Penrith City Council v Healey; GIO General Ltd v Healey

1. [1]

   BASTEN JA: The claimant, Mr Ralph Healey, brought proceedings in the Supreme Court claiming damages for injuries suffered by him whilst emptying street bins for the Penrith City Council. Although his primary claim was brought against the Council, it was not his employer. Rather, the claimant had, from 7 February 2000, been employed by an independent contractor, Usshers Pty Ltd (“Usshers”), which had a contract with the Council pursuant to which it was responsible for emptying the bins on a daily basis.

2. [2]

   The claimant’s employment with Usshers ceased on 30 November 2004, although Usshers continued to be the contractor employed by the Council to empty the street bins. From 1 December 2004 that work was still carried out by the claimant, who was then employed by Usshers Solid Waste Pty Ltd (“Solid Waste”). Due to injuries suffered in the course of his employment, the claimant ceased work on 29 April 2005.

3. [3]

   The claimant did not bring proceedings against his employers, Usshers and Solid Waste, because he failed to satisfy the statutory requirement of 15% whole person impairment, being a precondition to the liability of an employer in negligence, pursuant to s 151H of the Workers Compensation Act 1987 (NSW).

4. [4]

   However, on 18 June 2007 the claimant commenced proceedings in the District Court in negligence, naming the Council as the sole defendant. Those proceedings were later removed to the Common Law Division of the Supreme Court. In 2012, the claimant commenced separate proceedings in the Common Law Division against GIO General Ltd, which had been the public liability insurer for Usshers from 30 October 2004 until a date well after the claimant ceased his employment with Solid Waste. Those proceedings were brought pursuant to s 601AG of the Corporations Act 2001 (Cth), Usshers having been deregistered in October 2008.

5. [5]

   The claimant was successful in the Supreme Court, the principal judgment being delivered on 30 June 2014. [1] The claimant obtained a judgment against both the Council and against GIO General Ltd (“the insurer”). Both defendants have appealed.

Appeal by Penrith City Council

1. [6]

   The background to the appeals has been set out by Simpson JA and Emmett AJA and need not be repeated. For the reasons given by Simpson JA, the appeal from the judgment against the Council should be allowed and the orders made by the trial judge set aside.

Appeal by GIO General Ltd

1. [7]

   For the reasons which follow, I agree with Emmett AJA that the appeal by the insurer should also be allowed and the judgment in favour of the claimant against the insurer should be set aside.

2. [8]

   Usshers had a public liability policy with the insurer from 31 October 2004. For the month of November, the plaintiff was employed by Usshers, a period which included the date of a specific injury (29 November 2004). It remained Usshers’ public liability insurer after the plaintiff commenced employment with Solid Waste on 1 December 2004. The policy was an occurrence based policy; it did not cover liability to employees. It was not in dispute that the policy did not respond to any liability of Usshers whilst the claimant was in its employ.

3. [9]

   The plaintiff brought proceedings against the insurer in relation to the period of his employment by Solid Waste, but alleging negligent breach of duty by Usshers. The claim was brought pursuant to s 601AG of the Corporations Act 2001 (Cth), which provides:

4. [10]

   Two questions arose with respect to the claim against the insurer, namely:

5. [11]

   The second question requires reference to the terms of the policy and in particular the exclusions in cl 13, which read (relevantly):

6. [12]

   Simpson JA would answer both questions in the affirmative, and would therefore dismiss the appeal brought by the insurer. (That conclusion may give rise to several questions relating to the assessment of damages and the application of s 151Z of the Workers Compensation Act, which do not arise if the insurer’s appeal is upheld.) Emmett AJA would answer the two questions by denying the operation of the exclusions in the insurance policy (thereby rendering the insurer potentially liable), but also denying any liability on the part of Usshers in the relevant period. Accordingly, he would allow the insurer’s appeal and set aside the judgment against the insurer.

7. [13]

   It is convenient to address both the questions identified above by reference to the terms of cl 13 of the policy. The first issue was whether the plaintiff had been engaged to perform work on behalf of Usshers, or for Usshers’ benefit. This language should be understood as engaging a factual analysis. It is not necessary to address the first phrase because the second was satisfied; the benefit of the work was the fulfilment of the obligations of Usshers to the Council. Whatever the precise legal relationship between Usshers and Solid Waste, the contract for emptying the bins remained an agreement between Usshers and the Council.

8. [14]

   There was no dispute that the other elements of the chapeau to cl 13 were satisfied. The next question was whether the chapeau to par (a) was also satisfied. That would have been so if Solid Waste were either a “labour hire company” or “any other organisation, … or person whose business is, or includes, the supply of labour”. Again the descriptions are factual, not requiring an analysis of a legal relationship. The phrase “labour hire company” is not one having any precise delimitation. It covers circumstances where a contractor, with obligations to a third party, does not employ workers to fulfil its obligations but obtains the services of the necessary workers from a second company, which remains the employer of the workers. The second company is known as a labour hire company.

9. [15]

   The primary judge explained the circumstances in the following terms: [2]

10. [16]

    The judge also found, “that Usshers paid Solid Waste sufficient to pay the wages of its workers including the plaintiff.” [3] There was no finding (or evidence) that Solid Waste had any other function than to supply labour, being persons to drive the truck and empty the bins. Even if ownership of the truck had been transferred to Solid Waste, the description of at least part of Solid Waste’s business as supplying a driver (and truck) could render it a labour hire company. Alternatively, if “labour hire company” were construed to refer only to an exclusive business of labour hire, then the description would satisfy the second part of the definition, identifying any other organisation, … or person” whose business included the supply of labour.

11. [17]

    With respect to the third element, sub-par (i), the insurer submitted that unless the work performed by the plaintiff was at least in part under the care, control, direction or supervision of Usshers, there can have been no liability on the part of Usshers for any conduct causing the injury to the claimant. The trial judge dealt with this proposition in the following passage: [4]

12. [18]

    This provided an answer to part only of the insurer’s submission. The argument was that, unless the claimant was in some way subject to the care, control, direction or supervision of Usshers, Usshers would not be responsible for the nature and condition of his work and hence would not have been liable to him for any breach of duty.

13. [19]

    Earlier in his reasons, in a passage immediately following that set out at [15] above, describing the relationship between Usshers and Solid Waste, the trial had said: [5]

14. [20]

    If that description were apt and there was some kind of “joint venture”, no doubt Usshers retained a duty of care with respect to the nature and conditions of the claimant’s work. However, if that were the case, the claimant’s work was performed, at least in part, under Usshers’ care, control, direction or supervision. In that case, the exclusion in cl 13(a)(i) was engaged.

15. [21]

    The inconsistency between the respective findings was not explained in the course of the appeal. On one view, the claim against the insurer failed whichever analysis were to be adopted. However, the evidence did not support the view that when the claimant’s employment was transferred to Solid Waste, Usshers no longer retained any obligation to supervise his work. The contract with the Council was not assigned and Usshers remained responsible for carrying out the work. Solid Waste provided the claimant’s labour to Usshers, which continued to supervise his work.

16. [22]

    Accordingly, the exclusion in cl 13 applied; the policy did not respond to any liability Usshers may have had to the plaintiff. The appeal by the insurer should be allowed.

Orders

1. [23]

   The Court should make the following orders:

   1. (1)

      Allow the appeal and set aside the orders made in the Common Law Division on 2 April 2015.

   2. (2)

      Dismiss the proceedings brought by the plaintiff and order that the plaintiff pay the defendant’s costs of the trial.

   3. (3)

      Order that the first respondent (Ralph Healey) pay the appellant’s costs in this court.

   4. (4)

      No order as to the costs of the second defendant (GIO General Ltd).

   5. (5)

      Grant the first respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

   6. (6)

      Allow the appeal and set aside the orders made in the Common Law Division on 2 April 2015.

   7. (7)

      Dismiss the proceedings brought by the plaintiff and order that the plaintiff pay the defendant’s costs of the trial.

   8. (8)

      Order that the first respondent (Ralph Healey) pay the appellant’s costs in this court.

   9. (9)

      No order as to the costs of the second defendant (Penrith City Council).

   10. (10)

       Order that the first respondent repay to the appellant any amount paid to the first respondent pursuant to orders made on 2 April 2015, with interest at the post-judgment rate.

   11. (11)

       Grant the first respondent a certificate under the Suitors’ Fund Act 1951 (NSW).

2. [24]

   SIMPSON JA: Between early 2000 and 29 April 2005 Ralph Healey (“the plaintiff”) was employed to collect and empty garbage bins in the Penrith local council area, west of Sydney. Until 1 December 2004, he was employed by Usshers Pty Ltd (“Usshers”). Usshers was owned and operated by various members of the Ussher family, including Ms Susan McBurney Snr, Mr Robert Ussher, and Ms Susan Benzie (referred to as Ms Susan McBurney Jnr). On 1 December 2004 Usshers effected a restructuring of its business. Thereafter, the plaintiff was employed by a related company, Usshers Solid Waste Pty Ltd (“Solid Waste”).

3. [25]

   From 2000 Usshers held a waste collection contract with the first appellant, Penrith City Council (“the Council”) for the supply of services emptying street litter bins and wheeled garbage bins. The bins were the property of the Council, which was responsible for their maintenance. They were of a common type found in shopping centres and other public places, and usually sat in stands or cradles.

4. [26]

   The contract contained detailed provisions, to which it will be necessary to refer, some concerning the manner in which services were to be performed. Issues of various kinds with respect to the performance by Usshers of their contractual obligations arose from time to time. Supervision of the contract on behalf of the Council was the responsibility of Mr Geoffrey Brown, the Council’s Waste Management Coordinator.

5. [27]

   On 29 November 2004, while still employed by Usshers, the plaintiff sustained a shoulder injury while lifting and emptying a heavy and damaged bin which was jammed into its cradle, causing it to jolt when released. Notwithstanding the injury the plaintiff completed his shift, at the conclusion of which he reported the injury to Usshers. He continued to work, although with increasing pain and discomfort, until 29 April 2005. He has not worked since that date and it is not in issue that he is incapacitated, at least for the kind of work that he had been doing. He has received payments of workers compensation under the Workers Compensation Act 1987 (NSW). Certificates issued by the WorkCover Authority repeatedly certified him as unfit for work, diagnosing, for example:

6. [28]

   In 2007 the plaintiff commenced proceedings in the District Court, naming the Council as defendant. He pleaded that the Council’s involvement in determining the manner in which the contract services were to be provided by Usshers, and later Solid Waste, placed it in the position of “quasi-employer”, as a consequence of which it owed him a duty of care which it had failed to discharge, and as a result of which he suffered injury. He pleaded his claim both on the discrete injury suffered on 29 November 2004, and as an accumulated injury resulting from the nature and conditions of his work. Put briefly, the plaintiff’s claim against the Council was that, to the Council’s knowledge, the bins he was required to lift and empty were often damaged or defective or were too heavy for safe lifting. The repeated lifting of heavy bins, and difficulties in lifting created by damaged bins, caused progressive damage to his back, shoulders, neck, arms and knees, and aggravated pre-existing but asymptomatic degenerative changes to those parts of his body. He also claimed that the discrete injury of 29 November 2004 had the same effect. The claim against the Council, so far as it involved allegations of negligence after 20 March 2002, was governed by the provisions of the Civil Liability Act 2002 (NSW).

