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[2016] NSWCA 336

State of NSW v Wenham

(1) Application for leave to appeal granted. (2) Notice of Appeal in the form at White Book 20 to be filed within seven days. (3) Appeal allowed. (4) The respondents to pay the appellant’s costs as agreed or assessed in this Court. (5) Set aside orders of Elkaim DCJ made 15 March 2016 and instead order: (a) The question of whether the employer was entitled, in an action under s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW), to rely upon the “blameless motor accident” provisions of the Motor Accidents Compensation Act 1999 (NSW) (Part 1.2, Div 1) should be answered – “Yes”. (b) The respondents to pay the appellant’s costs as agreed or assessed in the District Court.

Catchwords

WORKERS COMPENSATION – worker employed by appellant – worker injured in motor accident – accident caused by truck driven and owned by respondents – respondents conceded motor accident was a “blameless motor accident” under s 7A of the Motor Accidents Compensation Act 1999 (NSW) – s 7B deems fault in blameless motor accident – worker recovered worker’s compensation payments from appellant – appellant sought indemnity from respondents under s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) – s 151Z(1)(d) requires “injury ... caused under circumstances creating a liability in some person other than the worker’s employer” – whether appellant entitled, in an action under s 151Z(1)(d), to rely upon the “blameless motor accident” provisions of the Motor Accidents Compensation Act

Cases cited

  • Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27;[2009] HCA 41
  • Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500;[2012] HCA 32
  • Commissioner of Taxation v Consolidated Media Holding Ltd (2012) 250 CLR 503;[2012] HCA 55
  • CSR Timber Products v Weathertex Pty Ltd (2013) 83 NSWLR 433;[2013] NSWCA 49
  • Franklins Self Serve Pty Ltd v Wyber (1999) 48 NSWLR 249;[1999] NSWCA 390
  • Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council (2009) 230 FLR 336;[2009] NSWCA 59
  • Manser v Spry(1994) 181 CLR 428
  • Page v Burtwell [1908] 2 KB 758
  • Tickle Industries Pty Ltd v Hann(1974) 130 CLR 321
  • Workers Compensation Nominal Insurer v Nominal Defendant[2013] NSWCA 301

Legislation cited

  • Competition and Consumer Act 2010 (Cth), § VIB
  • Motor Accidents Compensation Act 1999 (NSW), § 1.2 Div 1, ss 3, 3A, 3B, 7A, 7B, 122
  • Workers Compensation Act 1987 (NSW), § 5 Div 3, s 151Z

Judgment

  1. [1]

    BEAZLEY A/CJ: I have had the advantage of reading in draft the reasons of Payne JA and agree with his Honour’s reasons and orders. I also agree with the additional remarks of Meagher JA.

  2. [2]

    MEAGHER JA: I agree for the reasons given by Payne JA that leave to appeal should be granted and the appeal allowed with costs. I make the following additional observations. In doing so I have assumed the reader is familiar with the relevant facts, as recited in Payne JA’s reasons.

  3. [3]

    The issue in the appeal is whether the State (as employer) is entitled to be indemnified by one or other of the respondents (as owner or driver of the B double truck) in respect of workers’ compensation payments made by it to its employee, Ms Goddard. That issue turns on the construction of s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW), and is whether either was a “person so liable to pay those damages” within para (d).

  4. [4]

    The respondents contend that neither of them answers that description because the liability that they have to the worker as a result of the blameless motor accident is by reason only of the deeming of fault by s 7B of the Motor Accidents Compensation Act 1999 (NSW).

  5. [5]

    Before considering the arguments made in support of that contention it is necessary to refer to the statutory scheme worked by s 151Z (set out in Payne JA’s reasons at [29] below). The legislative history of that section is set out in my judgment in CSR Timber Products v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49 at [30]-[36].

  6. [6]

    Considered alone, s 151Z(1) does not apply where the employer is liable to the worker for damages independently of the Workers Compensation Act. That is because its application depends, as provided by the language of the chapeau, on the injury for which compensation is payable being caused “under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury” (emphasis added).

