J Blackwood & Son v Skilled Engineering - [2008] NSWCA 142

No judgment structure available for this case.

New South Wales

Court of Appeal

CITATION: J Blackwood & Son v Skilled Engineering [2008] NSWCA 142
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 20 March 2008

JUDGMENT DATE:
24 June 2008

JUDGMENT OF: Beazley JA at 1; Giles JA at 2; Campbell JA at 17

DECISION: Appeal dismissed with costs.

CATCHWORDS: TORT – negligence – duty of care – worker’s services made available to third party by labour hire company – nature of any duty of care owed by third party to worker – contributory negligence – whether worker took reasonable care for own safety – need to take into account practical opportunities for choice available to worker in deciding whether there is contributory negligence - CONTRIBUTION – joint or several tortfeasors – third party and employer of injured worker – employer paid worker compensation pursuant to Workers Compensation Act 1987 – employer brought proceedings against third party seeking an indemnity under s 151Z(1)(d) Workers Compensation Act – operation of s 151Z Workers Compensation Act – whether worker “entitled to take proceedings” to recover damages from third party – when amount recoverable in such proceedings is nil – s 151Z(2) Workers Compensation Act – assessment of proportionate responsibilities of employer and third party – to take into account causal significance of breach of duty of each and their culpability concerning any such breach of duty – application of s 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 – effect of contributory negligence on quantum of damages recoverable under Act – s 9 Law Reform (Miscellaneous Provisions) Act 1965 - STATUTORY INTERPRETATION – whether amendments to Part 5, Division 3 of Workers Compensation Act introduced by Workers Compensation Legislation Further Amendment Act 2001 applicable to assessment of quantum of contribution towards damages – construction of transitional provisions in clause 9, Part 18C of Schedule 6 Workers Compensation Act – where proceedings seeking damages were not begun before commencement of 2001 amendments – where all payments of compensation were made prior to commencement of 2001 amendments – whether right to indemnity accrued before commencement of 2001 amendments – whether reasonably certain that Parliament intended that amendments would apply to that right - WORDS AND PHRASES – “in respect of the recovery of damages” - LIMITATION OF ACTIONS – manner in which Limitation Act 1969 applies to employer's right of recovery under s 151Z(1)(d) and 151Z(2)(e) Workers Compensation Act of compensation paid

LEGISLATION CITED: Civil Liability Act 2002
Law Reform (Miscellaneous Provisions) Act 1946
Law Reform (Miscellaneous Provisions) Act 1965
Limitation Act 1969
Motor Accidents Compensation Act 1999
Trade Practices Act 1974 (Cth)
Workers Compensation Act 1926
Workers Compensation Act 1987
Workers Compensation Legislation Further Amendment Act 2001

CATEGORY: Principal judgment

CASES CITED: Atkinson v Gameco (NSW) Pty Ltd [2005] NSWCA 338
Burke v Victorian Work Cover Authority [1998] VSCA 24; [1999] 1 VR 189
Clout Industrial Pty Ltd (in liq) v Baiada Poultry Pty Ltd [2004] NSWCA 89; (2004) 61 NSWLR 111
Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594
Czatyrko v Edith Cowan University [2005] HCA 14; (2005) 79 ALJR 839
Forstaff Blacktown Pty Ltd v Brimac Pty Ltd [2005] NSWCA 423; (2005) 4 DDCR 179
Grant v Royal Rehabilitation Centre [1999] NSWCA 250; (1999) 47 NSWLR 263
Grljak v Trivan Pty Ltd (Court of Appeal, 19 April 1996, unreported)
Grljak v Trivan Pty Ltd (in liq) (1994) 35 NSWLR 82
Hampic Pty Ltd v Adams [1999] NSWCA 455; (2000) ATPR 41-737
I & J Foods Pty Ltd v Bergzam Pty Ltd (1997) 14 NSWCCR 486
Koehler v Cerebos (Australia) Ltd [2005] HCA 15; (2005) 222 CLR 44
Lapcevic v Collier [2002] NSWCA 300
Leonard v Smith (1992) 27 NSWLR 5
Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174
Podrebersek v Australian Iron & Steel Pty Limited [1985] HCA 34; (1985) 59 ALJR 492
Public Transport Commission of New South Wales v J Murray-More Pty Ltd [1975] HCA 28; (1975) 132 CLR 336
Sheather v Country Energy [2007] NSWCA 179
South Eastern Sydney Area Health Service v Gadiry [2002] NSWCA 161; (2002) 54 NSWLR 495
Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16
TNT Australia Pty Ltd v Christie [2003] NSWCA 47; (2003) 65 NSWLR 1
Turner v George Weston Foods t/as Tip Top Bakeries (Newcastle) [2007] NSWCA 67; (2007) 4 DDCR 571
Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207
Wonall Pty Ltd v Clarence Property Corporation Ltd [2003] NSWSC 497; (2003) 58 NSWLR 23

TEXTS CITED: Pearce and Geddes, Statutory Interpretation in Australia, 6th ed (2006) LexisNexis, Butterworths

PARTIES: J Blackwood & Son Limited (Appellant)
Skilled Engineering Limited (Respondent)

FILE NUMBER(S): CA 40859/06

COUNSEL: JG Stewart (Appellant)
MA Elkaim SC; MJ Walsh (Respondent)

SOLICITORS: McCulloch & Buggy, Sydney (Appellant)
Turks Legal, Sydney (Respondent)

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 1918/04

LOWER COURT JUDICIAL OFFICER: Coorey DCJ

LOWER COURT DATE OF DECISION: 6/12/06

CA 40859/06
DC 1918/04

BEAZLEY JA
GILES JA
CAMPBELL JA
24 June 2008

J BLACKWOOD & SON LIMITED v SKILLED ENGINEERING LIMITED

Judgment

1 BEAZLEY JA: I have had the advantage of reading in draft the judgments of Giles JA and Campbell JA. I agree the appeal should be dismissed and have nothing to add to the reasons of Campbell JA in respect of contributory negligence; the application of the November 2001 amendments (Workers Compensation Legislation Further Amendment Act 2001); and the trial judge’s apportionment of responsibility for the worker’s injuries as at 70:30 between the appellant and respondent respectively. I otherwise agree with Giles JA’s reasons for the dismissal of the appeal.

2 GILES JA: I have had the considerable benefit of reading the reasons of Campbell JA in draft. Drawing extensively upon them, I can state concisely my reasons for dismissal of the appeal.

3 The respondent’s recovery from the appellant under s 151Z(1)(d) of the Workers Compensation Act 1987 (“the Act”) was limited by that provision to the amount of the damages which the appellant was liable to pay to the worker, and was also subject to the operation of s 151Z(2)(e).

4 The potential recovery after excision of statute-barred payments was $130,736.08. The trial judge held that the “pool of notional damages” relevant to recovery was $159,600, and that there could be full recovery of the $130,736.08.

5 His Honour’s reasoning is seen from his apparent adoption of the respondent’s submissions, which he stated as follows -

“Pursuant to s 151Z of the Act, the plaintiff’s claim for indemnity from the defendant is as follows:

(a) The worker’s full entitlement to common law damages as against the defendant/occupier totals $228,000.

(b) The worker’s full entitlement to damages as against the plaintiff/employer is nil dollars.

(c) The apportionment of the responsibility for the accident is seventy per cent for the defendant/occupier and thirty per cent for the plaintiff/employer, that is, the plaintiff/employer is liable for thirty per cent of $228,000, that is an amount of $68,400.

(d) The percentage liability of the plaintiff/employer (thirty per cent) multiplied by the worker’s entitlement to damages pursuant to the Act as against the plaintiff (nil) equals nil, that is the amount of contribution recoverable by the defendant/occupier against the plaintiff/employer is nil.

(e) The maximum amount of money which the worker would have been entitled to recover from the defendant/occupier in common law proceedings is $228,000, less thirty per cent, as referred to in paragraph (c) above, equals $159,600. Therefore, $159,600 is the pool of notional damages which is relevant to the plaintiff/employer’s claim for recovery from the defendant/occupier.

(f) Section 151H of the Act prevents this worker from recovering damages from the plaintiff therefore as no damages would have been assessed there is no damages to which the defendant/occupier could look for contribution.

In conclusion, therefore, the indemnity payable by the defendant/occupier to the plaintiff/employer is the total of the non-statute barred payments of $130,736.”

6 As I understand the reasoning, the “pool of notional damages” of $159,600 was the amount of the damages which the appellant was liable to pay to the worker, constituting the limit in s 151Z(1)(d). That figure was arrived at on the basis that the reduction in the damages of $228,000 required by s 151Z(2)(c) was $68,400, being the excess of the amount of the contribution which the appellant would be entitled to recover from the respondent but for Pt 5 of the Act ($68,400; para (c)) over the amount of the contribution recoverable determined as directed by s 151Z(2)(d) (nil; para (d)).

7 It is not correct that contribution turns on there being damages payable by the respondent “to which [the appellant] could look for contribution” (para (f)), but no point was taken over this expression of the reasoning and it was not submitted that contribution was recoverable from the respondent notwithstanding that the damages determined as directed by s 151Z(2)(d) were nil.

8 The trial judge referred to s 151Z(2)(e) (para (g)), but did not set out how it operated. Implicitly, his Honour considered that it did not operate so as to impose a lower limit on the indemnity than that under s 151Z(1)(d). That is not correct. Section 151Z(2)(e) did apply, because the worker had not taken proceedings against the respondent. By s 151Z(2)(d) the amount of the contribution that the appellant could recover from the respondent was to be determined as if the damages were assessed in accordance with Div 3 of Pt 5 of the Act. On the trial judge’s findings, the compensation paid by the respondent ($157,973.45) exceeded the amount of the contribution which could be recovered from the respondent as joint tortfeasor (nil; para (d)). By force of s 151Z(2)(e)(i), the indemnity was “for the amount of the excess only”, that is, the $157,973.45. So there was a lower limit, although not lower than the total of the non-statute barred payments.

9 The appellant’s submissions were directed more to s 151Z(2)(e) than to s 151Z(1)(d). They were concerned with -

(i) contributory negligence on the part of the worker;

(ii) recoverability of damages by the worker from the respondent and so of contribution by the appellant; and

(iii) greater apportionment to the respondent of responsibility for the worker’s damage.

10 The appellant submitted that the trial judge erred in failing to find that the worker was contributorily negligent. If so, the starting-point of $228,000 for the “pool of notional damages” would be reduced and, if contribution could be recovered from the respondent ((ii) below), there would be reductions in damages flowing through to the amounts of contribution for the purposes of s 151Z(2)(c) and s 151Z(2)(e). However, not so. The submission was but faintly pressed. For the reasons given by Campbell JA, it should not be accepted.

11 The appellant submitted that the trial judge erred in holding that the damages which the worker could have obtained from the respondent were to be assessed under the regime introduced by the amendments to the Act coming into force in November 2001 (Workers Compensation Legislation Further Amendment Act 2001). So assessed, the damages were nil, and there was no contribution recoverable. The appellant said that the damages assessed under the prior regime were a substantial sum, although one which could not be determined because the trial judge had not, in consequence of his holding, made the necessary findings. The appellant’s purpose was to have contribution recoverable from the respondent for the purposes of s 151Z(2)(e), and the further submission was that the damages recoverable by the worker from the appellant would be considerably greater than the $228,000 and the damages recoverable from the respondent would be correspondingly, although not identically, the substantial sum.