7. [29]

   In 2010 the plaintiff commenced separate proceedings in the District Court against various members of the Ussher family. The details of this claim were not clearly revealed in the evidence. What is known is that judgment was ultimately entered for the first defendant.

8. [30]

   From 30 October 2004 Usshers held a policy of public liability insurance with GIO General Ltd (“GIO”). Usshers was deregistered in October 2008. In 2012 the plaintiff commenced proceedings in the Common Law Division of the Supreme Court against GIO, under s 601AG of the Corporations Act 2001 (Cth), claiming on Usshers’ public liability policy and alleging negligence against Usshers, in respect of which the public liability policy responded. Since the discrete injury of 29 November 2004 had been suffered during the period of his employment with Usshers, and any claim against Usshers based upon that injury, if sustainable, would have involved a claim for damages under the Workers Compensation Act, for which he was ineligible, he limited the claim against GIO to the “nature and conditions” of his employment by Solid Waste from 1 December 2004. The basis of the claim as pleaded was that Usshers had continued to carry out waste collection services pursuant to the contract and had maintained direction and control over the manner in which the plaintiff worked, and therefore owed the plaintiff a duty of care “the same as or analogous to” that of an employer, and was, accordingly, liable in negligence. This claim was governed in its entirety by the provisions of the Civil Liability Act.

9. [31]

   The proceedings against the Council, and those against the members of the Ussher family, were transferred from the District Court to the Supreme Court, and consolidated with the proceedings against GIO. They were heard by Adams J (“the primary judge”) over five days in November 2013.

10. [32]

    On 30 June 2014 the primary judge delivered judgment: Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd [2014] NSWSC 723 (“the primary judgment”). He found both the Council and Usshers were liable for the plaintiff’s injuries, and indicated his intention of awarding damages under the following heads (not all of which he quantified):

11. [33]

    For the purposes of s 151Z of the Workers Compensation Act, he assessed the responsibility of the Council for the plaintiff’s injuries as 50 per cent. He attributed to the period during which the plaintiff was employed by Solid Waste 15 per cent responsibility for his injuries.

12. [34]

    He directed the parties to bring in draft orders relating to the calculation of those heads of damages he had not quantified, and in relation to the apportionment required by s 151Z of the Workers Compensation Act, and costs. When this was done, the primary judge made orders giving judgment in favour of the plaintiff against the Council in the amount of $650,631.50 (plus interest to be quantified), and against GIO in the amount of $455,422.05 (inclusive of interest). At the same time he ordered that judgment be entered for the first defendant in the proceedings against members of the Ussher family.

13. [35]

    The orders were made in accordance with reasons for judgment delivered on 30 June 2014, subject to one correction. As set out above, the primary judge initially indicated an intention to include, in the award of damages, an allowance for attendant care services to be rendered to the plaintiff in the future on the basis that they would be provided gratuitously. On 23 December 2014, he delivered a second judgment (Healey v Penrith City Council; Healey v Ussher; Healey v GIO General Ltd (No 2) [2014] NSWSC 1870 in which he said that the reference to gratuitous assistance was mistaken; after hearing further submissions, he applied the “slip rule” to correct the order and reflect his intention, which had been to award damages for future assistance quantified on a commercial basis. He made other corrections which do not need here to be addressed. He issued an “updated judgment” effecting the corrections and calculations. The “updated judgment” has the same medium neutral citation as the original judgment.

14. [36]

    Both the Council and GIO appeal against the orders, both as to liability and the quantification of damages.

The Council

1. [37]

   Usshers’ contract with the Council specified the bins to be emptied and, by cl 15.1, obliged it to report daily to the Council as to, inter alia, bins that had become unserviceable (and to receive any orders or complaints about the service it was providing).

2. [38]

   It also required Usshers to employ a sufficient number of competent employees to carry out promptly and efficiently its duties and obligations under the contract, and to train them to a standard adequate to enable them properly to perform their duties. It required Usshers to comply with relevant occupational health and safety legislation.

3. [39]

   A section of a tender document, completed by Usshers, and incorporated into the contract, is headed “Labour Imput [sic]” and is as follows:

4. [40]

   The plaintiff’s employment conditions required him to work emptying the bins between 10.00pm and 6.00am six nights per week. Notwithstanding the labour input clause in the contract, he worked alone. Despite some issues in the evidence, the primary judge was satisfied that the number of bins he was obliged to empty each night exceeded 500. Specifically, the contract required Usshers to ensure that each bin was serviced in such a manner as to leave it completely empty each night.

5. [41]

   The plaintiff gave evidence that many of the bins were damaged or deformed or misshapen, such that they were difficult to dislodge from their cradles. Although the bins (or some of them) were fitted with internal handles, many of the handles were broken. On occasions (although the litter bins were intended for only light refuse) building materials, concrete and landscaping rubble, and other heavy materials (including dead animals) were deposited in them. At times, large plastic bags filled with restaurant waste and food scraps were left around the base of the bins. These bags could be very heavy, and presented a risk of splitting when lifted. Notwithstanding that, the plaintiff was told (by Usshers) that the Council insisted that all rubbish was to be removed from every bin every night, and that all rubbish around the bins was similarly to be removed.

6. [42]

   There was a significant conflict in the evidence about what instructions the plaintiff was given concerning heavy bins. It was the Council’s position that it told Usshers that it should be notified of bins that were too heavy to lift, in which case it would arrange for Council employees to empty them. One possibility is that, regardless of what the Council told Usshers, Usshers insisted that the plaintiff empty every bin every night, no matter what the contents were.

7. [43]

   At the commencement of each shift, the plaintiff was given, by Usshers, a “Run Sheet”. It told him which truck to drive and gave details of the bins to be emptied. It also made provision for him to record any problems encountered during the shift. The plaintiff returned the completed run sheet to the Usshers office at the conclusion of his shift. His evidence was that he recorded problems with bins on most nights. Usshers’ administrative staff were expected to convey these to the Council. Notifications from Usshers to the Council were frequent and varied, and included numerous complaints of bins full of builders’ rubble, bins too heavy to lift, bins jammed in their cradles, and bins filled with rotting meat or commercial restaurant waste. Until February 2005, few of the notifications were of bins that were damaged.

8. [44]

   There was conflict in the evidence about what the plaintiff was required to do about bins that were too heavy to lift safely, and, in particular, the role of the Council in this respect.

9. [45]

   Mr Brown, the Council’s Waste Management Coordinator, whose duties included the administration of the Usshers contract, confirmed that the Council required each bin to be emptied each night, regardless of its contents, except where the bin was unserviceable by reason, for example, of excessive weight. That the Council required every bin to be emptied every night was stated explicitly (without the qualification as to weight) in a letter written by Mr Brown to Usshers on 8 November 2001. Mr Brown pointed out that Usshers were under an obligation to empty every bin every night “whether full or otherwise”, and referred to default provisions of the contract (by way of obvious threat to Usshers’ continued engagement with the Council). He made no mention of the numerous notifications Usshers had already given of overweight bins.

10. [46]

    The plaintiff gave evidence of a conversation he said he had with Mr Brown sometime in 2001. He said that he returned from his run to find Mr Thomas McBurney Snr on the phone to Mr Brown. Mr McBurney told Mr Brown that he needed to speak to the plaintiff, and handed the telephone to the plaintiff.

11. [47]

    The plaintiff said that he told Mr Brown that about 10 to 15 per cent of the bins were “inoperable” due to disrepair, that they were lacking handles, or were jammed into the wrong cradles, some were too heavy to lift, or impossible to “jar free from the surroundings”. He also told Mr Brown of restaurant waste left in black bags that burst and covered him in “swill”; of concrete poured into bins, and landscaping rubble and bricks deposited in the bins. He said that Mr Brown replied that he inspected the bins regularly and saw no evidence of any disrepair, or of excessive weight.

12. [48]

    The plaintiff said that, during the conversation, Mr Brown asked him why he did not get help from “the other worker”, to which he replied:

13. [49]

    Mr Brown, in oral evidence, did not deny this conversation, but said that he had no recollection of any conversation with the plaintiff. In a statement made on 25 September 2007, Mr Brown confirmed that, on occasions that he learned of bins that had not been emptied, he contacted Usshers by telephone and mail to instruct them of the need to empty all of the bins every night.

14. [50]

    There was a considerable amount of evidence from which it might be inferred that the Council (probably through Mr Brown) maintained some pressure on Usshers to empty all bins every night. For example, on a date not disclosed in the evidence, Ms McBurney sent the plaintiff a handwritten note, in very large print, which read:

15. [51]

    On another occasion the plaintiff received, from within Usshers, a post-it note with the following message:

16. [52]

    In late 2004 the plaintiff received from Ms McBurney a handwritten note. It read:

17. [53]

    On 17 February 2005 a meeting took place between Usshers and the Council. Ms McBurney represented Usshers. Mr Brown and others were present for the Council. The minutes of the meeting record Ms McBurney expressing specific concerns about the condition of bins. They also record that she had not previously made the Council aware of these issues. Following that, she wrote a note to the plaintiff in the following terms:

18. [54]

    On 22 February 2005 Ms McBurney sent to Mr Brown a list of defective bins. As she said in her covering email note, most related to “handles, cradles, chains etc”. Mr Brown passed this note to Mr Ian Pell, who worked with Mr Brown, for “investigation + action as required”, and required a response as to “outcome”.

19. [55]

    There is a strong inference that the directions given to the plaintiff by Usshers, with escalating force, were given in response to pressure applied to Usshers by the Council. None of the directions to the plaintiff contains any rider that he is to exercise any caution, or is exempted from lifting bins of excessive weight. Whether that reflects what the Council told Usshers is, of course, a different question.

20. [56]

    On 29 April 2005, the last day he worked, the plaintiff made a list of defective bins. He divided this into three categories – bins with one handle, bins with no handles, and bins he described as “arm breakers”. “Arm breakers” were bins that would not budge and that caused great pain to an operator attempting to remove them from their cradles. He gave the list to Usshers.

21. [57]

    In his oral evidence he said that the bins that were damaged were never repaired during his employment. After his employment was terminated, the plaintiff made something of a survey of bins in the district, and took photographs of them.

22. [58]

    The plaintiff’s evidence about the condition of the bins was supported by the evidence of Mr Graham Blacklock, who had, for a time, worked the plaintiff’s shift on Saturday nights. He estimated that on any night about 40 of the bins were damaged in different ways. Some had been vandalised, some were missing handles.

