Kessler v Beveridge & Campbell
[1996] QSC 89
•29 May 1996
IN THE SUPREME COURT
OF QUEENSLAND
Brisbane Writ No.228 of 1993
Before the Hon. Mr Justice Shepherdson
[Kessler v. Beveridge & Campbell]
BETWEEN:
SUSAN CERI KESSLER
in her capacity as personal representative of
JORG KESSLER
Plaintiff
AND:
GRAHAM BEVERIDGE
First Defendant
AND:
PETER STANLEY CAMPBELL
Second Defendant
JUDGMENT - SHEPHERDSON J.
Judgment Delivered 29 May 1996
CATCHWORDS: DAMAGES - Lord Campbells Act action - Whether moneys charged to the Worker's Compensation Board of Queensland be reduced by 20 per cent in accordance with S.11(2) of the Law Reform (Tortfeasors Contribution, Contributory Negligence and Division of Chattels) Act 1952. Clause 24 and 24A of the schedule to the Worker's Compensation Acts 1916 considered. Tickle Industries v. Hann (1973) 130 CLR 321 Workers' Compensation Board v. Nominal Defendant (Queensland) (1989) 1Qd.R 356 referred to.
Counsel:A.J. Williams for the applicant/plaintiff
Warnick for the respondent/defendants
Solicitors:Bruce S. Dulley, Town Agents
for Doyle Wilson for the applicant/plaintiff
Hill and Taylor for the respondent/defendant
Hearing date: 7 May 1996
IN THE SUPREME COURT
OF QUEENSLAND
Brisbane Writ No.228 of 1993
Before the Hon. Mr Justice Shepherdson
[Kessler v. Beveridge & Campbell]
BETWEEN:
SUSAN CERI KESSLER
in her capacity as personal representative of
JORG KESSLER
Plaintiff
AND:
GRAHAM BEVERIDGE
First Defendant
AND:
PETER STANLEY CAMPBELL
Second Defendant
JUDGMENT - SHEPHERDSON J.
Judgment Delivered 29 May 1996
This application follows the settlement of a Lord Campbells Act action on 13 March 1996. The plaintiff had claimed damages for loss of dependency for herself and two infant children, Jake Jorg Kessler and Stephanie Louise Kessler consequent on the death of her husband and their father in a motor vehicle accident on 9 November 1990.
On 25 November 1994 quantum of the plaintiffs' claim was settled at $250,000. Liability remained in issue. The matter was listed for trial in this Court to commence on 14 March 1996. On 13 March 1996 the action was settled. The terms included an apportionment of liability whereby the defence accepted 80 per cent liability and the plaintiff a contribution of 20 per cent liability. As a result, in terms of the settlement, the plaintiffs' entitlement to damages was reduced to $200,000. On 14 March 1996 an application was made to this Court to sanction the settlement of the action applicable to the two infant plaintiffs. On that day the Hon. Mr Justice Williams ordered such sanction - as to Jake Jorg Kessler in the sum of $35,200 and as to Stephanie Louise Kessler in the sum of $42,400 plus costs to be taxed. I note in passing that the formal order dated 14 March 1996 shows $35,200 in words followed by $25,200 in brackets - the latter figure should obviously be $35,200. A transcript of the reasons dictated by His Honour on 14 March 1996 shows that His Honour had before him counsel's advice on quantum. This advice showed that Jake who was then aged 8 was to receive $44,000 and Stephanie who was then aged 4 was to receive $53,000. His Honour considered these figures could clearly be supported. When asked to sanction the settlement for the two children in the amounts of $35,200 and $42,400 respectively, he said "I am only prepared to sanction the settlement in those figures in light of the fact that there is a 20 per cent contribution."
His Honour's reasons show the plaintiffs' counsel asked His Honour to make a finding of 20 per cent contribution on the part of the deceased Kessler. His Honour was not prepared to do this, and his reasons show that there was some reference to s.11(2) of the Law Reform (Tortfeasors Contribution, Contributory Negligence, and Divisions of Chattels) Act 1952 and a decision of the Hon. Mr Justice Byrne in re McDonald (1992) 2 Qd.R 510. The application before me is made by the plaintiff who seeks the following orders:-
A declaration that the moneys charged to the Workers' Compensation Board of Queensland be reduced by 20 per cent in accordance with s.11(2) of the Law Reform (Tortfeasors Contribution, Contributory Negligence and Divisions of Chattels) Act 1952.
That the costs of and incidental to this application be paid by the defendant or alternatively the Workers' Compensation Board of Queensland.
