Buckley v Metal Mart Pty Limited [2008] ACTSC 79 (1 September 2008)

Last Updated: 15 September 2008

Buckley v Metal Mart Pty Limited

[2008] ACTSC 79 (1 September 2008)

NEGLIGENCE – personal injury – plaintiff's leg crushed when semi-trailer unloaded at first defendant's premises – unlicenced forklift operator – whether employer vicariously liable for forklift driver's negligence

NEGLIGENCE – personal injury – whether first defendant liable for failure to provide a safe system for unloading semi-trailer – whether owner of semi-trailer liable for failure to warn plaintiff of risks associated with unloading – whether owner of load being delivered in breach of duty of care to plaintiff

INSURANCE – whether insured breached special conditions of policy – whether insurer liable to indemnify insured – the obligation to comply with statutes and regulations, impliedly subject to qualification of reasonableness

Insurance Contracts Act 1984 (Cth) s 54

Occupational Health and Safety Act 1989 (ACT) ss 28, 29, 95

Albion Insurance Co Ltd v Body Corporate Strata Plan No 4340 [1983] 2 VR 399

Booksan Pty Ltd v Wehbe [2006] NSWCA 3

Casino Show Committee v Norris (1984) 3 ANZ Insurance Cases 60-580

Estate of the Late M T Mutton by its Executors v Howard Haulage Pty Limited [2007] NSWCA 340

Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; (2007) 230 CLR 89

Fraser v Furman [1967] 3 All ER 57

Harrison v Lau Nay Nominees Pty Limited [2004] NSWCA 18

Kim v Cole [2002] QCA 176

Legal & General Insurance Australia Ltd v Eather (1986) 6 NSWLR 390

TNT Australia Pty Limited v Christie [2003] NSWCA 47

No. SC 369 of 2003

Judge: Stone J

Supreme Court of the ACT

Date: 1 September 2008

IN THE SUPREME COURT OF THE )

) No. SC 369 of 2003

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: TREVOR BUCKLEY

Plaintiff

AND: METAL MART PTY LIMITED

First Defendant

AND: ONESTEEL TRADING PTY LIMITED

Second Defendant

AND GARY WILLIAM HAYES

Third Defendant

ORDER

Judge: Stone J

Date: 1 September 2008

Place: Canberra

THE COURT DECLARES THAT:

1. The first defendant is liable in negligence to the plaintiff for the injury he suffered consequent upon the accident that occurred on 7 January 2003.

2. The first defendant is vicariously liable to the plaintiff for the negligence of its employee, Mr Stuart Wood in respect of the injury the plaintiff suffered consequent upon the accident that occurred on 7 January 2003.

3. The plaintiff's negligence is assessed as contributing 10 per cent to the injury he suffered consequent upon the accident that occurred on 7 January 2003.

THE COURT ORDERS THAT:

4. CGU Insurance Ltd, pursuant to its Business Insurance Policy No 15T9485112904 commencing September 2001, indemnify the first defendant in respect of its liability declared in (1) and (2) above.

5. Costs be reserved.

INTRODUCTION

1. On 7 January 2003, the plaintiff (Mr Buckley) was doing casual work in the transport industry when he was involved in a serious accident. While his truck was being unloaded at the premises of the second defendant, OneSteel Trading Pty Limited, some very heavy metal pipes fell on him and, among other injuries, he suffered severe crushing of his right leg which eventually had to be amputated. Mr Buckley claims that the accident was caused by the negligence of the defendants and seeks damages as compensation for his injuries. He also claims a breach of ss 28 and 29 of the Occupational Health and Safety Act 1989 (ACT) (OH&S Act) but does not press this as a separate cause of action.

2. The fact of Mr Buckley’s injury is not in dispute nor, in broad terms, are the circumstances surrounding it. There is, however, a dispute about whether it was caused or contributed to by negligence on the part of any of the defendants and/or the contributory negligence of the plaintiff. There is also an issue between the first defendant and the third party insurer, CGU Insurance Ltd (CGU), as to whether the first defendant has breached the insurance contract between them, thus relieving CGU of its indemnity obligation. At the request of the parties I will presently determine all questions of liability and leave the assessment of damages either for agreement between the parties or for submissions at a later date.

THE FACTS

3. Mr Buckley is a married man in his early 70s. He left school at the age of 14 and started working in sawmills. He trained and worked as a motor mechanic until 1980 when he moved into the transport industry. Mr Buckley had his own truck for over 10 years and he drove trucks interstate until he retired in 1998 at the age of 62. From time to time the plaintiff supplemented his retirement pension by casual work as a truck driver. He drove, among others, for the third defendant, Mr Gary Hayes.

4. In early 2002 Mr Buckley met Mr Hayes and did some driving for him for about five days. The work involved carting steel from OneSteel's premises at Hume to various sites around Canberra. Mr Buckley testified that before he started working with Mr Hayes he went with him for about a week so that he could learn where the steel yards were and how to get into them. The truck he was driving was a prime mover with a 41-foot flat top trailer. It bore the OneSteel name in OneSteel's colours of white and red.