23. [59]

    The Council did not contest the evidence that bins sustained damage of various kinds, including by vandalism. While it acknowledged that it was under a duty to repair damaged bins, within a reasonable time, its response was that it had in place a system of inspection and repair that was adequate to discharge that duty. In his initial statement, Mr Brown said that the Council did not regularly inspect the bins, but relied on Usshers to notify it of any bin needing repair. In a later statement he retracted that, saying that he was not aware of any system of inspection maintained by “outdoor staff”.

24. [60]

    Between 2002 and 2004 Mr Charles Micallef was a street sweeper in the Penrith/St Marys area. In 2004 he became a team leader in the St Marys area. In a statement he described the system of bin maintenance in that area at that time. He said that he and his team walked around the area every day, observing the litter bins. When they noticed, or their attention was drawn to, damaged bins, they took whatever steps were necessary to repair them.

25. [61]

    Mr Pell, who was until 2007 the coordinator in charge of outdoor maintenance staff of the Council, said that, if he were notified by Mr Brown of a bin needing repair, he contacted a staff member to effect the repair.

26. [62]

    The plaintiff claimed that the Council was in breach of its duty in three respects:

27. [63]

    The Council denied that it insisted that every bin, regardless of its weight or contents, be emptied every night, asserting that its position was that, if it were notified of overweight bins, or damaged bins, it arranged for its own employees to attend and empty them.

The conclusions of the primary judge

1. [64]

   The relevant conclusions of the primary judge are substantially set out in four paragraphs of the primary judgment. He found the plaintiff to be “an impressive witness” who did not exaggerate. He accepted a submission on behalf of the Council that a principal will not generally be vicariously liable for the negligence of an independent contractor (Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; 226 CLR 161), and added:

The Council’s appeal

1. [65]

   By Grounds 10 and 11 of the Notice of Appeal, the Council challenges the factual findings, in the italicised passage in [80], that the plaintiff’s injuries were “mainly” caused by the damaged bins. The finding is important, because it tends to relegate to relative insignificance any contribution made by the ongoing conditions of the plaintiff’s work, including the need to lift bins that were overweight. It is important, too, because the Council was directly responsible for the maintenance and repair of the bins, and, to the extent that the plaintiff’s injury was caused by a failure of maintenance and repair, the Council could (subject to other considerations) be held liable; to the extent that the cause of the injury was the nature and conditions of the plaintiff’s work (including lifting and emptying bins of excessive weight), it is Usshers that is prima facie primarily responsible. Any liability of the Council in those circumstances must depend upon the nature and circumstances of its engagement with Usshers, and its involvement in the supervision of the performance of the contractual obligations.

2. [66]

   The medical evidence does not support the primary judge’s conclusion as to causation. It is not possible, on that evidence, to differentiate the effect of the broken or damaged bins from the effect of overweight bins. Generally speaking, the medical practitioners who expressed opinions addressed either the issue of the specific injury of 29 November, or the nature and conditions of the plaintiff’s work. There appears to have been no attempt on their part (and none appears to have been asked) to differentiate between the impact of lifting heavy bins and the impact of attempting to extricate damaged bins from their cradles. So far as the evidence shows, no medical practitioner was asked to consider the implications of the plaintiff’s lifting bins that had been damaged, as distinct from the general heavy lifting duties the plaintiff was required to perform.

3. [67]

   Dr Peter Giblin, an orthopaedic surgeon who examined the plaintiff at the request of his solicitors on 24 August 2006, reported that:

4. [68]

   Dr Mark Horsley, also an orthopaedic surgeon, reported to the plaintiff’s general practitioner on 27 February 2006, at, apparently, the request of the plaintiff himself. In recounting the history, Dr Horsley expressly referred to the plaintiff’s account of bins that were “occasionally rusted” or on which the locks were difficult to open, and which, the plaintiff said, accounted for pain in both thumbs as well as the shoulder and elbow injuries. Dr Horsley did not express any opinion of his own as to the cause of the injury, and does not appear to have taken any history of the plaintiff lifting bins loaded with concrete and other builders’ rubble.

5. [69]

   Dr Warren Kuo was the plaintiff’s treating orthopaedic surgeon, and provided many progressive reports. On 30 November 2012 he reported to the plaintiff’s solicitors that he believed that the plaintiff’s left shoulder, right shoulder and elbow conditions were causally related to his employment as a garbage collector, and that there was a connection between his neck problems and his employment. He also did not distinguish between lifting heavy bins, and lifting damaged bins.

6. [70]

   Dr Clive Sun, a consultant in rehabilitation and pain medicine, reported to the plaintiff’s solicitors on 10 August 2006, stating his belief that the nature and conditions of the plaintiff’s employment was the substantial contributing factor to his impairment and disability, but also did not distinguish between broken bins and heavy bins.

7. [71]

   Dr Raymond Wallace, an orthopaedic surgeon who assessed the plaintiff for WorkCover purposes, considered the plaintiff’s employment at Usshers to be a substantial contributing factor to his neck and shoulder conditions. He did not distinguish between the effect of lifting damaged bins and lifting heavy bins.

8. [72]

   A number of medical practitioners referred to the specific incident of 29 November, but none did so in the context of separating the effects of that injury from the general effects of the plaintiff’s work.

9. [73]

   The evidence does establish that the discrete injury of 29 November was caused when the plaintiff attempted to remove a bin that was damaged and had become jammed in its cradle. That, however, raises different questions concerning the extent to which that injury is responsible for the plaintiff’s ongoing problems. It may be not without significance that, even on that night, the plaintiff completed his shift and continued working in the ensuing months.

10. [74]

    The conclusion that it was the damaged bins that were the “main” contributing factor to the plaintiff’s ongoing condition cannot be sustained. What was established with relative clarity was that it was the general nature and conditions of the plaintiff’s work (including, but not limited to, the problems occasioned by damaged bins) that were the cause of his ongoing symptoms.

11. [75]

    Once it is accepted that the main cause of the plaintiff’s injury could not be said to be the damaged bins, the finding that the Council failed to repair damaged bins within a reasonable time becomes of diminished relevance.

12. [76]

    That, in turn, raises the question as to the nature and scope of the Council’s duty to the plaintiff, not limited to the duty to repair damaged bins. This is far from the first case in which this Court has had to give consideration to the scope of the duty of care owed by a principal who contracts with an employer to an employee of the contractor: see, for example: Sydney Water Corporation v Abramovic [2007] NSWCA 248; Aust Torts Reports 81-913; Wooby v Australian Postal Corporation [2013] NSWCA 183; 233 IR 471; Central Darling Shire Council v Greeney [2015] NSWCA 51. The issue has also been the subject of discussion in the High Court: see Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16; Sweeney v Boylan Nominees Pty Ltd [2006] HCA 19; 226 CLR 161.

13. [77]

    In Stevens, Mason J said:

14. [78]

    In support of the plaintiff’s case that the Council retained a significant measure of control over the manner in which Usshers performed its obligations under the contract reliance was placed on those clauses of the contract that specified the bins to be emptied, and on the Council’s requirement that Usshers report daily with respect to bins that had become unserviceable, and to receive and accept orders and complaints regarding its service. Of particular note is the final sentence in cl 15.1:

15. [79]

    Essentially, the primary judge accepted that the Council had retained sufficient control in respect of the performance of the contract, to make it liable: see the opening sentence of [78], extracted above.

16. [80]

    There was ample evidence that the Council, through Mr Brown, had actual knowledge:

    1. (1)

       that there were problems with damaged bins; and

    2. (2)

       that, contrary to the indication in the tender for the contract, Usshers was not employing two men for the task of emptying the bins; and

    3. (3)

       that bins were at times overloaded with heavy building materials and the like.

17. [81]

    There was also ample evidence that Usshers insisted that every bin be emptied every night, regardless of its contents. That evidence has been set out above, and need not be repeated. The primary judge interpreted this as meaning that the Council required that the bins be emptied unless “it was physically impossible to do so”.

18. [82]

    That inference is contrary to the evidence given by Mr Brown, which was to the effect that Usshers were told that, if the bins were too heavy, they should be left, and the Council should be notified; the Council would then arrange for its own employees to deal with those bins.

19. [83]

    Because of his conclusion that it was primarily the damaged bins that caused or contributed to the plaintiff’s injury, the primary judge did not make any findings as to the extent (if any) to which the Council was responsible for the conditions of the plaintiff’s work, other than the problems caused by the damaged bins.

20. [84]

    Whether the evidence lent itself to a conclusion that the Council’s requirements were so stringent is open to question. No witness – including the plaintiff – said that the Council’s availability to empty heavy bins was limited to those that it was physically impossible to lift. But there was room for interpretation as to what was “too heavy to lift”; certainly there was evidence that Mr Brown at times took a different view to the plaintiff as to what was “too heavy to lift”.

21. [85]

    On the authority of Stevens, the duty of the Council apart from that conceded (to repair damaged bins) was to ensure that the rubbish collection was in the hands of apparently competent contractors; this it did. (Nothing was advanced to suggest that the Council had reason to doubt the competence of Usshers, or the suitability of its employment practices.)

22. [86]

    However, the plaintiff’s case was that, by applying pressure to Usshers, the Council, in effect, caused Usshers to impose an unreasonable burden on the plaintiff, and subjected him to unsafe work practices.

23. [87]

    The evidence that the Council did this was scanty. Certainly, there is evidence that it maintained a degree of control, by way of supervision of the performance of the contract. But the supervision was of the performance of the contract by Usshers, and not by the plaintiff. The Council had almost no connection with the plaintiff, the one exception (on the evidence) being the conversation with Mr Brown in 2001.

24. [88]

    In submissions on behalf of the plaintiff, heavy reliance was placed upon what was construed as the failure of the Council to ensure that, in accordance with the contract, Usshers employed two men for the task of emptying the bins. However, the “two man” condition emerged from the tender documentation provided by Usshers to the Council, and was, no doubt, intended to provide justification for the tender price. It was no part of the Council’s role to supervise the day to day conditions of the plaintiff’s employment, including whether he worked alone or with assistance, and the Council did not purport to do so.

25. [89]

    There was a good deal of evidence to support a cause of action in negligence against Usshers and/or Solid Waste. Unfortunately for the plaintiff, that cause of action was foreclosed by the operation of the Workers Compensation Act, with its limitation on award of damages to cases in which the injury is assessed to be 15 per cent permanent impairment or greater.

26. [90]

    To the extent that the plaintiff would seek to rely on the frank injury of 29 November, he faces an even greater hurdle than he did in establishing that his injury was caused by a systematic failure of the Council to repair damaged bins. First, just as the medical evidence did not separate the effects of his lifting damaged bins from the effect of his work conditions in general, he was unable to establish that it was this particular incident that caused his ongoing condition. Second, the evidence does not establish that the Council knew, or ought to have known, of the damage to this bin. Not the least of his difficulties was that his own accounts of the location of the bin varied. In his incident report on the morning of the injury, he put the bin at Hewitt Street, Colyton; in his workers compensation claim form he stated the location as Smith Street; in his evidence, he said that the bin was in Station Street (in Penrith). He gave no evidence that he had previously encountered any difficulty with that bin, or was previously aware of its damage, and he gave no evidence of having reported any such damage to Usshers, to be passed on to the Council. It follows that it cannot be shown that the bin had been damaged for a period long enough to bring into play the Council’s acknowledged duty to repair damaged bins within a reasonable time.

