Delron Cleaning Pty Ltd v Public Transport Authority
[2007] WADC 34
•30 MARCH 2007
DELRON CLEANING PTY LTD -v- PUBLIC TRANSPORT AUTHORITY [2007] WADC 34
| Link to Appeal : |
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| DISTRICT COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WADC 34 | |
| Case No: | CIV:1464/2005 | 11 SEPTEMBER 2006 | |
| Coram: | SWEENEY DCJ | 30/03/07 | |
| PERTH | |||
| 46 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiff's claim dismissed | ||
| PDF Version |
| Parties: | DELRON CLEANING PTY LTD PUBLIC TRANSPORT AUTHORITY |
Catchwords: | Workers' compensation Deemed employer Employer's claim for indemnity from deemed employer Workers' Compensation and Rehabilitation Act 1981 s 93 Indemnity clause |
Legislation: | Workers' Compensation and Rehabilitation Act 1981 s 93, s 175 |
Case References: | Australian Turf Industries Pty Ltd v Dalet Pty Ltd, unreported; FCt SCt of WA; Library No 980658A; 21 August 1998 Foster v Chief Executive Officer of the Department of Agriculture [2006] WASCA 95 Hacai Pty Ltd v Rigel Kent Pty Ltd & Ors, unreported; FCt SCt of WA; Library No 960450A; 16 August 1996 Hewitt v Benale [2002] WASCA 163; (2002) 27 WAR 91 Jones v SNF (Australia) Pty Ltd & Anor [2002] WADC 207 Jones v Wesfarmers Ltd [2003] WASCA 225 Loongana v Lime Pty Ltd and Worth (2006) WASCA 183 Marsden v Unimin Australia Ltd; Price v Resolute Resources [2004] WASCA 143 NR Transport Pty Ltd v Brambles Ltd (2004) 317 CLR 424 Pinnacle Services Pty Ltd v Downsborough (2005) WASCA 142 Royal v Alcoa of Australia Limited (2004) WASCA 269 Skilled Engineering Limited v Glaxo Wellcome Australia Pty Ltd (2005) TASSCA 6 Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 Western Metals Zinc NL v Wesfarmers Transport Ltd and Aanor [2003] WASCA 152 |
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
- IN CIVIL
CORAM : SWEENEY DCJ HEARD : 11 SEPTEMBER 2006 DELIVERED : 30 MARCH 2007 FILE NO/S : CIV 1464 of 2005 BETWEEN : DELRON CLEANING PTY LTD
- Plaintiff
AND
PUBLIC TRANSPORT AUTHORITY
Defendant
Catchwords:
Workers' compensation - Deemed employer - Employer's claim for indemnity from deemed employer - Workers' Compensation and Rehabilitation Act 1981 s 93 - Indemnity clause
Legislation:
Workers' Compensation and Rehabilitation Act 1981 s 93, s 175
Result:
Plaintiff's claim dismissed
(Page 2)
Representation:
Counsel:
Plaintiff : Mr Christopher Charles Rimmer
Defendant : Mr Michael Patrick Bruce
Solicitors:
Plaintiff : Jarman McKenna
Defendant : Lavan Legal
Case(s) referred to in judgment(s):
Australian Turf Industries Pty Ltd v Dalet Pty Ltd, unreported; FCt SCt of WA; Library No 980658A; 21 August 1998
Foster v Chief Executive Officer of the Department of Agriculture [2006] WASCA 95
Hacai Pty Ltd v Rigel Kent Pty Ltd & Ors, unreported; FCt SCt of WA; Library No 960450A; 16 August 1996
Hewitt v Benale [2002] WASCA 163; (2002) 27 WAR 91
Jones v SNF (Australia) Pty Ltd & Anor [2002] WADC 207
Jones v Wesfarmers Ltd [2003] WASCA 225
Loongana v Lime Pty Ltd and Worth [2006] WASCA 183
Marsden v Unimin Australia Ltd; Price v Resolute Resources [2004] WASCA 143
NR Transport Pty Ltd v Brambles Ltd (2004) 317 CLR 424
Pinnacle Services Pty Ltd v Downsborough [2005] WASCA 142
Royal v Alcoa of Australia Limited [2004] WASCA 269
Skilled Engineering Limited v Glaxo Wellcome Australia Pty Ltd [2005] TASSCA 6
Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245
Western Metals Zinc NL v Wesfarmers Transport Ltd and Aanor [2003] WASCA 152
(Page 3)
1 SWEENEY DCJ: The evidence in this trial consisted of an agreed statement of facts and documents and the statements of two witnesses, tendered by consent. Ms Eleanor Jokich was employed by the plaintiff as a "passenger service host," in other words as a train passenger attendant. She worked the Avon Link Train Service, which travelled from Perth to Northam and back. Ms Jokich's duties included boarding passengers onto the train, serving food and beverages, keeping the galleys clean, announcing stations and disembarking passengers.
2 Before me was a duty statement for passenger service hosts and some explanation of those duties. As to disembarking passengers, Ms Jokich's duties included releasing the train steps at the train station and assisting passengers down the steps. Before me were various photographs of these steps. Each railcar has an exit door on the left and right hand side. Access to and from the railcar is by way of a set of retractable steps, attached to the railcar at each exit, leading down from the railcar floor to the station platform some feet below. The steps can be let down either from inside the railcar by standing on a knob, or from the station platform by standing on a lever located on the exterior of the steps.
3 On 27 January 2000, when the train stopped at the Toodyay railway station, Ms Jokich attempted to let the steps down from inside the railcar by stepping on the knob to release the steps. The step release failed. Ms Jokich then jumped from the railcar to the ground of the railway station, a drop of approximately five feet. Her plan no doubt was to attempt to release the steps using the exterior lever. Unfortunately, in so jumping and landing on the ground, she injured her back, leg and foot.
4 Following the accident, Ms Jokich sought payment from her employer, the plaintiff, pursuant to the Worker's Compensation and Rehabilitation Act 1981 ("the Act") and the plaintiff, as it was obliged to do, paid various benefits to Ms Jokich. On 20 July 2004 a form 15C memorandum of agreement was registered with the Conciliation and Review Directorate recording an agreement between the plaintiff and Ms Jokich pursuant to s 67(2) and s 76 of the Act. Ms Jokich agreed her claims were finalised upon payment to her by the plaintiff of the lump sum of $55,000. This sum comprised $37,142.80 by way of redemption of liability to make future weekly payments of compensation as for permanent total incapacity and $17,857.20, the worker having elected under s 24 of the Act compensation payable under Sch 2, presenting a 25 per cent loss of the efficient use of her back including her thoracic and lumbar spine (Item 36A).
(Page 4)
5 This lump sum was in addition to the amount of $160,000.66 which had at the time of the registration of the agreement already been paid to Ms Jokich by her employer. The total sum paid by the plaintiff to Ms Jokich was $215,000.60. According to the accompanying form 15 D, a statement of the consequences of the recording of a memorandum of agreement, Ms Jokich forfeited any entitlement to further compensation for weekly payments pursuant to the Act and forfeited any entitlement to pursue common law damages.
6 The plaintiff now sues the defendant for recovery of a percentage of that total sum pursuant to s 93 of the Act. At the time of Ms Jokich's accident, the Prospector and the Avonlink Train Services were owned and operated by the Western Australia Government Railways Commission ("Westrail"). From 1 June 2003, the defendant assumed ownership of every asset owned by Westrail and was assigned all rights and liabilities of that body pursuant to Pt IV Div 2 of the Public Transport Authority Act 2003. Amongst the rights and liabilities assigned were those pursuant to a contract between the plaintiff and Westrail dated 11 July 1997 ("the contract") in which the plaintiff agreed to provide passenger services to Westrail on the Prospector and Avonlink Train Services. The contract will be detailed later in this judgment.
7 It is agreed between the parties that the accident was caused by a combination of the negligence of Ms Jokich, the defendant and the plaintiff, the degree to which each contributed to the causation of the accident and injury being agreed at 10 per cent, 45 per cent and 45 per cent respectively. It is agreed therefore that, should the defendant be held liable in this action, the plaintiff is entitled to judgment for $96,750.27, representing 45 per cent of $215,000.60.
8 The plaintiff argues that the accident occurred in circumstances creating a legal liability in the defendant to pay damages to Ms Jokich and that the plaintiff is therefore entitled to an indemnity from the defendant to the extent that it negligently contributed to the cause of the accident, pursuant to s 93 of the Act. The defendant argues that it was Ms Jokich's deemed employer pursuant to s 175 of the Act and that s 93 cannot be used against a deemed employer. It further argues that the plaintiff is in any event obliged to indemnify it pursuant to s 175(2) and therefore the plaintiff's claim is circular. Finally, the defendant relies upon exclusion clauses in the contract.
(Page 5)
9 There are five key issues to be determined by me:
1. Was the defendant a "deemed employer" pursuant to s 175 of the Act? This is disputed by the plaintiff;
2. If the defendant was a "deemed employer" within the meaning of s 175 of the Act, can a "deemed employer" be the subject of a claim for indemnity pursuant to s 93 of the Act and, if so, does s 175(2) render the plaintiff liable to indemnify the defendant for its liability pursuant to s 93?
3. Ms Jokich having redeemed her claim against the plaintiff, can the plaintiff now establish that her disability was caused under circumstances creating a legal liability in the defendant to pay damages?
4. If the defendant would otherwise be liable to the plaintiff pursuant to s 93 of the Act, do cls 16.1 or 16.4 of the contract exempt the defendant from liability?
10 I will deal with these in turn.
Was the defendant a "deemed employer" pursuant to s 175 of the Act?
11 The accident in this case and Ms Jokich's claim against her employer the plaintiff took place prior to the amendments to the Act and particularly s 93B in October and November 2004. The writ in this matter was issued 1 July 2005; however it is common ground that the prior provisions apply and I have been provided with copies of the relevant provisions.
12 Section 175 of the Act provided:
"(1) Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor if he were the sole employer would be liable to pay under this Act.
