Honey v Richardson (No 2) - [2015] SASC 142

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
HONEY & ANOR v RICHARDSON (No 2)
[2015] SASC 142
Judgment of The Honourable Justice Bampton
22 September 2015
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - IN GENERAL AND PRELIMINARY MATTERS
PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS
The Return to Work Corporation of South Australia (the Corporation) made application to intervene in these proceedings and to strike out certain particulars of negligence pleaded in the first third party statement of claim (TPSOC) – the TPSOC alleges the injuries suffered by the first plaintiff were a consequence of the driving of the three vehicles in convoy and were caused or contributed to by the negligence of the third parties in the use, or arising out of the use, of all or one or other of the vehicles – defendant alleges that each of the third parties owed a duty of care to the first plaintiff in the driving of the vehicles and/or in the state of the vehicles’ illumination at the time of the collision – solicitors acting for the first third party sought indemnity from the Corporation in respect of these proceedings pursuant to s 105 of the Workers Rehabilitation and Compensation Act 1986 (SA) (s 166 of the Return to Work Act 2014 (SA) (the RTW Act)) – the Corporation denied liability asserting the claim pleaded against the third parties is an unsafe system of work which is statute barred by operation of s 66 of the RTW Act – whether the Corporation has a right pursuant to s 200 of the RTW Act to intervene and to seek orders striking out certain particulars of negligence pleaded in the TPSOC.
Held (on FDN 28):
1. The Corporation permitted to intervene pursuant to s 200 of the RTW Act.
2. Permission to re agitate the orders sought in paragraph 2 of FDN 28 to strike out of the particulars pleaded in paragraphs 10.1 to 10.7, 11.2 to 11.7 and 12.2 to 12.9 once the defendant’s liability to the plaintiffs has been determined or agreed.
3. The Court to hear submissions regarding the conditions, if any, to be imposed on the permission to intervene pursuant to rule 89(4) of the Supreme Court Civil Rules 2006.
Motor Vehicles Act 1959 (SA) s 99(3), s 104, Sch 4; Return to Work Act 2014 (SA) s 66, s 166, s 200; Supreme Court Civil Rules 2006 (SA) r 89(4); Workers Rehabilitation and Compensation Act 1986 (SA) (Repealed) s 54, s 105, referred to.
Corporate Affairs Commission v Bradley; Commonwealth of Australia (intervener) [1974] 1 NSWLR 391; Hocking v Southern Greyhound Racing Club (1993) 61 SASR 213; Honey & Anor v Richardson [2015] SASC 119; Jeavons v Chapman (2008) 257 LSJS 463; O’Meara v FWV Stanke Holdings Pty Ltd (2007) 250 LSJS 195; Roadshow Films Pty Ltd v iiNet Ltd (2011) 248 CLR 37; WorkCover Corporation v Reiter (1997) 70 SASR 347, considered.

HONEY & ANOR v RICHARDSON (No 2)
[2015] SASC 142
Civil: Application
BAMPTON J.
Introduction

Return to Work Corporation of SA (the Corporation) makes application to intervene in these proceedings. The Corporation also seeks an order striking out certain particulars of negligence pleaded in the first third party statement of claim (TPSOC).
As I detailed in Honey & Anor v Richardson (Honey v Richardson),[1] Mr Honey, by his litigation guardian, and Mrs Honey issued proceedings against the defendant for damages for injuries sustained by Mr Honey on 12 March 2008 when a prime mover driven by the defendant collided with the rear of a grape tote bin Mr Honey was towing behind a Massey Fergusson tractor (the collision).
[1] [2015] SASC 119.
Mr Honey was driving the Massey Fergusson tractor in convoy with two other vehicles on the Sturt Highway near Kingston-on-Murray.
The lead vehicle in the convoy was a Case tractor, driven by the second third party Dominic Nobile (Mr Nobile). The Case tractor was also towing a grape tote bin.
The middle vehicle in the convoy was a Gregoire G120 grape harvester vehicle (the harvester) driven by the third third party, Kym Cluse (Mr Cluse).
The Massey Fergusson tractor was owned by the fourth third party Ambrosia Developments Pty Ltd (Ambrosia).
The first third party Trevor McPhee (Mr McPhee) owned the Case tractor and the harvester.
Mr McPhee, who has since died, was also the employer of Mr Honey, Mr Nobile and Mr Cluse.
A permit issued by the Department for Transport, Energy and Infrastructure to Mr McPhee (the permit) permitted the two tractors and the harvester (the vehicles) to travel in convoy in accordance with conditions specified in the permit.
The vehicles were all registered in South Australia and insured by the Motor Accident Commission (the MAC). The defendant’s vehicle was registered in Victoria and insured by the Transport Accident Commission.
