Non-employing entity found liable in negligence for criminal acts of a third person

Legal Directions

Wright by his tutor Wright v Optus Administration Pty Ltd [2015] NSWSC 160

At the time of preparing this article, we learned that Optus Administration Pty Ltd (the defendant) intends to appeal the liability finding of the New South Wales Supreme Court.

However, as matters currently stand, the Supreme Court of New South Wales awarded damages of $3.8 million to the plaintiff who suffered injury, including mental harm, when he was assaulted by a fellow trainee.

Facts

The plaintiff and a Mr George (the perpetrator) were employed by separate labour hire companies. They were undertaking training by the defendant at its premises in preparation for work in the defendant’s call centre. The plaintiff and the perpetrator were unknown to each other prior to commencing the training a few days earlier.

The court accepted that, unknown to the defendant, the perpetrator had formed a desire to kill someone. That desire was directed to another person on the previous day although, fortunately, did not eventuate. The perpetrator’s intentions were then directed towards the plaintiff on the evening prior to the material day.

On 15 March 2001 the perpetrator left the training room without permission. Shortly after his departure, another trainee handed a note from the perpetrator to the plaintiff requesting the plaintiff follow the perpetrator, which the plaintiff ignored. Shortly after, another trainee orally advised the plaintiff that the perpetrator wanted to see him on the roof. Again, the plaintiff ignored the request.

A trainer employed by the defendant who was not initially aware of the perpetrator’s requests, but was aware of his unauthorised absence, noticed that the plaintiff looked frustrated, made enquiries of the plaintiff, and ascertained the whereabouts of the perpetrator.

She then went to the rooftop of the training centre and noticed that that the perpetrator seemed incoherent. She formed the view that he may have been under the influence of drugs, which led her to inform a colleague manager, and they both returned to the rooftop to counsel the perpetrator. The perpetrator asked to see the plaintiff.

The manager wrongly assumed that the perpetrator and the plaintiff were friends and directed the trainer to locate the plaintiff and bring him to the rooftop.

The plaintiff informed the trainer that he did not know the perpetrator and did not want to become involved. The trainer persuaded the plaintiff to attend the rooftop.

When the plaintiff arrived on the roof, the perpetrator encouraged him to look over the railing at a car. He then attempted to throw the plaintiff over the railing. When the perpetrator was unsuccessful he started to punch the plaintiff in the head. The manager intervened and restrained the perpetrator. The plaintiff, among other things, developed a severe anxiety disorder with secondary depression and post-traumatic stress disorder.

Proceedings

The plaintiff commenced proceedings alleging the defendant was negligent and sought damages. An issue arose as to the scope of the duty owed.

The plaintiff asserted that the defendant owed him a duty of care analogous to that owed by an employer to an employee per TNT Australia Pty Ltd v Christie [2003] NSCA 47; 65 NSW LR 1. The plaintiff alleged that the defendant failed in its duty to take reasonable care and to safeguard him from a foreseeable, not insignificant risk that the perpetrator may assault him [being relevant tests under the Civil Liability Act 2002 (NSW)].

The defendant denied that it owed the plaintiff a duty of care of that scope. Rather, it argued that the duty it owed was that of an occupier to a lawful entrant which did not extend to preventing the criminal act of the perpetrator. As such the defendant argued that it was not in breach, relying upon Modbury Triangle Shopping Centre Pty Ltd v Anzil [2000] HCA 61; 2005 CLR 254.

Further, the defendant argued that there was no basis to establish that it was negligent even if it owed the duty pressed by the plaintiff, as:

  • The assault was not foreseeable
  • There was not a legal nexus or connection between any breach and the criminal event so as to establish causation
  • That the plaintiff was negligent in approaching the perpetrator such that any damages ought to be reduced for contributory negligence.

The defendant cross-claimed for contribution against the plaintiff’s employer (a labour hire company) alleging that it was in breach of the duty of care owed as the plaintiff’s employer. The employer cross-claimed against the defendant seeking an indemnity / repayment of workers’ compensation payments made by it to the plaintiff.

Judgment

On the scope of duty point, the court found that the plaintiff’s attendance at the training was under a contract between his employer and the defendant which included terms that while present at the course, the plaintiff was subject to the defendant’s direction and control and, in fact, the defendant exercised that direction and control. On our reading, the fact that the trainer persuaded the plaintiff to attend the roof after it became clear that the manager’s assumption that the plaintiff and the perpetrator were friends was misinformed. The fact that the plaintiff did not want to go to the roof was important in the court’s assessment that the defendant was in relevant control of the plaintiff. Thus, similar to the decision in TNT, the court held that the duty of care owed by the defendant to the plaintiff was analogous to that of an employer and employee. It follows that the defendant had a duty to take reasonable care to protect the plaintiff from any foreseeable risk.

On the foreseeability point, the court found that that the defendant knew, or ought to have known from the perpetrator’s bizarre behaviour, that persons in his presence were at risk of harm. Also, as the perpetrator specifically requested the plaintiff, the court held that the risk/possibility of the perpetrator assaulting the plaintiff was foreseeable.

The court held that the breach of duty arose when the defendant authorised, permitted, allowed and encouraged the plaintiff and requested that he place himself in close proximity to the perpetrator. The defendant ought to have discharged its duty by:

  • Removing the perpetrator from the premises with the assistance of security personnel and/or the Police
  • Not permitting the plaintiff, the only person in whom that the perpetrator expressed an interest, to approach the perpetrator.

On causation, the court accepted that the effects of the incident on the plaintiff were not too remote to be compensable.

The court also held that the plaintiff could not have foreseen the imminent attack by the perpetrator and was thus not negligent in approaching the perpetrator in circumstances where he was acting on the instructions of the defendant to attempt to assist in counselling the perpetrator. Thus, no deduction for contributory negligence was made.

The defendant’s cross claim against the plaintiff’s employer was dismissed on the basis that the employer was not in breach of its duty of care, as the plaintiff’s accident was not foreseeable to it, bearing in mind that it was absent from the premises and not relevantly in control of the unusual circumstances giving rise to the injury. In short, the defendant was exclusively liable. It then follows that the defendant was liable to indemnify the employer for all workers’ compensation payments made.

Conclusion

This case serves as a reminder of the broad extent of duties potentially owed by principals involved in labour hire arrangements, particularly in circumstances where they exercise direct and broad control over the employees of a labour hire entity.

It also highlights, consistent with a number of authorities following the decision of Modbury Triangle, that in certain circumstances, liability can arise despite an injury being suffered as the result of a criminal act of a third person.

It will be interesting to consider the basis of the appeal and ultimate decision of the Court of Appeal in due course.

Authored by Kerry Wood, Partner, Perth.


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