Accident at Work – Responsibility for Leased Equipment

The recent WA District Court decision in Holden v Macmahon Contractors Pty Ltd [2013] WADC 202 concerns the plaintiff, Mr Holden (H), who suffered significant spinal injuries at the Sinclair mine near Leonora, while working under the instruction of Macmahon (M).

H was working on a truck when a strut holding up an awning-style door gave way, causing the door to swing down and hit him in the back of the head. At the time of the injury, the truck was leased to M by a third party – Envirocoat (E).

M admitted liability and the parties agreed to damages in the sum of $800,000 inclusive of workers’ compensation and interest. However, M commenced proceedings against E claiming contribution pursuant to s.7(1)(c) of the Law Reform (Contributory Negligence and Tortfeasors’ Contribution) Act 1947 (the LR Act). M also claimed indemnity pursuant to a contract between the two parties and damages for breach of warranty.

There was some confusion as to the cause of the strut failure. H’s work colleague, Mr Prince (P), who was working with him at the time, could not recall exactly how the accident occurred.

A number of experts gave evidence, leading to four hypotheses ranging from a slow loss of compression due to a gas leak to P using excessive force and breaking the strut just prior to the accident.

Interestingly, the latter was given some consideration, primarily because P was in a ‘bad mood’ at the time, to the point where H initially thought that he had been assaulted by P when struck by the door. However, His Honour said that being ‘a bit peeved’ fell a long way short of supporting a finding that H’s mood caused him to use such excessive or egregious force as to completely rupture a perfectly sound strut connection.

The Trial Judge concluded that the cause of the door collapse was the failure of the already damaged strut whilst P was opening the door. It was not possible to make a finding as to how the strut was damaged in the first place.

Legal principles

M owed H a duty of care, analogous to that owed by an employer, to provide and enforce a safe system of work and provide and maintain safe equipment. E, as a manufacturer, owed a duty of care to consumers and users of its product. So far as the contractual warranties were concerned, E also warranted that its equipment would be “of the best quality”.

The decision

His Honour found that M was directly negligent for failing to properly train and supervise the people under its control in the use of the service truck and for failing to enforce a safe system of work for P and H.

As to the second duty, M’s case was primarily based on the premise that the struts were not suitable for the conditions in which they were used. M also submitted that E’s design system was inadequate and that it should have sought and implemented professional design input from a mechanical engineer or similarly qualified person.

His Honour dismissed M’s allegations of negligence and/or breach of contract against E. In doing so, he commented that a product is unfit for its purpose if it has a defect which unacceptably increases the likelihood of its failure, which in this case it did not. The test of foreseeability and breach is not whether 99 trucks out of 100 were problem-free, nor is it that E had received no complaints. The test is whether an identified risk of injury was neither far-fetched nor fanciful.

The Trial Judge therefore concluded that M was not entitled to an indemnity from E nor was E liable to H. Accordingly, all of the blame for H’s accident lay with M and it was liable for the full amount of compensation of $800,000.

This decision highlights the importance for employers and occupiers of taking responsibility for the maintenance of equipment under their control, whether or not they are the owners. Furthermore, regardless of warranty periods, if the product is not inherently faulty or unfit for its purpose, the manufacturer or designer is unlikely to be held liable.

For more information on this update or any other workers’ compensation matters please contact Ashley Crisp or Ken Grunder on (08) 9321 3755.

The information published on this website is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.