- (2) The principal is entitled to indemnity from the contractor for the principal's liability under this section.
(Page 6)
- (3) The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal.
(4) Where the principal and the contractor are jointly and severally liable under this section, a judgment obtained against one is not a bar to proceedings against the other except to the extent that the judgment has been satisfied.
(5) Where compensation is claimed from or proceedings are taken against the principal, in the application of this Act a reference to the employer shall be read as a reference to the principal except where, for the purpose of calculating the amount of compensation, a reference is made to the earnings of a worker, the reference shall be read as a reference to the earnings of the worker under the contractor.
(6) For the purposes of this section, where sub-contracts are made —
(a) "principal" includes the original principal for whom the work is being done and each contractor who constitutes himself a principal with respect to a sub-contractor by contracting with him for the execution by him of the whole or any part of the work;
(b) "contractor" includes the original contractor and each sub-contractor; and
(c) a principal's right to indemnity is a right against each contractor standing between the principal and the worker.
(7) Where the disability does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply."
(Page 7)
13 Adopting the reasoning of Jenkins J in Royal v Alcoa of Australia Limited [2004] WASCA 269 at [58], in order to prove it was Ms Jokich's deemed employer the defendant will have to prove all of the following matters:
(a) that it contracted with the plaintiff for the execution of work by or under the plaintiff;
(b) that in the execution of the work, Ms Jokich was employed by the plaintiff;
(c) that the work on which Ms Jokich was employed at the time of her accident was directly a part or process in the trade or business of the defendant; and
(d) that Ms Jokich's disability occurred in respect of premises on which the defendant had undertaken to execute the work or which were otherwise under its control or management.
14 If the defendant was the deemed employer of Ms Jokich, she would not have been able to recover common law damages from the defendant in respect to a disability unless she complied with the provisions of Pt IV Div 2 of the Act as it was during the relevant time. The current s 93B(5) does not apply.
15 The plaintiff submits that pars (a) and (d) of the above list are not made out.
16 As to par (a), the plaintiff's submission is that the defendant cannot establish that it contracted with the plaintiff for the execution of work "by or under" the plaintiff, because it merely provided to the defendant the labour necessary for the defendant to perform certain tasks on the railcar, although the plaintiff sold food and drink on the train for its own profit.
17 The plaintiff says this case is akin to a labour hire case and relies upon the judgment of Wheeler JA (with whom Steytler P and Pullin JA agreed) in Foster v Chief Executive Officer of the Department of Agriculture [2006] WASCA 95 in which her Honour doubted the correctness of the decision in Marsden v Unimin Australia Ltd; Price v Resolute Resources [2004] WASCA 143.
18 The decision in Marsden v Unimin Australia Ltd (supra) has not been overruled in this State and in my view, I am bound by it. The case involved two appeals, involving similar legal issues, which were heard
(Page 8)
- and determined together. The majority, comprising Miller and McKechnie JJ, stated at par 2:
"The question for resolution in each case is whether, when a worker of a labour hire company works for and under the supervision of another company, the second company is deemed to be the employer under s 175."
20 In the appeal of Marsden v Unimin Australia Ltd(supra) the worker was employed by a labour hire company known as Integrated Workforce ("Integrated"). From time to time Integrated would send him out to various sites to work. In this instance, he reported to the business premises of Unimin Australia Ltd ("Unimin") in Welshpool where the health and safety officer and the shift supervisor allocated tasks to him. He received all his work instructions from Unimin's shift supervisor and had never seen anybody from Integrated on site. He was asked to operate a mobile mixing plant, a machine he had never used before. The shift supervisor and the machine's operator gave him instruction in how to operate the machine, but ultimately he was injured in its use.
21 The majority accepted the correctness of the decision in Hewitt v Benale [2002] WASCA 163; (2002) 27 WAR 91 and, expressly, the observations of E M Heenan J at par 109 to par 111 in which his Honour stated:
"109 It is against this background that the workers compensation legislation was originally framed at a time when the distinction between employee and independent contractor was both sharp and fundamental … .
110 This definition continues the approach of the common law to the employment of workers who are lent or let on hire by their ordinary employers to another. As in the common law, the ordinary primary employer continues as the employer liable under the Act.
111. However, s 175 has the effect of making the person who takes the person on loan or hire an employer and so liable under the Act for compensation concurrently with the principal employer. This result is achieved by deeming the person who takes the employee on loan or hire to be
- an employer 'for the purposes of the Act'. This 'deemed employment' is additional to, and not in substitution for or exclusive of, the contractual employment by the original employer … ."
22 Miller and McKechnie JJ then continued at par 30 – par 33:
"30 Although the decision in Hewitt v Benale proceeded on an agreed statement of facts, the ratio decidendi of the case is clearly established. Both the definition of 'employer' in s 5 and the provisions of s 175 of the Act were no doubt intended to be beneficial and expansive so that a worker would be able to identify, with ease, an employer with an obligation to pay workers' compensation. As the Workers Compensation and Rehabilitation Act has developed and has been interpreted there is also a burden on the worker from these sections, the burden of being the requirements of Pt IV Div 2.
31 Counsel for the appellant, in an able and ingenious argument, sought to distinguish labour hire contracts in a number of ways. It was argued that the contract was for the provision of labour to perform work under the direction and control of the company hiring the labour and that there was no ability to supervise or direct the work retained to the original employer. However, under the operational procedures between Integrated Workforce and Unimin, a representative of Integrated Work Force was required to make an assessment of the employee's performance on the day of commencement. Integrated Workforce was required to monitor the performance of the employee at regular intervals. It was the obligation of Integrated Workforce, amongst other things, to provide adequate supervision for any employees it assigned to Unimin.
32. …
33. Accepting, as we do, the correctness of the decision in Hewitt v Benale, the issue in this appeal is simply whether, in the words of s 175, Unimin contracted with Integrated Workforce for the execution of any work by or under Unimin."
(Page 10)
23 Paragraph 33 of the judgment contains a clear error as, if their Honours had faithfully followed the words of s 175, the issue in the appeal ought to have been described instead as whether "Unimin contracted with Integrated Workforce for the execution of any work by or under Integrated Workforce". In considering what they had identified as the key issue, Miller and McKechnie JJ considered the pleadings in the matters. The appellant worker had pleaded that he was subject to the supervision, direction and control of Unimin and Unimin had pleaded that its contract with Integrated was for the execution of work by or under Integrated (my emphasis) in that the appellant was directed by Integrated to work under the supervision, direction and control of Unimin.
24 Their Honours also referred to evidence that Unimin's operations co-ordinator would, together with Integrated, have created a profile as to the sort of person she would require on site and, as need arose, would then telephone Integrated and "request that I needed an employee to come to site or a person to come to site to fulfil some duties that were vacant at the time". Their Honours referred to the service proposal, by which Integrated announced that it had an obligation to provide high quality selectively recruited personnel to work in a suitably supervised environment as designated by the client, that it would ensure any particular site requirements, such as safety equipment and clothing requirements are met, that it would establish a pool of employees familiar with the clients' individual needs to be reassigned upon request where possible, and that it would monitor the performance of its employees upon commencement, at regular intervals during their assignment and upon completion of their assignment.
25 Finally, their Honours concluded at par 41- par 42 (my emphasis added):
"41 The arrangement described in the evidence was a contract for the execution of work under a contract and falls within s 175 of the Act. The execution of the work was under the contractor.Integrated Workforce contracted with the respondent to execute work by its employees at the direction of the respondent. The appellant was employed by Integrated to do that work.
42 Although the appellant took day-to-day directions from Unimin he was carrying out the work on behalf of Integrated Workforce, his employer. The contract with Unimin was for the supply of labour. The work carried
- out under that contract was one and the same as the work carried out by the appellant under the contractor even though it would also be correct to describe the work as being carried out under the principal."
26 In my view, when one considers the contents of par 41 and 42 of the majority judgment, it is clear that the error in par 33 was a typographical error, rather than a misreading on their Honours' part of s 175(1) of the Act. Everything that follows the error at par 33 seems directed to considering whether Unimin contracted with Integrated for the execution of any work by or under Integrated and that is the conclusion that their Honours reached.
27 It addition, while in par 31 their Honours did not specifically answer the "able and ingenious argument" advanced on behalf of the appellant seeking to distinguish labour hire contracts, in their conclusion in pars 41 and 42 their Honours found the contract to be both a contract for the supply of labour by Integrated and a contract for the execution of work by or under Integrated. The majority judgment does not lay down an exhaustive principle that a contract for the supply of labour is one and the same as a contract for the execution of work. Counsel's argument appears to have been rejected on the facts and the evidence, rather than as a general proposition.
28 In the second appeal, Price v Resolute Resources Ltd, a worker was employed by Drake Personnel Ltd ("Drake") and sent to the Marymia minesite outside Meekatharra which was occupied and controlled by Resolute Resources Ltd ("Resolute"). The worker was a qualified boilermaker and fitter who was a relief supervisor at the site but he took directions and supervision from the site supervisor employed by Resolute. He was injured after the site supervisor instructed him to assist a maintenance man to remove an air-conditioning unit from its setting in a wall at the workers' mess on site.
29 The trial Judge found that Resolute was a deemed employer of the worker. The majority concluded at par 49 (my emphasis added):
"On the state of the evidence it was open for the learned Commissioner to conclude that, within the meaning of the Workers Compensation and Rehabilitation Act s 175(1), Resolute was the principal, Drake the contractor, and the appellant the worker. The appellant was employed by Drake for the execution of work by or under the contractor.The work
(Page 12)
- undertaken by the appellant was coterminous with the execution of the work by Drake. The work was both under Resolute and under Drake."
30 Again, in my view, this passage makes it clear that the majority did not misread s 175(1), the terms of which are correctly adopted and ascribed to the parties.