12 The oddity of an appellant saying that the damages for which it was liable were more than the damages assessed by the judge comes from s 151Z(2)(e)(i). The greater the damages, the greater any contribution recoverable from the respondent and the smaller the excess in accordance with that provision. As I have said, the appellant’s submissions were directed more to s 151Z(2)(e) than to s 151Z(1)(d). Greater damages would increase the limit under s 151Z(1)(d), to the appellant’s disadvantage.

13 The appellant submitted that the trial judge was in error because the transitional provision now found in cl 9(1) in Schedule 6 of the Act, relevantly giving the November 2001 regime retrospective application, did so “in respect of the recovery of damages”, but the respondent’s claim under s 151Z(1)(d) was not a claim for damages: Westpac Banking Corporation v Tomassion (1993) 32 NSWLR 207. However, for the reasons given by Campbell JA the respondent’s claim was in respect of the recovery of damages although not a claim for damages. The trial judge was not in error.

14 The appellant submitted that the trial judge erred in apportioning responsibility for the worker’s damage 70:30 between the appellant and the respondent. It said that his Honour imposed upon it an excessively onerous duty of care by putting it in the position of an employer, and otherwise placed its responsibility at too high a level in comparison with that of the respondent, and that the apportionment should have been 30:70.

15 This would have been material to the contribution recoverable by the appellant from the respondent, for the purposes of s 151Z(2)(e), if contribution could be recovered, and would have brought a greater amount recoverable as contribution and a smaller excess in accordance with that provision. Since no contribution is recoverable, the submission takes the appellant nowhere. In any event, for the reasons given by Campbell JA the submission should not be accepted.

16 The available indemnity in accordance with s 151Z(2)(e) was $157,973.45, the lesser figure than the limit under s 151Z(1)(d) of $159,600. Recovery of some of the paid compensation for which the respondent was entitled to be indemnified, however, was statute-barred, and the recovery of $130,736.08 was within the limit. The appeal should be dismissed with costs.

17 CAMPBELL JA: Jody Heterick (the “Worker”) was an employee of the Respondent. The Respondent is a labour hire company. It arranged for the Worker to work in a warehouse of the Appellant. While the Worker was working there on 21 August 1997 she suffered an injury to her right knee. In consequence of that injury the Respondent has paid the Worker compensation pursuant to the Workers Compensation Act 1987 (‘the Act”).

18 The Worker has never sued either the Appellant or the Respondent seeking damages for her injury.

19 The Respondent brought proceedings against the Appellant in the District Court, seeking indemnity under section 151Z(1)(d) of the Act concerning the workers compensation payments it has made. His Honour Judge Coorey assessed the amount of damages that the Worker would have been able to recover, had the Worker sued the Appellant and the Respondent had not breached its duty of care in a way that caused the Worker’s injury, as being $228,000. He held that the Respondent had breached its duty of care to the Worker in a way that caused her injury, but assessed the amount of damages that the Worker would have been able to recover, had she sued the Respondent, as being nil. He held that the Worker’s injury had not resulted from any contributory negligence on her part. He held that, as between the Appellant and the Respondent, culpability should be apportioned in the proportions 70:30 respectively.

20 By the time of the trial, the Respondent had paid over $157,000 in workers compensation payments to the Worker. Part of those payments had become statute barred, leaving an amount that was not statute barred of $130,736.08. Seventy percent of $228,000 is $159,600. As that amount exceeded the amount of non-statute barred payments that the Respondent had made, the primary judge held that the Respondent was entitled to recover from the Appellant an amount of $130,736, plus interest and costs.

21 The issues that were argued on this appeal are:

(i) the nature of any duty of care that the Appellant owed to the Worker;

(ii) the correctness of the 70:30 apportionment between the Appellant and the Respondent;

(iii) the correctness of the finding that the Worker had not engaged in any contributory negligence;

(iv) whether the trial judge had applied the correct legal principles in coming to assess the damages that the Worker would have recovered from the Respondent at nil; and

22 After those issues are decided, so far as is necessary, some consideration needs to be given to the manner in which the operation of the Limitation Act 1969 affects the order that should be made.

23 To understand the steps that the trial judge took in reaching the amount of the judgment – namely, assessing the amount of damages the Worker would have been able to recover had the Worker sued the Appellant, assessing the amount of damages that the Worker would have been able to recover had she sued the Respondent, deciding whether the Worker had engaged in any negligence that was a contributing cause of her injury, and assessing the respective culpabilities of the Appellant and the Respondent – one must first understand how the indemnity under section 151Z(1)(d) of the Act operates.

Text of Section 151Z

24 So far as is relevant, section 151Z of the Act provides:

“(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect:

…

(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),

…

(2) If, in respect of an injury to a worker for which compensation is payable under this Act:

(a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker’s employer, and

(b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer,

the following provisions have effect:

(c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) are to be reduced by the amount by which the contribution which the person would (but for this Part) be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable,

(d) the amount of the contribution that the person is entitled to recover from the employer as a joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with provisions of Division 3 as to the award of damages,

(e) if the worker does not take proceedings against that employer or does not accept satisfaction of the judgment against that employer, subsection (1) applies as if the worker had not been entitled to recover damages from that employer, except that:

(i) if the compensation paid by that employer exceeds the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise—the indemnity referred to in subsection (1) (d) is for the amount of the excess only, and

(ii) if the compensation paid by that employer does not exceed the amount of that contribution—subsection (1) (d) does not apply and the employer has, to the extent of the compensation so paid, a defence to an action for such a contribution.”

25 The reference to “this Part” in section 151Z(2)(c) is to Part 5 of the Act, which runs from section 149 to 151AC. Part 5 includes the “Division 3” that section 151Z(2)(d) refers to.

26 Division 3 in its present form contains provisions that make extensive modifications to the common law concerning the amount of damages that may be awarded in respect of an injury to a worker, where that injury was caused by the negligence or other tort of the worker’s employer. It has consistently been construed as applying where a worker claims such damages from his or her employer, but as not limiting the damages recoverable from someone other than the employer, even if the worker’s injury is caused partly by the tort of the employer and partly by the tort of that other person. Division 3 prohibits the award of damages for certain types of loss that the common law took into account in assessing damages, and limits the amount of damages that may be awarded for certain other heads of damage. No damages at all are recoverable unless the injury results in the death of the worker or in a degree of permanent impairment of the worker that is at least 15% (section 151H(1)). Division 3 also prohibits the awarding of damages for certain types of injuries. It alters the common law concerning mitigation of damages, contributory negligence, voluntary assumption of risk, exemplary or punitive damages, and payment of interest on damages. It alters the “once and for all” rule of the common law, whereby payment of a single sum of money was the means of providing compensation for the entirety of the damage that a plaintiff had suffered up to the time of judgment and might suffer thereafter, by permitting the court to make orders for “structured settlements”.

Background to Introduction of Section 151Z(2)

27 As Allen J pointed out in Leonard v Smith (1992) 27 NSWLR 5, section 151Z(2) of the Act was necessitated by legislation that established a special regime that limited the damages recoverable by a worker injured as a result of the tort of his or her employer, and different legislation that established a different special regime that limited the damages of a person injured as a consequence of the negligent driving of a motor vehicle. Even after those two special statutory regimes had been introduced, there remained a significant number of situations in which a person might be injured as a consequence of a tort or other legal wrong to which neither of those special statutory regimes applied, and concerning which damages would be assessed in the common law’s traditional way, with the objective of providing the injured plaintiff with full restitution.

28 Before the two special statutory regimes of damages were introduced, if a worker sustained an injury partly as a consequence of the tort of his or her employer, and partly as a consequence of the legal wrong of some other person, the worker could sue the employer, the other wrongdoer, or both the employer and the other wrongdoer, as the worker might choose. In the usual situation where the other wrongdoer was a tortfeasor, if the worker had decided to sue only one tortfeasor, it was open to that tortfeasor to join the other tortfeasor in the action. Whether the other tortfeasor had been initially joined in the action, or was later joined, it was open to the two tortfeasors to seek contribution from each other, in accordance with section 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 (the “1946 Act”). That legislation enabled the court to order contribution by reference to what was “just and equitable having regard to the extent of [each tortfeasor’s] responsibility for the damage”. If the court decided that one tortfeasor was X percent responsible, and the other tortfeasor had a responsibility of (100 minus X) percent, the amount of damages for which each tortfeasor was ultimately held liable was ascertained by applying those percentages to the common law’s single measure – namely, restitution damages – of the quantification of the damage that the worker had suffered as a consequence of the torts.

29 With the enactment of specialised regimes for quantification of damages when a worker sued his or her employer, or when a person sued in connection with a negligent driving of a motor vehicle, this simple way of adjusting liability between the several tortfeasors was no longer available. Section 151Z(2) provided the means by which the ultimate respective liabilities of an employer tortfeasor, and a non-employer wrongdoer, were to be ascertained.

30 There are obiter statements in this Court that section 151Z(2)(c) is capable of operating to reduce the damages a worker can recover from someone other than his or her employer in a situation where the non-employer was legally liable to the worker for the worker’s injury by reason of a cause of action that was not a tort, such as a claim for damages under section 82 Trade Practices Act 1974 (Cth), the worker’s employer is liable to pay damages to the worker for the same injury, and contribution between the employer and the non-employer is available under the general law rather than under the 1946 Act: Hampic Pty Ltd v Adams [1999] NSWCA 455; (2000) ATPR ¶41-737 at [45], [53]-[59]; Lapcevic v Collier [2002] NSWCA 300 at [87]. It is not necessary to decide the correctness of those obiter statements in this appeal, and I shall not do so, but I shall give an account of section 151Z in a way that accommodates the possibility that those obiter statements will ultimately be adopted as the ratio of a case.

31 This Court has recently considered the operation of section 151Z(2)(c) and (d) in Forstaff Blacktown Pty Ltd v Brimac Pty Ltd [2005] NSWCA 423; (2005) 4 DDCR 179. I should state at the outset that I disagree with none of the conclusions expressed in paras [74] and [75] of that decision. However, as the conclusions arrived at in those paragraphs of Forstaff assume that the liability of both the employer and the non-employer on which section 151Z(2)(c) and (d) operates is liability as a tortfeasor (and hence contribution between those two tortfeasors occurs only on the basis of the 1946 Act), and as the reasoning by which I have arrived at my conclusions is not identical with that used in Forstaff, I prefer to state my reasons in my own words.

Objectives of Section 151Z(2)

32 Section 151Z(2) sought to achieve two separate objectives. The first was that, as between the employer tortfeasor and the non-employer tortfeasor, the same principle of what is “just and equitable having regard to the extent of [a tortfeasor’s] responsibility for the damage” as had previously operated in contribution proceedings under the 1946 Act should continue to apply to divide how liability ultimately fell between them. Likewise, if contribution was available between a wrongdoer and an employer tortfeasor on some other principle, that other principle should continue to apply to divide how liability ultimately fell between them. The second was that the amount that the employer tortfeasor ought ultimately be liable to pay should not be any greater than if its proportionate share of the responsibility for the damage had been applied to an amount of damages that had been quantified under the modified damages provisions of the Act.

