Norman Allan Betts v White Constructions (ACT) Pty Limited; Marr (Contracting) Pty Limited; Superior Rigging and Crane Erection Pty Limited and Austwork Pty Limited [1992] ACTSC 43; (1992) 107 FLR 352 (12 May 1992)

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
Damages - Negligence - Estoppel - Contract
[1992] ACTSC 43; (1992) 107 FLR 352

COURT

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

CATCHWORDS

Damages - Contribution between tortfeasors - Tort - Whether affected by contract between tortfeasors - Principles for assessment.

Negligence - Contributory negligence - Independent contractor - Neglect by independent contractor amounting to breach of employer's duty to injured employee - Duty of employer - Damages - Assessment as to relative degree of actual fault - Apportionment relative to damage caused to injured employee.

Estoppel Evidence - Scope of issue estoppel.

Contract - Apportionment of liability - Principle in Mowbray v Merryweather - Indemnity - Expressor implied warranty as to independent negligence absent - Assessment of contribution pursuant to Law Reform (Miscellaneous Provisions) Act 1955 - Contribution not barred by implied term.

Law Reform (Miscellaneous Provisions) Act 1955, s.12

Mowbray v Merryweather (1895) 2 QB 640

Marr (Contracting) v White (1991) 104 ALR 181

Kondis v State Transport [1984] HCA 61; (1984) 154 CLR 672

Barisic v Devenport (1978) 2 NSWLR 111

Hadley v Droitwich Construction Co Ltd and Ors (1967) 3 All ER 911

Lambert v Lewis (1982) AC 225

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337

Chamberlain v Commissioner of Taxation (1991) 28 FCR 21

HEARING

CANBERRA
12:5:1992

Counsel for the Plaintiff: No appearance

Instructing solicitors: No appearance

Counsel for the Defendant: Mr G.K. Downes QC with

Mr M.B. Williams

Instructing solicitors: Messrs Macphillamy Cummins
and Gibson

Counsel for the Third Party: Mr J.E. Maconachie QC with
Mr R. Molinari

Instructing solicitors: Messrs Abbott Tout Russell Kennedy

ORDER

The Court orders that:

1. There be judgment for White (the defendant) against Marr (the first third party) on the third party claim for 90% of the sum payable by White to or for Betts (the plaintiff).

DECISION

On 2 March 1986, the plaintiff ("Betts") was injured when a tower crane collapsed. He was seated in the cabin of the crane at the time.

2. He sued his employer, the defendant ("White"). White sought contribution or indemnity from a third, fourth and fifth party. The third party ("Marr") was the company engaged by White to dismantle the tower crane at one part of the work site at London Circuit, Canberra City, and re-erect it at another part of the same site. The fourth and fifth parties are sub-contractors to Marr. They are not relevant for present purposes.

3. On 19 December 1989, the plaintiff was awarded $254,055.00 plus costs. Kelly J. was asked to, and did, separately try the issues raised by the Third Party claims. His Honour decided, on 25 May 1990, that judgment would be entered against Marr for the whole sum awarded by the judgment entered in favour of Betts on 19 December 1989.

4. The issue before his Honour was whether a decision by Yeldham J. in the Supreme Court of New South Wales, delivered 14 February 1989, created an estoppel by virtue of which White was entitled to a complete indemnity from Marr in respect of Betts' judgment.

5. The matter before Yeldham J. had been a claim by White against Marr for compensation for the property damage, and other commercial losses caused by the collapse of the tower crane.

6. Yeldham J. found the collapse to have been due to the negligence of Marr. He found that negligence to have been a breach of the contract between White and Marr. He characterised Marr's performance of its duties as a lack of care "of significant proportions". The crane had collapsed because Marr's servants and agents ignored or overlooked the need for a steel "tie" to anchor the tower at the level of the third floor of the building then being erected. The building was five floors above ground level. The tie was to be a little below half-way between the base of the crane and the cabin. The plan given to Marrs had been endorsed with an express instruction stating "Crane tie to be installed at Level 3 prior to erection of Upper Crane".

7. A tower crane of the height erected could have been erected without a tie. It was ten sections above its base. However, the base would have needed to have been differently constructed so as to support the tower. If a building is already in place, against which the tower can be tied, the base construction does not need to be so extensive or expensive.

8. It is common ground between White and Marr that, had the tie been installed as directed by the plan, the crane would not have collapsed. Betts would not have been injured.

