Synergy Scaffolding Services Pty Ltd v Alelaimat

1. [1]

   MEAGHER JA: I have had the advantage of reading in draft the judgment of Simpson AJA. I agree with her Honour’s reasons for the making of the orders suggested at [194]. I also agree with her Honour that these orders should not be made without first giving an opportunity to the parties to make further submissions and to the State Insurance Regulatory Authority to seek leave to intervene.

2. [2]

   KIRK JA: This appeal raises numerous issues of significant complexity. I have had the privilege of reading the judgment of Simpson AJA, with which I agree.

3. [3]

   SIMPSON AJA: On 10 October 2012, in circumstances to be more fully described below, the first respondent, Mr Bilal Alelaimat, was seriously injured on a building site in the Sydney suburb of Artarmon. At the time, scaffolding, which had been erected to a height of three storeys, was being dismantled by workmen wearing orange shirts bearing the words “Synergy Scaffolding”. Mr Alelaimat was struck by a piece of metallic scaffolding that had fallen from above. He claimed and was paid compensation pursuant to the Workers Compensation Act 1987 (NSW).

4. [4]

   On 10 July 2017 Mr Alelaimat filed a Statement of Claim in the Supreme Court, claiming damages for the injury and consequent loss and damage suffered by reason of the falling scaffolding. He named Synergy Scaffolding Services Pty Ltd (“Synergy Scaffolding”) as the defendant. His claim was ultimately formulated in a Further Amended Statement of Claim, filed on 7 October 2020, in which Synergy Scaffolding was named as first defendant and the Workers Compensation Nominal Insurer (“WCNI”) was named as second defendant.

5. [5]

   After a five-day trial in the Common Law Division of the Supreme Court, Synergy Scaffolding was ordered to pay Mr Alelaimat the sum of $1,356,533.39 by way of damages for the injury and consequential loss and damage suffered, and to indemnify WCNI in relation to certain payments made by it under the Workers Compensation Act: Alelaimat v Synergy Scaffolding Services (No 3) [2022] NSWSC 536. Synergy Scaffolding appeals against those, and other, consequential, orders.

The pleadings

1. [6]

   Mr Alelaimat pleaded that, as at the date of injury, he was employed by DJ’s Scaffolding Services Pty Ltd (“DJSS”) but that his work was directed, coordinated and supervised by Synergy Scaffolding, who, he alleged, was in a position in relation to him analogous to that of employer. He pleaded that both Synergy Scaffolding and DJSS owed him a duty of care, that each was in breach of that duty, and that the breaches were the cause of his injury. He alleged that the scaffolding was being dismantled by employees of Synergy Scaffolding, or, alternatively, by employees of DJSS. As DJSS was deregistered on 20 March 2014, Mr Alelaimat sued WCNI as its insurer for the purposes of the Workers Compensation Act: Corporations Act 2001 (Cth) s 601AG; Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) s 4. He alleged that, as his employer, DJSS failed to take reasonable care to provide him with a safe place of work and was in breach of (unspecified) provisions of the “Workplace Health & Safety Act and Regulations”.

2. [7]

   Each claim was a common law claim, but they were subject to different statutory regimes. The claim against Synergy Scaffolding was governed by the provisions of the Civil Liability Act 2002 (NSW). The claim against DJSS was governed by the Workers Compensation Act, specifically Pt 5 Div 3 thereof.

3. [8]

   Each defendant filed a defence. Synergy Scaffolding denied that its position in relation to Mr Alelaimat was analogous to that of employer, did not admit that the falling scaffolding was caused by its negligence or that of its employees or agents, denied that the scaffolding was being dismantled by its employees and denied that it was the negligence of its employees that caused the scaffolding to fall and injure Mr Alelaimat. It invoked Pt 1A Div 4 of the Civil Liability Act (which deals with assumption of risk) and asserted that Mr Alelaimat’s injury was wholly or partly caused by his own negligence: Civil Liability Act, Pt 1A Div 8. Synergy Scaffolding pleaded that any damages to which Mr Alelaimat was entitled should be reduced pursuant to the provisions of s 151Z(2)(c) of the Workers Compensation Act. Finally, Synergy Scaffolding pleaded that Mr Alelaimat’s claim was statute barred pursuant to the provisions of the Limitation Act 1969 (NSW).

4. [9]

   In its defence WCNI expressly admitted that Mr Alelaimat was employed by DJSS. WCNI denied that the scaffolding was being dismantled by employees of DJSS and asserted that it was employees of Synergy Scaffolding who were undertaking that task. It relied on payments it had made to Mr Alelaimat in accordance with the requirements of the Workers Compensation Act. It did not plead a defence of contributory negligence.

5. [10]

   Each of the defendants filed a cross-claim, naming the other as cross-defendant. Synergy Scaffolding pleaded that Mr Alelaimat was employed by DJSS and that his injury, and consequent loss and damage, were caused by DJSS’s negligence. It claimed that WCNI was the insurer of DJSS under a policy of workers compensation insurance. The cross-claim did not make any express assertion about the identity of the employer of the workmen undertaking the dismantling of the scaffolding. Synergy Scaffolding claimed that, but for the deregistration of DJSS, it (Synergy Scaffolding) would have been entitled to indemnity or contribution from DJSS in respect of Mr Alelaimat’s claim. Although the pleading did not descend to identification of the legal and/or statutory basis for its claim for contribution or indemnity, it is apparent that Synergy Scaffolding invoked the provisions of s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (“the 1946 Miscellaneous Provisions Act”). Synergy Scaffolding also relied on s 601AG of the Corporations Act and s 4 of the Civil Liability (Third Party Claims Against Insurers) Act to fix WCNI with the liability that would otherwise have attached to DJSS.

6. [11]

   By way of defence to Synergy Scaffolding’s cross-claim, WCNI denied that Mr Alelaimat’s injury, loss and damage were caused by the negligence of DJSS, and asserted that the injury, loss and damage were caused or contributed to by Mr Alelaimat’s own negligence (a plea it had not made in its defence to Mr Alelaimat’s claim against it). It admitted that, but for the deregistration of DJSS, Synergy Scaffolding would have been entitled to indemnity and/or contribution from DJSS in respect of Mr Alelaimat’s claim.

7. [12]

   By its cross-claim WCNI claimed against Synergy Scaffolding contribution and/or complete indemnity pursuant to s 5(1)(c) of the 1946 Miscellaneous Provisions Act, and indemnity pursuant to s 151Z(1)(d) of the Workers Compensation Act. It asserted that Mr Alelaimat’s injury, loss and damage were caused by the negligence of Synergy Scaffolding. It pleaded that it had made payments pursuant to the Workers Compensation Act.

8. [13]

   By way of defence to WCNI’s cross-claim, Synergy Scaffolding repeated the allegation it had made in its cross-claim that Mr Alelaimat’s injury, loss and damage were caused by the negligence of DJSS by its employees (a plea it had not made in response to Mr Alelaimat’s claim).

Relevant factual background

1. [14]

   Although Mr Alelaimat filed an evidentiary statement, his evidence was taken orally. I do not understand what follows to be controversial. It is drawn from evidence that was not disputed, or findings of fact by the primary judge that are not challenged.

2. [15]

   Mr Alelaimat was born in Jordan in 1978. In 2001 he graduated from the University of Jordan with a Bachelor of Economics degree. In 2008 he came to Australia on a student visa. At some point he was granted permanent residency status. In 2010 he was employed as a truck driver.

3. [16]

   In about March 2011 Mr Alelaimat answered an advertisement he saw on Gumtree for a truck driver for a scaffolding company. He was interviewed by Mr Ali Hamka, the Operations Manager of Synergy Scaffolding. After consulting Mr El Jarrar (a director of Synergy Scaffolding), Mr Hamka offered Mr Alelaimat employment. Mr Alelaimat was given a Synergy Scaffolding uniform which bore the Synergy Scaffolding logo and number, some personal protective clothing and some equipment.

4. [17]

   For two weeks Mr Hamka trained Mr Alelaimat in how to drive trucks, first a smaller truck, and then a larger one, each of which bore on its side the Synergy Scaffolding logo and signage.

5. [18]

   Thereafter Mr Hamka directed Mr Alelaimat with respect to his work. His work involved assisting others (“yardies”) to load the truck with scaffolding and then to deliver scaffolding to the relevant job sites. Mr Alelaimat worked in accordance with Mr Hamka’s directions.

6. [19]

   In about July 2011, in a meeting with Mr Hamka and Mr El Jarrar, Mr Alelaimat was asked to obtain an Australian Business Number. He was told that it would be better for him and for Synergy Scaffolding if he did so. He agreed, considering that he had no choice.

7. [20]

   Ms Nada Hamka (the sister of Ali Hamka) provided Mr Alelaimat with a book of blank invoices, which she told him to sign, and told him that “we” (Synergy Scaffolding) would complete the invoices. A number of the completed invoices were in evidence. On their face the invoices are invoices from Mr Alelaimat for labour. The invoices in evidence commence on 4 August 2011. Until 22 December 2011 they showed the recipient as “Scaffhire” or “Scaffhire Aust” (which may be inferred to be a related or associated company of Synergy Scaffolding). From 29 December 2011 the invoices show “DJ Scaffolding Services” or “DJ’s” as the recipient. Mr Alelaimat said that the handwriting on the completed invoices was not his. He was unaware that invoices were being made out to DJSS.

8. [21]

   Mr Alelaimat said that on 9 October 2012 Mr Hamka gave him his instructions for the following day. He told Mr Alelaimat to load the truck and deliver scaffolding to a worksite at North Sydney, which Mr Alelaimat did on the morning of 10 October 2012. Mr Alelaimat then telephoned Mr Hamka for further instructions. Mr Hamka told him to go to a worksite in Artarmon, to pick up scaffolding from that site, and return it to Synergy Scaffolding’s premises at Kingsgrove. When Mr Alelaimat arrived at the Artarmon site the scaffolding was not stacked and ready to pick up and load onto the truck, and there were few workmen doing what was “a big job”. Mr Alelaimat recognised those who were present as people he had seen working on Synergy Scaffolding worksites. They were wearing Synergy Scaffolding clothing. He called either Mr Hamka or Mr El Jarrar and was instructed to assist the workmen. The workmen were passing the scaffolding down from 3 levels. Mr Alelaimat assisted by manually receiving some of the materials and picking up others from the ground, and stacking them in preparation for loading onto the truck.

9. [22]

   Three additional scaffolders arrived in a Synergy Scaffolding utility and wearing Synergy Scaffolding clothing. The work was then moving more quickly. Mr Alelaimat bent to pick up an item from the ground. He was struck by “a big force” on his back, his upper arm and his lower left shoulder. He saw that what had struck him was a metal plank that was caked in cement render.