33 Section 151Z(2) deals with the consequences of an employer tortfeasor never ending up paying, by way of damages, more than its proportionate share of the responsibility for the worker’s injuries, multiplied by the total damages that the worker is entitled to receive under the modified damages regime established by the Act. The consequences with which it is concerned are on the liability of a non-employer wrongdoer to pay damages to an injured worker, and on the employer’s right under section 151Z(1)(d) to obtain indemnity for workers compensation payments it has made to the worker.

Preconditions for Operation of Section 151Z(2)

34 The way in which section 151Z(2) operates is as follows. First, it states, in its chapeau and paras (a) and (b), the preconditions for operation of section 151Z(2). There must be an injury for which compensation is payable under the Act, and both paras (a) and (b) must be satisfied before section 151Z(2) can apply at all. Those two paragraphs are satisfied if the worker is entitled to take proceedings for damages against the worker’s employer, and is also entitled to take proceedings for damages against a wrongdoer who is not the worker’s employer. It is the entitlement of the worker to take those two types of proceedings that matters, not whether the proceedings have actually been taken. The expression “is entitled to take proceedings” is construed as referring to the worker presently having, or at any time having had, that entitlement to sue: Leonard v Smith at 11; Clout Industrial Pty Ltd (in liq) v Baiada Poultry Pty Ltd [2004] NSWCA 89; (2004) 61 NSWLR 111 at [20], [52], [68].

Ascertainment of Contribution Recoverable From Employer Tortfeasor

35 The next logical step that is taken in the application of section 151Z(2) is that required by para (d). Section 151Z(2)(d) deals with the amount of contribution that the non-employer wrongdoer can recover from the employer tortfeasor. Application of section 151Z(2)(d) requires the court to assess the amount of the damages to which the worker would have been entitled if all the damages that the worker received were calculated in accordance with the modified common law damages regime established by the Act. It also requires the court to ascertain the respective proportionate responsibilities of the employer tortfeasor and the non-employer wrongdoer. When the employer and the non-employer are both tortfeasors, that will be under the 1946 Act even though section 151Z(2)(d) makes no express mention of the 1946 Act, because that Act provides the only means whereby, under the law of this State, one tortfeasor can recover contribution from another tortfeasor. The manner of operation of the contribution provisions of the 1946 Act has been modified by some subsequent statutes, such as section 12 Law Reform (Miscellaneous Provisions) Act 1965, and section 19 Civil Liability Act 2002, but it is still the 1946 Act that is the source of any right of contribution between tortfeasors concerning any claim arising out of personal injury. (Section 34(1)(a) Civil Liability Act provides that the more extensive amendments to the law of contribution between tortfeasors made by Part 4 (section 34-39) Civil Liability Act do not apply to “any claim arising out of personal injury”). No argument has been put in this appeal that any of the statutory amendments to the 1946 Act bear upon the present case.

36 Once the amount of modified common law damages, and the proportionate responsibility of the employer tortfeasor have been ascertained, the amount of contribution that the non-employer wrongdoer can recover from the employer tortfeasor is calculated by multiplying the amount of modified common law damages by the proportionate responsibility of the employer tortfeasor.

37 Section 151Z(2)(d) says nothing about the amount of contribution that the employer tortfeasor can recover from the non-employer wrongdoer. However, there is no need for there to be any special statutory provision that deals with the amount of contribution that the employer tortfeasor can recover from the non-employer tortfeasor. That is because if a worker had sued only an employer tortfeasor, who then sought contribution from a non-employer tortfeasor, the damages recoverable by the worker from the employer tortfeasor would, through the operation of provisions of Part 5 of the Act other than section 151Z, be the modified common law damages. The application to those damages of the 1946 Act (or whatever other principle for deriving contribution is applicable) would result in the employer tortfeasor ultimately bearing exactly the same amount of the damages as arises if the worker sues the non-employer wrongdoer who then obtains contribution from the employer tortfeasor under section 151Z(2)(d).

38 The operation of para (d) will have the effect of reducing the amount of contribution that the non-employer wrongdoer can recover from the employer tortfeasor below the amount that would have been recoverable if the damages payable by the employer tortfeasor had continued to be assessed in accordance with the common law’s principle of restitution. Section 151Z(2)(d) is “a substantive provision limiting what otherwise would be the right under the Law Reform (Miscellaneous Provisions) Act [1946] to recover contribution from the employer": Grljak v Trivan Pty Ltd (in liq) (1994) 35 NSWLR 82 at 91. The policy of the Act is that the burden of the reduction that it makes in the amount of contribution recoverable should fall on the worker, not on the non-employer wrongdoer.

39 It is to be observed that there is nothing in section 151Z that positively requires that the damages that the worker can recover from the employer be damages for tort. It well may be that the attempt made in Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 by a worker to use an alleged breach of the Trade Practices Act as a means of recovering damages from his employer for an industrial accident was inspired by the prohibition on damages contained in the Act as originally passed. (The Act commenced operation on 30 June 1987, and the industrial accident involved in Nelson occurred in July 1987). Even though the result of Nelson is that many industrial accidents will not attract liability under the Trade Practices Act because the “in trade or commerce” element of a cause of action under many of the provisions of the Trade Practices Act will be missing, it may be the case that sometimes some other non-tortious cause of action will be available to a worker against his or her employer concerning an industrial injury.

40 While section 151Z(2)(d) requires the contribution that it talks about to be calculated “as if the whole of the damages were assessed in accordance with the provisions of Division 3”, it does not require that any of the damages involved in the calculation actually be assessed in accordance with the provisions of Division 3. Section 151E(1) provides that Division 3 applies only to damages concerning an injury “caused by the negligence or other tort of the worker’s employer”. Thus when Division 3 has work to do in a non-hypothetical situation it can only be when the employer is tortfeasor. (Whether Division 3 applies when the employer is a tortfeasor, but as well a worker has some non-tortious cause of action available against the employer concerning the same injury need not be considered in the present case). It may be that the calculation that is required by section 151Z(2)(d) on the basis “as if the whole of the damages were assessed in accordance with the provisions of Division 3” could be done even when the liability of the employer to pay damages in respect of compensable injury is a liability that does not arise in tort. If that is so, it might possibly be the case that the general account I am giving of how section 151Z(2) operates should be modified to take account of the possibility that the damages against the employer might be as a wrongdoer who is not a tortfeasor. However that issue does not arise on this appeal, and I shall say nothing more about it.

Effect of Section 151Z(2)(d) on Damages Worker Can Recover from Non-Employer Wrongdoer

41 Para (c) deals with one of the consequences of the amount of contribution that the non-employer wrongdoer can recover being thus reduced. It gives effect to the Act’s policy in the situation where the worker is suing the non-employer wrongdoer. That is shown by para (c)’s reference to “in proceedings referred to in paragraph (a)” – a reference back to section 151Z(2)(a). Para (c) requires the following steps to be taken:

(i) Calculate the total amount of damages that would be payable by the non-employer wrongdoer, if the non-employer wrongdoer bore all the damages. If no statutory modification of the common law applies to that non-employer wrongdoer, the measure of damages will be full restitution damages. If the non-employer wrongdoer has a special statutory regime for calculating damages applicable to it (such as that arising under the Motor Accidents Compensation Act 1999 , or under the Civil Liability Act 2002 ) the amount of damages payable by the non-employer wrongdoer will be calculated in accordance with that special statutory regime.

(ii) Calculate in dollars the amount of the contribution which the non-employer wrongdoer would have been entitled to recover from the employer tortfeasor if the modifications to the law effected by Part 5 of the Act had not been made. The amount of that contribution will be ascertained by multiplying the total amount of damages that the non-employer wrongdoer would have to pay, if it were solely liable, by the proportionate responsibility of the employer tortfeasor ascertained in accordance with the 1946 Act or any other applicable contribution principle. As Handley JA said in Grljak v Trivan Pty Ltd (Court of Appeal, 19 April 1996, unreported, at 6), calculating the contribution that “but for this Part” the non-employer tortfeasor would be entitled to recover from the employer tortfeasor involves a “statutory fiction” , but it is none the less a fiction that section 151Z(2)(c) requires to be employed.

(iii) Calculate in dollars the amount of the contribution that the non-employer wrongdoer is actually entitled to recover from the employer tortfeasor, in accordance with section 151Z(2)(d).

(iv) Subtract the amount obtained in step (iii) from the amount obtained in step (ii).

42 The effect of this is that the non-employer wrongdoer ends up paying no more than it would have had to pay if the modification of the common law by the Act had not been made and the non-employer wrongdoer had recovered contribution from the employer tortfeasor, but the total amount of damages that the worker can recover is less than would have been the case if the employer had not been a tortfeasor.

Effect of Section 151Z(2)(d) on Indemnity Recoverable by Employer for Compensation Payments Made

43 Para (e) carries through the policy of the Act in a different situation.

44 It is the prima facie effect of section 151Z(1)(d) that an employer who has paid compensation to a worker is entitled to recover the amount of that compensation from any non-employer wrongdoer whose wrong has caused the injury that led to the payment of the compensation, provided only that the non-employer wrongdoer does not end up paying more than the amount of the damages which the non-employer wrongdoer would have had to pay if sued for that wrong. Further, that prima facie right of the employer under section 151Z(1)(d) is one that the employer has whether or not the employer is itself a tortfeasor who has caused the injury to the worker with respect to which the compensation has been paid.

45 Section 151Z(2)(e) modifies that prima facie situation in a situation where (A) the worker has an entitlement to take proceedings for damages against both the employer and a non-employer, and (B) the worker has not taken proceedings against his employer or, having taken those proceedings and obtained a judgment, has not either (i) been paid the amount of the judgment or (ii) received whatever it may be that the worker has agreed to accept in satisfaction of the worker’s right to be paid the amount of the judgment.

46 In that situation the following steps are to be carried out:

(i) Ascertain the amount of compensation that has been paid by the employer.

(ii) Ascertain the amount of contribution that the employer would have been liable to make, under section 151Z(2)(d), to the non-employer wrongdoer.

(iii) If the amount ascertained in step (i) is greater than the amount ascertained in step (ii), the indemnity obtainable by the employer under section 151Z(1)(d) is not the prima facie amount, but is only the amount by which the amount ascertained in accordance with step (i) is greater than the amount ascertained in accordance with step (ii).

(iv) If the amount ascertained in accordance with step (i) is less than the amount ascertained in accordance with step (ii) the employer has no right of indemnity at all from the non-employer wrongdoer. However, if the non-employer wrongdoer were at some time to sue the employer seeking contribution, the employer would have a defence to that action for contribution, in an amount equal to the amount of the contributions it had paid.

How Contributory Negligence of a Worker Fits Into Section 151Z

47 Contributory negligence has effect on the quantum of damages through section 9 Law Reform (Miscellaneous Provisions) Act 1965. It provides:

claimant

contributory negligence

(a) a claim in respect of the damage is not defeated by reason of the contributory negligence of the claimant, and

(b) the damages recoverable in respect of the wrong are to be reduced to such extent as the court thinks just and equitable having regard to the claimant’s share in the responsibility for the damage.”

