Australian Native Landscapes Pty Ltd v Minogue & Anor

[2011] HCATrans 240

[2011] HCATrans 240

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S277 of 2010

B e t w e e n -

AUSTRALIAN NATIVE LANDSCAPES PTY LTD

Applicant

and

BERNIE MINOGUE

First Respondent

AUSTRALIAN NATIVE LANDSCAPES (ADMIN) PTY LTD

Second Respondent

Application for special leave to appeal

FRENCH CJ
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 2 SEPTEMBER 2011, AT 12.31 PM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR C.J. WYNYARD, for the applicant.  (instructed by David Veasey Solicitor)

MR J.E. SEXTON, SC:   May it please the Court, I appear with my learned friend, MR D.P. KELLY for the respondents.  (instructed by Moray & Agnew)

FRENCH CJ:   Yes, Mr Jackson.

MR JACKSON:   Your Honours, this case turns, in our submission, in the end, on are what are really very narrow issues.  May I deal briefly with the background that relates to the claim against each of the respondents and then deal with the claims against the respondents in that order because they are different.

Your Honours, the background is very briefly stated.  The applicant owned a motor vehicle which was a front end loader.  The first respondent was driving it.  He was employed by the second respondent.  While driving the front end loader in the course of that employment, he injured the plaintiff in the original proceedings.  The front end loader was a motor vehicle for the purposes of the Motor Accidents Compensation Act and by section 112(1)(a) of that Act the first respondent was taken, for the purposes of the plaintiff’s proceedings, to have been our agent and acting within the scope of his authority.  At the trial, he was found to have been negligent in the driving of the front end loader and was held liable and because of the statutory agency we were also held liable.  The claim ‑ ‑ ‑

CRENNAN J:   The plaintiff did not plead that the employer was liable for the casual acts of negligence?

MR JACKSON:   Well, no, your Honour, the case ‑ ‑ ‑

CRENNAN J:   Of the driver, I mean, of course.

MR JACKSON:   Yes, your Honour.  In the event, could I just say this.  There was a claim made by the plaintiff against the second respondent, the employer, but the claim failed for essentially two reasons which are summarised at page 61.

FRENCH CJ:   Because it was a safe system of work claim and not under the Motor Vehicle Accidents Act?

MR JACKSON:   Yes.  But it failed really for two reasons.  One was that by section 151H(1) of the Workers Compensation Act damages against an employer cannot be awarded unless the plaintiff employee has a permanent impairment of 15 per cent or more and the plaintiff also had not complied with the requirements for that Act for – they have to be complied with before instituting the proceedings.  It is summarised, your Honours, at page 61 in the primary judge, lines 14 to 30. 

Your Honours, the position then is that your Honours will see, staying at page 61 for the moment, in the paragraph commencing about line 31, that there is a reference to contribution under section 151Z of the Workers Compensation Act.  May I return to that your Honours because ‑ ‑ ‑

CRENNAN J:   I was just going to ask you, was that somehow raised as part of the owner’s defence, because the cross‑claims were put over, were they not?

MR JACKSON:   Yes, they were, your Honour.  Section 151Z is a provision which reduces the amount that a plaintiff can recover.

CRENNAN J:   Yes.

MR JACKSON:   Now, undoubtedly there were some similarities between the approach to be taken in applying that provision, not without its obscurities, but there were some similarities between the approach to be taken in applying that provision and also the provisions of the ordinary contribution legislation, the Law Reform (Miscellaneous Provisions) Act, section 5.  But that is something which reduces the damages the plaintiff can recover.

CRENNAN J:   It was obviously raised by the owner in the main proceedings?

MR JACKSON:   Well, it was raised by the defendants, if I can put it that way, because it is something that is required to be carried out to reduce it.  Yes, it was, your Honour.  We took part in that.  There was a degree of success.  Fifty per cent of the damages were taken off, otherwise payable, but taken off.

FRENCH CJ:   Sorry, can I just interrupt you for a moment, Mr Jackson, just for the benefit of counsel waiting for the next matters, we will be adjourning at 1 o’clock and resuming at 1.30.