  7. [7]

    In those circumstances s 151Z(1) regulates the enforcement by the worker of both the employer’s liability to pay compensation under that Act and the liability of any other person to pay damages in respect of the same injury. It does so by paras (a) to (e1) which provide that as between that employer and any third party liable for damages, the primary burden to compensate in respect of the injury is to be borne by the third party. Those paragraphs are directed to ensuring that the outcome between the three parties – injured worker, employer liable to pay compensation and third party liable to pay damages – is the same irrespective of who the worker first proceeds against and recovers either damages or compensation.

  8. [8]

    Section s 151Z(1)(a) acknowledges that the worker may take proceedings both against the employer liable for compensation, and against any third party, and makes clear that the worker is not entitled to retain both damages and compensation. Paragraph (b) provides for any compensation to be repaid out of damages recovered from the third party and para (c) prevents the worker from recovering any such compensation if he or she has first recovered damages from the third party. In circumstances where the worker has not recovered damages from the third party, para (d) produces the same outcome as between the third party and employer as would be produced if damages had been recovered and para (b) or (c) applied. Finally, consistently with the operation of para (d), paras (e) and (e1) ensure that the third party has the benefit of any amount paid by way of indemnity, either by way of defence or in satisfaction of any judgment in proceedings brought by the worker.

  9. [9]

    Section 151Z(2) regulates the position where the worker is entitled independently of the Workers Compensation Act to recover damages both from the employer and from “a person other than the worker’s employer”.

  10. [10]

    It addresses, in the context of there being contribution claims available as between the worker’s employer and any third party liable for damages in respect of the same injury, the fact that modified common law damages are recoverable against the employer in accordance with Pt 5 Div 3 of the Workers Compensation Act. Section 151Z(2)(d) provides that, as between the third party and employer as joint tortfeasor, the amount recoverable by way of contribution is to be determined as if the whole of the damages for which each was liable are to be assessed in accordance with Pt 5 Div 3. Paragraph (c) reduces the damages recoverable by the worker from the third party to take account of the lesser amount that the third party is entitled to recover by way of contribution from the employer because of that modified damages regime.

  11. [11]

    Finally, and significantly in the present context, para (e) addresses the circumstance that the worker does not commence proceedings against the employer in relation to its independent liability, but recovers compensation under the Act. In that event s 151Z(1)(d) (which as appears above entitles the employer or its insurer to be indemnified by the third party) is to apply “as if the worker had not been entitled to recover damages from that employer”, but subject to the exceptions in s 151Z(2)(e)(i) and (ii). Those exceptions limit or exclude the right to that indemnity depending on whether the amount of workers’ compensation paid by the employer or insurer exceeds the amount of the contribution that “could be recovered” by the third party from the employer as joint tortfeasor.

  12. [12]

    The significance of this last provision is that notwithstanding there being a difference in the language of s 151Z(1) and s 151Z(2)(a), the employer or its insurer by whom compensation has been paid is entitled to be indemnified by the third party liable, independently of the Act, for damages in respect of the same injury.

  13. [13]

    Turning then to the respondents’ two arguments; first, it is said that the “circumstances” in which the relevant injury was caused are not “circumstances creating a liability” because of the absence from those circumstances of any actual fault on their part. This submission assumes, by its reliance on the absence of any actual fault, that the question whether the injury was caused under circumstances “creating a liability” in some other person is to be answered by reference only to the common law. Acknowledging this, the respondents submitted that these words are to be construed as if they said “creating a liability arising wholly under the common law”.

  14. [14]

    Secondly, the respondents submit that the deeming of fault by s 7B is expressed to be only “for the purposes of and in connection with any claim for damages in respect of the death or injury” and that the State’s claim to an indemnity under s 151Z(1)(d) does not answer that description. It was accepted that this argument would not apply to proceedings brought by the worker (Ms Goddard) against the respondents to recover damages as contemplated by s 151Z(1)(a). It follows, if this argument were accepted, that a third party liable to pay damages by reason of a deeming of fault in accordance with s 7B will bear the primary burden to compensate in respect of the relevant injury only if the worker takes proceedings against and recovers damages from that third party. In that event para (b) or para (c) would apply.