.The application is directed to the abovenamed defendants and to the Workers' Compensation Board of Queensland. Mr Warnick appeared for the defendants and announced that he was instructed by the Workers' Compensation Board of Queensland. Mr A.J. Williams appeared for the applicant plaintiff in her own right and as next friend of the infant children.
Exhibit E to the affidavit of Lachlan Talbot Graham Wilson filed 26 April 1996 and relied by the applicant contains a bundle of letters passing between the Workers' Compensation Board Warwick branch and Doyle Wilson of Goondiwindi, the solicitors for the plaintiff. The correspondence shows that the Workers' Compensation Board claimed a charge of $103,543-97 being the compensation paid by the Board to the plaintiff and the two children after the death of Mr Kessler. The Board at all times maintained its right to be recompensed in full for that amount regardless of any apportionment of any liability between the late Mr Kessler and the defendants. The applicant's submission relies entirely on s.11(2) of the Law Reform (Tortfeasors, Contribution,Contributory Negligence, and Division of Chattels) Act 1952. That section relevantly reads:-
"(11)(2) Where a worker or the worker's dependant has recovered compensation under The Workers' Compensation Act 1916 in respect of an injury caused under circumstances which would give a right to recover reduced damages in respect thereof by virtue of section 10 from some person other than the employer ("the third party"), any right conferred by section 24 of the Schedule to the Act on the Insurance Commissioner to be indemnified by the third party shall be limited to a right to be indemnified in respect of such part only of the compensation recovered by the worker or the worker's dependant as bears to the total amount of compensation so recovered the same proportion as the said reduced damages bear to the total damages which would have been recoverable if the worker had not been at fault."
The section as it reads above is taken from a Reprint of the Act as in force on 9 December 1994 (Reprint No. 1). The reference to "section 24 of the schedule" must mean "clause 24 of the Schedule to the Worker's Compensation Act 1916". Before Reprint No. 1, s.11(2) mentioned clause 24 and not section 24. The parties before me agree that clauses 24 and 24A of the schedule are relevant to the present application and that The Workers' Compensation Act 1990 does not apply.
The reference to "Insurance Commissioner" must now be read as a reference to Workers' Compensation Board of Queensland. Clause 24 in the schedule to the Workers' Compensation Act 1916 (as amended) reads:-"24 Recovery of damages from stranger. When the injury for which compensation is payable by the Board under this Act was caused under circumstances creating also a legal liability in some other person to pay damages in respect thereof -
(i)the worker may both take proceedings against that person to recover damages and may apply for compensation under this Act, but is not entitled to recover both damages and compensation: and
(ii)if the worker has recovered compensation under this Act, the Board shall be entitled to be indemnified by the person so liable to pay damages as aforesaid, and all questions as to the right to and amount of any such indemnity shall in default of agreement be settled by action or, if the parties consent, by an Industrial Magistrate under this Act.
This clause applies subject to clause 24A of this schedule."
The last sentence of clause 24 was inserted by s.6 of "The Workers' Compensation Acts Amendment Act of 1954".
By that same amending Act clause 24A was inserted in the Schedule to follow clause 24. By the Workers' Compensation Acts Amendment Act of 1955 (assented to 14 April 1955) clause 24A of the Schedule was repealed and in lieu a new clause 24A was inserted. Clause 24A as applicable to the present application reads-"24A. Compensation receivable until damages become recoverable.
(1)Subject to this clause, in respect of an injury received under circumstances creating both
(a)Independently of this Act, a legal liability in some person, whether the employer or a person other than the employer, to pay damages in respect of that injury; and
(b)A claim for compensation under this Act,
a worker may both take proceedings to recover those damages and apply for compensation under this Act according to his entitlement thereto, but such a worker is not entitled to receive compensation under this Act at any time (or in the case of compensation under provision (B) of subsection one of section fourteen of this Act, in respect of any period of time) after those damages become recoverable by him.
(2)Any amount of compensation (which shall include medical, hospital, travelling, and other expenses) under this Act paid in respect of an injury to a worker to whom this clause applies at a time or in respect of a period of time before damages become recoverable by him from the employer or, as the case may be, other person legally liable therefor, shall be a first charge upon those damages.
The employer or other person from whom those damages are recoverable shall pay to the Board any sum charged thereon by virtue of this subclause or, if those damages are insufficient to meet that charge, the whole of those damages, and that payment shall, to the extent thereof, satisfy the liability of that employer or other person for payment of those damages.