MR JACKSON:   Your Honours, what I was going to say was this that we sought by cross‑claims to claim against the two present respondents.  May I deal now with the claim against the first respondent, the driver.  Your Honours, the claim against the driver is a claim for someone who was by statute deemed to be our agent and by the negligence of that person we were held to be liable.  So, your Honours, it is something similar if one likes to put it this way to the Lister v Romford Ice type of case, although the precise decision in that case was based on an implied contractual term of employment.  But it is simply a case, so far as the case against the first respondent is concerned, of a liability that we have incurred because our agent was negligent.

Your Honours, in the cross‑claim against the driver, the first respondent, the position, in our submission, would be that the driver would be liable to us for the amount of the damages and, as between the driver and his employer, that is the second respondent, the employer would be liable to indemnify the driver and that is because of the Employees Liability Act 1991, section 3.

CRENNAN J:   Was there anything to prevent your client from raising these issues by way of positive averments?

MR JACKSON:   Your Honour, we did.  The Court of Appeal judgment suggests, more than once ‑ ‑ ‑

CRENNAN J:   I mean in circumstances where the cross‑claims were to be dealt with later?

MR JACKSON:   We did raise them in the cross‑claims.

CRENNAN J:   Yes, but what I am asking you is whether you raised the section 151Z issue, contribution and so on, before the trial judge despite the fact that the cross‑claims were to be heard subsequently, which raises an issue about why was the point you are now seeking to agitate, the 5(1)(c) point, also raised in that setting having regard to the postponement of the hearing of the cross‑claims?

MR JACKSON:   Your Honour, the section 5(1)(c) point is a point that could relevantly arise between us and other defendants.  The issue raised under section 151Z(2) is an issue which reduces the amount of the plaintiff’s claim.  Your Honours, that would not, in our submission, have had the result that we could be indemnified by the use of that provision for the amount for which we would seek to be indemnified, that is, in effect, the amount we have paid or have to pay in relation to the plaintiff’s claim. 

CRENNAN J:   It is just that the way in which the case was conducted, the question, I suppose, is how do you - looking at 5(1)(c) the two classes of persons essentially against whom contribution might be recovered and - I suppose the argument against you is that there has been a determination in relation to the employer, who I will call the second respondent, in relation to liability in respect of the same damage.  So are you suggesting that in relation to the second class, would, if sued for vicarious liability that qua employer have been liable?  Do you see what I mean?  It is hard to see how, given the way in which the case was conducted you fit in the employer into one of these classes.

MR JACKSON:   Your Honour, may I come to the employer in just a moment?  What I was going to say was that if one goes to section 5(1)(c) one has in respect of the driver, first of all, a person who was a tortfeasor who is liable in respect of the damage.

CRENNAN J:   Yes, that is the driver?

MR JACKSON:   Sorry your Honour, the driver, yes.  It is simply part of the financial arrangements brought about by statute that if he is liable he has to be indemnified.  But so far as he was concerned, we are entitled to a claim for – we are entitled to be indemnified, in our submission, by him and that claim simply has never been heard. 

The point I was going to – the Court of Appeal and your Honour I will come to the second respondent in just a moment - but the position so far as the driver is concerned is that the Court of Appeal said this claim was never made or never articulated.  Your Honours, it is very difficult to see, with respect, that that is so because if one goes – I need to take your Honours just to two passages in the primary judge’s reasons.  He appears to make it pretty clear that that was done. 

The first of them is the paragraph commencing at the bottom of page 67 where he said that Mr Andrews, who was appearing for the side that we are representing, “submits that the fourth defendant was responsible”, et cetera.  If one goes over to the end of the paragraph at page 68 commencing about line 9, he said:

He submitted that liability should be found on the cross-actions as one hundred per cent against Mr Minogue, the third defendant, and therefore a similar finding against the fourth defendant as principal –

It is perhaps put more clearly at page 70 at line 28:

Mr Andrews repeated his submissions that the third defendant should contribute one hundred per cent to any liability found in the second defendant and that that one hundred per cent contribution should be indemnified by the fourth defendant.

