Can builders be liable for harm caused to employees of independent contractors?

In brief - Head contractors can be liable under certain circumstances

In a decision handed down on 20 April 2012 in Miljus v Watpow Constructions Pty Ltd [2012] NSWCA 96, the NSW Court of Appeal found that although this particular head contractor was not liable for injuries caused to an employee of an independent contractor, other head contractors may be held liable under certain circumstances.

Head contractor, concrete supplier, concrete pumper and transport company

Watpow Constructions Pty Ltd was engaged by the owner of a residential property at Rignold Street, Seaforth to carry out major redevelopments. Watpow contracted CSR Ltd to supply concrete to the site and Pump Force Concrete Pumping as a concrete pumper. CSR engaged Edensor Transport Pty Ltd as a subcontractor to transport the concrete from its depot to the site.

Concrete delivery driver suffers harm in accident at building site

Damien Miljus was employed by Edensor as a concrete delivery driver. On the morning of March 20, 2001 he was directed to deliver concrete to the Rignold Street building site. Although this was the second concrete delivery to the building site that morning, Miljus had not been to the building site prior to the accident.

Upon arriving at Rignold Street, Miljus climbed out of his truck, walked down the street and observed its condition and surrounding topography. With the help of his colleague he began reversing down the street to the building site. However in the course of reversing, Miljus lost control of the vehicle, which toppled over onto its side and fell into an adjacent gully.

As a result of this accident Miljus suffered physical and psychiatric injuries. He brought a claim against CSR as the first defendant and Watpow as the second defendant. However during the course of the hearing, Miljus and CSR reached an agreement and the proceedings continued only between Miljus and Watpow.

Responsibility for safety and maintenance of a public road

The question before the Supreme Court of NSW was whether Watpow owed a duty to provide and maintain the roadway as a safe means of access.

In answer to this question Justice Davies found that, despite the contract between Watpow and CSR for the delivery of goods, Watpow did not owe a duty to any independent contractor of CSR in respect of the safety and maintenance of a public road over which that independent contractor must travel to get to the building site.

Furthermore his Honour held that Watpow did not have any obligation to repair the road or make it or its environment safe, as the care of the road was the council's responsibility.

However, his Honour observed that if Watpow did owe a duty to CSR's independent contractor, it had breached that duty by failing to take precautions to minimise the risk of foreseeable injury. He found that a reasonable precaution would be to establish a second pump on the straight section of the road to obviate the need for vehicles to reverse around the difficult cornered section of the roadway.

Miljus appealed to the NSW Court of Appeal.

What was the extent of the head contractor's responsibility?

The issue before the Court of Appeal was to determine the extent of responsibility that head contractors have for injuries to employees of independent contractors working on a building site.

Their Honours upheld the decision in Australian Safeway Stores Pty Ltd v Zaluzna [1987] HCA 7, that an occupier of a building site has a general duty of care to persons coming onto the building site to take reasonable care to avoid foreseeable injury. In upholding this decision they found that Watpow, as an occupier of the building site, had that general duty of care.

In considering whether Watpow owed more than the general duty of care, their Honours looked to Leighton Contractors Pty Ltd v Fox [2009] HCA 35, where it was held that the general duty does not give rise to a duty of care towards an employee of the independent contractor akin to the duty of an employer to his employee.

Builder's obligation to prescribe a safe system of work

They also looked at Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1, where the High Court found that in circumstances where a builder engages an independent contactor to do work which might as readily be done by employees, and there is risk to them of injury arising from the nature of the work, and where there is a need for the builder to give directions as to when and where the work is to be done and to coordinate the various activities, the builder has an obligation to prescribe a safe system of work.

This obligation arises because even though the workers are not employees of the builder, the builder is still under an obligation to prescribe a safe system of work.

Independent contractor not supervised by the builder

However, the judges in this case also observed that in situations where an independent contractor has been engaged to control its employee's systems of work without supervision by the builder, there may, depending on the circumstances, be no liability imposed on the builder for failure by the independent contractor to control its own system of work.

Their Honours found that the situation between Watpow and Miljus was not one where there was risk to the contractor of injury arising from the nature of the work or where there was a need for Watpow to give directions as to when and where the work was to be done or to coordinate the various activities.

Rather, their Honours found that the situation was more akin to the second situation described, as the contractor had been engaged to control its employee's system of work.

Builder discharged duty of care by engaging competent contractors

In relation to the question of breach, their Honours departed from the findings of Justice Davies and held that even if Watpow did have the specific duty of care as ascribed by Miljus, it had discharged that duty by engaging competent contractors, CSR and Pump Force, who were responsible for the design and implementation of a system of work for the delivery of concrete to the building site.

Their Honours also stated that Watpow was entitled to rely on CSR to make determinations as to whether its delivery vehicles would be able to deliver concrete to the pump in its location effectively and safely.

Implications for contractors

All contractors, not just head contractors, should take reasonable care to avoid injury by engaging competent contractors for tasks that are not within their expertise. It is advisable to specify that the contractor is responsible for the control of its employee's system of work.

If you are a head contractor, you owe a general duty of care to all people on the building site to use reasonable care to avoid foreseeable injury.

A head contractor is likely to owe a duty of care to employees of independent contractors in circumstances where:

• the independent contactor is engaged to do work which might as readily be done by employees, and
• there is risk to them of injury arising from the nature of the work, and
• there is a need for the builder to give directions as to when and where the work is to be done and to coordinate the various activities.