5. When driving for Mr Hayes, Mr Buckley would start the day by going to OneSteel's premises in Hume where the truck was left for him. He would bring the truck, which was left empty overnight, into the depot for loading. The loads varied according to the jobs which, Mr Buckley said “were never the same”. Once the load was on the trailer Mr Buckley would secure it. He did this with “dogs” and “chains” which would go round the load, and then the chains would be tightened with a special pipe. The way in which this was done varied according to the load. Once the load was secure he would make his delivery. When the truck was positioned for unloading at the delivery site, Mr Buckley would undo the dogs and chains and the load would be removed with a forklift.

6. At the end of 2002 Mr Buckley agreed to do a few days driving for Mr Hayes in January 2003. He commenced working on 6 January 2003. Mr Hayes generally did not come to OneSteel's premises however on the morning of 6 January he came to the OneSteel yard and gave the plaintiff the keys to the truck. According to the plaintiff, Mr Hayes said, “[D]o your best and I'll see you in a week”.

7. Mr Buckley drove without incident on 6 January. The next morning he made several deliveries without encountering any difficulties. After his lunch break he drove to OneSteel’s premises where his truck was loaded with a number of items including three bundles of metal pipes. His evidence was that the loading was done by “Tim” and another man whom he could not identify. Three packets of square pipes approximately 20 to 25 feet long were loaded onto the trailer. On top of those were the three bundles of metal pipes of approximately the same length. At the back of the trailer there was some square sheeting which went across the trailer and was about four feet in length. An overhead crane was used to load the trailer. Mr Buckley then secured the load using four dogs and chains as well as two straps over the middle. He drove to Queanbeyan for a delivery and then went to Metal Mart's premises in Collie Street, Fyshwick.

8. When he arrived at Metal Mart, Mr Buckley said to a young man in the yard (whom he later learned to be Mr Wood) that he had three bundles for him to unload. He positioned the truck so that it could be unloaded. He said he had to drive as far over on the driver's side as he could, so that the forklift would be able to unload the material. Mr Buckley described what he then did:

I went out and I took the dogs and chains off. I went up to the driver's side first, and undone all of the dogs and took them off. And I proceeded to go around the back of the trailer to the hook - to the left-hand side and then - and undo the chains. I went back around the other side and pulled my chains across. I folded them up and put them in the toolbox.

The toolbox to which Mr Buckley referred is slung from underneath the trailer. When open the lid of the toolbox protrudes from the side of the trailer by 630 mm. Mr Buckley said that he did not see a forklift in the yard when he got out of the truck or when he was undoing the chains. He had undone all the chains but still had one to remove and put in the toolbox when he heard the forklift start. He did not look to see where the forklift was in relation to him, but could tell by the sound that it was “over down the back bit somewhere ...”.

9. Initially, Mr Buckley was unconcerned by the noise of the forklift and started to remove the third dog and chain. At some point however, it is not clear exactly when, he saw the forklift coming in and left the third chain on the toolbox and moved towards the front of the trailer, that is, towards the back of the prime mover. He said he did this to get out of the way. As Mr Buckley moved away from where the chain was he was hit by the falling metal rods and the next thing he remembers is regaining consciousness and being aware that his glasses were covered in blood. He said he had blood on his head, and that he remembered noticing that the pipes had squashed his foot on the ground. He passed out again and the next thing he remembers is being in the ambulance on the way to hospital.

10. Mr Buckley denied that the driver of the forklift had told him that he was about to start the unloading. He admitted that he knew that while the truck was being unloaded no one should be in an area around the truck known as the exclusion zone. It was put to him that he shouldn't have been on the blind side of the truck when the forklift driver was doing anything in relation to the load. According to Mr Buckley, however, he was unaware that the forklift driver was commencing to unload the truck while he was still putting away the dogs and chains. As soon as he became aware of this he attempted to move into a safe position and thought he was “out of the road”.

11. Mr Buckley was adamant that the forklift driver had not told him that he was about to unload. Similarly, he emphatically rejected a suggestion that the driver had put the forklift in position with its tines under the load and had then walked around to check that they were properly inserted. Mr Buckley also denied that when he was hit by the metal bundle that he had been standing on the right side of the truck rolling up the chain.

12. Mr Buckley accepted that having been a truck driver for many years and having loaded and unloaded “countless thousands of loads” he didn’t need to be told “that you shouldn’t be in that [driver’s side] position when a forklift started to unload the truck”. The plaintiff confirmed that he had moved as soon as he heard it coming and stated “I thought I was out of the road anyway”.

13. On 31 January 2003 Mr Buckley was interviewed by an ACT WorkCover officer and OH&S inspector, Steven Hart. At that time, Mr Buckley was in a rehabilitation unit which was a division of the Canberra Hospital. The record of this interview was tendered as Exhibit B. Mr Buckley's account in this interview of the accident and the events immediately before it occurred is generally consistent with his evidence at the hearing. The only material inconsistency is that in the record of interview Mr Buckley said that he saw the forklift moving into place. It is not clear at what point this was however and it is clear that Mr Buckley’s consistent assertion is that he did not have time to move out of the potential danger zone before the accident occurred.