10. [23]

    Mr Alelaimat had telephone conservations with both Mr Hamka and Mr El Jarrar. Both told him (in words he attributed to Mr El Jarrar):

11. [24]

    Mr Alelaimat was taken to a nearby medical centre. On 15 November 2012 he consulted a general practitioner he had previously consulted, Dr Ismail Mohammed.

12. [25]

    After what seems like a short time, Mr Alelaimat attempted to return to work on “suitable duties”, for which he was certified fit by Dr Mohammed. The duties he was provided with by Synergy Scaffolding were unsuitable and involved lifting, handling and driving. After one or two weeks he left work.

13. [26]

    On 12 October 2012 Nada Hamka submitted to CGU Workers Compensation (NSW) Limited (said to be “Agent for the NSW Work Cover Scheme”) an “Initial Notification of Injury”. The notification gave, as a description of the incident giving rise to the claim: “A 12Kg steel scaffold fell from the 3rd floor onto [Mr Alelaimat’s] upper arm and over shoulder onto lower back”. The injury was described as: “Left arm, shoulder and back injured”. The notification named DJSS as Mr Alelaimat’s employer. Although the evidence of what happened thereafter with respect to a claim made by Mr Alelaimat under the Workers Compensation Act is scant, it is clear that a claim was made under DJSS’s workers compensation policy and was accepted by DJSS’s workers compensation insurer and that medical expenses and weekly payments were made.

14. [27]

    Thereafter, Mr Alelaimat was referred to a variety of medical practitioners, including a psychiatrist. On 7 March 2013 he was referred to Dr Darweesh Al-Khawaja, a neurosurgeon. Dr Al-Khawaja recorded that Mr Alelaimat presented with neck, left shoulder and lower back pain. He appears to have attributed much of the pain to the nature of Mr Alelaimat’s work, and expressed the opinion that:

15. [28]

    As far as the evidence disclosed, it was not until November 2013 that Mr Alelaimat sought legal advice. Although the precise circumstances in which he did this were not elucidated in the evidence, he said that he did so when DJSS’s workers compensation insurer rejected the claim for the costs of spinal surgery. (The transcript records Mr Alelaimat saying that he sought legal advice when the insurer “predicted” the surgery. It was not in dispute that this was a transcription error and that it was rejection of a claim for compensation for the costs of spinal surgery that prompted Mr Alelaimat to seek legal advice.)

16. [29]

    In any event, the evidence shows that on 31 January 2013 Mr Alelaimat had a telephone conference with Ms Samantha McRae, a solicitor then employed by Slater & Gordon Lawyers. By November 2013 Ms McRae had left the employ of Slater & Gordon and was employed by another law firm, Law Partners. Ms McRae then had a conference with Mr Alelaimat on 27 November 2013. During the course of that conference Ms McRae completed a pro forma questionnaire, which, it may be inferred, was standard practice in the law firm for taking initial instructions from a new client seeking advice about remedies for personal injury. The form bears the heading: “Workers Compensation New Client Instructions”.

17. [30]

    On the first page of the document is a series of boxes, to be marked to signify the nature of the advice sought. The first five boxes are all clearly related to potential claims under the Workers Compensation Act. Ms McRae inserted crosses in the boxes against “Initial Lump Sum Claim” and “Medical/Treatment Expenses Dispute”. The sixth box, against “Possible Common Law”, is not marked.

18. [31]

    The following pages in the questionnaire may be taken to represent Ms McRae’s handwritten notes of her conference with Mr Alelaimat. The notes include:

19. [32]

    On p 3 of the document, against “Liability Status” a cross is inserted in the box that signifies that liability is admitted. Immediately following that, the insurer is identified as “CGU”. I infer from this that the liability that was said to be admitted was liability under the Workers Compensation Act.

20. [33]

    On p 7 of the document the name of Mr Alelaimat’s employer is recorded as “Synergy Scafolding” (sic).

21. [34]

    On 6 December 2013, over the name of Chantille Khoury as a Law Partners’ managing solicitor, Law Partners sent to Mr Alelaimat a detailed letter, referring to the conference with Ms McRae of 27 November. The letter opened by thanking Mr Alelaimat for instructing Law Partners to act on his behalf “in relation to your workers compensation claim arising out of the injuries sustained by you on 10 October 2012”. The letter goes on to give detailed advice concerning the benefits that may be available under the Workers Compensation Act, including “lump sum compensation” and compensation for permanent impairment (s 66). Brief mention is made of possible “compensation for pain and suffering”.

22. [35]

    It is apparent that Mr Alelaimat did make an application for compensation for permanent impairment pursuant to s 66 of the Workers Compensation Act. On 20 January 2017 Dr John Dickson-Hughes issued a medical assessment certificate certifying a “whole person impairment” of 17%.

23. [36]

    On 10 July 2017 Mr Alelaimat commenced the proceeding against Synergy Scaffolding.

24. [37]

    At this point it is necessary to say more about Mr Alelaimat’s employment.

25. [38]

    His initial interview was with Mr Hamka, who was Synergy Scaffolding’s Operations Manager. Mr Hamka consulted Mr El Jarrar, who was a director of Synergy Scaffolding. Mr Alelaimat was given training by Mr Hamka. He was given Synergy Scaffolding clothing by either Mr Hamka or Ms Hamka. He drove trucks emblazoned with the Synergy Scaffolding name. He was given day to day directions by Mr Hamka.

26. [39]

    There was, in evidence, a series of emails addressed to Mr Alelaimat. The emails emanate from what appears to be the email account of Ms Nada Hamka or, in some cases, Mr El Jarrar or Synergy Scaffolding, all on stationery bearing, in large print, the name “Synergy Scaffolding”. Attached to each email is what purports to be a timesheet showing hours worked by Mr Alelaimat and his hourly rate of pay. The emails in evidence begin in April 2011; the last is in December 2011. Also in evidence were a series of tax invoices purporting to be invoices from Mr Alelaimat to Scaffhire or DJSS, consistent with the direction Mr Alelaimat had been given in about July 2011. There is some overlap with the invoices referred to above. The evidence thus points, not incontrovertibly, but strongly, to a conclusion that Mr Alelaimat was employed by Synergy Scaffolding.

27. [40]

    Notwithstanding all of that, all parties went to trial on an agreed position that DJSS was Mr Alelaimat’s employer. CGU, DJSS’s then insurer for workers compensation claims, accepted that he was employed by DJSS, as did WCNI. The primary judge determined the issues on that agreed basis. This appeal must also be determined on that agreed basis.

28. [41]

    As will be seen in due course, the issues of employment give rise to some complexity.

The Supreme Court proceedings

1. [42]

   The proceedings came on for hearing before Campbell J (the primary judge) in the Common Law Division of the Supreme Court in October 2020.

2. [43]

   Considering himself obliged to do so by the decision of the High Court in Prince Alfred College Incorporated v ADC (2016) 258 CLR 134; [2016] HCA 37 at [9]-[10] the primary judge addressed first the issue raised by Synergy Scaffolding’s defence under the Limitation Act, which he rejected. He therefore went on to address the issues of the liability of Synergy Scaffolding and the liability of DJSS, for which Mr Alelaimat was entitled, by s 601AG of the Corporations Act and s 4 of the Civil Liability (Third Party Insurance Claims Against Insurers) Act, to recover from WCNI.

3. [44]

   Having rejected the Limitation Act defence, the primary judge upheld Mr Alelaimat’s claim in negligence against Synergy Scaffolding. He rejected Synergy Scaffolding’s defence of contributory negligence and entered judgment against Synergy Scaffolding in the sum of $1,356,533.39. His Honour held, notwithstanding that DJSS was accepted as Mr Alelaimat’s employer, that that company had not been shown to have been in breach of its duty of care to him (at [137]) and entered judgment in favour of WCNI against Mr Alelaimat. By reference to the quantification of damages under the individual heads claimed by Mr Alelaimat, it can be seen that, had Mr Alelaimat been successful in his claim against DJSS, the award of damages would, in accordance with Pt 5 Div 3 of the Workers Compensation Act, have been $917,686.00. His Honour declared that Synergy Scaffolding was bound to indemnify WCNI in accordance with the provisions of s 151Z(1)(d) of the Workers Compensation Act for compensation paid to Mr Alelaimat under that Act. His Honour otherwise dismissed each cross-claim. He ordered Synergy Scaffolding to pay the costs of Mr Alelaimat and of WCNI.

4. [45]

   The primary judge found Synergy Scaffolding liable to Mr Alelaimat in negligence on two independent bases. His Honour accepted that it was reasonably foreseeable that, in the dismantling of the scaffolding, a piece or component of the scaffolding might drop or fall because of “systemic, as opposed to casual, negligence”: [117]. His Honour also accepted that there was a foreseeable risk that such a part or component might drop or fall in circumstances falling short of negligence. It is not necessary to pause to debate the validity of the latter conclusion, because his Honour went on to find that, in those circumstances, a reasonable person in charge of the operation at the Artarmon site would have taken the precaution of creating an exclusion zone at ground level into which others may not venture, and onto which the scaffolders could drop the scaffolding without risk to those on the ground. His Honour was clearly satisfied that Synergy Scaffolding was in charge of the operation and ought to have taken that precaution. Its failure to do so was the first basis on which liability was attributed to Synergy Scaffolding: [119]. It is of some significance that Synergy Scaffolding’s failure in this respect was characterised as a failure to institute a safe system of work: [134].

5. [46]

   His Honour appears, however, not to have been satisfied, notwithstanding that they were wearing Synergy Scaffolding clothing, that the scaffolders on the site were employees of Synergy Scaffolding, and considered that they may have been sourced from a labour-hire company. There was good reason for that view, which reflected evidence given by Mr Hamka. For present purposes, it makes no difference whether the scaffolders were employed by, or hired to, Synergy Scaffolding. The primary judge was satisfied that the installation, maintenance and removal of the scaffolding was work undertaken by Synergy Scaffolding, whether using its own employees or contractors hired from labour-hire companies. That gave rise to the second basis on which Synergy Scaffolding was found to be in breach of its duty of care to Mr Alelaimat, which was failure to engage independent contractors competent to control their own system of work without external supervision, and failure to provide proper supervision. This also amounted to failure by Synergy Scaffolding to take reasonable care to institute and maintain a safe system of work: [129].

6. [47]

   The primary judge concluded that DJSS had not been shown to have breached its duty of care to Mr Alelaimat: [134]-[137]. His Honour pointed to DJSS’s lack of control over the “premises and system of work” at the site where Mr Alelaimat was injured, and the spontaneous or ad-hoc nature of the task assigned to Mr Alelaimat. He concluded that DJSS had “no opportunity to make its own enquiries about the safety of the system”, and even if it had, it would have been told by Mr Hamka that the dismantling of the scaffolding was “in the hands of competent scaffolders”.

