in the District Court
proceedings that which he now sought to
recover in his present claim against
Goldsmith; and
(d) that he did not defend the District Court
proceedings in the same right as that in
which he sued in his present claim against
Goldsmith.

14. The Full Court of the Supreme Court of New South Wales held that judgment in demurrer should be entered on behalf of Goldsmith. The High Court, Fullagar J dissenting, allowed an appeal.

15. By their further Amended Statement of Claim in action No. 21689 of 1986 in the Supreme Court of New South Wales, White Industries Limited and the defendant sued the first and second third parties.

16. The presence of White Industries Limited in that action may be ignored since the parties in their conduct of it and Yeldham J, in his judgment, proceeded on the basis that the true plaintiff was White Constructions (ACT) Pty Limited, the defendant; so, too, may the presence of the second and third third parties. Making necessary amendments to the Further Amended Statement of Claim in the New South Wales action to take account of that fact and to show, again for convenience sake, the title of the parties in the New South Wales action as they appear in these reasons, the relevant parts of that Further Amended Statement of Claim were as follows:-

"4. By an agreement made on or about 11 February
1986, (the first Third Party) agreed with
(the defendant) that in consideration of the
payment to it of the sum of $55,900.00 it
would dismantle (a) crane and relocate the
crane at office block No. 3 within (a
certain) Convention Centre...
PARTICULARS
The agreement was oral and was made at a
meeting between Mr John McClanachan on behalf
of (the defendant) and Mr Gary Davis on
behalf of the first (Third Party).
5. It was a term and condition of the Agreement
that the relocation and reconstruction of the
crane at office block No. 3 would be carried
out by the first (Third Party) in accordance
with drawing No. 796-7.
6. It was a further term and condition of the
Agreement that the said dismantling and
relocation of the crane would be carried out
by the first (Third Party) in a proper and
workmanlike manner.
7. In purported performance of its obligations
under the agreement, the first (Third Party)
on 1st and 2nd March 1986, dismantled the
crane and attempted to relocate it at office
block No. 3.
8. In breach of its obligations under the
agreement the first (Third Party) failed to
relocate the crane in accordance with drawing
No. 796-7 and failed to carry out its
obligations under the agreement in a proper
and workmanlike manner.
PARTICULARS
(a) failing to affix a crane tie at level 3
prior to the erection of the upper crane;
(b) failing to adequately or at all
supervise the erection of the crane;
(c) failed to properly or at all follow
drawing No. 796-7;
(d) failed to properly or at all inspect the
work being carried out in that the crane
tie had not been affixed before
attempting to erect the upper crane;
(e) failed to warn (the defendant) that the
crane tie had not been affixed before
attempting to erect the upper crane;
(f) failed to carry out the task of
relocating the crane with reasonable
care in order to prevent damage to the
crane;
(g) failed to devise, institute and to
maintain a method of relocating the
crane so as not to cause damage to the
crane.
9. Whilst being erected at office block No. 3,
the crane collapsed and was totally
destroyed.
10.By reason of the said destruction of the
crane the (defendant has) suffered loss and
damage.
11.The loss and damage suffered by the
(defendant) was caused by the breach by the
first (Third Party) of its obligations under
the agreement.

12.Further or in the alternative the first
(Third Party) at all material times held
itself out as being in the business of
dismantling, reconstructing and relocating
cranes and undertook to dismantle and
relocate the crane at office block No. 3.
The (defendant) claims and the fact is that
the first (Third Party) therefore owed to the
(defendant) a duty of care to exercise
reasonable care and skill in the dismantling
and relocation of the crane.
13.In breach of its duty of care the first
(Third Party) was negligent in and about the
relocation of the crane and failed to
exercise reasonable care to prevent damage to
the (defendant's) property, namely the crane,
and building and associated works."
PARTICULARS
The first (Third Party) was negligent in that by
itself, its servants or agents it:-
(a) Failed to affix a crane tie at level 3 of the
crane prior to the erection of the upper
crane.
(b) Failed to adequately or at all supervise the
erection of the crane.
(c) Failed to carry out its work in a proper and
workmanlike manner.
(d) Failed to properly or at all follow darwing
(sic) No. 796-7.
(e) Failed to properly or at all inspect the work
being carried out in that the crane tie had
not been affixed before attempting to erect
the upper crane.
(f) Failed to warn the plaintiff that the crane
tie had not been affixed before attempting to
erect the upper crane.
(g) Failed to carry out the task of relocating
the crane with reasonable care in order to
prevent damage to the crane.
(h) Failed to devise, institute and maintain a
method of locating the crane so as not to
cause damage to the crane.