In his defence filed on 18 October 2011, the defendant admits the collision occurred and alleges any injuries suffered by Mr Honey were caused or contributed to by Mr Honey’s negligence.
The third party proceedings
The defendant issued third party proceedings against Mr McPhee, Mr Nobile, Mr Cluse and Ambrosia (the third parties) on 25 March 2014. Paragraph 8 of the TPSOC alleges the injuries suffered by Mr Honey were a consequence of the driving of the vehicles and were caused or contributed to by the negligence of the third parties in the use, or arising out of the use, of all or one or other of the vehicles.
In paragraph 9, the defendant alleges that each of the third parties owed a duty of care to Mr Honey in the driving of the vehicles and/or in the state of the vehicles’ illumination at the time of the collision.
The particulars of negligence alleged in paragraphs 10, 11 and 12 include:
·allegations of negligent driving by Mr Nobile and Mr Cluse; and
·allegations of an inadequate or unsafe system of work.
In addition to the third party claim against the third parties, the defendant has issued third party proceedings against the MAC seeking a declaration that the MAC indemnify the third parties. The MAC has refused to indemnify asserting that the allegations made against the third parties do not give rise to an obligation to indemnify under the policies of insurance provided for in Schedule 4 of the Motor Vehicles Act 1959 (SA) (the MVA).[2]
[2] Schedule 4 provides:
The insurer insures the owner of the motor vehicle and any other person who at any time drives or is a passenger in or on the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth.
Workers Rehabilitation and Compensation Act 1986 (SA) and Return to Work Act 2014 (SA)
At the time of the collision the Workers Rehabilitation and Compensation Act 1986 (SA) (the WRC Act) prescribed the liability of an employer in respect of a compensable disability arising from employment.
The Return to Work Act 2014 (SA) (the RTW Act) came into operation on 1 July 2015 and repealed the WRC Act. The transitional provisions of the RTW Act provide that the RTW Act will apply to a compensable injury which occurred during the operation of the WRC Act. The provisions of the WRC Act relevant to the issues in this matter are replicated in the RTW Act.
Mr McPhee’s solicitors made a request for indemnity in relation to the third party proceedings to the WorkCover Corporation of South Australia (WorkCover) before the RTW Act came into operation. As such, under the next heading, I shall refer to the relevant section of the repealed Act as it was referred to in correspondence between Mr McPhee’s solicitors and WorkCover’s solicitors followed by the corresponding RTW Act provision in parentheses.
Mr McPhee’s request to WorkCover for indemnity
On 14 October 2014, solicitors acting for Mr McPhee sought indemnity from WorkCover in respect of these proceedings pursuant to s 105 of the WRC Act (s 166 of the RTW Act).
WorkCover’s solicitors advised Mr McPhee’s solicitors on 23 October 2014 that it was not required to indemnify as no claim arises against Mr McPhee, as employer.
WorkCover asserted the third party claim was based in negligence and as such, pursuant to s 54 of the WRC Act (now s 66 of the RTW Act), no liability attaches to Mr McPhee in respect of a compensable injury from employment by Mr McPhee except a liability under the WRC Act. WorkCover submitted that as the claim against Mr McPhee was not a claim arising out of the use of a motor vehicle but a claim involving negligence, s 54(2) of the WRC Act (s 66(1) of the RTW Act) did not apply.
Section 54(1) and s 54(2) of the WRC Act (s 66(1) of the RTW Act) provided that no liability attaches to an employer in respect of a compensable injury suffered by an employee arising from employment unless that liability arose out of the use of a motor vehicle being a liability against which the employer was or ought to have been insured under the law of compulsory third‑party motor vehicle insurance.
WorkCover contended that s 54(4b) of the WRC Act (s 66(4) of the RTW Act) also applied and prohibited any action by a person to recover a contribution from an employer.
Section 54(4b) (s 66(4) of the RTW Act) provided that where a worker suffers a compensable injury (not being an injury that arises out of the use of a motor vehicle pursuant to s 54(2) (s 66(1) of the RTW Act) and action is taken against a person other than the employer for damages in respect of the injury, the other person has no right to recover contribution from the employer.
As such, WorkCover contended that both s 54(1) and s 54(4b) (s 66(1) and s 66(4) of the RTW Act) prohibit any claim in negligence against Mr McPhee and against Mr Honey’s co-workers, Mr Nobile and Mr Cluse.
WorkCover suggested to the solicitors then acting for Mr McPhee that Mr McPhee should apply to strike out the TPSOC issued against him (including any claim of vicarious liability for the negligence of his employees Mr Nobile and Mr Cluse), thereby obviating the need for WorkCover to respond to the claim for indemnity.
Following this correspondence, WorkCover learned that the solicitors who had sought indemnity on behalf of Mr McPhee had ceased acting for Mr McPhee.
