Bostik Australia Pty Ltd v Liddiard and Anor [2009] NSWCA 167
In Brief
It is not sufficient for the purposes of the Limitation Act 1969, s 50D(1)(b)
that a person merely knows the facts necessary to establish the fault of the
defendant. The person must also know that the defendant is, as a matter of
law, liable to pay damages.
Background
On 30 January 2003 the plaintiff, Warren Liddiard, was injured when he lifted a
44 gallon drum that was being used as a rubbish bin. The plaintiff had carried
out this task approximately two times per week over the previous six to eight
months but found that the drum was unusually heavy on 30 January 2003.
The accident occurred on premises owned and occupied by Bostik Australia Pty
Limited (Bostik). Bostik carried on a packaging business in a factory on the site.
The plaintiff was employed by Brolton Industries Pty Limited (Brolton). Brolton
operated an engineering business in a small section of the factory and also had
access to the main yard area. Brolton also supplied labour to Bostik in the form
of production and non-production workers. However, there was no written
agreement in place in respect of these arrangements.
The plaintiff's labour was provided to Bostik by his employer, although at all times
the plaintiff remained under the belief that he was employed by Brolton and was
unaware of the terms of the arrangement between Brolton and Bostik.
The plaintiff brought proceedings against both Bostik and Brolton alleging breach
of duty of care.
District Court Decision
The trial judge Hungerford ADCJ held that both defendants were liable in
negligence to the plaintiff. His Honour apportioned 40% of liability in respect
of the injury to Brolton and 60% to Bostik.
Court Of Appeal
Bostik appealed raising inter alia the following grounds:
That it did not owe a duty of care to the plaintiff.
If it did owe a duty of care, it was not in breach of that duty.
Whether his Honour erred in his apportionment of liability between Bostik
and Brolton.
Whether the plaintiff's claim was statute barred.
Limitation Issue
Section 50D of the Limitation Act 1969 provides as follows:
"50D Date cause of action is discoverable
For the purposes of this Division, a cause of action is discoverable by a person
on the first date that the person knows or ought to know of each of the following
facts:
the fact that the injury or death concerned has occurred,
the fact that the injury or death was caused by the fault of the defendant,
in the case of injury, the fact that the injury was sufficiently serious to justify
the bringing of an action on the cause of action.
A person ought to know of a fact at a particular time if the fact would have
been ascertained by the person had the person taken all reasonable steps
before that time to ascertain the fact.
In determining what a person knows or ought to have known, a court may
have regard to the conduct and statements, oral or in writing, of the person.
To remove doubt, a compensation to relatives action is not discoverable
before the date of death of the deceased."
The plaintiff commenced proceedings by filing a Statement of Claim on
13 June 2007. Accordingly the relevant date for the purposes of s 50C
was 13 June 2004 and if the plaintiff's claim was discoverable before
13 June 2004, the plaintiff's cause of action against Bostik would be
statute barred.
The parties conceded that for the purposes of s 50D(1)(a) the relevant date
was 30 January 2003, this being the date of the injury. The dispute between
the parties centred on when the plaintiff knew, or ought to have known, of the
matters specified in sub-sections 50D(1)(b) or (c).
The plaintiff first retained his solicitor on 13 December 2004. During the
course of the claim the plaintiff provided statements to his solicitor, neither
of which made reference to Bostik. However, on 18 March 2004 the
plaintiff made a statement to the workers compensation insurer which
made reference to Bostik.
On 3 November 2006 the plaintiff's solicitor received a letter dated 31
October 2006 from Brolton's solicitors enquiring whether the plaintiff
had commenced, or was contemplating common law proceedings against
Bostik in relation to the injury on 30 January 2003. Attached was the
plaintiff's earlier statement to the workers compensation insurer which
made reference to Bostik and a statement that had earlier been made by
Mr Lynch, who was the owner of Brolton.
Bostik argued that for the purposes of s 50D(1)(b), it is sufficient for a plaintiff
to know the facts necessary to establish the fault of the defendant, not that the
defendant is, as a matter of law, liable to pay damages. In this regard Bostik
relied on Spandideas v Vellar [2008] VSC 198, which Beazley JA noted was not
followed by the New South Wales Court of Appeal in Baker–Morrison v State of
New South Wales [2009] NSWCA 35.
Beazley JA held that it was unlikely that the plaintiff had any understanding
that his work was being performed for the benefit of Bostik. Her Honour found
that the trial judge's factual findings that the plaintiff simply understood that
he worked for Brolton and saw no relevance in Bostik's role in the work he
performed, were well based.