17. By its pleading entitled "Further Amended Defence of First Defendant", (no doubt it should have been described as the "Defence of the First Defendant to the Further Amended Statement of Claim"), the first Third Party pleaded, so far as is relevant, (again I have called the parties by the titles given them in these reasons):-

"3. As to paragraphs 4, 5 and 6 of the Further
Amended Statement of Claim the first (Third
Party) says that in or about February 1986 an
agreement ("the Agreement") was made between
the first (Third Party) and the (defendant)
in consideration of the sum of $29,500.00
concerning the dismantling and relocation of
a crane on the building site.
(PARTICULARS WERE GIVEN)
4. It was an express term of the agreement that
the (defendant) would erect the first but not
in excess of the first five, tower sections
of the crane on the crane base constructed by
the (defendant).
5. Further, it was an express term of the
Agreement that the erection of the crane was
to be carried out in accordance with
drawing No. 796-7 ("the Drawing") save that:
(i) only ten tower sections not fourteen
tower sections as provided for in the
Drawing were to be erected; and
(ii) the climbing tower as provided for in
the Drawing was not to be installed.
6. Further, it was a term of the Agreement that
the first (Third Party) would not be
responsible for any loss or damage whether
direct or indirect of any kind whatsoever
incurred by the (defendant) due to any
accident or from any other cause whatsoever
arising out of a performance of the
Agreement.
7. Further, it was a term of the Agreement that
the (defendant) would indemnify and keep
indemnified the first (Third Party) against
all actions, demands, claims, suits, loss or
damage to the personal property of any person
arising from the acts or omissions of the
(first Defendant, its) employees, servants or
agents.
8. Further, it was a term of the Agreement or
alternatively a variation of the Agreement or
alternatively a further agreement ("the
Further Agreement") was made on or about
2nd March 1986 that (the defendant) would
move the collar of the crane from an
inaccessible place on the building site to a
position on the site whereby it could be
lifted by the first (Third Party) onto
level three at the new location of the crane
or alternatively that the (defendant) would
itself lift the tie collar onto level three
in order that the same may be connected to
the tower sections of the crane.
(PARTICULARS WERE GIVEN)

8A. It was an express or alternatively an implied
term of the said Agreement that the
(defendant) would:-
(i) supply long bolts of an appropriate
dimension to enable the tie collar to be
installed;
(ii) grant and otherwise prepare the area of
the works to enable the tie collar to be
affixed upside down;
(iii) supervise, co-ordinate and direct the
erection of the tower crane and the
installation of the tie collar.
(PARTICULARS WERE GIVEN)
9. In breach of the term, or alternatively the
variation of the Agreement, or alternatively
the Further Agreement referred to in the
preceding paragraph, the (defendant) failed
to move the tie collar to a position on the
site whereby it could be lifted to
level three and alternatively failed to lift
the tie collar onto level three.
9A. In breach of the said Agreements or one of
them, the (defendant) failed to provide long
bolts of appropriate dimensions, failed to
grant or otherwise prepare the works, and
failed properly or at all to supervise,
co-ordinate or direct the said erection and
installation.
.....
15. The first (Third Party) denies the allegation
made in paragraph 11 of the Further Amended
Statement of Claim.
16. In further answer to paragraph 11 of the
Further Amended Statement of Claim the first
(Third Party) says that if any loss or damage
was suffered by the (defendant), which is not
admitted, any such loss or damage was caused
by or contributed to by the (defendant's)
said failure to move the tie collar to a
position on the site whereby it could be
lifted to level three and (sic) alternatively
the (defendant's) failure to lift the collar
to level three for connection to the tower
sections of the crane.
17. As to paragraph 12 of the Further Amended
Statement of Claim the first defendant admits
that it is in the business of dismantling,
reconstructing and relocating cranes, denies
that it undertook to dismantle and relocate
the crane at office block number 3, repeats
the matter set out in paragraphs 3 to 8 hereof
and denies that it owed to the plaintiff any
duty of care as alleged therein.
18. The first defendant denies the allegations
made in paragraph 13 of the Further Amended
Statement of Claim."

18. Yeldham J did not, in his Reasons for Judgment, set out paragraphs 15, 17 and 18 just quoted. Neither did he set out paragraphs 11 , 12 and 13 of the Further Amended Statement of Claim. But paragraph 11 makes a claim for damages and is what the claim in contract is all about while he summarised paragraphs 12 and 13 as follows:-

"The further amended statement of claim also
alleged, in the alternative, that the first
defendant owed to the plaintiffs a duty to
exercise reasonable care and skill in the
dismantling and relocating of the crane, and that
it was in breach of that duty."

