Labour Hire & Host Employment – “Exceptional Circumstances” – no dual vicarious liability

Mt Owen Pty Ltd v Parkes [2023] NSWCA 77

The Court of Appeal dismissed an appeal by Mt Owen against an order for damages of $2,050,953 due to a workplace injury caused by an incident at the Glendell coal mine. Mr Parkes, whom Titan Technicians Enterprise Pty Ltd employed, was injured when his coworker, Mr Kemp, dropped the blade of a bulldozer, causing the track to flick up and crush Mr Parkes leg.

The trial judge found that Mt Owen was vicariously liable for Mr Kemp‘s negligence and attributed 60% of the responsibility to it and 40% to Titan and Mt Owen sharing equally. On appeal, Mt Owen argued that Titan should be liable rather than it, but the Court rejected this and held Mt Owen 100% liable. The Court upheld Titan‘s crossappeal and concluded that it bore no responsibility for the accident, as its safety requirements were not so deficient as to have caused the injury.

The judgment upholds the doctrine against ‘dual vicarious liability’ and considers the circumstances where the employee’s control and direction have been completely transferred to the host employer.

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 29 July 2017, Mitchell Kemp, Glen Parkes and a third worker were undertaking maintenance on a Caterpillar D10 bulldozer at the Glendell coal mine, owned and operated by Mt Owen Pty Ltd (Mt Owen). All three men were employed by Titan Technicians Enterprise Pty Ltd (Titan), but working at the premises of Mt Owen. During the work Mr Parkes was injured when Mr Kemp dropped the blade of the bulldozer suddenly, causing the track on which Mr Parkes was standing to flick up and crush his right leg between the track and the edge of the access platform beside the cabin of the bulldozer.

Mr Parkes claimed damages against Mt Owen and Titan. Neither party disputed that Mr Kemp’s act had been negligent. Mr Parkes claimed that Mt Owen (and not Titan) was vicariously responsible for Mr Kemp’s negligence and that Mt Owen breached its own duty of care to Mr Parkes. Mt Owen asserted that Titan (as Mr Kemp’s employer) was vicariously liable for his negligent act, and that Titan (as Mr Parkes’ employer) breached its duty of care to him and was at least partly responsible for any damages payable to Mr Parkes.

Campbell J found that at all material times Mr Kemp was the employee of Mt Owen pro hac vice and that it was therefore vicariously liable for Mr Kemp’s negligence. The judge also found that both Mt Owen and Titan breached their own duties of care to Mr Parkes. He apportioned liability as to 60% for Mr Kemp’s negligence (for which Mt Owen was responsible) and as to 40% to be shared equally by Mt Owen and Titan. A claim for contributory negligence was dismissed and not challenged on appeal.

Mt Owen appealed the findings that it was liable; Titan cross-appealed the attribution of liability ascribed to it.

The primary issues on appeal were whether the trial judge was correct to find that:

(i)    Mt Owen was vicariously liable for the negligence of Mr Kemp; and

(ii)      Titan, as Mr Parkes’ legal employer, breached its duty of care to him.

The Court held, dismissing the appeal and (by majority) upholding the cross- appeal:

As to issue (i) – vicarious liability of host employer

By Basten AJA (Brereton and Kirk JJA agreeing):

The trial judge correctly accepted that there can be no dual vicarious liability in two principals for the acts of a negligent individual. The judge also correctly held that while an employer is vicariously liable for the negligent act of an employee undertaken within the scope of his or her employment, the employer may not be the legal employer of the worker: [32], [33].

Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd (1986) 160 CLR 626; [1986] HCA 34; State of New South Wales v Lepore (2003) 212 CLR 511; [2003] HCA 4 applied.

Where a worker is undertaking work on the premises of, and under direction from another party, the transfer of control may lead to a shift of liability from the legal employer to the “host employer”. While such a transfer has been said to arise only under “exceptional circumstances”, modern labour hire arrangements and the statutory regulation of workplace safety may more readily lead to such a finding, depending on the nature and extent of control over a worker: [41], [48].

Mersey Docks [1947] AC 1 considered; Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61 applied.

Mt Owen’s authority to give directions and orders to workers provided by Titan conferred by cl 5.1 of the purchase orders issued for labour hire, the detailed safety requirements set out in Mt Owen’s “job safety analysis” (JSA), and evidence that Mr Kemp was subject to direction by Mt Owen’s supervisors, demonstrated a transfer of control to Mt Owen. Further, Titan required its employees to follow the workplace health and safety policies of the host employer where they were equal to or of a higher standard than Titan’s requirements: [56], [58] – [61].

As to issue (ii) – cross-appeal

By Brereton JA (Kirk JA agreeing):

The finding of negligence against Titan was based on the supposed inadequacy of Mt Owen’s JSA which was completed and signed off by Mr Wallace on behalf of Mt Owen before Mr Kemp and the crew commenced work on the bulldozer. Reasonable care did not require that the JSA specifically restate, for oil-testing, a requirement which was already adequately stated in a procedure applicable to the task, that there be no equipment movement while personnel were within the footprint: [17].

If the JSA were deficient in failing to stipulate that implement movement should occur only while the other tradesmen are beyond the footprint of the bulldozer, the deficiency was not causative. It was not proved that, but for the omission of further specification of the correct procedure for oil testing, the accident would not have occurred: [22].

By Basten AJA (dissenting):

The legal employer owed a non-delegable duty of care to the worker, the content of which is variable and dependent upon the circumstances in which it is engaged: [74]-[81].

Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1; [2009] HCA 35; TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47; DIB Group Pty Ltd t/as Hill & Co v Cole [2009] NSWCA 210 followed; Estate of the Late M T Mutton v Howard Haulage Pty Ltd [2007] NSWCA 340; Top Hut Banoon Pastoral Co Pty Ltd v Walker [2021] NSWCA 296 distinguished.

The finding that the JSA failed to make sufficiently clear that the controls with respect to movement of the equipment extended to movement of the implements should be accepted. Titan accepted its responsibility to take steps to ensure a safe working environment for its employees and had extensive safety protocols which were to apply unless those of the host employer were of an equal or more demanding standard. To ensure that their standard was fulfilled, Titan should have been alert to errors and/or omissions in the JSA. Accordingly, there was no error on the part of the trial judge in finding Titan liable: [84].

Since both Titan and Mt Owen had the relevant legal authority to impose constraints on the activities of Titan’s workers there was no error in attributing equal responsibility to the host employer (Mt Owen) and the legal employer (Titan) for the injury to the plaintiff: [85].

 

David Cormack

Barrister and mediator

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