Bevillesta Pty Ltd v Liberty International Insurance Co [2009] NSWCA 16 (17 February 2009)

Last Updated: 19 February 2009

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Bevillesta Pty Ltd v Liberty International Insurance Co [2009] NSWCA 16
This decision has been amended. Please see the end of the judgment for a list of the amendments.

FILE NUMBER(S):
40042/08

HEARING DATE(S):
12 December 2008

JUDGMENT DATE:
17 February 2009

PARTIES:
BEVILLESTA PTY LIMITED t/as Top Ryde Shopping Centre (ACN 008 428 162) (Appellant)
LIBERTY INTERNATIONAL INSURANCE COMPANY t/as Liberty International Underwriters (Respondent)

JUDGMENT OF:
Hodgson JA Gyles AJA Nicholas J

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
DC 4595/03

LOWER COURT JUDICIAL OFFICER:
Hughes DCJ

LOWER COURT DATE OF DECISION:
11 December 2007


COUNSEL:
K P REWELL SC/ P GOW (Appellant)
N J POLIN (Respondent)

SOLICITORS:
Moray & Agnew (Appellant)
Wotton & Kearney (Respondent)

CATCHWORDS:
TORTS – Negligence – Plaintiff injured by slipping on squashed orange at shopping centre – Occupier of shopping centre found liable – Occupier seeks contribution from insurer of cleaning contractor – Whether cleaning contractor owed duty of care to plaintiff – What was scope of that duty having regard to the terms of the cleaning contract.

LEGISLATION CITED:
Law Reform (Miscellaneous Provisions) Act 1946 s 5, s 6

CATEGORY:
Principal judgment

CASES CITED:
Allcorp Cleaning Services Pty Limited v Fairweather (New South Wales Court of Appeal, 29 June 1998, unreported)
Cairns v Woolworths Limited [2005] ACTSC 95
Jones v Dunkell [1959] HCA 8; (1959) 101 CLR 298
Leichhardt Municipal Council v Montgomery [2007] HCA 6, (2007) 81 ALJR 686
P & H Property Service Pty Limited v Branigan [2008] NSWCA 195
Prestige Property Services Pty Limited v Choi [2007] NSWCA 363
Woolworths (WA) Pty Limited v Berkeley Challenge Pty Limited [2004] WASCA 196, (2004) 28 WAR 540

TEXTS CITED:


DECISION:
Appeal dismissed with costs.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40042/08

DC 4595/03

HODGSON JA

GYLES AJA

NICHOLAS J

17 FEBRUARY 2009

BEVILLESTA PTY LIMITED t/as Top Ryde Shopping Centre v LIBERTY INTERNATIONAL INSURANCE COMPANY t/as Liberty International Underwriters

Headnote

Facts

On 23 July 2001, the plaintiff slipped on a squashed orange left on the premises owned by Bevillesta (the appellant). The plaintiff sued Bevillesta for damage suffered as a result of the fall. Bevillesta pursued a cross-claim against Liberty (insurer to the cleaning company under contract to clean to premises, and the present respondent).

The primary judge held the appellant liable for the plaintiff’s injuries on the ground that it had changed the contractual requirements from four to two cleaners over the relevant period of time, thereby increasing the time taken for cleaners to cover the area and exposing customers to a greater risk of injury. The cleaning company was held not liable and the primary judge dismissed the appellant’s cross-claim.

Bevillesta appealed against the dismissal of the cross-claim.

Issues

(1) What were the terms of the contract between Bevillesta and the cleaning company?

(2) What if any duty of care did the cleaning company owe to persons in the position of the plaintiff?

(3) Was the cleaning company in breach of any such duty of care or any contractual duty?

HELD (dismissing the appeal):

(Per Hodgson JA, Gyles AJA and Nicholas J agreeing)

(1) Following the change of contractual requirements, the cleaning contract still included an obligation to exercise reasonable skill and care, but not an obligation as to any particular frequency of inspection.