  15. [15]

    As to the first of these arguments, “a liability” in s 151Z(1) means any liability. There is no reason in the language or context of s 151Z(1) to read “liability” down and as referring only to a liability arising wholly under the common law. The purpose of the provision is to permit the worker to pursue any person liable to pay damages in respect of the injury for which compensation is payable and to provide for what should happen in that event. Acceptance of the respondents’ argument would leave some such “damages” recovered by the worker outside the application of s 151Z(1). It would also have the consequence that s 151Z(2) would apply to any third party liability to pay damages in respect of the injury (by reason of the language of s 151Z(2)(a)) whereas in the same circumstances s 151Z(1) may not. In a blameless motor accident case, such as the present, the respondent’s argument would mean that if the worker was entitled to take proceedings against the employer independently of the Act (so as to attract the application of s 151Z(2)), but did not do so, the person by whom workers’ compensation was paid would (by the application of s 151Z(2)(e)) be entitled to an indemnity in accordance with s 151Z(1)(d); although that person would not be entitled to such an indemnity under s 151Z(1)(d), if the worker is not entitled to recover damages from the employer independently of the Act.

  16. [16]

    The “circumstances” in s 151Z(1) under which the relevant third party liability must be created are those in which the injury for which compensation is payable was caused. In Page v Burtwell [1908] 2 KB 758 the Court of Appeal rejected an argument that the Court had to determine judicially that there was such a legal liability before an equivalent provision could apply. It was held to be sufficient that there were circumstances alleged to create such a liability. Here those circumstances attract the application of the “blameless accident” provisions in Pt 1.2 Div 1 of the Motor Accidents Compensation Act. That application deems fault with the result that the circumstances give rise to (and create in the relevant sense) the alleged liability of the respondents as owner or driver.

  17. [17]

    The respondents’ second argument ignores the language of s 151Z(1). The person against whom the entitlement to indemnity under para (d) arises is “the person so liable to pay those damages”. That person is within the language of the chapeau any person who in the circumstances in which the compensated injury was caused is liable to pay damages to the worker in respect of the same injury. In relation to the respondents, the relevant question is whether those circumstances give rise to a liability answering that description. In other words, does the worker have a claim for damages against the respondents in respect of the injury resulting from the motor accident. In that context the application of s 7B is engaged because that inquiry is “for the purposes of and in connection with” a claim for damages in respect of that injury, namely the worker’s claim against the respondents as owner or driver.

  18. [18]

    PAYNE JA: The State of New South Wales seeks leave to appeal from a decision of Elkaim DCJ concerning the proper interpretation of s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW).

Relevant facts

  1. [19]

    The State of New South Wales (who I will refer to as the appellant in these reasons) was the employer of Ms Jennifer Goddard. Ms Goddard was driving behind a “B-double” truck owned by Mr Phillip Whittman, who was the second defendant in the court below, and driven by Mr Timothy Wenham, who was the first defendant in the court below.

  2. [20]

    As Ms Goddard was driving behind the truck a wheel assembly “somehow became disconnected from the truck” and came into her path, collided with the vehicle she was driving, and caused her injury.

  3. [21]

    The truck was registered and insured in South Australia. There was no issue before the primary judge that the truck had “motor accident cover” within the meaning of s 3B of the Motor Accidents Compensation Act 1999 (NSW) (MACA).

  4. [22]

    Ms Goddard claimed and received payments under the Workers Compensation Act. She did not make a claim for damages under the MACA.

Decision of the primary judge

  1. [23]

    The appellant’s claim is based on s 151Z(1)(d) of the Workers Compensation Act. The appellant accepts that it is unable to prove a breach of duty of care on the part of the respondents in the use or operation of the motor vehicle from which the wheel came.

  2. [24]

    The only basis upon which the entitlement to an indemnity is pursued is that the respondents are persons “liable” to pay damages to Ms Goddard (and accordingly within s 151Z(1)) by the application of the deeming provision in the MACA dealing with blameless motor accidents.

  3. [25]

    In the court below the respondents conceded that the accident satisfied the definition of a “blameless motor accident” contained in s 7A of the MACA.

  4. [26]

    The primary judge determined a separate question, namely whether the employer was entitled, in an action under s 151Z(1)(d) of the Workers Compensation Act, to rely upon the “blameless motor accident” provisions of the MACA (Part 1.2, Div 1).