31 There is no discussion of principles by the majority in the second of the appeals as their Honours regarded the legal principles as being common to both appeals. While, like the majority judgment in Marsden v Unimin Australia Ltd, the majority judgment in the second appeal does not purport to lay down any general principle that a labour hire contract is indistinguishable from a contract for the execution of work, it is difficult to discern any facts or evidence in relation to the matter of Price v Resolute Resources Ltd (supra)by which the labour hire contract in that case could be distinguished from other labour hire contracts on the basis that it involved some particular obligations of Drake over and above the usual labour hire contracts. Accordingly, the majority decision in Price v Resolute Resources Ltd does not seem to me to be distinguishable on that ground, should one seek to do so.
32 It is the obvious error contained in par 33 of the majority decision in Marsden v Unimin Australia Ltd (supra) which led Wheeler JA in Foster vChief Executive Officer of the Department of Agriculture (supra) to remark at par 13 - 15:
"There are, however, two observations I would make about that decision.
(14) The first is that it appears to me that the decision may well rest upon an obvious misidentification of the party to be considered the contractor … .
(15) If, as appears may have been the case, the slip in [33] of the reasons of the majority flowed through to the remainder of the decision, then I would take the view that that decision was so plainly incorrect that it should not be followed."
33 For reasons which I have already stated and with the greatest respect to the concerns expressed by Wheeler JA, with whom Steytler P and Pullin JA agreed, I do not agree that "the slip in [33]" did flow through to the remainder of the decision. Wheeler JA cannot be said to have been
(Page 13)
- emphatic in that view, however, given what follows in her Honour's judgment at par 16:
"In any event, if it be accepted that Marsden is correct, it may be that it is explained on the basis that the contract in that case was one of the 'dual' types of contract which I have described, in which there was both a contract for identified work and for the provision of workers to perform that work. There is some support for that conclusion in [39] of the reasons of the majority. Their Honours refer, in that paragraph, to some evidence which may be understood as suggesting that Integrated was asked to supply a person 'to fulfil some [presumably particularised] duties that were vacant at the time'. It may have been that their Honours considered that that was sufficient to characterise the contract as one for the execution of that work and that the work was 'by or under' Integrated because of the procedures, described in [31] of the majority's reasons, which required supervision of the worker by Integrated; see also [40], [77] and [81], which refer to obligations of the contractor."
35 In my view, on balance, particularly given the facts in the second appeal Price v Resolute Resources Ltd, the majority judgment in Marsden v Unimin Resources should be understood as having found that a standard labour hire contract falls within the expression "work by or under the contractor" within s 175(1). If the majority did not go so far, then they did, at least in the decision in Marsden v Unimin Resources, give some guidance as to the features of a labour hire contract which would render it a contract for the execution of work by or under the contractor. The decision was not overruled and the view expressed that it is incorrect was a conditional view, based upon a premise with which I cannot agree.
36 The contractual arrangement under consideration in Foster v Chief Executive Officer of the Department of Agriculture was unusual, involving a joint venture whereby the University of Western Australia
(Page 14)
- agreed to "contribute" "seconded personnel" as part of its contribution to a joint venture in the field of legume research. Seconded personnel were to be subject to the day to day management of the Director of the centre established under the joint venture but were to remain subject to the terms and conditions of employment of the University. It does not seem that the employee was hired to the joint venture to carry out a specific task or tasks within a specific field, but rather was seconded to the centre to carry out whatever tasks might be specified from time to time and for an unspecified time. Wheeler JA concluded at par 11:
"While, as I have noted, the Agreement obviously contemplates that work will be done, it would not, in my view, be correct to characterise it as an agreement 'for the execution of work' by each of the joint venturers. It is, pursuant to cls 14 and 20, an agreement for the supply of personnel by any of the parties who might be called upon to make such a contribution. That is, it is not a contract for the execution of work, but a contract for the supply of workers. It seems to me that there is a distinction to be drawn between a contract for the execution of work, which one would generally understand to be the execution of some particular task, even if broadly defined, and one for the temporary provision of workers for the purpose of assisting the principal to complete whatever tasks the principal has set itself."
"… It is, of course, possible to contemplate agreements which are agreements both for the provision of workers and for the execution of work; for example, where there is a contract for particular identified work and there is further an identification of the manner in which particular workers are to be made available to perform that task."
38 Having discussed the decisions in Marsden v Unimin Resources and Hewitt v Benale Pty Ltd, her Honour continued at par 18:
"If I were wrong in the conclusion that the Agreement is not a contract 'for the execution of any work', I would nevertheless be of the view that there is no deemed employment relationship in this case, for the reason that the contract is not for the execution of that work 'by or under' UWA. It seems to me that the words 'by or under' require some degree of control or supervision greater than that implicit in merely providing an employee for a
(Page 15)
- task. If that were not the case, it is difficult to see what the words 'by or under' the contractor would add to the further requirement contained in s 175(1) that, in the execution of the work, the worker be employed by the contractor."
39 Those words introduce a component of "some degree of control or supervision greater than that implicit in merely providing an employee for a task." No such requirement is discussed by the majority in Marsden v Unimin Resources and it is difficult to discern how, had such a requirement been considered necessary in the appeal in Price v Resolute Resources Ltd, the majority could have arrived at its decision. To that extent, the decisions are inconsistent with that in Foster v Chief Executive Officer of the Department of Agriculture and it is submitted I ought to follow the latter. Both are binding on me and apparently inconsistent.
40 The plaintiff argues that unless I find that, in completing her duties, Ms Jokich was under some degree of control or supervision by the plaintiff, the defendant was not her deemed employer. It submits that at the time of sustaining her injuries Ms Jokich was working on her own, apart from the train driver, an employee of the defendant and was therefore not controlled or supervised by the plaintiff.
41 With the greatest of respect to the Court in Foster v Chief Executive Officer of the Department of Agriculture I have difficulty with the final sentence of par 18. The first requirement in s 175(1) is that the principal have entered a contract with the contractor for the execution of work by or under the contractor. The words "by or under the contractor" do not in my view "add to the further requirement … that the worker be employed by the contractor" and are not connected to that requirement. They are confined in my view to the contractual relationship between principal and contractor.
42 The principal might enter into a contract with a natural person who plans to carry out the work in person. That would be work "by" the contractor. A contractor which is a corporation would necessarily have to carry out the work by natural persons – that also would be work "by" the contractor. Section 175 also contemplates, however, the use of sub-contractors, with whom the principal would have no contractual arrangement. Where it was contemplated between principal and contractor that the contractor would or might have the work completed by sub-contractors, this would in my view be work "under" the contractor. While s 175(6) enables s 175 to be read so as to apply, in addition, to the
(Page 16)
- contractor and his arrangement with his sub-contractor, my interpretation of the expression "by or under" means the original principal is both the deemed employer of the employees of the contractor with whom the principal entered into a contractual arrangement and also the employees of the sub-contractors, with whom the contractor entered into a contractual arrangement. This is consistent in my view with s 175(6)(c) which provides that "a principal's right to indemnity is a right against each contractor standing between the principal and the worker." I conclude then that the requirement that there be a contract "for the execution of any work by or under the contractor" does not pertain to the contractor's supervision of his employee.
43 The next requirement is that "in the execution of the work, a worker is employed by the contractor". In my view, this second requirement is entirely independent of the first and now introduces the worker into the equation. The section creates a fiction extending the employment relationship to the principal, who would not otherwise contractually be the employer of the worker. If a sub-contractor has employed a worker, then by virtue of s 175(6)(a), both the original principal and now also the contractor become that worker's deemed employers, the subcontractor remaining his true employer. In so doing, the act provides additional protection to the worker who now has three employers from whom he may claim workers' compensation payments.
44 Of course, much of the case law in this area has been concerned with the ability of the "deemed employer" to gain protection from the corresponding limitations placed upon the employee in seeking common law damages. The 2004 amendments to the Act have altered the position. I am dealing with the Act as it stood prior to those amendments. But, recalling that s 175(1) is a section extending to the worker the right to claim workers' compensation payments from a second employer, it does seem to me that it would be a strange result if he were entitled to claim workers' compensation from an employer at whose site he is working, when under a degree of control or supervision of his true employer, but not be entitled to claim compensation from an employer at whose site he is working and whose supervision and control he is directly under, rather than his true employer. In the latter case, the fiction provided by s 175(1) is less of a fiction and the deemed employer closer to an employer in fact. It seems strange to me that in those circumstances the worker should not be entitled to the extra protection provided by s 175(1).
(Page 17)
45 Without in any way doubting the ultimate conclusion reached in Foster v Chief Executive Officer of the Department of Agriculture, I prefer to regard that decision as turning upon the construction of an unusual contractual relationship which the Court concluded was not an agreement "for the execution of any work" by the joint venturers concerned. That is the ratio decidendi of the decision, rather than the additional conclusion that the contract was not one for the execution of work "by or under UWA" contained at par 18 of the judgment. As Gleeson CJ stated at the conclusion of the application to the High Court of Australia for special leave to appeal the decision:
"The decision of the Court of Appeal in this case turned on the application of s 175(1) of the Workers' Compensation and Rehabilitation Act 1981 (WA) to the particular facts and circumstances of a certain joint venture arrangement. The case would not provide a suitable vehicle for the examination of obiter dictain par 18 of the leading judgment in the Court of Appeal."
46 As Hayne J remarked during the course of legal argument:
"It is a joint venture in which, as is so commonly done, the agreements proceed as if the venture has separate legal personality when it does not and to accommodate joint venture arrangements of the kind recorded at p 6 concerning seconded personnel to s 175(1) is not without its difficulty."
47 In all of the circumstances, I conclude that the decision of the majority in Marsden v Unimin Resources still represents the law in this State and that, in determining whether in this case the parties contracted for "the execution of any work by or under" the plaintiff it is not necessary for the defendant to prove that the defendant maintained some degree of control or supervision over Ms Jokich as she carried out her tasks. I also conclude that labour hire contracts are not outside the scope of s 175 providing the contract under consideration amounts to a contract for "the execution of any work" by the contractor, bearing in mind that the labour hire contract in Price v Resolute Resources Ltd was considered to meet that description.
