Andrew Douglas: Well, I’ve read and read this case, because to me, the case is a simple proposition that says that damages of common law do not flow from breach of contracts, even if the process of termination was flawed. Okay, that’s what the proposition, and it comes from an old House of Lords decision. It’s been repeatedly applied in Australia with two or three exceptions. The rule of law is that where a head of damage or a cause of action has been curtailed by a more senior court, a lower court, like the Victorian Court of Appeal can’t go around that until such time as a high court makes a decision. So in Vision Australia case, there was no doubt at all that the method of termination-

Nina Hoang: Was unlawful.

Andrew Douglas: Was flawed, yeah. And they settled the unfair dismissal code as part of that, there seemed to be some hidden narrative as to what was going on, which was not properly disclosed. There was a good unfair dismissal claim sitting in the middle of it.

Nina Hoang: Yeah.

Andrew Douglas: And what the plaintiff said in this case is that process so undermined my mental health that it caused me mental health disorder. Now, this wasn’t the perfect case for running a Court of Appeal decision to try and overturn that, but I do suspect this one’s off to the high court because-

Nina Hoang: Do you?

Andrew Douglas: Oh yeah. I think that this is a wrong decision. I think that any other thing that occurs during the course of employment that a reasonable person would understand, could cause psychological injury, would be the basis for a proper negligence claim. But because this was run on breach of contract, it was run on the basis that Vision Australia at 2006 when they employed this person, remember contract is formed at the time at which it’s entered into. Did they have any knowledge of his vulnerability at that time for which a breach later on could cause loss? It’s a nonsense argument, but it’s a matter of law. It’s truthful. So if 10 days before I terminated somebody, I abused a person and they suffered mental injury, that would be compensable. But because it relates to a wrongful breach of contract, it’s not compensable. And I think the high court when puts its arms around, that just goes, that is just such a nonsense.

Nina Hoang: But is that because of how they brought the claim? Because it all went around the fact that the contracts stipulated like procedural fairness that you had to do, and they didn’t comply with that. So it was like simultaneously a breach of contract and a negligence.

Andrew Douglas: Ah, and look, no, there was a kickout that was run on it, and they kept coming back to Addison saying, “No, we’re stuck with this case law. We can’t go anymore.”

Nina Hoang: Oh, wow.

Andrew Douglas: So I think Alicia, who’s the plaintiff, may not have the wherewithal to run it to the high court, but it agitates an issue that needs to be run, which is if one day before you’re terminated, the conduct of me towards you can allow damages. But the day at which I terminate and I fail in the manner in which I terminate can’t lead to damage. It has to be a nonsense. Anyway, that’s why I wanted to run this case today ’cause I just talk about this case.

Nina Hoang: It won’t be under workers’ comp normally if you’ve not followed the correct procedure?

Andrew Douglas: Yeah.

Nina Hoang: It’s a bit strange.

Andrew Douglas: It is strange. Well, it’s more than strange. You know, when the law gets to a stage where it differentiates by half an hour the entitlement that you’re going to have, where one attaches to a contract and one attaches to you working, you’ve got to say that level of dissonance that sits between the two is got to be a nonsense. People must be able to be protected while they’re at work. And if the method of termination is improper whilst they’re at work, surely it’s compensable.

Nina Hoang: But what the court specifically said is, you can’t imply and read a new duty of care if there’s already existing mechanisms to deal with it, which was the contract one. So you are saying that they should be able to do that?

Andrew Douglas: Oh, no. Well, what they’re saying is, look, you’ve settled that process that existed with unfair dismissal. But unfair dismissal gives you a very small claim. It doesn’t give you a multimillion dollar claim.

Nina Hoang: Yeah. Originally it was 1.44 million.

Andrew Douglas: For which there are no general damages allowed in that. So you’re not having a jurisdiction carved off. What you’ve got is this old House of Lords decision that simply prevents it. And that’s where they fell at the end.

Nina Hoang: Wow. Interesting.

Andrew Douglas: Yeah. Interesting case. Really interesting case. And I wouldn’t bet my house because I’ve recently sold it, but I wouldn’t bet my house on this going to the high court. But I’d love to see it get there because I think it’s wrong. Okay. Not wrong by the Court of Appeal, by the way. Absolutely right on precedent because of the legal rules.

Nina Hoang: Like morally wrong.

Andrew Douglas: Morally wrong, and I think ultimately legally wrong. And I’m being pushed on by Flora who’s telling me I need to get on with the case study, over to you.

Nina Hoang: Freddy’s Forks Proprietary Limited (FF) dry hired forklifts to warehouses throughout Melbourne. FF had a relationship with Toyota and supplied reconditioned Toyota forklifts. For Toyota, it filled a hole in its secondhand motorised plant business. And for FF it gave them cheap forklifts that they reconditioned and hired out. FF hired out one of its 8 series forklifts to Bored Board, a cardboard specialty manufacturer in Coburg. The 8 series can carry up to 3,500 kilogrammes.