  5. [27]

    His Honour held that the appellant could not rely on those provisions: J[23]-[25]. He did so for the following reasons:

    1. (1)

      section 151Z(1)(d) of the Workers Compensation Act required that there be a wrongdoer and that the defendant under the blameless accident provisions was not a wrongdoer: J[21] and [22](a);

    2. (2)

      the deeming of fault was only “for the purposes of and in connection with any claim for damages in respect of the death of or injury” to a person: J[22](b); and

    3. (3)

      the right created by s 151Z(1)(d) was not a claim for damages: J[22](c).

  6. [28]

    The effect of his Honour’s decision was to deny the appellant a right to recover payments made to, or on behalf of Ms Goddard, who was injured in the accident, in circumstances where the appellant concedes it cannot prove negligence or another tort.

Relevant statutory provisions

  1. [29]

    Section 151Z provides:

  2. [30]

    This case involves the interaction of s 151Z(1) with another difficult provision, s 7A of the MACA, which provides that:

  3. [31]

    Section 7B of the MACA provides:

  4. [32]

    Section 3A of the MACA provides:

  5. [33]

    Section 3B relevantly provides as follows:

  6. [34]

    Section 122 of the MACA provides:

Decision of the primary judge

  1. [35]

    The essence of the primary judge’s decision was brief and can be set out in full:

Leave to appeal

  1. [36]

    Leave to appeal should be granted. This case raises is an important point of construction about the interaction of two difficult provisions.

The appellant’s submissions

  1. [37]

    It will be recalled that in the court below the respondents conceded that the accident satisfied the definition of a “blameless motor accident” contained in s 7A of the MACA. It was also accepted that if Ms Goddard had made a claim under the MACA, the respondents would have been liable to pay her damages under that Act.

  2. [38]

    Accordingly the appellant submitted that the first of the statutory pre-conditions to its claim under s 151Z(1)(d) – that Ms Goddard’s injury, for which workers’ compensation was payable, was “caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury” – was satisfied.

  3. [39]

    It was submitted that all that was required to be shown was that the circumstances in which the liability to pay workers’ compensation for injury arose also created a liability in some person other than Ms Goddard’s employer to pay damages in respect of that injury.

  4. [40]

    It was submitted that the decision of the primary judge, and the respondents’ submissions on the appeal, did not sufficiently engage with the liability here admitted by the respondents to pay damages to Ms Goddard.

  5. [41]

    The appellant submitted that the relevant question is whether the "circumstances creating a liability" are such that there is a liability "to pay damages". Even if the determination of liability under the MACA was made by a court, there would nevertheless be a liability in the driver or owner in the present case to pay damages to Ms Goddard arising at the time of the accident.

The respondents’ submissions

  1. [42]

    The respondents’ argument on the appeal bore little relationship to what was presented before the primary judge. That argument was not addressed in its written submissions, which essentially repeated the matters which had found favour with the primary judge. As will become apparent, the respondents did not seek to support the reasoning of the primary judge.

  2. [43]

    It was submitted that the blameless accident provisions in ss 7A and 7B of the MACA deem a liability for a limited purpose under that Act and do not themselves meet the description of “circumstances creating a liability … to pay damages” within the meaning of s 151Z(1).

  3. [44]

    First, it was submitted that the conclusion that satisfies s 7A, that a motor accident has occurred not caused by the fault of the owner or driver of any motor vehicle involved in the accident, is inconsistent with circumstances which create a “liability” within the meaning of s 151Z(1).

  4. [45]

    It was submitted that the “circumstances” here engaged do not create the liability but, rather, s 7B of the MACA does, for the limited purposes of that Act only:

  5. [46]

    Secondly, the related submission was made that the “liability” in s 151Z(1) could not be a liability created by a statute. It was submitted that "the circumstances creating a liability" should be construed as meaning circumstances “creating a liability at common law".

  6. [47]

    This was because:

  7. [48]

    Thirdly, it was submitted that the deeming provisions in s 7B did not apply because the deeming was only “in connection with” a claim for damages and not a claim for indemnity.

