The issue is whether Hilift Ltd.

(Hilift) is liable, and to what extent it is liable for the harm

that occurred in all incidents through the intentional repeated use of a crane which was not
performing properly. Hilift is a limited company, defining it as a separate legal entity,
ensuring that personal assets are distinct from the company finances.

To establish liability for negligence, the court will first have to decide whether or not in
these circumstances a duty of care is required from the defendant to the plaintiff, whether
or not the defendant has breached that duty of care and that the defendant’s breach has
caused foreseeable harm to the plaintiff’s protected interests. Within this situation an
employee of Hilift, Elwyn, notifies the manager of Hilift that “the crane is not performing
properly” and that “it needs looking at.” The manager of Hilift does act on this, contacting
EFL limited asking for an engineer to be sent out immediately to inspect the crane. However
this would take two hours, and due to possible economic loss in the future the manager
instructs a different employee Osman, to begin his shift, immediately using the faulty crane.

As several people are affected by the incidents that follow, each individual situation must be
considered independently, in order to see as to whether and what extent a legal duty of
care is owed. Osman, is employed by Hilift, as a crane operator. As Osman is an employee of
Hilift, a common law duty of care arises, requiring the employer to take reasonable
precautions to prevent foreseeable harm from occurring, such as in the case Hamilton v
Nuroof (WA) Pty Ltd (1956) 96 CLR 18. In this situation Osman is under instruction to begin
his shift immediately and to run a crane, which is known to be not performing properly. If
Hilift can be seen as vicariously responsible for the manager’s decision, the plaintiff will also
be owed a duty of care under a liability for omission. This is, that the risk of harm has been
increased due to the failure to act to prevent the harm, i.e. use of the crane after it has been
reported not to be working properly, in which affected Osman (psychological and
econmical). It can also been seen that the managers provided a negligent misstatement, on
which the plaintiff has relied and, as a result, suffered the loss. As in this situation, the
manager was definitely being relied upon to give accurate advice on the basis of which the
other party will act. Therefore there is definitely a duty of care owed to Osman.

There are two workers employed by an external builder. The builder hired Hilift’s crane and
operators for two weeks in order to lift building materials. As there is a contractual
relationship between the two companies it is reasonable to say that Hilift owes a duty of
care to prevent foreseeable harm to the two employees of the builder, and the builder
themselves as doe the builder owe a duty of care to the employers of Hilift Ltd. Hilifts crane
broke and caused serious injury to the two workers, to which they owed a duty of care.

The owner of the building site, whom would have handed the property to the builder in
order for the construction to take place, is owed a duty of care from the builder themselves.
However, because there is a contractual relationship between the builder and Hilift Ltd. it is
not unreasonable to say that Hilift Ltd. also owes a duty of care to the site owner.

Hilift is a company, therefore it is important to underline the differences in law to which

legal conduct would be carried out, as there is a notable distinction. The law will treat Hilift
Ltd. as if it were a person or a “separate legal entity” to its owners which ensures the
distinction between personal and company assets. The abbreviation Ltd. following the
company name suggests Limited liability “which is the rule that the owners or shareholders
of a corporation cannot usually be sued as individuals for corporate actions unless they are
involved in fraud or criminal conduct.” Butterworths Encyclopaedic Australian Legal
Dictionary.

The issue is whether or not Hilift is vicariously responsible for the decision of its manager
not to cease work on the building pending the arrival of an engineer to inspect the crane.
This situation gives arise to the question of the principle, Hilift Ltd.’s liability for the harm
caused by its managers decision.

To determine whether the principle is liable in tort law for the wrongful conduct of their
agent, will depend on the degree of control that the principal exercises over the way the
agent carries out their work.

The manager cannot be classed as an independent contractor, of who would have liability if
the duty of care was found to be breached, as in this case the manager is subject to the
principal’s control in the way they carry out work. As the manager is an employee of Hilift
Ltd. and was duly carrying out duties of the company, and acted in accordance with a
calculated decision, which he believed were in the best economic interests of the company
it is reasonable to say that Hilift in law is responsible for the decision of its manager.

The manager has definitely made a wrong decision, or a negligent decision however this
decision was not an unauthorised act, or attending to some interest or activity of their own
making Hilift vicariously liable, respondeat superior. On the basis of this outcome
comparison can be made with similar cases such as Hollis v Vabu Pty Ltd [2001] HCA 44;
(2001) CLR 21. Where the courier of a company could not be regarded as running his own
business or enterprise as of which can be said also of the manager of Hilift.

Main factors behind companies like Hilift in these circumstances being vicariously liable
through the conduct of their employees, has been identified by the Queensland Law Reform
Commission.

These reasons are that:

(a) The plaintiff can obtain compensation from someone who is financially capable of
satisfying a judgement. It is likely that an employer will have greater financial resources
than an employee.
(b) A person or corporation who employs others to advance their own economic interest
should, in fairness, be placed under a corresponding liability for losses incurred in the
course of the enterprise.
(c) Vicarious liability promotes a wide distribution of tort losses as an employer can pass the
costs on through insurance and higher prices.
(d) The imposition of vicarious liability promotes deterrence of tortious conduct. It provides
incentives for employers to encourage employees to perform well on the job and to
discipline those that do not.

(Queensland Law Reform Commission, Vicarious Liability, Report No. 56 (2001) 9-13)

On the assumption that the court of law finds Hilift vicariously responsible, the issue is
whether or not a duty of care owed by Hilift was breached to the following persons, Osman,
the injured workers, the builder and the owner of the building site.
Section 5B of the Civil Liability Act 2002 (NSW) instructs that a person or entity will not be
negligent in failing to take precautions against a risk of harm unless:
a) The risk was foreseeable
b) The risk was not insignificant, and
c) In the circumstances, a reasonable person in the person’s position would have taken
those precautions.