7. [48]

   In light of these findings the primary judge made (inter alia) the following orders (as finally formulated and entered into JusticeLink):

The Appeal

1. [49]

   By Notice of Appeal filed on 25 July 2022 Synergy Scaffolding appeals (as of right) against:

2. [50]

   Pleaded grounds of appeal (grounds 6, 7, 8 and 9) challenging the rejection of the defence of contributory negligence and aspects of the quantification of damages were not pressed on appeal.

3. [51]

   Grounds 4 and 5 of the appeal are framed as depending on the success of grounds 2 and 3. By ground 4 Synergy Scaffolding contends on the hypothesis that grounds 2 and 3 are upheld, that WCNI’s cross-claim against Synergy Scaffolding should have been dismissed. By ground 5, Synergy Scaffolding contends that, if grounds 2 and 3 are upheld, the primary judge ought to have held that it (Synergy Scaffolding) was not liable to pay damages in respect of medical expenses already paid by WCNI to or on behalf of Mr Alelaimat.

4. [52]

   The orders sought are specified as follows:

5. [53]

   It is to be emphasised that Synergy Scaffolding does not challenge the finding of negligence against it. Its challenge in this respect is to the exoneration of DJSS, with the result that WCNI is obliged to make no contribution to Mr Alelaimat’s damages, and Synergy Scaffolding is obliged, by s 151Z(1)(d) of the Workers Compensation Act, to indemnify WCNI for the compensation paid to Mr Alelaimat in accordance with that Act.

6. [54]

   By s 75A of the Supreme Court Act 1970 (NSW) the appeal is to be by way of rehearing. By subs (6) this Court has the powers of the court at first instance, including, relevantly, the powers to draw inferences and make findings of fact. By subs (10) this Court may make any finding or assessment, give any judgment or make any order which ought to have been given or which the nature of the case requires. Exercise of those powers is subject to the constraints stated in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679; Lee v Lee (2019) 266 CLR 129; [2019] HCA 28.

Ground 1 of the appeal: the Limitation Act defence

1. [55]

   It is convenient to begin, as did the primary judge, with Synergy Scaffolding’s defence under the Limitation Act.

2. [56]

   It was common ground that the relevant limitation period was the “three year post discoverability limitation period” prescribed by s 50C(1)(a) of the Limitation Act as applicable to causes of action that relate to the death of or personal injury to a person. The “post discoverability limitation period” is the period of three years running from and including the date on which the cause of action is discoverable by the plaintiff. Mr Alelaimat’s action against Synergy Scaffolding was brought on 10 July 2017. Accordingly, if his cause of action were discoverable by him prior to 10 July 2014 it was, by s 50C(1)(a), not maintainable.

3. [57]

   When a cause of action is discoverable is defined in s 50D, subss (1) and (2) of which provide:

4. [58]

   Synergy Scaffolding accepted, correctly, that it bears the onus of proving that, by 10 July 2014, Mr Alelaimat knew or ought to have known each of the subs (1) “facts”. Synergy Scaffolding expressly disclaimed reliance on constructive knowledge. Its case was that, at the relevant time, Mr Alelaimat had actual knowledge of each of the three subs (1) “facts”.

5. [59]

   Subsection (2) nevertheless has significance because:

6. [60]

   It was not in issue that, prior to 10 July 2014 (and, indeed, from 10 October 2012) Mr Alelaimat knew that his injury had occurred. The first criterion of discoverability was satisfied.

7. [61]

   What was in issue was whether, before or by 10 July 2014, Mr Alelaimat knew both:

8. [62]

   Section 50D(1) is deceptively simple in its terms. Its application has been considered by this Court on a number of occasions: see, for example, Baker-Morrison v State of New South Wales (2009) 74 NSWLR 454; [2009] NSWCA 35 (“Baker-Morrison”); Frizelle v Bauer [2009] NSWCA 239 (“Frizelle”); State of New South Wales v Gillett [2012] NSWCA 83 (“Gillett”); Murgolo; Pomare v Whyte [2019] NSWCA 317; 377 ALR 352 (“Pomare”). Those cases show that the apparent simplicity of s 50D(1) is, indeed, deceptive. The complexities are exposed in the passages extracted below.

9. [63]

   For present purposes, two concepts arising from s 50D call for consideration – the concept of “knowledge” and the concept of a “fact”.

10. [64]

    In Vines v Djordjevitch (1955) 91 CLR 512; [1995] HCA 19, in the context of a statute that permitted a person injured by an unidentifiable motor car to recover damages against a nominal defendant, provided that “as soon as he knew that the identity of the motor car could not be established” the plaintiff gave notice of his intention to make a claim against the nominal defendant, the High Court (Dixon CJ, McTiernan, Webb, Fullagar and Kitto JJ) said at 522:

11. [65]

    In Baker-Morrison, in the context of s 50D, Basten JA (with the concurrence of Ipp and Macfarlan JJA) said with respect to knowledge (at [45]):

12. [66]

    Later, in Murgolo, Basten JA said:

13. [67]

    In the same case Leeming JA said:

14. [68]

    As indicated above, s 50D(1) is directed to knowledge of three “facts”, only two of which are presently in issue. Those in issue are the “facts” that:

15. [69]

    The fact contemplated by s 50D(1)(b) is:

16. [70]

    Whether the anterior facts known to the putative plaintiff are such as to constitute knowledge that the injury was caused by the fault of the putative defendant depends upon a “legal evaluative judgment”: Baker-Morrison at [41]. In particular, having regard to the provisions of the Civil Liability Act, notably ss 5B and 5D, the putative plaintiff needs an appreciation of the principles applicable to a claim for damages based on negligence. Similarly, where the putative plaintiff is an employee of the putative defendant, an appreciation of the provisions of the Workers Compensation Act is necessary. Ordinarily, the lay person will not have either of those appreciations without legal advice, and sometimes specialist expert advice. That is not to say that legal advice will be required in every case: see, for example, Pomare at [19] (Basten JA).

17. [71]

    The fact contemplated by s 50D(1)(c) is attended by even greater complexity. Although, having regard to the terms of s 50D(1), a judgment that an injury is sufficiently serious to justify the commencement of proceedings must be treated as a “fact”, it is a “fact” knowledge of which necessarily requires evaluation of both medical and legal issues, and which may not be able to be known to the lay person without appropriate medical and/or legal advice. The need for a “legal evaluative judgment … is even more explicit” with respect to s 50D(1)(c). The injury must not only be understood (by the putative plaintiff) to be serious, but “sufficiently serious to justify” bringing an action on the cause of action: Baker-Morrison at [41]. Inherent in that proposition is an appreciation of the causes of action that may be available. Also inherent in the proposition is an appreciation of the facts necessary to support such an action. Rarely is that likely to be understood – “known” – by a lay plaintiff without the benefit of both legal and medical advice.

18. [72]

    In Gillett at [131], Campbell JA said:

19. [73]

    A particular complexity arises in respect of s 50D(1)(c) where an injured person (the putative plaintiff) is faced with a choice of bringing common law proceedings claiming damages from his or her employer, or contenting himself or herself with the lesser, but more certain, benefits provided under the Workers Compensation Act. This is a classic example where it might be said that a putative plaintiff does not have the necessary knowledge unless and until he or she has received appropriate legal advice.

20. [74]

    In Gillett, in which a five-judge bench was convened in order to entertain an argument that Baker-Morrison was wrongly decided, Beazley JA, with whom McColl, Campbell, Young and Whealy JJA agreed, adopted the view expressed by Basten JA in Baker-Morrison that a proper view could not be formed about the justification for bringing an action absent appropriate legal and medical advice in respect of such matters. (The Court unanimously declined the invitation to declare that Baker-Morrison was wrongly decided.)

21. [75]

    To establish that Mr Alelaimat knew the s 50D(1)(c) fact (that the injury was sufficiently serious to justify bringing an action), Synergy Scaffolding relied on evidence given by him in cross-examination to the effect that, by the time he consulted Law Partners (in November 2013), he was in sufficient pain that he agreed to Dr Al-Khawaja’s recommendation for surgery and that he had challenged CGU’s refusal to pay for the proposed surgery. To establish the s 50D(1)(b) fact – that his injury was caused by the fault of Synergy Scaffolding) – Synergy Scaffolding relied on evidence, from Ms McRae’s notes, that, at the time he consulted Law Partners he believed that he was employed by Synergy Scaffolding and that he had been injured because Synergy Scaffolding had insufficient workers on site, or the workers on site were not properly qualified, and that one of the workers he believed to be employed by Synergy Scaffolding had been responsible for dropping the piece of scaffolding that injured him.

22. [76]

    The primary judge rejected each of Synergy Scaffolding’s contentions. He found that Synergy Scaffolding had failed to establish that, by 10 July 2014, Mr Alelaimat knew either the s 50D(1)(b) fact or the s 50D(1)(c) fact.

23. [77]

    In finding that Synergy Scaffolding had failed to establish that Mr Alelaimat knew that his injury was caused by the fault of Synergy Scaffolding the primary judge took into account Mr Alelaimat’s mistaken belief that he was employed by Synergy Scaffolding (as disclosed in Ms McRae’s notes of her conference with Mr Alelaimat). His Honour considered that, had Mr Alelaimat been correct about that, the factors relevant to his cause of action, including the degree of disability or impairment necessary to bring proceedings, would have been different: [21].

24. [78]

    In finding that Synergy Scaffolding had failed to establish that Mr Alelaimat knew that his injury was sufficiently serious to justify bringing an action, the primary judge took into account that Dr Al-Khawaja had advised Mr Alelaimat that his spinal condition might be amenable to surgery (that is, as relevant to the permanency or otherwise of the injury and thus its seriousness); that different thresholds and caps are applicable to damages that may be recoverable depending on whether the proceedings are subject to the Civil Liability Act or the Workers Compensation Act; and that, while Mr Alelaimat had sought legal advice, the advice he received was limited to his entitlements to compensation under the Workers Compensation Act (as distinct from common law damages). He had received no advice about any common law rights he might have had.

25. [79]

    In written and oral submissions Synergy Scaffolding did not seek to identify any specific error in the reasoning of the primary judge to the conclusion that Synergy Scaffolding had failed to establish that Mr Alelaimat knew that his injury was caused by the fault of Synergy Scaffolding. Rather, it identified circumstances that point to a different conclusion. In other words (by implication) Synergy Scaffolding sought to have this Court exercise the powers conferred by s 75A(6) of the Supreme Court Act and draw its own inferences as to Mr Alelaimat’s knowledge of the par (c) fact.