  8. [49]

    Fourthly, it was submitted that to the extent that the respondents’ construction gave rise to anomalous results, namely that an injured worker could obtain both compensation and damages, that was a matter for another day (as Ms Goddard had not made a MACA claim) and could be addressed in any event by the double compensation principle. It was submitted that Franklins Self Serve Pty Ltd v Wyber (1999) 48 NSWLR 249; [1999] NSWCA 390 at [53] provided a relevant analogy:

Consideration

  1. [50]

    The relevant principles of statutory construction were not controversial on this appeal. In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41 at [47], the plurality emphasised that construction must begin with a consideration of the text itself and while the language employed is the surest guide, its meaning may require consideration of the context, which includes the general purpose and policy of the provision, in particular the mischief it is seeking to remedy: see also Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; [2012] HCA 32 at [41]; Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39].

  2. [51]

    The terms “wrongdoer” and “tortfeasor” and their place in the statutory construction of s 151Z were at the heart of the primary judge’s decision. The primary judge relied heavily on the use of the terms “tortfeasor” and “wrongdoer” in the judgment of McColl JA in Workers Compensation Nominal Insurer v Nominal Defendant [2013] NSWCA 301 (quoted at [35] above).

  3. [52]

    In oral argument, Senior Counsel for the respondent accepted that s 151Z does not require that the person who is liable within the meaning of that section to be a “wrongdoer” or a “tortfeasor”. That concession was properly made.

  4. [53]

    The terms “tortfeasor” and “wrongdoer” do not appear in the relevant statutory language. The primary judge at [20]-[24] of his judgment (set out above) took out of context statements made by McColl JA in Workers Compensation Nominal Insurer v Nominal Defendant.

  5. [54]

    In the passages relied upon by the primary judge, her Honour was quoting from her earlier judgment in Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council (2009) 230 FLR 336; [2009] NSWCA 59 at [6]. By reference to that decision it is clear that the statutory language of s 151Z was reproduced in full by her Honour and that the terms “tortfeasor” and “wrongdoer” were only being used as convenient shorthand.

  6. [55]

    There was no suggestion by her Honour in Workers Compensation Nominal Insurer v Nominal Defendant that being a “wrongdoer” or a “tortfeasor” was a necessary condition of liability within the meaning of s 151Z(1). The use of those terms by McColl JA in that case, and the other cases to which her Honour referred, did not determine that only a “tortfeasor” or a “wrongdoer” could be liable under s 151Z(1).

  7. [56]

    Further, the fact that the words “tortfeasor” or “wrongdoer” can be found to be used as a shorthand expression in many of the authorities dealing with the “recovery action” provisions in workers’ compensation legislation is not to the point. In the particular facts of those cases damages were recoverable upon proof of negligence or some other tort.

  8. [57]

    The decision of McColl JA in Workers Compensation Nominal Insurer v Nominal Defendant provides no support for the construction accepted by the primary judge. The question of whether a third party was required to be a “wrongdoer” or a “tortfeasor” did not arise in that case or the other authorities to which her Honour referred.

  9. [58]

    That conclusion is sufficient to address the reasoning of the primary judge and the principal argument advanced by the respondent in writing. That reasoning and those submissions cannot be supported by the authorities upon which reliance was placed.

  10. [59]

    In construing the obligations here engaged it is appropriate to commence with a consideration of the statutory text.

  11. [60]

    Section 151Z(1) of the Workers Compensation Act is engaged upon demonstration of “liability in some person other than the worker’s employer to pay damages in respect of the injury”. Thus, what is required is a “liability” in a person other than the employer to “pay damages in respect of the injury”.

  12. [61]

    The initial questions posed by the text of s 151Z(1) are what are the “circumstances” and do they create a “liability” in any other person. The “circumstances” to which reference must be made and which must create the liability are in the language of s 151Z(1) those in which the injury “was caused”.

  13. [62]

    The “blameless motor accident” provisions in ss 7A and 7B deem the owner or driver to have been at “fault” where the MACA defines “fault” as “negligence or any other tort”: s 3.

  14. [63]

    The respondent’s submission that upon satisfaction of the definition in s 7A of the MACA there is no “fault” on the part of the driver and the owner here and thus no “liability” within the meaning of s 151Z should be rejected.