Now, your Honours, that is a case that is very clearly put and it is difficult, with respect, to see what the basis for rejection of that claim was by the trial judge.  The best one can do really is at page 72 where he said about lines 47 to 52:

The claim made by the second defendant against the third defendant . . . must also fail.  The fact of the matter is that the court found liability in the third defendant and that it was the agent of the second defendant.

FRENCH CJ:   This links into something I have had some difficulty with, that is paragraph 50 at page 101.  It said that:

the owner had not formulated the cross‑claims against the employer and the driver in the terms in which they ultimately came to be determined . . . it is apparent that the owner sought to pursue the s 5(1)(c) claim against the driver on the basis that he was executing the employer’s system of work.

Then jumping down to the last line or two:

at no stage did the owner advance a case that the driver was liable simpliciter -

I am not sure what other kind of liability was possible?

MR JACKSON:   Indeed, your Honour.  There was a finding that he was liable ‑ ‑ ‑

FRENCH CJ:   It does not matter whose agent he is, I suppose?  That is your proposition?

MR JACKSON:   He is found liable.  There is no James Hardie v Seltsam issue in relation to him.  He is found liable and, we then – so are we.  We make a claim against him for 100 per cent.  Now, that case has never been heard.  In the light of the passages to which I referred at pages 68 and 70, it is very difficult, with respect, your Honours, to see - if one goes to page 87 in the Court of Appeal first – sorry, there are two references in the Court of Appeal to which I wish to go.  The first is page 87 and if your Honours look at about line 12 or 13 it says:

However the owner first sought to advance that case on appeal.

Well, that seems, with respect, incorrect.  Then, your Honours, if one goes to where it is set out more fully at page 101 paragraph 50 and also paragraph 51 – the start of paragraph 51 it is described as a new case:

against the driver in those terms for the first time on appeal -

which really, your Honours, seems, with respect, incorrect.  If I could go back to paragraph 50 in the passage your Honour the Chief Justice was referring to, one would, in our submission, of course, seek to pursue a claim against the driver on the basis that he was executing the employer’s system of work.  To do otherwise one might think might result in the loss by the driver of any right to indemnity under the Employees Liability Act, that is because of section 5(b) of that Act.

So, your Honours, our case in relation to the first respondent is very short.  It is that there was a claim made against him, the claim for indemnity.  It is a claim that was made and has never been heard.  Your Honours, the case so far as the second respondent is concerned, the cross‑claim against the second respondent failed because in terms of James Hardie v Seltsam there had been a judgment in favour of it in the principal action. 

Your Honours, if I could just go to what was said in the principal judgment in James Hardie v Seltsam 196 CLR – it is paragraph 40.  I am sorry, your Honours, the version that your Honours have is a print from the computer.  It is paragraph 40, the joint judgment of Justices Gaudron and Gummow. 

Your Honours, I will not read out the paragraph but could we just say this.  What it makes apparent is that the central question is whether the re‑opening of the issue is something that is prevented by the order of the court of trial.  But, your Honours, could we just also say, orders are orders, no less but no more and in the present case there is a specific order, which was not the subject of appeal by any party, to the effect that the cross‑claims were to be dealt with after the resolution of the principal claims.

So that one has a situation - I will come to the relevant rule in a moment, your Honours - that there were two orders, not just the one determining the action but in addition an order that the cross‑claims await the determination of the principal action and, your Honours, the order at the trial is, in our submission, necessarily qualified by the order separating the cross‑claim issues from those in the principal proceedings and, in our submission, one cannot treat the order in the principal proceedings as necessarily determining finally the matter for the purposes of section 5(1)(c).

Your Honours, we have not included in the material the relevant provisions of the Uniform Civil Procedure Rules which relate to the topic and they are rules 9.8 and 9.10.  I wonder if I could give your Honours copies of those.  My learned friends have copies of these, your Honours. 

Your Honours will see that under rule 9.8 the Court has power to direct that a cross‑claim be tried separately and rule 9.10(1) provides that:

A cross‑claim may proceed even if:

(a)      judgment has been entered on the originating process –

So, in our submission, the judgment at trial in favour of the second respondent does not have quite the requisite air of finality that is spoken about in James Hardie v Seltsam.  Your Honours, next question is what happens if our cross‑claim is allowed to proceed against the second respondent?