The risk, was foreseeable, as the crane was reported to be not operating properly and the
risk was not insignificant, a dysfunctional piece of heavy machinery cannot be seen as a low
or insignificant risk no matter what the circumstances are.

To determine whether a duty of care was breached we must define “a reasonable person”
and decide whether or not a reasonable person in the same position as the manager of Hilift
would have acted equally. A reasonable person according to Butterworths Encyclopaedic
Australian Legal Dictionary is a hypothetical person in society who exercises average care,
skill, and judgment in conduct and who serves as a comparative standard for determining
liability.

The court at this point would determine whether or not the manager had acted negligently,
and due to the extremely high potential to serious harm, it is likely to be decided that a
reasonable person would not have instructed Osman to use the crane, and that Hilift has
breached a duty care.

Hilift has been determined to owe a duty of care to Osman, the injured workers employed
by the builder, the builder and the owner of the building site. The Company has also
breached that duty of care to all of them due to the negligent decision, whether it is a direct
cause of physical or psychiatric harm to the persons or economic loss. However the pathway
in which the persons would take in order to receive compensation for their loss would be
dependent upon their decisions in how to act following the incident.

The injured construction workers are employed by the builder, who has hired the crane
operators for two weeks. The duty of care is owed by Hilift and has been breached. Due to
the managers negligence this physical harm has occurred. If it was not for the managers
instruction to continue to use the crane, the builders would not be injured. Personal injury
covers all consequences of bodily injury, nervous shock disease and illness. It includes the
economic and other consequences of such injury, such as in this case medical costs for the
two builders and compensation for the economic loss to put them in them in the same
economic situation as if they had never been injured.

As the causation is a single cause of harm, i.e. the harm occurred because of the defendant’s
negligent conduct. Hilift can definitely be legally compelled to pay compensation. But to
what extent is Hilift Ltd liable for the harm affecting the construction workers and what is
the extent of harm.

The builder of who lost both legs has a considerably high degree of harm, leaving him
permanently disabled. This would make it impossible for the builder to carry out the duties
of his profession, as well as having a serious impact on the quality of life of the builder. The
builder would likely sue Hilift for general and special damages in regard to his current and
future incomes, as well as compensation for his disability, consequential mental harm and
medical costs. As for the construction worker who is to make a full recovery, they would
likely be allowed compensation to the extent of the medical costs and loss of income for the
period of rehabilitation. As there is no contributory negligence in the facts about the
conduct of the construction workers, it can be said that this builder was solely carrying out
the duties of the day as required by the builder, allowing a full compensation.

However if there are any contractual agreements such as the consent to a risk of harm,
between the construction worker and Hilift, compensation may be somewhat more limited,
and the figure required to pay for the defendant lower, according to the content of what
was in the contractual agreement.

Osman is deeply traumatized by the events and cannot bring himself to drive a crane again.
He also receives psychiatric treatment, in which afterward he is still unable to work as a
crane driver and instead has to take lower paid work as a general construction worker.
This situation would mean that Osman, would have to sue for damages relating to “pure
mental harm.” To conduct this, and attract compensation, the harmed person has to have
suffered a ‘recognised psychiatric illness’ (or ‘condition’) not merely from grief or distress.
This rule has the effect that expert evidence is normally required to establish whether
damages are recoverable for pure mental harm.

If it is diagnosed that Osman does have trauma, Hilift can be liable to the extent of the
economic supply that will as nearly as possible, put Osman in the same position in which he
had not had the injury, i.e. the difference in pay between his previous employment, and the
medical expenses of the psychiatric treatment.

To find whether or not Hilift Ltd can be legally compelled to pay the builder the full value of
the ‘late completion’ payments that the builder was required to pay to the building, we
must ask whether Hilift’s scope of liability covers that of the Builders contract. It is clear that
the negligence caused by the manager of Hilift’s decision caused delay in the construction of
the building; however it is arguable that Hilift is not liable to the full extent of the late
payment fees.

The manager of Hilift acted upon what he thought were the best interests of the builders
company and as the future is unforeseeable, it is not unreasonable to suggest that there
could have been delays caused by the builder of which are not from the accident. The
manager also instructed the employee to continue working in order to reduce the
foreseeable delays in construction due to the crane not performing properly. This argument
would come under justifiability of harm in which an action was taken to prevent the
economic loss of the builder however this caused some other action to occur. This may be
seen by the courts favourably and in turn reduction of the payout of the completion fees
would be liable to the defendant.

The issue is whether or not Hilift Ltd is liable for the rental income from tenants that the
owner lost as a result of the three month delay in completion.
Hilift did, owe the plaintiff a duty of care, and that duty of care was breached however the
loss suffered by the owner of the building site could be classed as too remote to the
accident that happened.

Questions arise to how a court of law would accurately calculate the proposed amount of
tenants, and to what rent they would pay if they did. As the landlord at present according to
the facts has possession of the premises but no tenant to produce rental income. It is not
unreasonable to say that the landlord may have had difficulty in the location and acquisition
of reliable tenants in months following even due-date completion of the site, warranting an
inconsistency to the amount in which the plaintiff is suing the defendant. This allows for a
reasonable doubt that Hilift can be legally liable in tort to pay for the harm that has
occurred to the owner of the building site in full for the rental income from tenants that it
lost as a result of the three month delay in completion.