D'Arcy v Caltex Australia Petroleum Pty Ltd

• Jurisdiction: Australian Capital Territory
• Court: Court of Appeal of ACT
• Judge: Murrell CJ,Mossop,Charlesworth JJ
• Judgment Date: 23 October 2019
• Docket Number: File Number: AC 71 of 2018
• Date: 23 October 2019

[2019] ACTCA 27

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY COURT OF APPEAL

Before:

Murrell CJ, Mossop and Charlesworth JJ

File Number: AC 71 of 2018

Phillip D'Arcy

(Appellant)

and

Caltex Australia Petroleum Pty Ltd

(Respondent)

Representation:

Counsel

P Webb QC and L Grey (Appellant)

R Cavanagh SC and J Gracie (Respondent)

Cases Cited:

Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301

Caltex Refineries (Qld) Pty Ltd v Stavar [2009] NSWCA 258; 75 NSWLR 649

Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249

D'Arcy v Caltex Australia Ltd [2018] ACTSC 206

D'Arcy v Caltex Australia Ltd (No 2) [2018] ACTSC 306

D'Arcy v Caltex Australia Ltd (No 3) [2018] ACTSC 307

D'Arcy v Caltex Australia Petroleum Pty Ltd [2016] ACTSC 270

Darling Island Stevedoring and Lighterage Co Ltd v Long (1957) 97 CLR 36

Downs v Williams (1971) 126 CLR 61

John Pfeiffer Pty Ltd v Canny (1981) 148 CLR 218

Leighton Contractors Pty Ltd v Fox [2009] HCA 35; 240 CLR 1

McDonald v Girkaid Pty Ltd [2004] NSWCA 297

Meyers v Commissioner for Social Housing [2019] ACTCA 19

O'Connor v SP Bray Ltd (1937) 56 CLR 464

Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397

Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16

Waugh v Kippen (1986) 160 CLR 156

Legislation Cited:

Civil Law (Wrongs) Act 2002 (ACT), ss 42, 43, 44, 168

Dangerous Substances Act 2004 (ACT), ss 10, 16, 17, 21, 31

Dangerous Substances (General) Regulation 2004 (ACT), ss 6, 280, 281, 285, 286, 292, 293

Occupational Health and Safety Regulation 2001 (NSW)

Work Health and Safety Act 2011 (ACT), ss 19, 267

Work Health and Safety Regulation 2011 (ACT), ss 9, 34, 35, 36, 37, 38, 44, 51, 52, 62, 66, 73

Workers Compensation Act 1951 (ACT), s 182D

APPEAL — NEGLIGENCE — Duty of care — workplace accident fibreglassing an underground petroleum storage tank — appellant severely burnt — claim against occupier of premises which had lease from Crown lessee — appellant an employee of a contractor engaged by Crown lessee — scope of duty of care — whether obligations under Work Health and Safety Regulation 2011 (ACT) affect content of duty of care — whether occupier obliged to take steps to check capacity of contractor of Crown lessee to comply with proposed method of work — whether primary judge erred in finding that occupier of premises did not breach duty of care — he did not

APPEAL — STATUTORY DUTY — Duties on persons in control of non-registrable premises under Dangerous Substances (General) Regulation 2004 (ACT) — whether primary judge erred in finding that statutory duties arising under regulations were not breached — he did not

Decision:

Appeal dismissed with costs

THE COURT:

Introduction

1 On 11 September 2012 the appellant, Phillip D'Arcy, along with a small team of workers, was relining an underground petrol tank at a petrol station in Kaleen, a suburb of Canberra. A fire broke out inside the tank and the appellant sustained very serious injuries, including partial to full thickness burns to 35% of his body. He sued his employer, Fuel-Sys Installations Pty Ltd, (Fuel-Sys) and Caltex Australia Petroleum Pty Ltd (Caltex). The primary judge made an award of damages against Fuel-Sys but entered judgment in favour of Caltex against the appellant. He also ordered that the appellant pay Caltex's costs of the proceedings: see D'Arcy v Caltex Australia Ltd [2018] ACTSC 206 ( D'Arcy). The appellant has appealed against his Honour's decision. The Amended Notice of Appeal challenges the judgment in favour of Caltex as well as the costs order made in favour of Caltex by his Honour.

2 The central issue for determination in this appeal is whether or not Caltex owed to the appellant a duty of care which extended to taking measures which would have prevented him from being injured in the accident. It is also necessary to consider the effect of regulations made under the Work Health and Safety Act 2011 (ACT) (WHS Act) and the Dangerous Substances Act 2004 (ACT) (DS Act) upon the liability of Caltex.

Facts

3 Save in minor respects, the factual issues were resolved by his Honour. The following summary of the relevant facts are drawn from the findings made by his Honour.