(2) (a) The cleaning company owed a duty of care to persons in the position of the plaintiff, at least in relation to the creation of a risk of injury: Leichhardt Municipal Council v Montgomery [2007] HCA 6; (2007) 81 ALJR 686; Woolworths (WA) Pty Ltd v Berkeley Challenge Pty Limited [2004] WASCA 196; (2004) 28 WAR 540 at [56]- [57].

(Per Hodgson JA and Nicholas J agreeing, Gyles AJA not deciding)

(b) Such duty could also extend to a duty to deal with hazards created by others: Allcorp Cleaning Services Pty Limited v Fairweather (New South Wales Court of Appeal, 29 June 1998, unreported); P & H Property Service Limited v Branigan [2008] NSWCA 195; Cairns v Woolworths Limited [2005] ACTSC 95 at [135].

(Per Hodgson JA, Gyles AJA and Nicholas J agreeing)

(3) The evidence did not establish what were the cleaning company’s obligations as regards inspection following the change of contractual requirements, and thus did not establish either a breach of a duty of care to the plaintiff or a breach of a contractual requirement to exercise reasonable skill and care.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40042/08

DC 4595/03

HODGSON JA

GYLES AJA

NICHOLAS J

17 FEBRUARY 2009

BEVILLESTA PTY LIMITED t/as Top Ryde Shopping Centre v LIBERTY INTERNATIONAL INSURANCE COMPANY t/as Liberty International Underwriters

Judgment

1 HODGSON JA: In proceedings in the District Court, Sharifeh Reshad (the plaintiff) sued the appellant (Bevillesta), together with Kidd’s Services Pty Limited (in liquidation) (Services) and Kidd’s Executive Cleaning Service Pty Limited (in liquidation) (Executive), for damages for injury she sustained when she slipped on a squashed orange at Bevillesta’s shopping centre at Top Ryde.

2 Bevillesta put on a cross-claim against Services and Executive; and also against the respondent (Liberty) which was the insurer of Executive, pursuant to s 6 of the Law Reform (Miscellaneous Provisions) Act 1946.

3 At the commencement of the hearing, the plaintiff discontinued her claim against Services and Executive, and it seems that Bevillesta likewise discontinued its cross-claim against them. In any event, those companies in liquidation are not involved in this appeal.

4 On 11 December 2007, Hughes DCJ gave a verdict and judgment for the plaintiff in the sum of $374,787 and ordered Bevillesta to pay the plaintiff’s costs. On the cross-claim, the primary judge gave a verdict for Liberty and ordered Bevillesta to pay Liberty’s costs.

5 Bevillesta appeals against the decision on the cross-claim.

Circumstances of the accident
6 As at 23 July 2001, Bevillesta was the owner and occupier of the Top Ryde Shopping Centre; and the plaintiff was employed at the Woolworth’s Supermarket in that shopping centre.

7 On that day, which was a Monday, at about 5.30pm, the plaintiff left the supermarket where she worked and walked towards the shopping centre carpark. Her route took her along a walkway within the shopping centre between a fruit shop and a garden bed. As she went along that walkway, she slipped on a squashed orange, and she fell and was injured. This occurred between 5.30pm and 5.40pm.

8 At 5pm, a witness had seen two oranges on that walkway, one of which was squashed; and the same witness saw the same squashed orange still there after the plaintiff’s fall, between 5.40pm and 5.45pm. The primary judge inferred that the plaintiff had slipped on this squashed orange, and this finding is not challenged.

Issues at the trial
9 The issues at the trial relevant to this appeal were the following:

(1) Was the contract for cleaning the shopping centre with Executive (which was insured by Liberty) or with Services (which was not)?

(2) What were the terms of that contract?

(3) Did Executive breach a duty of care to the plaintiff or breach a contract with Bevillesta?

(4) Was there a liability of Executive to Bevillesta covered by the policy with Liberty?