The reconditioned forklift for BB had obvious wear and tear and the safety sensor system was not working. FF knew the sensor was not working and its head of supply, Conrad, who supplied the forklift to BB, when asked by BB if everything was all right, said it was in good order. At the time of saying this, Conrad knew the sensor was not working and the risk that it posed. The BB warehouse had seven forklifts operating around 10 different aisles. The racking was 12 feet apart and the cardboard was packed on pallets of 48 inches.

BB did not undertake a risk assessment or test the forklift before using it. On the first day of use, BB signed off on the hire order and immediately put the forklift into operation. The forklift hire agreement required BB to check the forklift thoroughly and denied liability for any unchecked value in the forklift. The waive of liability. Harry Bright, a licenced forklift driver at BB, commenced using the forklift.

He didn’t do a risk assessment as required by BB policies and didn’t notice the lack of a sensor or warning sounds when he commenced driving the forklift. He took a load from aisle four, drove forward with raised tines, carrying the pallet to go around the corner, not being able to see what was coming and ran over his foreman. The load crashed on top of the foreman who was pinned under the forklift, causing his immediate death.

CCTV showed all drivers were driving forward well before the incident, with tines often raised, preventing clear vision of hazards in front. Also, many employees were in the warehouse, forklifts passing closer than the allowed three metres. A recent audit had underlined the high risk in the warehouse, non-compliance with exclusion rules and driver misconduct. The report went to the board who resolved to get a report for the next meeting from head of operations.

So this has happened, that last bit happened already?

Andrew Douglas: Yep.

Nina Hoang: Before the incident.

Andrew Douglas: Before the incident, yeah.

Nina Hoang: Okay.

Andrew Douglas: And dry hire means you just hire the crane or the forklift, you don’t hire a driver with it. Wet hire is when you have something with it. I know, it’s-

Nina Hoang: How weird.

Andrew Douglas: I know, I know.

Nina Hoang: Why’d the person make it wet. That’s weird.

Andrew Douglas: I dunno why a person makes it wet. But no one’s ever said that to me before either. Okay.

So could Freddy’s Forks and Conrad be prosecuted under safety law despite the express waive in the contract with BB? If so, what would be the offence?

Nina Hoang: Yes, definitely could because it doesn’t-

Andrew Douglas: Safety law doesn’t care about contracts.

Nina Hoang: Yeah. That’s just to do with like in terms of damages and insurers, right?

Andrew Douglas: That’s right. And even, even then, can I say we haven’t asked this question, would they be able to be sued? And the answer is yes. The waiver would have to be very, very specific and brought home to them. So at common law there would be a very, and we talk about it more later on at common law, the waiver would not protect them.

Nina Hoang: Yeah. So they definitely would, as a supplier, they haven’t provided something that’s fit for purpose. But not only that, they actually represented that it was, there was no risk even though they knew that it was. So they’re definitely in breach.

Andrew Douglas: So they’re in breach. But the issue is could it be reckless endangerment? Now remember, reckless endangerment is a person, it’s not an employer or an employee. So for reckless endangerment-

Nina Hoang: It could be Conrad.

Andrew Douglas: Well, no, it can be Conrad and it can, a person is corporate as well.

Nina Hoang: Oh yeah.

Andrew Douglas: So it can be Freddy’s Forks. So were they aware of a risk that could cause serious injury or death?

Nina Hoang: Yes.

Andrew Douglas: Absolutely. Nothing could be more serious in a traffic management system than having a failed sensor. So that they know the person will rely on it.

Nina Hoang: Yep.

Andrew Douglas: They don’t hear it. Bang. Were they indifferent to it? Well, they were positively indifferent to it.

Nina Hoang: Yeah. They did nothing.

Andrew Douglas: Yeah. So I think there’s a real risk of reckless endangerment here, okay.

Nina Hoang: Yeah.

Andrew Douglas: So interesting is that this is something that most people who supply things don’t understand that they could be off to jail. So Conrad here could be off to jail, particularly because Conrad was in a senior position, was aware of the nature of the relationship and the reliance was aware of who was supplying it to, and of the specific risk to them.

Nina Hoang: Do you still think he would get reckless endangerment had he not said it was fit? Say, had he said, “Oh, I don’t know, you’ll have to do a risk assessment.”

Andrew Douglas: Yeah.

Nina Hoang: It doesn’t, it’s kind of tricky with-

Andrew Douglas: Yeah, I think it’s the positive assertion to the con, something that he knows the country is where our regulator is. At the moment I think it’s unlikely by the way that Conrad or FF would be charged with reckless endangerment.

But what I think is in three or four years time, it would definitely be that. So WorkSafe in Victoria, WorkSafe in Queensland and South Australia are on an upward trend of prosecution. WorkSafe in New South Wales is really hard to predict what they’re going to do. In Western Australia, it’s calamity, you never know what’s going to happen. There’s so few inspectors over there and what happens over there is curious. Tassie, there’s very, very, very few, despite the high level of incidents, very, very few prosecutions in Tasmania at all. So when we look across.. and ACT, of course, very strong regulator, very likely to prosecute.

