CSR Timber Products Pty Ltd v Weathertex Pty Ltd

[2013] NSWCA 49

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

CSR Timber Products Pty Limited v Weathertex Pty Limited [2013] NSWCA 49

Hearing dates:

4 June 2012

Decision date:

11 March 2013

Before:

Bathurst CJ at [1];
Meagher JA at [2];
Hoeben JA at [49]

Decision:

(1) Leave to appeal granted.

(2) Appeal dismissed.

(3) Applicant/appellant (CSR) pay respondent's (Weathertex) costs of the appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

WORKERS COMPENSATION - disease of gradual onset - claim to indemnity under s 151Z(1)(d) of Workers Compensation Act 1987 by employer liable to pay compensation from earlier employer in employment to nature of which disease was due - whether earlier employer a "person other than the worker's employer" within s 151Z(1) - reference to "worker's employer" in s 151Z(1) is to employer liable to pay compensation under s 9(1) - in relation to disease of gradual onset that employer is "last" employer under s 15(1)(b)

ESTOPPEL - issue estoppel - worker takes proceedings for compensation in relation to disease of gradual onset against two employers - Workers Compensation Commission holds that worker entitled to compensation from "last" employer in employment to nature of which disease due - whether that employer prevented by issue estoppel from claiming indemnity from earlier employer under s 151Z(1)(d) of Workers Compensation Act 1987 - no issue estoppel - not necessary for Commission to decide whether disease not contracted during period of employment by earlier employer

Legislation Cited:

District Court Act 1973
Interpretation Act 1987
Uniform Civil Procedure Rules 2005
Workers Compensation (Benefits) Amendment Act 1989
Workers Compensation Act 1987
Workers' Compensation Act 1926
Workmen's Compensation Act 1897 (UK)
Workmen's Compensation Act 1906 (UK)
Workmen's Compensation Act 1910
Workmen's Compensation Act 1916
Workplace Injury Management and Workers Compensation Act 1998

Cases Cited:

Ainslie v Ainslie [1927] HCA 23; 39 CLR 381
Allianz Australia Ltd v Sim [2012] NSWCA 68
Amaca Pty Ltd v Booth [2011] HCA 53; 86 ALJR 172
Blair v Curran [1939] HCA 23; 62 CLR 464
Brewer v Brewer [1953] HCA 19; 88 CLR 1
CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; 187 CLR 384
Connair Pty Ltd v Frederiksen [1979] HCA 25; 142 CLR 485
Cory & Son Ltd v France Fenwick & Co Ltd [1911] 1 KB 114
Crisp v Chapman [1994] NSWCA 73; 10 NSWCCR 492
Dingle v Associated Newspapers Ltd [1961] 2 QB 162
Egri v DRG Australia Ltd (1988) 19 NSWLR 600
Elayoubi bhnf Kolled v Zipser [2008] NSWCA 335
Gett v Tabet [2009] NSWCA 76; 254 ALR 504
Grant v Sun Shipping Co Ltd [1948] AC 549
Grate Lace Pty Ltd v Theiss Watkins White (Constructions) Pty Ltd [1995] NSWCA 183; 12 NSWCCR 365
Griffiths v The Trustees of the Parliamentary Contributory Superannuation Fund [2012] NSWCA 231
I&J Foods Pty Ltd v Bergzam Pty Ltd (1997) 14 NSWCCR 486
Kelly v Glenroc Pastoral Co Pty Ltd [1994] NSWCA 162; 10 NSWCCR 178
Kempsey District Hospital v Thackham (1995) 36 NSWLR 492
Kornjaca v Steel Mains Pty Ltd [1974] 1 NSWLR 343
Kuligowski v Metrobus [2004] HCA 34; 220 CLR 363
Oliver v Nautilus Steam Shipping Company Ltd [1903] 2 KB 639
Page v Burtwell [1908] 2 KB 758
Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd [1975] HCA 28; 132 CLR 336
Sienkiewicz v Greif (UK) Ltd [2011] 2 WLR 523
Smith v Mann [1932] HCA 30; 47 CLR 426
Somodaj v Australian Iron & Steel Ltd [1963] HCA 50; 109 CLR 285
Strong v Woolworths [2012] HCA 5; 86 ALJR 267
Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; 186 CLR 574
Wilson v State Rail Authority of New South Wales [2010] NSWCA 198; 78 NSWLR 704