10 The primary judge in effect found issue (3) against Bevillesta, on the basis of a finding, in relation to issue (2), that Bevillesta had changed the contractual requirements on the contract cleaner from a requirement that four cleaners be provided at the time of the accident to a requirement that two cleaners be provided. The primary judge held that this reduction exposed customers of the shopping centre to a greater risk of injury, and that this risk materialised causing the plaintiff’s fall.

11 The primary judge found that a reasonable schedule for inspection coverage was that of 15 minutes; that there had been no inspection or cleaning within the 40 minutes between about 5pm and 5.40pm on the day of the accident; and that Bevillesta was liable to the plaintiff because of its willingness to take the risk of a less comprehensive cleaning schedule. He found that the cleaner was not negligent, in that there was “not sufficient manpower to eliminate the risk of food stuffs falling and remaining on the floor for longer periods”.

12 The primary judge made no finding on issue (1), and issue (4) did not arise.

Issues on appeal
13 Bevillesta relies on the following grounds of appeal:

1 His Honour erred in finding that the Appellant's system of cleaning was deficient (and therefore the Respondent was not liable) on the ground that the Appellant changed the manpower of the cleaning company from four cleaners to two prior to the subject fall.

2 His Honour erred in concluding that the change of manpower exposed the customers of the Appellant's premises to a greater risk of injury (and therefore the Respondent was not liable).

3 His Honour erred in concluding that because of a reduction in cleaners at the Appellant's premises, the cleaners were having to cover the same amount of shopping space but either were having to do it in less time and less thoroughly, or having to do it in greater time (and therefore the Respondent was not liable).

4 His Honour erred in holding that the reduction in cleaners expanded the inspection time for cleaning (and therefore the Respondent was not liable).

5 His Honour erred in failing to find the relevant cleaning company was liable to the Appellant in circumstances where his Honour held that the inspection coverage at the time of the subject fall was not less than 40 minutes.

6 His Honour erred in holding that the cause of the subject fall was the Appellant's reduction in cleaners from four to two in circumstances where the substance was present on the floor for the majority of time when three cleaners were rostered at the premises.

7 His Honour erred in failing to find it was the responsibility of the cleaning company to maintain a system for the inspection and removal of spillages at the Appellant's premises.

8 His Honour erred in failing to consider relevant evidence concerning the duties and obligations of the cleaning company.

9 His Honour erred in finding there was no real evidence that the cleaning company was negligent.

10 His Honour erred in failing to determine which cleaning company was engaged by the Appellant to clean the premises.

11 His Honour erred in failing to give adequate reasons in finding whichever cleaning company was engaged by the Appellant to clean the premises, was not liable to the Appellant.

14 Liberty relies on the following grounds in a notice of contention:

1. That the trial judge ought to have found that at the time of the plaintiff’s accident Kidds Services Pty Limited was the cleaner of the Top Ryde Shopping Centre.

2. Alternatively the trial judge ought to have found that the respondent was not negligent.

15 I will set out the evidence concerning the contract between Bevillesta and its contract cleaner, and then consider what the terms of the contract and the parties were at the date of the accident. Then I will consider in turn the issues (3) and (4) identified above.

Evidence as to the cleaning contract
16 Exhibit 4 and exhibit 8 before the primary judge included a cleaning tender document, issued by the previous owner of the shopping centre, and completed by Executive (under its previous corporate name Ellems Cleaning Services (No 2) Pty Limited). The document as issued by the previous owner bore the date September 1998, and invited tenders for a cleaning contract for the shopping centre. As completed by Executive, it included a typed date 29 September 1998, and it was signed by Steve Kidd, who was the principal of Executive and also the principal of Services.

17 The document as issued by the previous owner (Grosvenor Top Ryde Pty Limited) contained the following general terms and conditions:

The work under this contract comprises the cleaning of the interior exterior and surrounding car parks of the building; details of which are set out in the attached documents, and, includes the supply of all labour materials and equipment necessary to effectively carry out the work to the complete satisfaction of the Centre Owner. All employees are to be paid in accordance with the cleaning Contractors NSW State Award.