19. The case before Yeldham J was fought on the basis that the first defendant had been guilty of contributory negligence both in respect of the claim in contract and the claim in tort.

20. Yeldham J found that the contract between the (defendant) and the first (Third Party) was as pleaded in paragraph 4 of the (defendant's) Further Amended Statement of Claim and that it included also the terms and conditions pleaded in paragraphs 5 and 6 of that pleading, namely, that the first (Third Party) would carry out the work in accordance with drawing No. 796-7 and in a proper and workmanlike manner. These terms and conditions, his Honour said, the first Third Party clearly failed to perform.

21. His Honour then made findings which are faithfully reflected in paragraph 8 of the Amended Third Party Claim delivered by the first (Defendant) to the (first Third Party) in their action. Although the document referred to in paragraph 1 of the Reply to the Amended Defence to the Amended Third Party Notice in which paragraphs 4, 5, 6 and 8 referred to in paragraph 1 of that Reply is not further identified, it is clear that what is being referred to is the Amended Third Party Claim. The parties proceeded on that basis and at this stage I see no reason to quarrel with that approach.

22. The question is whether the damage caused the plaintiff may be said to have been caused wholly by the first Third Party's breach of its duty of care to the defendant and its breach of its contract with the defendant. As to the alleged breach of the duty of care - only if the states of fact and law which were legally indispensable to the judgment of Yeldham J on the claim in tort in respect of the property damage are also legally indispensable to and co-extensive with the states of fact and law which the defendant must establish in order to found its claim for total indemnity (nothing less will serve) in respect of the injuries and damage suffered by the plaintiff can the first Third Party be estopped as the defendant claims.

23. Counsel for the first Third Party contended that the findings made by Yeldham J were not conclusive against his client in relation to the claim made by the plaintiff. It was possible, he said, that the plaintiff, suing both defendant and first Third Party directly and jointly, might have recovered against each of them. He might have recovered against the first Third Party because of its direct negligence and against the defendant because of its failure properly to fulfil its duty of care to the plaintiff by appropriate supervision of the actions of the first Third Party in and about its performance of its contract and by ensuring that the plaintiff was not allowed to be at risk. The negligence of the defendant upon which the first Third Party relies is set out in the particulars furnished in the defence to the amended Third Party claim, the copy of which, called the Amended Defence to Third Party Claims, is annexed to these reasons.

24. It is convenient at this point to refer to s.11(4) of the Law Reform (Miscellaneous Provisions) Act 1955 which provides that:-

"A tort-feasor liable in respect of the damage
may recover contribution from any other
tort-feasor who is, or would if sued have been,
liable in respect of the same damage, whether as
a joint tort-feasor or otherwise, but no person
is entitled to recover contribution under this
section from a person entitled to be indemnified
by him in respect of the liability in respect of
which the contribution is sought."
Section 12 of that Act says,
"In proceedings for contribution under the last
preceding section the amount of the contribution
recoverable from a person is such as is found by
the court to be just and equitable, having regard
to the extent of that person's responsibility for
the damage, and the court has power to exempt a
person from liability to make contribution, or to
direct that the contribution be recovered from a
person shall amount to a complete imdemnity."

25. Counsel for the defendant sought to distinguish Jackson v Goldsmith (supra) on the ground that there the issue being tendered differed from that in this case which, he submitted, is the reverse of what was decided by the High Court. The issue decided by Yeldham J and that now sought to be litigated is, he submitted, the same.

26. In Jackson v Goldsmith, Latham CJ said at pp 455-6,

"In the District Court the issue was whether
Goldsmith had been guilty of contributory
negligence, that is, had he contributed to the
injury to Jackson by either - (1) carelessness
with respect to his own safety; or (2) breach of
a duty which he owed to Jackson to take care?
What was decided was that Goldsmith was not
guilty of contributory negligence. This decision
therefore negated the following propositions:-
(1) that Goldsmith contributed to his own injury
by carelessness for his own safety; (2) that he
contributed thereto by negligence consisting in a
breach of a duty owed by him to Jackson to take
care.
In the third party proceedings in the Supreme
Court the question is whether Goldsmith is liable
in respect of the injury done to White by reason
of a breach of duty to take care which he owed to
White.
The proceedings in the District Court did not
determine whether there was any breach by
Goldsmith of a duty which he owed to White.
Neither proposition (1) nor proposition (2) is a
determination of the issue in the third party
proceedings. Therefore the decision in the
District Court does not estop Jackson from
alleging that Goldsmith was guilty of a breach of
a duty which he owed to White."