14. Except where otherwise indicated I accept Mr Buckley's evidence. In my opinion, he attempted to give an accurate account of what occurred. He did not attempt to embellish his account nor did he attempt to attribute blame. To the extent that there were minor inconsistencies or uncertainties, in my view this merely reflects the fact that Mr Buckley is not a highly educated man; he does not have any particular verbal facility nor is he accustomed to the degree of precision of language that is common among lawyers.

15. In addition to the evidence given by Mr Buckley, oral evidence was also given by Mr Mark Smith, a licenced forklift operator who worked at Metal Mart at the relevant time and Mr Alan Dean, an inspector with ACT Workcover. All three witnesses were cross-examined. Statements made by the following were tendered in evidence: Mr Stuart Wood, the forklift driver at the time of the accident; Mr Mark Smith, certified forklift driver who had the supervision of Mr Wood; Mr Paul Chesterton, the managing director of Metal Mart; and Mr Barry Duthie, manager of the Canberra office and depot of OneSteel. The Court also had in evidence truncated answers to interrogatories by all three defendants. Other documentary evidence was tendered which will be discussed where relevant.

Stuart Wood

16. Mr Stuart Wood was the driver of the forklift at the relevant time. He was not licenced or certified to drive a forklift nor, when he was unloading the material delivered by Mr Buckley, was he supervised. It appears that Mr Wood attempted to pick up all three bundles of pipes from the trailer in one go. The best interpretation of what happened seems to be that the tines of the forklift went under two bundles, but only partly under the third. This was because the tines were not long enough to deal with all three bundles. When the load was lifted in an upward direction, one bundle of pipes was effectively thrown off and over to the far side of the truck. The fact that it was “thrown” (that is, its initial trajectory was upwards) rather than merely “fell” is evidenced by the fact that the lid of the toolbox, into which Mr Buckley was putting the chains just before the accident, was completely undamaged. Photographs taken after the accident and attached to the expert report of Mr Simpson showed the bundles of steel and the position of the toolbox from the front and back. The toolbox was on the opposite side (that is the driver's side) of the truck to the forklift driver and protruded about 630 mm from the underside of the trailer. Had the bundle of pipes merely fallen they would have made contact with the toolbox lid, which would have been damaged.

17. The bundle of pipes that injured Mr Buckley consisted of 10 round metal pipes some 6.5 metres in length. The weight of each bundle was approximately 825 kilograms. They were stacked on the trailer in a pyramid shape with two bundles forming the base and one bundle on top. The diameter of each bundle was between 12 and 18 inches. There was no evidence that the bundles had been improperly loaded onto the trailer or that they not been securely fastened.

18. Mr Wood was not called to give evidence however in his statement to the insurer on 17 January 2003 he gave the following account of the accident:

On Tuesday, 7 January 2003, I was working my normal hours at Metal Mart. At about 3.00 pm I was working in the scrap metal section which in at the back of the building. From the area where I work, we have a clear view of the yard alongside the building. I recall that about that time, a semi-trailer from OneSteel entered the yard with a delivery. OneSteel make regular deliveries to MetalMart and a man whom I only know as Gary, normally drives the semi-trailer. That’s the understanding. At the time, I believed I was the only MetalMart employee in the near vicinity to the truck and I approached the driver of the semi to see what had to be unloaded. Gary [Hayes] wasn’t driving the truck and I can’t recall ever seeing the driver on this day, before. I approached the driver and asked what had to be unloaded and he indicated there were 3 bundles of steel pipes and 3 bundles of RHS.

I got on the forklift and proceeded to drive the forks under the 3 bundles of steel pipe which were loaded on top of the RHS. There were lengths of timber between the RHS and the steel bundles which allowed for the forks of the forklift to slide under the bundles. Once I had the forks under the 3 bundles of steel, I proceeded to lift the forks prior to reversing away from the semi. I believed that all 3 bundles of steel were secure on the forks. I had only raised the forks a short distance when the front bundle rolled off one end of the forks. This bundle fell off the side of the semi on the opposite side to where I was working the fork lift. At that time, I didn’t know where the truck driver was and I couldn’t see him. I heard him yell out. I immediately stopped the fork lift and ran to the other side of the truck. I saw the truck driver near the side of the truck and one end of the steel bundle was resting on his foot. A customer came along and with his help, somehow the 2 of us managed to lift the steel so that the driver could release his foot. I could see that the driver was hurt pretty bad and I ran to the office to get some help.”