CRENNAN J:   So you would be suggesting that by reason of the rule there is no requirement on your client to seek deferral of entry of the judgment in the principal action?

MR JACKSON:   No, your Honour.  What had happened was that the hearing of the cross‑claims was severed and the rules contemplate that that can take place and that the trial can go ahead but the cross‑claims can be dealt with separately.  It takes away, your Honours, an element of the finality contemplated in the earlier decision. 

Your Honours, may I say very briefly, what happens if our cross‑claim against the second respondent were to proceed?  The point that has been put is that it is futile to do so because the result would be the same and that is because there had been a reduction in the plaintiff’s damages pursuant to section 151Z(2).  Your Honours, the proceeding in which that issue was determined was the plaintiff’s action.  The judge’s decision on the issue in the action did not take into account the fact that our liability was because of the statutory agency and we were entitled, as between us and the second respondent in the cross‑claim, to seek more than 50 per cent, in effect, from the second respondent including an indemnity.  Your Honours, in our submission, that case, too, has not been heard and it is a case where, we would submit, special leave should be granted.

FRENCH CJ:   Thank you, Mr Jackson.  Yes, Mr Sexton.

MR SEXTON:   Your Honours, the submissions that I will make orally go to the question of whether this is a suitable vehicle and that turns on two propositions that we have adverted to in our written submissions.  The first is, the way that these proceedings were conducted and the second is the prospects of success.  These submissions turn on the application of section 151Z(2) in these proceedings.  That section is conveniently set out at page 88 of the application books. 

My learned friend, early in his submissions, said that 151Z(2) is directed to reducing the amount which a plaintiff can recover against a non‑employer but does more than that because subsection (d) is a substantive provision which restricts the amount of contribution that a party in the position of the applicant can recover either from an employer, if the preconditions are satisfied or, in this case, from a first respondent.  I will come back to that in a moment.

The first point is this that the judgment against the applicant in these proceedings, but for section 151Z(2)(c), would have been $712,000 because that was the quantum of damages assessed under the motor accidents legislation.  Because of the operation of section 151Z(2)(c), having regard to the findings made by the primary judge, that amount of damages was reduced by 50 per cent to $356,000. 

The reason it was reduced was because, before the primary judge at the first hearing, the applicant submitted that 151Z(2)(c) applied and that, in turn, required the applicant to submit that the damages which would be assessable against the second respondent were to be assessed under Division 3 of the workers compensation legislation which, because of section 151H, meant that no damages were recoverable.

So far as the second respondent is concerned, the effect of section 151H is firstly to reduce to nil the amount of damages that the second respondent would pay if sued by the plaintiff but also to reduce to nil the amount of contribution that the applicant could recover from the second respondent.  So that the applicant relied on the application of 151Z and the application of the modified common law damages in Division 3 of the Workers Compensation Act to reduce its liability to the plaintiff by 50 per cent. 

What it subsequently sought to do, after amending the cross‑claims, was to contend that the damages payable by the second respondent were not to be assessed under Division 3 of Part 5 of the Workers Compensation Act, but were to be assessed under the Motor Accidents Act.  It is for that purpose that they rely on section 151E.  What, in essence, the applicant is seeking to do is to take advantage of the reduction of 50 per cent of its damages in reliance on the application of 151Z(2)(c) and then to say but, nevertheless, we now wish to assert – or I now wish to assert that that division has no application, the second respondent and the first respondent are liable under the motor accidents legislation and we can recover additional contribution.

Now, the difficulty is that if the points now raised had been run on the argument concerning 151Z before the primary judge and had been successful then the plaintiff’s damages would not have been reduced because 151Z(c) would have had nothing to work on.  The damages assessed against both the non-employer and the employer would both have been assessed under the motor accidents legislation and there would have been no deduction. 

If the arguments now being run are correct, the result at the primary hearing would have been that the plaintiff would have obtained a judgment for $712,000 from the applicant and/or from the employer.  On the findings made by the primary judge, the applicant’s net position would have been reduced to 356,000 because it would have recovered 50 per cent contribution from the employer.  It would, therefore, be in exactly the same position as it is now. 