27. [91]

    The Council’s appeal must succeed. The plaintiff has been unable to establish a relevant breach of duty on the part of the Council.

GIO

1. [92]

   The Usshers restructuring took effect from 1 December 2004. From that date, the plaintiff was nominally employed by Solid Waste. He was employed by Solid Waste for the purposes of the Usshers waste disposal contract with the Council, which was never assigned to Solid Waste. Solid Waste had no independent source of income. It depended upon a financial arrangement with Usshers to pay staff wages, including those of the plaintiff. Because Usshers retained its position as the contracting party, with contractual obligations to the Council, it also retained the responsibility of ensuring the provision of the services the subject of the contract.

2. [93]

   Accordingly, the plaintiff maintained that, notwithstanding the nominal change of employer, Usshers continued to owe him a duty at least analogous to that of an employer.

3. [94]

   The plaintiff’s case against GIO was brought under s 601AG of the Corporations Act. Section 601AG provides:

4. [95]

   Usshers’ policy of public liability insurance, issued by GIO on 30 October 2004 indemnified it, subject to specified exclusions, in respect of any liability to pay compensation for, inter alia, personal injury occurring during the period of insurance and caused by an occurrence connected with Usshers’ business. Usshers was deregistered in October 2008.

5. [96]

   Accordingly, if the plaintiff proved:

   1. (1)

      that Usshers had a liability to pay compensation to him for personal injury; and

   2. (2)

      that that liability fell within the cover afforded by the policy,

6. [97]

   Both questions were in issue. With respect to the second, GIO relied upon certain exclusions in the policy to which it will be necessary to come.

7. [98]

   The plaintiff’s case against GIO was based on the asserted negligence of Usshers. Relevantly, the case was pleaded in a Further Amended Statement of Claim as follows:

8. [99]

   Four elements were involved in the first question. In order to prove that Usshers had a relevant liability it was necessary that the plaintiff prove:

9. [100]

   The primary judge made no express findings as to any of the four elements set out. The focus on the judgment so far as it concerned GIO was on the terms of the policy, particularly the exclusions. The relevant findings are as follows:

10. [101]

    Further relevant observations and findings were made in a different part of the judgment, in which the primary judge was dealing with the exclusions contained in the policy. They are, however, relevant to the first question. These findings were:

11. [102]

    The failure of the primary judge to make express findings with respect to the elements of liability in negligence gave rise to a number of GIO’s pleaded grounds of appeal (see Grounds 1(a), (c), (d), 3, 5(a), (e), 6, 7 and 9). Essentially, GIO contended that, in the absence of findings:

12. [103]

    The logic of that proposition is difficult to avoid. However, it does not dictate that GIO’s appeal must succeed. To the extent that relevant findings were not made by the primary judge, ss 75A(6) and (10) of the Supreme Court Act permits this Court to fill the gaps.

13. [104]

    It seems to me to be plain, from the passage quoted from [75] of the judgment, that the primary judge took the view that Usshers continued, even after the restructuring, to play at least an equal role in management decisions with respect to the administration of the waste collection contract and the plaintiff’s employment. Significant in this analysis is that Usshers did not assign the contract to Solid Waste. Usshers continued to bear responsibility for the discharge of the obligations under the contract. It is also clear from the evidence that Usshers continued to deal with the Council with respect to contract matters.

14. [105]

    No clear picture emerged in the evidence as to the relative roles of Usshers and Solid Waste in the administration of the contract generally, or in the control of the manner in which the plaintiff performed his duties. That was probably because the members of the Ussher family themselves had no clear picture in their own minds as to the differentiation.

15. [106]

    Ms McBurney was the general manager of Usshers, although how that came about was unclear. Ms McBurney said that she had started working at Usshers in about May 2000; at a time she could not pinpoint, her role “morphed” into that of general manager. When Solid Waste was incorporated for the purposes of the restructure, she became general manager of that company also. She said that Solid Waste received no income from the Council; it paid its employees from funds it received from Usshers via “book entry”. It was, in reality, Usshers that was responsible for payment of the plaintiff’s wages.

16. [107]

    Correspondence between the Council and Usshers post-dating the restructuring confirms that Usshers (as distinct from Solid Waste) continued to have a dominant management role in the waste collection contract. While these documents are consistent with the contractual arrangements between Usshers and the Council, they also indicate that the lines (if they existed at all) between Usshers and Solid Waste were blurred. There was no distinction between what Ms McBurney did as general manager of Usshers, and what she did as general manager of Solid Waste.

17. [108]

    All this is not to say that Usshers remained the plaintiff’s employer. It did not, as the primary judge accepted. It did retain the control, and supervisory role, of an employer. That was done by Ms McBurney, in her dual role of general manager of both companies.

18. [109]

    It was therefore open to the primary judge to find (as he did by implication in [75]) that Usshers continued to owe the plaintiff a duty of care after 1 December 2004.

19. [110]

    However, that has to be contrasted with his later express finding (for the purposes of the exclusion clauses in the policy) that the plaintiff was not under the “care, control, direction or supervision of Usshers”. That finding is difficult to reconcile with the conclusions, clearly expressed in [75], extracted above. In my view, the earlier finding is correct, and the later one cannot stand. GIO, in written submissions, in a proposition with which I agree, submitted:

20. [111]

    There was no change in the conditions of the plaintiff’s work after the change of employment. He continued to lift and empty heavy, broken and damaged bins. Ms McBurney continued to apply pressure to him to empty every bin every night, regardless of contents. She continued to require him to perform alone work that Usshers had indicated to the Council required two men. There was ample evidence of breach of the duty of care that Usshers owed to the plaintiff. There was ample evidence that the breach caused injury to the plaintiff.

21. [112]

    No submission to the contrary of these conclusions was advanced on behalf of GIO. The grounds of appeal with respect to breach of duty and causation were, with one exception, limited to contending that the finding of liability of Usshers was not open in the absence of relevant findings as to the elements of negligence, or the articulation of the basis of such findings.

22. [113]

    Grounds 8 and 10(a) pleaded, respectively, that the primary judge should have found that the plaintiff’s injury was not caused by any relevant breach by Usshers during the period of insurance, and that any injuries which occurred during that period constituted a minor aggravation of degenerative changes of pre-existing conditions caused by earlier incidents.

23. [114]

    No submissions were directed to these grounds. I would reject them.

24. [115]

    Accordingly, I am satisfied that Usshers had a liability to pay compensation to the plaintiff.

The policy

1. [116]

   Relevantly, the policy provided as follows:

2. [117]

   GIO relied on cl 13 as excluding any liability of Usshers to the plaintiff on the basis that he had been engaged to perform work on Usshers’ behalf or for Usshers’ benefit. It further argued that the exclusion was not limited by the more specific provisions of cl 13(a) or (c). That is, GIO’s position was that the policy did not indemnify Usshers for any liability to the plaintiff because he had been engaged to perform work on Usshers’ behalf or for Usshers’ benefit, and that the plaintiff came within sub-cl 13(a)(i) and (ii) and sub-cl 13(c).

3. [118]

   In [85] of the judgment, extracted above, the primary judge rejected as an “oversimplification” a submission that the plaintiff came within the opening words of cl 13 as a person who was not Usshers’ employee, but who had been engaged to perform work on behalf of or for the benefit of Usshers, saying that the plaintiff was employed by Solid Waste to enable it to fulfil the obligations it had assumed to enable Usshers to discharge its contractual obligations to the Council. This is difficult to reconcile with the conclusions stated in [75] (set out at [100] above).

4. [119]

   It was with respect to cl 13(a)(i) that his Honour found that the plaintiff’s work was not performed under “the care, control, direction or supervision” of Usshers. He held that Ms McBurney “in controlling, and directing [the plaintiff’s] work”, was acting as general manager of Solid Waste, although she remained responsible to Usshers to ensure the performance of the contract. As indicated above, this conclusion cannot stand with the findings in [75].

5. [120]

   GIO asserted error in two respects. The first is the finding that the plaintiff’s employment did not come within the opening words of cl 13. It argued that the word “engaged” is a word “of wide import”, wider than “employed”, and that the final sentence of [85] (“The plaintiff was not working for Usshers in any sense,”) was not only wrong, but irrelevant.

6. [121]

   I accept these submissions. In my opinion the plaintiff was clearly “engaged [by Solid Waste] … to perform work … for [Usshers’] benefit”. The evidence does not explicitly establish that the contract price or value of the total works relating to the plaintiff’s engagement exceeded $20,000, but this may be assumed.

7. [122]

   However, it was necessary for GIO also to bring itself within one of the three specific categories of exclusions specified in sub-cll 13(a), (b) and (c). GIO principally relied on cl 13(a)(i). In order to do so it was necessary that it satisfy the opening words of cl 13(a), and show that the plaintiff was a person who was:

8. [123]

   Senior counsel for GIO accepted that the plaintiff was not employed by an employment placement agency or labour hire company, or government body, but contended that he was employed by “any other organisation whose business” included the supply of labour.

9. [124]

   The submission is untenable. The exclusion clause is directed to a class of employees who are employed by what might generically be labelled “labour hire” firms. The words “or other” make it quite clear that this is so. Even if it were not, in no way could be said that Solid Waste’s business was, or included, the supply of labour. Solid Waste’s business (whether alone or in conjunction with Usshers) was to empty garbage bins, and, on Usshers’ behalf, perform the obligations of the contract with the Council. For that purpose, it required labour, which it employed. It did not supply labour to others. That being the case, it was (and is) not necessary to consider whether either of the two further conditions for exclusion performed in whole or in part under the care, control, direction or supervision of Usshers, or arising directly or indirectly out of any relevant defect or deficiency was met.

10. [125]

    The exclusion contained in cl 13(a) of the policy did not apply.

11. [126]

    Somewhat half-heartedly, senior counsel for GIO also argued that cl 13(c) applied, in that the plaintiff was engaged to perform work “in connection with any building, structure, machinery or plant at the situation” (“situation” being defined in the Schedule to the policy, which identifies an address at Berkshire Park, not a place at which the plaintiff emptied bins). It was argued that the bins were “structures” and therefore the plaintiff was engaged at the formwork within the sub-clause.

12. [127]

    Senior counsel’s lack of enthusiasm for the argument is understandable and justified. The argument, like the earlier argument, is untenable. A glance at cl 13(c) reveals plainly that what is contemplated is building work. Garbage removal is not remotely connected with building work.

13. [128]

    The ultimate conclusion of the primary judge that the exclusions did not protect GIO was correct. The finding of liability against GIO was also correct.

Damages

1. [129]

   Since preparing the above reasons, I have read in draft the judgments of Basten JA and Emmett AJA. As both of their Honours are in favour of allowing the appeals of both the Council and GIO, the question of damages does not arise. I can therefore state briefly my conclusions in relation to the issues raised in respect of damages.

