England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MANCHESTER DISTRICT REGISTRY
HIS HONOUR JUDGE PLATTS (Sitting as a Deputy High Court Judge)

		Royal Courts of Justice Strand, London, WC2A 2LL
		10/11/2011

Lord Justice Longmore:

1. Kendal Calling Ltd promote and organise an annual music festival in the Lowther Deer Park near Penrith. For the purposes of the July 2010 festival, Kendal Calling needed a number of accommodation units which were supplied by Ashtead Plant Hire Company Ltd ("Ashtead"). Ashtead made arrangements for the delivery of those units to the site of the festival by contracting with Star Autos Ltd to collect and deliver the units a few days before the festival began. They were collected and taken to the site by Mr Donald Berry one of Star Autos' employees in a lorry with a mounted crane known as a Hiab. While Mr Berry was delivering the units, he was operating the Hiab crane using hand operated controls. Most unfortunately either the crane or the accommodation unit, in the course of that operation, came into contact with a live overhead power cable. Mr Berry was electrocuted, and suffered appalling injuries; his brain is severely affected, he cannot communicate, he is immobile and needs 24 hours care currently provided by the Priory Highbank Neuro-Rehabilitation Centre at a cost of £464.00 per day or £169,360.00 per annum.
2. On 29^th December 2010 Mr Berry initiated proceedings by his wife and litigation friend Carol Berry. He has sued (1) his employer Star Autos Ltd (2) Kendal Calling Ltd the occupier of the site and (3) Ashtead who supplied the accommodation units. He has alleged a failure to provide a safe system of work, negligence and breach of the Electricity Regulations. Star Autos and Ashtead are insured but Kendal Calling is not. Kendal Calling had appointed Piper Event Services ("Piper") as its health and safety adviser and manager for the festival and on 5^th July 2011 Mr Berry obtained permission to join Piper as the fourth defendant to the proceedings. Piper is insured.
3. There is considerably uncertainty about how the accident occurred. Mr Berry has no recollection or, at least, cannot communicate any recollection he might have. Kendal Calling have made an investigation which has disclosed that Mr Berry was working under the direction of their events operation manager, Mr Denny Rankin, who, it is said, signalled to Mr Berry not to unload the relevant unit or units while some loose cattle were being dealt with. It is further said that Mr Berry proceeded to unload despite that signal and that was when the accident happened. It is apparent that there will be some time before the case is ready for trial.
4. In these circumstances Mr Berry needs, if possible, an interim payment to fund the high cost of his current care. His employers originally paid £100,000.00 to Mr Berry by way of an interim payment but on 8^th July 2011 Mr Berry issued an application against Star Autos, Ashtead and Piper for an interim payment of £350,000.00. On 27^th July HHJ Platts decided that it was too soon to make any such order against Piper who had only recently been served but he did make an order as asked requiring Star Autos to make a further payment of £75,000.00 (which they have done) and £175,000.00 against Ashtead. Ashtead appeal.
5. In Ricci Burns Ltd v Toole [1989] 1 WLR 993 this court held that on the true construction of the then rules of court relating to interim payments, the court had to be satisfied, in a case where interim payment was sought against one of a number of defendants, that the claimant would succeed against the particular defendant against whom the order was sought. It was not enough for it to be clear that one or other of the defendants must be liable, if the court could not decide which. This may well have been thought to be rather harsh on a claimant if he was bound to have succeeded against defendant A or defendant B but could not presently tell which one of them it would be. In any event CPR 25.7 now provides:-

"(1) The court may only make an order for an interim payment where any of the following conditions are satisfied -

(a) the defendant against whom the order is sought has admitted liability to pay damages or some other sum of money to the claimant;

(b) the claimant has obtained judgment against that defendant for damages to be assessed or for a sum of money (other than costs) to be assessed;

(c) it is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against the defendant from whom he is seeking an order for an interim payment whether or not that defendant is the only defendant or one of a number of defendants to the claim;

(d) [relevant only to claims for the possession of land];

(e) in a claim in which there are two or more defendants and the order is sought against any one or more of those defendants, the following conditions are satisfied –

(i) the court is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against at least one of the defendants (but the court cannot determine which); and

(ii) all the defendants are either –

(a) a defendant that is insured in respect of the claim;

(b) a defendant whose liability will be met by an insurer under section 151 of the Road Traffic Act 1988 or an insurer acting under the Motor Insurers Bureau Agreement, or the Motor Insurers Bureau where it is acting itself; or

(c) a defendant that is a public body."