Texts Cited:

New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 14 May 1987, 12205-12213

Category:

Principal judgment

Parties:

CSR Timber Products Pty Limited (Applicant)
Weathertex Pty Limited (Respondent)

Representation:

Counsel:
M J Neil QC, B C A Bradley (Applicant/Appellant)
R J H Darke SC (Respondent)
Solicitors:
Leigh Virtue & Associates (Applicant/Appellant)
Edwards Michael Lawyers (Respondent)

File Number(s):

2010/101169

 Decision under appeal 

Date of Decision:

2011-04-01 00:00:00

Before:

Kearns DCJ

File Number(s):

2010/101169

Judgment

1. BATHURST CJ: I agree with Meagher JA.

1. MEAGHER JA: This is an application for leave to appeal from an interlocutory judgment of Kearns DCJ in which the respondent (Weathertex) seeks an indemnity from the applicant (CSR) under s 151Z(1)(d) of the Workers Compensation Act 1987 (the 1987 Act) in respect of compensation payments made to a worker. Section 151Z regulates a worker's rights of recovery against the employer liable to pay compensation and third parties liable to pay damages at common law in respect of the injury for which workers compensation is payable. It also regulates rights of recovery as between that employer and any such third parties.

1. A question raised by the proposed appeal is whether, where the relevant "injury" is a disease of gradual onset, the employer who is liable to pay compensation in respect of that injury, is entitled to claim an indemnity under s 151Z(1)(d) from an earlier employer who also employed the worker in employment to the nature of which the disease was due. The answer to this question turns on whether that earlier employer is within the meaning of the words "person other than the worker's employer" in the chapeau to s 151Z(1).

Relevant facts and issues

1. The worker was employed by CSR at its masonite factory at Raymond Terrace, north of Newcastle, from 15 March 1965 until 31 October 1998. Weathertex purchased that factory from CSR on 1 November 1998 and the worker continued to work as an employee of Weathertex from that date until February 2004.

1. The worker was engaged in activities which included sawmilling hardwood logs and chipping planks used to make masonite and hardwood exterior planks. In that work he was exposed to significant quantities of hardwood dust. As a result he developed an adenocarcinoma of the right nasal cavity and paranasal sinuses. That carcinoma was diagnosed on 15 February 2004. On 16 February 2004 the worker gave Weathertex notice of a claim for compensation. That claim was disputed by Weathertex, including on the basis that CSR was liable to pay any compensation. That dispute was referred to the Workers Compensation Commission for determination: see s 288 of the Workplace Injury Management and Workers Compensation Act 1998 (the WIM Act). It was heard by the Commission constituted by an arbitrator, Mr Douglas, on 13 December 2007.

1. In a judgment delivered on that day, the Commission held that Weathertex, as the employer who last employed the worker (within s 15(1)(b) of the 1987 Act), was liable to pay compensation to him. Subsequently, specific orders were made for the payment of compensation by Weathertex pursuant to ss 36, 38, 40, 60 and 66 of the 1987 Act. There was no appeal under s 352 of the WIM Act from that judgment or those orders. As at March 2010 Weathertex had made payments to the worker totalling approximately $215,000.

1. Weathertex commenced proceedings against CSR in the District Court to recover that amount by way of an indemnity under s 151Z(1)(d). That subsection provides:

"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 "injury" for which the compensation was payable is the carcinoma. By its statement of claim, Weathertex alleges that injury was caused and resulted from the nature and conditions of the worker's employment with CSR prior to 31 October 1998.