Caltex's lease of the premises

4 The service station in question was on Maribyrnong Avenue in Kaleen. Evangelista Pty Ltd (Evangelista) held the Crown lease of the property. The premises were subleased to Caltex under a sublease commencing on 1 January 2009 and expiring on 31 December 2013. The sublease permitted the use of the premises for a “Service station/convenience store, mechanical car service and repairs, restaurant and/or takeaway food facility”.

5 In September 2011 Caltex entered into a “Star Franchise Agreement” with another company, Olmos Investments Pty Ltd (Olmos), as the trustee of a trust. Under that agreement Olmos was to conduct the retail activities at the service station on a day-to-day basis.

6 The sublease from Evangelista to Caltex gave occupancy of the premises to Caltex, subject to a reasonable right of re-entry for inspection. Clauses 2 to 4 of the sublease allocated certain responsibilities between the parties in relation to tanks, pipes, services and fittings on or beneath the driveway of the premises. Those clauses were in the following terms:

2. (i) The Lessee acknowledges that at the Date of Commencement hereof the Lessor has all property and Title to the underground tanks, pipes, services and fittings installed in or beneath (but not upon) the driveway, hereafter referred to as ‘the Lessor's Fixtures’.

(ii) The Lessee shall maintain, repair and be responsible for the proper operation of the Lessor's Fixtures pursuant to clause 5.02 during its occupation of the Premises pursuant to the terms hereof.

3. The Lessee may subject to the Lessor's consent which shall not be unreasonably withheld, permit the Lessee at the Lessee's cost to upgrade and/or renovate, replace and/or repair any of the Lessor's improvements on the site, and/or to fix, install or bring upon the site new equipment, trade fixtures or improvements of its own, PROVIDED ALWAYS:

(i) That the responsibility for repairs and maintenance of the existing and/or upgraded or renovated system of underground tanks, pipe works, services and electronic communications to the tanks and pumps and any other Lessee fixtures and fittings installed in or beneath the driveway shall at all times be repaired and maintained by and continue to be the sole responsibility of the Lessee; and

(ii) At the expiration of this Lease or any further Lease granted pursuant to the Option contained herein, or sooner determination of this Lease, all underground tanks, underground pipes, services and electronic communications to the tanks and pumps and any other Tenant fixtures and fittings installed in or beneath (but not upon) the driveway after the date hereof, shall revert to the Lessor for a consideration of one dollar, the receipt of which is hereby acknowledged.

4. The Lessor and Lessee agree that if circumstances arise whether during, or, after the Lessee's occupation of the site (provided always that there has been no intervening use of the premises as a Service Station after the Lessee vacates the site), requiring the carrying out of remediation work on the site resulting from leakage of petroleum products from any underground tank, pump, pipe or fitting, then the cost of that remediation work shall be borne equally by the Lessor and Lessee.

[Emphasis added.]

7 The trial judge correctly identified that the chapeau to clause 3 is a riddle, as on its face it permits Caltex to give itself consent to update, renovate, replace or repair any of the lessor's improvements. He correctly identified that it was unnecessary to resolve the confusion in the chapeau because under clause 3(i) the repairs and maintenance of the underground tanks was the sole responsibility of Caltex. That contrasts with the obligation under clause 4 which relates to remediation work on the site, the cost of which was to be borne equally by the parties.

8 The distinction between the obligation in clause 3(i) and 4 is significant because, as will be seen, Caltex persuaded Evangelista to contribute to the cost of tank relining as if clause 4 governed that work, whereas clause 3(i) applied. This in turn led Evangelista to be the party that contracted with Fuel-Sys to undertake the tank relining work, rather than Caltex.

The plaintiff's involvement with Fuel-Sys

9 The plaintiff had previous experience with fibreglass as he had worked for a number of years with a company that made fibreglass catamarans. In late 2011 the plaintiff was approached by Trevor Marshall. Mr Marshall put him in touch with Peter Hale of Fuel-Sys, who asked the plaintiff to put together a group of workers for a business that was being restarted. The business was involved in the relining of old steel fuel tanks that lay underground at service stations.

10 Prior to commencing work with that business, the plaintiff and the team of workers participated in training for working in confined spaces. Although that training usually involved a two day course, the training for the plaintiff and the team of workers was shortened to one day. Not everything in the course was completed on that day. There was no discussion of completing the remainder of the course in the future. The plaintiff was not trained in the use of fire extinguishers because that comprised a part of the course that was not completed. The plaintiff was not subsequently given any training in relation to the use of fire extinguishers.

11 After the training, the team commenced work relining an underground fuel tank in Marrickville in January 2012. Four workers...