The relevance of that to this application is this is an application for special leave in an appeal which seeks the opportunity to re‑agitate a claim for just and equitable contribution under 5(1)(c) where that circumstance must be taken into account.  Any judge hearing a further application under 5(1)(c) must take into account the circumstance that the applicant’s liability to the plaintiff has already been reduced by 50 per cent.

Now, the second point, and I apologise that this section was not part of the material handed up, is that section 150 of the Workers Compensation Act – if I could hand up copies to your Honours – provides:

A reference in this Part –

that is Part 5 –

to a worker’s employer includes a reference to:

. . . 

(b)      a person for whose acts the employer is vicariously liable.

So the effect of that provision is that section 151Z which is within Part 5 but in Division 5 not Division 3 is to be read as if references to the employer are also references to the first respondent, Mr Minogue.  If we go to page 88 of the appeal book where 151Z is set out, that provision operates:

in respect of an injury to a worker for which compensation is payable under this Act -

That condition is satisfied:

(a)the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker’s employer –

That is satisfied because the worker, in fact, took proceedings against the applicant: 

(b)the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer –

That includes the first respondent directly -

the following provisions have effect:

(d)the amount of the contribution that the person is entitled to recover from the employer as a joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with provisions of Division 3 –

That means that the liability of Mr Minogue to pay contribution pursuant to 5(1)(c) is to be assessed as if the whole of the damages were assessed in accordance with the provisions of Division 3, even if his liability to the plaintiff has to be assessed under the motor accidents legislation.  That is another reason why this is not an appropriate vehicle for these issues to be ventilated because there is a very reasonable prospect that the result will simply be that the claim against Mr Minogue is defeated by that section.

Now, this is not a section and it is not a point that has been the subject of consideration in the courts below because of the way in which the case has been conducted, but this Court will not have the benefit of the reasons of an intermediate appellate court on the question of the proper instruction application of 151Z(2)(d) in these circumstances if special leave is granted.

So, your Honours, for those two reasons we submit that this is not an appropriate vehicle and we obviously place great emphasis on the first point which is that the way in which the applicant conducted its case, whether deliberately or inadvertently, and the reason I say deliberately or inadvertently is because there was obviously a distinct advantage to the applicant in the way it conducted its case at first instance in the first contest concerning the application of section 5(1)(c) to contend that the second respondent and the first respondent to the extent that section 150(b) has application were liable to the plaintiff under Division 3 of the Workers Compensation Act so as to significantly reduce the liability of the applicant to the plaintiff.  If it please the Court, they are our submissions.

FRENCH CJ:   Yes, thank you, Mr Sexton.  Mr Jackson.

MR JACKSON:   May I just say these things, your Honours.  The application of section 151Z had to be taken into account in the plaintiff’s case.  It is not a matter of taking advantage of it or not taking advantage of it.  It had to be taken into account. The result of that was that there was, on that basis, a reduction in the amount of the plaintiff’s verdict by half.  The complaint that we make is in relation to the other half.  No one seeks to affect the position in terms of the plaintiff being paid, but our complaint is in respect of the other half.

What we would say, your Honours, is that even if one were to assume, which may perhaps be a largish assumption, that section 150(b) with the expanded definition of “employer” applies to section 151Z.  The terms of section 151Z(2)(d) are expressing the method of calculation for the purpose of reduction of the plaintiff’s damages and do not go beyond that.  Your Honours, those are our submissions.

FRENCH CJ:   Thank you.  The Court will adjourn briefly to consider what course it should take.

AT 1.05 PM SHORT ADJOURNMENT

UPON RESUMING AT 1.08 PM:

FRENCH CJ:   The Court will refer this application to an enlarged Bench.  I do not imagine it should take more than half a day, Mr Jackson.

MR JACKSON:   Your Honour, I am slightly more pessimistic than that but I do not think it will take a day.  I think it might take more than half a day.

FRENCH CJ:   Let us say half to a day.  Mr Sexton?  All right.

We will adjourn until 1.30.

AT 1.09 PM THE MATTER WAS CONCLUDED