48 Whether a worker has been injured partly as a result of failure to take reasonable care for his or her own safety enters into the operation of section 151Z in several places.

· Contributory negligence can sometimes operate to reduce the amount of the damages that a non-employer wrongdoer is liable to pay to the worker, and so affect directly the upper limit on the indemnity that an employer can recover under section 151Z(1)(d).

· It can affect the calculation of the damages that can be recovered from a non-employer wrongdoer if Part 5 of the Act had not been enacted, and thereby enter into the operation of Section 151Z(2)(c).

· It can (as modified by section 151N of the Act) affect the calculation of the amount of damages that an employer tortfeasor is liable to pay to the worker, and thus the amount of the contribution that a non-employer wrongdoer can recover from the employer if all the damages are assessed in accordance with the provisions of Division 3 of Part 5 of the Act. In that way, contributory negligence enters into the operation of section 151Z(2)(d).

· If contributory negligence entered in this last mentioned way into the operation of section 151Z(2)(d), it would have a consequential effect on the operation of section 151Z(2)(e).

49 While the detail of the manner in which the law of contributory negligence operates has been affected by sections 5R–5T Civil Liability Act, it was not submitted that those provisions of the Civil Liability Act bore upon the facts in the present case.

50 The trial judge found that the Appellant had breached a duty of care which it owed to the Worker, and had thereby caused the injuries that led to the payments of compensation being made by the Respondent. The trial judge also held that the Respondent was in breach of a duty of care which it owed to the Worker, and that that breach of duty had also caused the injuries in question. Thus, the trial judge held that the Worker was “entitled to take proceedings independently of this Act to recover damages from” both the Appellant, and the Respondent. Hence, he reasoned, the preconditions for the operation of section 151Z(2) were satisfied. Further, because the Worker had not taken any proceedings against her employer, it was the provisions of section 151Z(2)(e) that governed the availability to the Respondent of an indemnity under section 151Z(1)(d) concerning the amount of compensation it had paid.

51 The trial judge held that the amount of damages that the Worker would be entitled to if the whole of the damages were assessed in accordance with Division 3 was nil because the 15% threshold for damages was not passed. Thus, he reasoned, the amount of contribution that could be recovered from the employer under section 151Z(2)(d) was also nil.

52 Even though the trial judge gave no express consideration to it, from the fact that he applied section 151Z(2)(d) at all, it seems that he took the view that the preconditions for operation of section 151Z(2) were satisfied. In taking that view he was acting consistently with the decision of this Court in Grljak v Trivan Pty Ltd (in liq) (1994) 35 NSWLR 82. The Court there considered two separate arguments.

53 The first argument was that, because the right of a worker to sue an employer for damages was totally abolished when the Act was first enacted in 1987, but the regime of modified common law damages was established by an amendment to the Act in 1989, the right of a worker to sue the employer was purely one that arose under the Act, and so not one “to take proceedings independently of this Act to recover damages from” the employer. Mahoney JA (with whom Kirby P and Priestley JA agreed) held that the right to sue for damages, as reinstated in 1989, was still a common law right, not a purely statutory one.

54 The second argument was that a worker is not “entitled to take proceedings” to recover damages if the result of those proceedings is that, because the circumstances in which the Act permitted recovery of damages against an employer did not apply, the worker actually recovers no damages. Mahoney JA rejected that argument, saying at 88:

“I do not think that this is the intended operation of par (b). The test which in this regard par (b) applies is “entitlement”. The entitlement is entitlement “to take proceedings” not “to recover damages”. It looks, I think, to the existence of what conventionally is described as a cause of action rather than to whether the enforcement of the cause of action will result in an award of damages. I am conscious that, in principle, a right of action in negligence or for breach of statutory duty involves the proof not merely of duty and breach of duty, but also of loss by the plaintiff. I do not think that it was the intention of the 1989 amendments to alter the nature of a proceeding of this kind at common law. The purpose and effect of the 1989 amendments was to change and, in many respects, to limit the damages which could be awarded and the way in which they were to be quantified. But that, in the relevant sense, does not go to the “entitlement” to bring the proceeding; it goes rather to the quantum of the damages which (if any) may be recoverable. Accordingly, the fact that, in the proceeding to recover damages, the assessments made by the trial judge are such that, in the event, no damages are awarded does not mean that, within par (b), the worker was not “entitled to take proceedings … to recover damages from” the employer.”

55 That the preconditions for operation of section 151Z(2) are satisfied even when no damages are recoverable from an employer because the worker’s injuries do not pass the threshold is also implicit in the decisions of this Court that section 151Z(2)(c) is capable of operating to reduce the damages recoverable by a worker from a non-employer tortfeasor even when the contribution “recoverable” from the employer is zero: Grljak v Trivan Pty Ltd (in liq) (1994) 35 NSWLR 82 at 89; Grljak v Trivan Pty Ltd (Court of Appeal, 19 April 1996, unreported) at 5; Clout Industrial Pty Ltd (in liq) v Baiada Poultry Pty Ltd [2004] NSWCA 89; (2004) 61 NSWLR 111 at [50], 130 per Giles JA; Forstaff Blacktown Pty Ltd v Brimac Pty Ltd [2005] NSWCA 423; (2005) 4 DDCR 179 at [107], 204-5 per McColl JA.

Circumstances of the Worker’s Injury

The System of Work

56 The Worker’s duties were performed in part of the Appellant’s warehouse known as the “decombi area”. It included a shelving system consisting of tall blocks of shelves, each block separated from its neighbours by a very narrow laneway, and each block several storeys high. A system of conveyors ran perpendicular to those narrow laneways, above a mezzanine floor. Each conveyor was a combination of a central belt and rollers on both sides of the belt. At the outer extremity of each side of the conveyor was a steel rail about an inch wide, elevated somewhat from the bed of the conveyor. It operated as a guide, to help to stop items that were travelling along the conveyor from falling off.

57 There were three different conveyors that were located at different heights above the floor of the mezzanine level. The bottom conveyor was about a metre from the floor, the middle conveyor about waist high, and the top conveyor about armpit height. The conveyors were used to bring empty receptacles for goods into the shelving system. Then, once the receptacles had had goods placed into them, the conveyors were used to transport goods from the shelving system, to the place where the goods were needed. Branches of that conveyor system fed into each of the narrow laneways.

58 In each laneway was an “elevating and translating platform” that operated somewhat like a cherry picker. An operator stood on it, and could manoeuvre it to travel either along its laneway, or up and down in height, and thereby reach any part of the shelving system. Having thus reached the appropriate part of the shelving system the operator would remove from the shelf any particular goods that were needed, and place them in a bucket-like plastic receptacle shaped like a rectangular prism that lay on its longest and widest side, was hollow, and had no top. These bucket-like receptacles were called “totes”.

59 The system involved paperwork identifying the type of goods that were needed being placed into an empty tote outside the decombi area, and that tote being transported by the conveyor system to one of the operators of a mobile platform, who would use the platform to "pick and pack" the required items – i.e., locate the required items in the shelving system, and then place them in the tote. The filled tote would then be placed on the conveyor system which would take it to the place where it was required. In this way the conveyors in the decombi area were just one part of a more complex system for the procuring and storing of large quantities of many different types of goods, and the supplying of goods to meet particular orders of customers.

60 Different coloured totes were used to indicate orders that were especially urgent, or orders that were to go to a special destination. Use of the different coloured totes enabled the workers in the decombi area to prioritise their work. Sometimes an employee of the Appellant also gave a specific instruction if particular urgency needed to be accorded to a particular order.

61 The Appellant had carried on its business at the factory in question since 1979. The system whereby goods were transported within the warehouse using the conveyor lines had been in operation for that time.

How the Worker Fit Into the System

62 At Easter 1997 all the unskilled staff who had previously worked in the Appellant’s warehouse were made redundant, and the Respondent provided an entire substitute workforce of about 90 people. The Worker was part of that substitute workforce. She had been working at the Appellant’s warehouse for about four months at the time she was injured.

63 After the unskilled workers at the Appellant’s warehouse were made redundant, three managerial employees of the Appellant remained working at the warehouse – Mr Geoff Leak was the warehouse manager, Mr Gordon Clark was the assistant manager, and Mr Cal Rixon was the dispatch manager. They were assisted in their duties in the warehouse by a number of other employees of the Appellant. Mr Clark had worked at the warehouse since 1995. He said:

…

64 The Worker gave evidence in the proceedings. The trial judge said of her:

“She struck me as being a very frank witness. She was not one of the parties in these proceedings, that is, there was no reason for her to exaggerate or to distort the true facts.”

65 When the Worker first began to do work of any kind for the Respondent she was shown a video that related to industrial safety procedures generally. After she was chosen to join the new workforce to be sent to the Appellant’s factory the members of the new workforce were given some training by the Respondent in meetings at the Wetherill Park RSL. Some people wearing T-shirts or labels bearing the Appellant’s name were there also. This occurred before there was allocation of specific tasks amongst workers.

66 Two busloads of workers were taken to the Appellant’s factory, where they were addressed by two employees of Blackwood, Mr Clark and a woman referred to as lady “L” (because the Worker was not sure of her name). They told the Worker “what to do and what not to do in the Blackwood's factory”. The Worker was allocated to the decombi area, and instructed how to use the apparatus there by Mr Clark and the lady L.

67 Mr Clark acted as the overseer of the Worker, and gave her instructions as to her day-to-day duties.

68 The Worker said that

“Gordon and lady “L” walked the whole of the bottom area of Blackwood’s supervising everybody in there."

69 Mr Clark gave evidence:

70 Mr Clark also said:

71 The Worker gave evidence that “there was a yellow painted line in front of the entrance of the decombi area and anyone that was not working in the decombi area was not allowed to go past that yellow line.” Mr Clark had an office that “was just above the whole warehouse area and it had windows all around, so he could see everything that was going on downstairs.”

72 An employee of the Respondent, Mr Barry Woodham, was on the site of the warehouse most of the time. On occasions when he was away he was relieved by another supervisor from the Respondent. He had an office there, but not near the Worker. The Worker explained his role:

…

73 She explained the respective responsibilities of Mr Clark and Mr Woodham:

“A. Barry – we just went to Barry if there was a problem. Barry didn’t allocate work at all for us.

74 Mr Woodham's own account of his duties was:

“To co-ordinate the time sheets, to be there, to be made available for people that wished to see me or ask me questions or as a point of contact for the Blackwood’s management.

75 He also gave evidence:

76 His duties on the factory floor during the course of the day were to act “as the liaison between Skilled and Blackwood's.” He had a daily meeting with Mr Clark, at which he could have raised any matters of concern that he had.

Blockages on the Conveyor

77 From time to time a tote that had been placed on a conveyor would become jammed. There were “many, many blockages” of the conveyor. The blockages always occurred on the top line. The trial judge found that “whenever the workers had a problem with a jammed tote it was necessary for the workers to unblock the jammed tote immediately because the other totes would pile up and fall from the conveyor.”

78 The Worker’s evidence included:

…

79 On occasions Mr Clark was there when a blockage occurred, and a worker climbed onto the conveyor belt to unblock it.

80 The Worker gave evidence:

…

81 As well as the Worker herself asking Mr Clark for a ladder, she heard another worker in the decombi section also asking Mr Clark that a ladder be provided. She gave evidence

“I complained to Gordon about needing ladders and I was told to go back to work it’d be seen to. You had to do as you were told or you were out of there.”