6. HHJ Platts held that raising a crane and a portakabin underneath a live power cable was an unsafe practice and thus an unsafe system of work. He therefore asked who was responsible for that unsafe system of work. He also held that there had been breaches of Regulations 4 and 14 of the Electricity at Work Regulations 1989 ("the Regulations") which provided respectively that every work activity had to be carried out

"in such a manner as not to give rise, so far as is reasonably practicable, to danger"

and that no person was to engage in any work activity near any line conductor (other than one suitably covered in insulating material) so as to give rise to danger. He accordingly asked who was responsible for those breaches.

7. He then said that Mr Berry's employer (or other person in control of Mr Berry) could not escape these responsibilities. Since there was a dispute between Star Autos and Ashtead as to who was the employer of Mr Berry or the person in control of Mr Berry for the purpose of the Regulations he could not be satisfied that either of them would be liable to Mr Berry but he was quite satisfied that one of them would be held liable. He therefore held that the requirement of alternate liability in CPR 25.7(1)(e)(i) was satisfied. He further held that the requirements of rule 25.7(1)(e)(ii) were satisfied because "the defendants" must mean "the defendants against whom the application for interim payments is made". It did not, therefore, matter that the second defendant Kendal Calling was not insured. Any other decision would be contrary to "the purpose and spirit of those Rules".
8. Ashtead now appeal on the basis:-

i) that it is quite possible that neither it nor Star Autos will be found liable. The responsibility for the accident is said to be, on any view, primarily that of Kendal Calling. At the time of the accident Mr Berry was not in the presence of either his employer or Ashtead and therefore they could not exercise any effective control over either Mr Berry or the situation on site; and

ii) that, even if it were shown that either Star Autos or Ashtead must be liable, the rule only applies if all the defendants are insured which was not the case since Kendal Calling (although not a defendant to the interim payment application) was, and is a defendant to the action and is uninsured.

It is convenient to deal with these points in reverse order.

Construction of CPR 25.7(1)(e)

9. Mr Oliver Campbell submitted that, on the face of it, the rule envisaged that, even if the court were satisfied that one or other of two defendants would be held liable, an interim payment could only be obtained in a case where all the defendants were insured. The fact that the application was made against two defendants who were themselves insured did not make any difference to that position. That is certainly a possible construction of the rule but it is difficult to see any rational basis for preventing an interim payment in those circumstances if the court is quite satisfied that one or other of two defendants against whom the application for interim payment is being made is insured and will be held liable. The fact that there may be another defendant who is not insured has nothing to do with the matter.
10. Mr Campbell accepted that, if a claimant sued two insured defendants (e.g. both an insurer and a broker) and obtained an interim payment on the basis that one or other of them must be liable and then added a third defendant e.g. a sub-broker who was not insured, neither of the first two defendants could demand a return of the interim payment which had been made. He was also inclined to accept that, if the claimant in the present case were to discontinue against the uninsured second defendant and re-apply for an interim payment, it might be difficult to resist the application (always subject to it being shown that judgment would in fact be obtained against one or other defendant). There might be arguments about costs but it is not particularly likely that a court would hold a second application to be abusive. It would be odd if the Rules required a claimant to go through the motion of discontinuance in order to obtain an order for interim payment. He made the perfectly fair point that the claimant might not wish to do that because his case was stronger against Kendal Calling than against Star Autos or Ashtead. But, if true, that means Ashtead will succeed on their first point; in a case where there is truly no doubt but that either Star Autos or Ashtead will be held to be liable (which is a pre-condition of the rule in any event) it would be unreal to require a claimant to discontinue just because he had also sued an uninsured defendant against whom he was not seeking any order for interim payment.
11. There is moreover an indication in the rule itself that the word "defendants" in (ii) must mean the "defendants against whom the application for interim payment is made". "Defendants" is a word used 4 times in CPR 25.7(1)(e). On the first occasion it must mean the "defendants in the action"; the second occasion refers to "those defendants" which must mean, again, the "defendants in the action"; on the third occasion, however, when the rule requires the court to be satisfied that if the claim went to trial, the claimant would obtain judgment for a substantial sun "against at least one of the defendants (but the court cannot determine which)", the word "defendants" must, in my view, mean not the defendants in the action but the defendants against whom an interim payment is sought. It cannot be the contemplation of the rule that a decision under it could be made in the absence of one of the defendants, whom the claimant asserts to be liable. The whole point of the rule is that the court must be satisfied that one of the defendants will be liable but, if only one of the contenders for such liability is before the court and blames the other who is not before the court, the court will be hamstrung in its assessment of the certainty that one or other will be liable and in its assessment of the inability to tell which one of them it is. For that reason "the defendants", when it is used for the third time in the rule must mean "the defendants against whom the interim application is being made". It then follows that there is little difficulty in construing "the defendants" in the same way when it appears in the rule for the fourth time.
12. After some thought Mr Campbell asserted that on the third occasion the "defendants" still meant the defendants in the action and that it was possible to apply against one defendant while not applying against the other defendant against whom he would in the alternative obtain judgment. But I cannot believe that to be correct for the reasons given above.
13. One is not supposed to refer to the old RSC for assistance on construction but it is at least of interest to observe how the requirement for insurance was expressed, before there was any ability to obtain an interim payment in a case of what I may call alternate liability. It was RSC Order 29 rule 11 and provided:-