27. McTiernan J, while agreeing in the result, pointed out at pp 458 that,

"It is not inconsistent with the finding for the
appellant to allege that the respondent is a
tort-feasor. The appellant did not allege in the
action in the District Court that the respondent
was a tort-feassor the finding that the
respondent was not guilty of contributory
negligence is not necessarily equivalent to an
acquittal of the tort of negligence.
The appellant is precluded from alleging that the
respondent negligently drove his motor car
against the appellant's motor cycle, if a finding
that he did not do so is fundamental or necessary
to the finding that the respondent was not guilty
of contributory negligence."
At p 461, Williams J said,
"As a result of the proceedings in the District
Court it is now a res judicata between Jackson
and Goldsmith that the damage to Goldsmith's
vehicle was caused by the negligence of Jackson
and that Goldsmith was not guilty of contributory
negligence, but the issue of fact whether any
damage which the passenger White may have
suffered in the accident was caused by the
negligence of Jackson or Goldsmith or both has
never been taken and found in any court. White
is therefore free to sue either Jackson or
Goldsmith severally, or to sue them jointly. He
has chosen to sue Jackson severally. Part III of
the Law Reform (Miscellaneous Provisions) Act
1946 relates to contribution between tort-feasors
and s.5(1)(c) provides, so far as material, that
one tort-feasor who is made a defendant may
recover contribution from any other tort-feasor
who is or would if sued be liable in respect of
the same damage, whether as a joint tort-feasor
or otherwise. The right of the tort-feasor who
is sued to recover contribution from another
person therefore depends upon the proof that the
other person is also a tort-feasor in respect of
the plaintiff or, in other words, that the
plaintiff would succeed in an action for damages
against that other person. As a result of the
accident Jackson had at one stage two possible
causes of action. He might have sued Goldsmith
for any damage to his person or property caused
by the negligence of Goldsmith. He is now
estopped by the judgment of the District Court
from bringing this action. If sued by White he
might have sued Goldsmith for contribution under
the Law Reform (Miscellaneous Provisions) Act.
He has now been sued by White and has taken
proceedings against Goldsmith under this Act.
"The proceedings by the defendant against the
third party are independent of and separate from
the proceedings by the plaintiff against the
defendant, except that, when the defendant is
made liable to the plaintiff, he then has his
right open against the third party to establish,
if he can, that he possesses a right to indemnity
and contribution from that third party"
(Hordern-Richmond Ltd v Duncan (1947) 1 KB 545,
at p 552). But, as I have said, the issue in
these proceedings is whether any damage to White
was caused by the negligence of Goldsmith. The
proceedings in the Supreme Court are not
therefore proceedings which, though different in
form, raise the same issue of fact as that raised
and found in the action in the District Court..."
Continuing at p 463, his Honour said,
"The liability of Goldsmith to White for any
damage that White may have suffered was not in
any sense the groundwork of the decision in the
District Court. It was not the same but a
different damage which was then in issue...No
doubt the facts which will be litigated between
Jackson and Goldsmith in the Supreme Court will
be substantially the same facts as those
litigated in the District Court but they will be
litigated for a different purpose, and to prove
or disprove a different issue."

28. As against the defendant, the first Third Party is, in my opinion, precluded from denying that its negligence and breach of contract caused the collapse of the tower.

29. Undoubtedly an employee suing his employer and a third person in respect of damage sustained as a result, allegedly, of the negligence of both, may set out to prove that each was in breach of a different duty to him. This is illustrated aptly by the facts in Cervellone v Besselink Bros Pty Ltd (1984) 55 ACTR 1.

30. Yeldham J did not consider the duty of care owed by the first Third Party to the plaintiff. As Williams J pointed out in Jackson v Goldsmith (supra) in the passage from his judgment from which I have quoted the right of a tort-feasor who is sued to recover contribution from another person depends upon the proof that the other person is also a tort-feasor in respect of the plaintiff or, in other words, that the plaintiff would succeed in an action for damages against that other person. There can be no doubt that the plaintiff would have succeeded against the first Third Party had he joined it as a defendant or even had he sued it alone. But, as appears from the pleadings, the negligence alleged against the defendant by the first Third Party is of a different kind from that alleged by the plaintiff against the defendant. Accordingly, it seems to me that there would be differences in the issues of facts to be litigated between the defendant and the first Third Party because what would be in question would be the conduct of the defendant vis-a-vis the plaintiff, a question which was not litigated in the earlier action before Yeldham J. Therefore, following the principles enunciated in Jackson v Goldsmith [1950] HCA 22; (1950) 81 CLR 446 and distinguishing the decision in Bollen v Hickson (1981) QdR 249 I am bound, I think, to find that the Third Party is not, in respect of the defendant's claim against it in negligence, estopped from alleging that the plaintiff's injury was due to the negligence of the defendant or that the defendant was guilty of contributory negligence.