9. Yeldham J. found that Marr was liable to White for the damage caused by the crane collapse. His Honour considered whether White had, through any of its servants or agents, been guilty of any contributory negligence viz-a-viz Marr. His Honour rejected that contention.

10. Kelly J. considered that the findings of Yeldham J. precluded Marr from denying that its negligence and breach of contract had caused the collapse of the crane and, hence, the injury to Betts. His Honour did not find that Marr was estopped from asserting that White had been negligent towards Betts or from asserting that White had been guilty of contributory negligence in relation to the injury caused to Betts. However, that related to the claim as framed in negligence. White contended that Marr was bound in contract to indemnify it. It relied on the judgment of Yeldham J. to support a contention that Marr was estopped from denying this. It relied on what was referred to as the doctrine in Mowbray v. Merryweather (1895) 2 QB 640 to support that contention.

11. Kelly J. found that there was an implied term in the agreement between White and Marr whereby Marr 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."

12. Marr appealed from the decision of Kelly J. to a Full Court of the Federal Court of Australia. The history of the matter is there set out in detail in the judgment of Beaumont J. Marr's challenge to Kelly J.'s decision was based on the role played by issue estoppel in his Honour's decision. That decision is reported (Marr (Contracting) v. White (1991) 104 ALR 181). Marr's appeal was upheld.

13. Beaumont J. considered that no estoppel arose from the following findings of Yeldham J.:

(a) That the contract between (White) and (Marr) was
as pleaded in paragraph 4 of the Further Amended Statement
of Claim and included terms that (Marr) would carry out
the work in accordance with the identified drawing and in
a proper and workmanlike manner;
(b) That (Marr) failed to comply with those terms
and conditions;
(d) That 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 (Marr).

Those findings did not necessarily involve the existence of a term of the kind implied in Mowbray v Merryweather.

14. Burchett J. delivered a separate judgment. His Honour accepted that a breach of contract by Marr could be established by an estoppel arising from Yeldham J.'s judgment but held:

(196) "... it is not permissible to extend an
estoppel to include what is its logical consequence when
it is combined with some additional, even undoubted, fact.
The estoppel itself must reach the target. It will not be
eked out by inferences from further facts."

15. It followed, in his Honour's view, that a warranty requiring complete indemnity without consideration of the relevant degree of blame, if any, of White and Marr for Betts' injury was not established by such an estoppel.

16. Neaves J. agreed with both Beaumont and Burchett JJ.

17. Accordingly, the matter has been factually re-litigated before me. Part of the evidence has been presented by way of transcripts of evidence, statements of witnesses and other exhibits which were before Yeldham J.

18. In the end result there was little, if any, conflict as to what happened. Nor was there any doubt as to why the crane collapsed.

19. The relevant events started with a consultation between Mr Hans Egon Bruno Bernhard Metzner, a consulting engineer ("Metzner"), and Mr John Andrew McClanachan ("McClanachan"), an engineer then employed by White as its deputy construction manager for the project in question.

20. Metzner advised upon the preparation of the plan to which I have referred. He told McClanachan that it was essential that the tie be in place before the upper section of the crane was constructed. McClanachan, who was not cross-examined before me, deposed that on 11 February 1986 he spoke to Mr Gary Davis ("Davis") about the proposed crane re-erection. Davis was not a witness before Yeldham J., Kelly J. or me. He was Marr's senior representative on the site.

21. McClanachan told Davis:

"Look Gary, the way we've designed this crane is
different from normal because normally you don't have any
superstructure to fix it to in which case the base of the
crane has to be designed for overturning, either with a
heavy mass foundation or bolted to rock. In this case, we
don't have to do either because we're doing something
unusual in putting the crane up after the building has
been erected. The tie must go in in the right sequence.
Your work includes provision of labour, provision of the
heavy lifting crane to take down and re-erect the top part
of this crane and to fix the tie. We will arrange for the
tie to be on site and we will provide the bolts for it and
if necessary we will do the grouting. Your price must
include the installation of the tie."

22. McClanachan's evidence was that Davis appeared to understand this. Davis quoted a price for the job. McClanachan told Davis, on 24 February 1986, that the quote was accepted.

23. The conversation I have referred to was not challenged. I accept that it happened as stated by McClanachan.

24. Mr Kerry Daniel Mahar ("Mahar") was White's crane foreman. He was given the task of assisting with the dismantling and re-erection of the crane. He was to be under the direction of Mr Brian Patrick Watson ("Watson"). Watson was the leading hand rigger engaged by Marr's.