The purpose of this specification is to provide a high standard of cleaning throughout the premises. In submitting prices it is acknowledged that the tender has taken this into account when formulating its costing.

18 It contained the following indemnity by the contractor:

The Contractor shall indemnity Grosvenor Top Ryde Pty Ltd and IFP (NSW) Pty Ltd against:

(a) loss of or damage to property of Grosvenor Top Ryde Pty Ltd and IFP (NSW) Pty Ltd, including existing property in or upon which the work under the Contract is being carried out; and

(b) claims by any person against Grosvenor Top Ryde Pty Ltd and lFP (NSW) Pty Ltd in respect of personal injury or death, or loss of or damage to any property, arising out of or as a consequence of the carrying out by the Contractor of the work under the Contract,

but the Contractor's liability to Indemnify Grosvenor Top Ryde Pty Ltd and IFP (NSW) Pty Ltd shall be reduced proportionately to the extent that any act or omission of Grosvenor Top Ryde Pty Ltd and IFP (NSW) Pty Ltd or employees of Grosvenor Top Ryde Pty Ltd and IFP (NSW) Pty Ltd may have contributed to the loss, damage, death or injury.

19 It referred to a coverage route map “with coverage not less than 15 minute intervals on plans attached”.

20 It included a staff roster showing four cleaners on duty between 4pm and 6pm on Mondays.

21 Exhibit 5 was a letter bearing date 29 September 1998 from Executive to Byvan (apparently a company acting on behalf of the previous owner) which clearly must have accompanied its tender. This letter included the following paragraph:

We have included all company information and documentation and completed all schedules as requested. The labour levels reflect the requirement for constant 15 minute coverage during trading periods. We have previously provided a route map to Centre Management. These routes remain unchanged, however the coverage is increased as per our schedules.

22 Included in exhibit 8 was a document entitled “Contract Signature”, signed on behalf of Executive under date 25 May 1999 and on behalf of the previous owner under the date 10 August 1999, stating a commencement date for the contract of 1 June 1999 and an expiry date of 31 May 2002.

23 Exhibit 9 is a letter or copy letter bearing date 18 October 1999 from Byvan (NSW) Pty Limited addressed to “Mr Steve Kidd, Ellem’s Cleaning Service” accepting “your offer of Thirty-Nine Thousand Six Hundred and Ninety-Five Dollars and Twenty-Eight Cents ($39,695.28) per month” subject to terms and conditions, which included a term that the letter superseded all previous correspondence and communications, and contained the whole of the agreement between the parties. One term contained in this letter was that the contractor:

10.5 fully indemnifies Byvan and the owner and will keep Byvan and the owner indemnified from and against all present and future claims, actions, demands, proceedings, threats, losses, costs (including solicitors' costs on a solicitor and own client basis), expenses, penalties and liabilities, however, and whenever incurred, which any person may have or bring against Byvan and the owner in relation to any failure of any of the services provided in respect of the property by the Contractor including without limitation the failure of any equipment, technology or machinery provided by the Contractor in carrying out its services, to be Year 2000 Compliant.

24 This letter made provision for acknowledgement of acceptance of the terms of the letter by its recipient, but the copy of the letter in evidence does not contain any indication of such acceptance. Indeed, the only evidence that such a document was ever sent was that the document put into evidence was found among the papers of the previous owner.

25 Exhibit 7 was the front page of a contract for the purchase of the shopping centre by Bevillesta from the previous owner. This page bore the date 17 October 2000.

26 There are in evidence (exhibits G and 12) two copies of a letter, on the letterhead of Services and signed by Steve Kidd, originally bearing date 21 May 2001 and addressed to “Top Ryde Shopping Centre”. The letter is headed “Re: Reassignment of Cleaning Contract to Kidds Services”, and the body of the letter is as follows:

We hereby provide the Contract Document for execution. Terms and Conditions remain as per the original Top Ryde Contract, which commenced 01.06.1999.

