Andrew Douglas: So the main topic comes out of a court of appeal case in New South Wales, called Value case. And it is a case of an occupier, and the occupier had a pit effectively, or a hole in the floor that should have been covered by a metal grate.

Nina Hoang: It’s a storm drain.

Andrew Douglas: Yeah, a storm drain. And the builder who’d come in, or the independent contractor who’d come in and actually covered that storm drain with some black plastic-

Nina Hoang: But removed the grate.

Andrew Douglas: But removed the grate. Maybe not removed the grate. The grate wasn’t there, nobody really knows.

Nina Hoang: It was just somewhere else.

Andrew Douglas: What was very clear is that the occupier knew that that was there. Probably knew or would’ve known the grate had been removed before the plastic was put down, and a worker, quite unrelated, was just walking across and fell down that hole.

Now this is a case which is caught up in the pleading or how you craft the claim. So there’s a lot of issues that don’t relate. But the New South Wales Court of Appeals are very powerful and good court of appeal. And so they spent some time going through what the law is.

So I’m going to tell you what the law is and then we are going to break it up a little bit.

The law is that an occupier, so a commercial occupier. Now an occupier can be somebody who has complete management control, can be an occupier, or it could be the person who actually owns the premises, has a common law duty to exercise reasonable care and prevent foreseeable harm. Now, did you hear that? That’s what they have. They don’t have no duty.

Now, when they appoint an independent contractor to work, sorry, a contractor to work for them to undertake specified work, it is not assumed at common law that the occupier will have a liability to manage the safe system that the contractor uses, it is assumed that the contractor has that responsibility.

And this is where the confusion starts. Because a group of people say, “Well, that’s why you use contractors.” ‘Cause contractors take away, they absolve all the duties of the principal or the occupier in this case. But that’s not what the law says. The law says actually to the extent that the occupier does create a risk, it can’t be fixed by an expectation the independent contractor will fix that because of its skill, there’s dual liability.

Nina Hoang: Yes. And it can’t be split. That’s such an annoying misconception.

Andrew Douglas: Now that gets a little bit more complex where you know that the occupier appointed somebody that they had reasonable concerns about their competence in carrying out their specified trade.

Or that the occupier had a shared knowledge of risk in respect of the trade that was being carried out and therefore was able to observe obvious risks that were being carried out. So you see the law is not dumb. A common law, it’s really clear that courts, over a long period of time have said, “There are specified duties like employer to employee, which is a non-delegable duty.” You can’t arm it off.

But there is underlying duties that everyone has based on the circumstance of a case. So an occupier, someone who has exclusive management or control, or say a principal contractor who comes on site to undertake work has a residual duty to exercise reasonable care that prevent foreseeable damage. That never goes. Now it’s not a high duty, like somebody who’s doing a specific task has to do that specific task.

But if we use the classic circumstance of a builder who has been appointed to undertake work, they have the general duty described, then they have specific knowledge duties that arise because of their skills as builders, which they can’t get rid of.

Just ’cause they have an independent contractor to go and do demolition works, they see someone doing demolition works three metres above the ground, they’re a builder, they know about working from heights.

Nina Hoang: Everyone knows how.

Andrew Douglas: They see that danger in a premises that they’re managing, their own liability, okay. So you can see this isn’t hard, is it? But it’s not one thing or the other. It is not, “Okay, I’m going to appoint a contractor,” and let’s just say I’m a manufacturer, I bring a contractor to come in and work on a machine. Do I have any liability in respect of that contractor working on a machine for that contractor’s employees? The answer is yes.

Nina Hoang: But that contractor also has obligations.

Andrew Douglas: Oh, they do too.

Nina Hoang: It’s not one or the other.

Andrew Douglas: Yeah, so let’s say the contractor comes in to work on a machine and they’re an electrician. When the person goes to work on a machine, the manufacturer knows that there are problems with the electrics, which create immediate risk to someone and that’s why they’re brought in the electrician.

So they’re on knowledge of that risk. They can’t see an electrician go in without depowering the unit and think it’s okay and it’s safe, it’s not.

If they look at the SWMS that has been provided and they see there’s no depowering of the site before someone goes, “They know that’s wrong.” “They’re liable.” So is the electrician if they’re still alive. But I want you to be clear that it is a state of knowledge of risk that creates liability that you can’t absolve yourself and wash away by the appointment of a contractor. That’s the nonsense that we hear.

On the other side, we hear people saying, “Oh, well the builder’s liable for everything. The principal contractor or the occupier, they’re liable for everything.” That’s not true either, they’re liable for no risks. They’re not liable for people exercising their expertise in doing work for risk, which is not within the skillset.

But if they observe something which is within their skillset, which is a risk, they cannot turn a blind eye. So that’s the law. Now I hope I haven’t made that too, I make that confusing?