26. [80]

    In my opinion, for the purposes of s 50D(1)(b), the relationship between Synergy Scaffolding and DJSS was not material, and in taking into account Mr Alelaimat’s mistaken belief that he was employed by Synergy Scaffolding on the question of his knowledge that his injury was caused by the fault of Synergy Scaffolding, the primary judge was in error. Section 50D(1)(b) does not require knowledge of the capacity in which a putative defendant might be liable. It requires knowledge that the circumstances in which the injury occurred are such that legal liability could be established. Whether Synergy Scaffolding was Mr Alelaimat’s employer, or no more than an occupier of premises, had no necessary bearing on the question whether Mr Alelaimat’s injury was caused by Synergy Scaffolding’s fault.

27. [81]

    The anterior facts relevant to the question posed by par (b) that were known to Mr Alelaimat prior to 10 July 2014 were:

28. [82]

    With some hesitation I have come to the view that it was. That conclusion is reinforced by reference to Ms McRae’s notes in which she attributed to Mr Alelaimat an assertion that Synergy Scaffolding (as his employer, as he then believed it to be) was negligent.

29. [83]

    In my opinion, Synergy Scaffolding established that, for the purposes of s 50D(1)(b), Mr Alelaimat knew, at least by the time he consulted Ms McRae in November 2013, that his injury was caused by the fault of Synergy Scaffolding.

30. [84]

    It is otherwise, however, in relation to the s 50D(1)(c) “fact”, in relation to which the issues are more complex, and which, as indicated above, could not be properly evaluated by a lay person without adequate legal advice.

31. [85]

    Mr Alelaimat had no realistic means of knowing the intricacies of the Civil Liability Act and the Workers Compensation Act and the bounds and limits of benefits to which he may have been entitled under whichever of those statutes was applicable to him. In this respect his unawareness of the identity of his employer is significant.

32. [86]

    The advice Mr Alelaimat received from Law Partners did nothing to inform him of any rights he had to bring proceedings at common law (against either Synergy Scaffolding or DJSS). That advice was clearly focussed on and directed to his entitlements under the Workers Compensation Act.

33. [87]

    I am satisfied that Synergy Scaffolding failed to prove that Mr Alelaimat knew the third of the s 50D(1) facts within the relevant period. For that reason I agree with the conclusion of the primary judge that the defence under the Limitation Act fails. It follows that ground one of the appeal must be rejected.

Grounds 2 and 3 of the appeal

1. [88]

   As noted above, Synergy Scaffolding does not dispute the liability findings against it. By ground 2 it challenges the finding of the primary judge that DJSS was not liable to Mr Alelaimat in negligence. By ground 3 it asserts that the primary judge:

2. [89]

   The formulation of ground 3 is, as will be seen below, of some importance. The issue of DJSS’s liability to Mr Alelaimat has important and potentially complex implications in terms of apportionment of liability (although these were not spelled out with any clarity, either at first instance or in the written submissions filed in this Court).

3. [90]

   Section 151Z(2) of the Workers Compensation Act makes elaborate provision with respect to awards of damages where a plaintiff has a cause of action for damages against a defendant who is an employer (the extent of whose liability is to be determined under the restrictive provisions of the Workers Compensation Act) and a concurrent cause of action against a defendant other than an employer (the extent of whose liability is to be determined, generally, by reference to the Civil Liability Act). One effect of s 151Z(2) is to reduce the liability to the plaintiff of the defendant who is not the employer (par (c)). Another is to modify any contribution the non-employer defendant may recover from the employer defendant (par (d)).

4. [91]

   Section 151Z(1) of the Workers Compensation Act addresses the circumstance in which an employer, while liable to pay compensation under the Workers Compensation Act for an injury, is not a tortfeasor liable to pay damages, and the injury is caused in circumstances creating a liability in a third party tortfeasor to pay damages. It is not applicable where the employer is also a tortfeasor liable to pay damages: Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336; [1975] HCA 28 (“Murray-More”); CSR Timber Products Pty Ltd v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49 at [33] ("Weathertex”); Endeavour Energy v Precision Helicopters Pty Ltd (No 2) [2015] NSWCA 357 at [43] (“Endeavour Energy”); South West Helicopters Pty Ltd v Stephenson (2017) 98 NSWLR 1; [2017] NSWCA 312 at [170] (“South West Helicopters”).

5. [92]

   One purpose of the 7 paragraphs of s 151Z(1) is to prevent double recovery by a plaintiff who is entitled to both compensation from the employer under the Workers Compensation Act and to damages from a third party tortfeasor (pars (a), (b) and (c)). Another purpose is to entitle an employer (or its insurer) to recover payments made under the Workers Compensation Act from the third party tortfeasor (par (d)).

6. [93]

   As stated above, despite clear indications to the contrary, this Court must proceed on the basis that DJSS was Mr Alelaimat’s employer and had provided his services to Synergy Scaffolding by way of labour-hire. The question raised by ground 2 of the appeal is whether the primary judge was wrong in finding that DJSS had not been shown to be in breach of its undoubted duty of care to Mr Alelaimat. Both Mr Alelaimat in his Further Amended Statement of Claim and Synergy Scaffolding in its cross-claim against DJSS asserted that Mr Alelaimat’s injury was caused by the negligence of DJSS.

Ground 2: the liability of DJSS to Mr Alelaimat

1. [94]

   The primary judge accepted, as he was obliged to do by the common position of the parties, that DJSS was Mr Alelaimat’s employer. His Honour treated DJSS as, in effect, a labour-hire company that supplied labour to entities with which it contracted.

2. [95]

   It is uncontroversial that an employer is under a duty to take reasonable care to provide a safe system of work for its employees. It is equally uncontroversial that that duty cannot be delegated by, for example, engagement of an independent contractor: Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61 (“Kondis”).

3. [96]

   In Kondis, in common with the present case, the plaintiff (Mr Kondis) was struck on the back by an object (a metal rod) which had been dropped from above by another worker on the site as he (Mr Kondis) bent to pick up some items from the ground. There the commonality ends.

4. [97]

   Mr Kondis was sent by his employer (the Victorian Railways Board) to assist in dismantling a large metal structure on property which, it seems a fair inference, was owned by the employer. For the purpose of the dismantling the employer had engaged a contractor to operate a crane. The jib of the crane needed to be extended. It was an employee of the contractor who was responsible for dropping the metal rod during the extension process. Mason J, with whom Brennan, Murphy, Deane and Dawson JJ agreed, held the employer to be in breach of its duty to provide a safe system of work. It could not escape liability by engaging an independent contractor to undertake the work. The duty of the employer was to ensure that reasonable care was taken by the contractor (at 686-687). The employer was liable to its employee for any negligence on the part of the contractor in failing to adopt a safe system of work (at 688). An employer bears liability for the negligence of its independent contractors in devising a safe system of work, and bears the consequences of requiring its employees to work according to an unsafe system. The liability is not vicarious but arises because the contractor’s omission to adopt a safe system of work is a breach of the employer’s duty.

5. [98]

   Deane J agreed, adding:

6. [99]

   The duty of care owed by an employer to provide a safe system of work is therefore characterised as non-delegable. It has been said that the characterisation of a duty of care as non-delegable involves, in effect, the imposition of strict liability on the defendant (in this case DJSS) who owes the duty: Scott v Davis (2000) 204 CLR 333; [2000] HCA 52 at [248] (Gummow J).

7. [100]

   Mason J would also have found the employer liable to Mr Kondis on an independent basis, that the employer’s foreman, who was on-site, had failed to give appropriate instructions or directions to Mr Kondis to avoid the area of the crane while the extension of the jib was in process.

8. [101]

   Kondis was decided before the advent of labour-hire companies, or at least before labour-hire became commonplace. The arrangements attending employment under such contracts have raised questions that did not arise in Kondis. Some of these have been discussed in TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47 (“Christie”) by Mason P; in Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99 (“Pollard”) by McColl JA; in Dib Group Pty Ltd Trading as Hill and Co v Cole [2009] NSWCA 210 (“Dib Group”) by Basten JA; and in Galea v Bagtrans Pty Limited [2010] NSWCA 350 (“Galea”) by Allsop P and Hodgson JA.

9. [102]

   Generally, it has been accepted that the reasoning in Kondis to the effect that an employer cannot escape liability for injuries negligently inflicted on an employee by an independent contractor applies equally to injury negligently inflicted by a client to whom the employer (a labour-hire company) has contracted the services of the employee. That was the effect of the decisions in Christie, Pollard and Galea. Indeed, it has been said that the duty of an employer in such cases may be greater – see Christie at [67], where Mason P said that the very fact that employees are despatched to external venues and placed under the de facto management of outsiders will, in some cases, have the practical effect of requiring the employer to take additional measures by way of warnings or training in order to discharge its continuing common law duty of care to employees.

10. [103]

    In Christie at [63]-[64] Mason P, with whom Davies and Foster AJJA generally agreed, rejected a submission by a labour-hire employer that the non-delegable duty doctrine did not apply to it because “it [the employer] was no more than an employment agency/bureau or ‘body hire company’” and had handed over its employee (Mr Christie) into the control of the company (TNT) with which it contracted to supply labour. The Court found that the employer company was liable to Mr Christie for the failure of TNT (and another entity) adequately to maintain equipment.

11. [104]

    Galea was also a case involving labour-hire. Mr Galea was employed by a labour-hire company and assigned to a transport company as a truck driver. The transport company required him to drive a truck that was fitted with an unsafe seat as a result of which he suffered injury. Allsop P found liability in the employer on the basis of the Kondis principles. His Honour said (at [5]-[6]):

12. [105]

    Hodgson JA said, at [65]:

13. [106]

    The underlying question is whether the entity to whom the employer has contracted to provide the services of its employee has, by negligence, caused injury to the employee. If so, the employer will be liable to the employee for that injury equally with the contracting party (although, as will be seen below, questions will arise as to the respective contributions between employer and contractor). In labour-hire arrangements, it is no answer to a claim by an employee injured by the negligence of the contracting party for the employer to say that it took what steps it could to ensure that the contracting party acted reasonably in the provision of a safe system of work. Nor is it an answer to say that the employer company did not have the opportunity to intervene to prevent the injury (although that consideration, too, may be highly material to the apportionment of liability between the employer and the non-employer). If the contracting party is negligent then, notwithstanding that the employer has taken steps to satisfy itself that the contracting party will provide a safe system of work, the employer will be liable to the injured employee as a joint tortfeasor with the non-employer. That is the consequence of the firm pronouncements in Kondis, adopted in relation to labour-hire arrangements by the subsequent decisions to which I have referred. Of course, the liability of the contracting party (and therefore the employer) will be assessed on established principles of negligence.