2. [130]

   The award made in respect of non-economic loss was in the sum of $150,000. This was not in accordance with the provisions of s 16 of the Civil Liability Act, which requires assessment of the severity of the non-economic loss as a proportion of “a most extreme case” as to which a statutory cap is prescribed. In written submissions (adopted by GIO and accepted by the plaintiff) the Council calculated that an award of $150,000 equated to between 31 and 32 per cent of a most extreme case, on the statutory cap as it existed at the relevant time. Such an outcome, it was contended, could “not be achieved through the proper application of s 16”.

3. [131]

   Senior counsel for the plaintiff sought to defend the award by arguing:

4. [132]

   The submission cannot be accepted. Section 16 does more than prescribe a maximum amount of damages payable in respect of economic loss, and require assessment of the relationship a particular case bears to a most extreme case. Where the severity of the non-economic loss is assessed at less than 15 per cent, no damages may be awarded under that head. Where the severity of the non-economic loss is assessed at 15 per cent or greater, a Table to s 16 contains a sliding scale, prescribing the proportion of the maximum that may be awarded. Thus, where the severity of the non-economic loss is assessed at 15 per cent, 1 per cent of the statutory maximum may be awarded. The Table progresses to 34 per cent, where the proportion of the statutory maximum is 34 per cent. Thereafter, where the assessment is greater than 34 per cent, the proportion of the statutory maximum awardable equals the assessment.

5. [133]

   The legislation clearly requires a three step process, beginning with the determination of the claimant’s non-economic loss as a proportion of a most extreme case (expressed as percentage), proceeding to ascertain the maximum amount allowable in respect of a most extreme case. Once those steps have been taken, application of the Table determines the monetary sum to be awarded.

6. [134]

   Paragraph 73 of the plaintiff’s submissions (at least on one reading) appears to suggest that it would have been permissible for the primary judge to have begun with the monetary sum that he wished to award and work backwards to determine the percentage that the sum bore to the maximum. So to approach the question would be to subvert the statutory process. It is correct to say that the primary judge was entitled to select a percentage of the maximum that (as it happened) equated with $150,000, and translate that by the s 16 process. But that is not what the primary judge did. In contravention of the three step process, he began with the monetary sum. In fact, he disregarded s 16 entirely.

7. [135]

   There is clear error in the calculation of damages in this respect. Senior counsel for the Council (and senior counsel for GIO) urged (without opposition from the plaintiff) that, if error were found, this Court was in a position to make the relevant assessment. Such a course is open to this Court by ss 75A(6) and (10) of the Supreme Court Act 1970 (NSW).

8. [136]

   No criticism was made of the primary judge’s analysis of the plaintiff’s injuries, which was comprehensive. It is appropriate to adopt it as the basis for the assessment.

9. [137]

   He accepted that, prior to his employment by Usshers (which commenced when he was 50 years of age) the plaintiff was “a very fit and strong man”. Within months of commencing employment he began to experience pain in his shoulders, which grew steadily worse over 2002-2004. In 2004 he developed pain in his knees, elbows and shoulders on every shift; the shoulder pain spread to his neck and he began to notice pain in his back. The pain increased until the end of April 2005, when the plaintiff ceased work. On 10 May 2005 he was certified (for WorkCover purposes) as fit for “suitable duties, involving a desk job” with “no pulling or pushing”, but the duties to which the plaintiff was assigned proved unsuitable (not necessarily because of any physical inability on his part to perform them). On 29 June 2005 he underwent surgery on his right shoulder, at the Nepean Hospital, and, three months later, similar surgery on his left shoulder. On 30 May 2005 Dr Kuo, his treating orthopaedic surgeon, reported:

10. [138]

    The plaintiff was examined by a number of medical practitioners who provided reports. There was a difference of opinion between the principal experts (orthopaedic specialists) as to two issues – the cause of his shoulder injury, and the extent of his symptoms. Dr Anthony Smith, who examined the plaintiff on behalf of the Council, considered it unlikely that the incident of 29 November was the cause of the shoulder condition; Dr Giblin, to whom the plaintiff was referred by his own solicitors for medico-legal opinion, considered it “possible” that both shoulders were then injured, while acknowledging pre-existing degenerative changes in the cervical spine and shoulders.

11. [139]

    The primary judge preferred the opinion of Dr Giblin, in part at least because he considered that Dr Smith took an unfavourable view of the plaintiff’s credibility, a view which did not accord with the assessment made by the primary judge. He accepted that the plaintiff was:

12. [140]

    Ultimately, the primary judge considered that the plaintiff had retained reasonably normal upper and lower limb function and a significant degree of shoulder function, and that it was likely that he had suffered from degenerative changes “to a greater or lesser extent” over the entire period of his employment, and that the likely prognosis was a slow progressive deterioration manifested by exacerbation and remissions of the symptoms and an increased susceptibility to repeat material damage.

13. [141]

    Dr Giblin’s most recent report (23 November 2013) contained the following:

14. [142]

    There was also evidence that the plaintiff had developed a psychiatric condition, but, again, both the cause and the extent of this were disputed. In a report dated 16 October 2007 Dr Thomas Oldtree Clark (a psychiatrist) diagnosed “severe or major depression” with a poor prognosis. On 13 September 2009 he diagnosed “regional pain syndrome with features of a severe depression”, with a “guarded” prognosis. He adhered to that diagnosis on 30 November 2011, but with a “good” prognosis, attributable to the plaintiff’s having formed a new relationship.

15. [143]

    In a report dated 3 June 2011 prepared at the request of the Council, Dr John Champion (also a psychiatrist) appears to have diagnosed “adjustment disorder with depressed mood or pathological grief reaction” which he attributed (apparently wholly) to a series of:

16. [144]

    On 5 June 2011 Dr Champion reported that the plaintiff was suffering with a mild to moderate adjustment disorder with depressed and anxious mood, but that the factors that contributed to this condition were not associated with his previous employment.

17. [145]

    The primary judge preferred the views of Dr Clark.

18. [146]

    For the purposes of assessment under s 16 of the Civil Liability Act I consider the following to be material. The plaintiff was 52 years of age when he first began to experience symptoms. Those symptoms progressively worsened over the following four years of employment but have not diminished on the cessation of his employment. He has twice undergone surgery, and has been unable to work since 2005 (when he was aged 56, and could have expected several years of productive work). He can expect pain in virtually all parts of his body for the remainder of his life. He has a psychiatric condition that is, at least in part, attributable to his experiences.

19. [147]

    On my estimation, his case, taken as a whole, represents 30 per cent of a most extreme case. The current maximum prescribed by s 16 is $594,000. The Table to s 16 provides that a case assessed at 30 per cent of a most extreme case is to be awarded 23 per cent of the maximum (rounded to the nearest $500), resulting in an award of damages for non-economic loss of $136,500.

20. [148]

    The primary judge allowed a sum of $35,000 to represent the need for future medication, occasional physiotherapy and the risk of shoulder replacement.

21. [149]

    Earlier, in recounting the plaintiff’s physical symptoms, he said:

22. [150]

    This passage was largely drawn from a joint report of Drs Giblin and Smith dated 22 October 2012. Two rehabilitation specialists (Drs Dalton and Sun) concurred that future operative treatment would not be required although Dr Dalton considered that the plaintiff may require physiotherapy for symptomatic aggravation of his left shoulder, the likely cost of which would be in the order of $80 per consultation.

23. [151]

    GIO, in a brief written submission, contended that the need for future surgery is “speculative at best” and that a figure of $20,000 representing future out of pocket expenses was appropriate.

24. [152]

    No response was made to this submission on behalf of the plaintiff.

25. [153]

    I accept that undue weight was given to the somewhat tentative views expressed concerning the likelihood of future shoulder surgery. Although it is impossible to place an exact figure on it, I would allow, in respect of all aspects of future treatment expenses, a sum of $27,500.

26. [154]

    The primary judge allowed a sum of $518,324 in respect of past loss of earning capacity, but, in light of the plaintiff’s age, declined to make any allowance for future loss of earning capacity. The principal complaint that appears to be made in respect of this head of damages is that, notwithstanding the acknowledgment of the primary judge that, absent the work injury, the plaintiff may have been rendered unable to work due to his degenerative condition, he failed to make any such allowance.

27. [155]

    The plaintiff was 56 years of age when he ceased work. He could have expected to work, uninjured, until at least the age of 67. Immediately following the comment that some allowance should be made for the possibility that he might not have been able to continue working by reason of his degenerative condition, the primary judge said:

28. [156]

    Although, if strictly construed, the word “however” in parentheses is a little problematic, it seems to me that, in notionally terminating the plaintiff’s working life at 65, his Honour was making the allowance which he had immediately before said ought to be made. To conclude that the plaintiff would have retired at 65, and then further reduce the quantification, would, in my opinion, do an injustice to the plaintiff. I am not satisfied that any adjustment ought to be made to the damages allowed in respect of past economic loss.

29. [157]

    The evidence with respect to future attendant care was as follows. In an initial evidentiary statement, made on 9 September 2011, the plaintiff said that, prior to the breakdown of his marriage, he had had to rely on his then wife, his son-in-law and friends to help him with housework. Prior to his injury, because he worked nightshift, he had undertaken much of the housework, and prepared the evening meals. He lived on a one acre block with a large garden, which he looked after. Post injury, he was unable to do this; after the breakdown of his marriage, he relied on friends to do both housework and gardening. One friend spent about six to eight hours per week gardening; two other friends each gave him about six hours per week help with housework.

30. [158]

    In a subsequent statement (21 January 2013) the plaintiff said that he had remarried in December 2011. His wife did most of the housework. His wife confirmed that, since their marriage, she had performed most of the domestic tasks. She estimated that she spent about three and a half hours per day doing domestic tasks that, but for his injuries, the plaintiff would have been capable of doing. She described the plaintiff as a person who did not like to ask for help.

31. [159]

    Both the plaintiff and his wife gave oral evidence. The plaintiff’s evidence was that his wife suffered from both psychiatric and physical conditions that impeded her movement. Uninjured, he would have expected to take on the major part of the housekeeping. This he was unable to do.

32. [160]

    The rehabilitation specialists, Dr Dalton and Dr Sun, met in conclave on 8 October 2012 and prepared a joint report dealing with a number of issues. With respect to domestic assistance they reported:

33. [161]

    In that report, Dr Dalton said:

34. [162]

    GIO’s submissions referred to:

35. [163]

    To characterise the findings as “very brief” is unfair. The primary judge reviewed in some detail the evidence concerning the plaintiff’s need for domestic assistance. He referred to the evidence from the plaintiff’s wife on that subject, and to the evidence of the rehabilitation experts (Dr Sun and Dr Dalton) to the effect that the plaintiff requires “at most four hours assistance a fortnight with domestic duties, heavy housework, home maintenance and gardening” and said:

36. [164]

    The first criticism that was made of this approach was that it was not open to the primary judge to take judicial notice of the amount of domestic assistance that the plaintiff would require.