82 Mr Clark’s evidence was that he had not demonstrated to workers how to unblock a tote by climbing onto the conveyor belt, but the trial judge did not accept his evidence in that respect. The judge accepted the Worker’s evidence on this topic.

83 After the Worker felt uneasy in the course of her first experience of climbing up onto the conveyor to unblock the tote, she said she sought Mr Woodham out and told him "that it wasn't safe for us to be doing it", and that "we needed ladders". He "said that he’d look into it". Mr Woodham did not recall any such incident. Indeed, his evidence was that he would not have approved of using a ladder to climb up to unblock the totes, because he regarded even that method as unsafe. The trial judge accepted the Worker’s evidence on this topic also.

84 No ladder was provided by anyone prior to the Worker sustaining her injury.

85 As to the accessibility of Mr Woodham, the Worker said:

86 There was an occupational health and safety officer at the warehouse, with whom Mr Woodham had occasional meetings. The usual practice was that if he raised anything with the occupational health and safety person, it would be followed up.

The Worker’s Injury

87 On the occasion when the Worker was injured a tote travelling along the top conveyor had become jammed. The conveyors were stopped, whereupon the Worker went to the mezzanine floor, climbed onto the bottom conveyor, stood upright on it, lent towards the jammed tote, and lifted it. She then sought to place the tote on the middle conveyor. She found that the tote had an unusually heavy load in it. Having lifted the tote, the Worker twisted her body in order to place the tote on the middle conveyor. In the course of so doing she felt a sharp pain in her right knee. It is the injury that she thus sustained that led to the Respondent making workers compensation payments to her.

Findings Concerning Breach of Duty

88 Dr Johnn Olsen, a consultant physician in occupational and environmental medicine, gave evidence that the rails at the side of the conveyor gave inadequate foothold for obtaining access to places above the conveyor, both because the rails were only one inch wide, and because they were likely to be greasy. He expressed the view that the use of a stepladder would have been a reasonable alternative to the use of standing on the side rails of the lower conveyor for access to the upper conveyor. He identified inadequacies in the system of work as being, failure to provide a suitable ladder or other suitable platform; failure to adequately supervise the work to identify hazards; and inadequate instruction of workers to avoid a dangerous situation. Dr Olsen was not cross-examined.

89 The trial judge concluded that there was an unsafe system of work in operation at the time of the accident. He found that the Appellant exercised day-to-day control over the employees of the Respondent in their daily work in the Appellant’s commercial activities, and the Respondent did not. In particular he accepted that it was the Appellant, not the Respondent, who had given instructions to the workers in relation to the work to be done in the decombi area. He accepted that it was foreseeable that a worker could stand on a conveyor belt to unblock a jammed tote, and that it would have been a relatively cheap and easy thing for the Appellant to have provided a ladder for the Worker to allow her to unblock a jammed tote without having to climb onto the belt. He held that there was a breach of duty on the Appellant’s part in failing to devise and maintain a safe system of work, including an appropriate system to ensure that workers were not unreasonably exposed to risk of injury in unjamming totes on the top conveyor line. He was satisfied that this breach of duty on the part of the Appellant caused the Worker’s injury.

90 The Respondent conceded that it owed the Worker a non-delegable duty to take reasonable care that she was provided with a safe system of work. It is implicit in the judgment of the trial judge that the absence of a safe system of work relating to the manner of unblocking jammed totes, that could readily have been remedied, was in itself a breach of that duty. The trial judge was also satisfied that the Worker had asked Mr Woodham to provide a ladder, that her request was ignored by Mr Woodham, and that the Respondent took no action towards devising a system of work which removed the risk of injury to the plaintiff while she was working at the conveyor belts.

91 The trial judge held that the Appellant owed to the Worker “a duty to take reasonable care to avoid foreseeable risk of harm occurring to the worker analogous to that owed by an employer to an employee. The plaintiff has referred me to the Court of Appeal decision of Forstaff Blacktown Limited v Brimac Pty Ltd [2005] NSWCA 423, at paragraphs 35 and 36”. Forstaff is now reported at (2005) 4 DDCR 179. It was the finding that the duty was “analogous to that owed by an employer to an employee” that was the subject of the first ground of appeal.

92 Forstaff was another case involving a worker employed by a labour hire company, who was injured while working at the premises of a company to whom the worker was hired. The occupier of the premises in that case was Brimac. McColl JA (with whom Hodgson and Ipp JJA agreed, save on a point not presently relevant) said at [35]-[36], 189:

TNT Australia Pty Ltd v Christie

In such circumstances, Brimac’s duty was clear. It owed a non-delegable duty to take reasonable care to avoid exposing Mr Johnston to unnecessary risks of injury.”

93 In its written submissions the Appellant dealt together with the questions of whether the Appellant owed the Worker such a duty of care, whether the Appellant had breached any such duty, and apportionment of responsibility between the Appellant and the Respondent. It should in fairness be said that the Appellant did not submit that it owed no duty of care at all to the Worker. Rather, the forensic thrust of its submission was that any duty it owed was not the same as the comparatively stringent non-delegable duty that an employer owes to an employee, and that that difference should be reflected in the apportionment of responsibility between Appellant and Respondent.

94 Even so, it is necessary to identify whether the Appellant owed a duty of care to the Worker at all, and the content of any such duty so far as is relevant to the facts of the particular case. It is unnecessary for the purposes of this case to enter into the debate about whether the content of a duty of care is properly seen as part of the question of existence of a duty, or part of the question of breach: Sheather v Country Energy [2007] NSWCA 179 at [20]–[21] per Hodgson JA cf at [55]–[68] per Ipp JA. One way or another, both the existence of a duty and its content must be identified, because it is only by making that identification that one can be clear about whether any such duty of care has been broken, and if so, the respects in which the Appellant and the Respondent have each failed in their duty to the Worker. Identifying the respects in which they have each failed in their respective duties to the Worker is necessary to be able to form a view about the causal contribution that each of those failures has made to the injury that the Worker has suffered, and the culpability of those failures. Any apportionment of responsibility between the Appellant and the Respondent requires such an assessment of the causal significance of any breach of duty of each of them, and of their culpability concerning any such breach of duty. Those factors of causal significance and culpability were identified by the High Court in Podrebersek v Australian Iron & Steel Pty Limited [1985] HCA 34; (1985) 59 ALJR 492 at 494 and (1985) 59 ALR 529 at 532–533 as ones relevant to apportionment of responsibility between a defendant and plaintiff who has been guilty of contributory negligence. When the wording of the statutory test by reference to which apportionment for contributory negligence is made is the same as the statutory test by reference to which apportionment of contribution between tortfeasors is made, those factors are equally relevant to apportionment of contribution between tortfeasors.

95 The Appellant pointed out (correctly) that both Forstaff Blacktown Limited v Brimac Pty Ltd and TNT Australia v Christie [2003] NSWCA 47; (2003) 65 NSWLR 1 involved a worker who was an employee of a labour hire company whose services were made available to an enterprise which then exercised comprehensive control of the circumstances and manner in which the employee carried out his daily duties.

96 In TNT Mason P at [41], 9 said:

“TNT exercised day to day control over the plaintiff’s work activities, treating him to all intents the same as its employees as regards work on the factory floor … It can be seen that the plaintiff and TNT placed themselves in a relationship, day in and day out, indistinguishable from that of employee and employer. I am not saying that every client of an employment bureau will assume such a relationship with a person at whose workplace he or she attends. But here the plaintiff had for months been under the daily control of TNT and its managerial staff at the brewery. He was a relatively unskilled labourer. He reported daily to the brewery and everything that he did there was done under the full control of TNT. TNT’s relationship was more than that of an occupier of a factory. In all respects relevant to the imposition of a duty of care the plaintiff was in an identical position to the four TNT employees with whom he worked.”

97 By contrast, the Appellant submits, in the present case the Respondent had a full-time employee (either Mr Woodham, or his substitute) at the warehouse all the time. As well, in both Forstaff and TNT the “hired” employee was integrated into an existing workforce of the occupier of the premises, while in the present case all the unskilled workers of the Appellant were replaced. Further, the Appellant points out (accurately) that the Worker in the present case wore a name badge that bore the name of the Respondent and (one would infer) had been supplied by it.

98 Those factual distinctions between the present case (on the one hand) and Forstaff and TNT (on the other) do not suffice to show that in the present case the Respondent owed a duty to the Worker that differed in any presently relevant respect from that owed by an employer to an employee.

99 By virtue of the contract of employment, the Respondent had a legal right to direct the Worker concerning the day-to-day conduct of her work. However, by its conduct, the Respondent made clear to the Worker that what it required of her was to do work of the type and in the manner directed from time to time by the Appellant. The work of the Worker at the Appellant’s warehouse involved her, so far as has any causal bearing on her injury, in using equipment installed and supplied by the Appellant, in the course of carrying out a system of work that was devised and supervised by the Appellant. Her work in the decombi area was one part of a larger industrial operation that the Appellant carried out. It was the Appellant who had instructed her in the manner of carrying out the particular work tasks she was required to perform. By the yellow line the Appellant required people it had not authorised to keep out of the decombi area. Mr Clark and the other employees of the Appellant exercised personal supervision over the Worker. Even though all the unskilled workers of the Appellant were replaced, the Appellant continued to employ managerial staff and experienced workers who supervised and instructed the workers supplied by the Respondent, so that those new workers could carry out the same tasks, in accordance with the same system, as the replaced workers had previously carried out. In those circumstances, the Appellant was under a duty to workers in the position of the Worker to take reasonable care to provide a safe system of work. The duty arises from the particular relationship between the Appellant and the workers, in a similar way to that in which a company that coordinates the activities of various people working in a common enterprise can have an obligation to set a safe system of work even if the people involved are not its employees (Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 at [29], 31), or an occupier with control over premises can have an obligation to provide warnings in relation to dangerous features of those premises (Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174 at [47]-[53]).

100 That Mr Woodham had the opportunity to have input into the conditions under which the Respondent’s employees worked at the Appellant’s warehouse, and may well have been listened to if he had complained about the inadequacy of the system of work insofar as it affected the Worker, does not relieve the Appellant of its duty of care. That the Respondent provided the Worker with some generalised industrial safety training, and some other industrial safety training not related to the specific tasks she was required to perform in the decombi area, does not relieve the Appellant of its duty of care.

101 If the Worker had been injured through a chain of events in which her name badge played a causal part, this analysis might possibly be different. But when her wearing the name badge is irrelevant to the cause of her injuries, and is not an indicium of how any relevant training occurred or day-to-day control of activities in the warehouse was exercised, it has no bearing on any relevant duty that is owed by the Appellant to the Worker.

102 An employer owes a variety of different duties to its employee independently of statute, and the common law makes those duties non-delegable. It is not necessary to examine whether the duties owed by the Appellant were co-extensive with those owed by the Respondent, across the full range of the duties that the Respondent owed to the Worker. That is because only one aspect of an employer’s duty to an employee was relevant in the present case, namely that requiring the employer to take reasonable steps to provide a safe system of work.