  15. [64]

    First, the question in s 151Z(1) is not “fault”; the question is “liability”. It is not correct as a matter of construction of s 151Z(1) that because there is no “fault” there is no liability.

  16. [65]

    Secondly, s 7B of the MACA in any event deems fault (relevantly upon each of the respondents here).

  17. [66]

    Thirdly, the circumstances here create a “liability". Fault is deemed by reason of the operation of the MACA. The MACA deems fault where there is not otherwise fault. The other “circumstances” are taken as they are proved in fact.

  18. [67]

    Fourthly, satisfaction of the introductory words of s 151Z(1) does not require separate proof of an entitlement to an indemnity under s 151Z(1)(d). The introductory words of s 151Z(1) look simply at the position as between the injured person and, in the present case, the respondents.

  19. [68]

    Fifthly, the relevance of the use of the word "creating" in s 151Z(1) is to indicate that the “circumstances” have to give rise to a liability at the point in time when they occur. When one reads s 151Z in full its concern is with circumstances creating a “liability … to pay damages”. The circumstances creating that liability, including the operation of s 7B, give rise to a liability at the point in time when they occur, although determination of that liability may be much later, after determination by a court.

  20. [69]

    Sixthly, the words "in some person" are relevant. If s 151Z(1)(d) was really directed only at a “tortfeasor”, the section would have so provided.

  21. [70]

    The second, related, submission that the “liability” in s 151Z(1) could not be a liability created by a statute and that "the circumstances creating a liability" should be construed as meaning circumstances “creating a liability at common law" should also be rejected.

  22. [71]

    First, the “circumstances” creating a liability do not exist in a vacuum. The “liability ... to pay damages” that the section requires is not concerned with why there is a liability to pay damages, merely that there is one. There is no textual warrant for reading words into the statute, the effect of which would be to erect an unexpressed premise, referable to “liability at common law”.

  23. [72]

    Secondly, as I have said, the “circumstances” to which reference must be made and which must create the liability are in the language of s 151Z(1) those in which the injury “was caused”. In every case the question of whether there is a “liability” ... “to pay damages” is to be determined by the application of legal principle, whether that liability arises under the common law or under a statute other than the Workers Compensation Act.

  24. [73]

    Thirdly, the relevant history and policy matters, addressed below, point strongly against a constriction of s 151Z(1) as limited to “liability at common law”.

  25. [74]

    The respondents’ submission that the deeming provisions in s 7B did not apply because the deeming was only “in connection with” a claim for damages and not “indemnity” should also be rejected.

  26. [75]

    First, the MACA makes a blameless driver or owner liable to pay damages by deeming that driver or owner to be at fault “for the purposes of and in connection with any claim for damages in respect of the death or injury”: s 7B(1). The effect of that provision is that the employee, Ms Goddard, would have been entitled to recover damages had she sued the respondents. The indemnity created by s 151Z(1)(d) is one for the purposes of and in connection with a claim for damages in respect of her injury.

  27. [76]

    Secondly, s 151Z(1)(d) creates an entitlement to an indemnity from “the person so liable to pay those damages”. The “person so liable to pay those damages" is a reference back to the introductory words of s 151Z(1). That is, a reference to the person other than the employer who has a “liability” … “to pay damages in respect of the injury”. The legal mechanism by which the other person comes to be “liable” to pay damages is not relevant to this inquiry. Provided the liability to pay damages is a liability in respect of the same injury as that from which the obligation to pay worker’s compensation arises, payments are recoverable in one of the ways specified in s 151Z of the Workers Compensation Act.

  28. [77]

    Thirdly, since the right to indemnity is derived from the availability of a claim for damages, and is otherwise closely connected with it, the fault deemed to lie in the owner or driver is effective for the purposes of s 151Z of the Workers Compensation Act. The entitlement in the Workers Compensation Act to indemnity is conditioned upon establishing a liability in some third party to pay damages to the injured worker and not proof of the commission of a tort.

  29. [78]

    Finally, so far as textual considerations are concerned, s 3B(1)(b) of the MACA is also inconsistent with the respondents’ preferred construction. That section makes clear that an injury might give rise to a work injury claim as well as a motor accident claim.