So there are differences in every jurisdiction where the three moving jurisdictions are, which is South Australia, Victoria, and Queensland, who are moving quite quickly, by the way, Northern Territory, again, quite courageous when they do prosecute, but very lowly resourced.

So, but those three major jurisdictions unlikely to go now for reckless endangerment. But you can see by the nature of the prosecutions they’re doing and you see in Victoria, you know, three industrial manslaughter in two or three months. You are starting to see this elevation of charges. I suspect in a year or two’s time, we definitely see Frankie’s Forklifts and Conrad in real strong.

Nina Hoang: Freddy’s Forklifts.

Andrew Douglas: Okay, could BB and its officers and Harry be liable under safety law and if so, what are the offences?

Nina Hoang: Also, they’ll definitely get primary duty breaches because of the repeated breaches of their traffic management.

Andrew Douglas: Yeah.

Nina Hoang: The, oh, I think-

Andrew Douglas: Can I just say the officers are in deep trouble.

Nina Hoang: Yeah, because they’re aware of this.

Andrew Douglas: They had brought homes, so in every jurisdiction, but Victoria, they’re in a lot of trouble because their objective, the objective measure, should they be aware of these risks is enlivened. But because they have been told about, and those jurisdictions, they’re at a very high risk, much easier to prosecute.

But in Victoria, they’ve been told about it. So they’ve got the 144. So they’ve got the duty that kicks up to industrial manslaughter. Again, unlikely to be charged with industrial manslaughter because they’re not operational in nature that we know about.

But as we’ve said before, the fact that they have a governance obligation makes them liable in all jurisdictions. But I don’t have any doubt that the CEO most definitely is at risk of reckless endangerment in this case. Because if a board comes back to you and says, “Look, we’ve seen this, this is terrible. Give us a report,” and you go, “Give us a report?” I’ve seen this incredible non-compliance in the highest risk area where we’re working. Give us a report.

Nina Hoang: Yeah.

Andrew Douglas: It’s nowhere near enough.

Nina Hoang: And there’s no follow through or anything.

Andrew Douglas: So I’m reckoning that BB and Harry are looking at sort of reckless endangerment. Harry’s in a lot of trouble. Harry didn’t do the risk assessment. He was obliged to do it. Harry was driving forward with his tines elevated, a strict breach. In employment law he’d be able to say, well look, you can’t terminate me for that ’cause everyone does it.

Nina Hoang: Yeah. Condone.

Andrew Douglas: But under safety law, that’s not the way it works. Safety law holds those people to account to teach everybody else. So I think Harry’s in real trouble and Harry is the voice of BB. So if Harry’s reckless endangerment, BB is reckless endangerment and I think the CEO, certainly an operational officer seized with that knowledge of what is the problem that went to the board. I think they’re in real strife as well.

Nina Hoang: So messy.

Andrew Douglas: It is, isn’t it? Could BB and FF be liable under the Wrongs Act, which is the extension. It’s like workers’ compensation. When someone dies, the dependents can bring a claim for the loss of a breadwinner, effectively.

Nina Hoang: So would the waiver come into play now?

Andrew Douglas: Well, the argument is, so the first claim under workers’ compensation would go directly towards BB. BB would seek recovery actions against FF. FF would plead the waiver and there would be a huge fight around the, what was said by Conrad, he’d blown the waiver.

Nina Hoang: Yeah.

Andrew Douglas: And I think you’d find that both would be liable and there’d be a sharing of responsibility. I think that you’d see BB wearing about 70% of the liability and FF earning about 30% of the liability.

Nina Hoang: But then the waiver would be more effective had they disclosed that there is a risk and they still have to do a risk assessment.

Andrew Douglas: Well, I think depending on the nature of the waiver and whether it was brought home to them. So one of the rules of waiver is, A, it has to cover all circumstances of the risks, but it can never, so it’s a case called the lifesavers case. You can, if you say including express misrepresentations, then the waiver might’ve worked.

Nina Hoang: Yeah. Okay.

Andrew Douglas: But most waivers don’t, they’d say negligence but not express. So whatever it is, I think that FF would be found liable in part and they’d certainly want to settle it.

Nina Hoang: Yeah.

Andrew Douglas: So next week we’re going to get right into discrimination, ’cause I think it’s a good time to do it.

Nina Hoang: Yeah.

Andrew Douglas: And we’re heading towards Christmas, which is always a good harassment, discrimination time. But it’s really interesting seeing how different parts of the law, which have been quiet up until Secure Jobs and Respect at Work are now starting to see some cases pre that legislation. And of course it doesn’t affect the case we’re talking about, is the Victorian equal opportunity. So didn’t touch that jurisdiction ’cause it was federal jurisdiction to touch. We’re going to see some very big changes. We’re going to see people moving to the federal jurisdiction every single time. But a costs order in Victoria, most unusual. Okay.

Nina Hoang: Yeah.

Andrew Douglas: So let’s look at that as well and see what’s going on about this one, okay.

Nina Hoang: Okay, cool.

Andrew Douglas: See you next week. Thumbs up. Don’t forget. Cheers. Bye.

Nina Hoang: Thank you. Bye.