31. However, the matter does not end there. Counsel for the first Third Party conceded that he must make out his case against the defendant both in contract and tort. It will be enough to allow the defendant to succeed if it establishes that the first Third Party is estopped as it alleges in respect of the claim in either tort or contract. The defendant's case against the first Third Party in the New South Wales action was based, it would seem, primarily on an alleged breach of contract. I set out a lengthy passage from the Judgment of Yeldham J.

"I have earlier held that the contract between
the second plaintiff and the first defendant was
as pleaded in par 4 of the further amended
statement of claim. It included also the terms
and conditions pleaded in paras 5 and 6, namely,
that such defendant would carry out the work in
accordance with drawing No. 796/7 and in a proper
and workmanlike manner. This it clearly failed
to do. The fact that the plaintiff did assist
with some of the work, which technically was the
obligation of the first defendant, does not
affect this conclusion. The job was urgent;
both companies had men on the spot; but the
ultimate obligation to properly re-erect the
tower crane lay upon the first defendant, which
was an expert in the field and which was to be
paid a substantial sum for the work. Although
Mr Mahar had a duty in relation to the
co-ordination of the various tasks being
performed, it was Mr Watson who was in charge of
the actual operation of the dismantling of the
crane and its re-erection by the first defendant
or, more accurately by its sub-contractor, the
second defendant. The very fact that engineers
engaged by the plaintiff had produced designs for
the re-erection of the crane and for the
footings, with a note plainly to be seen that the
crane tie was to be installed at level 3 prior to
erection of the upper crane, served to emphasise
the importance of compliance with the engineer's
instruction by the expert engaged in the work for
which the plan provided. Paragraph 17 of the
further amended defence of the first defendant
admits "that it is in the business of
dismantling, reconstructing and re-locating
cranes" as undoubtedly it was. Even without the
express instruction contained on the relevant
drawing, it should have been aware of the
necessity to properly tie the crane, having
regard to its height and its nature, and
notwithstanding the apparent condition of the
base. It was the obligation of Mr Davis to make
plain to those in charge of the actual carrying
out of the work on the part of the first and
second defendant that the plan had to be
carefully followed, that the base would carry no
overturning forces, and that the tie must go in
in its correct sequence. The job was really a
simple one for expert crane erectors, and their
lack of care was of significant proportions. The
project was one with inherent dangers,
notwithstanding the familiarity of the defendants
with the type of work in question. There were
166.3 tonnes of upper crane weight one hundred
feet above the ground, and the foreseeable
consequences of the tower crane falling were
indeed immense. I reject the submission by
counsel for the first defendant that the cause of
the collapse was the failure of Mr Mahar to
properly co-ordinate the works and ensure that
the tie and collar were affixed before the
erection and fitting out of the machinery deck.

Mr Watson conceded, in a passage which I have
earlier set out, that, apart from two irrelevant
tasks, the dismantling of the crane and its
re-erection (with the exception of the first
crane section) were entirely matters for him and
his men.
In my opinion the first defendant is liable to
the second plaintiff in damanges for breach of
contract, such breach being the failure to erect
the tower crane in strict accordance with the
relevant drawing and in a proper and workmanlike
manner; and in particular the failure of
Mr Davis to bring home to those in charge of the
work or those performing it on behalf of the
first and second defendants the importance of
complying with the requirements of the drawing as
to the installatiaon of the crane tie prior to
the erection of the upper crane. I consider that
the breach of contract referred to was
causatively connected with the collapse of the
crane and the damage suffered by the plaintiff.
Even if, as the defendants have asserted, the
plaintiff was to some extent guilty of
negligence, that would not preclude it from
recovering in full its damages - see Floria
Hotels Pty Limited v Mayo and Anor [1965] HCA 26; 113 CLR 588...
...it is necessary that I should consider
whether or not the second plaintiff was negligent
in a sense which was causatively related to the
damage which it suffered, having regard at least
to the claim in tort.
It should here be made clear that there is no
evidence that any plaintiff was aware that the
first defendant had subcontracted to the second
defendant the work which the former had
contracted to perform for the second plaintiff.
The relevance of this is that it removes any
obligation from the plaintiff to instruct the
actual men working on the site of the need to
install the tie, it being entitled to assume that
the plan which had been given to Mr Davis (an
officer of the "first Third Party") initially
would be followed, as would the instructions
given by Mr McClanachan (the "defendant's" deputy
construction manager) to Davis during their
conversations in early February. In addition the
first defendant was and the plaintiff was not an
expert in the erection of tower cranes. The
plaintiffs were builders and the whole task of
dismantling and re-erecting the crane, subject to
the minor exceptions already dealt with, was to
be performed for substantial reward by the first
defendant. In these circumstances the
plaintiff was entitled to assume, unless it was
or should have been aware to the contrary, that
the men on the job would be properly instructed,
competent and experienced, and would be well
aware of the function of the tie and the need for
it to be installed to ensure stability and
safety. Although the work of co-ordination was
performed by Mr Mahar, I am satisfied that he was
not in any way supervising the work which the
first defendant had contracted to do and the
second defendant was carrying out for it, nor was
he required to do so.
Upon consideration of the evidence as a whole,
and of the arguments advanced in the written
submissions, I am not satisfied that either
plaintiff has been proved to be guilty of
negligence. I reject the defendant's submissions
based upon contributory negligence including
those which argue that in any event negligence by
the plaintiff broke the chain of causation
between any breach of contract by the first
defendant and the damage suffered by the plaintiff."