1. By its defence, CSR denies that it is a "person other than the worker's employer" who could be liable to indemnify that employer under s 151Z(1)(d) in respect of that injury. It also alleges that it has the benefit of an issue estoppel by reason of the Commission's decision of 13 December 2007.

1. Two questions were formulated for decision as separate questions under Uniform Civil Procedure Rules 2005 (UCPR) r 28.2. They were:

(1) Is the plaintiff (Weathertex) estopped by the decision of the Workers Compensation Commission given on 13 December 2007 from pressing its claim under s 151Z of the Workers Compensation Act 1987 against the defendant (CSR) in these proceedings; and

(2) Upon the proper construction of s 151Z of the Workers Compensation Act 1987, is it open to the plaintiff to press its claim against the defendant pursuant to that provision in these proceedings?

1. In his judgment delivered on 1 April 2011, Kearns DCJ answered the first question "No" and the second question "Yes".

1. CSR seeks leave to appeal from the decision with respect to those separate questions. Leave is required under s 127(2)(a) of the District Court Act 1973. The question of construction raised by the second of the separate questions has not, as far as the researches of counsel reveal, been the subject of decision. It is an important question of general application in relation to injuries consisting of diseases of gradual onset or the aggravation or acceleration of a disease or the loss of hearing caused by a gradual process. Leave to appeal should be granted.

1. For the reasons which follow it is my view that the primary judge correctly answered each of the separate questions.

Is Weathertex estopped from pressing its claim under s 151Z(1)(d)?

1. It was not in issue that the decision of the Commission made on 13 December 2007 was a "final" decision which could give rise to issue estoppels: Somodaj v Australian Iron & Steel Ltd [1963] HCA 50; 109 CLR 285; Kuligowski v Metrobus [2004] HCA 34; 220 CLR 363; Egri v DRG Australia Ltd (1988) 19 NSWLR 600. The Commission had, by s 105(1) of the WIM Act, exclusive jurisdiction to hear and determine the dispute as to the worker's claim. Its determination of that dispute was "final and binding on the parties": s 350(1) of the WIM Act. The fact that the decision was subject to a right of appeal and to reconsideration under ss 350(3) and 352 did not mean that its legal effect was not "final": Ainslie v Ainslie [1927] HCA 23; 39 CLR 381 at 390; Somodaj at 297-298; Kuligowski at [25].

1. A final decision given by a competent tribunal binds the parties and their privies in respect of any matter of fact or law which was legally indispensable to that decision: Blair v Curran [1939] HCA 23; 62 CLR 464 at 531-532; Brewer v Brewer [1953] HCA 19; 88 CLR 1 at 15. However, there is no issue estoppel in respect of evidentiary facts found in the course of determining such a matter of fact: Blair at 532; Brewer at 15-16.

1. CSR argues that it has the benefit of an issue estoppel in respect of a finding that the worker's injury was not contracted during the period of his employment by CSR.

1. The Commission found that the carcinoma was contracted by the worker in the course of his employment at the masonite factory at Raymond Terrace and that this employment was the only and therefore a substantial contributing factor to his contracting that disease. It found that the disease was due to the worker's exposure to wood dust over the period of his employment from 1965 to February 2004. The Commission also found that Weathertex was the last employer who employed the worker in employment of the nature which exposed him to wood dust.

1. The decision of the Commission was that the worker had received an injury and was entitled under s 9 of the 1987 Act to receive compensation in respect of that injury from Weathertex as the "worker's employer". The matters of fact and law which had to be established and which were legally indispensable to that decision were as follows. First, that the worker had contracted a carcinoma in the course of employment and to which that employment was a contributing factor (s 4 definition of injury, cl (b)(i)); secondly, that the employment was a "substantial contributing factor" to that injury (s 9A(1)); thirdly, that the carcinoma was a disease of such a nature as to be contracted by a gradual process (s 15(1)); fourthly, that the worker made a claim for compensation in relation to that disease on 16 February 2004 (s 15(1)(a)(ii)); and finally, that Weathertex was the employer who last employed the worker in employment to the nature of which that disease was due (s 15(1)(b)).