25. Watson spoke with Davis on 25 February 1986. Various details were discussed between them concerning the re-erection of the crane. According to Watson, Davis said nothing to him about the need for the tie to be in place before the upper sections of the crane were erected. Davis did refer to the fact that the tie was to be installed but did not say why it was required or specify any sequence which Watson was to follow concerning its installation.

26. On Friday, 28 February 1986, Watson met with Mahar on site. Various details were discussed. There was no discussion of the sequence in which the various components, including the tie, were to be erected. Watson neither asked for, nor was given, a copy of the plan Metzner had caused to be prepared and which had been given to Davis by McClanachan.

27. Watson was aware that a tower crane of the type in question could be erected to 10 sections without a tie.

28. On the next day, Saturday, 1 March 1986, work started on the dismantling and re-erection of the crane. The collar section of the tie was on site. The anchor section of the tie, i.e. that attached to the building floor on level 3, was put in place but not bolted down. The bolts with it were too short. However, nobody then on site felt any need to attach the tie before the tower was fully erected.

29. McClanachan observed the first part of the re-erection process. It was not, apparently, up to level 3 before he left the site. He did observe some work being done on the anchor section of the tie. The collar section was not then in place. The correct bolts were in fact delivered on the Saturday morning. Mahar was not specific as to the time. The anchor section was not, however, fully attached on that day.

30. Mahar remained on site on the Saturday till 7.30 pm. By then the ten sections of the tower were in place. The deck and cabin had been installed. Only the A-frame and jib remained to be installed. The tie was not complete. There was a reference to the tie on the Saturday. Watson, in the context of a discussion about cleaning out two sections of the crane left at the previous site of the tower crane, said to Mahar:

"Well, after we've finished putting up the tower
crane on Sunday, I'll put two boys on the tie and the
other two on removing the two sections."

31. It is obvious that neither Mahar nor Watson realised that the tie should have been in place before the crane was fully erected. They obviously believed that the tie was needed only before the crane was put into use lifting loads.

32. On the Sunday, 2 March 1986, the erection of the crane continued from about 6.00am. Mahar told Watson that the bolts were ready for the anchor section of the tie. The bolting and grouting of the anchor section of the tie then proceeded.

33. The A-frame was installed. Betts was then told to ascend the tower and get into the cabin of the crane. He was then to operate and rotate the crane cabin and the A-frame so as to receive the jib. The mobile crane lifting the jib was being directed by Watson. The order to ascend the crane was given by Mahar to Betts. The collar was attached to another mobile crane ready to be lifted into place when the anchor section was properly installed.

34. Watson requested Mahar to get Betts to rotate the cabin of the tower crane to receive the jib. Betts did so. The crane tower toppled over and Betts was injured.

35. It is obvious that none of the persons directing work on Sunday, 2 March 1986 were aware of the need to fix the tie in place before operating the crane to rotate the cabin. If the tower was unstable before the cabin was rotated, it became more so when that was done.

36. McClanachan was informed of the disaster shortly after it happened. He spoke to Davis on 3 or 4 March 1986. He said that Davis told him:

"I can't understand what happened. I personally gave
the foreman the drawing and briefed him as to what way the
work was to be done. That was in my office in Sydney and
I've got witnesses to prove it."

That contradicts Watson's account.

37. However, whilst I accept that Davis said that to McClanachan, I do not accept that it was the truth. It is striking that neither Davis nor any of the witnesses Davis said he had were called. I believe that Davis failed adequately to instruct Watson so as to alert him to the need to erect the tie before the upper section of the crane was erected.

38. It is also clear that McClanachan relied entirely on Davis properly instructing Watson to ensure that those who might ascend the crane during the course of its erection would be protected from the real risk that, unless tied to the building, the tower crane would collapse.

39. Marr accepts that it was at fault. However, it contends that White must share the blame and the compensatory damages paid (or payable) to Betts. It denies that White is entitled to the complete indemnity which it seeks.

40. The effect of the contention will depend on whether contribution is to be assessed by reference to tort or contract. The former involves only a comparison of relative fault. The latter involves a consideration of the terms, both express and implied, of the agreement between White and Marr.
Contribution between tortfeasors

41. White was, and admits it was, a tortfeasor viz-a-viz Betts. It breached its duty to him as an employer by causing or permitting him to ascend to the cabin of the crane when the tower was, as it knew or ought to have known, unstable. Had McClanachan been present he would probably have noticed the absence of the collar tying the tower to the building. Mahar knew it was absent. However, he had not been properly briefed as to the significance of its absence.