14. [107]

    The issues are therefore not the same as those that arise where an employer, for its own purposes and in the course of its own business, requires an employee to attend or work temporarily at external premises over which the employer has limited control. Such issues arose in Estate of the late M T Mutton v Howard Haulage Pty Ltd [2007] NSWCA 340; Atkinson v Gameco [2005] NSWCA 325; and in Dib Group at [24]-[55]. They are not pertinent to the present case, which involves the Kondis principle, as applied to labour-hire arrangements.

15. [108]

    Notwithstanding that he had found Synergy Scaffolding liable to Mr Alelaimat in negligence, the primary judge considered (at [135]) that:

16. [109]

    In my opinion, so far as that statement is a reference to DJSS’s liability to Mr Alelaimat, it is inconsistent with the authorities and principles referred to above. Those authorities establish that DJSS was under a duty to ensure that Synergy Scaffolding provided Mr Alelaimat with a safe system of work. The conclusion that Mr Alelaimat’s injury was caused by the negligent failure of Synergy Scaffolding to do so was sufficient to establish, on the application of the Kondis principle, that DJSS was liable to Mr Alelaimat for that negligence. On the application of the Kondis principle, the primary judge ought to have found DJSS liable to Mr Alelaimat for the negligence of Synergy Scaffolding. That is sufficient to uphold ground 2.

17. [110]

    The primary judge was not satisfied that DJSS had been shown to have been in breach of its own duty of care to Mr Alelaimat. This was a question independent of the Kondis principle. It is analogous to the alternative basis on which Mason J would have found the employer liable to Mr Kondis, for breach of its own duty of supervision. The primary judge found that the case was “clearly one where the premises and system of work were not under [DJSS’s] control”: [136]. His Honour referred to the reasons of Mason P in Christie, and Basten JA in Dib Group. Because the last-minute instruction given to Mr Alelaimat by Mr Hamka or Mr El Jarrar to assist the workmen at the Artarmon site (when Mr Alelaimat reported that the scaffolding on the site was not ready for loading and transporting) could not have been known to DJSS, DJSS had no opportunity to inform itself about the conditions at the site, the system of work in operation, or the competence of those in charge. The primary judge accepted a submission made by counsel for WCNI that DJSS was deprived of any opportunity to satisfy itself of the safety of the system by the ad-hoc arrangements put in place by Mr Hamka: [137].

18. [111]

    Synergy Scaffolding took issue with that reasoning. It contended that, on analysis of the primary judge’s conclusions with respect to its own liability, it could be seen that it was not correct that DJSS had no opportunity to familiarise itself with the conditions at the Artarmon site, and that the reasoning failed to recognise evidence given by Mr Alelaimat that he had been given no training or instruction about exclusion zones around scaffolding. Synergy Scaffolding submitted that the evidence did not establish that its failure to create an exclusion zone was unique to the Artarmon site and therefore something over which DJSS had no control and no opportunity to take steps to ensure that Mr Alelaimat was provided with a safe system of work.

19. [112]

    These arguments appear to be an attempt to fix DJSS with direct liability to Mr Alelaimat analogous to the second basis on which Mason J would have found the employer liable in Kondis. Since I have concluded that DJSS has been shown to have been liable to Mr Alelaimat on the non-delegability principle, it is unnecessary, for the purposes of ground 2 of the appeal, to determine whether it would also have been liable on the alternative basis. The findings and the arguments are, however, material to the issues raised by Synergy Scaffolding’s claim for a reduction, under s 151Z(2)(c) of the Workers Compensation Act, of the damages awarded to Mr Alelaimat, and to its cross-claim against DJSS, with which I will deal below.

20. [113]

    As I will endeavour to demonstrate, the considerations that moved the primary judge to exonerate DJSS, while apposite to the issue of the relative liabilities between Synergy Scaffolding and DJSS, are inapposite to the liability of DJSS to Mr Alelaimat. The correct conclusion was that DJSS was, on the principles stated in Kondis, Christie, Pollard and Galea, liable to Mr Alelaimat for the negligence of Synergy Scaffolding. That conclusion may be tested by asking what the outcome would have been had Mr Alelaimat confined his claim to DJSS and not sued Synergy Scaffolding, or had Synergy Scaffolding been impecunious and uninsured. Undoubtedly, Mr Alelaimat would have been entitled to recover against DJSS (or its insurer) as employer/joint tortfeasor (although the damages to which he was entitled would have been calculated under the more restrictive provisions of the Workers Compensation Act). DJSS could not have escaped liability to Mr Alelaimat by claiming that, once it had despatched Mr Alelaimat to work at the direction of Synergy Scaffolding, it had lost control of his working conditions and absolved itself of liability.

21. [114]

    In my opinion, the primary judge’s reliance on the observations of Basten JA in Dib Group was also inapposite. In that case, the employer was directly responsible for the conditions of work. The work involved employment of the plaintiff in locations not under the employer’s control. There was no question of delegation. In such circumstances, the duty of an employer may extend to inspection of premises and imposing conditions on the occupiers of the premises to which the employee is directed. Nevertheless, the duty remains that of the employer, it is not delegated, and it is to be determined by assessment of what is reasonable in the particular circumstances.

22. [115]

    The primary judge then found that the case was “quite unlike Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28” (“Andar”) and found it to be “more in the category of Shoalhaven City Council v Humphries [2013] NSWCA 390” (“Humphries”). That calls for some explanation.

23. [116]

    Andar (as its full name implies) was a transport company. It held a contract with Brambles for the supply of laundry services to hospitals. For that purpose it employed the plaintiff, Mr Wail, to load large trolleys filled with clean laundry onto trucks for delivery to hospitals, and there to unload them. The trolleys were supplied by Brambles. The trucks were Andar’s property, but, at Brambles’ insistence, were painted with Brambles’ insignia. One day, while Mr Wail was unloading the truck, one trolley jammed against another. Mr Wail attempted to free the trolley and, in doing so, suffered spinal injury.

24. [117]

    Mr Wail sued Brambles – but not Andar – in negligence in the Victorian County Court. A jury upheld his claim. It was accepted that, in doing so, the jury found that the trolleys were not safe to use. As the supplier of the trolleys, Brambles was liable to Mr Wail for the injury caused by their use.

25. [118]

    A third party notice filed by Brambles, claiming contractual indemnity from Andar, was dismissed by a County Court judge. The relevant indemnity in the contract on which Brambles relied was for loss, damage or injury to any person caused or contributed to by the conduct of Andar or by any act, omission, neglect or default of Andar. The Court of Appeal upheld an appeal by Brambles against the dismissal of the third party notice: Brambles v Wail [2002] VSCA 150. It held that Brambles was entitled to a complete indemnity from Andar.

26. [119]

    Andar appealed to the High Court. One question that arose was whether Andar was contractually obliged to indemnify Brambles for the liability it had incurred as a result of Mr Wail’s injury. That depended on whether the injury was caused or contributed to by the conduct of Andar or by “any act, omission, or breach or default by Andar”, specifically whether it (as employer) had breached its duty to take reasonable care to provide Mr Wail with a safe system of work. The High Court (Gleeson CJ, McHugh, Gummow, Kirby, Hayne, and Heydon JJ, Callinan J dissenting) held that it had. The majority held that Andar had (apparently) given no consideration to the best method of loading trolleys and that steps could reasonably have been taken to reduce the likelihood of injury. Their Honours specified what those steps might have been. It was clear that Andar had full knowledge of the system of loading and unloading trolleys, and could have taken precautions to prevent the kind of jamming that caused the injury to Mr Wail. There was no issue of delegation in that case. Andar was the employer, responsible for Mr Wail’s working conditions. It was therefore correct for the primary judge to hold that the present case was “quite unlike” Andar.

27. [120]

    However, whether it was properly seen as “in the category of Humphries” is another question.

28. [121]

    Mr Humphries was employed by a labour-hire company. He was assigned to work for an arm of the Shoalhaven City Council (“the Council”) to attend to the servicing of sewerage main manholes. The work at times necessarily involved removal of manhole covers, some of which were heavy. Mr Humphries had received no particular training for that task but was under the direction of a Council supervisor. The Council had available trucks fitted with mechanical lifting devices for use in circumstances where heavy lifting was required.

29. [122]

    Mr Humphries was injured while performing the work. He brought proceedings in the District Court against the Council claiming damages, asserting negligence. He did not bring proceedings against his employer. The trial judge found that the Council owed Mr Humphries a duty of care (analogous to that of employer) of which it was in breach, and therefore liable to the plaintiff: Humphries v Shoalhaven City Council [2012] NSWDC 216 at [205].

30. [123]

    Although the Council did not cross-claim against the employer, it contended that it was entitled to a reduction, in accordance with s 151Z(2)(c) of the Workers Compensation Act, in the damages to be awarded to Mr Humphries on the basis of the contribution to which it would have been entitled from the employer by reason of its negligence. That involved an assessment of what contribution (if any) the Council would, pursuant to s 5 of the 1946 Miscellaneous Provisions Act, have been entitled to recover from the employer as a joint tortfeasor.

31. [124]

    The trial judge (Levy DCJ) rejected the Council’s contention. He found that, while there was evidence that the employer had given some training to Mr Humphries in relation to working in confined spaces, and in traffic control safety (both tasks in which it might have been anticipated that Mr Humphries would be required to engage) it had given him no training in safe lifting techniques. His Honour held that there was, however, no evidence that the employer was aware that Mr Humphries might have been employed in heavy lifting tasks, such that he ought to have been appropriately trained. Levy DCJ found that Mr Humphries’ injury resulted, not from an unsafe system of work, but from a casual act of negligence by the Council supervisor in failing to direct Mr Humphries to use an available lifting device. He considered that, had the employer made appropriate enquiries of the Council as to its work system, it would have ascertained that it had available appropriate lifting devices. That would have satisfied it that the system of work was safe for Mr Humphries. The trial judge therefore declined to reduce the damages he awarded to Mr Humphries by reason of the employer’s negligence. Given that this determination was made in the context of a claim, by the Council, under s 151Z(2)(c) of the Workers Compensation Act, for reduction in the damages to which Mr Humphries was entitled, the finding is in my opinion, properly to be seen as a finding that the Council was not entitled to any contribution from the employer because it was just and equitable that the Council bear the whole of the responsibility for Mr Humphries’ injury.

