Employers win the battle, but not the war

Is an occupier of premises liable to indemnify the employer for workers compensation payments as a tortfeasor who, if sued, by the Worker for negligence, would have been liable to pay damages to the Worker? The Court of Appeal answers this question in Charter Hall Real Estate Management Services (NSW) Pty Limited v State of New South Wales.

 

Author: Mathew Shammas
Judgement date: 25 February 2020
Citation: Charter Hall Real Estate Management Services (NSW) Pty Limited v State of New South Wales [2020] NSWCA 26
Jurisdiction: NSW Court of Appeal1

Principles

  1. An employer is not always liable for the non-delegable duty of care it owes to an employee who is injured at a third party's premises. Each case must be determined on its own facts.
  2. In determining liability for negligence, a person who suffers harm is presumed to have been aware of the risk of harm if it was an obvious risk, unless the person proves on the balance of probabilities that he or she was not aware of the risk.

Background

The State of New South Wales (plaintiff) commenced proceedings against the owner and managers of the Metro Plaza Shopping Centre in Orange (defendant) as a result of an accident which occurred on 22 January 2007, when the Worker responded to an alarm at the defendants' premises, with a number of his colleagues. Access to the roof was only by way of a door located at the top of a ladder. The access door had a metal locking bar in front, which had to be raised for access to the roof. After the Worker verified that the incident was a false alarm, he descended the stairs and knocked the locking bar (an inch-thick metal bar about one metre long) with his elbow and was injured as a result of the locking bar impacting the back of his neck.

Following the injury, the Worker began receiving weekly payments from the workers compensation insurer. The plaintiff's claim against the owner failed and only proceeded against one of two managers as the other manager was deregistered.

The primary judge held that the defendant, being the manager of the shopping centre, owed a duty to take reasonable care to avoid a foreseeable and significant risk of injury to entrants. This included avoiding such a risk to the Worker.

The primary judge found that the defendant breached its duty of care as it had actual knowledge of the risk, but failed to take reasonable steps to remove that risk. He assessed the damages to which the Worker would have been entitled had he sued the defendant to be $984,268. He rejected the defendant's claim that the plaintiff as the Worker’s employer was guilty of negligence and rejected its claim that the Worker was contributorily negligent.

The amount of notional damages assessed by the primary judge was well in excess of the workers’ compensation payments made in the six years prior to the commencement of proceedings. Accordingly, the primary judge found that the plaintiff was entitled to be indemnified in respect of all of the workers’ compensation payments for which it claimed indemnity, being payments made for the period between 22 December 2011 and 29 November 2018, with interest. Judgment was entered for the plaintiff in the sum of $325,599.36.

The defendant appealed.

Court of Appeal

The Court of Appeal upheld the primary judge's findings that the defendant had actual knowledge of the risk due to previous reports being made by a security guard to centre management.

The defendant unsuccessfully submitted that the risk was insignificant because of the obviousness of the risk. The Court of Appeal found that the risk was not obvious. It followed that the risk was not insignificant. The Court reasoned that the Worker (from his evidence on cross-examination) did not perceive a risk at the time and that a reasonable person in his position would not have perceived the risk, under the circumstances.

The defendant was also unsuccessful in arguing that the plaintiff should have given their employees a warning following an inspection of the premises. Ultimately, the Court of Appeal held that no knowledge of the risk could be imputed to the plaintiff, which was found not to be liable at all.

The court held the Worker by accidentally knocking the locking bar (presumably at its lower point where it obtruded beyond the vertical towards the ladder) was accidental inadvertence, not amounting to contributory negligence (Podrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34).2

The Court found in favour of the plaintiff by dismissing the appeal with costs.

Why this case is important

This case reaffirms that an occupier of premises is under a duty to take reasonable care to ensure that the premises are reasonably safe for entrants. Such entrants could include members of fire or emergency services.

The case reaffirms the principle that although an employer owes an employee a non-delegable duty of care, it does not follow that this always translates into a breach of that duty by the employer. Importantly, this case reaffirms the ability of a workers compensation insurer to recover all payments made to an injured Worker under section 151Z of the Workers Compensation Act 1987 from a negligent third party.


1 Macfarlan JA, White JA and Simpson AJA

2 (1985) 59 ALJR 492)

Contributors

Mathew Shammas Lawyer