COUNCIL LIABILITY FOR CONTRACTOR’S NEGLIGENCE

In an important decision for Council’s, the High Court recently found in Leichhardt Municipal Council v Montgomery that Council’s are not automatically liable for the negligent behaviour of employees of roadwork contractors.

In this case, Leichhardt Council engaged Roan Constructions (‘Roan’) to repair a section of footpath. While doing so an employee of Roan placed carpet over the top of a broken cover to a telecommunications pit. Mr Montgomery was walking on the pathway, stepped onto the carpet and fell into the pit below. Mr Montgomery made a claim against both Roan and Leichhardt Council. Roan settled with Mr Montgomery for $50,000. The District Court of NSW, ordered Leichhardt Council to pay Mr Montgomery $264,450 less the $50,000.00 already paid by Roan. This decision was upheld by the NSW Court of Appeal which said the Council owed the pedestrian a non-delegable duty of care and that duty had been breached. They found that the Council was automatically liable for any negligence of the contractor’s employees, and the pedestrian did not need to prove fault on his part. Leichhardt Council appealed to the High Court.

Can Council’s duty of care be delegated?

The High Court found that engaging a contractor does not absolve council of its duty to exercise reasonable care. It said “The exercise of reasonable care for the protection of road users, in a case where an independent contractor is engaged, may be affected by the nature of the work involved and the resources respectively available to the roads authority and the contractor… The content of requirements of reasonable care adapts to circumstances, unlike the content of a requirement to ensure that care is taken.”

However, the High court found that Leichhardt Council did not have a duty to ensure that the employees of Roan did not behave carelessly: “To speak of a council having a duty to ensure that such an apparent low-level and singular act of carelessness does not occur is implausible. It is one thing to find fault on the part of council officers where there has been a failure to exercise reasonable care in supervising the work of a contractor, or in approving a contractor’s plans and system of work. It is another thing to attribute to the council a legal duty of care which obliges the council to do the impossible: to ensure that no employee of the contractor behaves carelessly.”

The High Court allowed the appeal. However, it only answered the question of whether the Council had a non-delegable duty of care. The issue of whether there was a lack of care by officers of the Council is undetermined. The case has been remitted to the NSW Court of Appeal to determine whether there was any negligence by the Council.

Interestingly, even though it is a condition of contracts with Leichhardt Council that all contractors have a $10 million public liability insurance policy, Roan contractors were uninsured. Given this, Mr Montgomery settled with Roan for $50,000, and pursued Leichhardt Council. We will inform you of the Court of Appeal decision once handed down.

What does this mean for Council?

• Council does not have a non-delegable duty of care to road works contractors. Therefore, if there is negligence on the part of a road works contractor that could not have been prevented by Council, the liability will lie with the contractor.
• However, Council has a general duty to ensure that is takes reasonable care to prevent injury. Accordingly, it must act reasonably in exercising supervision of what its contractors do. It is in Council’s best interests to carry out regular inspections and checks of all road work (and other work undertaken by contractors) and investigate any perceived unsafe practices on the part of the contractor.
• Council should ensure that no contractor is allowed to commence work before proving the currency and validity of their relevant insurance policies.