19. Although Mr Wood was not a certified forklift operator he had been given some training in the use of a forklift by Mark Smith, who was certified. Mr Smith said that Mr Wood had about 100 to 150 hours of operational experience, 90-95 per cent of which was under his supervision. There were, however, no records kept of this. Mr Smith explained that what he meant by supervising Mr Wood was making sure that he could at all times see him while he was operating the forklift. Mr Smith said that Mr Wood was not permitted to drive a forklift unsupervised. Though Mr Wood had some experience in unloading scrap metal bins (which have forklift pockets built into them) he had, to Mr Smith's knowledge, never done any other loading of material from trucks. As Mr Smith explained, unloading bins with forklift pockets is more straightforward than unloading metal products, such as were involved in Mr Buckley's accident. The bins are of a standard size and as Mr Smith explained, “[T]he size of our bins were adequate for the forklift, we used. The forklift adequately picked the bins up. You knew that the forklift would pick the bins up and were long enough. Whereas [where] it comes to the packs of steel, the judgment on how long the tines are to the width of the packs you're picking up varies”.

20. According to Mr Smith, when he was unloading he would direct the driver to stand at the back of the truck so that at all times he could see the driver. He said that often the driver would assist in guiding the operator. Mr Smith said that as a safety measure it was Metal Mart’s practice to lock the forklifts when they were not in use, and for the licenced operators to retain custody of the keys. It would appear, however, that this practice was not uniformly adhered to. The fact that Mr Wood had access to the forklift truck on the day of Mr Buckley's accident without recourse to a licenced operator indicates this. Mr Smith said that at the time of the accident he was in the smoko room. The other licenced forklift driver, Mr Chesterton, had gone to the bank and was absent from the premises. I accept that Mr Wood was not a licenced forklift driver and was not being supervised at the relevant time. I also accept that Mr Wood commenced to unload the trailer without first having ensured that Mr Buckley was clear of the potential danger area.

Expert Evidence

21. The plaintiff tendered an expert report prepared by Mr Colin Simpson of Simpson Associates Forensic Engineering. Mr Simpson is a consulting industrial and automotive engineer of considerable experience in industrial safety and automotive accident analysis, including in relation to industrial work systems. He was not required for cross-examination, and hence, his expert report was unchallenged.

22. In preparing his report, Mr Simpson was provided with a large number of documents which are listed at the outset of his report. They included answers to interrogatories by all three defendants, photographs of the accident scene and the statements of Mr Duthie, Mr Hayes, Mr Smith, Mr Chesterton and Mr Wood as well as records of interviews with Mr Wood and Mr Buckley. Mr Simpson described the accident scene, including the position of the metal bundles that remained on the trailer and the bundle on the ground which had hit the plaintiff. He also described the position of the toolbox lid and expressed the opinion that the load did not fall and strike the plaintiff simply as a result of the chains that secured it being removed.

23. Mr Simpson said that there could be “no doubt whatsoever” that if the toolbox lid had been struck by the metal bundle that fell on the plaintiff it would have been “very severely damaged, if not demolished”. In order that the metal bundle could clear the toolbox lid and strike the plaintiff there must have been some form of mechanical force applied that would give it the requisite energy. For reasons explained in detail in his report, Mr Simpson rejected the possibility of the metal tubes having being rolled or pushed, bouncing on the side of the truck with sufficient energy had to clear the toolbox lid. He concluded:

It therefore remains, in the opinion of the writer, that it is more likely than not, that the sling of steel tubes, some 6.5 metres in length and weighing in excess of 800 kg, was given a substantial force input to clear the side of the truck and toolbox lid and the only source of that substantial force was through the action of a forklift truck under the control of its driver, Mr Stuart Wood.

...

In the opinion of the writer, the cause of the accident in which the Plaintiff suffered his injuries can be attributed directly to the actions of a forklift driver, the failure of the forklift driver to ensure that the Plaintiff was clear of the danger area (the "exclusion zone"), and his failure to ensure that all three slings of tubes were properly supported by the tines of the forklift truck prior to attempting to lift them clear of the dunnage otherwise supporting them.

Mr Simpson added:

It would also appear from the documents available, that the forklift driver, not being licensed or otherwise qualified to operate the forklift truck, operated the forklift truck, contrary to safe and proper forklift operating practice. Had he done so, then the writer is of the view that the accident would not have occurred.

It would appear that the Plaintiff was aware that, for his own safety, he was to extricate himself from the exclusion zone or the danger area and was actually in the process of doing so when the forklift driver moved the relevant sling of tubes. Had the forklift driver ensured, that the plaintiff was clear, and/or otherwise was in sight and clear of the danger area, then the accident would not have occurred.

LIABILITY AND NEGLIGENCE

No system to ensure safe delivery

24. The fact that Mr Wood decided to operate the forklift and was able to do so when neither Mr Smith nor Mr Chesterton was present, much less supervising Mr Wood, shows that Metal Mart had no system to ensure the safe delivery of metal to its yard. Mr Smith stated to the insurer that “All [of Mr Woods’s] training was done under my supervision”. This statement sits uncomfortably with the evidence of Mr Chesterton and Mr Smith as to where they were at the time of the accident, namely “at the bank just around the corner”, and at “a late lunch in the staff smoko room” respectively.

