Gallagher Bassett Services NSW Pty Ltd v Murdock

In the New South Wales Court of Appeal, Gallagher Bassett Services NSW Pty Ltd (as statutory insurer for the employer) sought to appeal a decision that granted a worker, Mr. Murdock, an extension of time to commence proceedings against a third party. Mr. Murdock had been receiving weekly compensation and wished to sue the alleged tortfeasor, but his proposed action against his employer was time-barred. The central dispute concerned the effect of the court's order granting Mr. Murdock leave to commence proceedings out of time, particularly in relation to the employer's potential rights of indemnity or contribution from the third party.

The Court of Appeal was required to determine whether the grant of leave to Mr. Murdock to commence his action against the third party, notwithstanding the usual limitation period, extinguished the employer's right to seek indemnity or contribution from that third party. Specifically, the court had to consider whether, after such leave was granted, there remained any "limitation period fixed by or under this Act or by or under any other enactment" for the cause of action for indemnity or contribution, and whether the potential defendant's ability to claim such indemnity or contribution would be adversely affected by the dispensation from the time bar.

The Court of Appeal reasoned that the grant of leave to Mr. Murdock to commence his action against the third party did not, in itself, extinguish the employer's right to seek indemnity or contribution. The court applied the principle that a statutory provision allowing for an extension of time, when exercised, effectively removes the time bar for the primary action. However, this did not preclude the employer from pursuing their own claims for indemnity or contribution, provided those claims were brought within the relevant limitation periods applicable to them, or if further leave was sought and granted for those claims. The court found that the potential defendant's ability to claim indemnity or contribution was not inherently prejudiced by the extension granted to the worker, as the employer could still pursue their own proceedings.

The Court of Appeal granted leave to appeal but ultimately dismissed the appeal, ordering that Gallagher Bassett Services NSW Pty Ltd pay the respondent's costs.