"(1) If, on the hearing of an application under rule 10 in an action for damages, the Court is satisfied –

a) that the defendant against whom the order is sought (in this paragraph referred to as "the respondent") has admitted liability for the plaintiff's damages, or

b) that the plaintiff has obtained judgment against the respondent for damages to be assessed; or

c) that, if the action proceeded to trial, the plaintiff would obtain judgment for substantial damages against the respondent or, where there are two or more defendants, against any of them,

the Court may, if it thinks fit and subject to paragraph (2), order the respondent to make an interim payment of such amount as it thinks just, not exceeding a reasonable proportion of the damages which in the opinion of the Court are likely to be recovered by the plaintiff after taking into account any relevant contributory negligence and any set-off, cross-claim or counter-claim on which the respondent may be entitled to rely.

(2) No order shall be made under paragraph (1), in an action for personal injuries if it appears to the Court that the defendant is not a person falling within one of the following categories, namely –

a) a person who is insured in respect of the plaintiff's claim or whose liability will be met by an insurer under section 151 of the Road Traffic Act 1988 or an insurer concerned under the Motor Insurers' Bureau agreement:

b) a public authority; or

c) a person whose means and resources are such as to enable him to make the interim payment."

Here it is clear that the requirement of insurance applies to the person against whom the application for interim payment is being made. This has now been relaxed so as to require insurance to exist only in the case of alternate liability but it is difficult to believe that the framers of the rule, while relaxing that requirement, intended to refuse relief if it was the case that a defendant, who was not being asked to make an interim payment at all, happened to be uninsured.

Judgment against either Star Autos or Ashtead?

14. Star Autos and Ashtead each says that the other was Mr Berry's employer for the purpose of performing the task of the delivery of the accommodation units to the site of the music festival. If, therefore, the court could be satisfied that Mr Berry's employer would be liable, there would be no impediment to ordering an interim payment payable as to half each by Star Autos and Ashtead as the judge has done. But ought he to have been satisfied that, as employers of Mr Berry, they would be liable? The parties agreed that another way of putting this question is whether, if one could disregard the identity of Mr Berry's employer, Mr Berry would be entitled to summary judgment on the presently available material, see British and Commonwealth Holdings v Quadrex [1989] QB 842.

1) Common law negligence

15. It will not be often that an interim payment can be made with respect to a claim in negligence at common law. It may be obvious that the defendant owes a duty to the claimant but it will not always be obvious that he was in breach of his duty because that will depend on the facts. There is no evidence that either defendant did not train Mr Berry or assume correctly that the other had done so; nor is there any evidence that they ought to have known he was going into an unsafe environment. Normally an employee will not be content, in any event, to rely on negligence pure and simple but will wish to rely (as Mr Berry does) on a failure on the part of an employer to comply with his non-delegable duty to take all reasonable steps to provide a safe place to work and a safe system of work.

2) Failure to provide a safe place and system of work

16. An employer's liability under this heading can be obvious if an employee suffers an injury at a place of work owned, occupied or controlled by his employer e.g. a factory or an office. But problems begin to arise when the place where the accident happened is not under the control of the employer, as is the position in this case. Neither Star Autos nor Ashtead were present at or exercised any control over the Lowther Deer Park where the music festival was due to take place. The law is set out in Clerk & Lindsell (Torts) 20^th ed. (2010) para 13-13 under the heading "Distant places of work".