42. Although the duty of White to protect Betts from injury could not, as between them, be delegated to Marr, it was clearly Marr's task to erect the crane and do it safely.

43. In Kondis v. State Transport [1984] HCA 61; (1984) 154 CLR 672, 688 Mason J. concluded that the personal or non-delegable duty of the employer did not rest on a vicarious basis but rested on the basis that the neglect of the independent contractor was a breach of the employer's duty to the injured employee. His Honour also noted, however, that even though the independent contractor in that case had control of the operation (extending a crane jib) the employer's supervisor still had a duty to give the employee directions so as to protect him or her from harm.

44. Murphy J. considered (690) that the nature of the employer's liability could rest on vicarious liability by reference to the "organisation" test. Brennan J. (692) did not agree that vicarious liability was the answer. The employer had given control of the manner in which the work was done to the independent contractor. His Honour considered (694) that whoever should have warned the employee, the failure to do so breached the employer's duty of care to the employee.

45. Deane J. agreed with Mason J. but expressed that agreement in terms which, for all practical purposes, appear to equate the negligence of a fellow employee, for which the employer was clearly vicariously liable, with that of an independent contractor. Dawson J. agreed also with Mason J. but laid emphasis, in a short concurring judgment, on the failure of the employer's supervisor, a fellow employee, to warn the injured employee.

46. In my opinion, the liability for contribution between joint tortfeasors is to be decided on an assessment of the relative degrees of actual fault. If no independent negligence exists in an employer then whether the duty be breached vicariously by a fellow employee or by an independent contractor to whom performance of a task has been delegated, it is the real fault of each that falls to be assessed.

47. Section 12 of the Law Reform (Miscellaneous Provisions) Act 1955 provides:

"In proceedings for contribution ... 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 ..."

48. This is a similar test as for apportioning responsibility between a plaintiff and defendant following a finding of contributory negligence. Barisic v. Devenport (1978) 2 NSWLR 111 provides an example of that process.

49. The apportionment relates, not to the damage caused to White, in respect of which Yeldham J. found that White was not guilty of contributory negligence, but to the damage caused to Betts. The duty White had to take care for Betts' safety was a higher duty, one requiring a more careful response, than that it had to look out for its own property interests. The description of the employer's duty in Kondis amply warrants that conclusion.

50. I do not, however, accept the submission that because Mahar directed Betts to ascend the crane and, through an intermediary, to operate it, Mahar bears culpable responsibility for Betts' injury. Of course, Mahar knew the tie was not in place. He assumed, as he was entitled to do, that Watson had been correctly instructed in the safe construction of the crane. Watson was not personally culpable either. He assumed that the base was designed to free-stand and that the tie was merely to protect the building from sway in the tower during operational use of the crane.

51. McClanachan was entitled to assume that Davis would properly instruct Watson. Davis must bear the lion's share of responsibility for the collapse of the crane. It is disingenuous on the part of Marr to submit that the cause of the collapse of the crane is not central to Marr's culpability in relation to Betts' injury. There is no novus actus interveniens. The injury to Betts was inevitable once the crane started to operate without the tie being in place.

52. The situation differs from Hadley v. Droitwich Construction Co. Ltd and ors (1967) 3 All ER 911. Mahar was entitled to assume that Watson knew what he was doing. McClanachan, who would have known better, was neither present nor aware of any reason why he needed to be present.

53. I do see some analogy with Lambert v. Lewis (1982) AC 225. However, there, the owner of the trailer knew the coupling with the motor vehicle to be faulty. He had been entitled to assume it was adequate until seized of that knowledge. He had not himself realised the risk arising from that fault but had not sought expert advice either. The Court of Appeal upheld an apportionment of 25 percent of responsibility to the owner. That finding, of course, related to tortious liability. The issue as to contractual indemnity was separately considered.

54. The contractual arrangements between Marr and White are, of course, relevant to apportionment. This is not dependant on an indemnity clause being implied as was the case in Mowbray v. Merryweather. I will consider that contention separately. It seems to me that, although McClanachan was entitled to assume, as a matter of ordinary expectation, that Davis would do his job properly, he could have told Mahar to ensure that the tie was in place before the crane was used in any way.

55. Had he done so it is quite likely that the injury to Betts would have been avoided. It is less likely that the damage to the crane and property damage arising therefrom would have been avoided. The degree of responsibility flowing from that omission, however, is very much less than that to be borne by Davis. Marr's had the contract. They had the plan. I consider White's responsibility is only 10 percent.
The principle in Mowbray v. Merryweather

56. The question is whether Marr has agreed with White that it will accept full responsibility for all precautions in the course of erection of the crane, at least insofar as the sequence of construction was concerned. The only description of the contractual arrangement is in McClanachan's conversation with Davis, to which I have referred. Each of White and Marr agreed to perform some tasks connected with the erection of the crane.