The revised price and labour schedule is attached and now forms part of the contract. The new monthly invoice amount for regular cleaning is $38,100.27 + $3,810.03 GST = $41,910.30.

We trust this documentation meets with your approval.

27 On one of the copies of the letter in evidence, the 2 in the date is struck through, suggesting a date of 1 May 2001.

28 There is also in evidence (exhibit 11) a letter bearing date 3 May 2001 on the letterhead of the Beville Group (of which Bevillesta was part) addressed to Mr Steve Kidd as managing director of Executive. The letter is headed “Re: Top Ryde Shopping Centre” and the body of the letter is as follows:

Thankyou for your revised contract price dated 1 May 2001 which we accept to commence 1 June 2001.

Please forward your contract assignment for our execution.

Should you have any queries please contact us.

29 The “revised price and labour schedule” referred to in the letter that originally bore date 21 May 2001 showed two cleaners employed from 4pm to 5pm on Mondays, three employed from 5pm to 5.30pm, and two employed from 5.30pm to 6pm. The schedule showed that the total number of hours for cleaners on Mondays was about 57 hours, rather than about 72 hours as previously.

30 Exhibit 13 comprised invoices issued by Executive for cleaning services to Suntrack Pty Limited (an administration company for Bevillesta) covering the period 1 January 2001 to 13 December 2001; and also business records showing the preparation of cheques to Executive in response to these invoices.

31 Oral evidence was given by Mr Savill, Bevillesta’s operations manager at material times, and the person with day to day control and management of the cleaners and cleaning system at the Top Ryde Shopping Centre.

32 In cross-examination, he was referred to the letter originally dated 21 May 2001, and the following questions and answers followed:

Q. So there's no doubt is there that at or about this time the cleaning contract was reassigned to Kidd's Services Pty Limited? A. Correct.

Q. And I take it that they then continue to undertake the cleaning of the premises up until after the date of this accident?

A. Correct.

33 In his evidence in chief, Mr Savill was asked (Black 61) about the frequency of cleaners at level 1 of the Centre around the lunchtime break, to which Mr Savill replied:

They would be there constantly okay, but it would take them about a 15 minute interval in their duty cycle.

34 Later he was asked about the afternoons, to which he replied:

I finished at 4.30 of a day okay and they were constant till I left there and then there would be a security person there with two cleaners.

35 In cross-examination, Mr Savill was referred to the 1998 tender documents and the letter of 29 September 1998, and there were then the following questions and answers:

Q. And that laid the labour levels in the tender complied with your specification as to the number of cleaners that were to be there on anyone day at any onetime?

A. Correct.

Q. And it was on that basis, namely that they complied with your specification on having a certain number of cleaners at a certain time, enable them to say, well that reflects the requirement for constant 15 minute coverage?

A. Correct.

Q. Because if you knew that if there wasn't 15 minute coverage, particularly in areas around the food court and the fruit shop, there was a real risk that there could be spillages and dropages, is that right?

A. Yes.

36 He was then referred to the May 2001 documents, and there were the following questions and answers:

Q. So you see, what I'm suggesting to you is, that whilst you had originally specified the need for four cleaners at this time, for some reason better known to the company, your company, that had been reduced to two cleaners by the time this lady had her injury, that's so isn't it?

A. Correct.

Q. And that was quite inadequate, wasn't it, wasn't it?

A. We had two cleaners and one security guard.

Q. Mr Savill you had had four cleaners plus one security guard, hadn't you?

A. In the previous regime yes.

Q. It had been reduced to two cleaners, hadn't it?

A. It did, yes.

Q. That was quite inadequate wasn't it?

A. I couldn't say that, well it was cut yes.

Q. Cut?

A. Yes.

Q. When you'd been told by the cleaner when he wrote his letter submitting the tender that he needed that level four to maintain the 15 minute turn round, he told you that and yet you cut it, that's right isn't it?

