State of New South Wales (NSW Police) v Wenham [2016] NSWDC 25

District Court New South Wales

Medium Neutral Citation: State of New South Wales (NSW Police) v Wenham [2016] NSWDC 25 Hearing dates: 15 March 2016 Date of orders: 15 March 2016 Decision date: 15 March 2016 Jurisdiction: Civil Before: Elkaim SC DCJ Decision: The separate question is answered 'No' Catchwords: Recovery of workers compensation payments. Worker injured in a blameless accident. Legislation Cited: Motor Accidents Compensation Act 1999 Workers Compensation Act 1987 Cases Cited: The Nominal Defendant v Hi-Light Industries Pty Ltd [2004] NSWCA 423 Workers Compensation Nominal Insurer v Nominal Defendant [2013] NSWCA 301 Category: Procedural and other rulings Parties: State of New South Wales (NSW Police) (Plaintiff) Timothy Paul Wenham (First Defendant) Phillip Whittam (Second Defendant) Representation: Counsel: D Hanna (Plaintiff) J Gracie (Defendants)

Solicitors: Turks Legal (Plaintiff) Moray & Agnew (Defendants) File Number(s): 2015/00114495

Judgment 1. On 19 March 2010 a Ms Jennifer Goddard was injured in a motor vehicle accident. At that time she was an employee of the plaintiff. 2. The accident happened in this way: Ms Goddard was in a motor car behind a B-double truck being driven by the first defendant. The truck was owned by the second defendant. 3. As Ms Goddard was driving behind the truck a wheel assembly somehow became disconnected from the truck and came into Ms Goddard's path. There was a collision. She was injured. 4. The defendants' vehicle was insured in South Australia but no point arises from this fact. There was no issue that the vehicle had "motor accident insurance cover" as defined by Section 3B of the Motor Accidents Compensation Act 1999 (the "MACA"). 5. Because Ms Goddard was driving in the course of her employment she claimed and received workers compensation payments under the Workers Compensation Act 1987 (the "WCA"). 6. Ms Goddard did not make a claim for damages under the MACA. 7. The workers compensation payments were made by the plaintiff. By these proceedings it seeks to recover those payments pursuant to Section 151Z(1) of the WCA. 8. The original Statement of Claim was filed on 17 April 2015. An Amended Statement of Claim was filed on 26 February 2016. In the Amended Statement of Claim the plaintiff alleges that the accident was caused by the negligence of the defendants and then, in paragraph 13A, makes an alternative claim that the accident was a blameless motor accident as defined in Section 7A of the MACA. 9. On 12 February 2016 the plaintiff filed a Notice of Motion seeking the determination of a separate question. 10. On 26 February 2016 orders were made for the hearing of the separate question. That is the matter that I have dealt with today. 11. The separate question is as follows: Can a Plaintiff seeking an indemnity pursuant to Section 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) rely upon the "blameless accident provisions" contained in Chapter 1 Part 1.2 of the Motor Accidents Compensation Act 1999 (NSW) to obtain the indemnity sought? 1. Both parties provided written submissions which were very helpful. Both sides also relied on the Court of Appeal decision in The Nominal Defendant v Hi-Light Industries Pty Ltd [2004] NSWCA 423 in support of their respective positions. 2. I think the parties' submissions can be distilled to the following. 3. The plaintiff submitted that Section 151Z(1) entitles a workers compensation insurer to recover, as an indemnity, payments made to an injured worker from a third party who, if sued by the worker, would be liable to pay damages to that worker. The blameless accident provisions of the MACA provide a mechanism for a worker, like Ms Goddard, to recover damages from another person even though that person had not been at fault. In turn, the person is liable to indemnify the plaintiff by reason of Section 151Z(1). 4. The defendants' position was: 1. The blameless accident provisions provide a benefit to victims of blameless accidents but, absent specific legislative statement, they cannot be applied for the benefit of other persons such as a workers compensation insurer relying on Section 151Z. 2. The "circumstances creating the liability" referred to in Section 151Z(1), have always been interpreted to involve circumstances where there is a tortfeasor. There must have been a wrongdoing to create the liability. 3. By definition a blameless accident involves no wrongdoing, at least not on the part of the defendants. Accordingly the gateway for Section 151Z, as expressed in subsection (1) does not exist. 1. My initial reaction to the issue was in favour of the plaintiff on the basis that the workers compensation insurer should be entitled to seek an indemnity from the person who would be liable to pay damages to the worker, if sued by the worker. 