48 It now becomes necessary to consider the contractual arrangement in this case between the plaintiff and Westrail, later assigned to the defendant, to determine whether the plaintiff contracted with Westrail for the execution of any work by or under the plaintiff. For ease of
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- understanding and given the assignment to the defendant, I will substitute in the contractual clauses "the plaintiff" where "The Contractor" appears and maintain the present tense used in the contract.
49 The contract, dated 11 July 1997, provides in the preamble to the formal instrument of agreement that the plaintiff covenants with Westrail "to carry out the services in conformity in all respects with the provisions of this agreement."
50 Via the definition of "services" in cl 1.2, the specification to Sch 1 sets out the responsibilities of the plaintiff.
51 By cl 2.1:
"The plaintiff must provide personnel, to be called Passenger Services Host (sic), trained in accordance with the terms of the Agreement, and management, supervision, consumables and materials as required by the Agreement and as agreed by the Joint Management Group to ensure the efficient and effective delivery of services by the Passenger Services Hosts, to enable the attainment of the outcomes required under the Agreement."
52 Cl 2.6 provides:
"The work of the Passenger Services Hosts must be supervised by the plaintiff and will be monitored periodically by Westrail."
53 Cl 2.7 provides:
"To assist with the administration of the contract on a day-to-day basis, the plaintiff will nominate one Passenger Services Host on each service to be the plaintiff's On Board Representative. This On Board Representative will act as the single point of contact between the plaintiff and Westrail for all issues relating to this service. Westrail will specify Nominated Westrail Employees at Kalgoorlie and East Perth who will liaise with the plaintiff's On Board Representative and assist, where required, with the resolution of any issues on a day-today (sic) basis."
54 Further specific responsibilities of the plaintiff described as "outcomes" in cl 3.1 of the specification to Sch 1 which "the plaintiff must achieve" include obligations of courtesy, ensuring all passengers have valid and appropriate tickets, ensuring sufficient refreshments and food
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- are provided during each journey, ensuring compliance with alcohol consumption by-laws, serving well presented meals at appropriate times during the journey, ensuring the security of passenger property on board the train and maintaining "a safe environment for passengers and staff within the passenger compartment, and while embarking and disembarking from the train."
55 By cl 5.1 of the specification to Sch 1 the plaintiff is obliged, at its own cost, to ensure that all of the passenger service hosts working under the contract met specified competency standards.
56 By cl 9 of the terms and conditions of the contract, which sets outs in its various sub-clauses the general obligations of the plaintiff, the plaintiff is obliged to perform the services in a good and workmanlike manner in accordance with the professional standards, level of care, skill, knowledge and judgment required or reasonably expected under best industry practice. It is to ensure that all its employees hold all necessary qualifications and permits and are adequately trained and competent to carry out their duties. It is to ensure compliance with Westrail's safety and health policy. Should any of the plaintiff's employees not have the necessary qualifications or not display the level of competence necessary to perform the services safely, Westrail can require the plaintiff to remove that employee from the work site.
57 By cl 2.8, without relieving the plaintiff of its obligations under the agreement, Westrail is obliged to co-operate with the plaintiff to enable it to properly perform its services and, by cl 2.9, is to provide training for the plaintiff's employees and, if necessary, for sub-contractors and their employees, which will be provided free of cost.
58 By cl 4 Westrail is obliged to make the railcars available to the plaintiff 20 minutes before each journey and is to provide specified equipment and material free of charge to the plaintiff. Westrail is also obliged to allocate an area to the plaintiff for the purpose of providing the services and is obliged by cl 5 to arrange the supply of all meals required for passengers and the plaintiff's personnel on board the railcar during each journey, which responsibility extends to delivering the meals to their storage inside the railcars, the plaintiff then being responsible for the preparation of each meal for service and the service of the meal to the passenger.
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59 Finally, Westrail is obliged to pay the plaintiff for the provision of its services. By cls 9.26 and cl 9.28, Westrail is entitled to access the work site at all times and inspect all equipment and other property used by the plaintiff in connection with the contract and also has the right, without prior notice, to inspect the performance of the services pursuant to cl 9.28.
60 That is sufficient to give the flavour of the contractual arrangement between the plaintiff and Westrail, binding on the defendant.
61 In addition, two statements were tendered by consent explaining how the contractual arrangement worked in practice. Leslie James Walton, the former operations and performance manager for Westrail, explained that the plaintiff had an office at what was then known as the Westrail Centre, being a large building at the East Perth Rail Terminal. That office was occupied by Mr Rocco Catalano, the plaintiff's onsite supervisor, who had a close working relationship with Westrail's first line supervisor, Mr Vince Cianci, whose formal title was "co-ordinator rail services". His role was to liaise with the plaintiff over day to day issues with the contract.
62 The plaintiff needed an onsite office, not only because it was convenient for its staff, but because of their responsibilities to arrange all aspects of the refreshments, food and meals. The profits from the on-board sale of refreshments and snacks belonged to the plaintiff.
63 Mr Cianci would provide Mr Catalano or his representative with the train timetables and running information, indicating how many railcars would be on the train, passenger manifests and so on and then it was up to the plaintiff to make arrangements for its staff to provide the on-train services. Mr Walton accepted that Mr Cianci would have liaised directly with the plaintiff's on-train staff in relation to minor matters, but said Westrail had no involvement in issues such as performance management of individual on-train staff members, or their entitlements or working hours. In Mr Walton's view, Westrail never assumed control or management over the plaintiff's on-train staff.
64 Mr Walton accepted that on many Avonlink services there would only be the driver, invariably an employee of Westrail, and one or two of the plaintiff's on-train passenger services hosts and again accepted that, during the journey, the driver would liaise with the services hosts, but stated that the roles, responsibilities and reporting lines were quite distinct, the driver reporting to Westrail and the on-train staff reporting to the plaintiff.
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65 Rocco Catalano, the contracts manager employed by the plaintiff, also provided a statement. He said that there was only ever one on-train hostess on the Avonlink train service at any one time. At the Northam end of the line, the plaintiff also had an office. The morning shift hostess would be the first to arrive at the Northam station in the morning and open up the office.
66 Westrail would provide the plaintiff with the passengers list one week in advance, so that he could prepare the roster for the following week. Westrail would tell him how many staff were required because the number of cars on each train varied. Back in January 2000, the Avonlink service provided food to passengers. The plaintiff would order the meals and drinks for the train, its staff would record what had been used during the service and the train would be restocked the following day. At the end of each service, the hostesses would deliver their paperwork, the keys to the train, money and the trip report to the plaintiff's office at the Westrail building in East Perth, or the Northam office if that was the last service they completed. The paperwork included a daily trip report, copies of which would be provided to Westrail by Mr Catalano, who would also discuss with Westrail any faults or problems that had occurred.
67 Mr Catalano also explained that both the plaintiff and Westrail provided training to on-train hostesses. The plaintiff could not put any of its staff on a train unless they first obtained the various certificates required by Westrail. The training provided by the plaintiff was in relation to the actual performance of the on-train services.
68 Mr Catalano explained that the on-train hostess was the plaintiff's only staff member present on the Avonlink service. During the service she had no contact with the plaintiff unless she telephoned Mr Catalano on his mobile phone. If there was a problem on the train, such as rowdy passengers or equipment issues, the on-train hostesses reported to the driver. If the driver could not rectify the problem and there was still a need to obtain assistance or instructions, then the hostess would call the customer liaison officer, known as the station master back in 2000, for advice or instructions. This person was employed by Westrail. The incident would also be recorded in the hostess's trip report, which was delivered to Mr Catalano and ultimately to Westrail.
69 There were occasions when a passenger list changed at the last minute, in which case Westrail's customer liaison officer would contact the plaintiff's on-train hostess on the train directly, so that she could ensure the additional passenger was picked up from the correct station.
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70 Section 175(1) of the Act focuses upon the contract, rather than the day to day implementation of the relationship. Were there to be some inconsistency between the contractual arrangement and the day to day operations, in my view the contract must govern whether a principal has contracted with a contractor for the execution of any work by or under the contractor.
71 In this case, however, the day to day implementation of the contract is not inconsistent with its terms. While there is, at any given time, only one train hostess on the Avonlink service who reports difficulties to the driver and from time to time the customer liaison officer, both employed by Westrail, the contract makes it clear that the on-train hostess is the on board representative of the plaintiff. What is described by Mr Catalano is not so much supervision of the hostess while she is on board, as liaising with her and cooperating with her to ensure the smooth performance of her services.
72 This was a contract to provide very specific services by the plaintiff, performed by its employees who had met specific safety and accreditation requirements and who were trained to perform the specific tasks listed in the contract. The on-train hostesses are the plaintiff's on board representatives. I conclude that the defendant has proved that it contracted with the plaintiff for the execution of work by the contractor, the plaintiff, by its employees.
73 If I am in error in my comments concerning the decision in Foster v Chief Executive Officer of the Department of Agriculture and there is a necessity for the defendant to prove that the plaintiff exercised some degree of control and supervision over its staff in order for the work to be "by or under" the plaintiff, then there is ample evidence of such control and supervision in the contract in the specific obligations of the defendant which I have set out above. The overall responsibility for performance by the hostess of her services and the supervision and training of the hostess rested with the plaintiff. This is supported by an internal memoranda on the plaintiff's letterhead dated 23 August 2001 addressed to all staff from Mr Steve Dawson, Executive Manager, commencing: "It has been brought to our attention that staff have either forgotten or are not following company policy with relation to the Prospector stairs and disembarking procedures. As per previous advice if for any reason all steps onboard a Prospector rail car do not release, staff are under no circumstances permitted to jump or climb from the train. Any actions such as these will be considered gross misconduct and shall be dealt with accordingly." While no member of the plaintiff's staff apart from the hostess will be
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- present to witness such an incident, or supervise the disembarkation, it is clear that the plaintiff has control over such conduct and will impose consequences after the event if thought fit.
