Welcome to the July 2012 issue of the Edwards Michael Lawyers eBulletin.

Duty of Care to Employee in Relation to Dismissal

In Shaw v State of New South Wales [2012] NSW CA, the Court of Appeal considered whether an employer could be sued in negligence on the basis of failing to adequately apply termination procedures mandated in two of its internal publications.

The Court decided that to succeed on this basis would involve an extension of an employer’s duties, such as to impose an obligation to provide a safe system of investigation and decision making with respect to procedures for discipline and termination of employment.

The Court ultimately decided that such a duty should not be recognised as it was incompatible with the law applicable to termination of employment and with administrative law procedures:

“In substance, applicable employment law (in both its contract aspects and its statutory aspects), coupled with administrative law procedures, occupied the relevant field in such a way as to leave no scope for the development of a novel duty of care based on a new concept of what is involved in a safe system of work”.

The Plaintiff was allowed to proceed on the basis of allegations of breach of contract and breach of statutory duty, however the allegations of negligence were struck out.

Common Law: Employer Apportionment

In an apportionment dispute involving a CTP Insurer and a workers’ compensation insurer, the Court of Appeal was required to decide whether the trial Judge’s apportionment of 0% to the employer was correct.

In Izzard v Dunbier Marine Products (NSW) Pty Limited [2012] NSW CA 132, a worker was injured as the result of the negligent design of a trailer, resulting in heavy, unsecured frames which ultimately caused the Plaintiff’s injuries.

The trial Judge found that the employer was aware of the system of loading and unloading the trailer, but that it was not aware of any specific risk involving the defective frames.  He held that the employer was not required to devise a system of work where no risk was identified.

The Court of Appeal accepted that the trailer was regularly unloaded at the employer’s premises and that the defect in the trailer was noted by at least two (2) of its employees.

The Court held that the employer had an obligation to obtain knowledge of the dangers from employees who possessed it and that:

“(the) slightest consideration on (the employer’s ) part would have revealed that the unloading operations required the heavy metal frames to be unlocked and left, at least for a short period of time, in a state in which a mere push, pull or knock would topple them over, quite possibly onto a Dunbier employee.  It should also have revealed there had been at least two earlier incidents when frames had toppled over”.

The Court therefore overturned the 0% apportionment of the trial Judge, and apportioned 40% of liability to the employer.

Common Law: “Use or Operation” of Motor Vehicle

In TVH Australasia Pty Limited v Chaseling [2012] NSW CA 149 the Court of Appeal considered whether the circumstances of an injury resulted from the “use or operation” of a motor vehicle during the driving of the vehicle, such as to entitle the Plaintiff to damages under the Motor Accidents Compensation Act 1999.

The Plaintiff’s injuries were sustained when he was struck by a box weighing 219 kilograms which fell from a forklift whilst he was assisting to unload a shipping container.  The Plaintiff was walking beside the forklift whilst it was reversing down a ramp.

The evidence disclosed that the driver of the forklift had not spread the tines sufficiently to counter the flexibility of pallets on which the boxes rested, which often shifted and became unstable during transit.  The Court stated:

“….the evidence set out above supports the conclusion that the appellant (employer) knew, or at least should have reasonably been aware of the problem and should have notified an inexperienced forklift driver as to what steps to take to avoid an accident arising while unloading possibly unstable packages which may have shifted in the container during the long sea voyage.  It should have warned the Plaintiff in similar terms as to the known risk”.

The CTP insurer sought to argue that the Plaintiff’s injury was not caused “in the use or operation of the vehicle”, rather as a result of an antecedent failure to devise a safe system of work.  However, the Court determined that an experienced forklift driver with knowledge of the risk which in fact materialised would have spread the tines and also perhaps taken other steps to secure the load.  It held that the negligence related directly to the manner in which the forklift was to be used and operated and that the proximate cause of the accident was the use or operation of the vehicle.

The Plaintiff was therefore entitled to damages under the Motor Accident Compensation Act 1999.

Economic Loss: “Theoretical” Work Capacity

In Mead v Kerney [2012] NSWCA 215 the Court of Appeal declined to overturn the trial Judge’s finding that whilst there was a theoretical capacity for work, for practical purposes the Plaintiff’s residual earning capacity had no value.  The Court endorsed the following statement in Nominal Defendant v Livaja [2011] NSW CA 121:

“…Because an individual has a physical and mental ability to undertake certain tasks, it does not necessarily follow that he has a significant residual earning capacity.  Earning capacity must be measured by reference to the individual, when viewed with all his or her characteristics, in the labour market.  When a person in middle age has spent all his or her life in a skilled or semi-skilled occupation which, as a result of injury, is no longer available, the identification of occupations which are theoretically available is only part of the task.  There must also be a practical assessment of the likelihood of the individual obtaining employment in some such occupation…”.

The Plaintiff was therefore allowed damages on the basis that he was effectively totally incapacitated.

Common Law Damages: Early Retirement

In Mead (Supra) the Court also endorsed the trial Judge’s finding that due to the arduous nature of the Plaintiff’s pre-accident employment, future economic should be calculated on the basis of a retirement age of 65, rather than the relevant statutory retirement age of 67.

Costs: Schedule 7

Schedule 7 provides an allowance of $1,500.00 per day for Counsel, however the allowance is stipulated to be “for representation in Court”. In Racing NSW Insurance Fund v Steinhardt, the Registrar’s Delegate was required to consider whether a party could recover for days set aside by Counsel where a case settled before a three day hearing. The issue at hand was whether costs should be recovered for days set aside by Counsel.

The Registrar’s Delegate decided that because no allowance was made by Schedule 7 for days set aside, then costs were to be assessed pursuant to the Legal Profession Regulation 2005 on the basis of what is ‘fair and reasonable”.

The Registrar’s Delegate determined that the costs associated with retaining Counsel to appear were reasonably incurred and allowed two days set aside at $1,000.00 plus GST per day.

Schedule 6 Costs: Item E v Item F

In Harris v Hunter New England Area Health Service trading as Rankin Park Hospital, the Registrar’s Delegate concluded that it was not necessary for the Arbitration phase of proceedings to commence in order for costs to be assessed by reference to Item F.

The Registrar’s Delegate effectively decided that follow-on attendances for Items D and E are only applicable for “mere” consequential settlement attendances and that any additional work, such as referral to an AMS and reviewing a Medical Assessment Certificate, engages the next Item for the purposes of assessing costs.


We are pleased to announce the appointment of Dennis Kim and Jo Hennessy as Associates of the firm from 1 July 2012.

Jo Hennessy