(For consistency, of course, the words "second plaintiff" where used by Yeldham J in the passage from his judgment should be read as "defendant" as should the word "plaintiff" where it is obvious that that word was intended by him to refer to the second plaintiff and a substitution of the phrase "first Third Party" for the expression "first defendant" should be made.)

32. The facts indispensable to the judgment of Yeldham J are, I think, as follows:-

(a) that the contract between the defendant and
the first Third Party was as pleaded in
paragraph 4 of the Further Amended Statement
of Claim and included terms that the first
Third Party would carry out the work in
accordance with the identified drawing and in
a proper and workmanlike manner;
(b) the first Third Party failed to comply with
those terms and conditions;
(c) the ultimate obligation properly to re-erect
the tower crane lay upon the first Third
Party, an expert in the field which was to be
paid a substantial sum for the work;
(d) the dismantling of the crane and its
re-erection (with the exception of the first
crane section) were entirely matters for
Mr Watson, a leading hand rigger, effectively
the agent of the first Third Party;
(e) the first Third Party was liable to the
plaintiff in damages for breach of contract,
in particular the breaches of the terms and
conditions referred to in sub-paragraph (a)
above;
(f) the breach of contract was causatively
connected with the collapse of the crane and
the damage suffered by the defendant;
(g) even if the defendant was to some extent
guilty of negligence, that would not preclude
it from recovering in full its damages.
(h) There was no obligation on the defendant to
instruct the men actually working on the site
of the need to install the tie, it being
entitled to assume that the plan which had
been given initially to Mr Davis of the first
Third Party would be followed, as would the
instructions given by Mr McClanachan (the
defendant's deputy construction manager) to Davis
during a conversation in early February.
(i) The defendant was entitled to assume, unless it
was or should have been aware to the contrary,
that the first Third Party's men on the job would
be properly instructed, competent and
experienced, and would be well aware of the
function of the tie and the need for it to be
installed to ensure stability and safety.
(j) The defendant was not proved to be guilty of
negligence vis-a-vis the first Third Party.
(k) The defendant was not proved to be guilty of
contributory negligence vis-a-vis the first Third
Party.

33. In summary, therefore, the first Third Party was -

(a) in breach of its contract; and
(b) in breach of its duty of care to the
defendant;

so that it was liable both in contract and in tort to the defendant in respect of damage caused to the crane and other property as a result of the crane's collapse without reduction for contributory negligence which the learned Judge negatived.

34. The question is whether those indispensable findings amount in law to a finding that the first Third Party is liable in contract to indemnify the defendant in respect of any damage caused the plaintiff. If no, the first Third Party would not be estopped as the defendant states it is; if yes, it would, in my opinion, be so estopped.

35. In Keating: Building Contracts, 4th Edn at p 151 it is said that if, as a result of defective work by a contractor not in accordance with the contract, a third party is injured or suffers loss and sues the employer, the latter may be able to recover from the contractor the amount of the damages or some paid by way of settlement of the claim. In support of that proposition the learned author cites Fisher v Val de Travers Asphalte Company (1876) 45 LJQB 479; Kiddle v Lovett (1885) 16 QBD 605; Mowbray v Merryweather (1895) 2 QB 640 (CA); and Sims v Foster Wheeler Ltd. (1966) 2 All ER 313. See also Scott v Foley, Aikman, and Co. (1899) 16 TLR 55. The most important of those cases is Mowbray v Merryweather. The House of Lords has held that the true ratio decidendi of Mowbray v Merryweather is to be found in what Winn, LJ said in Hadley v Droitwich Construction Co., Ltd (1967) 3 All ER 911 at p 914,

"The principle (of Mowbray v Merryweather),...is
this that in a case where A has been held
liable to X, a stranger, for negligent failure to
take a certain precaution, he may recover over
from someone with whom he has a contract only if
by that contract the other contracting party has
warranted that he`need not`- there is no
necessity to - take the very precautions for the
failure to take which he has been held liable in
law to the plaintiff."