A. That is correct.

Q. To save money, that's right isn't it?

A. Yes.

Q. Exposing the customers of this centre to a risk of injury, that's right isn't it, isn't it?

A. It was cut yes.

<CROSS-EXAMINATION BY MR POLIN

Q. Sir it's the case that it wasn't just the cleaning company that was responsible for cleaning services at the shopping centre, it was also the security company as well?

A. No the security company was a different company.

Q. You have told us on a number - I know they were a different company?

A. Yes.

Q. But you have told us on a number of occasions that it was part of the security officers--

A. Is briefed to call in any spillages.

Q. That's right, so part of patrolling the shopping centre was to look out for spillages?

A. Correct.

Q. So is it the case that Bevillesta relied heavily upon the security company for the detection of spillages?

A. Correct.

Q. And the cleaning company was relied upon primarily for actual cleaning duties?

A. Correct.

37 There was other evidence also from Mr Holden, company secretary and general manager of Bevillesta, that he was unaware of any assignment from Executive to Services; and that any such assignment would usually be referred to him, and would have needed to be signed by him as company secretary.

Terms of the contract
38 It is clear that initially, there was a contract between the previous owner and Executive, on the basis of the September 1998 tender documents. In my opinion, no doubt is thrown on this by the “contract signature” document of 1999. This contract provided relevantly for 15 minute coverage, to be provided by four cleaners.

39 I am not satisfied, on the balance of probabilities, that this contract was displaced by the letter of 18 October 1999. If the only question had been whether that letter had been sent, I am inclined to think that such an inference could be drawn from the presence of the letter among the business records of the previous owner. However, there is also a question of whether, if it had been sent and received, its terms were accepted. There is no written or oral evidence directly supporting such an acceptance.

40 Mr Rewell SC for Bevillesta submitted that an inference should be drawn that the terms were accepted, particularly because of Liberty’s failure to call Mr Kidd.

41 This submission would have had force if Executive itself was the relevant defendant, with Liberty conducting the case on behalf of its insured. However, in my opinion it has little if any force in circumstances where Liberty has been sued direct pursuant to s 6 of the Law Reform (Miscellaneous Provisions) Act 1946. In my opinion, it cannot be said that Mr Kidd is in Liberty’s “camp”, or that Liberty has any particular reason to have confidence in his evidence. If it can be said that Mr Kidd would be expected to be called by Liberty rather than by Bevillesta, that expectation could not be considered a strong one. Accordingly, in my opinion, if it is a case in which an inference can be drawn in accordance with the principle in Jones v Dunkell [1959] HCA 8; (1959) 101 CLR 298, the inference could not be considered a strong one. Accordingly, I would not be prepared to infer that the terms of the letter of 18 October 1999 were accepted.

42 In circumstances where Executive continued to provide cleaning services to Bevillesta, after it acquired the shopping centre, I would infer that there was a contract between Executive and Bevillesta on the same terms as the contract that existed before Bevillesta’s purchase with the previous owner.

43 It is clear that the contractual terms changed in May 2001. As a result of the new cleaning schedule, the cleaner was obliged to provide only two cleaners on Mondays between 4pm and 5pm, three cleaners between 5pm and 5.30pm and two cleaners between 5.30pm and 6pm. In those circumstances, in my opinion it was no longer an obligation of Executive to provide 15 minute coverage of relevant areas at these times. The question then is, what were the relevant obligations of Executive.

44 Mr Rewell submitted that the primary judge had erred in finding that the obligation was to provide only two cleaners at the relevant times, and did not further consider what the obligation of the cleaner was. Mr Rewell submitted that the ongoing obligation of the cleaner must have been to provide coverage commensurate with the continuing personnel, that is at 30 minute intervals in those periods when there were two cleaners and 20 minute intervals in those periods when there were three cleaners. At the very least, he submitted, there must have been a requirement for coverage within the period of 40 minutes during which the squashed orange was shown to be present.