37. [165]

    I reject this proposition. The question is not one of taking judicial notice; it is of evaluating the evidence in the particular circumstances of the plaintiff. This is precisely what the primary judge did. It is not clear what information Drs Sun and Dalton had in respect of the plaintiff’s specific needs. Further, as the primary judge said, the need for domestic assistance is not a matter of medical expertise.

38. [166]

    A second complaint was that the primary judge should have determined the claim in accordance with s 15 of the Civil Liability Act, which, relevantly, provides:

39. [167]

    Although the primary judge made no reference to the Civil Liability Act in this context, the final sentence of [109], extracted above, indicates that he was well aware of the provisions of s 15. The evidence plainly indicated a reasonable need for the services to be provided. The evidence also indicated that, but for the injury, the plaintiff would have been able to manage his own living arrangements; accordingly, sub-s (2)(c) is satisfied (although no express finding was made). It was open to the primary judge to infer (although it may have been better if he had said so expressly) that the need arose solely because of the injury sustained by the plaintiff. I would not interfere with the award of damages in respect of past domestic services.

40. [168]

    The award in respect of future domestic services is more complicated, by reason of the alteration made by the primary judge to the judgment as originally delivered. In the original judgment, he clearly stated an intention to award damages to be quantified on a gratuitous, not a commercial, basis. In the subsequent judgment, he corrected that, relying on the slip rule, and stating that his error had been brought about by reliance upon a schedule of damages provided to him on behalf of the plaintiff, and which contained the same error, although the error was corrected orally by senior counsel for the plaintiff.

41. [169]

    The submission made on behalf of the Council, adopted by GIO, was simply:

42. [170]

    Given the explanation provided in the subsequent judgment, and given the absence of any reasoned criticism of the application of the slip rule, I accept that it was open to the primary judge to make the correction that he did.

43. [171]

    GIO stated as its “primary position” that no allowance should be made:

44. [172]

    For reasons already given, I reject this proposition. I accordingly would not interfere with the allowance made in respect of domestic assistance, either past or future.

45. [173]

    The dispute as to the allowance made in respect of the Fox v Wood component was very minor. The plaintiff claimed an amount of $7,500, representing his tax liability on workers compensation payments for the relevant period. Documentary evidence showed that, in fact, the amount paid was $6,187.80. The difference is $1,312.20.

46. [174]

    The primary judge allowed the larger sum on the basis that, even though such payments had not been deducted, the plaintiff remained liable for the payment.

47. [175]

    The reasoning of the primary judge is correct. The outstanding taxation remains a liability of the plaintiff. I would not interfere with this award.

48. [176]

    Had my views with respect to the liability of GIO prevailed, additional questions as to the assessment of damages may have arisen. Although the question of indivisibility of damage was touched on at times during the argument, the parties did not address the question of the quantification of damages in the event that the Council’s appeal succeeded but that of GIO failed (as I have proposed). It may have been necessary to allow the remaining parties an opportunity to consider and make submissions in that respect.

49. [177]

    A question concerning the application of s 151Z of the Workers Compensation Act may also have arisen. In the circumstances, it is neither necessary nor appropriate to address those issues.

50. [178]

    The orders I would make are:

51. [179]

    EMMETT AJA: These two appeals arise out of injuries suffered by Mr Ralph Healey in the performance of his duties as an employee of Usshers Pty Ltd (Usshers) up to 30 November 2004 and as an employee of Usshers Solid Waste Pty Ltd (Solid Waste) from 1 December 2004. The injuries arose out of work done by Mr Healey in emptying street litter bins in the local government area of Penrith City Council (the Council) under a contract between the Council and Usshers.

52. [180]

    Mr Healey sued the Council in the Common Law Division of the Supreme Court on the basis that it owed him a duty to take care in relation to the performance by him of his duties as an employee of Usshers and Solid Waste (the Council Proceedings). Mr Healey also sued GIO General Ltd (GIO) in the Common Law Division of the Supreme Court on the basis that, after 30 November 2004, Usshers owed him a duty to take care in connection with the performance by him of his duties as an employee of Solid Waste (the GIO Proceedings). Under s 601AG of the Corporations Act 2001 (Cth) (the Corporations Act), Mr Healey was entitled to sue GIO in respect of any liability that Usshers had to him, being a liability that was the subject of indemnity under a contract of insurance between GIO and Usshers.

Background

1. [181]

   At some time in 1996, the Council entered into a contract with the partnership of Messrs Robert Ussher Jnr, Thomas McBurney and Robert Ussher Snr, trading as “RW Ussher & Sons” (the Contract). On 19 March 1999, the Council sent a letter to “RW Ussher & Sons” regarding the transfer of the partnership business to Usshers. A draft deed of consent to assignment was attached to the letter. While there was no evidence that the deed was ever signed, it was common ground that, from some time in 1999 and at all times thereafter, the Contract was performed by Usshers and the parties thereafter treated the Contract as one between the Council and Usshers.

2. [182]

   However, with effect from 1 December 2004, Usshers ceased to perform its obligations under the Contract directly. Rather, under a somewhat informal arrangement, Usshers retained Solid Waste to perform and discharge its obligations under the Contract on its behalf. In that context, Mr Healey ceased to be employed by Usshers at the end of 30 November 2004 and was employed by Solid Waste from 1 December 2004.

3. [183]

   The Contract was comprised of several documents as follows:

4. [184]

   Clause 3.1 of the Contract provided that the Contractor must regularly and diligently provide the Services in the manner specified in the Specification. Under cl 3.5, the Council was entitled to direct the Contractor to provide the Services in a manner different from that specified in the Specification and the Contractor could request the Council’s consent to provide the Services in a manner different from that specified in the Specification. Under cl 4.1, the Council required the Contractor to ensure that at all times there were available adequate numbers of appropriate vehicles, plant and equipment of a type approved by the Council to provide the Services. Clause 6.1 provides that the Contractor must, at its own expense, employ a sufficient number of competent employees to carry out promptly and efficiently the duties and obligations of the Contractor under the Contract.

5. [185]

   The term Services was defined as the Collection Services, the services specified in the Specification and all obligations that the Contractor is or may be required to perform to fulfil or carry out under the Contract. The term Collection Service was defined as the emptying of the contents of one litter bin or other receptacle. Litter Bin was defined as a container for the reception of garbage with a capacity of approximately 80 litres or less and a wheeled container for the reception of garbage with a capacity of approximately 240 litres. Garbage was defined as including all refuse, waste, rubbish, ashes, garden refuse, household, industrial and commercial waste and soil, sand, rocks, bricks, building material and machinery parts.

6. [186]

   Clause 2.1 of the Specification provided that the Contractor must service each street litter bin and each MGB specified in a schedule to the Specification by emptying the contents of each bin and by disposing of the refuse at an approved waste disposal depot at the Contractor’s expense. The clause provided that each street litter bin and MGB must be serviced nightly, seven nights per week for the duration of the Contract. Under cl 3.1 of the Specification, the Contractor was required to ensure that each bin specified in cl 2.1 was serviced in such a manner so as to leave each bin completely empty and convey to and deposit the refuse in the vehicle for transport to the waste depot or recycling depot, whichever was applicable. Where the contents of any street litter bin or MGB have been spilt, the Contractor was required to leave the footpath, road, reserve or premises in a tidy condition. Clause 5.1 provided that street litter bins were to be serviced each night seven nights per week between the hours of 10pm and 7am or as approved by the Council.

7. [187]

   Clause 15.1 of the Specification provided that the Contractor or its employees must contact the Council’s Civil Centre each day to make such reports as may be required by the Council’s general manager, including reports as to litter bins or MGBs that had become unserviceable and also to receive and accept orders and complaints regarding the service that the general manager may give.

8. [188]

   In the tender form completed by RW Ussher & Sons, a price was stated in respect of each street litter bin and each MGB, as well as bulk bins. In the space for the entry of labour input, RW Ussher & Sons specified two drivers full-time working eight hours per day, one driver casual working eight hours per day, a contract manager working two hours per day, office staff working one hour per day and others working three hours per day. There does not appear to be any provision contained in the Contract requiring RW Ussher & Sons, as Contractor, to employ those people. Rather, cl 6.1, as I have said, required the Contractor to employ a sufficient number of competent employees to carry out the duties and obligations of the Contractor promptly and efficiently.

9. [189]

   In approximately May 2000, Ms Susan McBurney started working for Usshers in a sales role. Her role subsequently changed into that of general manager. In her capacity as general manager, Ms McBurney’s duties were to make executive decisions about the day-to-day running of Usshers’ business, which included both solid waste and liquid waste components. In September 2004, she decided to split Usshers’ business into two and transfer each component to a new company. Solid Waste was registered on 28 September 2004 to take on the solid waste component. Ms McBurney’s mother became the sole director and secretary of Solid Waste and Ms McBurney became its general manager. Ms McBurney continued to be the general manager of Usshers.

10. [190]

    Ms McBurney decided that the employees of Usshers who were previously working with the solid waste component, as opposed to the liquid waste component, were to transfer from Usshers to Solid Waste, effective from 1 December 2004. From 1 December 2004, Usshers had no employees and did not pay any wages. All employees who were affected by the change, including Mr Healey, were required to sign a new employment declaration. From 1 December 2004, Mr Healey was employed by Solid Waste, which paid his wages from that date. There was no evidence as to the transfer of plant and equipment or other assets employed by Usshers in its business before the split. In particular, there was no evidence as to the ownership of the vehicles that had been used by Usshers and continued to be used by Solid Waste in the performance of the Contract or whether they were transferred to Solid Waste.

11. [191]

    From 31 October 2004, Usshers was insured for public liability by GIO under a contract of insurance (the Policy). Usshers has since been deregistered. However, by the operation of s 601AG of the Corporations Act, Mr Healey was entitled to sue GIO in respect of any liability that Usshers had to him, being a liability that was the subject of indemnity under the Policy.

12. [192]

    The Council Proceedings and the GIO Proceedings were heard together. On 2 April 2015, a judge of the Common Law Division (the primary judge) directed the entry of judgment for Mr Healey against the Council in the sum of $650,631.50 plus interest. On the same day, the primary judge ordered the entry of judgment for Mr Healey against GIO in the sum of $375,408.26 plus interest. Each of the Council and GIO has now appealed from the orders made against it by his Honour. Each has been joined as a respondent to the other’s appeal.

Claim against the Council

1. [193]

   In his Amended Statement of Claim against the Council, Mr Healey made allegations that may be restated as follows:

2. [194]

   The negligence on the part of the Council alleged in the Amended Statement of Claim was as follows:

3. [195]

   In the Amended Statement of Claim, Mr Healey alleged that, in the circumstances, the Council’s dictation of the work that he had to perform placed the Council in the position of a quasi-employer. That allegation is simply not supported by the evidence before the primary judge.