74 Therefore, on any view of what the defendant must prove, it has made good its argument that it contracted with the plaintiff for the execution of any work by or under the plaintiff.
75 The plaintiff's second contention is that the defendant cannot prove that Ms Jokich's disability occurred in respect of premises on which the defendant had undertaken to execute the work or which were otherwise under its control or management: s 175(7) of the Act.
76 As the submission was developed before me, it is that the railcar from which Ms Jokich leapt could not be considered to be "premises" in respect of which her disability had occurred, relying upon the decision at first instance of Martino J in Jones v SNF (Australia) Pty Ltd & Anor [2002] WADC 207. In that case Martino J held that a bulk-transport trailer was not "premises" within the ordinary meaning of that word, a finding which was not disturbed on appeal: Jones v Wesfarmers Ltd [2003] WASCA 225.
77 Section 175(7) of the Act does not require the disability to occur "on" or "in' premises, but rather "in respect of" premises. In Jone v Wesfarmers Ltd (supra)Parker J at par 60 stated:
"For the purposes of deciding this case it is sufficient, in my view, to regard the relevant premises as the transport depot of Wesfarmers at Boulder, rather than the SNF trailer itself, as was submitted, leaving open the question of the trailer. So viewed, s 175(7) requires that there be a relationship or connection between the depot and the occurrence of the disability. I am not persuaded that to establish such a relationship or connection, the phrase 'In respect of' should be construed so narrowly as to require that some attribute of the premises themselves was a causative factor of the disability."
78 In the same decision, McKechnie J at par 65 left open the question of whether a trailer or vehicle could ever be regarded as premises, but concluded at par 66 and par 72 that for the disability to have occurred "in respect of premises" there must be a material connection or nexus between the premises and the disability.
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79 By the combined effect of the Public Transport Authority Act 2003 and s 13(1) of the Government Railways Act 1904 the defendant has the management, maintenance and control of every government railway. Within the meaning of the Government Railways Act 1904 "railway" and "government railway" includes all Crown land upon which the railway is constructed or which is held or used in connection with the railway and also all branch lines, sidings, buildings, works, locomotives, motor cars, motor and other vehicles, rolling stock, plant, machinery, goods, chattels and other fixed or movable property of every description or kind belonging to the Crown and situated on such land or held or used in connection with or for the purposes of the railway.
80 It is clear then that the railcars themselves are part of the railway, at least while ever they are "situated on such land or held or used in connection with or for the purposes of the railway". The disability in this case occurred as a combination of Ms Jokich being unable to release the steps from inside the railcar and then jumping from the railcar onto the platform. Both the railcar and the platform were on the land on which the railway is constructed. In my view a person inside the railcar when the railcar is on the railway is on the premises on which the defendant had undertaken to execute the work or which were otherwise under the defendant's control or management.
81 Whether the disability was incurred solely on impact with the platform as one suspects, though there is no evidence before me on that point, or partly or solely in the jumping action, the disability occurred "in respect of" the premises.
82 The question of whether the railcar, of itself, could amount to premises need not be answered. In the case of Jones v SNF (Australia) Pty Ltd & Anor (supra)the distinction was important, because the disability had occurred on a trailer owned by one party, that trailer being parked in premises owned by another party, liability depending upon whether or not the trailer itself amounted to "premises".
83 In this case, the defendant has the control and management of both the railcar and the land on which it was then stationary, both being part of the railway. It was a chattel within the premises of the defendant and was part of the premises. At least in so far as this reasoning applied to one of the parties in Jones v Wesfarmers Limited, Malcolm CJ at par 32 stated:
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- "In my opinion, a liability 'in respect of premises' includes a liability which arises in respect of something which happens on the premises, or arises otherwise in respect of the premises … . At all material times, the trailer was on Wesfarmers' premises. The accident occurred on SNF's trailer while it was on Wesfarmers' premises and under its control and management for the purposes of repair."
84 I conclude the defendant has proved that the disability occurred in respect of premises on which it undertook to execute the work or which were otherwise under its control or management.
85 It being accepted that, in the execution of the work, Ms Jokich was employed by the plaintiff and that the work on which she was employed at the time of the occurrence of the disability was directly a part or process in the trade or business of the defendant, it follows that the defendant was the "deemed employer" of Ms Jokich pursuant to s 175(1) of the Act.
Can a "deemed employer" be the subject of a claim for indemnity pursuant to s 93 of the Act and, if so, does s 175(2) oblige the plaintiff to indemnify the defendant against any such liability?
86 The plaintiff brings its claim against the defendant pursuant to s 93 of the Act on the basis that Ms Jokich's disability was admittedly caused in part by the defendant's negligence. Neither party has specified the precise pathway by which s 93 applies in the case of contributory negligence, which is not surprising given the unfortunate drafting of that section. The section has been amended since the disability was caused, but for the reasons explained earlier it is accepted that I am to apply the legislation as it was at the time of the incident and Ms Jokich's claim against the plaintiff.
87 At the relevant time, s 93(1) and s 93(2) provided as follows:
"(1) Where the disability for which compensation is payable under this Act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof but neither the employer nor any person for whose negligence the employer is legally responsible was negligent —
(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 such
- compensation, but shall not be entitled to recover both damages and compensation and shall bring to account in reduction of his entitlement to compensation the amount recovered by way of damages;
- (b) the employer is entitled to be indemnified by the person whose negligence caused the disability to the worker (in this section called "the defendant") to the full extent of the employer's liability to pay compensation under this Act, whether or not the defendant has discharged his liability to pay damages to the worker by judgment or by settlement or otherwise.
- (2) If there were —
(a) negligence by the employer or by some person for whose negligence the employer is legally responsible which caused or contributed to the worker's disability, the extent of the indemnity of the employer by the defendant is reduced by the proportion that the employer's negligence and that of any person for whose negligence the employer is responsible bears to 100%; or
(b) negligence by the worker which caused or contributed to the worker's disability, the extent of the indemnity of the employer by the defendant is reduced by the proportion that the worker's negligence bears to 100%."
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89 This is not a case in which Ms Jokich's employer, the plaintiff, was not negligent. Therefore, leaving to one side the question of whether Ms Jokich's disability was "caused under circumstances creating a legal liability in some person other than the employer to pay damages," s 93(1), which would entitle the plaintiff to be indemnified to the full extent of its liability to pay compensation by "the defendant" as defined in s 93(1)(b) does not apply.
90 It is agreed in this case that there was negligence, contributing to the cause of the disability, on the part of the plaintiff (the employer), the defendant (the deemed employer) and Ms Jokich (the worker.) It is necessary for me then to consider what application s 93(2) has, interpreting it as best I can and necessarily, it seems to me, in conjunction with s 93(1) even though the full terms of s 93(1) do not apply.
91 The plaintiff's submission is that, while Hewitt v Benale is authority for the proposition that, where a principal is a deemed employer by operation of s 175 of the Act, the principal is to be regarded as the employer for all purposes of the Act, the Court in that case did not fully consider the anomalies that might be created by simply substituting the term "deemed employer" wherever the word "employer" appears in s 93.
92 The plaintiff submits that I should imply into s 93, wherever I see the word "employer," the words "the employer who has paid compensation under the Act". On this argument, the deemed employer, if the deemed employer has not paid compensation under the Act, is therefore capable of also being "the defendant", that is to say the person not being the employer whose negligence caused the disability to the worker.
93 The defendant relies upon s 175(5) of the Act which provides: "Where compensation is claimed from or proceedings are taken against the principal, in the application of this Act a reference to the employer shall be read as a reference to the principal…" (save for an exception which is irrelevant here.) The defendant submits that, this being "proceedings taken against the principal" wherever I see the word "employer" in s 93, I should read "employer or deemed employer" and that, consistent with this approach, "the defendant" referred to in s 93 cannot be either. While I have some doubts that s 175(5) was intended to have application where the action is taken against the principal not in its capacity as principal but in its capacity as a negligent party the point was not argued before me and I intend to assume for the sake of argument that it does apply here.
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94 The defendant further submits that if s 93 is construed to enable recovery between employers and deemed employers this would detract from, and in many cases defeat, the indemnity available to a deemed employer pursuant to s 175(2) of the Act. If the plaintiff's construction of s 93(1) is accepted, the defendant counters, a "real" employer could rely upon s 93 to assert that the amount of the indemnity available to a deemed employer pursuant to s 175(2) should be reduced in proportion to that deemed employer's negligence and the worker's negligence. The defendant argues that s 93 regulates workers' compensation recovery rights against a person who is not an employer and was never intended to affect recovery rights between employers, whose rights are governed by s 175.
95 I will begin by examining this last proposition first. Section 175(2) provides: "The principal is entitled to indemnity from the contractor for the principal's liability under this section". In other words, a deemed employer is entitled to indemnity from a true employer for the deemed employer's liability under s 175. It is by virtue of s 175(1) that the principal is deemed to be an employer and consequently is rendered "jointly and severally liable" to pay compensation to the worker under the Act. It is the deemed employer's liability to pay that compensation against which it is entitled to be indemnified pursuant to s 175(2).
96 Section 175(2) says nothing of the deemed employer's liability to pay damages for negligence. Its liability to pay compensation under the Act arises independently of fault and purely by virtue of its contractual arrangement with the worker's employer, but that same liability is then the subject of the right to indemnification. I conclude that s 175(2) provides no right to indemnity in respect of any liability to pay damages to the worker.
97 If the remainder of the defendant's submission is correct and the deemed employer cannot be "the defendant" referred to in s 93 of the Act, the deemed employer enjoys an immunity from the consequences of its negligence as between itself and the true employer. Can this be what was intended by s 93 of the Act?
98 Pursuant to s 93(1)(b) an employer who has not been negligent is entitled to an indemnity to the full extent of his liability to pay compensation under the Act from "the defendant", being a person whose negligence caused the disability to the worker.
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99 This will only be the case however where the disability for which the compensation is payable "was caused under circumstances creating a legal liability in some person other than the employer to pay damages", an expression not without difficulties of interpretation and to which I will later refer.