32. [125]

    The Council appealed to this Court. The Court (Tobias AJA, Leeming JA in a short concurring judgment, Barrett JA agreeing with both) doubted Levy DCJ’s conclusion that the evidence at trial was insufficient to establish that Mr Humphries’ employer did not have actual or constructive knowledge that he might be deployed in heavy lifting tasks. Their Honours nevertheless dismissed the appeal. Tobias AJA considered that the employer ought to have ascertained from the Council what the system of work required of Mr Humphries. Had it done so, it would have been informed that the work at times involved heavy lifting. However, his Honour also considered that, had the employer made enquiries, it would have been told of the availability of mechanical lifting devices. That would have been sufficient to discharge the employer’s duty of care. It could not, therefore, be shown that any default on the part of the employer was the cause of injury to Mr Humphries. Leeming JA was of the same view. As indicated, Barrett JA agreed with both Tobias AJA and Leeming JA.

33. [126]

    It would be easy to misconstrue the decision in Humphries. It is important at this point to be clear as to the issue with which the courts were dealing, both at first instance and on appeal. The issue was not whether, if sued by him, the employer would have been liable to Mr Humphries. The application of the Kondis principle means that the employer would, if sued by Mr Humphries or joined by the Council, have been held liable to Mr Humphries for the Council’s negligence. The issue was not whether the employer was in breach of its duty to Mr Humphries other than by its failure to ensure that the Council provided a safe system of work. The issue was whether, and if so to what extent, the Council was entitled to a reduction, pursuant to s 151Z(2)(c) of the Workers Compensation Act, in the damages award. It was in that context that both the court at first instance and this Court on appeal held that the employer was not liable.

34. [127]

    A further observation may, at this point, be made. It is important to be clear about what Kondis and the subsequent cases that apply the principle to labour-hire arrangements stand for. The Kondis principle is about the liability of an employer to an injured employee. There it stops. The principle says nothing about the respective liabilities of an employer tortfeasor and a third party tortfeasor to one another. That is to be determined in accordance with s 5 of the 1946 Miscellaneous Provisions Act (see below). A decision on the Kondis principle that an employer is liable (or, where not sued by the employee, would, if so sued or joined by a non-employer who is sued, be liable) is, at most, a first step on the way to determination of the respective liabilities of the employer tortfeasor and non-employer tortfeasor. On established principles, if both are sued by the injured employee, both are liable to the employee for the whole of the damages awarded (although, again, the damages will be calculated on different statutory bases).

35. [128]

    While the third party tortfeasor may rely on the Kondis principle to establish that an employer tortfeasor is liable to the injured employee, apportionment of the liability between the employer tortfeasor and third party tortfeasor raises different considerations. The onus of establishing that a tortfeasor is entitled to a contribution or indemnity from another tortfeasor lies on the tortfeasor seeking to establish the entitlement. That was the basis of the decision in Humphries.

36. [129]

    For the reasons given above, the conclusion of the primary judge that DJSS was not liable to Mr Alelaimat was not correct. Ground 2 of the appeal should be upheld. The consequence is that Order 5, as sought (an order setting aside the judgment in favour of WCNI against Mr Alelaimat) must be made, as must Order 6 as sought. Neither WCNI nor Synergy Scaffolding took issue with the primary judge’s quantification of those heads of damages available under the Workers Compensation Act. Judgment for Mr Alelaimat against WCNI should be given in the sum of $917,686.00 (see [44] above).

Ground 3: was DJSS liable to Synergy Scaffolding?

1. [130]

   Ground 3 of the appeal is a composite. It contends that the correct finding was that DJSS was in breach of its duty of care to Mr Alelaimat as employer, and was therefore liable (i) to Mr Alelaimat and (ii) to Synergy Scaffolding. That the correct finding was that DJSS (and thus WCNI) was liable to Mr Alelaimat follows from the conclusion above that Ground 2 should be upheld. To that extent, Ground 3 should also be upheld. It does not necessarily follow that the correct finding was that DJSS was liable to Synergy Scaffolding.

2. [131]

   The potential liability of WCNI to Synergy Scaffolding arises in this appeal in two ways – first, as will be explained below, with respect to Synergy Scaffolding’s claim for reduction in the damages it is liable to pay to Mr Alelaimat by reason of s 151Z(2)(c) of the Workers Compensation Act; and, second, under its cross-claim against WCNI. Also relevant in this context is WCNI’s cross-claim against Synergy Scaffolding, claiming contribution or complete indemnity pursuant to s 5(1)(c) of the 1946 Miscellaneous Provisions Act, and indemnity pursuant to s 151Z(1)(d) of the Workers Compensation Act.

3. [132]

   Any liability DJSS (or WCNI) had to Synergy Scaffolding was (and is) to be determined under Synergy Scaffolding’s cross-claim. By its cross-claim Synergy Scaffolding claimed that (but for the deregistration of DJSS) it (Synergy Scaffolding) would have been entitled to indemnity or contribution from DJSS (and was therefore entitled to indemnity or contribution from WCNI). The basis for that claim lies in s 5 of the 1946 Miscellaneous Provisions Act, which is relevantly in the following terms:

4. [133]

   Before coming to the cross-claims it is necessary to deal with the claim by Synergy Scaffolding for reduction, pursuant to s 151Z(2)(c) of the Workers Compensation Act, in the damages awarded to Mr Alelaimat.

5. [134]

   Section 151Z is a notoriously difficult provision to construe and to apply. It was enacted in the context of statutory amendments that quite drastically reduced the damages to be awarded at common law to employees injured by the negligence of employers: see the history recounted by Allen J in Leonard v Smith (1992) 27 NSWLR 5. The relevant provisions are to be found in Pt 5 Div 3 of the Workers Compensation Act.

6. [135]

   As already mentioned subs (1) of s 151Z, to which it will be necessary to return, applies where a plaintiff has a claim for compensation under the Workers Compensation Act against his or her employer in respect of an injury for which a third party (but not the employer) is liable in damages.

7. [136]

   Subsection (2) of s 151Z applies where a plaintiff has a cause of action for damages (as distinct from a claim for compensation under the Workers Compensation Act) against both his or her employer and a third party in respect of an injury. It is convenient to use the terminology “employer tortfeasor” and “third party tortfeasor”. Subsection (2) of s 151Z provides:

8. [137]

   In this case, subs (2) is applicable because compensation under the Workers Compensation Act was payable (and was paid) to Mr Alelaimat and (as I have found) Mr Alelaimat had a cause of action for damages against both Synergy Scaffolding (as a third party tortfeasor) and DJSS (as employer tortfeasor). The provisions of pars (c)-(e) of subs (2) therefore apply. It is pars (c) and (d) that call for immediate consideration. Each refers to the contribution that the third party tortfeasor (in this case, Synergy Scaffolding) is or would be entitled to recover from the employer tortfeasor (DJSS) as a joint tortfeasor. That is a reference to the contribution that Synergy Scaffolding would be entitled to recover from WCNI under s 5 of the 1946 Miscellaneous Provisions Act: Leonard v Smith at 11. If no cross-claim is made, par (c) of s 151Z(2) nevertheless requires a notional assessment of what that contribution would be. The test, by subs (2) of s 5, is what is or would be just and equitable. The reduction in the damages payable by the third party tortfeasor to the plaintiff depends upon the third party tortfeasor being entitled to contribution (or indemnity) from the employer tortfeasor under s 5. As will be seen, it is not always the case that the employer tortfeasor will be liable to make such a contribution or give an indemnity. Section 5(2) recognises that either tortfeasor may be held to be responsible for the whole of the damages.

9. [138]

   The amount of the contribution that the third party tortfeasor is entitled to recover from the employer tortfeasor is, by par (d) of s 151Z(2), to be determined as if the whole of the damages were assessed under Pt 5 Div 3 of the Workers Compensation Act. By par (c) of s 151Z(2) the plaintiff’s damages are to be reduced by the difference between that amount and the contribution the third party tortfeasor would be entitled to recover from the employer tortfeasor on damages assessed otherwise than under Pt 5 Div 3 of the Workers Compensation Act (for example, at common law or under the Civil Liability Act). The onus of establishing an entitlement to a reduction under s 151Z(2)(c) lies on the third party tortfeasor: Humphries at [4] (Leeming JA, Barrett JA agreeing) and [129] (Tobias AJA, Barrett and Leeming JJA agreeing).

10. [139]

    Expressed as an equation, the effect of s 151Z(2)(c)-(d) is that, where the conditions in s 151Z(2)(a) and s 151Z(2)(b) are engaged (that is the worker (plaintiff) has a cause of action for damages against both the employer tortfeasor and the third party tortfeasor), the sum of damages (D) ultimately recoverable by the plaintiff worker from the third party tortfeasor is equal to the total damages which would be recoverable from the third party tortfeasor but for the operation of s 151Z(2) (T), minus the difference between the sum that the third party tortfeasor would be entitled to recover from the employer tortfeasor as contribution under s 5 of the 1946 Miscellaneous Provisions Act but for the operation of s 151Z(2)(d) (C), and the amount of contribution that is actually recoverable under s 5 once s 151Z(2)(d) is taken into account (X).

11. [140]

    That is, D = T – (C – X), where:

12. [141]

    The first step therefore, for the purposes of s 151Z(2)(c), is to determine what, if any, contribution it is just and equitable to require WCNI to make to Synergy Scaffolding. That requires an assessment under s 5(2) of the 1946 Miscellaneous Provisions Act of the relative responsibility of the parties for Mr Alelaimat’s injury. As the primary judge found DJSS not liable to Mr Alelaimat, he did not consider it to be a joint tortfeasor and s 5 was therefore inapplicable. His Honour simply (by implication) dismissed Synergy Scaffolding’s cross-claim. It will be necessary that this Court undertake the s 5 assessment. That DJSS has been found to have been liable to Mr Alelaimat does not have the necessary consequence that it is also liable to Synergy Scaffolding. That is a different question, to be determined on the just and equitable basis under s 5(2) of the 1946 Miscellaneous Provisions Act.

13. [142]

    For the reasons given below, I have concluded that Synergy Scaffolding has not established that it would be just and equitable to require WCNI to make any contribution to Synergy Scaffolding. The consequence of that conclusion is that s 151Z(2)(c) simply has no application, there being no “amount of … contribution” as would be necessary to apply that provision. To use the language of the equation above, C and X are both zero, such that D simply equals T.

14. [143]

    Any contribution to be made by WCNI to Synergy Scaffolding is to be determined by what is just and equitable “having regard to the extent of [DJSS’s] responsibility” for Mr Alelaimat’s injury.

15. [144]

    Evidence about DJSS’s role in Mr Alelaimat’s conditions and circumstances of work is entirely lacking. Apart from its liability to Mr Alelaimat as his employer and thus its liability for the negligence of Synergy Scaffolding, almost nothing is known of DJSS’s role.