4. [196]

   The primary judge found that the Council, through Mr Geoffrey Brown, its Waste Management Coordinator, insisted on all bins being emptied by Usshers each night. His Honour held that the Council insisted that bins were to be emptied however difficult it was, provided it was “physically possible to do so”. His Honour also found that Mr Brown knew that bins were being filled by commercial users with rubbish, that could by no means be regarded as litter, of a kind that would probably be very much heavier than would be safe for one person to lift. His Honour found that Mr Brown was aware that, on many occasions, heavy waste was placed in litter bins and that, had he thought about it, that might well have constituted a risk for a worker emptying the bins. His Honour found that Mr Brown expected all bins to be emptied if that was physically possible and did not turn his mind to the issues of what might be safe for a worker undertaking that task. On the other hand, his Honour appears to have found that Mr Brown accepted that bins that were too heavy to be lifted could not be emptied and required Council workers to attend to them.

5. [197]

   The primary judge found that issues such as missing handles or damaged bins were seen only as maintenance problems requiring correction, but not as hazards creating a risk of injury. His Honour was satisfied that Mr Brown was well aware of damaged bins. His Honour considered that the Council had a duty of care towards Mr Healey, as a person who was emptying its bins, to keep the bins in a sufficient state of repair so as not to expose him to foreseeable risk of injury. That, his Honour held, involved repairing the bins and cradles that were so damaged as to impede easy removal of the bins, replacing missing handles and not impeding the removal of bins by attaching signs with screws that caught the bins. His Honour accepted that that duty did not require immediate or daily repair of the bins, but that the Council should have repaired the bins within a reasonable time of becoming aware of the damage. His Honour found that the bins were left damaged with missing handles for lengthy periods.

6. [198]

   The primary judge held that the risk that a worker in the position of Mr Healey might be injured by litter bins that were too heavy or too damaged to lift safely was one of which the Council knew or ought to have known. His Honour held that there was a significant risk that serious physical injury might well result to a worker required to empty the bins. Accordingly, his Honour held, a reasonable person in the position of the Council would have taken the precaution of ensuring that bins were promptly repaired and would not have agreed with Usshers that the bins must be emptied unless it was physically impossible to do so. His Honour therefore concluded that, since the Council did not ensure that all bins were promptly repaired and insisted on bins being emptied unless it was physically impossible to do so, the Council breached the duty of care that it owed to Mr Healey.

7. [199]

   The breach of duty so far as heavy bins was concerned, to which the primary judge referred, appears to have been insisting that all bins be emptied if it was physically possible to do so. The requirement that all bins be emptied arose under the Contract. That was the obligation undertaken by Usshers and there was certainly evidence of numerous complaints by the Council that bins had not been emptied. The Council’s complaint was that bins were not being emptied that should have been emptied. That, however, is a different matter entirely from requiring that bins be emptied unless they were physically incapable of being lifted.

8. [200]

   The primary judge considered that the Council’s active involvement day by day in the performance of litter removal showed that it had not surrendered its control over that matter. While it was contractually entitled to ensure that the service for which it had bargained was being carried out appropriately, and for that purpose to liaise with Usshers, that also involved the proper maintenance of the bins to ensure that they were safe to handle.

9. [201]

   The primary judge was satisfied that the injury suffered by Mr Healey was mainly contributed to by deformed and single-handled bins, of which the Council was well aware and which, despite its acceptance of the responsibility to repair, were left unrepaired for lengthy periods. His Honour held that the Council was or should have been aware that its deformed bins, bins without two handles, and bins with internal handles, presented a hazard to any worker whose job it was to lift and empty them. His Honour also held that, since the Council, through Mr Brown, insisted in effect that all bins were to be emptied unless it was physically impossible to do so, in the knowledge that he should have had that that exposed a single worker doing the task to injury, any training about not unloading dangerous weights would have been immaterial.

10. [202]

    The Council says that the only conclusion that could be drawn on the evidence is that the Council actually took steps to ensure that defective bins that were drawn to its attention were repaired within a reasonable time and that there was no requirement that the bins must be emptied unless it was physically impossible to do so.

11. [203]

    At the meeting held on 17 February 2005 attended by Mr Brown and other Council officers, and Ms McBurney, several OH&S issues were raised as follows:

12. [204]

    Following that meeting, Ms McBurney gave a note to Mr Healey asking him to “do every bin tonight”. She said that she needed lots of paperwork from Mr Healey about “bins being abused by residents or shopkeepers”. She said that the meeting was good, but “we need to do every bin”.

13. [205]

    On 21 February 2005, Ms McBurney wrote to Mr Brown on the letterhead of “Usshers’ Waste”, a business name registered to Usshers. Ms McBurney said:

14. [206]

    On 22 February 2005, Ms McBurney sent to Mr Brown a schedule of defective bins. Several communications on following days also added to the schedule of defective bins.

15. [207]

    On 16 March 2005, Mr Brown wrote to Usshers concerning the correspondence of 22 February 2005 “regarding OH&S issues and commercial use of bins”. On 18 March 2005, Ms McBurney responded saying that she would arrange for “the driver” to identify properties with a street number and business name where there is suspicion of commercial use of street litter bins. Mr Healey was the driver.

16. [208]

    The Council accepts that it owed a duty in the terms suggested above. However, it says that there was no breach of that duty because it had in place adequate arrangements for the repair of damaged bins. In any event, the evidence, it says, does not support the conclusion that there was a causal connection between the injuries suffered by Mr Healey and any failure to repair damaged bins.

17. [209]

    Apart from a conversation that the primary judge found that Mr Healey had on the telephone with Mr Brown in 2001, there was no evidence that Mr Healey ever spoke to or had any dealings with anyone at the Council. The Council had no reason to have dealings with Mr Healey or any other person employed by Usshers or Solid Waste. Mr Healey received his instructions from Usshers up to 30 November 2004 and from Solid Waste thereafter. He accepted that he did what Usshers or Solid Waste required him to do. Further, Mr Healey said that he did not generally complain about problems associated with the litter bins and did not complain about any injuries that he sustained, albeit because he was discouraged from doing so by Usshers. Certainly, he accepted that he did not make any complaint to the Council.

18. [210]

    It is not possible to find in the terms of the Contract briefly summarised above any obligation on the part of the Council to supervise the employees of the Contractor carrying out the work of emptying litter bins. Nor is it possible to find any entitlement on the part of the Council to interfere in the day-to-day manner in which the emptying of litter bins was to be carried out by the Contractor, through its employees.

19. [211]

    No obligation was imposed on the Council under the terms of the Contract to supervise or train Mr Healey. To the contrary, under cl 6.1, the Contractor was obliged to train its employees to a standard adequate to enable them to perform properly the services to be performed under the Contract. Any duty of care owed by the Council to Mr Healey could only be a duty to exercise reasonable care in replacing bins when it became aware that a particular bin was damaged such that it ought to have considered that there may be some risk of injury to persons such as Mr Healey employed to empty the bins. That is the extent of the duty found by the primary judge.

20. [212]

    The Council accepts that it was aware of the fact that bins could be damaged from time to time, since it had a system of repair and replacement in place. Nevertheless, it was incumbent upon Mr Healey to establish that the Council knew or should have known that the fact of particular bins being damaged or bins being damaged in a particular way posed a risk of harm to him.

21. [213]

    Mr Healey accepted that it was, at least initially, the policy that if a bin was too heavy he was not to lift it. The primary judge interpreted the question and answer as being a suggestion that Mr Healey was merely told not to do the impossible. Mr Healey agreed that there were occasions when he would report back to Usshers that he was unable to empty a particular bin and would give reasons why he could not empty it. He agreed that, after reporting that a bin was too heavy, the next time he went around, the bin had at least, on occasions, been emptied, but not on every occasion.

22. [214]

    The Council adduced evidence that, when notified by Usshers that a bin was too heavy because it was full of waste, it would send its own staff out to empty the bin. Further, Mr Healey accepted that there was a note from Ms McBurney directly requesting that he tell her about any difficult or inoperable locks on bins or bags left around the bins. He accepted that that was the procedure.

23. [215]

    Mr Healey became aware during the period December 2004 to May 2005 of increasing complaints from the Council about the Services not being performed properly. That was after Mr Healey claimed that he was injured, on 29 November 2004.

24. [216]

    The Council adduced evidence concerning the listing of facsimile and email reports from Usshers of defects in bins throughout the period from June 2000 to the end of April 2005. A substantial proportion of the issues identified in that correspondence concerned the dumping of commercial waste, such as builders’ rubble or concrete, cleaners leaving waste in bins and the like. There were very few notifications of stuck or jammed bins prior to February 2005. On the other hand, there were records of complaints by the Council to Usshers about litter bins not being emptied.

25. [217]

    Mr Healey did not ever report any problems that he may have had to the Council, other than the conversation that his Honour found that he had with Mr Brown in 2001. There was no evidence of any other employee of Usshers reporting problems directly to the Council. Mr Healey’s assertion that, during his employment, he saw no bins ever replaced, thus meaning that six witnesses called to give evidence on behalf of the Council, should not be believed as to the system of repair and replacement adopted by the Council. The primary judge should not have accepted Mr Healey’s responses to his Honour’s own questions on that issue.

26. [218]

    The primary judge did not identify any evidence that could be regarded as notice to the Council that it was failing to repair bins on a regular basis and that, as a result of some failure to repair bins, persons such as Mr Healey were being exposed to injury. His Honour did not address the content of statements made by Council officers that were contrary to Mr Healey’s assertions that bins were not repaired.

27. [219]

    A distinction should be drawn between damaged litter bins, on the one hand, and bins that were too heavy because members of the public had placed refuse in them that should not have been placed there, on the other. The primary judge made no finding as to what steps or actions the Council failed to take in order to overcome the problem of extra-heavy bins. The only evidence was that, when the Council was notified that a bin was too heavy, because prohibited garbage had been placed in it, the Council sent its own staff to empty the bins. The Council could not be under a duty to Mr Healey to ensure that members of the public do not put unauthorised garbage into litter bins in public places.

28. [220]

    While Mr Healey complained of numerous injuries during the time of his employment, he did not draw specific distinctions between injuries suffered because of damaged bins, on the one hand, and injuries suffered by trying to lift bins that were too heavy because of unauthorised garbage contained in them, on the other.

29. [221]

    I am not persuaded that there was any breach by the Council of the limited duty that it owed to Mr Healey to ensure that bins were promptly repaired. There is no basis for a finding that the Council required that bins must be emptied unless it was physically impossible to do so.

Claim against GIO

1. [222]

   GIO relied on two answers to Mr Healey’s claim against it. First, it said, Usshers did not owe a duty of care to Mr Healey, after he had ceased to be an employee of Usshers and had become an employee of Solid Waste. While Usshers may well have owed him a duty of care while he was its employee, and Solid Waste owed him a duty of care after he became its employee, Usshers ceased to owe any duty of care after 30 November 2004.

