Commercial, Insurance, Workplace Insurance

Can a failure to institute a system of inspection be found to have caused a plaintiff’s injury? – Australian Winch & Haulage Company Pty Limited v Collins [2013] NSWCA 327

18 October, 2013

Author: Melinda Conry

Judgement Date: 9th October, 2013

Citation: Australian Winch & Haulage Company Pty Limited v Collins [2013] NSWCA 327

Jurisdiction: Court of Appeal [1]

In Brief

  • The Court of Appeal considered the issue whether an employer’s failure to institute a system of inspection of a gangway was a cause of the plaintiff’s injury.
  • The incident was the result of a shackle giving way. It was alleged the installer of the shackle had ordered the incorrect shackle – one which could not withstand submersion in seawater – from a supplier. The Court of Appeal considered whether the plaintiff or the installer of the shackle bore the burden of proving whether or not the correct shackle had been ordered.


The plaintiff was employed by Sydney Ports Corporation (Ports) as a Port Officer Grade 2 (Engineer). In the course of his employment, the plaintiff was required to board vessels moored at Port Botany. To do so, he was required to walk across an emergency response jetty gangway.

On 23 July 2001, the plaintiff was walking across the gangway when it rotated suddenly, violently propelling the plaintiff onto the wharf below. The movement was caused by the failure of a shackle linking to a counterweight used in the gangway. The plaintiff suffered serious injury as a result.

The plaintiff sued his employer – Ports – and Australian Winch & Haulage Company Pty Limited (AWH). AWH had supplied a stainless steel shackle to Ports. It was alleged that AWH had not ordered the proper shackle, in that the shackle installed was not suitable for use in seawater, and had corroded as a result of its submersion, which had resulted in its failure.

Decision Under Appeal [2]

In the decision under appeal, Ports did not dispute that it had been in breach of its statutory duty, in that it had failed to provide safe means of access to every place which the plaintiff was required to work, contrary to Regulation 73 of the Construction & Safety Regulations 1950. The plaintiff also contended that Ports owed him a non-delegable duty of care, which it breached as a result of AWH’s failure to exercise reasonable care in supplying the proper shackle. This argument was accepted by the trial judge, Harrison J.

His Honour also found that Ports, despite knowing the gangway had failed in the past, did not implement any regular inspection or maintenance regime for the underwater stainless steel components of the gangway. Rather, it waited until something went wrong and then called AWH to fix the particular fault – this was considered by Harrison J to be “clearly inadequate”.

In relation to the duty of a contractor in the position of AWH, Harrison J found that AWH was negligent in supplying the defective shackle. AWH’s duty included exercising reasonable care to select and install a grade of shackle that was reasonably fit for the intended purpose, in this case, for submersion in seawater.

AWH contended that it had in fact ordered a Grade 316 shackle (ie waterproof shackle) from its supplier. However, Harrison J found that the evidence did not support this assertion, and accordingly the failure of AWH to order a suitable shackle created a “clearly foreseeable and not insignificant risk of very serious injury to a worker” pursuant to s 5B of the Civil Liability Act 2002 (CLA).

In determining the apportionment between AWH and Ports, Harrison J noted that Ports was the plaintiff’s employer and in effective control of the gangway that failed. Ports were responsible for the gangway and for its upkeep and maintenance. The gangway had failed before, so that a degree of diligence that one might have expected would be assigned to it would have been “high”. Ports did not regularly inspect or methodically maintain the gangway. Rather, they took a reactive approach to the gangway and its maintenance in response to problems. That, in his Honour’s view, “had the unfortunate and inevitable consequence that a failure sooner or later was predictable, if not inevitable, but was in any event preventable”.

In terms of AWH, Harrison J found that the role of AWH amounted to more than “momentary inadvertence”. The performance of the shackle was central to the performance of the gangway.

Harrison J found that a “just and equitable apportionment between Ports and AWH” was 65% to the former and 35% to the latter.

Judgment for the plaintiff against both Ports and AWH was in different amounts, reflecting the different statutory regimes governing the assessment of damages against negligent employers and negligent third parties. Judgment was entered against Ports for $1,141,238.00 and against AWH for $1,368,304.70. His Honour also directed judgment for Ports against AWH for contribution in the sum of $399,433.30 and judgment for AWH against Ports for contribution in the sum of $741,804.70.

In relation to costs, Harrison J ordered that AWH was to recover 65% of its costs on its cross‚Äëclaim against Ports and Ports will recover 35% of its costs on its cross‚Äëclaim against AWH.

