FAI Traders Insurance Co Ltd v Price

[1999] NSWCA 425

CITATION:	FAI Traders Insurance Co Ltd v Price & Ors [1999] NSWCA 425
FILE NUMBER(S):	CA 40005/98
HEARING DATE(S):	17 September 1999
JUDGMENT DATE:	10 December 1999
PARTIES :	Appellant- FAI Traders Insurance Co Ltd Respondent 1- Peter Price Respondent 2- WorkCover Authority Respondent 3- Tommy Tortoise Removals
JUDGMENT OF:	Meagher JA at 1; Stein JA at 2; Davies AJA at 3

LOWER COURT JURISDICTION:	Compensation Court
LOWER COURT FILE NUMBER(S) :	CC1429/94
LOWER COURT JUDICIAL OFFICER:	Moran CCJ

COUNSEL:	Appellant: R.E. Williams QC, G. Linney Respondent1( Price): J.D Hislop QC Respondent 2 (WorkCover): S.Grawshaw SC & F Davis Respondent 3 (Tommy Tortoise):S. G. Campbell
SOLICITORS:	Appellant: Hunt & Hunt Respondent 1 (Price):Carroll & O'Dea Respondent 2 (Workcover):Nick Vrabac Respondent 3 (Tommy Tortoise) : A.O. Ellison & Co.
CATCHWORDS:	Personal injury; in the course of employment; territorial restriction of employer's insurance policy; extent of liability of NSW Workcover authority
ACTS CITED:	Workers Compensation Act 1987 ( NSW) Workers Compensation Act 1951 (ACT) Workers' Compensation Act 1928 (VIC) Workers Compensation Legislation Act 1995(NSW) Compensation Court Act 1984(NSW)
CASES CITED:	Union Steamship Company of Australia Pty Ltd v King (1988)CLR 1 Pearce v Florenca (1976)135 CLR 507 Mynott v Barnard (1939)62 CLR 68 Awdejew v Walkerden Bros. (1958)76 WN 176 WorkCover Authority (NSW) v Billpat Holdings (1995)11 NSWCCR 565 GRE Workers' Compensation Insurance (NSW) Ltdv Nohil Pty Ltd (1996)13 NSWCCR 74 Liverpool & London Globe Insurance Co. Ltd v J.W. Deaves Pty Ltd [1971]2 NSWLR 131
DECISION:	1. That the appeal by FAI Traders Insurance Company Limited and the cross-appeal by Peter Price be allowed; 2. That the following awards and orders be set aside; the award in favour of Tommy Tortoise Removals (Aust) Pty Ltd against FAI Traders Insurance Company Limited; the order that FAI Traders Insurance Company Limited pay the costs of the proceedings of Tommy Tortoise Removals (Aust) Pty Ltd; the award in favour of the WorkCover Authority of NSW; 3. that in lieu thereof, it be ordered; that, subject to the hearing and determination of the cross-appeal brought by Tommy Tortoise Removals (Aust) Pty Ltd, there be an award in favour of Peter Price against the WorkCover Authority of NSW; that the third party proceedings against FAI Traders Insurance be dismissed.; that Tommmy Tortoise Removals (Aust) Pty Ltd pay the costs below of FAI Traders Insurance Company Limited.; 4. That Tommy Tortoise Removals (Aust) Pty Ltd pay the costs of the appeal of FAI Traders Insurance Company Limited and of Peter Price and that no order be made as to the costs of the appael of the WorkCover Authority of NSW; 5. That the cross-appeal by Tommy Tortoise Removals (Aust) Pty Ltd be reserved; 6.That liberty to apply be reserved; Council should bring in short minutes within 7 days

IN THE SUPREME COURT
OF NEW SOUTH WALES
SYDNEY REGISTY
COURT OF APPEAL

CC No. 1429 of 1994
CA No 40005 of 1998
MEAGHER JA
STEIN JA
DAVIES AJA

10 NOVEMBER 1999

FAI TRADERS INSURANCE CO Limited V Peter PRICE & ORS

PERSONAL INJURY-IN THE COURSE OF EMPLOYMENT-TERRITORIAL RESTRICTION OF EMPLOYER’S INSURANCE POLICY -EXTENT OF LIABILITY OF NSW WORKCOVER AUTHORITY-WORKERS COMPENSATION ACT 1987 (NSW)-WORKERS COMPENSATION ACT 1951 (ACT)