36. Lambert v Lewis (1982) AC 225 at p 276 per Lord Diplock with whose speech the other Law Lords concurred.

37. In Mowbray v Merryweather (supra) at p 644 Lord Esher MR said,

"The plaintiffs owed no duty to the defendant to
examine the chain before allowing it to be used
by their workmen. The only duty they owed in
that respect was to the workman."

In Mayo v Florida Hotels Pty Ltd (1964) 65 SR(NSW) the respondent employed architects in respect of building operations carried on by its own employees. The contract of employment called for "such periodical supervision and inspection as may be necessary to ensure that the works are being executed in general in accordance with the contract". The architects were not required to undertake constant supervision. It was eventually found that they had failed to give such periodical supervision and inspection. A workman was injured as a result of the collapse of some of the work and recovered damages from the respondent who claimed contribution under the Law Reform (Miscellaneous Provisions) Act, 1946 (NSW) from the appellants. At p 51 Sugerman J said,

"It was also a ground of decision in Mowbray v
Merryweather ((1895) 2 QB 640) that there had
been no breach of duty owed to the defendant by
the plaintiffs - "The plaintiffs owed no duty to
the defendant to examine the chain before
allowing it to be used by their workmen. The
only duty they owed in that respect was to the
workmen" (per Lord Esher MR (at p 644)). In
cases such as are now in question there will also
be a want of due care on the part of some
employee of the owner in proceeding contrary to
the plans and specifications. But this is the
very thing which the supervising architect is
employed, by reasonable measures of general
supervision, to guard against. To imply a term
in favour of the architect that no such want of
due care on the part of employees would occur
would be contrary to this purpose. Indeed the
implication of such a term would seem to deprive
the duty of supervision of all content, since the
term would have to apply to all consequences of
the workman's negligence, including the added
cost to the owner of setting right the
consequences of the default. And protection
against that risk is part of the primary purpose
of employing an architect to supervise in those
cases where there is no contract builder,
analogously to the protection against wrongful
certification which is gained by employing an
architect to supervise in cases where a builder
is employed under a contract. Other
considerations may arise where the owner himself
is party or privy to the departure from the plans
and specifications. Where the departure has been
by the owner's employees, however, then in the
practical sense which is appropriate in these
cases (Voli's Case (Voli v Inglewood Shire
Council [1963] HCA 15; (1963) 110 CLR 74 at p 88)) it is proper
to treat as a cause of such loss as is ultimately
sustained by the owner the failure in the duty of
reasonable supervision which afforded the
opportunity for the departure or led to is being
covered up and hidden. Subject only to the
reasonable foreseeability of the injury suffered
as liable to result from the breach, the owner
is, then, entitled to recover from the architect
the damages which he has had to pay to an injured
person. Thus a measure of indemnity is afforded
by contract, which, where it exists, is different
from and independent of the right to contribution
under the Law Reform (Miscellaneous Provisions)
Act and results in a full indemnity (see Lister v
Romford Ice and Cold Storage Co. ((1957) AC 555)."

38. The decision of the Full Court of the Supreme Court of New South Wales in that case was reversed in the High Court. Sugerman J had dissented from the majority but it seems to me that I ought, with great respect, follow his reasoning as set out above. It is true that the reasoning widens a little the ratio in Mowbray v Merryweather in that it is not confined to a case where a contracting party has warranted to another contracting party that he need not take the very precautions for failure to which the second party had been held liable in law to another. It applies to a case where that second party has been held liable to another who was injured in circumstances where by contract a first contracting party has agreed, expressly or impliedly, that he will so perform his contract as not to cause injury to another person who is entitled to look to the second contracting party for recovery of damages in respect of that injury. Accepting that there is a difference between the warranty referred to in Mowbray v Merryweather and the breach of an expressed or implied term of the kind I have mentioned, I nevertheless am unable to see any essential difference between the two so as to prevent the doctrine in Mowbray v Merryweather operating in this case. This seems to flow from a passage in the judgment of Sugerman J at pp 50-1 where he said,