100 If, however, there was negligence on the part of the employer then pursuant to s 93(2) the extent of the indemnity of the employer by the person whose negligence caused the disability is reduced by the proportion of the employer's own negligence. In addition, if the worker was negligent the extent of the indemnity of the employer by the person whose negligence caused the disability is also reduced by the proportion of the worker's negligence.
101 As I read the whole of s 93(1) and s 93(2) there is a legislative intent that the employer is entitled to be indemnified against his liability to make compensation payments under the Act to the extent to which another party, not the worker, has been responsible through negligence for causing the disability.
102 While s 175 obliges the employer to indemnify any deemed employer against its liability to make compensation payments, I can think of no just reason why an employer should not be entitled to be indemnified by a person whose negligence caused the disability to the worker purely because that person happens also to be the deemed employer.
103 I accept the defendant's submission that, if s 93 is construed to enable recovery between employers and deemed employers this would detract from, and in many cases defeat, the indemnity available to a deemed employer pursuant to s 175(2) of the Act. I accept also that, on my construction of s 93 a "real" employer can rely upon s 93 to assert that the amount of the indemnity available to a deemed employer pursuant to s 175(2) should be reduced in proportion to that deemed employer's negligence, though I do not accept that it will also be reduced in proportion to the worker's negligence, which involves in my view a misreading of s 93(2). Both scenarios, however, achieve a just outcome and are consistent with the legislative intent of s 93.
104 I cannot improve upon the reasons for judgment of Evans J in SkilledEngineering Limited v Glaxo Wellcome Australia Pty Ltd [2005] TASSCA 6. In that case very similar issues arose to those under consideration before me. That was an appeal to the Supreme Court of
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- Tasmania against a decision rejecting a claim by Skilled Engineering, the true employer, for indemnification from Glaxo Wellcome Australia Pty Ltd, the principle and deemed employer, in respect of compensation paid by Skilled under the Act to an injured worker. It is necessary to set out the provisions of the Workers Rehabilitation and Compensation Act 1988 (Tasmania) to enable comparisons. Section 134 of the Act provided:
"(1) Subject to this section, where an injury for which compensation is payable to a worker is caused under circumstances creating a liability in some person other than the employer to pay damages in respect of that injury to that worker, the employer may recover indemnity against that person in respect of the compensation paid by the employer to the worker in respect of that injury.
(2) Subject to subsection (3), where the circumstances referred to in subsection (1) create the liability to pay damages both in the employer and some other person, whether arising as a result of a tort or otherwise, the employer has the like right of indemnity or contribution against that other person in respect of the compensation paid by the employer as if that compensation were part of those damages.
(3) …
In this Part, unless the contrary intention appears –
…
'employer', used in relation to an injury suffered by a worker, includes any person who, in respect of that injury, is liable, under section 29, to pay compensation or to indemnify any other person for any compensation paid by that other person."
"(1) Where a person (in this section referred to as 'the principal') in the course of, or for the purposes of, his trade or business contracts with any other person (in this section referred to as 'the contractor') for the execution by
- or under the contractor of the whole or any part of any work undertaken by the principal, the principal is liable to pay to a worker employed in the execution of the work any compensation under this Act that he would have been liable to pay if that worker had been immediately employed by him.
- (2) Where compensation is claimed from, or proceedings are taken against, the principal, then, in the application of this Act, a reference to the principal shall be substituted for a reference to the employer, and the amount of compensation shall be calculated with reference to the earnings of the worker under the employer by whom he is immediately employed.
(3) …
(4) Where the principal is liable to pay compensation under this section, he is entitled to be indemnified by any person, other than the Nominal Insurer, who would have been liable to pay compensation to the worker independently of this section, and the right to that indemnity is available against every contractor standing between the principal and the worker.
(5) …
(6) …"
106 At first instance, the trial Judge accepted that proceedings had been taken against Glaxo, the principal, within the meaning of s 29(2) and therefore the references to "the employer" in s 134(1) and s 134(2) must be read as referring to "the principal". The trial Judge ruled that, s 134 only conferring a right to claim an indemnity against a "person other than the employer", it followed that Skilled could not claim an indemnity from Glaxo.
107 At par 9 Evans J, with whom Tennent J and Hill AJ agreed, stated:
"[9] With respect, I take a different view. Pursuant to s134(1), the right to receive indemnification is given:
- to 'the employer';
- against a 'person other than the employer', in which person has been created a liability to pay damages in respect of injury to the worker;
'in respect of the compensation paid by the employer'.
- [10] An essential pre-condition to the employer claiming indemnification is the payment of compensation by that employer. So, whilst the term 'the employer' includes both a principal and an employer, to my mind that term as used in s 134(1) refers interchangeably to the employer or the principal who has paid the compensation that is the subject of the claim for indemnification. When the claimant is the employer, that term should be applied throughout s 134(1) in assessing whether the employer's claim is substantiated. Similarly, when the claimant is the principal, that term should be applied throughout the provision. To allow that for the purposes of s 134(1), the term employer includes principal in the sense that the employer comprises or encompasses the principal as part of a whole, could give rise to a claim by an employer for indemnification in respect of compensation paid not by the employer but by the principal. I do not consider that such an outcome is intended. The objective I discern in s 134(1) is to enable the payer of compensation to recover that compensation from the person liable for the worker's injury. The ultimate responsibility for the payment of compensation is placed on that person. It would be inconsistent with that objective to construe s 134(1) in a way that enabled a principal who was liable for the worker's injury to avoid that ultimate responsibility. I do not consider that there is any unresolvable tension between this interpretation of s 134(1) and the indemnity conferred on a principal by s 29(4). The latter is a no fault entitlement as between the principal and the employer and should give way where the principal is in fact liable for the worker's injury. The ultimate responsibility for the payment of compensation should be borne by the person liable for the worker's injury.
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- [11] I accordingly conclude that Skilled's claim for indemnification from Glaxo pursuant to s 134(1) is not outside that section simply because Glaxo is a principal."
108 True it is there are some differences between the legislation referred to in that case and the legislation before me. Section 134 of the Tasmanian legislation contained the words "the employer may recover indemnity against that person in respect of the compensation paid by the employer by the worker in respect of that injury" and, in subparagraph (2) the words "has the like right of indemnity or contribution against that other person in respect of the compensation paid by the employer as if that compensation were part of those damages". Section 93 of the legislation in this state does not contain similar expressions, containing instead in s 93(1)(b) "to the full extent of the employer's liability to pay compensation".
109 The presence of those words in the Tasmanian legislation renders the interpretation given to the section by Evans J more easily arrived at, however the expression "to the full extent of the employer's liability to pay compensation" used in our legislation seems designed to include in the indemnity compensation not yet paid, to ensure that complex issues of timing and litigation of proceedings do not impact adversely upon the employer's right to an indemnity.
110 I accept, on the strength of the decision in Hewitt v Benale, that where a principal is a "deemed employer", the principal is to be regarded as the employer for all purposes of the Act (under the legislation as it stood for the purposes of this matter) and that the term "employer" in s 93 includes a reference to "deemed employer". It does not follow however that s 93 is to be read by substituting for the expression "the employer" either the expression "the employer and deemed employer" or "the employer or deemed employer", both readings producing in my view tortured and anomalous results. This would be to regard the employer and deemed employer, as Evans J put it, as "part of a whole".
111 In my view both the true employer and the deemed employer are entitled equally to the benefit of s 93 interchangeably and independently of each other. Both, in my view, have a right to indemnification by a person whose negligence caused the disability to the worker to the extent to which that person caused the disability. Both are liable to pay compensation pursuant to s 175, however pursuant to that section the true employer is obliged to indemnify the deemed employer.
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112 It is argued by the plaintiff that I should imply into s 93, wherever I see the word "employer", the words "the employer who has paid compensation under the Act", consistent with the interpretation adopted by Evans J in SkilledEngineering Limited v Glaxo Wellcome Australia Pty Ltd (supra). Evans J however had no need to imply those words, as they appeared in the legislation under consideration in that case. Nor do I consider that I must imply those words.
113 It is suggested that, unless I do, a deemed employer who has made no compensation payments could yet claim full indemnity pursuant to s 93 because he is jointly and severally liable for compensation. But the concept of "indemnity" surely answers such a concern. As Mason CJ said in Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 254: "An indemnity is a promise by the promisor that he will keep the promisee harmless against loss as a result of entering into a transaction with a third party". Hence a deemed employer who has not made compensation payments is, in my view, equally entitled to be held indemnified against his liability to make compensation payments by a person whose negligence has caused the disability, but if the deemed employer has suffered no loss the indemnity is academic. Similarly, by s 175(2), the deemed employer is entitled to indemnity from the true employer, but if the true employer has paid all compensation under the Act, the indemnity is academic.
114 I conclude then that, where an employer is claiming pursuant to s 93, the term "employer" refers to him and the deemed employer is included in the description "some person other than the employer". Where a deemed employer is claiming pursuant to s 93, he is within the description "employer" and "some person other than the employer" includes the true employer. Both may claim under the section.
115 In the case of the employer claiming pursuant to s 93 and in circumstances where, as here, there has been negligence by both the employer and the deemed employer, the employer is entitled to be indemnified by the deemed employer but the extent of that indemnity is reduced by the proportion of the employer's negligence and that of the worker. The deemed employer is entitled to be indemnified by the employer pursuant to s 175 for his liability to make workers' compensation payments reduced by the extent to which he has negligently caused the disability.
116 There is no inconsistency here or tension between the two rights to indemnity. While the worker has the right to compensation payments from
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- both the true employer and the deemed employer, who are jointly and severally liable to make those payments, the deemed employer is entitled to be indemnified against liability to make those payments by the true employer in a no fault situation but, where the deemed employer has negligently caused or contributed to the disability, the true employer is entitled to make the deemed employer bear that proportion of the loss reflected by its negligence. This is surely the most just and equitable interpretation of s 93. By contrast, the defendant's interpretation would see it enjoying a complete indemnity from its liability to pay compensation and the true employer having no recourse against it even though it has been admittedly negligent and partly caused the disability giving rise to that compensation.