(3)If a worker to whom this clause applies who has received compensation under this Act has not, independently of this Act, recovered any damages from the employer or, as the case may be, other person legally liable therefor, the Board shall be entitled to be indemnified by that employer or other person to the extent of his liability.
If, subsequently to that employer or other person paying under such indemnity, the worker recovers damages against him, the payment under the indemnity shall to the extent thereof, satisfy the liability of that employer or other person.
(4)A worker shall not settle or compromise, for a sum less than the amount of compensation charged on those damages, any claim for damages had by him independently of this Act in respect of an injury to which this clause applies without the prior consent in writing of the Board.
If, without that consent, such a settlement or compromise is made the Board shall nevertheless, to the extent to which the damages recovered are insufficient to meet all payments payable to the Board under this clause, be entitled to be indemnified by the party, other than the worker, to that settlement or compromise.
(5)For the purposes of section 16 hereof, clause 24 of the Schedule hereto and this clause, compensation under this Act in respect of an injury to a worker shall be deemed to include medical, hospital, travelling, and other expenses."
At first glance the provisions of s.11(2) appear to favour the construction for which Mr Williams contends.
However, in my view the matter must be resolved by considering first the policy of legislation such as that appearing in clause 24A as explained by the High Court of Australia in Tickle Industries Pty Ltd v. Hann (1973) 130 CLR 321 and then considering the historical sequence in which s.11(2) and the 1954 amendment to clause 24 and the appearance of clause 24A were enacted.
In Tickle Industries Pty Ltd v. Hann the High Court of Australia considered s.22(1) of the Workmens' Compensation Ordinance 1949-1968 of the Northern Territory. This legislation, although not identical with clause 24A was similar in principle to that clause. In Workers' Compensation Board of Queensland v. The Nominal Defendant (Queensland) (1989) 1 Qd.R 356 Connolly J. with whose reasons McPherson J. agreed, said when referring to Tickle Industries Pty Ltd v. Hann (p. 357) that s.22(1) "may be regarded as the equivalent of clause 24A".
In Hann an employee died as a result of a motorcar collision whilst he was in the course of his employment with Tickle Industries Pty Ltd. The company paid his widow and child $6,300. No action was brought by the employee's dependants within the relevant time limitation period against the persons apparently liable in respect of the death. After that period had expired the company sought to recover from the persons apparently liable for the death, an indemnity under s.22(1)(d) which was the equivalent of clause 24A(3) of the Queensland Legislation.
The High Court held that it was entitled to maintain such action. Barwick C.J. (with whose reasons McTiernan J. agreed) considered the policy behind legislation such as that embodied in s.22. He pointed out (p.326) that the provisions in s.22 had their origin in s.6 of the Workers' Compensation Act 1906 of the United Kingdom as developed through the workers' compensation legislation of the Australian States; that the policy of s.6(2) which was the prototype of s.22(1)(d) of the Ordinance was that an employer who paid the statutory compensation to an injured employee or, in the case of his death, to his dependants, where the injury or death, though occurring in the course of employment was caused by the wrongful act or omission of another person, was to be entitled to be indemnified against the payment of that compensation by that other person. He commented (p.326):-"There is obvious and necessary justice in giving the employer, who has been involved in the payment of compensation by the wrongful act of another, a right of recovery against that other but only up to the amount of damage which that other has caused and for which he was legally responsible."
The case makes it clear that the right to indemnity is independent of the action or inaction of the employee and is a right directly against the wrongdoer (see Hann p.327-8 and Workers' Compensation Board v. Nominal Defendant (Supra) p. 358).
In the latter case the Full Court of the Supreme Court of Queensland applied Tickle Industries Pty Ltd v. Hann. It is now to be taken as settled in Queensland that the right to indemnity given to the Workers' Compensation Board under clause 24A(3) is a right directly against the tortfeasor. In Tickle Industries Pty Ltd v. Hann, Barwick C.J. construed the phrase "the person liable to pay damages" in clause 22 (1)(d) as meaning the tortfeasor. In my respectful view the Board's right to an indemnity from the tortfeasor given by clause 24A(3) is the same as the right to an indemnity given to the Board under clause 24. Clause 24 is set out earlier in these reasons.
The indemnity under clause 24A(3) can be claimed initially when the worker has not independently recovered any damages from the tortfeasor employer or another person who is the tortfeasor.
The indemnity under clause 24 can be claimed by the Board against the tortfeasor who has been sued by the worker to recover his damages.