Tommy Tortoise Removals (Aust) Pty Ltd was a transport company located in Canberra. The company carried out removals in the Australian Capital Territory, New South Wales and Queensland. Peter Price was an employee from Sydney. Tommy Tortoise had taken out a workers’ compensation policy insurance with the appellants pursuant to the Workers’ Compensation Act 1951 (ACT) but did not have any insurance under the Workers’ Compensation Act 1987 (NSW).
During the course of his employment, Peter Price travelled to New South Wales where he was injured while descending from his prime mover.
Peter Price applied for compensation under the under the New South Wales Act. His claim to the New South Wales WorkCover Authority failed. He then sought relief from the NSW Compensation Court. This court found that FAI Traders, as insurers of Tommy Tortoise, were liable to pay compensation for the injuries suffered by Peter Price. FAI Traders appeals this decision.
On of the subjects of the appeal became whether the insurance policy was valid in NSW. Division 6, Part 4 of the NSW Worker’s Compensation Act provides a scheme where interstate workers can claim from the WorkCover Authority even though their employer is not insured under the NSW Act.
FAI Traders argued that applying Division 6 of the act to an insured whose policy was issued under the Australian Capital Territory Act was ultra vires the jurisdiction of the NSW Worker’s Compensation Act 1987.
A cross-appeal was filed by Tommy Tortoise against Peter Price and FAI Traders. Tommy Tortoise argued that at the time the worker was injured he was not in the course of his ordinary employment and therefore not entitled to compensation. In addition Tommy Tortoise argued that the insurance policy with FAI Traders indemnified it for all workplace injuries, no matter where they occurred. This is because the insurance proposal indemnified the employer against all civil as well as statute based liability and did not limit the territorial cover sought.

Held: per Davies AJA (Meagher JA and Stein JA agreeing):
1. S144(2)(b) of the Workers’ Compensation Act 1987 (NSW) only refers to insurance of parties (other than employers) who may be liable to pay compensation to the employee under the NSW Act. As Tommy Tortoise was an employer and was insured under the ACT Act, S144 had no operation on the policy.
2. The jurisdiction of the Workers Compensation Act 1987 (NSW) does not extend to other territories. The NSW Compensation Court acted ultra vires in hearing a matter which concerned an insurance policy issued in the Australian Capital Territory.
3. If it is outside the jurisdiction of the NSW Compensation Court to make a ruling on the FAI Traders’ policy, the Court of Appeal cannot adjudicate on any issue arising out of that policy.
4. The decision of the WorkCover Authority against Peter Price is reversed. In its place an award in favour of Peter Price against Tommy Tortoise and the WorkCover Authority is substituted.
5. The issues arising out of the cross-appeal to be heard at a later date.

ORDERS

1. That the appeal by FAI Traders Insurance Company Limited and the cross-appeal by Peter Price be allowed.
2. That the following awards and orders be set aside:
the award in favour of Tommy Tortoise removals (Aust) Pty Ltd against FAI Traders Insurance Company Limited;
the order that FAI Traders Insurance Company Limited pay the costs of the proceedings of Tommy Tortoise Removals (Aust) Pty Ltd;
the award in favour of the WorkCover Authority of NSW.
3. That, in lieu thereof, it be ordered:
that, subject to the hearing and determination of the cross-appeal brought by Tommy Tortoise Removals (Aust) Pty Ltd, there be an award in favour of Peter Price against the WorkCover Authority of NSW;
that the third party proceedings against FAI Traders Insurance Company Limited be dismissed;
that Tommy Tortoise Removals (Aust) Pty Ltd pay the costs below of FAI Traders Insurance Company Limited.
4. That Tommy Tortoise Removals (Aust) Pty Ltd pay the costs of the appeal of FAI Traders Insurance Company Limited and of Peter Price and that no order be made as to the costs of the appeal of the WorkCover Authority of NSW.
5. That the cross-appeal by Tommy Tortoise Removals (Aust) Pty Ltd be reserved.
6. That liberty to apply be reserved.