Accordingly, her Honour found that the plaintiff did not know the fact that the
injury was caused by the fault of Bostik until after his solicitor had received a
copy of Mr Lynch's statement as he did not know of the relationship between
Bostik and Brolton.
In respect of s 50D(1)(c) the plaintiff argued that he did not know the injury
he sustained was sufficiently serious to justify the bringing of an action until
after his first operation.
The plaintiff underwent operative treatment on 17 November 2004 in the
form of decompression surgery. The operation was unsuccessful and the
plaintiff required a second operation which was performed on 28 November
2005. The second operation was also unsuccessful.
Beazley JA held that the plaintiff's initial injury was relatively minor, involving
a tear to the right bicep. Her Honour held that such an injury would not normally
be sufficiently serious to justify the bringing of proceedings but that by the
time that surgery was recommended the problem had become sufficiently serious.
Her Honour added that had significant relief occurred following the first
operation it is likely that the injury would not have been sufficiently serious
to justify the commencement of proceedings.
Her Honour found that the earliest that the cause of action was discoverable
was some time after November of 2004 when the first operation did not
provide the relief that the plaintiff's specialist anticipated. Accordingly the
claim was held to have been brought within time.
Basten JA agreed and held that the cause of action was not discoverable
until the plaintiff had actual or constructive knowledge of a "reasonably
arguable case involving a connection between his injury and fault on the
part of the appellant". His Honour held that this included an understanding
of the practical and contractual relationship between Brolton and Bostik.
Duty Of Care And Breach
Beazley JA held that Bostik owed the plaintiff a duty of care that was akin
to the duty owed to an employee. In this regard her Honour held that
although the plaintiff was employed by Brolton, he performed work for
Bostik, and in turn Bostik paid Brolton for the services provided. Bostik
was also the principal occupier of the premises and had overall control of
the activities that took place on the premises. Her Honour held that it
was aware of the method of rubbish removal from the shed and permitted
its empty drums to be used as rubbish bins. Her Honour further held
that Bostik breached its duty of care to the plaintiff by leaving any
response to the admitted unsafe system of work to Brolton.
Ipp JA (Basten JA agreeing) held that Bostik's control over the site was
insignificant and ought to be regarded as "theoretical rather than actual".
His Honour held that Bostik did not exercise any measure of control over
Brolton and was not involved in the training of Brolton's employees and
did not supervise or instruct them. As such his Honour held that Bostik
did not owe the plaintiff any duty of care.
Basten JA held that neither the legal arrangement nor the practical
circumstances in which the plaintiff's work was undertaken imposed a
duty on Bostik to the plaintiff. His Honour further held that in the
absence of a finding as to the specific cause of the injury, there was
no basis for a conclusion that Bostik was in breach of such a duty, if
it were accepted that a duty existed.
Accordingly, the majority of the Court of Appeal overturned the trial judge's
verdict in favour of the plaintiff against the second defendant.
Implications
Whether an occupier of premises owes a duty of care to an employee of
an independent contractor depends to a significant extent upon the
relationship between the occupier and the contractor. The degree of
control or direction exercised or which the occupier is entitled to exercise
over the worker is a significant factor to be taken into account in determining
whether a duty of care exists.
Section 50C provides no relief for a plaintiff to extend a limitation period
as was previously the case under Pt 3, Div 3, Sub Div 2 of the Limitation
Act 1969. However, as the decision in Baker-Morrison v State of New South
Wales illustrated, the seemingly rigid regime imposed by s 50C is ameliorated
by the flexible criteria embodied in s 50D
Confirming the approach adopted in Baker-Morrison, the Court of Appeal
held that an element of legal knowledge is required for the purposes of
satisfying s 50D(1)(b). Baker-Morrison seemed to suggest that the act of
instructing a solicitor is sufficient for a prospective plaintiff to satisfy
s 50D(1)(b), although this decision illustrates that the mere act of
instructing a solicitor is not sufficient for the purposes of s 50D(1)(b).
In this case it was not until the contractual relationship between Bostik
and Brolton became apparent did the Court hold that the cause of action
was discoverable.
Defendants cannot simply assume that a cause of action will be discoverable
on the date on which it accrues. The decision highlights the difficulty
defendants and their insurers face in asserting that a limitation period
has expired in situations involving complex commercial and contractual
relationships between parties and in circumstances where a plaintiff is
not initially aware his or her injuries are sufficiently serious to justify
the commencement of proceedings.
The content of this article is intended to provide a general guide to the subject
matter. Specialist advice should be sought about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
Article by Olivia Dinkha
Curwoods Lawyers.
09 July 2009
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