As noted in Honey v Richardson, none of the third parties have taken steps to defend the third party claim.
WorkCover Corporation of South Australia continued as the Return to Work Corporation of South Australia
After 1 July 2015, WorkCover continued as the Corporation. Accordingly, the application filed 6 July 2015 is made by the Corporation pursuant to s 200 of the RTW Act.
The application for permission to intervene
The Corporation makes this application insofar as the third party claim relates to Mr McPhee as the employer of Mr Honey, and Mr Nobile and Mr Cluse as employees of Mr McPhee and co-workers of Mr Honey.
The Corporation submitted that, as the asserted insurer of Mr McPhee who may be found liable in its own right and vicariously liable for the acts and omissions of Mr Nobile and Mr Cluse, it has a right pursuant to s 200 of the RTW Act to intervene.
Section 200 of the RTW Act provides that the Corporation has a right to intervene and be heard in any proceedings before a Court in which the interpretation or application of the RTW Act or the WRC Act is in issue; or in which the Corporation’s interests may be directly or indirectly affected.
The Corporation also seeks an order striking out the particulars in paragraphs 10.1 to 10.7 of the TPSOC, which it argues raise allegations of an unsafe system of work as a cause of Mr Honey’s injuries rather than allegations of Mr McPhee’s negligence in terms of driving, or running out of control of a motor vehicle.
Further, the Corporation submitted that the particulars pleaded against Mr Nobile and Mr Cluse in paragraphs 11.2 to 11.7 and 12.2 to 12.9 raise issues of negligence and an unsafe system of work against co-workers of Mr Honey employed by Mr McPhee.
The Corporation argued it was quite clear the third party action instituted against Mr McPhee is an action in negligence and as such is statute barred.
In other words, the Corporation contended that the impugned particulars allege matters of unsafe systems of work which are not matters arising out of the use of a vehicle within the meaning of s 99(3) and s 104 of the MVA.
As at 12 March 2008, s 99(3) of the MVA provided:
(3)Subject to subsection (3a), for the purposes of this Part and Schedule 4, death or bodily injury will be regarded as being caused by or as arising out of the use of a motor vehicle only if it is a consequence of—
(a)     the driving of the vehicle; or
(b)     the vehicle running out of control; or
(c)     a person travelling on a road colliding with the vehicle when the vehicle is stationary, or action taken to avoid such a collision.
As at 12 March 2008, s 104 of the MVA provided:
In order to comply with this Part a policy of insurance must insure the owner of the motor vehicle to which the policy relates, and any other person who at any time drives or is a passenger in or on the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth.
The defendant refers to and repeats paragraphs 10.2 to 10.7, 11 and 12 of the TPSOC in his third party statement of claim against the MAC.
In Honey v Richardson, the MAC submitted that the impugned particulars ought plainly be characterised as allegations of participation in unsafe work practices. The MAC contended that if the particulars were struck out that would leave particulars 11.1 and 12.1 which may also be characterised, upon a hearing of all of the evidence, as particulars of unsafe work practices, lacking the necessary causal nexus with any untoward driving on the part of Mr Nobile and Mr Cluse. The MAC relied on the decision in WorkCover Corporation v Reiter[3] and argued that the causal significance of the driving can only be determined following a full factual enquiry to determine whether Mr Honey’s injuries were caused by the driving of one or more of the vehicles.
[3] (1997) 70 SASR 347.
In WorkCover Corporation v Reiter,[4] Lander J (with whom Doyle CJ and Bleby J agreed) said that s 99(3) of the MVA contemplates a factual inquiry to determine in every case whether the particular bodily injuries or the death were a consequence of the driving of the vehicle or a collision or action taken to avoid a collision whether in motion or stationary or the vehicle running out of control.[5]
[4] (1997) 70 SASR 347.
[5] (1997) 70 SASR 347, 366.
Justice Lander also stated that in enacting s 99(3) of the MVA Parliament intended to limit the circumstances in which claims could be made, for compensation for death or bodily injury caused by or arising out of the use of a motor vehicle as defined in schedule 4 of the MVA, to circumstances where the death or bodily injury was a consequence of the driving of the vehicle or a collision or action taken to avoid a collision whether in motion or stationary or the vehicle running out of control.[6]
[6] (1997) 70 SASR 347, 366.
The defendant’s submissions
The defendant opposes the Corporation’s application arguing that the Corporation has not established that its interest might be directly or indirectly affected by these proceedings. Rather, it was submitted, the interest identified by the Corporation is that it seeks to ventilate an issue not raised on the pleadings as to whether the Corporation is liable to indemnify Mr McPhee as insurer of last resort. The defendant contended the pleadings raise no issue of the Corporation as insurer. It was submitted the application seeks to interfere in the defendant’s case against Mr McPhee and the MAC by seeking to alter the issues defined by the third-party proceedings against the third parties.