- 11 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40005/98
CC 1429/94

MEAGHER JA
STEIN JA
DAVIES AJA

10 DECEMBER 1999


FAI TRADERS INSURANCE COMPANY LIMITED v Peter PRICE & ORS


JUDGMENT



1    MEAGHER JA: I agree with the judgment of Davies AJA.

2    STEIN JA : I agree with the judgment of Davies AJA and the orders he proposes.

3    DAVIES AJA: Peter Price was an employee of Tommy Tortoise Removals (Aust) Pty Ltd (“Tommy Tortoise”), a transport company having its headquarters in Canberra in the Australian Capital Territory and carrying on business not only in that Territory but also in New South Wales and Queensland. Mr Price, whose home was in Sydney, was injured when stepping down from the cabin of the prime mover of the vehicle he had driven in the course of his employment. He applied to the Compensation Court of New South Wales for a determination under the Workers Compensation Act 1987 (“the NSW Act”). On 11 December 1997, a Judge of that Court made an award in favour of Mr Price. A cross-appeal, brought by Tommy Tortoise and challenging the award on the basis that the relevant injury did not arise in the course of Mr Price’s employment, has been reserved for future consideration.

4    The issue which is now under consideration has arisen from the fact that Tommy Tortoise had taken out a workers’ compensation policy under the Workers’ Compensation Act 1951 (ACT) (“the ACT Act”) with FAI Traders Insurance Company Limited (“FAI Traders”) but did not hold a policy issued under the NSW Act.

The Territorial Operation of Workers’ Compensation Legislation


5    In Union Steamship Company of Australia Pty Ltd v King (1988) 166 CLR 1, Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ examined the powers which State Parliaments have to enact laws having extraterritorial effect. Their Honours pointed out that earlier views that colonial legislatures were incompetent to enact such legislation had been discarded. Their Honours said, at p 12, that the words “peace, order and good government” in State constitutions were now the source of the territorial limitations which exist in relation to the Parliaments of the States. At p 14, their Honours expressed their agreement with the comments of Gibbs J in Pearce v Florenca (1976) 135 CLR 507 at 518 that the requirement for a relevant connection between the circumstances on which the legislation operated and the State should be liberally applied and that even a remote and general connection between the subject-matter of the legislation and the State would suffice.

6    However, that point does not solve the issue as to the ambit of a particular State statute. This must be determined having regard to the nature and subject-matter of the legislation and the terms used. For obvious reasons, most State legislation is regarded as having an operation limited to the territory of the State.

7    In Mynott v Barnard (1939) 62 CLR 68, it was held that, where a worker had been employed to work on a building site in Tocumwal in New South Wales and was injured in the course of his employment at that site and later died, his dependants were unable to claim under the Workers’ Compensation Act 1928 (VIC) notwithstanding that the contract of employment had been entered into in Victoria and that the worker and the building contractor were both domiciled and resident in Victoria. At p 86, Latham CJ said:
“The Act is directed towards providing compensation for injury or death resulting from accidents to employed persons. If those accidents take place in Victoria there is every reason why the Act should be held to be applicable. If the object and character of the Act has been correctly described in what I have said, there is no apparent reason for regarding its general provisions as applicable to accidents which take place beyond Victoria.”

Rich, Starke and McTiernan JJ expressed like views.


8    In Mynott v Barnard at p 91, Dixon J agreed in the result, saying, “The general words of the statute must obviously receive an application restricted territorially” . However, his Honour considered that the place where the employment was located was the proper test for the application of the Act, and that occasional transitory work beyond the territory of the State might reasonably be said to be work performed in the course of employment in that territory: see pp 92-3. It is interesting to note that s 7A of the ACT Act, as recently amended, and s 9 of the NSW Act, as proposed to be amended by the Workers Compensation Legislation Act 1995 but which has not yet come into force, both adopt as a criterion the place where the employment was located.

9    On the basis of the approach of Dixon J in Mynott v Barnard , Tommy Tortoise proposes to argue in its cross-claim, which has been reserved for future consideration, that the Compensation Court of New South Wales did not have jurisdiction to hear Mr Price’s application, it being alleged that the location of Mr Price’s employment was in Canberra in the Australian Capital Territory. The WorkCover Authority will wish to argue that Awdejew v Walkerden Bros. (1958) 76 WN 176 and WorkCover Authority (NSW) v Billpat Holdings Pty Ltd (1995) 11 NSWCCR 565 were wrongly decided. As this matter is to be considered in the future, I do no more than observe that it would be one thing to say that a statute of a State or Territory may have an operation beyond the limits of its territory because of an event or events which occurred within its territory, and quite another thing to say that the NSW Act, as it read at the relevant time, did not apply and that the Compensation Court of New South Wales did not have jurisdiction to award compensation in the circumstance that Mr Price’s injury occurred in New South Wales in the course of his employment.