25. Similarly, Mr Wood’s statement, quoted above at [18], does not indicate any consciousness that, being uncertified, he should not have been driving the forklift without supervision. Significantly, he said:

I believed that at the time I operated the forklift to unload the OneSteel truck, that I had sufficient operational experience to carry out the task. I have unloaded and loaded trucks on previous occasions without incident. I didn't think to call for a licensed operator to unload the truck.

26. This is not the comment of someone who had been cautioned that he was not to drive the forklift unless supervised by a licenced operator. Similarly it invites disbelief that 7 January 2003 was the first occasion on which Mr Woods had operated the forklift without supervision.

27. The lack of a system to ensure the safe delivery of metal to the yard is demonstrated most obviously in the fact that a driver without a licence and with limited experience had access to a forklift with keys and was able to operate the forklift unsupervised. It is also demonstrated by the lack of any evidence that management had ever instructed any of its employees as to the safe practices that should be implemented to protect visitors to the premises unloading metal; nor were books or manuals made available.

The first defendant

28. I am satisfied that Metal Mart’s own negligence, putting to one side for the moment its vicarious liability for Mr Wood’s negligence, was, at least in part, responsible for Mr Buckley's injury. It follows that Metal Mart is partly liable for the injury to Mr Buckley.

29. These facts also lead to the conclusion that Mr Wood’s behaviour cannot be characterised as him being “on a frolic of his own”. His behaviour on the day of Mr Buckley’s accident was consistent with the lack of system I have found. His action in precipitately unloading the trailer without any serious assessment of his competence and without taking even the most basic precaution for Mr Buckley’s safety were in breach of his duty of care to Mr Buckley. For these reasons I find that Metal Mart is also vicariously liable for Mr Wood’s actions on that day.

The third defendant

30. As to the liability of the third defendant, the thrust of the plaintiff’s case against Mr Hayes, as Mr Buckley’s employer, was that he failed to provide a safe system of work and failed to provide the plaintiff with adequate training in operational and safety procedures. In particular, Mr Hayes gave no instructions or information as to how to undertake the various jobs the plaintiff was required to do, nor did he inspect any of the sites that the plaintiff was required to attend for the purposes of ensuring the safety of those sites.

31. Mr Hayes’ answered interrogatories on his issues as follows:

Q. Please specify with particularity what training you provided to the plaintiff for delivery of metal product including Onesteel products.

1. I provided on the job training to the plaintiff when he first assisted me as an offsider for approximately a week in December 2001. This training would have included safety procedures and exclusion zones. The plaintiff was a truck driver with over 25 years experience which included delivery or [sic] metal products.

Q. Did you at any time prior to 7 January 2003 provided [sic] training to the plaintiff in Exclusion Zones?

1. Yes. The plaintiff was a very experienced driver and had over 25 years experience in dealing with trucks. The plaintiff underwent on the job training for approximately a week in December 2001 which would have included exclusion zone training

32. The plaintiff’s argument on this point bears some similarity to the situation in Harrison v Lau Nay Nominees Pty Limited [2004] NSWCA 18, where Meagher JA (with whom McColl and Ipp JJA agreed on this point) said at [11]-[12]:

Mr Petty attempted to surmount this difficulty in a variety of ways. His principal attempt was to argue that the employer had attempted to delegate his non-delegable duty to provide a safe system of work by treating Mr Harrison as his "expert". But this is to play with words. Mr Harrison gave evidence that he had from the age of 16 years worked either on or with trucks and had secured a truck driver's licence by the age of 18. He said he had extensive experience in the loading and unloading of trucks and in the driving and transportation of fully loaded vehicles; and that it was because of his skill and experience that he sought and obtained employment with the first respondent. In these circumstances, there was no "delegation" of anything by his employer to him, but many a sensible recognition by his employer of his expertise. The situation in this case has nothing in common with the situation in McLean v Tedman [1984] HCA 60; (1984) 155 CLR 306 at 311, when his Honours Mason, Wilson, Brennan and Dawson JJ said: "It is not an acceptable answer to assert that an employee has no control over an employee's negligence or inadvertence."

As Mr Little SC, learned senior counsel for the first respondent, said: "This is not a case where it can be suggested that a safety officer travel to every site before the truck driver gets there to see that the loads are safe to pick up."

33. This passage was quoted with approval by Ipp JA in Estate of the Late M T Mutton by its Executors v Howard Haulage Pty Limited [2007] NSWCA 340. In my view the sentiments expressed in Harrison are equally applicable here. In the circumstances, I do not find that Mr Hayes was negligent in not giving Mr Buckley specific instructions or in not inspecting Metal Mart’s premises. Mr Hayes contracted the services of a driver with whom he had worked on many previous occasions and who had many years experience in the safe carriage, including the loading and unloading, of metal products.

34. In any event, in light of my findings with regard to the negligence of Mr Wood and Metal Mart, I am not satisfied that the giving of specific instructions or inspecting of Metal Mart’s unloading site would have made any difference to the events of 7 January 2003. Realistically, there was nothing that Mr Hayes might have been expected to do that would have prevented the accident.