Harrison J also gave a supplementary judgment dealing with various issues including a claim for interest on past damages and funds management. [3]

The plaintiff claimed for pre‚Äëjudgment interest under s 100 of the Civil Procedure Act 2005, and as modified by s 151M(4)(a)(i) and (ii) of the Workers Compensation Act (WC Act). Ports argued that interest ought not to be awarded, in that it had not been appropriate for Ports to make any settlement offer because AWH was a co‚Äëdefendant and there were unresolved contribution claims between the co‚Äëdefendants. Harrison J rejected this argument stating that although it is true there were two defendants involved and damages against each of them fell to be assessed by reference to different statutory regimes, that is “not an uncommon occurrence in industrial litigation in this state and is not obviously a factor that derogates from the appropriateness of making an offer of settlement”. Interest was consequently awarded on past damages.

In terms of funds management, the parties had agreed on the sum of $100,000 towards this head of damage. It was argued at trial that this claim was precluded because the plaintiff had not included it in his amended pre‚Äëfiling statement of 17 November 2008, served in compliance with s 315 of the Workplace Injury Management and Workers Compensation Act 1998 (WIM Act).

The plaintiff submitted that it was not until he received a joint report from two clinical neuropsychologists in April 2011 that the need for assistance in funds management was identified. Harrison J granted leave for the plaintiff to file an Amended Statement of Claim stating that the medical material concerned “was not reasonably available to Mr Collins when his pre‚Äëfiling statement was served”. Harrison J also stated he was satisfied a failure to grant leave to the plaintiff would substantially prejudice his case, in that [t]he inability to recover that sum in the circumstances of this case would in my view alone be a matter of substantial prejudice to Mr Collins.”

Court of Appeal

On appeal AWH submitted that the primary judge had erred in finding AWH had not ordered a Grade 316 shackle (ie a shackle that could be submerged in seawater) from its supplier. That is, it was incorrect to hold that AWH bore the legal burden of proving it had ordered a suitable shackle, and there was no evidence to support the finding that AWH had not ordered a Grade 316 shackle.

It was also argued the primary judge erred in apportioning to AWH 35% of the responsibility for the plaintiff’s damages.
AWH also challenged the orders made by Harrison J concerning indemnity costs consequent to the service of an Offer of Compromise by the plaintiff.

Ports sought leave to file a Notice of Cross‚ÄëAppeal. Although Ports accepted it had a non‚Äëdelegable duty to the plaintiff, Ports submitted Harrison J erred in finding the absence of a proper system of inspection and maintenance of the gangway caused the plaintiff’s injuries. Ports claimed that the evidence showed the deterioration responsible for the failure of the shackle would not have been discoverable through a visual inspection, even if one had been carried out.

Ports also submitted Harrison J ought to have attributed a greater share of responsibility to AWH for the plaintiff’s loss and damage. This was on the basis that the shackle had been sourced, selected and installed entirely by AWH. Ports also challenged the primary judge’s conclusions the plaintiff was entitled to claim the costs of funds management and receive interest on his award of past damages.
Sackville AJA found that the onus of proving that AWH did not order a suitable shackle rested upon the plaintiff. His Honour engaged in a lengthy discussion of the evidence at trial and noted that it was open for Harrison J to infer from the evidence that AWH did not in fact order a Grade 316 shackle from their supplier. In particular, Sackville AJA noted there was no documentary evidence in the form of an order form or invoice to support AWH’s assertion.
Sackville AJA concluded that plaintiff had established on the balance of probabilities that AWH did not order a shackle suitable for use in seawater. Hence the primary judge’s finding on this issue “should stand, even though his Honour did not apply the burden of proof correctly”.

Ports challenged the primary judge’s finding that its failure to institute a system of inspection and maintenance of the gangway was a material cause of the plaintiff’s injuries. It was contended that although the experts agreed that regular above water inspections of the shackle should have been undertaken, the evidence was that the deterioration responsible for the failure would not have been apparent to a visual inspection. The failure of the shackle in this case was argued to be due to intergranular corrosion initiated at crevices between the pin and the eye of the shackle. Evidence was said to have been adduced at trial that the corrosion “would not have been readily visible because it was occurring within the shackle and travelling through the micro‚Äëstructure”.

Sackville AJA found that the primary judge was justified in finding that if Ports had implemented a proper system of inspection and maintenance at the time the shackle was installed (if not before) the system would probably have detected the dangerous corrosion of the shackle and thus prevented the plaintiff from being injured by the failure of the shackle.

In relation to the apportionment of damages, Sackville AJA expressed a view that Ports had advanced no additional reasons of any cogency for disturbing the primary judge’s apportionment of responsibility of 65% to it and 35% to AWH. Sackville AJA noted the question of apportionment involves the exercise of discretion and appellate deference to the exercise of discretion by the tribunal of fact is “well established” see Podrebersek v Australian Iron Steel Pty Limited [4]. Sackville AJA noted the primary judge’s findings that no steps were taken by Ports to institute a proper system of inspection and maintenance, or to incorporate a failsafe mechanism, despite previous incidents, provided a sound basis for his Honour to allocate the greater responsibility for the plaintiff’s damages to Ports.

