Andar Transport Pty Ltd v Brambles Ltd

• Jurisdiction: Australia Federal only
• Judge: Gleeson CJ,McHugh,Gummow,Kirby,Callinan JJ,Heydon JJ
• Judgment Date: 15 June 2004
• Neutral Citation: 2004-0615 HCA A,[2004] HCA 28
• Docket Number: M214/2003
• Date: 15 June 2004
• Court: High Court

Andar Transport Pty Ltd

Appellant

and

Brambles Limited

Respondent

[2004] HCA 28

Gleeson CJ, McHugh, Gummow, KirbyCallinan JJ and Heydon JJ

M214/2003

HIGH COURT OF AUSTRALIA

Andar Transport Pty Ltd v Brambles Limited

Employer and employee — Duty of care by employer to employee — Common law duty — Safe system of work — Relevance of corporate structure — Where employee is director of employer — Where employee responsible for day-to-day operation of the company — Where employee injured due to unsafe system of work — Where employee in part responsible for devising system of work — Whether employer liable to employee for breach of duty committed by employee in his capacity as director of employer.

Employer and employee — Duty of care by employer to employee — Common law duty — Safe system of work — Meaning of ‘safe system of work’ — Where existing system of work had been in place for many years — Whether employer took reasonable steps in ensuring that a safe system of work was created and maintained — Whether length of time in which system of work has been used is relevant in assessing whether system is safe.

Contract — Construction — Indemnity clauses — Whether principles governing construction of contracts of guarantee also govern the construction of contracts of indemnity — Whether indemnity clause to be construed in favour of the indemnifier.

Tort — Joint or several tortfeasors — Contribution between tortfeasors — Wrongs Act 1958 (Vic), ss 23B, 24(2) — Where appellant liable as employer — Where injured employee responsible for breach of duty by appellant — Where damages previously reduced to account for contributory negligence of employee — Whether previous apportionment based on contributory negligence relevant in assessing contribution under statute — Whether previous apportionment based on contributory negligence is ground for exemption from contribution under s 24(2).

Words and phrases — ‘safe system of work’.

Wrongs Act 1958 (Vic), ss 23B, 24(2).

Corporations Act 2001 (Cth), s 124.

Representation:

D F Jackson QC with P H Solomon for the appellant (instructed by Wisewoulds)

S G Finch SC with D J Christie for the respondent (instructed by Allens Arthur Robinson)

ORDER

1. Appeal allowed with costs.

2. Set aside the orders of the Court of Appeal of the Supreme Court of Victoria dated 21 November 2002.

3. Remit the matter to the Court of Appeal of the Supreme Court of Victoria for further consideration.

4. Costs of the whole of the proceedings in the Court of Appeal of the Supreme Court of Victoria to be for that Court to determine.

1 Gleeson CJ, McHugh, Gummow, KirbyCallinan JJ and Heydon JJ. This is an appeal from the orders of the Victorian Court of Appeal 1 allowing in part an appeal from the jury verdict and consequential orders of the County Court of Victoria. The issues that arise in this appeal fall into two categories: the construction of a contract of indemnity, and the operation of Pt IV of the Wrongs Act 1958 (Vic) (‘the Wrongs Act’).

The facts

2 The respondent, Brambles Limited (‘Brambles’), provides laundry delivery services to a number of hospitals. Those services involve, amongst other things, the delivery by truck of large trolleys of clean linen. Since 1990, it has been the practice of Brambles to contract out its laundry delivery services to corporations that, in turn, employ drivers to load, deliver and unload the linen as directed by Brambles.

3 Mr Daryl Wail was one such driver. He was employed by the appellant, Andar Transport Pty Ltd (‘Andar’). Prior to the change in business practice adopted by Brambles, Mr Wail had been employed directly by Brambles to load, deliver and unload linen trolleys. Mr Wail was also one of two directors of Andar and one of two shareholders in the company. It will be necessary to say something further regarding the corporate structure of Andar later in these reasons.

4 On 26 July 1993, Mr Wail loaded a truck with 22 trolleys of clean linen at Brambles' laundry premises in Box Hill, Victoria and drove to Cotham Private Hospital in Kew. After reversing the truck into a driveway adjacent to the hospital's delivery bay, Mr Wail opened the rear of the truck and lowered the hydraulic tailgate. He then attempted to remove one of the trolleys. However, that trolley was jammed against another trolley and, in attempting to pull it free, Mr Wail felt a searing pain across his lower back. It was subsequently determined that, as a result of this incident, the lumbosacral disc in Mr Wail's lower back had been damaged.