1. The Commission correctly proceeded upon the basis that it was unnecessary for the worker to establish that the period of his employment by Weathertex was a contributing or substantially contributing factor to his contracting the carcinoma. It was sufficient that he establish that the carcinoma was caused by employment of the nature of that in which he was engaged by Weathertex: Smith v Mann [1932] HCA 30; 47 CLR 426 at 440, 441, 449, 459; Connair Pty Ltd v Frederiksen [1979] HCA 25; 142 CLR 485; Crisp v Chapman [1994] NSWCA 73; 10 NSWCCR 492 at 496, 513; Kelly v Glenroc Pastoral Co Pty Ltd [1994] NSWCA 162; 10 NSWCCR 178; Grate Lace Pty Ltd v Theiss Watkins White (Constructions) Pty Ltd [1995] NSWCA 183; 12 NSWCCR 365. That employment was in the occupation of a woodworker, continually exposed to wood dust.

1. It was also unnecessary for the Commission to determine whether the carcinoma was contracted during the period of the worker's employment with Weathertex as distinct from that of CSR. Section 15(1)(a)(ii) deemed the "injury" to have happened at the time the worker made his claim for compensation on 16 February 2004. The relevant question then became who was the employer who "last employed" the worker in employment of the same nature as that which gave rise to the disease: s 15(1)(b).

1. It makes no difference to this analysis that Weathertex argued that the Commission should find that the carcinoma had developed by 31 October 1998 or that the Commission was not prepared on the evidence to make such a finding. That argument raised a false issue and the Commission's refusal to make such a finding did not amount to a finding that the carcinoma had not been contracted during the worker's employment by CSR.

1. It follows that there are two reasons why CSR does not have the benefit of the claimed issue estoppel. First, the Commission did not find that the carcinoma had not been contracted during the period of the worker's employment by CSR. Secondly, it was not legally necessary for the Commission to make such a finding in order to decide that Weathertex was liable under s 9(1) of the 1987 Act to pay compensation to the worker.

1. The primary judge correctly answered this first question in the negative.

Could CSR be liable under s 151Z(1)(d) as a person "other than the worker's employer"?

1. In its current form, s 151Z relevantly provides:

"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:

(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,

(b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker's injury under this Act, and the worker is not entitled to any further compensation,

(c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,

(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),

(e) if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages,

...

(2) If, in respect of an injury to a worker for which compensation is payable under this Act:

(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, and

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

the following provisions have effect:

(c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) are to be reduced by the amount by which the contribution which the person would (but for this Part) be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable,

(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 as to the award of damages,

(e) if the worker does not take proceedings against that employer or does not accept satisfaction of the judgment against that employer, subsection (1) applies as if the worker had not been entitled to recover damages from that employer, except that:

(i) if the compensation paid by that employer exceeds the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise - the indemnity referred to in subsection (1)(d) is for the amount of the excess only, and

(ii) if the compensation paid by that employer does not exceed the amount of that contribution - subsection (1)(d) does not apply and the employer has, to the extent of the compensation so paid, a defence to an action for such a contribution.

..."

1. CSR submits that in relation to the worker's injury, it is within the expression "the worker's employer" in the chapeau to s 151Z(1). Therefore, it is not within the description "some person other than the worker's employer" and accordingly cannot be within the description "the person so liable to pay those damages" within s 151Z(1)(d). It argues that the expression "the worker's employer", in relation to a disease of gradual onset, includes any employer who employed the worker in the employment to the nature of which the relevant injury was due. It also argues that as a "former employer" of the worker in that employment it is within the definition of "employer" and, for that reason, included in the expression "the worker's employer". CSR refers to s 15 of the 1987 Act which provides in relation to diseases of gradual onset, that employers other than the employer "who last employed the worker in employment to the nature of which the disease was due" may be liable to make contributions to that last employer in respect of the compensation which is payable. It submits that s 151Z(1) should not be construed in a way which may result in the burden for payment of that compensation being borne as between it and Weathertex other than in accordance with s 15(2A).