117 I conclude then that where an employer is seeking an indemnity pursuant to s 93 "the defendant" can include a deemed employer.
118 It follows from this reasoning that I have also rejected the defendant's submission that, if it could be liable to the plaintiff pursuant to s 93, then the plaintiff is obliged to indemnify it against that liability pursuant to s 175(2) and hence the plaintiff's claim is circular. The defendant's right to indemnity pursuant to s 175(2) is confined to its liability pursuant to make workers' compensation payments to Ms Jokich. A claim for an indemnity pursuant to s 93 is not an action to seek compensation payments for the worker and is a quite different beast.
The worker in this case having redeemed her claim against the plaintiff by registering a compromise agreement, can the plaintiff now establish that the defendant is or was under a legal liability to pay damages pursuant to s 93 of the Act?
119 In dealing with the issue above, I put to one side the question of whether the disability in this case "was caused under circumstances creating a legal liability in some person other than the employer to pay damages", the condition upon which s 93(1) depends for its application, and the challenge of determining to what extent this expression applies to s 93(2). The defendant argues that, while it did negligently cause, in part, the disability, it is not and never was under a legal liability to pay damages and therefore the plaintiff cannot claim an indemnity from it pursuant to s 93.
120 In the decision of this State's Court of Appeal in Loongana v Lime Pty Ltd and Worth [2006] WASCA 183, a third party was liable to pay damages to the worker pursuant to a strict liability statutory obligation and did so with no admission as to negligence. Steytler P noted at par 4:
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- "…under s 93(1)(b), the employer is entitled to be indemnified by the person 'whose negligence caused the disability to the worker', a concept narrower than that of a person under a 'legal liability … to pay damages' in respect of the disability (although, in practice, in the vast majority of cases the 'legal liability' will arise as a consequence of the commission of the tort of negligence)".
121 The case concerned primarily the issue of double recovery by the worker and whether s 93(1)(a) operated so as to oblige the worker to "bring to account" the payment received from the third party which, not having been shown to have been negligent, did not meet the description of "the defendant" employed in s 93(1)(b) against whom the worker's employer would have had a right of indemnity. The Court concluded that the payment received did amount to "damages" within the meaning of the expression "legal liability … to pay damages" and that those words were not to be qualified or narrowed by implying that those damages had to have arisen by negligence.
122 In the case before me, however, the plaintiff has no difficulty in establishing that the defendant has negligently caused, in part, the disability. The plaintiff and the worker have also been negligent. The issue as I see it is whether the words "the person whose negligence caused the disability to the worker" are to be qualified or narrowed by the requirement in s 93(1) that the disability "was caused under circumstances creating a legal liability in some person other than the employer to pay damages." The distinction matters in this case not because the latter is a broader category than the former, as was appreciated in Loongana v Lime Pty Ltd and Worth (supra)but because on the facts of this case the defendant may be negligent, but not liable to pay damages.
123 Wheeler JA in Loongana v Lime Pty Ltd and Worth at [36] stated:
"Section 92 is concerned with the position where the worker brings an action against either his employer or some other person, or both. Section 93 is not necessarily concerned with a situation where an action is brought by the worker against anyone, although certain subsections are capable of application only if there has been such an action; for example, subs (5) applies only where the worker 'has been successful in proceedings' against a third party defendant".
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124 At par 47 in the same decision, her Honour stated:
"In the broad, then, the way I would read s 93(1) is as follows. The words 'creating a legal liability in some person' have effect in relation to subpar (a). Where there is such a liability, and the worker takes proceedings, and the worker 'recovers' damages, the worker would be entitled to further workers' compensation only where the amount of damages recovered was smaller than the amount of workers' compensation properly payable by the employer, assuming some compensation remained unpaid. Under subpar (b), it is necessary for the employer to identify a person who is negligent, rather than a person who has a legal liability of some other kind. Where a person whose negligence caused the injury is identified, then regardless of whether the worker takes proceedings, the employer is entitled to take proceedings and is entitled to be indemnified by that person to the full extent of the employer's liability to pay compensation. That is so whether the third party has paid damages to the worker or not."
125 Finally, in the same judgment, Steytler P states at par 15:
"Finally, I should mention that the appellant seems to me to be right in not contending that s 93(1)(b) has any operation in this case. It is apparent from the plain meaning of the words used in s 93(1) that the third person referred to in subpar (b) is one whose negligence caused the disability, notwithstanding that, as I have said, a wider category of persons appears to have been deliberately specified in the opening words of s 93(1). There may be sound policy reasons for including a wider range of persons in the opening words of s 93(1), so far as the operation of subpar (a) is concerned (which, as I have said, seems to me to be designed to avoid double recovery), but restricting the category of persons who are required by subpar (b) to indemnify the employer, whether or not those persons have discharged their liability to pay damages to the worker, to persons whose negligence caused the disability to the worker. That being so, there is no more justification for ignoring the words "whose negligence caused the disability" in subpar (b) than there is, in my respectful opinion, for reading down the category of third persons referred to in the opening words of s 93(1)."
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126 I have already referred above to the difficulties in interpreting s 93(2) which ought, in the manner in which it has been drafted, to stand alone from s 93(1). It does not. In order to give some sense to s 93(2), s 93(1)(b) at least must be called upon. The expression "the defendant" where it twice appears in s 93(2) is nowhere defined in that section, but is clearly intended to have the meaning given to that expression in s 93(1)(b). Further, the expression "the extent of the indemnity of the employer" where it twice appears in s 93(2) bears no meaning, except by recourse to s 93(1)(b).
127 The reference to "the defendant" in s 93(2)(a) and (b), s 93(4) and s 93(5) all contemplate the involvement of a person whose negligence has caused the disability to the worker and the worker's entitlement, whether successful or not, to recover damages against that person.Consequently, while there is no reference to s 93(2) to the defendant as being a person who was under a legal liability at some stage to pay damages, by necessarily having recourse to the definition of "the defendant" in s 93(1)(b) one is also lead to the defendant potentially having "discharged his liability to pay damages." That expression can only be a reference to the requirement in s 93(1) that the disability "was caused under circumstances creating a legal liability in some person other than the employer to pay damages."
128 I therefore conclude one must import into s 93(2) the first portion of s 93(1) and that "the defendant," by whom the employer is entitled to be indemnified, must be a person in whom was created a legal liability to pay damages, whether or not he has discharged his liability to pay damages to the worker.
129 That interpretation, in my view, is what was intended by the draftsman of s 93. It follows in this case that the plaintiff can only succeed in claiming an indemnity from the defendant pursuant to s 93(2) if it can establish that the disability was caused under circumstances creating a legal liability in the defendant to pay damages in respect thereof. I further interpret that to mean damages to the worker.
130 It is accepted that the defendant was negligent and did in part cause the accident. Pursuant to s 93C of the Act, if Pt IV Div 2 applies, a court is not to award damages to a person contrary to that division. Pursuant to s 93B(1) the division applies to the awarding of damages against a worker's employer independently of the Act in respect of a disability suffered by a worker where it was caused by the negligence of the employer and compensation has been paid or is payable under this Act.
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131 Following the decision of the Supreme Court in Hewitt v Benale Pty Ltd this section applies to a deemed employer. In 2004 the section was amended to exclude its application to a deemed employer, however as the accident in this case occurred on 27 January 2000 and as I am considering the circumstances in which the disability was caused, I am dealing with the law as it then stood.
132 Section 93E(3) provides:
"Damages can only be awarded if –
(a) it is agreed or determined that the degree of disability is not less than 30% and that agreement or determination is recorded in accordance with the regulations; or
(b) the worker has a significant disability and elects, in the prescribed manner, to retain the right to seek damages and the election is registered in accordance with the regulations."
133 Section 93E(4) provides:
"For the purposes of subsection (3)(b) the worker has a significant disability if it is agreed or determined that the degree of disability is not less than 16% and that agreement or determination is recorded in accordance with the regulations".
134 Pursuant to s 67(2) and s 76 of the Act, Ms Jokich entered into an agreement with the plaintiff recorded pursuant to s 76 by which she "releases and forever discharges the employer from all claims and demands which the worker now had or, but for the execution of this agreement, could or might have had against the employer under the Act in any respect to the disability to the worker" and accepted a lump sum including weekly payments of compensation by way of redemption of liability to make future weekly payments. In the form 15D "statement of the consequences of the recording of a memorandum of agreement" (see s 76(2)(a) of the Act) Ms Jokich acknowledged that she:
"forfeits any entitlement he/she may have to pursue common law damages under s 93D of the Act, in respect of the injury referred to in the agreement. THAT IS, in general terms, the worker forfeits any entitlement they have to sue their employer for civil damages".
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135 Ms Jokich has lost any right, by virtue of this agreement, to pursue the plaintiff for workers' compensation payments and to sue the plaintiff for damages independently of the Act. Her right to workers' compensation payments having been redeemed, it follows that she also has now no entitlement to workers' compensation payments from any deemed employer, her right to such payments having been redeemed. Does such an agreement impact upon her right to commence damages against the defendant in this case, being her deemed employer, independently of the Act? In my view, par 5 of the form 15D accurately records the position, namely that Ms Jokich has forfeited any entitlement she may have had to pursue common law damages under s 93D of the Act. Section 93E(13) provides:
"If the liability for an incapacity resulting from the disability has been redeemed under s 67, damages are not to be awarded in respect of the disability."
136 The section is very broad in its terms and does not qualify its operation by reference to a right to seek damages against the employer only.
137 Ms Jokich never having crossed the threshold provisions contained within s 93E(3) and s 93E(4) she cannot now do so by virtue of the agreement reached. By virtue of those constraints upon seeking damages against an employer, which includes a deemed employer by virtue of the decision in Hewitt v Benale it follows that, although the defendant was negligent, it was not liable to pay damages to Ms Jokich unless and until she crossed the threshold provisions, which she did not. Even if the memorandum of agreement was binding upon Ms Jokich only in relation to her claim against the plaintiff, the fact remains that she has not and will not ever cross the threshold provisions as against the defendant.