45 In my opinion, it is significant, as submitted by Mr Polin for Liberty, that Mr Savill gave no evidence of any instructions given to the cleaners or to the security guard as to responsibility for detection of spillages and, apart from the evidence referred to above about 15 minute coverage at lunchtime, no evidence as to what the practice was after May 2001.

46 As submitted by Mr Polin, the obligations of the cleaning contractor went far beyond the detection and cleaning of spillages and other hazards (see Blue 79-85); so particularly in circumstances where some responsibility for detection of spillages was accorded to the security company, it would not be appropriate to infer that there should be simply a proportionate adjustment of the coverage, as submitted by Mr Rewell.

47 Accordingly, in my opinion, while the cleaning contract did undoubtedly still include an implied obligation to exercise reasonable skill and care, it did not in my opinion include any obligation as to any particular frequency of inspection for spillages.

48 Turning to the question of assignment, in my opinion very little weight can be given to the letter, originally bearing date 21 May 2001, which purported to emanate from Services and referred to an assignment to Services. I would infer that the correct date of the letter is 1 May 2001, and that the letter of 3 May 2001 was a response to it. The letter of 3 May 2001 was directed to Executive, and made no reference to any assignment.

49 Further, in my opinion, the oral evidence of Mr Savill carries very little weight. An assignment would have to be by words and/or writing and/or conduct. The evidence of Mr Savill was thus of a conclusion of mixed fact and law, without identifying or giving evidence of relevant facts. If it had been objected to, it would have been rejected as inadmissible.

50 In my opinion, the invoices and cheques have far greater weight, in suggesting that Executive continued to be the cleaner. It is not to the point that the invoices were addressed to a company providing management services to Bevillesta rather than Bevillesta itself.

51 Accordingly, in my opinion, the presumption of continuance was not displaced, and the relevant contract was between Bevillesta and Executive.

Breach of duty?
52 There is no doubt that Bevillesta as owner and occupier of the shopping centre owed a duty of care to the plaintiff.

53 There is no doubt also that this occupier’s duty of care is “delegable”, in the sense that it may be discharged in whole or in part by the occupier’s exercise of reasonable skill and care in engaging someone else to take steps to keep the property safe either generally or in particular respects. Discharge of the duty in this way requires reasonable skill and care in the selection of the other person, in arranging the terms of engagement of that person, and in confirming that the person does take appropriate steps. If it is reasonable for an occupier to seek to discharge or partly discharge the occupier’s duty in this way, and the occupier does exercise reasonable skill and care in all these respects, then if a person coming on to the property is injured due to the failure of the other person engaged to exercise reasonable skill and care to keep the property safe, the occupier may escape liability.

54 In my opinion, a corollary of this is that a person engaged in this way may come under a duty of care to persons coming on to the property. If that person knows or reasonably should know that he or she has been engaged to keep the property safe for persons coming on to it (and the exercise of reasonable skill and care by the occupier would require that this be conveyed to that person), then in my opinion the person so engaged would appreciate that if he or she does not exercise reasonable skill and care, there is a risk of injury to persons coming on to the property; and the person’s understanding of that engagement and risk gives rise to a relationship with persons coming on to the property sufficient to support a duty of care.

55 This accords with what Hayne J (Crennan J concurring) said in Leichhardt Municipal Council v Montgomery [2007] HCA 6, (2007) 81 ALJR 686 at [157]:

[157] There is no reason for adding the liability of a highway authority to road users to an otherwise limited number of cases where a non-delegable duty has been held to be owed. If a highway authority acts without reasonable care, absent particular statutory provision to the contrary, it will be liable to the road user who is injured as a result. If the highway authority acts with reasonable care in appointing and supervising the work of an independent contractor, but that contractor is negligent, the contractor will ordinarily be liable (as Roan was here) to the road user who suffers injury in consequence.

See also Prestige Property Services Pty Limited v Choi [2007] NSWCA 363 at [37]- [43].