  30. [79]

    Turning to the history of the provision, in CSR Timber Products v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49, this Court traced the history of s 151Z and in particular the words “creating a liability” which appear in s 151Z(1)(d) at [30]-[33]:

  31. [80]

    The language of “some person other than the worker’s employer” and the long history of the provision supports the conclusion that the section is to be understood as addressing any liability which arises in the circumstances, not simply one which arises at common law. If a limitation to claims arising at common law were intended it is surprising in such a long legislative history that it was never made express.

  32. [81]

    The respondents’ construction produces the anomalous result that if the worker had sued the respondents for damages she would have succeeded. In the present case, however, where she chose not to sue, the employer cannot recover payments of compensation made to her in respect of the same injury. That result points strongly against the construction contended for by the respondents.

  33. [82]

    Equally, the respondents accepted that a further consequence of their construction was that the worker may recover both damages under the MACA and compensation. It was submitted that this otherwise anomalous result was addressed by application of the double compensation principle: Manser v Spry (1994) 181 CLR 428.

  34. [83]

    The construction advanced by the respondents has the effect that within this provision, which deals with the range of proceedings which the injured worker might take to recover damages for the injury, there is a group of claims which are outside the scope of s 151Z(1).

  35. [84]

    In Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321 Barwick CJ considered an analogous submission in relation to an earlier version of workers compensation legislation applying in the Northern Territory. The Chief Justice described the finding of the Court of Appeal in that case as giving rise to a capricious result in that the decision of the worker as to the amount he would settle for might defeat or prevent the employer from recovering payments made (at 331).

  36. [85]

    In the present case the outcome of the respondents’ construction can properly be described as unjust or capricious.

  37. [86]

    A brief consideration of the nominal defendant cases also points to difficulties with the construction of s 151Z(1) proposed by the respondents.

  38. [87]

    McColl JA's judgment in Workers Compensation Nominal Insurer v Nominal Defendant made the point at [64]:

  39. [88]

    That passage accurately describes the position in the present case. There is a liability to pay damages under a statute other than the Workers Compensation Act. In my view her Honour’s decision provides further support for the proposition that it was specifically envisaged that a statutory liability such as the present could fall within the provisions of s 151Z(1).

  40. [89]

    Finally, the submission that the anomalous results which arise by reason of the respondents’ suggested construction should be addressed by application of the double compensation principle should be rejected. No reason in the history or policy of the provisions was suggested which would provide any support for leaving such an important issue to an application of the double compensation principle. There is a vast array of statutory provisions which may give rise to liability in a person who may not be the person’s employer: for example Part VIB of the Competition and Consumer Act 2010 (Cth) which is entitled “Claims for damages or compensation for death or personal injury”. No policy reason was advanced by the respondents for regulating recoveries by injured workers under that Act who were also entitled to workers compensation payments by the application of the double compensation principle. The application of the double compensation principle, in any event, would not address the issue of the resolution of claims between a person liable under the Competition and Consumer Act to a worker and an employer liable to the same worker in respect of the same injury under the Workers Compensation Act.

  41. [90]

    Policy considerations also support the conclusion that the language of the section is to be understood as addressing any liability which arises in the circumstances, not simply one which arises under common law.

Conclusion and Orders

  1. [91]

    Accordingly, in my view the relevant text, history and policy all point in the same direction. The employer here was entitled, in an action under s 151Z(1)(d) of the Workers Compensation Act, to rely upon the “blameless motor accident” provisions of the MACA (Part 1.2, Div 1).

  2. [92]

    For these reasons the appeal should be allowed and the decision of the primary judge set aside.

  3. [93]

    The following orders should be made:

    1. (1)

      Application for leave to appeal granted.

    2. (2)

      Notice of Appeal in the form at White Book 20 to be filed within seven days.

    3. (3)

      Appeal allowed.

    4. (4)

      The respondents to pay the appellant’s costs as agreed or assessed in this Court.

    5. (5)

      Set aside orders of Elkaim DCJ made 15 March 2016 and instead order:

Unofficial copy. Source: NSW Caselaw. Refer to the official version for authoritative text.