1. CSR also submits that s 151Z(1) only applies if the "circumstances" under which the relevant injury was caused also create a liability in "some person other than the worker's employer". It argues that this description could not apply to it because the circumstances under which the injury was caused extend beyond the period of the worker's employment by it and also include his employment by Weathertex. In support of this argument, it refers to Kornjaca v Steel Mains Pty Ltd [1974] 1 NSWLR 343 and Kempsey District Hospital v Thackham (1995) 36 NSWLR 492.

1. Weathertex contends that the primary judge was correct to conclude that the expression "the worker's employer" refers to the employer liable to pay compensation. It alleges that the worker's carcinoma was caused by his employment by CSR (as distinct from his employment by Weathertex or his employment by both of them). If that allegation is made out, Weathertex says that because it is under no liability to the worker independently of the Act, it is entitled to an indemnity under s 151Z(1)(d).

1. I do not understand Weathertex to allege that it is entitled to a more limited indemnity under s 151Z(1)(d) on the basis that the worker was entitled independently of the Act to take proceedings against it and CSR to recover damages so that the provisions of s 151Z(2) might apply. Weathertex and CSR would each be liable to the worker if both negligently exposed him to conditions which materially contributed to the carcinoma. In those circumstances each would be liable for the worker's loss subject to the application to one or both of them of the modified damages regime in Division 3 in Part 5 of the 1987 Act: Grant v Sun Shipping Co Ltd [1948] AC 549 at 563; Dingle v Associated Newspapers Ltd [1961] 2 QB 162 at 188-189; Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; 186 CLR 574 at 600; Elayoubi bhnf Kolled v Zipser [2008] NSWCA 335 at [57]; Gett v Tabet [2009] NSWCA 76; 254 ALR 504 at [367]; Sienkiewicz v Greif (UK) Ltd [2011] 2 WLR 523 at [90]; Amaca Pty Ltd v Booth [2011] HCA 53; 86 ALJR 172 at [70]; Strong v Woolworths [2012] HCA 5; 86 ALJR 267 at [26]; Allianz Australia Ltd v Sim [2012] NSWCA 68 at [41]-[43], [49]. The carcinoma contracted by the worker is an "indivisible" disease as that expression is used in this context, because once contracted its severity is not affected by the quantity of wood dust that has been or continues to be inhaled or ingested.

1. The task of construing a statute must begin with the text and have regard to the words used in their legal and historical context. That context includes the existing state of the law and the mischief or object to which the statute was directed: CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; 187 CLR 384 at 408. Other relevant authorities are referred to in Wilson v State Rail Authority of New South Wales [2010] NSWCA 198; 78 NSWLR 704 at [12]-[14]; and Griffiths v The Trustees of the Parliamentary Contributory Superannuation Fund [2012] NSWCA 231 at [10].

1. Similar provisions to those in s 151Z(1) have been contained in workers compensation legislation since 1897. Those provisions recognised that the worker may have a claim against a third party liable to pay damages independently of the relevant Act as well as a claim under that Act against the person liable to pay compensation. Section 6 of the Workmen's Compensation Act 1897 (UK) provided that the worker could "at his option, proceed, either at law against that person to recover damages, or against his employer for compensation under this Act, but not against both". If compensation under the Act was paid, the "employer [was] entitled to be indemnified" by that other person: see Oliver v Nautilus Steam Shipping Company Ltd [1903] 2 KB 639; Page v Burtwell [1908] 2 KB 758.