16. [145]

    The most that has been advanced by Synergy Scaffolding is that Mr Alelaimat responded in the negative to a question whether he had been “given any training or instruction about entering into a zone that was not safe around scaffolding”. He also said that, until his injury, he had no knowledge of DJSS, from which some inference may be drawn that he had not, at least to his knowledge, been given any instruction by DJSS. That is a flimsy basis for finding DJSS liable other than on the Kondis principle.

17. [146]

    In Kondis the separate basis on which Mason J would have held the employer liable to Mr Kondis lay, in part, in the circumstances that pertained to that work site. The employer retained a foreman on the site who, Mason J found, could and should have given Mr Kondis directions to distance himself from the crane when the jib was being extended. His Honour said:

18. [147]

    In this case, apart from one answer given by Mr Alelaimat, it is not known what instructions, if any, DJSS gave either to Mr Alelaimat or to Synergy Scaffolding. What is apparent from the evidence is that, so far as DJSS knew, Mr Alelaimat was engaged by Synergy Scaffolding to drive a truck. He was not hired to Synergy Scaffolding to assist in the dismantling of scaffolding, nor of clearing up the Artarmon site. DJSS could not reasonably have thought that it was necessary to direct him to stay out of the scaffolding area in order to secure him from the danger of injury by falling scaffolding. On the evidence, DJSS could not reasonably have been expected to establish, or to insist that Synergy Scaffolding establish, an exclusion zone around the worksite. No breach of duty by DJSS other than its failure to ensure that Synergy Scaffolding provided Mr Alelaimat with a safe system of work has been established. That says nothing about the respective responsibilities of Synergy Scaffolding and DJSS for Mr Alelaimat’s injury.

19. [148]

    The application of s 5 of the 1946 Miscellaneous Provisions Act involves findings and questions “not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations”: A V Jennings Construction Pty Ltd v Maumill (1956) 30 ALJ 100. As this court noted in Vinidex Tubemakers Pty Limited v Thiess Contractors Pty Limited [2000] NSWCA 67 at [29] (Rolfe AJA, Sheller and Fitzgerald JJA agreeing), in considering what is just and equitable, the Court:

20. [149]

    I have come to the view that Synergy Scaffolding has not demonstrated its entitlement to any contribution from DJSS. That is not because I consider that DJSS discharged its obligations as employer; nor am I persuaded that DJSS had no opportunity to exercise care in relation to the working conditions afforded to Mr Alelaimat by Synergy Scaffolding. My conclusion is based on the onus of proof which Synergy Scaffolding has failed to discharge.

21. [150]

    Synergy Scaffolding did not challenge the primary judge’s assumption that Mr Alelaimat was assigned to it by DJSS under a labour-hire arrangement. It did not challenge the finding that it was in control of the Artarmon site, nor the findings that Mr Alelaimat’s injuries resulted from its failure to provide him with a safe system of work. Whatever those arrangements were, it was, undoubtedly, the obligation of Synergy Scaffolding to determine the system of work, and to take reasonable steps to ensure Mr Alelaimat’s safety.

22. [151]

    It is in respect of the s 5 apportionment of responsibility question that the observations made by the primary judge at [136]-[137] concerning the extent to which DJSS had the opportunity to take steps to ensure that Synergy Scaffolding provided Mr Alelaimat with a safe system of work are pertinent.

23. [152]

    In Humphries, both Tobias AJA and Leeming JA emphasised that the onus lay on the Council to establish negligence in the employer. Leeming JA noted that Mr Humphries had not sued the employer. That was an echo of what McColl JA said in Pollard at [32]:

24. [153]

    Whatever arrangements existed between Synergy Scaffolding and DJSS was not revealed by the evidence. Synergy Scaffolding was in the best position to call that evidence. It did not do so. Mr Hamka gave evidence, but was entirely unhelpful. He said that Mr Alelaimat had come to work for Synergy Scaffolding through DJSS. That could not have been correct. The evidence showed that DJSS was incorporated in December 2011. Mr Alelaimat commenced work with Synergy Scaffolding in March 2011.

25. [154]

    Mr Hamka gave the following evidence:

26. [155]

    Later, Mr Hamka gave the following evidence:

27. [156]

    There is an evidentiary vacuum in relation to the involvement of DJSS. On the somewhat fragile premise that Mr Hamka did, as he said, ring DJSS when he needed workers, it is simply not known what, if any, enquiries DJSS made of Synergy Scaffolding before assigning DJSS employees to Synergy Scaffolding sites, or what conditions, if any, it imposed on Synergy Scaffolding in relation to the work that the employees were required to do. What is known is that it was Mr Hamka – Synergy Scaffolding – who directed Mr Alelaimat from day to day. It was in the hands of Synergy Scaffolding, through Mr Hamka (or Mr El Jarrar) to provide the evidence that DJSS had not taken appropriate steps to satisfy itself of the safety of its employees at Synergy Scaffolding worksites and that it was therefore just and equitable that it make a contribution to the damages payable to Mr Alelaimat.

28. [157]

    In written submissions Synergy Scaffolding outlined the “reasonable steps” that it contended, in this case, DJSS could and should have taken. These were:

29. [158]

    It may be accepted that this list sets out what might reasonably have been expected of DJSS. The difficulty is that the evidence does not establish that DJSS failed, for example, to ascertain the range of duties that Mr Alelaimat would be required to perform when assigned to work for Synergy Scaffolding or to impose conditions on the circumstances in which he would be deployed. Whether or not DJSS took such a step lay well within the knowledge of Synergy Scaffolding, and could have been adduced in evidence, through either Mr Hamka or Mr El Jarrar. That evidence was not forthcoming.

30. [159]

    In oral submissions, senior counsel pointed to what he said was “the complete absence by the employer it seems to have done anything”. Again, the difficulty with the submission is that it is entirely unsupported by evidence. It is pure speculation. Evidence to support the speculative assertion was in the hands of Synergy Scaffolding, and not adduced.

31. [160]

    It may also be accepted that occasional spot checks by DJSS was a reasonable precautionary step for DJSS to take. Again, whether that was done or not lay within the knowledge of Synergy Scaffolding, but no evidence was forthcoming.

32. [161]

    The negligence on the part of Synergy Scaffolding that his Honour identified was failure to create an exclusion zone, and a failure to engage or adequately supervise its independent contractors. What is not known is whether either or both of these failings was or were part of Synergy Scaffolding’s modus operandi, or were aberrant conduct on the day of Mr Alelaimat’s injury. If the former, any failure by DJSS to correct them would clearly, independently of its liability to Mr Alelaimat for the negligence of Synergy Scaffolding on the Kondis principle, warrant attributing some responsibility for Mr Alelaimat’s injury to DJSS. But if the failings were aberrations from Synergy Scaffolding’s normal practices, it would be difficult to attribute to DJSS any significant share of the responsibility for the injury. Which is the position is not revealed by the evidence.

33. [162]

    For these reasons Synergy Scaffolding has failed to establish that, for the purposes of s 151Z(2)(c) of the Workers Compensation Act, it was entitled to a contribution under s 5 of the 1946 Miscellaneous Provisions Act and thus to a reduction in the damages awarded to Mr Alelaimat. I would therefore reject Ground 3 of the appeal so far as it asserts that, by reason of DJSS’s liability to Mr Alelaimat, WCNI was also liable to Synergy Scaffolding.

34. [163]

    As Synergy Scaffolding’s cross-claim against WCNI also depended on an apportionment of responsibility, the onus of proving which lay on it, it follows that its cross-claim against WCNI was correctly dismissed.

Grounds 4 and 5 of the appeal

1. [164]

   As pleaded, grounds 4 and 5 of the appeal are predicated on the success of both grounds 2 and 3. Synergy Scaffolding has had success on ground 2, and partial success only on ground 3.

Ground 4: was WCNI entitled to indemnity under Workers Compensation Act s 151Z(1)(d)?

1. [165]

   By ground 4 Synergy Scaffolding contends (on the hypothesis that grounds 2 and 3 are upheld), that WCNI’s cross-claim against it should have been dismissed.

2. [166]

   By its cross-claim WCNI sought:

3. [167]

   Because he found WCNI not liable to Mr Alelaimat, it was not necessary for the primary judge to address the question of contribution or indemnity under s 5 of the 1946 Miscellaneous Provisions Act. His Honour ordered Synergy Scaffolding to indemnify WCNI, in accordance with s 151Z(1)(d), for compensation paid by WCNI under the provisions of the Workers Compensation Act. That order also resulted from the finding that WCNI was not liable to Mr Alelaimat. Synergy Scaffolding contends that it should be set aside.

4. [168]

   Paragraph (d) of s 151Z(1) provides:

5. [169]

   As stated above (see [91]), s 151Z(1) does not apply (of its own force) where the employer (as well as the third party) is a tortfeasor liable to the plaintiff for damages. On the findings of the primary judge, therefore, the order was appropriately made. On the findings I make, because WCNI is liable to Mr Alelaimat for damages, s 151Z(1) can have no application unless by some route other than its own terms. Such a route potentially emerges in s 151Z(2)(e). That paragraph (subject to the presently immaterial exceptions stated in sub pars (i) and (ii)) applies subs (1) in relation to an employer who is also a tortfeasor in specified circumstances. It is worth repeating the substance of par (e), which is:

6. [170]

   There are thus two negative conditions, one of which must be satisfied for par (e) to apply: Endeavour Energy at [48]. If either condition is satisfied, the effect of par (e) is that the provisions of subs (1) come into effect, notwithstanding that the employer is also a tortfeasor. The first condition is that the plaintiff does not take proceedings (for damages) against the employer. In this case, Mr Alelaimat did take proceedings against WCNI (although unsuccessfully at first instance). That condition has not been satisfied. The second condition (that the plaintiff does not accept satisfaction of the judgment) is obscure. That condition assumes (by the words “satisfaction of the judgment”) that proceedings taken against the employer are successful, resulting in a judgment in favour of the plaintiff. To date there has been no judgment in favour of Mr Alelaimat, satisfaction of which he could accept or not accept (although, on the orders I propose, there would be such a judgment).

7. [171]

   Assuming that there is such a judgment, Mr Alelaimat will have the opportunity of enforcing the judgment against Synergy Scaffolding (which is not challenged by Synergy Scaffolding other than as to quantum) or enforcing the judgment against WCNI. The words in s 151Z(2)(e) “if the worker … does not accept satisfaction of the judgment against the employer” may be taken to mean “if the worker [the plaintiff] does not enforce the judgment against the employer”.

8. [172]

   Although it may with some confidence be predicted that Mr Alelaimat will elect to accept satisfaction of (enforce) the judgment against Synergy Scaffolding and not accept satisfaction of (enforce) the judgment against WCNI (that, indeed, was Mr Alelaimat’s submission at trial), and it may with equal confidence be predicted that WCNI will not press the judgment against it on Mr Alelaimat, those predictions fall short of establishing that Mr Alelaimat “does not accept satisfaction of the judgment against [WCNI]”.