103 McHugh, Gummow, Hayne and Hayden JJ pointed out in Koehler v Cerebos (Australia) Ltd [2005] HCA 15; (2005) 222 CLR 44 at [19]-[22], 53-54, that it can be inviting error to assume that there is a one-size-fits-all duty of care owed between all people who are in a relationship that can be categorised in a particular way, without considering the other obligations, both contractual and statutory, that exist between the parties. However in the present case there is no other obligation existing between the Respondent and the Worker that requires any qualification to the usual duty of an employer to provide a safe system of work.

104 The first ground of appeal seizes upon a particular phrase that the trial judge used, that the duty owed by the Appellant was “analogous to that owed by an employer to an employee” without seeking to take into account how that phrase fits into the overall reasoning of the judge. It need hardly be said that a finding that the duty was “analogous to that owed by an employer to an employee” would be an inadequate one, if that was all that was said about the existence of duty and it did not make clear in what respect the analogies existed. But the trial judge said more about the existence of duty, and was quite specific about the respect in which the relevant analogies existed. He found explicitly that:

"… there was a breach of duty by the defendant by failing to devise and maintain a safe system of work, including an appropriate system to ensure that workers were not unreasonably exposed to risk of injury in unjamming totes on the top conveyor line."

105 It is the latter finding that contains his operative finding concerning the relevant duty that existed. That finding is correct.

106 On the appeal it remained common ground that the Respondent, as an employer, owed a duty of care to the Worker. The content of the duty is stated by Gleeson CJ, McHugh, Hayne, Callinan and Heydon JJ in Czatyrko v Edith Cowan University [2005] HCA 14; (2005) 79 ALJR 839 at [12], 842-843:

“An employer owes a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. If there is a real risk of an injury to an employee in the performance of a task in the workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards.”

107 The fact that the Respondent operated a business of making its employees available to work in the enterprises of others did not relieve the Respondent from its duty to its employees: TNT Australia Pty Ltd v Christie at [67]-[69], 15-16; Burke v Victorian Work Cover Authority [1998] VSCA 24; [1999] 1 VR 189; Atkinson v Gameco (NSW) Pty Ltd [2005] NSWCA 338 at [18]-[19]. The specific breach of duty that the trial judge found the Respondent had engaged in was breach in its duty to provide a safe system of work.

108 Turning to how responsibility for these breaches should be apportioned, it was an inadequacy in the manner of operation of the conveyor system that the Appellant supplied that caused the totes to jam in the first place, requiring the Worker to unjam them. However, it was not suggested that having a conveyor system that had a tendency to jam was itself negligence. Rather, the fact that there was a known, and frequently occurring, risk of the conveyor system jamming, made it important for the Appellant to provide a means by which the problem could be fixed without exposing a worker to unreasonable risk of injury. Without that means being provided, there would not be, so far as this particular warehouse was concerned, a safe system of work. It was adoption of the precise method of unjamming that Mr Clark had instructed the Worker in, that led to the injury.

109 Taking steps to have available equipment that is needed for work to take place safely is part of providing a safe system of work. There is no suggestion in the evidence that, as between the Appellant and the Respondent, it was any part of the Respondent’s tasks to itself provide any equipment for use by its employees at the warehouse. If a ladder was to be provided to enable the totes to be unjammed, it would be the Appellant who provided it. It did not do so even when asked. In all these respects the Appellant was in breach of its duties to the Worker.

110 Because the Respondent’s duty as employer was non-delegable, the fact that it had handed over to the Appellant the task of providing the equipment and systems of work with which the Worker worked, does not relieve it from liability when that equipment and system of work proved defective, in a readily avoidable way, and injured the Worker.

111 The trial judge correctly recognised that Mr Woodham had the opportunity to avoid the very problem which eventually caused the Worker to be injured, yet he did not take it.

112 At its most basic level, the cause of the Worker being injured was the absence of a safe system of work, and both the Appellant and the Respondent were at fault in there being no safe system of work. However apportionment of responsibility for the purpose of contribution should be performed with greater attention to detail than this, if the evidence permits. When the trial judge assessed the respective responsibilities of the Appellant and the Respondent as being in the ratio 70:30, he evidently regarded the causal significance of the Appellant’s breaches, and the culpability of those breaches, as being significantly greater than the causal significance and the culpability of the Respondent’s breaches. I agree.

113 The particular figures that the trial judge chose shows that he regarded the significance of the Appellant’s breaches as being a little more than twice as serious as the significance of the Respondent’s breaches. He made specific mention of the control that the Appellant had over the day-to-day work, and of it having been the Appellant who provided the relevant specific training. Both of those matters are ones that significantly differentiate the position of the Appellant from that of the Respondent. The conclusion he arrived at concerning apportionment is comfortably within the range within which a trial judge could decide such a question without appellable error.

114 The trial judge disposed very briefly of a submission that the Worker had engaged in contributory negligence:

“The worker was shown by the assistant warehouse manager how to unblock a jammed tote and she followed his instructions. Her complaints about the procedure were ignored by the assistant warehouse manager and by the site coordinator. The worker had no control over the system of work. There is no evidence of negligence on her part.”

115 Though the Appellant did not abandon its challenge to this finding, the argument supporting the challenge was very brief. In essence, it was that the Worker realised that the method of unblocking the conveyor line that she had been shown was unsafe – indeed, so unsafe that she complained about it to two separate people in authority – but she persisted in using that unsafe method for months until eventually its use injured her. The Appellant submitted that contributory negligence is an objective standard, and that this behaviour on the part of the Worker involved a departure from the standard of reasonable care required of her.

116 I do not accept that submission. It is not as though the Worker was injured by an act of carelessness for her own safety that was incidental to the performance of her duties – she was injured through performance of her duties in the precise way in which she had been instructed to perform them. Any assessment of what reasonable care for a plaintiff’s own safety requires that plaintiff to do must take into account the practical opportunities for choice that the plaintiff has concerning his or her own safety. In the present case, the only practical choice that the plaintiff had, short of resigning, was to complain to people in authority about the inadequacy of the system, and seek to have it fixed. She complained, more than once. Taking reasonable care for her own safety did not require her to take the further step of resigning when her complaints proved useless. The trial judge was right in holding that there was no contributory negligence.

117 The Appellant submits that the trial judge was in error in concluding that the amount of contribution obtainable from the Respondent pursuant to section 151Z(2)(d) was nil. The Respondent made periodical payments to the Worker for many months after the date of the accident, and paid medical and related expenses, but the final payment that it made was on 15 May 2000, when a payment was made to the Worker of a lump sum in commutation of her entitlements.

118 The Workers Compensation Legislation Further Amendment Act 2001, Schedule 1, introduced a new section 151G and 151H into Division 3 of Part 5 of the Act. They provided, so far as relevant:

“151G(1) The only damages that may be awarded are:

(a) damages for past economic loss due to loss of earnings,

and

(b) damages for future economic loss due to the deprivation or impairment of earning capacity.”

“151H(1) No damages may be awarded unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15%.”

119 That 2001 legislation had transitional provisions, now contained in clause 9, Part 18C, Schedule 6 of the Act, which included:

Workers Compensation Legislation Further Amendment Act 2001

120 Those particular amendments all commenced on 27 November 2001: New South Wales Government Gazette, No 195A, 21 December 2001, at 10175. There was no relevant change to any of them between the date of their commencement and now.

121 The trial judge applied the law contained in the 2001 amendments when deciding the amount of contribution that the Appellant could recover from the Respondent. It was because he was not satisfied that the degree of permanent impairment of the Worker was at least 15% that he decided that the Worker would have received no damages if her damages had been assessed in accordance with Part 3 of the Act, and hence that the amount of contribution that the Appellant was entitled to recover from the Respondent was nil.

122 The Appellant attacks the starting point of the trial judge’s reasoning, namely that the damages recoverable by the Worker that are relevant to the assessment of contribution are ascertained in accordance with the 2001 amendments to the Act.

123 The first payment of workers compensation was made to the Worker on 15 October 1997. The Appellant points out that this Court held in South Eastern Sydney Area Health Services v Gadiry [2002] NSWCA 161; (2002) 54 NSWLR 495 that a separate right of indemnity arises under section 151Z(1)(d) in relation to each payment of compensation that is made, that hence there is a separate limitation period for each right to be indemnified against a payment of compensation, and that the limitation period for each right of indemnity concerning each payment of compensation commences to run when each such payment is made. See also Turner v George Weston Foods t/as Tip Top Bakeries (Newcastle) [2007] NSWCA 67; (2007) 4 DDCR 571 at [41], 580-581. The Appellant submits that because all the payments of compensation were made prior to 27 November 2001, any rights that the Respondent had to indemnity concerning those payments had all accrued before the 2001 amendments came into operation.

124 This Court has also held that a claim for indemnity under section 151Z(1)(d) of the Act is not a claim for damages in either form or substance: Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207 at 209 (Kirby A-CJ agreeing) 215, 220 per Mahoney JA; Turner v George Weston Foods at [33], 579. The Appellant implicitly recognises that the words “in respect of the recovery of damages” in the transitional provision in clause 9 of Part 18C, Schedule 6, of the 2001 legislation could impose a limited degree of retrospectivity on the amendments made by the 2001 legislation. However, the Appellant’s argument goes, because the proceedings for indemnity are not for the recovery of damages, any retrospectivity of the 2001 legislation does not apply to those proceedings.

125 The Appellant’s argument requires closer examination. I start by considering the significance of the accrual of the right of action for indemnity. That a cause of action has accrued means nothing more than that the person in whose favour it has accrued could, if minded to go to court to enforce it, succeed in doing so. However, this Court has held that because the right of indemnity is subject to an upper limit prescribed by section 151Z(1)(d) (namely, the amount of the damage that the worker can recover from the non-employer tortfeasor) it is part of the statutory intent that the amount of those damages must be assessed, in their entirety, on the first occasion when a claim for indemnity under section 151Z(1)(d) is made: Grant v Royal Rehabilitation Centre [1999] NSWCA 250; (1999) 47 NSWLR 263 at [8]-[9], 265. Prima facie, that assessment would be made as at the time of that hearing: Turner v George Weston Foods at [34], 579; [62], 585. The hearing took place in May 2006, with judgment being given in December 2006. Both of those dates are after the 2001 amendments became operative.

126 In the circumstances where the worker is entitled to take proceedings independently of the Act against both the employer and a non-employer tortfeasor, section 151Z(2)(e) must also be applied to calculate the amount of any indemnity. As explained earlier at [45], application of section 151Z(2)(e) involves calculation of the amount of contribution that the non-employer tortfeasor could recover from the employer tortfeasor “if the whole of the damages were assessed in accordance with the provisions of Division 3 as to the award of damages”. Division 3 runs from section 151E to 151T inclusive of the Act. Prima facie those damages would likewise be calculated as at the time of the first hearing in which a right of indemnity under section 151Z(1)(d) was claimed – in the present case, after the 2001 amendments became operative, and thus using Division 3 in the form that it had after those amendments became operative. In this way it might be argued that the right of indemnity has as an essential part of it the quantification of the relevant amounts of damages, and because those amounts of damages had not been quantified by 27 November 2001 there was no accrued right to indemnity prior to 27 November 2001.