2. [223]

   The second answer advanced by GIO was that, even if Usshers owed a duty of care to Mr Healey such that a liability on the part of Usshers arose from breach of that duty, that liability was not covered by the Policy. Rather, GIO said, any such liability was the subject of exclusions contained in the Policy.

3. [224]

   Section 7 of the Policy dealt with public liability cover. By s 7, GIO agreed to insure Usshers for any amount that it might become legally liable to pay as compensation for personal injury during the period of insurance and caused by an occurrence connected with Usshers’ business. Section 7 did not insure liability arising directly or indirectly out of or caused by, through, or in connection with, or for employers’ liability or contractors and supplied labour.

4. [225]

   Thus, exclusion 3, dealing with employers’ liability, excluded liability for personal injury to any of Usshers’ employees arising out of or in the course of their employment in Usshers’ business and liability for personal injury to any person deemed to be an employee of Usshers or in respect of which Usshers is entitled to seek indemnity under any policy of insurance required to be taken out pursuant to any statute relating to workers compensation. Clearly, any liability of Usshers to Mr Healey for personal injury caused by an occurrence before 1 December 2004 would be excluded by that provision.

5. [226]

   Exclusion 13, dealing with contractors and supplied labour, excluded liability for personal injury to any person who is not Usshers’ employee, but has been engaged to perform work on behalf of Usshers or for Usshers’ benefit, where the contract price or value of the total works relating to the engagement of the person exceeds $20,000 during the period of insurance. The contract price or value of the total works relating to the work performed by Mr Healey in 2004 and 2005 exceeded $20,000. However, the first question is whether it can be said that Mr Healey was engaged to perform work on behalf of Usshers or for Usshers’ benefit, within the meaning of exclusion 13. That is to say, it is clear that, after 30 November 2004, Mr Healey was not engaged by Usshers but was employed by Solid Waste. The question is whether, in those circumstances, his engagement by Solid Waste to perform work in discharge of the obligations of Usshers under the Contract is sufficient to attract the exclusion.

6. [227]

   In any event, exclusion 13 only applies, relevantly for present purposes, to personal injury to persons:

7. [228]

   Thus, GIO must demonstrate that the personal injury suffered by Mr Healey fell within (a) or (c) summarised above. The first question is whether Mr Healey was employed by an organisation whose business included the supply of labour. That is to say, the question is whether Solid Waste was an organisation whose business included the supply of labour. Secondly, it must be shown that Mr Healey’s work was performed in whole or in part under the care, control, direction or supervision of Usshers or that his injury arose out of a defect or deficiency in any structure, fixture, fitting, machinery or plant used by Usshers in connection with its business. The primary judge found that Mr Healey’s work was not performed under the care, control, direction or supervision of Usshers. Further, although Mr Healey’s injury arose out of or in connection with defects or deficiencies in the litter bins or their cradles, it could not be said that the litter bins or cradles were used by Usshers in connection with its business. The litter bins belonged to the Council. Usshers simply provided the service of emptying the litter bins. It did not in any sense use the litter bins. Further, it could not be said that the litter bins constituted structure, machinery or plant at any place where Usshers carried on business. It did not carry on its business in the streets of the Council’s area.

8. [229]

   It follows that GIO is not entitled to rely on any of the exclusions in the Policy. The primary question, however, is whether Usshers had any liability to Mr Healey that arose after 30 November 2004. Any liability that arose before 1 December 2004 would be the subject of exclusion 3, dealing with employer’s liability.

9. [230]

   The primary judge found that, while Mr Healey’s employment changed from Usshers to Solid Waste, it was clear that nothing changed so far as his work was concerned. Thus, his Honour held, Ms McBurney became general manager of Solid Waste, but remained in her previous role of general manager of Usshers. Usshers continued to be the party to the Contract and continued to have its obligations to the Council in respect of the emptying of litter bins. His Honour found that Solid Waste fulfilled the responsibilities of Usshers under the Contract, but by arrangements with Usshers and not with the Council. Curiously, his Honour considered it was clear that “the two companies undertook the run” and that the emptying of the litter bins was “the joint enterprise of the two companies”. His Honour held that from 1 December 2004, Usshers was undertaking the work of emptying the Council’s bin “jointly with Solid Waste”.

10. [231]

    The primary judge held that Ms McBurney managed Solid Waste alongside her responsibilities to Usshers to ensure that its contractual obligations, in respect of the litter bins, were satisfied. His Honour held that the Council was well aware of that situation, although it was indifferent to it, provided the litter bins continued to be emptied in accordance with the Contract. His Honour considered that the Council’s interactions over the Contract were with Ms McBurney “wearing, as it were, both her hats”.

11. [232]

    The primary judge found that, after 30 November 2004, Mr Healey was no longer under the care, control, direction or supervision of Usshers. Rather, his Honour held, after that date, Ms McBurney controlled and directed his work, acting as general manager of Solid Waste, although, at the same time, she was responsible to Usshers for ensuring that Solid Waste performed the obligations of Usshers under the Contract. His Honour found that the arrangement between Usshers and Solid Waste was “a commercial arrangement”, one of the features of which was that Usshers paid Solid Waste sufficient to pay the wages of its workers, including Mr Healey. The primary judge held that the obligation of Solid Waste to Usshers was to undertake such work in relation to the litter bins as was specified in the Contract. Mr Healey was employed by Solid Waste to enable it to fulfil its obligations to Usshers. Usshers was, for its part, obliged to have the litter bins emptied in accordance with the Contract.

12. [233]

    In his Further Amended Statement of Claim against GIO, Mr Healey made allegations that may be restated as follows:

13. [234]

    The particulars of negligence alleged against Usshers were as follows:

14. [235]

    The primary judge found, in effect, that Usshers owed a duty of care to Mr Healey during the currency of the Policy and in particular from 1 December 2004 to 29 April 2005, as regards the nature and conditions of his work. His Honour found that Usshers was in breach of its duty of care to Mr Healey in exposing him to an unreasonable risk of injury by the nature and conditions of the work. His Honour found that there were two causes of Mr Healey being unable to work after April 2005. The first was the injury suffered on 29 November 2004. The second was the aggravation of an underlying degenerative condition for the whole of the period of his employment.

15. [236]

    However, the primary judge made no express finding that Usshers owed a duty of care to Mr Healey during the period after 29 November 2004. For his Honour to find a duty, it would have been necessary to find that Usshers retained some residual power of care, control and supervision over Mr Healey. However, his Honour expressly found that Mr Healey was not at the relevant time under the care, control, direction or supervision of Usshers. GIO contends that, unless that finding is set aside, the claim in negligence against Usshers must fail.

16. [237]

    Further, in order to establish some residual power of control on the part of Usshers so as to found a duty to Mr Healey, it would be necessary to make findings as to the arrangements on foot between Usshers and Solid Waste. Whether a head contractor continues to owe a duty to employees of a sub-contractor will depend upon the particular circumstances of each case. A principal will not generally be vicariously liable for the negligence of its independent contractor. The common law does not impose a duty of care on principals for the benefit of independent contractors engaged by them of the kind that they owe to their employees. However, in some circumstances, a principal will come under a duty to use reasonable care to ensure that a system of work for one or more independent contractors is safe. An entrepreneur who organises an activity involving a risk of injury to those engaged in it is under a duty to use reasonable care in organising the activity to avoid or minimise that risk. The entrepreneur’s duty arises because he is creating a risk and his duty is more limited than the duty owed by an employer to an employee. The duty to use reasonable care in organising an activity does not import a duty to avoid any risk of injury. Rather, it imports a duty to use reasonable care to avoid unnecessary risks of injury and to minimise other risks of injury. It does not import a duty to retain control of working systems if it is reasonable to engage the services of independent contractors who are competent themselves to control their system of work without supervision by the entrepreneur. Once the activity has been organised and its operation is in the hands of independent contractors, liability for negligence by them within the area of their responsibility is not borne vicariously by the entrepreneur. If there is no failure to take reasonable care in the employment of independent contractors competent to control their own systems of work, or in not retaining a supervisory power, or in leaving undefined the contractor’s respective areas of responsibility, the entrepreneur is not liable for damage caused merely by the negligent failure of an independent contractor to adopt or follow a safe system of work (Leighton Contractors Pty Ltd v Fox (2009) 240 CLR 1 at [20]).

17. [238]

    It is clear enough that there was no direct arrangement made between the Council and Solid Waste concerning the performance of the Contract. The arrangements between the Council and Usshers continued in force after 30 November 2004. His Honour found that Usshers remained contracted to the Council to continue to empty litter bins. However, Solid Waste performed the obligations of Usshers under the Contract by agreement between Usshers and Solid Waste. It fulfilled the responsibilities of Usshers under the Contract by arrangement with Usshers.

18. [239]

    The primary judge expressly found that Mr Healey was not under the care, control, direction or supervision of Usshers after 30 November 2004. There is no notice of contention in relation to that finding. His Honour found that Mr Healey’s work was not performed to any degree, whether in whole or in part, under the care, control, direction or supervision of Usshers. There was no finding by the primary judge that Usshers retained a residual right of control and direction over the nature and conditions of the work performed by Mr Healey after 30 November 2004. There is every reason to conclude that the fact that Usshers was making payments to Solid Waste to enable it to pay its employees and that Ms McBurney continued in her role as general manager of both companies, indicates that it was the intention of Usshers and Solid Waste, through the guiding mind of Ms McBurney that the whole of the responsibility for the performance of the Contract, and as to the nature and conditions of Mr Healey’s work, be passed to Solid Waste, as his employer.

19. [240]

    The primary judge simply did not make any finding as to the basis upon which a duty was owed to Mr Healey by Usshers after 30 November 2004. A fortiori, his Honour made no finding as to what the content of that duty might be. In the light of his Honour’s finding that Usshers ceased to exercise any care, control, direction or supervision of Mr Healey, it is not possible to glean the content of any duty that might have been owed to Mr Healey by Usshers, as distinct from his employer, Solid Waste.

20. [241]

    Further, the primary judge did not make any finding of any breach on the part of Usshers of any duty said to be owed by it to Mr Healey. In order to do so, it would be necessary for his Honour to specify the responsibilities on the part of Usshers that continued after 30 November 2004 as regards the nature and conditions of Mr Healey’s work. His Honour made no finding as to any steps or action that Usshers’ should have taken in order to discharge any duty of care owed by it. Indeed, his finding that Mr Healey was no longer under the care, control, direction or supervision of Usshers is inconsistent with the finding of a breach of duty on the part of Usshers.

21. [242]

    It is difficult to see why Usshers, once it had parted with its business to Solid Waste, would owe a duty analogous to that of an employer to its former employees, who had become employees of Solid Waste.

Conclusion

1. [243]

   It follows that each of the appeals should be allowed. The orders made by the primary judge in each of the proceedings at first instance should be set aside. In lieu of the orders made against the Council, there should be an order directing a verdict for the Council. In the proceedings against GIO, there should be an order directing judgment for GIO.

2. [244]

   I agree with the orders proposed by Basten JA.