"The fact that the place of work is not under the control of the employer is only one factor in deciding whether the obligation to provide a safe place of work has been discharged. Although generally an employer owes no duty to employees as to the safety of the premises occupied by another, it will have to provide a system of work suitable for those premises. For example, window cleaning firms are not bound to inspect the premises of those whose windows they clean before sending men to clean them, but they must be taken to know that window sashes may move unexpectedly and should give instructions and provide any necessary implements accordingly."

This is supported by both Smith v Austin Lifts [1959] 1 WLR 100, and Cook v Square D Ltd [1992] ICR 262. In the first case Lord Denning said (page 117):-

"Notwithstanding what was said in Taylor v Sims & Sims (1942) 167 L.T. 414 it has since been held, I think rightly, that employers who send their workmen to work on the premises of others cannot renounce all responsibility for their safety. The employers still have an overriding duty to take reasonable care not to expose their men to unnecessary risk. They must, for instance, take reasonable care to devise a safe system of work, see General Cleaning Contractors Ltd v Christmas [1953] A.C. 180: and if they know or ought to know of a danger on the premises to which they send their men, they ought to take reasonable care to safeguard them from it. What is reasonable care depends, of course, on the circumstances, see Wilson v Tyneside Window Cleaning Co. [1958] 2 QB 110."

In the second case, Farquharson LJ said (pages 268-9):-

"It is clear that in determining an employer's responsibility one has to look at all the circumstances of the case, including the place where the work is to be done, the nature of the building on the site concerned (if there is a building), the experience of the employee who is so despatched to work at such a site, the nature of the work he is required to carry out, the degree of control that the employer can reasonably exercise in the circumstances, and the employer's own knowledge of the defective state of the premises, as referred to in that last passage of the speech of Lord Denning.

There is no doubt that it is an employer's duty to take all reasonable steps to ensure the safety of his employees in the course of their employment. That has been said again and again, including those cases which I have just cited. There is also no doubt that the duty cannot be delegated, but the authorities show that the considerations which I have just summarised must be taken into account when the employee is injured on premises in the occupation of a third party. As was pointed out in Wilson's case, it depends on what is reasonable in all the circumstances."

17. These extracts show that whether an employer has discharged his duty to take all reasonable steps to provide a safe place or safe system at work at a place which is not under his control is a fact-sensitive inquiry. Naturally enough the court asked Mr Melton QC for Mr Berry what it was that either employer (particularly Ashtead as the appellant in the appeal) ought to have done but did not do. He replied that Ashtead's (and Star Autos') duty as reasonable employers was to enquire of Kendal Calling whether there were any significant hazards on the site and in particular whether there were any live electric cables; that they had not done. No doubt that is an arguable proposition although it may be questioned whether that is really necessary if the crane operator has been properly trained and has the appropriate experience. But it does not seem to me that the proposition is so clearly right on the facts of this case as to justify summary judgment against the employer, whoever he might be found to be.
18. Mr Melton relied on the fact that on a previous occasion, when Ashtead used the services of (or employed) Mr Berry, Ashtead provided Mr Berry with a form which he and the site occupier had filled in and which included the question

"Is there sufficient clearance between the Long Mounted Crane and overhead hazards?"

On that occasion a negative answer was given. Mr Melton submitted that there was no evidence that any such form was given (let alone filled in) in July 2010 and that, in the absence of such form, Mr Berry had a cast iron case.

19. That is a strong argument but it does depend on evidence. The mere fact that no form can now be produced does not necessarily mean that one never existed; there may, in any event, be reasons why no form was filled in that day e.g. because Mr Berry and/or Star Autos and/or Ashtead had performed the carriage and delivery of units on a previous occasion when nothing had gone wrong. The whole case is still too fact-sensitive to justify the court in being satisfied that either Ashtead or Star Autos must be liable.

3) The Electricity at Work Regulations 1989

20. These provide:-

"3. Persons on whom duties are imposed by these Regulations

1) Except where otherwise expressly provided in these Regulations, it shall be the duty of every –

a) employer and self-employed person to comply with the provisions of these Regulations in so far as they relate to matters which are within his control.

…

2) It shall be the duty of every employee while at work –

a) to co-operate with his employer so far as is necessary to enable any duty placed on that employer by the provisions of these Regulations to be complied with; and

b) to comply with the provisions of these Regulations in so far as they relate to matters which are within his control.