1. Unlike that earlier provision, s 6 of the Workmen's Compensation Act, 1906 (UK) allowed the worker to take proceedings against the person liable to pay damages and the employer liable to pay compensation but provided that if the worker recovered damages and compensation he was not entitled to retain both. It also provided that if the worker only recovered compensation, the employer was entitled to be indemnified by the third party liable to pay damages. Section 17 of the Workmen's Compensation Act 1910 (Act No 10 of 1910) and s 10 of the Workmen's Compensation Act 1916 (Act No 71 of 1916) were in the same terms as s 6 of the 1906 UK Act. Section 64(b) of the Workers' Compensation Act 1926 (Act No 15 of 1926), which later became s 64(1)(b), was in substantially the same terms as those earlier provisions. The successors of these provisions are ss 150(1) of the 1987 Act, as originally enacted, and s 151Z(1).

1. The 1987 Act as originally enacted abolished the worker's entitlement to damages at common law. Section 149(1)(a) provided that a worker was not entitled to recover damages from "the worker's employer" in respect of an injury to the worker for which compensation was payable under the Act "by that employer". In 1989, the Workers Compensation (Benefits) Amendment Act 1989 reinstated the right of the worker to sue the employer at common law but provided for modified common law remedies.

1. Section 151Z(1), as did these earlier provisions, regulates the enforcement by a worker of remedies under the common law and under the Act in respect of an injury for which compensation is payable. It is critical to an understanding of the scheme of s 151Z to appreciate that if s 151Z(1) is considered alone, it does not apply where the employer is liable to the worker for damages at common law. That is because its application depends on the injury for which compensation is payable being caused under circumstances creating liability in "some person other than the worker's employer" to pay damages in respect of that injury: see, in relation to s 64(1) of the 1926 Act, Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd [1975] HCA 28; 132 CLR 336 at 341, 348, 351, 352, 354; and, in relation to s 151Z(1) of the 1987 Act; I&J Foods Pty Ltd v Bergzam Pty Ltd (1997) 14 NSWCCR 486 at 492-496.

1. In Murray-More, the High Court followed the decision of the English Court of Appeal in Cory & Son Ltd v France Fenwick & Co Ltd [1911] 1 KB 114. It held that the right to an indemnity under s 64(1)(b) was given only to an employer who had no liability to the worker independently of the Act. Barwick CJ considered (at 340) that the indemnity was intended to cover the case where "the only liability of the employer to the worker is the statutory liability to pay compensation". Gibbs J described (at 350) the reference to the employer entitled to the indemnity as being to "the person primarily liable to pay compensation". McTiernan J referred (at 348) to the cases to which the indemnity applied as ones "in which the employer has paid workers compensation".

1. The third parties against whom the employer has rights independently of the Act are described in s 151Z(1) as persons "other than the worker's employer". Section 151Z(1)(a) permits the worker to take proceedings both against a third party liable for damages at common law and against the employer for compensation. In that event, the worker cannot have double recovery and as between the employer and the third party, the primary burden to compensate the worker is on the third party (s 151Z(1)(b)). The indemnity in s 151Z(1)(d) gives effect to that scheme by entitling the employer who has paid compensation to be indemnified by any third party liable under the common law to pay damages to the worker: see generally per Giles AJA in I&J Foods Pty Ltd v Bergzam Pty Ltd at 492.

1. The predecessors of s 151Z(2) are s 150(2) and s 64A of the 1926 Act. Section 64A(2) was enacted in 1980 to regulate the position, not covered by s 64, where the worker was entitled to recover damages independently of the Act, both from "his employer and from another person". As Barwick CJ noted in Murray-More (at 340), at the time s 64 and its predecessors first appeared in workers compensation legislation, there was no contribution between tortfeasors nor any ability for tortfeasors liable for the same damage to be sued in the one action. Section 64A(2) provided that s 64 applied "as if the worker had not been entitled to recover the damages from the employer" and where the worker recovered damages from the third party and not the employer or obtained judgment against both but did not accept satisfaction of the judgment against the employer. In those circumstances, the indemnity in s 64(1)(b) applied subject to three qualifications. They were described in paragraphs (c), (d) and (e) of s 64A(2). Which of those paragraphs applied depended upon the amount of the "compensation paid by the employer" and whether it exceeded or was equal to or less than the amount of the contribution which could be recovered by the third party from that employer. Each of paragraphs (c), (d) and (e) made clear that the "employer" to which s 64A(2) and s 64 referred and applied was the employer liable under the Act to pay compensation to the worker. The same observation may be made concerning subparagraphs (e)(i) and (ii) of s 151Z(2).