127 In my view that argument is incorrect. It is possible for a right of indemnity to be an accrued right, even though the amount for which the indemnity exists has not yet been quantified. For example, an insured under an insurance policy can have an accrued right to indemnity from the insurer against a particular liability before the quantum of that liability is established. Even though it is often presumed that when a statute creates a new right and gives a remedy for enforcement of that right, no other remedy is available (Pearce and Geddes, Statutory Interpretation in Australia, 6th ed (2006) LexisNexis, Butterworths, para [5.35]), section 151Z confers a new right to indemnity but does not confer any special remedy for its enforcement – enforcement is left to ordinary action in the courts. Thus, it seems to me that the fact that the statute requires quantification of damages as part of establishing the amount for which the indemnity exists is not a sufficient reason for concluding that it is the provisions of Division 3 in its present form that should be applied. In my view, it is right to approach the application of section 151Z in the present case on the basis that the Appellant had an accrued right to indemnity before the 2001 amendments became operative, even though the precise quantum of that indemnity had not been established.

128 There is a well-established principle of statutory construction that:

Maxwell v Murphy

129 When the right to an indemnity under section 151Z was the type of right that existed independently of the means for its enforcement, and had accrued before the 2001 amendments came into effect, the reference to “Division 3” in section 151Z(2)(d) would need to be construed in accordance with that principle of construction. So construed, if a fully accrued right existed before the terms of Division 3 were changed in 2001 the manner in which it was enforced would not be altered by the law having changed, unless it appeared with reasonable certainty that it was the intention of Parliament that the alteration of Division 3 would apply to that right. That would then require close attention to the terms of 2001 legislation and in particular the transitional provision.

130 The transitional provision states in terms that the amended provisions apply “in respect of the recovery of damages after the commencement of the amendment”. The expression “in respect of the recovery of damages” is wider than the expression “claim for damages” with which Westpac Banking Corporation v Tomassian was concerned. The fact that the expression "in respect of the recovery of damages" appears twice in the transitional provision assists one in concluding that the use of that phrase was quite deliberate. The expression “in respect of” is capable of having a meaning indicating any type of connection or relation between the two subject matters to which the words refer, though its precise shade of meaning must be gathered from its context: Wonall Pty Ltd v Clarence Property Corporation Ltd [2003] NSWSC 497; (2003) 58 NSWLR 23 at [41]-[43], 44-45 and cases there cited.

131 In the present case it seems to me that there are two reasons why the correct construction of the transitional provisions requires that the version of Division 3 introduced in 2001 apply to the assessment of the quantum of contribution towards damages, where proceedings seeking those damages were not begun before the 2001 amendments commenced.

132 First, it is well within the ordinary meaning of words to regard proceedings claiming contribution towards damages as being proceedings "in respect of the recovery of damages", even though they are not themselves proceedings for the recovery of damages. I see nothing in the context to lead to any different reading.

133 Second, a clear objective of the amendments made by the 2001 legislation is that from the time of commencement of those amendments the liability of employers to pay damages to workers should be quantified in accordance with Division 3, even in relation to injuries that had occurred prior to that date. The only exception was if proceedings to recover the damages had been started before the commencement date of the amendment. To require contribution to be paid by an employer on any different basis to that on which damages would be assessed against the employers would not be consistent with that objective. Of course, the amendment should be construed in accordance with the usual presumption that I have identified from Maxwell v Murphy, but it seems to me that it is easier to find "reasonable certainty" of an intention to alter the basis on which the quantum of the contribution is calculated when so doing advances the general policy of the legislation.

134 Adopting the construction I advanced at [132] is not contrary to earlier decisions of this Court that consider the effect of the transitional provisions, though not in the precise factual context in which they arise in the present case. In Clout v Baiada a hired worker (Mr Raj) was injured before the 2001 amendments became operative, sued the factory owner to whom he had been hired, and began those proceedings for damages before the 2001 amendments became operative. Thus, there were proceedings for recovery of damages commenced in the court before the commencement of the amendment, and the qualification in the transitional provision whereby an amendment “does not apply in respect of the recovery of damages if proceedings for their recovery were commenced in the Court before the commencement of the amendment” was also operative. It was in that context that Sheller JA said at [38] said that if the object of section 151Z(2) of reducing the damages which would otherwise have been recoverable by the worker from a non-employer is to be achieved equitably, as one would suppose the legislature intended, it can only be achieved by all steps in the calculation being taken on the common assumption that the November amendments apply, or alternatively a common assumption that they do not apply. Giles JA at [62] said that not to proceed in that way would be “incongruous”. In my view the fact that in Clout proceedings were on foot prior to the commencement date of the amendments distinguishes Clout from the present case.

135 In Forstaff v Brimac a hired worker was injured before the 2001 amendments became operative, sued the factory owner to whom he had been hired, and began those proceedings for damages after the 2001 amendments became operative. McColl JA at [77], 198-9 observed:

Clout

136 The factual situation in Forstaff was distinguishable from that in Clout because the proceedings that the worker brought in Forstaff were commenced after the 2001 amendments became operative. McColl JA held at [78] that application of the process of reasoning in Clout required that the 2001 amendments should apply to the assessment of contribution in Forstaff.

137 In the present case, the proceedings from which this appeal is brought were commenced in 2004, and the Worker has never brought proceedings seeking damages for her injuries. Thus, the present is not a case in which the qualification in the transitional provision applies in the manner in which it did in Clout. When the Worker has not brought proceedings even after the amendments commenced, the ratio decidendi of Forstaff is not applicable to the facts of the present case. However Forstaff supports the construction of the transitional provision that seems to me to be the correct one.

138 Thus I conclude that the judge made no error in assessing the contribution to which the non-employer tortfeasor was entitled from the employer tortfeasor in accordance with the law as established by the 2001 amendments.

139 An issue was argued on the appeal concerning whether the trial had been conducted on the basis that the method of calculating damages as established by the 2001 amendment was the appropriate one to apply. Clearly, the plaintiff’s written submissions at the trial specifically put that the post-2001 provisions applied, and the written submissions of the defendant did not specifically take issue with that. In light of the conclusion to which I have come concerning the correctness of applying the post-2001 law, it is not necessary to consider these arguments further.

140 As I understand the submissions of the Appellant, this ground only arises in the event that the judge ought to have applied the law as it was before the 2001 amendments in assessing damages. In light of my conclusion so far, this ground does not need to be considered.

Limitation Act

141 There remains to be considered what is the appropriate amount for which judgment should have been given, in light of the findings so far. Because the worker was entitled to take proceedings independently of the Act to recover damages from her employer, but has not done so, and neither has she accepted satisfaction of a judgment against her employer, the present is a situation in which section 151Z(2)(e) applies.

142 The Appellant submits that the way in which section 151Z(2)(e)(i) operates is “by subtracting from the payments of compensation which are not statute barred the employer's contribution to the notional damages”. In my view that is not the calculation that section 151Z requires to be made, but (at least in the present case) it comes to the same mathematical answer as a calculation performed on the correct principle.

143 In a situation where a worker has not taken proceedings against the employer or accepted satisfaction of a judgment against the employer, the consequence that the chapeau of section 151Z(2)(e) says then follows, namely that “subsection (1) applies as if the worker had not been entitled to recover damages from that employer”, needs to be understood bearing in mind the history of this section and its statutory predecessors. Giles JA in I & J Foods Pty Ltd v Bergzam Pty Ltd (1997) 14 NSWCCR 486 explained that the statutory predecessor of section 151Z(1) contained in section 64(1) Workers Compensation Act 1926 was held in Public Transport Commission of New South Wales v J Murray-More Pty Ltd [1975] HCA 28; (1975) 132 CLR 336 to not entitle an employer to indemnity from a wrongdoer for compensation payments if the employer’s negligence had contributed to the occurrence in respect of which a right to compensation arose. Giles JA held that the phrase “as if the worker had not been entitled to recover damages from” the employer, in the chapeau of section 151Z(2)(e) was

Public Transport Commission of New South Wales v J Murray-More Pty Ltd

144 Sub-paras (i) and (ii) of section 151Z(2)(e) go on to state how that “partial indemnity” operates.

145 The operation of each of those sub-paras requires the calculation of two amounts.

146 The first is “the compensation paid by that employer”. In my view the clear meaning of that expression is the total amount of compensation ever paid by the employer (in the present case, $157,973.45, which for ease of explanation of the method I shall treat as $157,000 in round figures), not a figure that has been reduced in some fashion pursuant to a statute of limitations.

147 The second amount that must be calculated for the operation of sub paras (i) and (ii) is “the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise”. That amount of that contribution is ascertained under section 151Z(2)(d). The phrase “the amount of the contribution that could be recovered from that employer as a joint tortfeasor or otherwise” echoes the similar phrases (differing only saying “the employer” instead of “that employer”) that occur in section 151Z(2)(c) and (d). All those phrases mean the same thing. In the present case, the amount of that contribution is nil.

148 When the correct amount to adopt for “the compensation paid by that employer” is $157,000, that amount exceeds nil, and so it is sub-para (i) that applies. The operation of subpara (i) would then give the amount for which indemnity can be obtained under subsection (1)(d) as being the difference between those amounts, namely $157,000.

149 It is still necessary, however, to apply section 151Z(1)(d) according to its terms. Because of the words in brackets at the end of section 151Z(1)(d), the amount actually recoverable under the indemnity is limited to the amount of the damages that the indemnifier is liable to pay to the worker. The practical effect of this is that the indemnity under section 151Z(1)(d) is for whichever is the lesser of the amount derived from section 151Z(2)(e)(i) and the amount of the damages that the indemnifier is liable to pay to the worker.

150 The reasoning so far does not mean that the Limitation Act does not enter into the calculation of the amount of an indemnity that is recoverable in a situation where section 151Z(2)(e) applies. All that it shows is that the Limitation Act does not operate on section 151Z(2)(e) itself.

151 It would be seriously anomalous for a limitation period to apply when section 151(1)(d) operated in circumstances where a worker had sued his or her employer, but not to apply when section 151(1)(d) operated in circumstances where a worker had not sued his or her employer. In my view no such anomaly arises.

152 South Eastern Sydney Area Health Service v Gadiry [2002] NSWCA 161; (2002) 54 NSWLR 495 shows that the rationale for there being a limitation period in the action under section 151Z(1)(d) is that there is a separate right of indemnity in relation to each amount of compensation paid, and as each amount of compensation comes to be more than six years old the statutory right to recover it become statute barred.

153 The provision that operates to bar recovery in an action that sues on section 151Z(1)(d) is section 14(1)(d) Limitation Act 1969, which establishes a six-year limitation period for any cause of action to recover money recoverable by virtue of an enactment: Turner v George Weston Foods at [41], 580-581. Considered by themselves sections 151Z(2)(e) (i) or (ii) do not involve the assertion of any cause of action to recover money recoverable by virtue of an enactment. Rather, what 151Z(2)(e)(i) and (ii) do is to set out a means by which a calculation is performed for the purpose of the cause of action that arises under section 151(1)(d), and any limitation period then applies to section 151(1)(d).