The second defendant

35. The plaintiff’s case against the second defendant was, in summary, that OneSteel owed a duty of care to Mr Buckley and that it breached that duty by failing to advise him of precautions he should take when the steel he was delivering on behalf of Mr Hayes was being unloaded at Metal Mart’s premises. Mr D Miller, counsel for the second defendant, summarised the duty sought to be imposed on his client. In his words the proposition raised against his client is to the effect that:

...[T]hat a principal in the position of OneSteel owes a non-delegable and absolute duty of care to a casual employee of an independent contractor ... to take unspecified steps to ensure that that employee of the independent contractor is not injured on the premises of a third party by the casual act of negligence of a third party or an employee of a third party who’s undertaking an activity that that third party is, in fact, controlling on his own premises.

Mr Miller continued:

Distilled to its essential elements, that is the plaintiff’s case against OneSteel. It is novel. It is not supported by authority. It does not spring from TNT v Christie for the reasons I’ll outline in a moment. At one point Mr Campbell as an aside said that some of the points he was putting rose “slightly higher” than TNT v Christie. With due respect, they were in another galaxy. And it is a proposition that it is said would apply to a principal such as OneSteel on any site that OneSteel might deliver to, no matter how many thousands of sites that might encompass over the course of a year, no matter how regularly or irregularly it might do those deliveries.

36. I agree with Mr Miller that the situation here is entirely different from that in TNT Australia Pty Limited v Christie [2003] NSWCA 47, in which the claimant, Mr Christie, had been employed by an employment agency, Manpower Services, who assigned him to work at a brewery operated by TNT. In the Court of Appeal, Mason P observed at [67]:

Indeed, the very fact that employees are dispatched to external venues and placed under the de facto management of outsiders will, in some cases, have the practical effect of requiring the employer to adopt additional measures by way of warning or training in order to discharge its continuing common law duty of care to its employees.

37. I agree with Mr Miller that this fact situation is so removed from the present that the case is not relevant. I know of no authority that supports the proposition advanced against Mr Miller's client, and it would be entirely inappropriate, even were I so inclined, for a judge at first instance to extend the law in this way. This is particularly so given that there is no evidence and indeed no allegation that the steel was incorrectly loaded or improperly secured. Moreover, there is evidence in the form of OneSteel’s unchallenged responses to interrogatories that it had made available to Mr Buckley and to Mr Hayes a copy of a nine minute video entitled, “Loading and Unloading” and also a publication entitled “Loading/Unloading Trucks”.

CONTRIBUTORY NEGLIGENCE

38. I am also satisfied that Mr Buckley's own negligence contributed, in a minor way to his injury. Metal Mart claimed that Mr Buckley was inattentive and careless to his own safety. He admitted in cross-examination that he was aware of the maxim “Can't see it; can't work”, yet he continued to “work” on the wrong side of the trailer when he knew that the forklift’s engine had been started. In response to the interrogatory, “Where was the forklift?”, he answered “Oh, I wasn't taking much notice of it ...”. Clearly, in his view the fact that the engine had been started did not signal that the forklift driver would commence unloading the trailer without waiting for him to finish putting away the dogs and chains and without waiting until the driver could see Mr Buckley. It is an understandable expectation given his experience of many years. On his own evidence however, he did not know Stuart Wood although he spoke to him on his way into the yard and apparently expected him to be involved in the unloading. He could not know whether Mr Wood was experienced or inexperienced in operating a forklift. In those circumstances, care for his own safety should have prompted him to make a visual check when he heard the forklift engines start to ensure that the forklift driver understood the correct operating procedure. Had he done so, he would have seen the forklift approaching and have realised that it was about to start unloading. This realisation, even if not arrived at in sufficient time to enable him to stop the unloading process, would have given him sufficient time to get completely out of the way. I would assess the plaintiff's contribution as 10 per cent.

THIRD PARTY CLAIM

39. As I have found that Mr Buckley has succeeded in his claim against Metal Mart, it is therefore necessary for me to decide if Metal Mart is entitled to be indemnified pursuant to Business Insurance Policy No 15T9485112904 commencing in September 2001 issued by CGU to the first defendant. The policy of insurance contains the following clause under the heading “Special Conditions”:

(1) Reasonable Care

You shall

(a) take all reasonable precautions to prevent:

(i) Public liability and Products Liability

(ii) Personal Injury and Damage to Property

(iii) the manufacture, sale or supplier of defective Products.

(b) comply with and ensure Your employees, servants and agents comply with, all laws, by-laws, regulations and recognised standards for the safety of persons or property;

(c) ensure that only competent employees use, operate, maintain and service plant and equipment;

(d) to maintain all premises, fittings, plant and equipment in sound condition; and

(e) take immediate action to trace, recall modify all Products that You know or have reason to suspect contain a defect or deficiency.

40. In a letter dated 14 October 2004, CGU declined to indemnify Metal Mart, claiming that Metal Mart had breached special conditions 1(a)(i) and (ii) and 1(b) of the insurance policy. The letter claimed that Metal Mart:

... knowingly allowed employees to operate forklifts when it knew that some such employees did not hold the required certificate of competency, and had not undertaken the required course of training, and this accident resulted from the actions of one such employee.