The defendant accepts that, save for the effect of s 54(2) of the WRC Act (s 66(1) of the RTW Act), an action does not lie against Mr McPhee for negligence as employer of Mr Honey. However, it was submitted that s 54(2) (s 66(1) of the RTW Act) makes it clear that in the circumstances pleaded in paragraph 8 of the TPSOC, an employer such as Mr McPhee may be held liable for damages for injuries negligently caused to an employee in the course of their employment where it arises as a consequence of the driving of a motor vehicle.
The defendant argued that if the injuries did not occur as a consequence of the driving of the vehicles by Mr Nobile, Mr Cluse and Mr Honey in the circumstances described in the TPSOC then the matters pleaded in paragraph 10 will not fall to be determined. In other words, it was submitted the plea in paragraph 8 must be decided in the defendant’s favour before the issues in paragraph 10 arise for determination.
It was submitted that paragraph 8 does not concern a question of negligence but a question of whether the bodily injuries were a consequence of the driving of the motor vehicle. Accordingly, it was contended that the concerns raised by the Corporation are without foundation. Further, it was argued that if the injuries are a consequence of the driving by Mr Nobile and Mr Cluse in the course of their employment with Mr McPhee and an unsafe system of work is established as the cause of the negligence of the injuries, the indemnity available to Mr McPhee is pursuant to the compulsory third-party statutory policy of insurance issued by the MAC.
Discussion
Whether an order permitting intervention by the Corporation should be made is a matter of discretion, to be determined in all of the circumstances of the case.[7]
[7] See O’Meara v FWV Stanke Holdings Pty Ltd (2007) 250 LSJS 195, [7]; Jeavons v Chapman (2008) 257 LSJS 463, [12].
Section 200 of the RTW Act provides a right of intervention if the Corporation’s interests may be directly or indirectly affected by the outcome of the proceedings. If those interests may be indirectly or contingently affected in the future permission should not be granted.[8]
[8] Roadshow Films Pty Ltd v iiNet Ltd (2011) 248 CLR 37, 39.
Where intervention is permitted, generally an intervener has the rights and privileges of a party to tender evidence, to participate fully in the argument and to appeal.[9] However, an intervener may assert no interest greater than that of the original parties and cannot raise new issues.[10]
[9] Corporate Affairs Commission v Bradley; Commonwealth of Australia(intervener) [1974] 1 NSWLR 391, 396.
[10] Hocking v Southern Greyhound Racing Club (1993) 61 SASR 213, 215-216.
The Corporation’s interpretation of the impugned particulars is arguable. The fact that Mr McPhee sought indemnity from the Corporation, in my view, indicates the Corporation’s interests may be affected by the proceedings. Further, the fact that the MAC has refused to indemnify the third parties as it says it has no relevant liability for the purposes of s 104 of the MVA, together with the MAC’s submission in Honey v Richardson that the impugned particulars ought be characterised as allegations of participation in unsafe work practices, support the conclusion that the Corporation’s interpretation of the particulars is arguable. As such, in my view, the Corporation’s interests may be directly or indirectly affected by the proceedings in the event the defendant is found liable to Mr and Mrs Honey.
As I noted in Honey v Richardson, the defendant has denied liability for Mr Honey’s injuries and has further alleged that if he suffered the injuries as alleged they were caused or contributed to by Mr Honey’s negligence. If the defendant succeeds on the case he has pleaded, and the injuries are found not to have been suffered as alleged, there can be no finding of liability against the third parties.

Just as it is premature for there to be a determination of a third party’s obligation to indemnify the defendant prior to determination of the defendant’s liability to the plaintiffs, it is also premature to consider the Corporation’s application to strike out the impugned particulars of the TPSOC prior to determination of the factual circumstances of the collision.
It is necessary for findings to be made regarding the circumstances of the collision and how the injuries were sustained in the plaintiffs’ claim before there can be a determination of whether or not the impugned paragraphs of the TPSOC should be struck out.
Until there has been a full factual enquiry to determine whether Mr Honey’s injuries were caused by the driving of one or more of the vehicles the Corporation’s liability is a contingent liability. As such, it is premature to consider the Corporation’s application to strike out paragraphs of the TPSOC at this stage in the proceedings.
However, as Mr McPhee has sought indemnity and as the Corporation’s interpretation of the TPSOC is arguable the Corporation has permission to intervene in the proceedings and permission to re‑agitate the orders sought in paragraph 2 of FDN 28 striking out the particulars pleaded in paragraphs 10.1 to 10.7, 11.2 to 11.7 and 12.2 to 12.9 once the defendant’s liability to the plaintiffs has been determined or agreed.
I will hear the parties regarding the conditions, if any, that should be imposed on the permission to intervene pursuant to r 89(4).