154 There are two different ways, not different in substance, in which one can explain how section 14(1)(d) Limitation Act operates in a situation where section 151Z(2)(e) also applies, and the first payment of compensation was made more than six years before proceedings to enforce the indemnity under section 151Z(1)(d) were commenced. One is if one first considers what the right of the employer would have been to recover indemnity under section 151Z(1)(d) immediately before six years prior to the date of commencement of proceedings. If, at that date, the amount of compensation paid by the employer exceeded the amount of the contribution that could be recovered from that employer, there would be a cause of action to recover the amount of the excess under section 151Z(1)(d) (“the Six Years Old Amount”). By the time proceedings were actually brought, the cause of action to recover the Six Years Old Amount would have become statute barred. By the operation of section 63 Limitation Act, the right to recover that sum is extinguished. At the time the calculation is done for the purpose of the proceedings that are actually brought, “the compensation paid by that employer” is treated as being the total amount of compensation ever paid by the employer, the operation of subpara (i) then proceeds to calculate the excess of that total amount of compensation over the amount of contribution that could be recovered from the employer, and the amount of that excess is then the amount for which proceedings for indemnity can be brought. However, in those proceedings the defendant has a partial defence to a claim to recover that amount, by reason of the right to recover the Six Years Old Amount having become statute barred.

155 The other way of explaining it is that, at the time that the indemnity is actually sued for, the combined operation of section 151Z(2)(e)(i) means that the upper limit on the amount for which the indemnity is recoverable is the lesser of the amount obtained by performing the calculation in section 151Z(2)(e)(i), and the amount of the damages that the worker could recover from the person from whom the employer seeks indemnity. Even so, the indemnity is still for a series of individual payments of compensation. Insofar as the amount for which the employer seeks indemnity is made up (up to the upper limit of the total amount) of individual payments that are more than six years old, each of those individual payments more than six years old has become statute barred.

156 Doing the calculation in the correct way is of significance in a situation where an amount is recoverable by way of contribution from the employer. As Giles JA explained in I & J Foods v Bergazam, in that situation:

"… para (e) adjusted the employer’s indemnity so that the burden of the compensation paid under the Act would remain with the employer to the extent of the employer's fault which led to the employer paying contribution to the third party."

157 If an employer has not committed a tort that has injured the worker, but has paid compensation, the effect of section 151Z(1)(d) is that the employer can recover back from the indemnifier the full amount of compensation paid, up to the limit of the amount of damages that the indemnifier is liable to pay to the employer. However, if the employer is at fault, it is not entitled to indemnity for the full amount of the compensation paid, up to that limit. Rather, the employer is required to bear the compensation, up to the proportion of the compensation that equals the degree of fault of the employer, and only after the employer has borne the amount of compensation to that extent does it have a right of indemnity from some other wrongdoer liable to pay damages for the same injury.

158 This can be illustrated by an example in which the measure of damages that the worker could recover from the non-employer is $200,000, the measure of damages that the worker can recover from the employer is $150,000, the employer has paid compensation of $75,000, and the employer is 40% at fault. The amount of contribution that the non-employer can recover from the employer under section 151Z(2)(d) is 40% of $150,000, namely $60,000. Applying section 151Z(2)(e)(i), the upper limit of the indemnity recoverable under section 151Z(1)(d) is the excess of the compensation paid over the amount of that contribution, namely $15,000. If the employer had paid only $50,000 in compensation, there would be no excess of the compensation paid over the amount of the contribution, and so the employer would not have an indemnity. If the employer had paid $100,000 in compensation, the excess of the compensation paid over the amount of the contribution would be $40,000. In this way, the employer bears the compensation up to the amount of the contribution that can be recovered from it.

159 If the employer had paid $100,000 in compensation, but $20,000 of it was paid more than six years before the action was brought, the method of calculation advocated by the Appellant seems to proceed as though “the payments of compensation that are not statute barred” are $80,000, and the amount of indemnity is ascertained by subtracting $60,000 from that, resulting in $20,000. In my view that is a mistaken way of proceeding. Rather, one should first do the calculation that deducts from the total amount of compensation the amount of the employer's contribution, thereby arriving at a figure of $40,000. But, while that $40,000 is the total amount for which indemnity can be claimed, the indemnity is still in relation to particular payments of compensation that the employer has made. The employer is able to allocate that $40,000 so that the employer seeks indemnity for $40,000 that was paid less than six years before action was brought. In that way, the limitation period does not operate to cut down the amount of indemnity recoverable – the employer is still entitled to indemnity for $40,000. It nonetheless remains true that the employer has paid in total $100,000, of which it can recover back $40,000. Thus, even in the situation where some of the payments of contribution are more than six years old, the employer still ends up bearing the first $60,000 of the compensation paid.

160 The correct calculation of the amount of the indemnity in the present case is as follows:

(a) The amount of the contribution that Appellant is entitled to recover from the employer under section 151Z(2)(d) is nil.

(b) The compensation paid by the employer is $157,000. The “excess” referred to in section 151Z(2)(e)(i) is thus $157,000.

(c) The full measure of damages that the Worker would have been entitled to recover from the Appellant if the Appellant were the only wrongdoer who had caused her injury was $228,000. The amount of the contribution that the Appellant would be entitled from the Respondent if Part 5 of the Act had not been enacted it is 30% of that amount, namely $68,400. The amount of the reduction that is to be made from $228,000 pursuant to section 151Z(2)(c) is the excess of that $68,400 over the amount of contribution actually recoverable under section 151Z(2)(d). That excess is itself $68,400. Thus the amount of damages that would actually have been recoverable by the Worker from the Appellant is $228,000 -$68,400, ie $159,600.

(d) The maximum amount which can be recovered under section 151Z(1)(d) is thus the lesser of two amounts calculated in (b) and (c), ie $157,000.

Limitation Act

161 Thus the trial judge gave judgment for the correct amount.

162 I propose that the appeal be dismissed with costs.

**********

06/03/2009 - Citation for South Eastern Area Health Services v Gadiry corrected. - Paragraph(s) 123

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QBE Workers Compensation (NSW) Ltd v Dolan [2004] NSWCA 458

Libreri v Ironidol Pty Ltd (No 2) [2007] NSWCA 198

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CITATION:	J Blackwood & Son v Skilled Engineering [2008] NSWCA 142 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	20 March 2008
JUDGMENT DATE:	24 June 2008
JUDGMENT OF:	Beazley JA at 1; Giles JA at 2; Campbell JA at 17
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	TORT – negligence – duty of care – worker’s services made available to third party by labour hire company – nature of any duty of care owed by third party to worker – contributory negligence – whether worker took reasonable care for own safety – need to take into account practical opportunities for choice available to worker in deciding whether there is contributory negligence - CONTRIBUTION – joint or several tortfeasors – third party and employer of injured worker – employer paid worker compensation pursuant to Workers Compensation Act 1987 – employer brought proceedings against third party seeking an indemnity under s 151Z(1)(d) Workers Compensation Act – operation of s 151Z Workers Compensation Act – whether worker “entitled to take proceedings” to recover damages from third party – when amount recoverable in such proceedings is nil – s 151Z(2) Workers Compensation Act – assessment of proportionate responsibilities of employer and third party – to take into account causal significance of breach of duty of each and their culpability concerning any such breach of duty – application of s 5(1)(c) Law Reform (Miscellaneous Provisions) Act 1946 – effect of contributory negligence on quantum of damages recoverable under Act – s 9 Law Reform (Miscellaneous Provisions) Act 1965 - STATUTORY INTERPRETATION – whether amendments to Part 5, Division 3 of Workers Compensation Act introduced by Workers Compensation Legislation Further Amendment Act 2001 applicable to assessment of quantum of contribution towards damages – construction of transitional provisions in clause 9, Part 18C of Schedule 6 Workers Compensation Act – where proceedings seeking damages were not begun before commencement of 2001 amendments – where all payments of compensation were made prior to commencement of 2001 amendments – whether right to indemnity accrued before commencement of 2001 amendments – whether reasonably certain that Parliament intended that amendments would apply to that right - WORDS AND PHRASES – “in respect of the recovery of damages” - LIMITATION OF ACTIONS – manner in which Limitation Act 1969 applies to employer's right of recovery under s 151Z(1)(d) and 151Z(2)(e) Workers Compensation Act of compensation paid
LEGISLATION CITED:	Civil Liability Act 2002 Law Reform (Miscellaneous Provisions) Act 1946 Law Reform (Miscellaneous Provisions) Act 1965 Limitation Act 1969 Motor Accidents Compensation Act 1999 Trade Practices Act 1974 (Cth) Workers Compensation Act 1926 Workers Compensation Act 1987 Workers Compensation Legislation Further Amendment Act 2001
CATEGORY:	Principal judgment
CASES CITED:	Atkinson v Gameco (NSW) Pty Ltd [2005] NSWCA 338 Burke v Victorian Work Cover Authority [1998] VSCA 24; [1999] 1 VR 189 Clout Industrial Pty Ltd (in liq) v Baiada Poultry Pty Ltd [2004] NSWCA 89; (2004) 61 NSWLR 111 Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594 Czatyrko v Edith Cowan University [2005] HCA 14; (2005) 79 ALJR 839 Forstaff Blacktown Pty Ltd v Brimac Pty Ltd [2005] NSWCA 423; (2005) 4 DDCR 179 Grant v Royal Rehabilitation Centre [1999] NSWCA 250; (1999) 47 NSWLR 263 Grljak v Trivan Pty Ltd (Court of Appeal, 19 April 1996, unreported) Grljak v Trivan Pty Ltd (in liq) (1994) 35 NSWLR 82 Hampic Pty Ltd v Adams [1999] NSWCA 455; (2000) ATPR 41-737 I & J Foods Pty Ltd v Bergzam Pty Ltd (1997) 14 NSWCCR 486 Koehler v Cerebos (Australia) Ltd [2005] HCA 15; (2005) 222 CLR 44 Lapcevic v Collier [2002] NSWCA 300 Leonard v Smith (1992) 27 NSWLR 5 Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174 Podrebersek v Australian Iron & Steel Pty Limited [1985] HCA 34; (1985) 59 ALJR 492 Public Transport Commission of New South Wales v J Murray-More Pty Ltd [1975] HCA 28; (1975) 132 CLR 336 Sheather v Country Energy [2007] NSWCA 179 South Eastern Sydney Area Health Service v Gadiry [2002] NSWCA 161; (2002) 54 NSWLR 495 Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 TNT Australia Pty Ltd v Christie [2003] NSWCA 47; (2003) 65 NSWLR 1 Turner v George Weston Foods t/as Tip Top Bakeries (Newcastle) [2007] NSWCA 67; (2007) 4 DDCR 571 Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207 Wonall Pty Ltd v Clarence Property Corporation Ltd [2003] NSWSC 497; (2003) 58 NSWLR 23
TEXTS CITED:	Pearce and Geddes, Statutory Interpretation in Australia, 6th ed (2006) LexisNexis, Butterworths
PARTIES:	J Blackwood & Son Limited (Appellant) Skilled Engineering Limited (Respondent)
FILE NUMBER(S):	CA 40859/06
COUNSEL:	JG Stewart (Appellant) MA Elkaim SC; MJ Walsh (Respondent)
SOLICITORS:	McCulloch & Buggy, Sydney (Appellant) Turks Legal, Sydney (Respondent)
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 1918/04
LOWER COURT JUDICIAL OFFICER:	Coorey DCJ
LOWER COURT DATE OF DECISION:	6/12/06