138 In Pinnacle Services Pty Ltd v Downsborough [2005] WASCA 142 Pullin JA stated at par 26:
"Section 93E(13) is clear in its terms. It says that if the liability for an incapacity resulting from the disability has been redeemed under s 67, then damages are not to be awarded in respect of a disability. The liability had been redeemed. So if s 93E(13) applies, then that was the end of the matter; damages could not be awarded; proceedings were therefore futile …"
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139 In that case the proceedings were issued against the same employer who was a party to the memorandum of agreement, however I conclude the same principle applies here.
140 The plaintiff's submission is that s 93C of the Act only prevents the awarding of damages, but does not prevent the commencement of proceedings. I accept that submission, particularly as the Act had been amended to remove the previous requirement to seek leave before commencing proceedings and possible reasons for commencing proceedings prior to crossing the threshold requirements were discussed in the case of Western Metals Zinc NL v Wesfarmers Transport Ltd and Aanor [2003] WASCA 152 at [29] – [30].
141 The plaintiff's submission must go further, however, than establishing that Ms Jokich could have commenced proceedings. A similar argument was mounted in Australian Turf Industries Pty Ltd v Dalet Pty Ltd, unreported; FCt SCt of WA; Library No 980658A; 21 August 1998 but was not decided finally by the Court (see the discussion of Ipp J at p 11). In my view the submission is answered by the express terms of s 93(1) of the Act. In both the first paragraph and in subparagraph (b) of that section the emphasis is on the defendant's liability "to pay damages." What is contemplated, then, is proceedings which will culminate in an order that the defendant part with money, rather than the pyrrhic victory of an order for judgment with no attendant order for damages.
142 Because it was very briefly raised in submissions, I will mention that I also conclude that the defendant cannot in my view be liable to make any contribution under the Contribution Act. The plaintiff does not contend otherwise.
143 It follows that, while the disability in this case was caused under circumstances in which the defendant was negligent, the disability was not caused under circumstances creating a legal liability in the defendant to pay damages to the worker. The plaintiff therefore is not entitled to be indemnified by the defendant pursuant to s 93(2). I conclude that the plaintiff's action fails.
144 In case I am wrong in my conclusion that the plaintiff cannot establish that the defendant was under a liability to pay damages to the worker, I will give consideration to the last issue before me, namely, the contractual clauses.
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- Does the defendant escape a liability to indemnify the defendant by virtue of cl 16.1 and 16.4 of the contract?
145 Under the heading "Indemnification", cl 16.1 of the contract provides:
"16.1 The Contractor indemnifies and will keep indemnified Westrail at all times against all and any liability or loss and all costs, charges and expenses arising from, any personal injury to, or the death of, any person or any damage to or loss of any property of Westrail or any other person or from anything else, however occurring, (and whether or not involving negligence) caused by or resulting from any action or omission of the Contractor or its employees, sub-contractors or agents in connection with the Services or this agreement, including:
(a) a failure by the Contractor to perform any of its obligations under this agreement or to comply with any requirement under this agreement, including any direction properly given by a Westrail Representative; or
(b) any negligent or reckless act or omission of the Contractor or its employees, sub-contractors or agents in the performance or non-performance of any of the Contractor's obligations under this agreement or otherwise in carrying out the Services, including, if applicable, the commissioning of any works or projects in connection with the Services; or
(c) the use of any defective or unsuitable plant, equipment, tools, spare parts or other materials; or
(d) the unauthorised or unlawful use by the Contractor of any Confidential Information, including intellectual property rights, in connection with the performance of its obligations under this agreement."
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146 Under the heading "Insurance of Employees" cl 16.4 of the contract provides:
"16.4 The Contractor indemnifies and will keep indemnified Westrail at all times against any claims, whether under any statute or at common law, arising from any injury to or the death of any employee of the Contractor caused by, contributed or arising from any act or omission of the Contractor or the Contractor's employees, servants or agents".
147 The plaintiff argues that cl 16.1 has no application, being directed to personal injury to persons other than the plaintiff's employees. The plaintiff's argument is that, if the plaintiff's employees were intended to be the subject of the indemnity in cl 16.1, then cl 16.4 would not have been necessary.
148 In my view it is unnecessary for me to decide that point, because cl 16.1 has no application in any event. It obliges the plaintiff to indemnify the defendant against all liability arising from any personal injury to any person "caused by or resulting from" any action or omission of the plaintiff or its employees in connection with the agreement. It is accepted by the parties that, between them, the plaintiff and Ms Jokich were 55 per cent responsible for causing her injury and the plaintiff makes no claim against the defendant in respect of the liability for her injuries caused by its negligence or Ms Jokich's own negligence. Clause 16.1 provides no exemption to the defendant for liability or loss caused by its own actions or omissions. This interpretation is confirmed in my view by the actions or omissions of the contractor or its employees, subcontractors or agents which are inclusively listed in subparagraphs (a) to (d).
149 By contrast to cl 16.1, cl 16.4 requires the plaintiff to indemnify the defendant "against any claims" arising from any injury "caused by, contributed or arising from any act or omission of the" plaintiff or its employees. Clause 16.4 extends to claims, whether made under statute or at common law, arising from any injury to any employee of the plaintiff, including any injury "contributed or arising from any act or omission" of the plaintiff or Ms Jokich. But for the use of the expression "against any claims" and the word "contributed" I would hold the same view of cl 16.4 as I do of cl 16.1.
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150 The use of the word "contributed", however, although the sentence appears to be grammatically incorrect, is significant. I conclude that the plaintiff is by this clause obliged to indemnify the defendant against any claim arising out of injury to the plaintiff's employee, the cause of which was contributed to by the plaintiff of those for whom it was responsible. The use of the expression "against any claim" is to be contrasted to cl 16.1 which refers instead to "any liability or loss".
151 The question is whether, by being obliged to indemnify the defendant against "any claim" "arising from any injury to any employee" of the plaintiff "caused by, contributed or arising from any act or omission of" the plaintiff or Ms Jokich, the plaintiff is obliged to indemnify the defendant to the full extent of the claim, or only that extent to which it was responsible. Was it intended by this clause that the plaintiff should be obliged to indemnify the defendant against the defendant's own negligence, or does the clause intend that the plaintiff should indemnify the defendant for any claim only to the extent to which the plaintiff and its employees, servants or agents are the responsible or contributing parties?
152 The defendant concedes that, in the case of ambiguity, such a clause is to be read contra proferentem and construed against the party seeking to rely upon the indemnity clause; see NR Transport Pty Ltd v Brambles Ltd (2004) 317 CLR 424 at 438. To the extent to which the clause remains ambiguous, the principles of construction require the provisions to be construed in favour of the plaintiff.
153 Clearly the obligation on the part of the plaintiff to indemnify the defendant against any claims can only relate to claims made against the defendant. There can be no occasion for the plaintiff to indemnify the defendant against claims made upon the plaintiff. The plaintiff's claim against the defendant in this case is, in my view, a claim arising from any injury to one of its employees. Clause 16.4 does not restrict the nature of the claim arising from any injury to any employee and includes any statutory or common law claim. That includes in my view the plaintiff's statutory claim in this case against the defendant for indemnification.
154 I have reached the conclusion that cl 16.4 was intended to provide a complete indemnity to the defendant wherever a claim arose from an injury to one of the plaintiff's employees where the injury had been caused by or arisen from an act of the plaintiff or when the plaintiff had contributed to the cause of the injury, even if it be the case that the defendant had also contributed to the injury. Were it otherwise, in my view the clause would have no meaning and effect within the contract.
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- The defendant would not in any event be liable at common law for injury to the plaintiff's employee where no act or omission on its part or those of anyone for whom it was responsible had caused or contributed to the injury. The defendant's statutory liability to make workers' compensation payments is already the subject of a right to indemnity pursuant to s 175(2) of the Act.
155 In Hacai Pty Ltd v Rigel Kent Pty Ltd & Ors, unreported; FCt SCt of WA; Library No 960450A; 16 August 1996, Murray J, with whom Malcolm CJ and Owen J agreed, placed a similar interpretation upon an indemnity clause which provided:
"That the Lessee will indemnify the Lessor from and against all actions causes of action losses claims demands costs and expenses for which the Lessor shall or may be or may become liable in respect of arising from … loss damage or injury to property or person occasioned or contributed to by any act omission neglect or default of the Lessee."
156 At p 14 Murray J stated:
"Without wishing to express a concluded view upon the clause, it does seem to me that its intention and effect is that, whether or not the respondents as lessor were themselves negligent, it was agreed by the appellant as lessee that it would provide a full indemnity in respect of claims of the kind mentioned where it was, itself, negligent or otherwise under a legal liability in that regard. The way in which the provision might impact upon a claim for contribution by the appellant was not argued before us."
157 Although the comments are obiter dicta, they support my interpretation of a clause similar in many respects and, significantly, containing the expression "contributed to".
158 It follows then that if I am wrong in my conclusion that the defendant was not liable to indemnify the plaintiff pursuant to s 93 of the Act, I would further hold that cl 16.4 of the contract between the parties entitles the defendant to be fully indemnified by the plaintiff against any claim made upon it arising from any injury to one of the plaintiff's employees. I consider that the plaintiff's own claim pursuant to s 93 is such a claim.
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159 This view is also supported by the same decision. At p 9 Murray J found that the appellant's claim against the respondents for contribution, as a joint tortfeasor, towards the damages paid to the injured worker was a claim "arising out of" the injuries suffered by the worker. Similarly in my view the plaintiff's claim for an indemnity is a claim under a statute arising from the injury. Had the plaintiff been able to make good its claim for an indemnity pursuant to s 93 of the Act, the defendant's corresponding right to an indemnity against such an action would entirely undermine the claim of the plaintiff.
160 For these reasons I dismiss the plaintiff's claim.
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