The litigation

5 By a writ and statement of claim filed on 17 June 1998 in the County Court of Victoria, Mr Wail commenced proceedings against Brambles alleging

negligence. The particulars of negligence pleaded by Mr Wail included a failure by Brambles to ensure that the trolleys could be manoeuvred without risk of injury and a failure by Brambles to ensure that the trolleys could be manoeuvred having regard to their excessive weight when fully laden.

6 On 22 March 2000, the jury found in favour of Mr Wail. Mr Wail was awarded general damages of $100,000 and pecuniary loss damages of $315,000. After a subtraction of $104,411.60 pursuant to s 135A of the Accident Compensation Act 1985 (Vic), the balance of damages was reduced by 35 per cent to take account of Mr Wail's contributory negligence. As a result, the trial judge entered judgment for Mr Wail in the amount of $201,822.46 with damages by way of interest of $2,000 and costs to be paid on a ‘solicitor/client’ basis. The findings of the jury, and the consequential orders of the trial judge in this respect, are not the subject of an appeal to this Court. However, it will be necessary further to consider the basis of the jury's determination as to the negligence of Brambles later in these reasons.

7 By a third party notice deemed to have been served on 7 June, Brambles had joined Andar as a party to the County Court proceedings. It had sought an indemnity from Andar in respect of any damages which Brambles might be ordered to pay to Mr Wail or, in the alternative, contribution by reference to Andar's own alleged negligence as the employer of Mr Wail. By agreement between the parties, the issues arising on the third party notice were heard by Judge Kent sitting without a jury. On 6 June 2001, Judge Kent dismissed Brambles' claims against Andar.

8 Brambles appealed against the jury verdict and the orders of Judge Kent in the principal proceeding and the third party proceeding 2. On 27 September 2002, the Court of Appeal (Winneke P, Charles and Batt JJA) dismissed the appeal in respect of the former, but allowed the appeal in respect of the latter. The Court held that a contractual agreement said to be in force between Brambles and Andar obliged Andar to indemnify Brambles against all sums payable by Brambles in the principal proceeding. Although the Court also concluded that Brambles was entitled to contribution pursuant to s 23B of the Wrongs Act, the existence of the indemnity made it unnecessary to consider further the contribution claim. Andar now appeals to this Court.

9 Two primary questions arise for consideration: first, whether the Court of Appeal erred in concluding that Andar was contractually obliged to indemnify Brambles for liability incurred as a result of Mr Wail's injury; and, secondly, whether the Court of Appeal erred in concluding that a claim for contribution by Brambles against Andar pursuant to the Wrongs Act was otherwise available. The latter question in turn requires consideration of the circumstance that the person who suffered damage in the present case (Mr Wail) was a director of the company said to be jointly liable in respect of that damage (Andar) and also was responsible for the day-to-day operations of that company in respect of its laundry delivery operations. As will appear from these reasons, the first question should be answered in the affirmative and the second in the negative. The result is that the appeal should be allowed, the orders of the Court of Appeal should be set aside, and the matter should be remitted to that Court for calculation of the amount of contribution to which Brambles is entitled.

Contractual relationship

10 Before turning to the indemnity clause said to apply in the present case, it is first convenient to consider the agreement in which the clause arises. That agreement is entitled ‘INDEPENDENT TRUCKING CONTRACTOR AGREEMENT’ (‘the Agreement’). The parties to the Agreement are identified as Princes Fabricare Services (‘Princes Services’) and Andar. Princes Services is a division of Brambles and, for present purposes, it is convenient to refer to it as Brambles when construing the Agreement. Brambles did not dispute that the Agreement is a standard form document prepared by solicitors acting on its behalf. That, as will appear, is a significant circumstance for questions of construction of the document.

11 The Agreement is dated 28 March 1990. Pursuant to cl 1 of the Agreement, when read with the definition of ‘Term’ on the attestation page, the Agreement is limited to a period of three years from the commencement date of 4 April 1990. During argument before this Court, and before the courts below, submissions were made concerning the extent to which the terms of the Agreement continued in force after the conclusion of the three year period. However, as will appear from these reasons, a proper construction of the indemnity clauses relied upon by Brambles makes it unnecessary to determine that question.

12 Clause 1 of the Agreement sets out the principal obligation imposed upon Andar. By virtue of that clause, Andar is obliged to make available to Brambles a specified truck for use in connection with Brambles' laundry delivery business. Clause 2 regulates the operation of the truck. Amongst other...