"There would seem to be no good reason for
concluding otherwise than that, within the limits
of securing by a reasonable supervision
compliance with the plans and specifications in
such respects as may tend to provide the safety
of workmen on the job, the owner is entitled to
rely as between himself and the architect
(although not necessarily as between himself and
his employees or other third persons to whom he
may owe a duty Voli's Case (supra), upon the
performance of this duty of supervision not only
for its primary purpose but also as a measure for
securing the safety of employees and others who
may be lawfully upon the premises. The opposite
view would seem to require the implication into
the architect's contract of employment of a term
absolving him from the consequences of defective
supervision. It must be remembered in this
connection that, even where a builder is employed
under contract, the owner may come under
liabilities to third persons, at any rate after
the building has been completed, to which his
reliance upon the architect, if the architect has
been wanting in due care, may provide no answer
(Voli's Case). In principle, although the facts
are greatly different, no difference appears
between this case and Mowbray v Merryweather
((1895) 2 QB 640), in which the essence of the
matter as between the plaintiffs and the
defendant was "that he gave them a warranty on
which they were entitled to reply" (per Kay L.J.
((1895) 2 QB at p 645)) - and see Vogan and Co. v
Oulton ((1899) 16 TLR 37). It was also a ground
of decision in Mowbray v Merryweather (supra)
that there had been no breach of duty owed to the
defendant by the plaintiffs - "The plaintiffs
owed no duty to the defendant to examine the
chain before allowing it to be used by their
workmen. The only duty they owed in that respect
was to the workmen" (per Lord Esher M.R.)."

39. Mowbray v Merryweather was not referred to by the majority of the High Court when the case, sub. nom. Florida Hotels Pty Ltd v Mayo [1965] HCA 26; (1965) 113 CLR 588, went on appeal. But Windeyer J said at p 601,

"I agree generally in the analysis by Sugerman J
of the facts and the law. The case of Mowbray v
Merryweather ((1895) 2 QB 640), on which counsel
for the building owner relied and to which his
Honour referred, is apposite in the context in
which he used it; but of course an obligation to
use reasonable care is not the equivalent of a
warranty that a thing is reasonably fit for a
purpose."

40. The assumptions which the defendant was entitled to make, according to the judgment of Yeldham J, are, in my opinion, so close to the warranty referred to in Mowbray v Merryweather as to be virtually indistinguishable from such a warranty.

41. It seems to me that there must have been implied in the contract between the defendant and the first Third Party a term whereby the first Third Party warranted that it would so carry out the work which it had contracted to do that there would not be, as a result of its negligence, any damage to persons or property which might reasonably be expected if the crane were to fall as a result of that negligence. Such an implied term would, I think, entitle the defendant to recover damages from the first Third Party under the rule in Hadley v Baxendale [1854] EWHC J70 (Exch); (1854) 9 Ex 341; 156 ER 145. The well known statement of the rule in the words of Alderson B at p 355; p 151 is as follows:-

"Where two parties have made a contract which one
of them has broken, the damages which the other
party ought to receive in respect of such breach
of contract should be such as may fairly and
reasonably be considered either arising
naturally, that is, according to the usual course
of things, from such breach of contract itself,
or such as may reasonably be supposed to have
been in the contemplation of both parties, at the
time they made the contract, as the probable
result of the breach of it."

42. If an implied term that work is to be performed in a good and workmanlike manner necessarily incorporates a promise that the work will be so carried out as to not cause damage (whether to persons or property) which might reasonably be expected to flow from any breach of that term, it seems to me that the promisee is entitled to recover damages which he might be required to pay to a third party for injuries sustained by that third party as a result of the negligent performance of the contract.

43. In this case it seems to me to be beyond doubt that it must have been obvious that should the crane collapse as a result of any negligent performance of the contract, damage to the crane itself, to property nearby and to persons on or near the crane would be caused. That damage would flow naturally, according to the usual course of things, from the breach of contract and might reasonably have been supposed to have been in the contemplation of the parties at the time when they made the contract as the probable result of the breach of it.

44. In all the circumstances, I think that the findings made by Yeldham J, which were indispensable to his judgment, established that the defendant had a right to complete indemnity from the first Third Party in respect of any damages which it might be required to pay the plaintiff and therefore the first Third Party is estopped as pleaded by the defendant's reply.

45. There must accordingly be judgment for the defendant against the first Third Party for the sum of $254,055.00 and costs. The formal order of the Court will be that
(a) there be judgment for the defendant against

the first Third Party in the sum of
$254,055.00 and for the amount of costs which
the defendant is or has been required to pay
to the plaintiff pursuant to the judgment for
the plaintiff entered herein on 19 December 1989;

(b) the first Third Party is to pay the

defendant's costs of and incidental to the
plaintiff's action and of and incidental to
its claim for contribution or indemnity
against the first Third Party, those costs to
be taxed;

(c) the defendant is to have liberty to apply in

respect of any interest which it may have
been required to pay pursuant to the judgment
entered herein on 19 December 1989 in favour
of the plaintiff.