10    At the time of Mr Price’s injury, the ACT Act contained an express provision extending its operation beyond the limits of the Australian Capital Territory. Section 6(8) provided:
(8) Where an employer has a place of employment in the Territory, or is for the time being present in the Territory, and there employs a worker whose employment under a contract of service or apprenticeship with that employer is not wholly carried out in the Territory and is in part carried out in any State or in any other Territory, then, if the worker, while in that State or other Territory, sustains personal injury under circumstances which, had the injury been sustained in the Territory, would entitle the worker to compensation in accordance with this Act, the worker’s employer shall, subject to this Act, be liable to pay compensation in accordance with this Act as if the personal injury had arisen out of or in the course of the worker’s employment in the Territory.

A similar provision appeared at the time in s 13 of the NSW Act.

11 Mr Price would have been entitled to seek compensation under the ACT Act. Had he done so and had compensation been awarded in the Australian Capital Territory, FAI Traders would have been bound to indemnify Tommy Tortoise in respect of that liability. However, Mr Price did not apply for compensation under the ACT Act. He applied for compensation under the NSW Act and was awarded compensation under that Act.

The Claim Against the WorkCover Authority


12    The claim against the WorkCover Authority must be considered on the assumption that the Compensation Court of New South Wales had jurisdiction to hear and determine Mr Price’s claim. The issue raised in the cross-claim will be considered in the future, if the cross-claim is pressed.

13 The NSW Act provided for compulsory workers’ compensation insurance and required that that insurance was to be provided by licensed insurers. Section 155(1) of the NSW Act provided, inter alia:
(1) An employer (other than a self-insurer) shall obtain from a licensed insurer, and maintain in force, a policy of insurance that complies with this Division for the full amount of the employer’s liability under this Act in respect of all workers employed by the employer …

Tommy Tortoise was not insured under the NSW Act and FAI Traders was not a licensed insurer in New South Wales.

14 Division 6 of Part 4 of the NSW Act established a scheme called the Uninsured Liability and Indemnity Scheme, administered by the WorkCover Authority, which operated when an employer was not insured in accordance with the NSW Act. Section 140(1) provided, inter alia:
(1) A claim may be made under the Scheme by any person who considers he or she has a claim for compensation under this Act against an employer in respect of an injury to a worker, if the employer:

(a) had not obtained, or was not maintaining in force, a policy of insurance for the full amount of the employer’s liability under this Act in respect of the injured worker at the relevant time, …

Section 144 provided, inter alia:

(1) A claimant under the Scheme who is dissatisfied with a decision of the Authority in respect of the claim may apply to the Compensation Court for a determination of the claim.

(2) If such an application is made:


(a) the applicant shall name the employer by whom the applicant alleges compensation is payable and the Authority as respondents to the proceedings, and

(b) the Authority may, by service of a notice on any person who, in the opinion of the Authority, may be liable to pay to the applicant compensation under this Act (or may have insured that liability), join that person as a party to the proceedings.

(3) The Compensation Court may hear and determine any such application and may make such orders in relation to the application as the Compensation Court thinks fit.

15 Mr Price made a claim on the WorkCover Authority. That claim not having been met by the WorkCover Authority, Mr Price instituted proceedings in the Compensation Court seeking a determination in his favour. He joined Tommy Tortoise, another company and the WorkCover Authority as respondents. Tommy Tortoise joined FAI Traders as a party alleging that it had insured the liability to pay Mr Price compensation under the NSW Act. The judgment in GRE Workers’ Compensation Insurance (NSW) Ltd v Nohil Pty Ltd (1996) 13 NSWCCR 74 establishes that the procedural irregularity whereby the joinder was made by the employer rather than the Authority does not matter.

16    An issue in this case is whether the words in s 144(2)(b) “or may have insured that liability” referred to insurance under the Act or to any insurance which may have covered the liability.

17 In my opinion, the reference in s 144(2)(b) to insurance was a reference to insurance under the NSW Act indemnifying a person other than the employer who may have been liable to pay to the applicant compensation under the NSW Act. That is because, first, the reference to insurance is in the context, clearly a reference to insurance under the NSW Act. Secondly, by reason of s 144(2)(a), the employer will already be a party to the proceedings. Thirdly, the operation of Division 6 is predicated upon the fact, referred to in s 140(1), that the employer had not obtained or had not maintained in force a policy of insurance for the full amount of the employer’s liability under the Act. Section 144(2)(b) enabled the joining in the proceedings of a person other than the employer who may have been liable to pay compensation under the NSW Act or the insurer of that person.