4. Systems, work activities and protective equipment

1) All systems shall at all times be of such construction as to prevent, so far as is reasonably practicable, danger.

2) As may be necessary to prevent danger, all systems shall be maintained so as to prevent, so far as is reasonable practicable, such danger.

3) Every work activity, including operation, use and maintenance of a system and work near a system, shall be carried out in such a manner as not to give rise, so far as is reasonably practicable, to danger. …

....

14. Work on or near live conductors

No person shall be engaged in any work activity on or so near any live conductor (other than one suitably covered with insulating material so as to prevent danger) that danger may arise unless –

a) it is unreasonable in all circumstances for it to be dead; and

b) it is reasonable in all circumstances for him to be at work on or near it while it is live; and

c) suitable precautions (including where necessary the provision of suitable protective equipment) are taken to prevent injury."

21. It can be seen that the pre-requisite of these Regulations is that compliance is necessary

"in so far as they relate to matters which are within his" [namely the employer's] "control."

The live conductors envisaged in regulation 14 were not within either Star Autos' or Ashtead's control because they were on land occupied by Kendal Calling and had nothing to do with either of them in their capacity as employers. The lorry mounted crane could, no doubt, be said to be within the control of Mr Berry's employer whoever that might be. But there is no evidence that the electrical system was not constructed or maintained to prevent danger within regulation 4(1) or 4(2). It is no doubt for that reason that it is regulation 4(3) on which Mr Berry places most reliance.

22. The court is grateful for the short further submissions in relation to regulation 4(3) which it has received after the oral argument. Mr Melton submits that this sub-paragraph imposes an absolute obligation on any employer to ensure that the operation and use of a system of work, for example a lorry mounted crane, must be carried out in such a manner as not to give rise to danger. He relies on Stark v Post Office [2000] ICR 1013 in which this court held an employer to be liable when his employee suffered injury as a result of a bicycle's brake stirrup being broken pursuant to the Provision and Use of Work Equipment Regulations 1992.
23. There are three difficulties with this submission. In the first place it must be arguable that the operation and use of the crane in relation to the live overhead power cable was not within the control of either employer. The fact that either employer might have had the power (or even the duty) to, for example, undertake a risk assessment does not necessarily mean that the operation and use of the crane while at Lowther Park was under the employer's control since "power" and "control" are not identical concepts, see Mason v Satelcom [2008] ICR 971, paras 13 and 36-37 and McCook v Lobo [2003] ICR 89 at para 16 per Judge LJ, although the point in that case was (ironically) whether it was the occupier rather than the employer who had control. Secondly the presence of the words "so far as is reasonably practicable" in the regulation brings in considerations comparable to common law negligence. This was recently held by the Supreme Court in Baker v Quantum Clothing Group [2011] 1 WLR 1003 albeit in connection with the domestic legislation of the Factories Act 1961 rather than the EU inspired Electricity at Work Regulations. But it is arguable that the words should receive the same construction in both domestic and EU inspired legislation. These words were not present in the regulation being considered in Stark v Post Office which is, therefore, distinguishable. Thirdly regulation 3(2) (b) imposes the duty to comply with the regulations on the employee "in so far as they relate to matters which are within his control". It may well be said that since, on any view, Mr Berry as a trained professional, was more in de facto control of the crane mounted on his lorry than his employer (whoever that was) it was Mr Berry's own breach that was causative of his injury rather than any breach by Star Autos or Ashtead. Similar objections to these apply just as much to any suggestion that Ashtead (or Star Autos) are liable pursuant to regulation 14.

Conclusion

24. The sad truth is that this is not an easy case on liability as against either Star Autos or Ashtead. I fear I cannot agree, for the reasons given in paragraph 17 above, that the case can be as simply expressed as it was by the judge when he set out Mr Melton's submissions to the effect that (para 4) "any reasonable inquiry by either of them could have revealed the obvious danger" if by that he meant that one of them would obviously be liable for Mr Berry's injury. I would therefore allow this appeal on the first ground, although I would have dismissed it on the second ground if it had been clear that one or other of Star Autos or Ashtead would be liable to Mr Berry.
25. This will be a great disappointment to Mrs Berry and the court was concerned to hear that the case can only be tried next summer. If the date really cannot be brought forward, the court expresses the hope that Star Autos will continue to fund the current care of Mr Berry until the trial in his capacity as a valued employee.

Lord Justice Rimer:

26. I agree.

Mr Justice Warren:

27. I also agree.