In terms of AWH’s similar challenge concerning apportionment, Sackville AJA noted that while the shackle was an inexpensive piece of equipment, the foreseeable consequences of using an unsuitable shackle were potentially (and, as it turned in actuality) very serious indeed.

Accordingly, Sackville AJA found that no basis had been shown for interfering with the primary judge’s apportionment of responsibility between AWH and Ports.

In relation to funds management, Sackville AJA found that Ports had not identified any error in the primary judge’s conclusion that the plaintiff’s damages against it should include a component for the costs of funds management. His Honour found it was open to the primary judge to find that the plaintiff’s case would have been substantially prejudiced if leave were not granted, since he would be unable to claim a head of damages that (as the parties had agreed) could support an award of $100,000.

Ports also challenged Harrison J’s ruling that the plaintiff was entitled to pre‚Äëjudgment interest stating that as funds management was not claimed until nearly the end of the trial, Ports never had a reasonable opportunity to make an offer in respect of the plaintiff’s full entitlement toward damages. It was also claimed that the different statutory regimes governing damages on the cross‚Äëclaims between Ports and AWH made it inappropriate for Ports to make an offer of settlement.

Sackville AJA found that s 151M(4)(a)(i) of the WC Act ought to be constructed in terms that relate to a defendant having a reasonable opportunity to make an offer of settlement to the plaintiff’s claim to damages as formulated at the time the opportunity is said to have been available to the defendant. Sackville AJA found that Ports had a reasonable opportunity to make an offer of settlement of the kind identified in s 151(4)(a)(i), but did not do so. Sackville AJA agreed with the primary judge that Ports had advanced no compelling reason why it was inappropriate for it to make an offer of settlement in the plaintiff’s claim and noted that Ports did not explain why the different damages regime applicable to each defendant prevented it from making an offer of settlement to the plaintiff while preserving its entitlement to seek contribution from AWH. Accordingly, Sackville AJA considered Ports’ second argument on the issue of interest must also be rejected.

Sackville AJA found the primary judge erred in ordering Ports to pay the plaintiff’s costs of the proceedings. There was no dispute that the plaintiff’s claim for damages against Ports was a claim for “work injury damages” as defined in s 250 of the WIM Act. Regulation 106 confirmed that the parties to the proceedings are to bear their own costs, and the exceptions as found in regulations 104 and 105 had no application to the case.

In relation to costs between Ports and AWH, Sackville AJA agreed with Ports’ submission that since it and AWH each succeeded on the respective cross‚Äëclaims, the appropriate costs order is for each cross‚Äëdefendant pay the cross‚Äëclaimant’s costs of the cross‚Äëclaim.

Sackville AJA’s consequent orders included:

  • Ports was to pay 75% of the plaintiff’s costs of the cross‚Äëappeal.
  • AWH was to pay 90% of the plaintiff’s costs of the appeal.
  • As between Ports and AWH, that there be no order as to costs on the appeal and cross‚Äëappeal, to the intent that each party bear its own costs.
  • The percentages as expressed in the above orders are intended to reflect the fact that Ports and AWH enjoyed very limited success on the cross‚Äëappeal and appeal respectively.

Emmett JA agreed that the primary judge was justified in finding that, if Ports had implemented a proper system of inspection and maintenance at the time when the shackle in question was installed, its corrosion would probably have been detected and the plaintiff’s injuries that resulted from its failure would have been prevented. Emmett JA also agreed with the conclusion of Sackville AJA that no basis had been shown for interfering with the apportionment of responsibility as between AWH on the one hand and Ports on the other.

Leeming JA agreed with the orders of Sackville AJA.


The onus of proof in establishing inappropriate equipment has been used falls on a plaintiff.

The case reinforces the importance of making regular safety inspections of work sites, and taking steps to have appropriate maintenance regimes of equipment. The onus of proof falls on a plaintiff to prove that the absence of such a system constitutes a breach of duty.

Once breach of duty has been established, the onus is on the plaintiff to prove the breach was causative of his or her injuries in accordance with common law principles in the case of a claim against an employer and in accordance with s 5E of the CLA in respect of a claim against a third party.

There is no reason why one or both defendants who are subject to different damages regimes cannot serve an offer of settlement on the plaintiff. In respect of a claim against an employer this is a requirement under s 151M(4)(a)(i) of the WC Act where it is appropriate to do so.

  1. Emmett and Leeming JJA and Sackville AJA
  2. Collins v Sydney Ports Corporation [2012] NSWSC 115
  3. Collins v Sydney Ports Corporation [2012] NSWSC 1316
  4. [1985] HCA 34; 59 ALR 529 at [532]

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