41. The above special conditions are contained in section 5 of the insurance policy. Section 5 deals with indemnity for public or products liability. Public liability is defined as, “your legal liability to pay damages for an occurrence in the course of your business, but exclude products liability”. CGU submitted that, subject to s 54 of the Insurance Contracts Act 1984 (Cth), a breach of either of the above conditions entitles CGU to refuse to indemnify Metal Mart. It is necessary therefore to determine this issue taking into account the whole of the contract, including the context of the special condition and the nature of the contract itself, interpreted in the light of relevant authorities.

42. In Fraser v Furman [1967] 3 All ER 57, the Court of Appeal considered a condition (clause 4) that provided “the insured shall take reasonable precautions to prevent accidents and disease”. The matter came before the Court because the plaintiff's insurance broker, in breach of contract, had failed to obtain public liability insurance for the plaintiff from the Eagle Star Insurance Company. In determining the damages to be paid by the broker the court needed to determine what the obligations of Eagle Star would have been had the insurance been taken out, as it should have been.

43. Unlike the present policy, the policy considered in Fraser included a proviso which specifically stated that “the due observance and fulfilment of the conditions of this policy” was a condition precedent to any liability of the insurer under the policy. Lord Diplock, with whom Winn and Wilmer LJJ agreed, noted at 60, that it was necessary to construe these provisions in the context of a policy of insurance that covers specific risks and that:

Therefore, when one approaches the construction of the condition, one does so in this context, and applies the rule that one does not construe a condition as repugnant to the commercial purpose of the contract.

His Lordship added, at 61:

What in my judgment is reasonable as between the insured and the insurer, without being repugnant to the commercial purpose of the contract, is that the insured, where he does recognise the danger, should not deliberately court it by taking the measures which he himself knows are inadequate to avert it. In other words, it is not enough that the employer's admission to take any particular precautions to avoid accidents should be negligent; it must be at least reckless, i.e., made with actual recognition by the insured himself that a danger exists, not caring whether or not it is averted.

44. The test in Fraser was adopted by the Supreme Court of Victoria; Albion Insurance Co Ltd v Body Corporate Strata Plan No 4340 [1983] 2 VR 399 per McGarvie J, with whom Young CJ and Anderson J agreed at 344-346. The clause considered by the Supreme Court required that the insured “shall take all reasonable precautions to prevent bodily injury...”. In McGarvie J’s view, a construction of this clause that would exclude liability where the insured was negligent would be "repugnant to the commercial purpose of the contract". Such a construction “would cut a great swathe from the practical adequacy of cover under a public liability policy ...”. His Honour held, at 344, that it would be consistent with the commercial purpose of the insurance contract if its purpose “were to protect the insurer where the failure to take reasonable precautions, was not due to causes such as delay or neglect, but due to a deliberate decision to expose himself to the risk of bodily injury occurring, because he did not care, whether it occurred or not”; see also Legal & General Insurance Australia Ltd v Eather (1986) 6 NSWLR 390.

Special condition 1(a)

45. CGU accepted that special condition 1(a) in the policy taken out by Metal Mart should be interpreted in the light of these authorities. Applying these authorities, for Metal Mart’s negligence to put it in breach of special condition 1(a) it would be necessary for it, at a minimum, to be recklessly indifferent to its obligations under the special condition. For reasons given above, I have found that Metal Mart was negligent and that it is vicariously liable for the negligence of its employee, Mr Wood. I do not, however, accept that the evidence establishes that it was reckless about the danger of physical injury.

Special condition 1(b)

46. CGU submitted that special condition 1(b) should be distinguished from 1(a) since the obligations it imposed were not qualified by any reference to “reasonable”. In support of this submission, CGU relied on the decision of the Queensland Court of Appeal in Kim v Cole [2002] QCA 176. The clause there in question required the insured to “take all reasonable measures” in relation to damage to property and for its safety, however the obligation to “comply ... with all statutory obligations, By-laws and Regulations imposed by any Public Authority” was not so qualified. Noting that difference, McPherson JA, with whom McMurdo P and Helman J both agreed, was not prepared to imply the qualification in relation to statutory obligations. His Honour held that the obligation of the insured was to comply with all statutory obligations etc and "not merely to take all reasonable precautions to do so". The same approach was adopted by the New South Wales Court of Appeal in Casino Show Committee v Norris (1984) 3 ANZ Insurance Cases 60-580. In Casino Show Committee Priestley JA, with whom Glass and Mahoney JJA agreed, rejected the repugnancy argument as follows:

This argument may have some force in regard to some other parts of condition five, breaches of which were relied upon by the insurer. It does not, however, appear to me to have any force in regard to that part of condition 5 with which I have been dealing. Indeed, it seems to me that not only is the construction which I put upon the relevant part of condition 5 required by the language, it is also the meaning which the insurer actually intended the policy to have.