1. Compensation is payable under s 9(1) of the 1987 Act by the "the worker's employer" in accordance with the terms of the Act. The same expression is used in the chapeau to s 151Z(1). There the context makes clear that the reference is not to the or any "former employer" of the worker at the time of the injury. It is to an employer with respect to a particular injury for which compensation is payable. That employer may or may not also answer the description "former employer" at the time the application of s 151Z(1) is to be addressed. However, that it does so is irrelevant to whether it is the employer liable to pay compensation. The identity of that employer is determined by reference to the injury in respect of which the compensation is payable.

1. The definition of "employer" in the 1926 Act did not include a "former employer". That definition was included in s 3(1) of the 1987 Act as first enacted. It is now in s 4(1) of the WIM Act and applies to the 1987 Act unless it "provides otherwise": s 3(1AA); and, except in so far as the context or subject matter otherwise indicates or requires: s 6, Interpretation Act 1987. Neither the Second Reading Speech to the Workers Compensation Bill in 1987, nor the Explanatory Note relating to that Bill, explain why this definition was amended: New South Wales Legislative Assembly, Parliamentary Debates, (Hansard), 14 May 1987, 12205-12213 (Mr Hills). The Explanatory Note does, however, record that Part 5 "continues the substance (with necessary adjustments because of the operation of proposed section 149) of the provisions of sections 64, 64A and 65 of the former Act relating to remedies against an employer and a third person, where both are liable". It is likely, as the primary judge observed, that the definition was amended to make clear that s 149 (which abolished the right to damages at common law) was capable of applying to former employers, as well as to any current employer of the worker.

1. Except in the case of injuries consisting of diseases of gradual onset (s 15), or diseases involving the aggravation or exacerbation of a disease (s 16) or being a loss of hearing or further loss of hearing caused by a gradual process (s 17), the employer liable to pay compensation is the employer who employed the worker in the employment which was a substantial contributing factor to the injury received. In relation to those injuries, the employer liable to pay compensation is the employer who last employed the worker in employment to the nature of which the disease was due or who employed the worker in such employment at the time notice of the injury was given: ss 15(1)(b), 16(1)(b) and 17(1)(c). However, the position remains that in all cases there will only be one "worker's employer" liable to pay compensation under s 9. In the case of injuries which are the subject of ss 15, 16 or 17, that employer may have a statutory entitlement to recover contribution in respect of that compensation from earlier employers: ss 15(2), 16(2), 17(1)(d). However, none of those earlier or former employers is liable to pay compensation to the worker under s 9. In the earlier legislation on which these provisions are based there were similar provisions which made one employer liable to pay compensation and provided for the recovery of contribution from other employers of the worker in employment of the same nature: see s 8(1) of the 1906 Act (UK); s 12(1) of the 1916 Act; and s 7(4) of the 1926 Act.

1. A construction of "worker's employer" as referring, with respect to an injury, to the employer liable to pay compensation for that injury under s 9(1) of the 1987 Act gives effect to the object of s 151Z, does not lead to unreasonable results, is consistent with the provisions of s 151Z(2)(e) and is not inconsistent with the operation of ss 15(2), 16(2) and 17(1)(d) which provide the statutory right to contribution.

1. The Act does not take away the worker's right at common law to sue a previous employer in the position of CSR for a disease caused solely by its employment of the worker. Section 151Z(1) should be construed consistently with that being the position and as allowing, by paragraph (a), the worker to take proceedings against the employer liable to pay compensation and any third party liable independently of the Act, even if that third party is a former employer. Paragraphs (b) and (c) of s 151Z(1) prevent the worker from having double recovery and provide that the primary burden for the compensation falls on any third party so liable. Paragraph (d) produces the same outcome as between such a third party and the employer liable to pay compensation as would be produced if the worker recovered damages from the third party and had to refund to the employer any compensation received.