Nina Hoang: No, I actually think you simplified some things.

Andrew Douglas: And look, when we come to safety law, and you look at the definition of what a worker is just saying, Victoria section 5 makes it absolutely clear that it is a contractor’s employee as well as worker.

And there are other provisions in each state which recognise that for the purpose of safety law, there is this continuing liability that exists for a person who is an occupier or management control person or a principal contractor over subcontractor’s employee. It is understood as a matter of law that there is a liability.

So what it comes down to in safety law is the factual analysis of hazard and risk and the controls that should have been in place and who, so it’s a principal contractor, are they satisfied that the contractor coming in is doing everything that is reasonably practicable?

And once they are satisfied, and that is a continuing obligation on the principal contractor, then they’re absolved from liability in relation to a subcontractor’s employee. And the subcontractor will sit alone. But remember, it’s not a zero-sum game. They’re each independently, fully exposed to liability, each person who participates in it, that’s not only the organisation, it’s the officers of each BCBU or employer. And it is the supervisors, managers, and employees all have an individual silo liability, which is independent from the others.

So I hope that makes sense. The common law is not, was codified in 1970 in the very first safety legislation. It’s changed dramatically through interventions and statuary interventions throughout Australia, which make it very different to what the 1970 common law was like. So the common law now has evolved in one stream, legislative law has evolved in another, they are very different.

There you go. I feel like taking a breath after all of that.

Nina Hoang: No, that was good.

Andrew Douglas: Okay, good. Why don’t we give it a bit of a test and run it through a bit of a complex problem I’ve got where the answers aren’t completely clear on that, it’s just really to test where we’re up to. So let’s go to our case study. I think it’s a bit shorter this week.

Nina Hoang: Baz Build (BB) was the principal contractor renovating the site for King Kong Experiences (KKE), an adventure park operator for children. The renovation was of a large warehouse in Collingwood to create various game and adventure experiences for children.

The warehouse had a refrigerated area beside which was a hole at the entrance of a pit, leading down to an old refrigeration unit and gas tank, which had several protruding iron bars preventing access to the tank. Across the top of the pit was a metal plate that was ill-fitting and moved sideways easily if stepped on. The risk associated with the plate and the pit was not known by BB at the time of taking control of the site. BB took exclusive possession of the warehouse site on 2nd of February, 2023. BB engaged several contractors to undertake specialised work.

The demolition business, Smash Trash, my God, ST, was engaged to demolish the refrigerated area and make the area safe for the installation of trampolines. ST used Ready Hire (RH) for labour. On the 6th of May, 2023, Pete Tampress, a labour hire employee of RH, was directed to remove wiring 2.6 metres above the ground from the refrigerated panelling. He had undertaken an induction before starting work run by ST. It dealt with many generic issues including working with heights. He had signed the SWMS dealing with the demolition of the refrigerated area, but there was no description of the job he was directed to undertake.

Pete noticed a large 4-meter skip, length, 4-meter length skip bin near the wall where he had to remove the wiring. He asked the forklift driver, Dan, to move it next to the wall and Dan moved the skip as asked. The height of the skip was 1.8 metres. Pete used the ladder to climb up on the skip and then he moved to the wall side of the skip and reached up to start removing the wiring with a claw hammer.

The movement of the skip bin and subsequent actions was observed by Mick Clutch, the managing director of BB, Danny Kong, the owner of KKE, and Jen Dang, site boss for ST. They watched, bemused by Pete and his antics. Danny turned to Mick and Jen as Pete climbed up on the skip bin and said, “Novel way to do this?” They all laughed.

Unfortunately for Pete, the wiring gave way easily as he pulled. As a result, he fell backwards onto the edge of the skip, bouncing off hitting the metal plate, which gave way and he fell into the pit and was fatally impaled on one of the protruding iron bars.

Gosh.

Andrew Douglas: A terrible story. Alright, so could King Kong Enterprise who is-

Nina Hoang: So many people.

Andrew Douglas: So many people, could King Kong Enterprise be liable in safety law and why? Well, this is exactly what the Value case was about. There was a known, something that was known, they knew about it and they weren’t in a position to know that it was safely being managed, and that’s the test.

Nina Hoang: Yes, they hadn’t verified that there were sufficient controls.

Andrew Douglas: So they’re definitely liable. Now BB is the builder.

Nina Hoang: So like the principal contractor?

Andrew Douglas: The principal contractor. So could they be liable in safety law? Absolutely, because their obligation was to identify hazards in a workplace. Remember, reasonable practicability identify hazard determines risk and institute of control. They simply hadn’t done that, so they’re-

Nina Hoang: In fact, they all sat and watched him do the unsafe thing.

Andrew Douglas: They did.

Nina Hoang: So they’re all liable under reckless endangerment?

