The recent ACT Supreme Court case of Sebastian v ACT & Others(February 2006) is a timely reminder of contracting parties’ responsibilities for an unsafe construction site.
John Sebastian (then an infant) was injured at a partly completed gross pollution trap at Tuggeranong Creek in the ACT. The first contractor engaged by the ACT to build the trap had become defunct and the works stopped. The Superintendent (Willing and Partners) agreed to continue its involvement in the project and to document the partly completed project with a view to calling tenders for its completion. Tenders were called.
On 18 December 1990, National Capital Earthmovers Pty Ltd entered into an agreement with the ACT to complete the works and Willing was appointed Superintendent once again.
Nine days later, on 27 December 1990, young John Sebastian entered the site and ducked under a barrier. A construction reinforcement rod that was left bent and exposed struck his eye. At the time of the injury, National Capital had not commenced work on site.
The ACT admitted liability for the injury and sought contribution from the Superintendent and from National Capital as the contractor.
The contractor and the principal
The contract between the ACT and National Capital contained the usual terms – in summary providing that:
- the contractor was deemed to have examined the site and all its surroundings;
- the contractor was to erect and maintain all barricades and fencing for the protection of the work and for the safety of the public.
In addition, the contract included a requirement that National Capital indemnify the principal (ACT) in relation to injury arising from the construction or maintenance of the works.
The ACT claimed that National Capital had been granted possession of the site on 20 December 1990 and had failed to protect John Sebastian by allowing him access to the site. It also claimed that National Capital was liable to pay compensation to Sebastian by reason of the indemnity under the contract.
National Capital said that it was not liable under the contract because the contract required it to produce insurance certificates to the superintendent before it was permitted to access the site. It had not provided the insurance details until 7 January 1991.
It said that, not withstanding that it had inspected the site when it prepared its tender, it was under no duty to ACT to warn as to the unsafe conditions until after it had provided the insurance details. The Court agreed with the contractor, National Capital. It noted that the Superintendent had written to the contractor on 20 December 1990 informing it that it could not commence on site until the insurance details were provided.
As to the indemnity clauses, National Capital said that because it had not done any work on the site prior to the injury date, the injury could not have “arisen” from the construction or maintenance of the works. Again, the court agreed with National Capital and dismissed the claim against it.
The Principal and the Superintendent
In relation to the claim against the Superintendent, the outcome was very different. The Superintendent had entered into an agreement with the National Capital Development Authority in which it gave indemnities to the ACT. The Superintendent indemnified the ACT against all claims (widely defined) as a consequence of any breach of the agreement, or any negligent act. The indemnities extended to claims for personal injury.
The Superintendent’s role extended to the giving of directions to the defunct contractor in the event that unsafe conditions existed on the site. The Superintendent had inspected the site to document the outstanding works after the financial failure of the first contractor and had charged fees for that work. The court found that the Superintendent had breached this requirement of its agreement by failing to give the directions to either the first contractor or to National Capital.
The court found that the indemnity offered by the Superintendent could be relied upon by the ACT, resulting in a finding that the Superintendent was 100% liable for the compensation to be paid to John Sebastian.
Notably, the court said that, if the claim had been based in negligence, it would have been inclined to find the principal and the superintendent each 50% liable for the damage that had been caused.
The case is a reminder to contracting parties of the need to:
- audit site safety on a regular basis;
- exclude visitors (and in particular children) from the site by the means of barricades;
- carefully consider the terms of their contract;
- review the terms of any indemnity clauses;
- ensure that appropriate insurances are in place.
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Contributor: Tom Grace
Tom is a former engineer who ran his own construction company for 20 years before becoming a construction and Ron Bell car accident lawyer Albuquerque. He has wide experience in the engineering and construction fields and specialises in the resolution of commercial disputes.