56 This approach applies with particular force when the person engaged has specialist skill, as in the case of the tree contractor in Prestige. However, it has also been applied to cleaners engaged by occupiers to clean premises. Certainly a cleaner would be liable if it creates a hazard, for example by leaving a floor wet and unguarded: see Woolworths (WA) Pty Limited v Berkeley Challenge Pty Limited [2004] WASCA 196, (2004) 28 WAR 540 at [56]- [57].

57 Even when a hazard is created by someone else, and the cleaner fails to deal with it, it seems clear that the cleaner can be liable for breaching a duty of care to persons coming on to the property. This was assumed, without being discussed, in cases such as Allcorp Cleaning Services Pty Limited v Fairweather (New South Wales Court of Appeal, 29 June 1998, unreported) and P & H Property Service Pty Limited v Branigan [2008] NSWCA 195. See also Cairns v Woolworths Limited [2005] ACTSC 95 at [135].

58 In the present case, the lack of precision as to the terms of the contract makes the application of this approach difficult.

59 I would infer that Executive did appreciate, at least under the original contract and schedules, that it had been engaged to keep the property safe for persons coming on to it, and that one of its responsibilities to this end was to maintain 15 minute coverage at times and places that included 4pm to 6pm on Mondays at the location of this accident.

60 However, when the schedules were changed, so far as the evidence goes, it is unclear precisely what was the responsibility of Executive at the relevant time and place. As mentioned before, since its obligations went well beyond that of checking for spillages and other hazards and cleaning them up, I do not think it would be appropriate to apply an automatic proportionate reduction of the coverage. In the absence of evidence as to instructions given to cleaners and security personnel and absence of evidence as to actual practice, the Court is left in a position where it just does not know what was the role of the cleaner and what was the role of the security guard and perhaps others in relation to the detection of spillages; or how the reduction in personnel impacted on the question of detection of spillages as opposed to other services provided by the cleaner.

61 In those circumstances, I would not find on the balance of probabilities that Executive has breached a duty of care owed to persons coming on to the premises, including the plaintiff.

62 On the same basis, I would not be prepared to find that Executive had breached its contract with Bevillesta to exercise reasonable skill and care in carrying out its cleaning contract. For reasons already given, cl 10.5 of the letter of October 1999 was not shown to be part of the relevant contract.

Insurance Contract
63 Having regard to my decision on the question of breach, the question of the effect of the insurance contract does not arise. However, I will briefly indicate my views on it.

64 The relevant term of the insurance contract is an exclusion of the following liabilities:

7.6 Liabilities assumed:

7.6.1 Under the terms of a contract, agreement or warranty unless the Insured would have been liable in the absence of such term or warranty.

65 Plainly, this provision would not exclude liability in Liberty in respect of any right to contribution which Bevillesta had pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946.

66 However, if the contract between Executive and Bevillesta made Executive liable to Bevillesta to any extent greater than this contribution under the Law Reform (Miscellaneous Provisions) Act, in my opinion cl 7.6.1 would be effective to exclude this greater liability. In my opinion this would be so, even if the liability is merely pursuant to an implied term to exercise reasonable skill and care in performing the contract. If the liability were to arise under a term such as cl 10.5 of the letter of October 1999, such liability would clearly be excluded.

Conclusion
67 For those reasons, in my opinion, the appeal should be dismissed with costs.

68 GYLES AJA: I agree with the orders proposed by Hodgson JA and generally with his Honour’s reasons for those orders. However I would prefer to leave for another day consideration as to whether and, if so, in what circumstances, a cleaning contractor might be directly liable in tort to an entrant to premises for other than a negligent act causing a foreseeable risk of injury such as leaving a bucket in a dangerous position or leaving an access way in a slippery condition.

69 NICHOLAS J: I agree with Hodgson JA and with the orders proposed by him.

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AMENDMENTS:


18/02/2009 - Changed abreviation to full words in short case title - Paragraph(s) cover sheet


LAST UPDATED:
18 February 2009