In the case now before me, the indemnity might have been sought and obtained by the Board pursuant to clause 24. However clause 24 is expressly made to apply "subject to clause 24A". Under clause 24A(2) the compensation paid by the Board must be a first charge upon the plaintiffs' damages. Quite obviously, the plaintiffs having begun their damages action in the present suit, there was no need for the Board to seek an indemnity under clause 24 - it had the protection of its "first charge upon those damages" as stated in clause 24A(2).
In my opinion, under clause 24A(2) the amount of the Board's charge in the present case namely $103,543-97 is a mandatory first charge upon those damages.
I thought it not without significance in the present case, that in Tickle Industries Pty Ltd v. Hann at p.334, Barwick C.J. said:-"Reading the description "the person liable to pay damages" as meaning the tortfeasor, par.(d) makes an intelligible and just provision. The compensating employer must establish against the tortfeasor the condition of his right of indemnity. He must establish that the defendant was the tortfeasor: that the injury he caused was a compensable injury: that the amount paid and claimed in the action was properly payable under the Compensation Ordinance: and the amount of damages properly assessable in respect of injury caused by the tortfeasor."
I see no difficulty in the assessment of damages in the employer's action. Such damages will not be in any sense "notional". Having established these matters, the employer will be entitled to judgment for the amount of compensation paid, if the damages equal or exceed that amount. If not, he will have judgment for the amount of the damages. This construction and this result are conformable to the policy of the workers' compensation legislation as well as being just."
Although this passage in the judgment is strictly obiter dicta, Barwick C.J. later considered what he had written in Hann's case. In Xpolitos and Another v. Sutton Tools Pty Ltd (1977) 136 CLR 418 at p.423 His Honour said:-
"I have reconsidered what I wrote in Tickle Industries Pty Ltd v. Hann ... all that I wrote in Tickle Industries Pty Ltd v. Hann in analysis of the relevant sections of the Workers' Compensation Ordinance 1949 - 1968 (N.T.) is applicable, in my opinion to the counter part provisions of the Act. I have no need to repeat that analysis. Having reconsidered the matter, I reaffirm the conclusions I formerly expressed."
I add that in that case, the Court was considering s.62 of the Workers' Compensation Act 1958 (Victoria) and also s.79 of the same Act. Stephen and Jacobs JJ. agreed with the reasons of the Chief Justice.
I turn now to the historical sequence of the relevant pieces of legislation. When s.11(2) of the Law Reform (Tortfeasors Contribution Contributory Negligence and Divisions of Chattels) Act 1952 was enacted in 1952, clause 24A did not exist in The Workers' Compensation Acts. Clause 24 did exist but did not then contain the concluding sentence which, when enacted, made it subject to clause 24A.
Were it not for clause 24A there would be much to commend Mr Williams argument that s.11(2) would cause the Board's charge to be reduced by 20 per cent.
The legislative history shows that in 1954 clause 24 was amended and clause 24A inserted and subsequently amended without any alteration being made to s.11(2) which had existed since 1952. In my view clauses 24 and 24A have effectively destroyed Mr Williams argument - they have neutralised the interpretation of s.11(2) for which Mr Williams contends.
I should add that I have read the reasons for judgment of the Hon. Mr Justice Byrne in re McDonald (1992) 2 Qd.R 510. I agree with His Honour's conclusions that the legislative constraint imposed by s.11(2) on the Board's rights under clause 24 to be indemnified by the wrongdoer in respect of compensation paid was not germane in the circumstances of that case.
In my view, in the circumstances of the case now before me, the plaintiff is not entitled to the declaration which she seeks. I should add that there is another very good reason why the declaration should not be made in this case. On 25 November 1994 the parties settled and agreed the quantum of the damages at $250,000. At that stage the matter of contribution between the deceased man and the defendants was still in issue. The correspondence between the plaintiff's solicitors and the Workers' Compensation Board which ensued after the damages were agreed, shows no suggestion that the $250,000 figure was to be amended in any way by reason of a subsequent possible apportionment of the Workers' Compensation Board charge. Ultimately, the plaintiff and the defendants agreed to apportion liability as already stated. This meant the liability of the defendants to pay damages was reduced to $200,000. The judgment given reflected this apportionment. If the plaintiff's argument that the charge should be reduced by 20 per cent were correct, then the damages to which the plaintiffs were entitled would be increased beyond the agreed figure by slightly more than $20,000. There is not the slightest suggestion in the correspondence that such a possibility was considered. If it were considered by the parties, it could only have come to pass with the consent of the Workers' Compensation Board as holder of the statutory charge. The correspondence shows the Board consistently demanded payment in full of its charge.
I dismiss the application.
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