2. The plaintiff's response to the second point made by the defendants was stated in this way in the written submissions: "The concept of liability to pay damages is also consistent between section 151Z(1) of WCA and Section 7B of MACA. The usage in WCA, being "circumstances creating a liability … to pay damages" is entirely neutral as to what those circumstances are. There is no stipulation that negligence or fault be involved. The indemnity arises as easily with a blameless accident as it does with a fault-based one." (paragraph 14) 1. In addition the plaintiff submitted that, in any event, Section 7B(1) of the MACA specifically deems the injury "to have been caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle". The deeming provision, said the plaintiff, provides the requirement for wrongdoing, assuming such a requirement exists at all. 2. I think the starting point for the argument must go back to the terms of Section 151Z(1), in particular the following relevant parts: "151Z Recovery against both employer and stranger (1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect: … (d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages), …" 1. The words "under circumstances creating a liability" in Section 151Z(1) have been interpreted to refer to a wrongdoing by the person who is to provide the indemnity. McColl J, in Workers Compensation Nominal Insurer v Nominal Defendant [2013] NSWCA 301 provided a comprehensive explanation of Section 151Z. Commencing at paragraph 62, her Honour said: "[62] Thus s 151Z creates a legislative scheme designed to reimburse the party liable to pay compensation out of the fund provided by the party liable to pay damages (the "wrongdoer") but it applies only where the ""circumstances creating" liability for the compensable injury also create a liability in the tortfeasor to pay damages": Kurnell (at [31]); Franklins Self Serve Pty Ltd v Wyber [1999] NSWCA 390 ; (1999) 48 NSWLR 249 (at [52], [53], [99]) per Mason P (Sheller JA and Cole AJA agreeing). [63] The right which is given to the employer who has paid compensation rests on the existence for however brief a time of a true liability to pay damages in some wrongdoer or wrongdoers in respect of the injury for which compensation was payable and has been paid and, in that sense, has been described as "derivative": Tooth & Co Ltd v Tillyer [1956] HCA 49 ; (1956) 95 CLR 605 (at 612) per Dixon CJ, Williams, Webb and Fullagar JJ; QBE Workers Compensation (NSW) Ltd v Dolan [2004] NSWCA 458 ; (2004) 62 NSWLR 42 (at [42]–[43]) per Beazley JA (Mason P and Tobias JA agreeing). [64] The statutory right of indemnity conferred by s 151Z(1)(d) upon the person who has paid the compensation is not to be equated to the cause of action which the worker would have had against the wrongdoer. Section 151Z(1)(d) creates a cause of action separate to that vested in the worker: WorkCover Queensland v Amaca Pty Ltd [2010] HCA 34 ; (2010) 241 CLR 420 (at [14], [19]) per French CJ, Gummow, Crennan, Kiefel and Bell JJ. The claim to enforce the entitlement to indemnity is not a claim in tort, rather it is a cause of action created by statute for an indemnity against a person liable to pay damages to another: Esso Australia Ltd v Victorian WorkCover Authority [2000] VSCA 74; (2000) 1 VR 246 (at [28]) per Winneke P (Tadgell and Chernov JJA agreeing); approved Victorian WorkCover Authority v Esso Australia Ltd (at [14]) per Gleeson CJ, Gummow, Hayne and Callinan JJ. The liability of the wrongdoer is a "'notional liability at common law [or under a statute other than the Compensation Act] for pecuniary and non-pecuniary loss' … having regard to limitations on the liability of the wrongdoer to the person who has received compensation": WorkCover Queensland v Amaca Pty Ltd (at [26])." 1. What I think emerges plainly from the above passages is that the person liable to pay damages must have been a wrongdoer and secondly that the right of indemnity "is not to be equated to the cause of action which the worker would have had against the wrongdoer" (paragraph 64). 2. Bearing these just made points in mind, and returning to the plaintiff's assertion that the necessity for there to be a wrongdoer is catered for by the deeming provision in Section 7B of the MACA, I think the following emerges: 1. The defendant under the blameless accident provisions is not a wrongdoer under the WCA. 2. The deeming provision in Section 7B is specifically stated to be "for the purposes of and in connection with any claim for damages in respect of the death or injury" of a person. 3. The right under Section 151Z is a right to indemnity. It is not a claim for damages. 1. I think I can put my conclusion, in summary form, in this way: The cause of action relied upon by the plaintiff is provided by Section 151Z. That cause of action requires there to be a wrongdoer. The deeming provision concerning fault in Section 7B of the MACA is a deeming provision only for the purposes of a claim for damages. It is there to assist the victim of a blameless accident. It does not extend, absent specific reference, to the cause of action provided by Section 151Z. 2. I think this conclusion resolves the question before me. However I think I should add some comments arising from the plaintiff's reliance on Hi-Light. The plaintiff submitted that the decision allowed the court "to impose liability on an artificial person created by MACA". If the Court of Appeal countenanced this approach then it would no doubt countenance, according to the plaintiff, the even smaller step of imposing liability on the defendants where that liability is a product of the plain terms of the blameless accident provisions. The problem here is however, extending that liability to create a wrongdoing on the defendants' part beyond the deeming provision in Section 7B. As I have said that deeming provision is for "the purposes of and in connection with any claim for damages …". A cause of action created by Section 151Z(1) is not a claim for damages, it is a claim for an indemnity. I therefore do not think that the decision assists the plaintiff. 3. Accordingly I answer the separate question in this way: 'No'. 4. I make the following orders: 1. The separate question is answered 'No'. 2. The plaintiff is to pay the defendants' costs of the motion.