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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters

Alert24 - Safeguard Update

A principal's liability is limited

A principal's liability is limited
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New Zealand

The two key responsibilities of a principal under the HSE Act are to engage a competent contractor and to make sure safety is being taken care of on site. The principal is not required to double-check the safety of highly technical elements beyond its expertise because that is the very reason a specialist contractor has been engaged.

Making this argument, South Roads Ltd successfully defended a section 18 charge (Dunedin DC, 13 August). The contractor, Dennis Industries Ltd (DIL), has been separately convicted.

The company was contracted by KiwiRail to replace two rail bridges on the line between Dunedin and Port Chalmers. In turn, South Roads contracted DIL to supply and install precast concrete elements, including driving piles for the replacement bridges, and building a temporary piled platform alongside each side of the bridges on which a crane could operate.

The first bridge was completed during 2010. In September work began on the second bridge, known as 218. After a couple of weeks DIL had installed three piles for the temporary platform and moved a 50-tonne crane onto the platform to prepare to drive the fourth and final pile. The weight of the crane caused the piles to begin sinking, and workers were cleared from the platform. The piles sank further until the platform was at an angle and the crane slid into the sea. No one was injured.

In his decision, Judge M A Crosbie said there was no dispute that the incident was caused by errors in piling design and methodology, namely the failure to allow for the difference in soil at the bridge 218 site compared to the earlier bridge, and the failure to test to ensure a pile capacity of 85 tonnes had been achieved.

"The facts are incontrovertible. The work of DIL (and by connection OCEL, the design engineer employed) was found wanting."

MBIE's case was that South Roads as principal had failed to:

  • test the stability of the temporary platform before the crane was moved onto it;
  • obtain detailed drawings and a producer statement for the platform;
  • obtain written certification from a design engineer that the platform was erected as designed; and
  • ensure a geotech analysis was undertaken.

South Roads said it accepted responsibility as principal to monitor the site as part of its responsibility for the progress of the project. But it said it expected to have little involvement in the design and build of the temporary platforms because it had contracted that task to DIL.

South Roads left DIL to engage a temporary works designer - OCEL - to work together to design the platforms, including ensuring the piles met the capacity required.

"The defendant's position," said the judge, "is that it was not required to oversee the technical design aspects of the work contracted out. The defendant submits that to do so imposes too high an obligation on it and negates the purpose of engaging subcontractors."

However the judge found a "material error" by KiwiRail's engineer contributed to how South Road managed the contract, in that he approved its request that the same drawings for the first bridge's temporary platform be used for the second, despite geotech evidence that the soil substrata at the two sites was very different. An experienced piling company such as DIL should have picked that up and adjusted its design accordingly.

Noting there were ambiguities and uncertainties in the contract between KiwiRail and South Roads as to responsibility for certification of the work carried out by DIL, nevertheless he accepted that for South Roads to have gone as far as MBIE argued would have been "a counsel of perfection".

"It is clear that section 18 [of the HSE Act] cannot be intended to be a provision which in effect requires a principal to be an insurer in respect of compliance with statutory obligations by subcontractors. The issue must always be one of fact and degree."

The facts here, he noted, were quite different from the situation in the Central Cranes Court of Appeal case - the leading authority on principals' obligations. With Central Cranes, the company as principal had failed to monitor basic health and safety on site, so the employment of a competent contractor was insufficient in that case. Here, the allegation was that South Roads as principal failed to monitor technical piling and design work that it was authorised by KiwiRail to contract out.

There was no evidence presented to suggest this is standard industry practice, nor that it was the expectation of the client, KiwiRail.

People Mentioned:
Judge M A Crosbie
Organisations Mentioned:
South Roads Ltd; Dennis Industries Ltd; OCEL; KiwiRail; MBIE
Reference No:

From Alert24 - Safeguard Update

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