18 This interpretation was confirmed by s 145 of the NSW Act which specified action which the WorkCover Authority may have taken against an employer or an insurer under the NSW Act of the employer. Section 145(3) provided that a person who had been given notice under s 145(1) by the WorkCover Authority may have applied to the Compensation Court for a determination of its liability under the NSW Act. Section 145, not s 144(2)(b), was the provision that dealt with the situation of the insurer of the employer.

19 As FAI Traders issued its policy under the ACT Act and not under the NSW Act and as it was not alleged that FAI Traders was an insurer under the NSW Act, the insurance which Tommy Tortoise had taken out with FAI Traders was irrelevant to the operation of Division 6 of the NSW Act.

20 In the circumstance that Tommy Tortoise had not obtained and was not maintaining in force a policy of insurance under the NSW Act, Mr Price was entitled under Division 6 to an award against the WorkCover Authority. The trial Judge erred in law in dismissing the claim against the WorkCover Authority and his award in favour of the Authority must be set aside.

Jurisdiction of the Compensation Court


21 It follows from the discussion in the preceding section that there was no relevant issue as raised under Division 6 of Part 4 of the NSW Act for the consideration of the Compensation Court.

22 Section 107 of the NSW Act specified the general jurisdiction of the Compensation Court. It read:
Subject to this Act and the Compensation Court Act 1984 , the Compensation Court has exclusive jurisdiction to examine, hear and determine all matters arising under this Act (except Part 5).

In my opinion, the issue as to whether the policy issued by FAI Traders under the ACT Act indemnified Tommy Tortoise in relation to workers’ compensation payable under the NSW Act was not a matter arising under the NSW Act. It was a matter arising under the general law of contract and under the ACT Act, not under the statutory scheme established by the NSW Act. In my opinion, neither Division 6 of Part 4 of the NSW Act nor s 107 of that Act conferred jurisdiction upon the Compensation Court to consider and determine the ambit of operation of that policy of insurance: cf. Liverpool & London & Globe Insurance Co. Ltd v J. W. Deaves Pty Ltd [1971] 2 NSWLR 131.

23 It follows that the orders made by the trial Judge in favour of Tommy Tortoise against FAI Traders must be set aside. As it was not contended that the relevant policy of insurance was a policy of insurance under the NSW Act, the Compensation Court had no jurisdiction to determine its meaning and effect.

The FAI Traders’ Policy


24    The issue has been debated as to whether the words, “liability independently of the Act for any injury” in the FAI Traders’ policy encompassed all liability, both Common Law and statutory, in relation to the injury of a worker, wherever occurring, or whether those words referred to liability other than workers’ compensation liability. Also debated was an issue as to the geographical ambit of those words in the policy.

25 As the Compensation Court had no jurisdiction to rule upon those issues and as this is an appeal brought under s 32 of the Compensation Court Act 1984 on a point of law raised in the proceedings before the Compensation Court, it seems to me that any view expressed by this Court would be advisory only. If the Compensation Court had no jurisdiction to rule upon the issue, this Court has no jurisdiction in the appeal to rule upon it. In the circumstances, it seems to me to be inappropriate to consider the issue.

Orders

26    The following orders would appear to be appropriate:
1. That the appeal by FAI Traders Insurance Company Limited and the cross-appeal by Peter Price be allowed.
2. That the following awards and orders be set aside:
* the award in favour of Tommy Tortoise Removals (Aust) Pty Ltd against FAI Traders Insurance Company Limited;
* the order that FAI Traders Insurance Company Limited pay the costs of the proceedings of Tommy Tortoise Removals (Aust) Pty Ltd;
* the award in favour of the WorkCover Authority of NSW.
3. That, in lieu thereof, it be ordered:
* that, subject to the hearing and determination of the cross-appeal brought by Tommy Tortoise Removals (Aust) Pty Ltd, there be an award in favour of Peter Price against the WorkCover Authority of NSW;
* that the third party proceedings against FAI Traders Insurance Company Limited be dismissed.
* that Tommy Tortoise Removals (Aust) Pty Ltd pay the costs below of FAI Traders Insurance Company Limited.
4. That Tommy Tortoise Removals (Aust) Pty Ltd pay the costs of the appeal of FAI Traders Insurance Company Limited and of Peter Price and that no order be made as to the costs of the appeal of the WorkCover Authority of NSW.
5. That the cross-appeal by Tommy Tortoise Removals (Aust) Pty Ltd be reserved.
6. That liberty to apply be reserved.

27    Counsel should bring in short minutes within seven days.
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