57. Although Mowbray was discussed in the Federal Court by Beaumont J., it was only for the purpose of denying that an issue estoppel arose as to whether the contract impliedly contained a Mowbray v. Merryweather provision. Yeldham J. did not consider that question directly. The only reference he made was:

(30) "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 Florida Hotels Pty Limited v. Mayo and Anor [1965] HCA 26; 113 CLR
588 and Buckley v. Pre-Stressed Concrete (Australia) Pty
Limited and Anor (Court of Appeal, unreported 20 September
1977)."

58. Burchett J. noted, after consideration of the above authorities amongst others, that the rule in Mowbray v. Merryweather:

(196) "... requires, for its application, a contract
containing a very stringent warranty, and a third
party whose injury is the result of a default which was
the precise subject matter of that warranty ...
(197) "... The obligation to erect the crane with
care did not involve a warranty that it was reasonably fit
for a workman to mount whilst it was still in the course
of erection."

59. It is plain, of course, that Yeldham J.'s treatment of the issue was obiter. His Honour found no negligence on the part of White in relation to the collapse of the crane viz-a-viz its own interests. I accept also that Burchett J. did not find there was no such warranty as that for which White contended. His Honour found only that such a finding did not follow from Yeldham J.'s decision. Nor was such a finding "inevitable":

(197) "The same consequence (as in Mayo v. Florida
Hotels (1964) 65 SR(NSW) 4) does not follow where a
subcontractor's negligence is a cause of injury to a head
contractor's employee whose injury is also attributable to
the co-existing negligence of his own employer."

60. For White to succeed on the basis that it is entitled contractually to a full indemnity from Marr, it must persuade me that Davis impliedly agreed that White could leave the sequence of construction relating to installation of the tie entirely to Marr. I agree that such a clause was implied. However, the implication must go further and contain a proviso that there would be a full indemnity whether or not there was independent negligence on the part of White which contributed to the damage suffered by a person such as Betts. I do not consider that such an implication is warranted (see Codelfa Construction Pty Ltd v. State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337). It was not necessary to give "business efficacy" to the agreement. It does not "go without saying".

61. As between White and Marr, McClanachan had no duty to warn Mahar about the tie. As between White and Betts, he did have such a duty to make doubly sure it was safe for Betts (or any other White employee) to operate the crane whilst it was being erected. There is nothing I can see to preclude Marr from claiming that its contribution in this case should not be assessed pursuant to the Law Reform (Miscellaneous Provisions) Act 1955.
Judgment recovered

62. Marr goes further than claiming that its contribution should be reduced by reference to White's breach of duty towards Betts. It submitted, albeit more in hope than expectation, that because White had judgment for damage arising from the crane collapse (24/9/91 for $830,000 plus costs), the present claim for contribution was barred.

63. That claim must fail. The issue as to liability to Betts was not one that "ought to have been raised" in proceedings between White and Marr for damage to property and consequential losses (see Chamberlain v. Commissioner of Taxation (1991) 28 FCR 21). Indeed, Burchett J. in Marr (Contracting) v. White (supra) at 197, referred to a submission put by White and opposed by Marr, that the damages found by Yeldham J. to be payable by Marr to White and assessed by consent included liability for the loss suffered by Betts:

(197) "Counsel for the respondent (Marr) attempted to
retain the decision in his favour on the simple basis that
the damages payable to the plaintiff are but part of the
damages for the very breach of contract found by Yeldham
J. Aside from the difficulty that they were not claimed
as damages in the earlier action, I do not think Marr can
be shut out, on any such basis, from litigating the issues
of causation it seeks to raise."

64. The damages payable to Betts could only be assessed on action taken by him. The right to contribution White has, being liable to Betts as a tortfeasor, to recover from a joint tortfeasor is conferred, if not by contract, then by statute. In either case it is dependent on Betts establishing a right to damages. The claim for contribution is ancillary to that action. It follows that White could not be shut out from asserting its claim against Marr for contribution because of the action taken between them in New South Wales.

65. It follows that there will be judgment for White against Marr on the third party claim for 90 percent of the sum payable by White to or for Betts. I will give leave to the parties to bring in short minutes specifying the sum payable and will hear the parties as to costs.