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Court of Appeal Case Law Update

by Matthew Gerathy
27 September 2016
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On Thursday, 22 September 2016 the Court of Appeal handed down its unanimous decision in Gulic ats Boral Transport Pty Limited & Anor dismissing the Claimant's Appeal, ordering him to pay Boral's costs, and dismissing the workers’ compensation insurer’s recovery claim against Boral. The decision is another successful defence of the Boral group of companies by Matthew Gerathy and although specific to its facts, highlights the Court of Appeal accepting the defence based upon the proper construction and application of the content and scope of a head contractor’s duty of care to a subcontractor’s employee, and the evidence called on behalf of Boral relating to breach.

Background

Mr Gulic (the Claimant) was the sole employee, Director and professional heavy vehicle driver of GMG Transport Pty Limited (GMG Transport), whom entered into a Haulier Agreement with Boral Transport Pty Limited (Boral) to transport its brick and masonry products.  Pursuant to the Agreement, GMG Transport supplied the driver and a prime mover and Boral provided the trailers and gates for the brick trucks.

In 2009 Boral replaced the fleet of original trailers and gates with a newer version.  After some difficulties were identified with the gates, Boral arranged staggered rectification works on the fleet of brick trucks. Rectification work was performed on the trailer gates operated by the Claimant and GMG Transport in mid to late January 2010. In early February 2010 the Claimant alleged he sustained serious bilateral shoulder, thoracic and cervical spine injuries as he attempted to lift and then close and lock the truck gates. He claimed he would never be able to return to heavy work again and to have sustained significant damages.

District Court proceedings

In 2011 the Claimant commenced proceedings in the District Court of NSW against Boral seeking damages for his alleged significant injuries and disabilities.  At trial he sought damages in excess of $750,000 plus costs. The workers’ compensation insurer sought recovery of the large amount it had incurred in payments to or on behalf of the Claimant, plus costs.

Initially the Claimant’s case was the new truck and trailer gates were twice the height and at least twice as heavy as the old ones. However, expert engineering evidence commissioned on behalf of Boral established the new gates were only slightly higher and actually lighter than the old version. As the proceedings advanced, the Claimant then altered his case to allege the design and construction of the new gates was defective and allowed for collision with the forklifts that caused the gates to bend and become difficult to lock. The Claimant alleged he had made complaints about this before his accident and the response was inadequate.

On behalf of Boral, MakDap successfully defended the proceedings in the District Court, denying liability and alleging contributory negligence. To reduce Boral's exposure, MakDap also filed a Cross Claim upon the workers’ compensation insurer seeking indemnity and/or contribution for any damages for breach of the employer’s non-delegable duty of care. Essentially Boral's defence was that:

  • Although the Claimant was the Director and sole employee of GMG, he was nevertheless an employee and GMG therefore owed him a non-delegable duty of care as the employer.
     
  • The evidence established GMG was an independent contractor to Boral, and therefore the content and scope of the duty of care owed by Boral was much more limited than that of the employer.
     
  • Boral neither designed, manufactured, nor performed any rectification work on the new gates and vertical posts to which they locked onto, but rather retained independent and reputable specialists to do so, and was entitled to delegate those tasks and rely upon their expertise.
     
  • The Claimant did not establish his allegations of increased height, weight and inadequate design of the gates. The Claimant's evidence at trial was ultimately that the removable vertical posts were bent and that caused the problem with locking the gates. However, the evidence established the vertical posts had to be removed during loading and unloading. Accordingly, any allegation of inadequate design of the gates themselves was not relevant and any problem with bent vertical posts was either a design and/or manufacturing problem, or was caused by the Claimant/GMG not removing them during the loading/unloading process and none of these problems could be attributable to Boral.
     
  • As part of its staggered rectification process, Boral sent the Claimant's truck gates for repair between 19 – 21 January 2010. Upon its return, the Claimant made no complaint. Some days later when Boral asked if there were any problems, the Claimant advised there were still difficulties, and was informed the gates would need to be returned for further repair. At no time did he say they were a safety issue. The Claimant's alleged accident occurred only days later on 4 February 2010.
     
  • In the circumstances, the content and scope of Boral’s duty of care was limited and it could not be liable for any alleged defect in design, manufacture or repair of the gates and/or vertical posts to which they locked onto.  The evidence otherwise established Boral's response of sending the gates for repair was reasonable and it did not breach its limited duty of care.

Although MakDap successfully defended the District Court proceedings, the Judgment from the District Court in favour of Boral was a thinly reasoned extempore one. The lower Court erroneously found that the duty of care owed by Boral was akin to the employer/employee relationship, did not make any findings about breach and ultimately found against the Claimant based upon medical causation and there being no evidence the alleged incident caused his injuries.

Court of Appeal Judgment

The Claimant Appealed, however the Court of Appeal unaminously dismissed his Appeal and Ordered the Claimant to pay Boral's costs. The leading Judgment from Macfarlan JA with whom Gleeson JA and Garling J agreed, clearly stated that the content and scope of Boral’s duty of care was limited and was not non-delegable. Garling J stated it was plain that there were dangers in assuming that a non-delegable duty of care owed by an employer can, or ought to be, readily imposed on parties to a contractual arrangement which is not an employer/employee relationship.

The Court of Appeal found the risk of harm was from bent vertical posts and not the gates themselves, and therefore any issues relating to weight and height of the gates was irrelevant, but that Boral's evidence met those allegations anyway. The Court further found the risk of vertical posts becoming bent might not have been foreseeable because they were meant to be removed by the Claimant/GMG Transport during the loading and unloading process, but that Boral was aware of the problem of bent vertical posts.

The Court of Appeal found the delegable nature of Boral's duty of care was discharged by retaining reputable specialists to design and manufacture the brick truck gates and perform any repairs.  Accordingly, the only remaining issue on breach needing to be determined was the reasonableness of Boral's responses to its knowledge of bent vertical posts. The Court of Appeal found in all the circumstances, Boral's response of sending the gates back for repair was reasonable and the Claimant therefore failed to establish breach of any limited duty of care.

Conclusion

Although specific to its facts, the above example is another successful liability defence establishing a limited content and scope of a head contractor’s duty of care. On this occasion it was the appropriateness of Boral's delegation to specialists to design, manufacture and repair the allegedly defective brick truck gates. The defence evidence then established the otherwise reasonable precautions taken by Boral in response to a narrower risk of injury and no breach of its limited duty of care.


 

MakDap’s Matthew Gerathy has been successfully defending the Boral Limited group of companies for 8 years and other large head and subcontractors and occupiers for over 15 years. He has a deep understanding of the content and scope of the relationships between head and subcontractors and occupiers generally and the rights, interests and liabilities arising out of those relationships in both negligence and contract and what evidence to marshal to best defend these types of cases.

If you have any issues you would like to discuss concerning this judgment, or claims you have involving head and subcontractors and occupiers generally, the Dispute Resolution team at MakDap can assist.