Andrew Douglas: Well, look, let’s break it down. Let’s get to RH and then go backwards, if that makes sense because I think, so ST, which is the demolition business, they’re absolutely liable. They’ve got a guy there. They had to make sure the area was safe. Forget about the fact that they saw him doing something unsafe, we’ll come to it.

Nina Hoang: Doesn’t look like they’ve done a proper risk assessment.

Andrew Douglas: None at all. So they’re gone, and RH, because they are the employer, are most definitely liable. And this is one of the things for labour hire providers who think they get away with no site inductions, they don’t. So they’re all primary duty breaches without difficulty. The next thing is-

Nina Hoang: And the host employer has to treat the labour hire as working, their own employees now under safety law.

Andrew Douglas: That’s right, so both-

Nina Hoang: So ST and RH?

Andrew Douglas: Yeah, both liable there. So the next question is reckless endangerment.

Was there a risk of serious injury? Yes.

Nina Hoang: Yes,

Andrew Douglas: There was. Were they indifferent to it? In other words, had they addressed it? Well, they actually hadn’t addressed it at all. So the short answer is they’re all potentially liable for reckless endangerment. BB is in deep trouble and so is ST for reckless endangerment.

Nina Hoang: But even more so the individuals who watched, right?

Andrew Douglas: Yeah, definitely individual. Well, once the individuals watch, that’s attributed as straight to, it’s a, because safety law is a law of attribution. So one person watches who is a director or officer then the business is deemed to have that knowledge.

So I think the difficulty here is that as far as BB goes and probably KKE, and ST goes, you’ve got industrial manslaughter. It’s just running at you because there’s obvious breaches that exist there and they’re breaches that are contemplated under the legislation. They are of an unspeakably high level. You’ve got something which is a deep hole with sharp objects pointing upwards, you couldn’t have something more dangerous.

Nina Hoang: And there was no controls at all.

Andrew Douglas: And there was no controls at all. So if we come then to, Mick, Danny and Jen, now, let’s just say Jen, as the occupier-

Nina Hoang: No, Jen is from ST.

Andrew Douglas: Jen is from ST?

Nina Hoang: Yeah, and Danny is KKE, and Mick is BB.

Andrew Douglas: Okay, I wrote this too. Anyway, I think the occupier in this case has really significant liability. So I think Mick has very significant liability ’cause Mick has, or ought to have the knowledge and that’s certainly what the case law says, so the primary duty breach, but I think that’s much more than that. I think that these people, forget about the hole, they saw someone doing something, they knew it was inherently dangerous.

Nina Hoang: The wheelie bin case, where that 72 year old went to jail for it.

Andrew Douglas: Yeah, Jackson.

Nina Hoang: Yes.

Andrew Douglas: Yeah.

Nina Hoang: Maria Jackson I think.

Andrew Douglas: So this is a case where all of these people are looking at definitely reckless endangerment and probably industrial manslaughter.

Nina Hoang: They all need to grab a toothbrush.

Andrew Douglas: They do need to take their toothbrush in their top pocket. The reason I show this case is there are some real arguments in-between about whether liability would attach, based under contractor law, but that’s in common law. I’m talking about safety law.

Nina Hoang: And everyone’s liable.

Andrew Douglas: And everyone’s liable here, there is no escape for them. The issue for KKE is whether the liability attaches to both the hole and the working at heights incident or just the hole, so there’s an argument to say it’s not their place as the occupier to be involved in the elevator.

Nina Hoang: The working with heights.

Andrew Douglas: But the working with heights next to the hole connects them evidently.

Nina Hoang: But also, working from heights is an obvious known risk. Although it’s specialised work, I think it’s arguable that they witnessed it and should have stopped it as well.

Andrew Douglas: Look, I think as an occupier, as a true occupier as KKE, they may not be liable for the working at heights, even in safety law. But the working heights next to a hole, unquestionably. Okay, so the hole’s the issue for KKE, for the rest of them, it’s everything.

So there you go. We took it for a walk, didn’t we? We said common law and then we gave you a safety law problem and you kept thinking about the common law. And I did that for a reason ’cause I want you to understand that common law has nothing to do with safety law. Safety law is legislative.

And when we talk to you about what the safety law is, you’re probably all going, “Ah-ha!” The only question, the only question, was the level of knowledge or state of knowledge of risk that attaches to KKE over the working at heights.

And I don’t think they’d be punished for that, except as it pertains to the fact that there was someone working above a hole that was significant, which made the hole so much more dangerous, there you go.

Nina Hoang: Thanks for joining us, see you next week. Give us a thumbs up.

Andrew Douglas: Let’s talk about the CMFEU next week and see exactly what is going to happen with ’em.

See you next week. Cheers, guys.

Nina Hoang: Bye.