47. There is in my view, a significant difference between the clause with which I am concerned and those considered in Kim v Cole and Casino Show Committee. In both of those cases only the requirement to comply with statutory obligations was not qualified by reference to reasonableness and, for that reason, the argument that the unqualified obligation to comply with statutory requirements was repugnant to the commercial purpose of the contract had less weight.

48. In this case, however, subclauses (b), (c), (d) and (e) are all unqualified. If the construction for which CGU contends were to be accepted it would mean, for instance, that subclause (d) would effectively preclude any claim that stemmed from a failure or malfunction of any plant or equipment, unless, perhaps, it could be shown to flow from some inherent defect. Only the most explicit statement that strict compliance was a precondition to the insurer's liability would be sufficient to support such an interpretation. For this reason, special condition 1(b) should be construed as subject to a qualification of reasonableness in the same way as special condition 1(a).

49. Applying therefore the approach in Fraser, the issue is whether Metal Mart's failure to ensure that only a fully licenced and certified person drove the forklift shows that it acted recklessly. To quote again the words of Lord Diplock in Fraser, the insured’s conduct must be “made with actual recognition by the insured himself that a danger in exists, not caring whether or not it is averted.” In my view, Metal Mart's conduct did not reach this level, and it therefore follows that it was not in breach of special condition 1(b).

50. As I have found that Metal Mart was not in breach of its contract of insurance, it is not necessary to consider s 54 of the Insurance Contracts Act. This much is clear from the opening words of subsection (1):

Subject to this section, where the effect of a contract of insurance would, but for this section, be that the insurer may refuse to pay a claim, either in whole or in part, by reason of some act of the insured or of some other person, being an act that occurred after the contract was entered into ...

In this case the situation contemplated in these opening words has not arisen.

51. I mentioned for the sake of completeness that CGU attempted to adduce evidence of Metal Mart’s contravention of certain sections of the OH&S Act and its plea of guilty in respect of those contraventions in the ACT Magistrates Court. There was a spirited debate at the hearing as to the admissibility of this evidence. It is not necessary for me to rehearse all of the arguments that were put on the issue. The matter is resolved by s 95 of the OH&S Act as it was at the relevant time. The section provided:

Nothing in this Act shall be taken-

(a) to confer a right of action in any civil proceedings in respect of any contravention of any provision of this Act; or

(p) to confer a defence to an action in any civil proceedings or affect a right of action in any civil proceedings.

52. In Booksan Pty Ltd v Wehbe [2006] NSWCA 3, the NSW Court of Appeal considered the New South Wales equivalent of s 95 which was in exactly the same terms as 95. Ipp JA, with whom Giles and Tobias JJA agreed, held that s 22 of the Occupational Health and Safety Act 1983 (NSW) precluded the insurer from relying on a breach of s 16(1) of that Act as a basis for denying indemnity to the insured because to do so would “affect a right of action in the proceedings”. Mr McCulloch submitted that Booksan was wrongly decided. I do not accept this submission but, even were I to be of that opinion, sitting as a trial judge I would not dissent from the unanimous decision of an intermediate Court of Appeal; Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; (2007) 230 CLR 89. The conclusion that the Court of Appeal reached in Booksan must apply here. The notion that a court is not to be bound by the interpretation placed on like words in other legislation by another court does not apply here because the words of the ACT statute are not merely like those considered by the NSW Court of Appeal; they are identical. Moreover, there is nothing in the context of either provision to suggest that they should be interpreted differently.

CONCLUSION

53. For reasons given above, I have found and concluded that the second and third defendants are not liable in negligence to the plaintiff. I shall make declarations and orders as follows:

(1) the first defendant is liable in negligence to the plaintiff for the injury he suffered consequent upon the accident that occurred on 7 January 2003;

(2) the first defendant is vicariously liable to the plaintiff for the negligence of its employee, Mr Stuart Wood in respect of the injury the plaintiff suffered consequent upon the accident that occurred on 7 January 2003;

(3) the plaintiff's negligence is assessed as contributing 10 per cent to the injury he suffered consequent upon the accident that occurred on 7 January 2003.

(4) CGU Insurance Ltd, pursuant to its Business Insurance Policy No 15T9485112904 commencing September 2001, indemnify the first defendant in respect of its liability declared in (1) and (2) above.

(5) Costs be reserved.

I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of her Honour, Justice Stone.

Associate:

Date: 1 September 2008

Counsel for the plaintiff: D Campbell SC, J Gracie, T Moisidis

Solicitor for the plaintiff: Blumers Personal Injury Lawyers

Counsel for the first defendant: F J Purnell SC

Solicitor for the first defendant: Ken Cush & Associates

Counsel for the second defendant: D Miller, M Castle

Solicitor for the second defendant: Moray & Agnew

Counsel for the third defendant: G A Stretton

Solicitor for the third defendant: Mallesons Stephen Jaques

Counsel for the third party: M T McCulloch SC, D R Sulan

Solicitor for the third party: DLA Phillips Fox

Date of hearing: 17-20 December 2007

Date of judgment: 1 September 2008