9. [173]

   Neither condition for the application of s 151Z(2)(e) has been satisfied. As was the case in Hossain v Unity Grammar College Ltd [2019] NSWSC 1313 at [204], the occasion has not yet arisen for Mr Alelaimat to choose whether he will accept satisfaction of the judgment against WCNI. Synergy Scaffolding therefore argued that, neither of the conditions having been satisfied, and WCNI being liable to Mr Alelaimat for damages, none of the provisions of subs (1) (including par (d)) is applicable. Section 151Z(2)(e) does not have the effect of rendering subs (1), including par (d), applicable other than in circumstances where one of the two conditions is satisfied. No alternative statutory basis for an order that WCNI indemnify Synergy Scaffolding for the compensation paid has been identified.

10. [174]

    I would accept that contention. Ground 4 of the appeal should be upheld and order 9 as sought (that the order that Synergy Scaffolding indemnify WCNI pursuant to s 151Z(1)(d) of the Workers Compensation Act be set aside) should be made.

11. [175]

    This conclusion is consistent with those reached by Basten JA (with whom, in this respect, Leeming and Payne JJA agreed) in South West Helicopters. The issues in South West Helicopters were complex. The facts relevant for present purposes may be stated briefly.

12. [176]

    Mr Stephenson was an employee of Parkes Shire Council. As part of his duties he took part in conducting, from a helicopter, an aerial noxious weed survey. The helicopter was owned and operated by South West Helicopters. The helicopter crashed, killing Mr Stephenson (and others on board). Mr Stephenson’s widow, Ms Stephenson, received from Parkes Shire Council payments of compensation.

13. [177]

    Ms Stephenson then took proceedings in negligence against both South West Helicopters and Parkes Shire Council and succeeded in obtaining an award of damages against each. Parkes Shire Council paid the damages that had been awarded against it (and Ms Stephenson accepted the payment).

14. [178]

    Parkes Shire Council then sought, from South West Helicopters, indemnity for the payments of compensation it had made to Ms Stephenson. It identified s 151Z(1)(d) as the statutory authority for the claim.

15. [179]

    At first instance that claim was upheld. On appeal to this Court it was pointed out that, on the authority of Murray-More, Weathertex, and the cases mentioned in [91] above, subs (1) of 151Z was inapplicable because Parkes Shire Council was itself a tortfeasor: [169]-[172]. It was also pointed out that s 151Z(1) could be made applicable if one of the two conditions in s 151Z(2)(e) was satisfied. In South West Helicopters, neither condition was satisfied, because Ms Stephenson had both taken proceedings against Parkes Shire Council and had accepted satisfaction of the judgment against it. Subsection (1) of s 151Z, including par (d), did not apply. Parkes Shire Council was not entitled to indemnity from South West Helicopters in respect of the payment it had made to Ms Stephenson under the Workers Compensation Act.

16. [180]

    Against that background Basten JA (at [182]) identified the purpose of par (e) of s 151Z(2) as:

17. [181]

    In the present case, Mr Alelaimat did take proceedings against WCNI, and, if my conclusions above prevail, will have obtained judgment against WCNI. But it cannot be said that he has not accepted the judgment against WCNI because the occasion to accept or not accept satisfaction of the judgment has not yet arisen.

18. [182]

    In South West Helicopters, Parkes Shire Council sought the s 151Z(1)(d) indemnity on the basis that the second condition (that the plaintiff does not accept satisfaction of the judgment against the employer) might be satisfied in the future (notwithstanding that, on the facts of that case, judgment against the employer had been satisfied). The Court (at [181]) rejected that proposition as inconsistent with pars (a), (b) and (e) of s 151Z(2), which, as Basten JA observed, are all framed in a “continuous present tense”. Further, his Honour said (again with the reference to the facts of that case):

19. [183]

    In contrast, in this case, there is every reason to suppose that the second condition will, in due course, be satisfied. The judgment against Synergy Scaffolding is significantly greater than the proposed judgment against WCNI, and (even if the judgment against Synergy Scaffolding were to be reduced by reason of s 151Z(2)(c), which I have rejected) it would still necessarily be greater than the judgment against WCNI. But, at the time of determination of WCNI’s cross-claim, the condition, framed as it is in the present tense, has not, and will not have been, satisfied.

20. [184]

    The difficulty arises, at least in part, because, in accordance with usual practice, WCNI’s cross claim was heard and determined concurrently with Mr Alelaimat’s claims. At the time of determination it is not, and cannot be, known that Mr Alelaimat will not accept satisfaction of judgment against WCNI (although the indications are that he will not). In some cases, that may depend on the solvency and/or insurance status of the third party tortfeasor.

21. [185]

    Neither of the conditions in par (e) of s 151Z(2) that would render s 151Z(1)(d) applicable has been satisfied. WCNI’s cross claim, so far as it seeks indemnity from Synergy Scaffolding for compensation paid by it, depends on s 151Z(1)(d), which has not been shown to be applicable.

22. [186]

    Section 151A of the Workers Compensation Act does not assist WCNI. Relevantly, that section provides:

23. [187]

    Subsections (2)-(5) are inapplicable. The effect of s 151A(1) is that, if Mr Alelaimat recovered damages from WCNI, then his entitlement to workers compensation payments would cease and such payments as had been made would be deducted from those damages. On the findings I have made, Mr Alelaimat is entitled to recover damages from WCNI. But he has not done so. In the event that Mr Alelaimat seeks to enforce judgment against WCNI, WCNI will be entitled to deduct from the damages the weekly payments it has made. It is well established that the words “recovers damages in respect of an injury from the employer …” require the actual receipt of the damages awarded: Smith v Commonwealth Oil Refineries Ltd (1938) 60 CLR 141 at 147; [1938] HCA 33; Watson v The Council of the City of Newcastle (1962) 106 CLR 426 at 445; [1962] HCA 6; Adams v Fletcher International Exports Pty Ltd [2008] NSWCA 238 at [19]; Abdulle v QBE Insurance (Australia) Ltd [2010] NSWCA 6 at [11]-[15].

24. [188]

    As Mr Alelaimat has not recovered damages from WCNI s 151A does not apply.

25. [189]

    These conclusions may have some curious and unexpected consequences. Paragraph (d) is only a small part of s 151Z(1). Paragraphs (a), (b), and (c) are directed to ensuring that a plaintiff who is entitled to compensation from his or her employer under the Workers Compensation Act and to damages from a third party tortfeasor is not entitled to retain both, and is required to repay, out of the damages awarded, any compensation paid. If subs (2)(e) of s 151Z does not apply to render subs (1) applicable, those provisions also will not apply. For that reason, I will propose that, before final orders are made, the parties have an opportunity to make further submissions with respect to the consequences of the findings proposed in these reasons.

Ground 5: was Synergy Scaffolding liable to pay damages representing Mr Alelaimat’s medical expenses?

1. [190]

   By ground 5 Synergy Scaffolding contended that it was not liable to pay Mr Alelaimat damages in respect of medical expenses paid to or on his behalf by WCNI. This ground, too, invoked par (e) of s 151Z(2) and s 151Z(1).

2. [191]

   Besides par (d), subs (1) of s 151Z contains a number of other important provisions, including notably that a plaintiff who recovers damages from a third party tortfeasor is required to repay out of the damages any compensation he or she has been paid under the Workers Compensation Act (par (b)). “Compensation” in that context includes medical expenses.

3. [192]

   The award of damages in favour of Mr Alelaimat against Synergy Scaffolding included an amount of “past out of pocket” expenses, but did not identify what (if any) of this amount was constituted by medical expenses and what, (if any) had been paid by WCNI. The evidence sufficiently established that WCNI had paid a sum of $175,841.79 as medical expenses.

4. [193]

   If, as I have concluded, subs (1) is not made applicable by s 151(2)(e), and Mr Alelaimat is not otherwise obliged to repay WCNI for the medical expenses paid on his behalf, then, arguably, the loss for which he was entitled to be indemnified did not include those expenses and the order in his favour so far as it includes a component representing medical expenses constitutes a windfall. Arguably, that amount should be deducted from the award of damages. If that is correct, ground 5 should be upheld.

5. [194]

   On the basis of the conclusions I have reached the appropriate orders would appear to be:

   1. (1)

      Judgment for the first respondent against the appellant (Synergy Scaffolding) in the sum of $1,356,533.39 set aside;

   2. (2)

      In lieu thereof, judgment for the first respondent against the appellant in the sum of $1,180,691.60;

   3. (3)

      Judgment for the second respondent (WCNI) against the first respondent set aside;

   4. (4)

      In lieu thereof, judgment for the first respondent against the second respondent in the sum of $917,686.00;

   5. (5)

      The order that the appellant indemnify the second respondent pursuant to s 151Z(1)(d) of the Workers Compensation Act in the sum of $246,202.54 set aside;

   6. (6)

      Costs reserved.

6. [195]

   However, the parties necessarily advanced their arguments and submissions on hypotheses not entirely consistent with the conclusions I have reached. The conclusion above with respect to s 151Z(2)(e) could have entirely unexpected consequences. It would mean, for example, that a plaintiff who succeeded in obtaining an award of damages against a third party tortfeasor and an employer, but who enforced only the judgment against the third party tortfeasor, would be protected from the provisions of s 151Z(1), which would otherwise terminate his or her rights under the Workers Compensation Act, and require repayment of the compensation paid. I am not aware of any provisions, other than s 151A and s 151Z(1)(b) that require such repayment.

7. [196]

   I am reasonably confident that this does not represent the intention of the legislature. But it appears to be the consequence of what has been legislated.

8. [197]

   These consequences, if they are correct, go beyond the particular circumstances of this case. Before final orders are made, the parties should have the opportunity of making submissions, in the light of these findings of fact, with respect the consequences of those findings, and the orders that follow. This is not an invitation to any party to canvass any of the findings of fact. The invitation is limited to the consequences of the findings.

9. [198]

   Since the statutory construction question is of general application the organisation having responsibility for the administration of workers compensation legislation should have, if it wishes to avail itself of it, the opportunity to seek leave to intervene for the purpose of assisting the Court with respect to the construction issues.

10. [199]

    Accordingly, I propose to publish my findings of fact with respect to all issues in the appeal and the cross appeals. I would direct the parties to the proceedings to provide any further submissions on which they wish to rely on or before 29 September 2023.

11. [200]

    I direct the appellant and the second respondent to notify, within 3 days of publication of these reasons, the State Insurance Regulatory Authority of these reasons and proposed orders.