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Esso Australia Ltd v Victorian Workcover Authority

Esso Australia Ltd v Victorian Workcover Authority

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SUPREME COURT OF VICTORIA

COURT OF APPEAL Not Restricted

No. 8279 of 1995

ESSO AUSTRALIA LTD
Appellant
v.
VICTORIAN WORKCOVER AUTHORITY
And F.A.I. WORKERS’ COMPENSATION (VIC.) PTY. LTD.	Firstnamed Respondent
Secondnamed Respondent

No. 8050 of 1998

VICTORIAN WORKCOVER AUTHORITY and

APRONA PTY. LTD. and
MMI WORKERS’ COMPENSATION (VIC.) LTD.

Appellants

COATS PATON PTY. LTD.

Respondent

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JUDGES:	WINNEKE, P., TADGELL and CHERNOV, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	17 April 2000
DATE OF JUDGMENT:	19 April 2000
MEDIUM NEUTRAL CITATION:	[2000] VSCA 74

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Accident Compensation – Claim for indemnity pursuant to Accident Compensation Act 1985 (s.138) in respect of compensation payments “paid or payable” – Nature of the entitlement to indemnity discussed – Whether notional assessment of damages pursuant to s.138(3)(b) of the Act contemplates assessment of “damages in nature of interest” – Whether court entitled to award penalty interest pursuant to s.60 of Supreme Court Act on amounts of compensation recovered – Whether the action is a “proceeding for the recovery of debt or damages” – s.138 Accident Compensation Act 1985; s.60(1) of Supreme Court Act 1986.

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APPEARANCES:

Counsel

Solicitors

No. 8279 of 1995
For the Appellant

Mr. D.E. Curtain Q.C. and
Mr. G.A. Lewis

Middletons Moore & Bevins

For the Respondents

No.8050 of 1998
For the Appellants

For the Respondent

Mr. R.P. Gorton Q.C. and Mr. M. Wheelahan

Mr. R.P. Gorton Q.C. and Mr. M. Fleming

Mr. G.A. Lewis

Wisewoulds

Gadens Lawyers

Phillips Fox

WINNEKE, P.:

These two appeals raise similar questions relating to the proper interpretation of s.138 of the Accident Compensation Act 1985 ("the Act"). The purpose of the section, which is headed "Indemnity by Third Party" is to confer an entitlement to indemnity upon employers or insurers who have paid or have a liability to pay compensation benefits under the Act to injured workers. If those workers have suffered injury in circumstances creating a legal liability in the third party to pay damages to the workers in respect of it, then s.138 requires that negligent third party to indemnify the employer or insurer against payments made or to be made in accordance with the terms of the section.

The section at the relevant times was in the following form:

"Indemnity by third party
(1)Where an injury or a death for which compensation has been paid, or is or may be payable, by the Authority, an authorized insurer, a self-insurer or an employer was caused under circumstances creating a legal liability in a third party to pay damages or that would, but for section 134A, create such a liability in respect of the injury or death, the Authority, authorized insurer, self-insurer or employer is entitled to be indemnified by the third party in accordance with this section.
(2)In determining for the purposes of sub-section (1) whether an injury or death was caused under circumstances creating a legal liability in a third party to pay damages in respect of the injury or death, Division 9 of Part IV must not be taken…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] VSCA 74
Decision Date: 19 April 2000

CaseChat Overview and Summary

Esso Australia Ltd sought a declaration that it was entitled to indemnity from the Victorian Workcover Authority under section 138 of the Accident Compensation Act 1985, in respect of compensation payments made to an employee. The dispute centred around the nature of the entitlement to indemnity, particularly whether the notional assessment of damages under section 138(3)(b) of the Act included an assessment of damages in the form of interest. Additionally, Esso argued for the entitlement to penalty interest pursuant to section 60 of the Supreme Court Act 1986 on the amounts of compensation recovered, and whether the action constituted a “proceeding for the recovery of debt or damages”.

The court was required to interpret the scope of indemnity under section 138 of the Accident Compensation Act, specifically whether it included interest on compensation payments. The court also needed to determine if the action was a proceeding for the recovery of debt or damages, which would entitle Esso to penalty interest under section 60 of the Supreme Court Act. The central issue was whether the indemnity sought could be considered a debt or damages for the purposes of attracting penalty interest.

The court held that the indemnity claim was not a proceeding for the recovery of debt or damages, and therefore, penalty interest was not applicable. The court found that the notional assessment of damages under section 138(3)(b) of the Act did not include damages in the nature of interest. Consequently, Esso's entitlement to indemnity did not extend to interest on the compensation payments. The court clarified that the indemnity claim was a statutory remedy rather than a debt or damages claim, and thus, penalty interest was not available.

The court ruled in favour of the Workcover Authority, stating that Esso was not entitled to penalty interest on the indemnity claim and that the indemnity did not include damages in the form of interest. The final orders were that Esso's claim for indemnity was limited to the compensation payments made to the employee, without any additional interest or penalty interest.

Orders