Be aware – head contractor found liable for 40% of a claim

07 April 2017

A recent decision by the District Court of Western Australia is likely to have significant repercussions for head contractors who elect not to exercise supervision over a work site, even where they delegate responsibility to competent sub-contractors.

The decision in Coote (by his next friend Stephen Desmond Coote) v Terry’s Crane Hire Pty Ltd [2017] WADC 28, delivered on 3 March 2017, represents a shift in the law of some significance in relation to the apportionment of liability to a head contractor.

Factual background in Coote

Mr Coote sustained serious injuries in September 2010 when he fell through a damaged skylight on the roof of a workshop. Mr Coote was employed by Terry’s Crane Hire Pty Ltd (TCH), who as his employer, accepted liability in negligence for his injuries.

The main contractor in Coote, Frontline Roofing (Frontline, de-registered and substituted in the proceedings by CGU as Frontline’s insurer pursuant to the Corporations Act (Cth)) was engaged to replace the roof of the damaged workshop. In turn, Frontline engaged TCH and a second roofing contractor, Debris Pty Ltd (Debris) to perform the required works.

The principal of Frontline reportedly visited the Workshop on only one occasion prior to the accident in September 2010. Frontline left the roofing work entirely to the competent roofing sub-contractor, Debris. Frontline provided no instructions as to how Debris were to perform the work, nor did they provide any instructions in relation to safety issues. Frontline engaged TCH to perform the crane work required (including moving roofing materials).

The issues to be determined by the Court included the following:

  • The nature and scope of the duty of care owed by Frontline to Mr Coote (if any);
  • Whether Frontline had breached its duty owed to Mr Coote; and
  • If so, the appropriate apportionment of liability to pay damages to Mr Coote between Frontline and TCH.
Nature and scope of the duty owed

Bowden DCJ found that Frontline had a duty of care at common law and as an occupier of the work site (under the Occupiers Liability Act 1985 (OLA)), in addition to a statutory duty under the Occupational Safety and Health Regulations 1996.

Frontline was subject to a duty at common law to use reasonable care in organising an activity (namely, the replacement of the Workshop’s roof) to avoid unnecessary risks of injury or minimise the risk of injury to those engaged in the activity it organised.

Frontline’s duty did not require it to retain control of the working systems if it was reasonable to engage independent contractors who were competent themselves to control their system of work without supervision by Frontline. There was no evidence that either Debris or TCH were not competent contractors, and Bowden DCJ found there was no failure by Frontline to take reasonable care in the engagement of Debris or TCH. However, Bowden DCJ held that the circumstances made it necessary for Frontline to retain and exercise a supervisory power at the work site.

Essentially, the Court found that Frontline, who organised the job, knew of the relevant risk posed by the damaged skylights, knew that a crane would be lifting materials on and off the roof, and knew or ought to have known that one trade had no control over the other (that is, Debris and TCH had no control over each other), remained under a duty to retain and exercise its supervisory power.

The Court determined that Frontline breached its duty of care in organising the activity to avoid unnecessary risks of injury to those engaged in the activity by not supervising the works to ensure ensuring that the skylights were made safe by either covering them (with planks or temporary sheeting) or meshing. That breach was said to have caused Mr Coote’s injury.

The Court also found that for the purposes of the OLA, Frontline had actual control over the work site on the basis that, in part, Frontline had arranged for the workshop to be vacated by the owners and engaged two trades to perform work at the workshop. Frontline was in actual control of the workshop, even though they did not direct the activities of the workers at the workplace. The duty under the OLA required Frontline to take the same steps to avoid unnecessary risks of injury as required by the duty of care at common law.

The key point for head contractors and insurers is that notwithstanding the head contractor in this case delegated the work to competent sub-contractors, was not staffed, organised or able to supervise the relevant work, maintained no active presence at the worksite and gave no direction as to the manner or the system of work under which the activity was to be carried out, they nevertheless retained an overarching duty of care to supervise the activity and to take reasonable steps to mitigate foreseeable risks of harm to the sub-contractor’s staff. The duty is not as onerous as that of an employer, but is still nevertheless significant.

Apportionment

Generally, liability is apportioned to the employer to a greater extent than others. The law is clear in that the primary obligation rests with the employer who owes a personal, non-delegable duty of care to its employees to take all reasonable care to institute a safe system of work and a safe place of work.

Deductions may be made for the employee’s own contributory negligence. In Coote, 15% liability was apportioned to Mr Coote for his own injuries. Of the remainder, 60% was apportioned to TCH, and an unexpectedly significant 40% was apportioned to Frontline. Bowden DCJ noted that:

“TCH did not provide any instructions to Mr Coote as to what to do in circumstances where he found the roof was in a dangerous stateā€¦On the other hand, Frontline had not issued any instructions to their roofing contractor to make the roof safe. In those circumstances I would apportion liability as to 40% to Frontline, 60% to TCH”.

The apportionment of liability is a matter of discretion and will turn on the facts of each case. It requires a comparison both of culpability (the degree of departure from the required standard of care) and of the relative importance of the acts of the parties in causing the injury. There is no standard percentage figure for apportionment between “employers” in cases involving labour hire companies and contributions must be assessed by reference to the particular facts and circumstances (Parlin v Choiceone Pty Ltd [2012] WASCA 19).

That being said, previous cases have followed a trend of apportioning approximately 10% to 15% to an absentee occupier or head contractor. That has been the case even where, contrary to Frontline in Coote, the head contractor or principal has taken on a “de facto” role as employer, and the employee is acting under their management and instruction. The result in Coote is surprising, and may represent a significant change in the law, in a direction which is markedly less favourable to head contractors/principals (and their insurers).

This article was written by Andrew Davidson, Partner and Annaleise Bryant, Solicitor.

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