1. If the references to a person "other than" the worker's employer were not capable of applying to a previous employer in the position in which CSR is alleged to be, s 151Z(1) would not regulate the exercise of all of the worker's common law rights of recovery in respect of the compensable injury or provide the employer liable to pay compensation with rights of recovery as against all persons liable independently of the Act to the worker. Furthermore, if paragraph (a) is construed as permitting the worker to take proceedings against an earlier employer such as CSR but the indemnity in paragraph (d) is not construed as extending to such an employer, whether the employer who has paid compensation ultimately bears the burden of that payment will depend on whether the worker chooses to recover damages from all persons liable independently of the Act before seeking to recover any compensation from the employer liable to pay compensation under the Act.

1. These provisions operate in the same way if the compensable injury is a disease of gradual onset and the employer liable to pay compensation as the last employer has recovered contribution in respect of that compensation from earlier employers under s 15(2) of the 1987 Act. Assume, as Weathertex alleges, the worker's carcinoma was caused solely by his employment by CSR. In that event, the worker could take proceedings for damages against CSR and also recover compensation under the Act from Weathertex. Weathertex may then be entitled to contribution in respect of its liability for compensation from an earlier employer under s 15(2). That subsection would not apply to CSR in this case because it was not an employer during the twelve months before the date of the claim. If the worker recovered first compensation from Weathertex and then common law damages from CSR, he would have to repay the compensation to Weathertex which in turn would have to refund any contributions received from earlier employers. As between CSR and Weathertex, the ultimate burden of the liability for compensation would be borne by CSR as the party liable to the worker independently of the Act. If the worker recovered compensation from Weathertex, but did not take proceedings against CSR, Weathertex could enforce the indemnity under s 151Z(1)(d). Provided it established that CSR was solely liable as alleged, it would recover that compensation (net of any contribution it may have recovered under s 15(2)). The result is the same as it would have been had the worker recovered first compensation from Weathertex and then damages from CSR. In either scenario, CSR would bear the ultimate burden of the compensation payments.

1. For these reasons, the expression "the worker's employer" in s 151Z refers to the employer liable to pay compensation under s 9(1) of the Act.

1. Finally, it is necessary to consider CSR's argument that the circumstances under which the injury was caused were not capable of creating a liability in CSR. That argument must also be rejected. Those circumstances were that the worker was exposed to wood dust in the course of his employment at the Raymond Terrace factory over the period from 1965 to February 2004. They are capable of creating a liability in CSR for negligence as the worker's employer during part of that period on the basis either that the carcinoma was solely caused by his employment with CSR or that its development was materially contributed to by the employment of CSR and Weathertex.

1. The facts of the present case are different from those in Kornjaca v Steel Mains Pty Ltd and Kempsey District Hospital v Thackham. Here there is only one injury and it occurred in circumstances which are alleged to give rise also to CSR's liability. Kornjaca involved successive injuries to a worker's back which were unrelated both as to the occasion when they occurred and cause and each involved a separate employer/tortfeasor. The second employer sought an indemnity from the first under s 64(1)(b). It failed because the second injury did not occur under circumstances which created a liability in the first employer. The liability of the first employer existed before the circumstances involving the second employer occurred. Thackham also involved successive injuries to a worker's back in the course of different employments. This Court, applying Kornjaca, held that the second employer who had not been negligent, was not entitled to an indemnity under s 151Z(1)(d) because the circumstances of the second accident did not create any tortious liability in the first employer.

1. The primary judge correctly answered this second question in the affirmative.

Conclusion

1. The orders I propose are as follows:

(1)   Leave to appeal granted.

(2)   Appeal dismissed.

(3)   Applicant/appellant (CSR) pay respondent's (Weathertex) costs of the appeal.

1. HOEBEN JA: I agree with Meagher JA.

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Decision last updated: 11 March 2013