New South Wales v Kennelly

NEW SOUTH WALES COURT OF APPEAL

CITATION: State of New South Wales v Kennelly [2001] NSWCA 71

FILE NUMBER(S):
40259/99

HEARING DATE(S): 2 November 2000

JUDGMENT DATE: 10/04/2001

PARTIES:
State of New South Wales
Dorothy Shirley Kennelly

JUDGMENT OF: Meagher JA Beazley JA Young J

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): 796/92

LOWER COURT JUDICIAL OFFICER: Goldring DCJ

COUNSEL:
Appellant: G Giagios
Respondent: L King SC/J Kernick

SOLICITORS:
Appellant: I V Knight, Crown Solicitor
Respondent: Steve Masselos & Co

CATCHWORDS:
Workers compensation
Alternate rights against occupier and employer
Employees and servants of the Crown

LEGISLATION CITED:
Workers Compensation Act 1987 (NSW) ss 151E, 151Z
Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5(1)(c)

DECISION:
Appeal allowed with costs

JUDGMENT:

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40259/99

MEAGHER JA
BEAZLEY JA
YOUNG AJA

Tuesday, 10 April 2001

STATE OF NEW SOUTH WALES v Dorothy KENNELLY
FACTS
The respondent was employed as a cleaner by Government Cleaning Services at Hebersham Public School and was injured whilst closing a window of one of the classrooms at the school. The incident gave rise to two causes of action in negligence: one against the State (as the Department of Education), as occupier of the school premises and one against the State (as Government Cleaning Services), as her employer. The respondent confined her claim to one against the State as occupier in order to avoid the limiting affect of the Workers Compensation Act 1987 (NSW) on her damages claim.
The question raised in appeal concerned the proper construction of s 151Z(2) of the Workers Compensation Act and whether it has any interaction with the provisions of s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).
HELD
per Meagher JA and Beazley JA (in separate judgments)
(i) The principle in Haines v Tempesta (1995) 37 NSWLR 24 that the indivisibility of the Crown does not apply in respect of s 151Z(1) of the Workers Compensation Act extends to subs (2).
(ii) Section 151Z does not have any reference to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act or to principles of contribution at common law or equity.
(iii) Section 151Z(2) operates as follows: Once arriving at the figure of damages for the present case, the trial judge should have recalculated it as if Div 3 of the Workers Compensation Act applied. Next his Honour should have decided what proportion each of the branches of the Crown should bear of that sum and deducted from the respondent’s verdict against the Crown as occupier whatever figure represented the just and equitable percentage owing by the Crown as employer.
per Young AJA (dissenting)
(iv) The wording of s 151Z(2) is insufficiently wide to allow the application of Haines v Tempesta to extend to that subsection.
(v) Section 151Z(2) directs attention to s 5 of the Law Reform (Miscellaneous Provisions) Act and Haines v Tempesta does not apply to that provision.
ORDERS
(i) Appeal upheld and verdict below set aside.
(ii) New trial ordered
(iii) Respondent to pay the appellant’s costs.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40259/99

MEAGHER JA
BEAZLEY JA
YOUNG AJA

Tuesday, 10 April 2001

STATE OF NEW SOUTH WALES v Dorothy KENNELLY
JUDGMENT

MEAGHER JA: In this case I have had the privilege of reading the judgment of Young AJA. Unfortunately I find myself unable to agree with it. This is not wholly surprising, however, in view of the fact that anyone who plunges into the murky waters of s.151Z of the Workers Compensation Act, 1987 (NSW) might well be expected to reach a different destination from other explorers of these waters.
On 10 February 1989 Mrs Kennelly, the respondent, a 49 year old school cleaner, injured her back whilst attempting to close a window during the course of her employment at Hebersham Primary School. The windows of the school were difficult to close because most, if not all, lacked counter weights and were held in position by pins, a fact which was well known to the principal of the school and to his predecessor and about which several complaints were made.
The school was conducted by the New South Wales Department of Education, an emanation of the Crown. She was employed by the Government Cleaning Service, another emanation of the Crown.
The principle that the Crown is indivisible does not apply to proceedings governed by the Workers Compensation Act. That was decided by this Court in Haines v Tempesta (1995) 37 NSWLR 24, a curious decision, leave to appeal against which was refused by the High Court. In the present case, it enabled Mrs Kennelly to sue the Crown either as occupier of the school or as employer, or both. In fact, she chose to sue the Crown only as occupier.
The learned District Court judge, Goldring DCJ, found all the facts relied upon by Mrs Kennelly in her favour. He awarded her a verdict in the sum of $297,588.75.
He also found that the Crown as employer was also negligent. His Honour’s words in this regard deserve repetition:
“It is quite clear that an employer has a non-delegable duty to provide a safe system of work …, and I bear that duty in mind.
It is also true that an occupier of land has a duty of care also. The occupier must take reasonable care to prevent injury to those who may reasonable come onto the land…”
Bearing in mind His Honour’s findings of primary fact, one would have thought it followed that both the Crown as occupier and the Crown as employer would have been equally liable to Mrs Kennelly, the former as sued in this action, and the latter if it had been sued by Mrs Kennelly, which it was not.
In these circumstances, one must consider the application of s.151Z(2) of the Act, which, insofar as relevant, reads as follows:
151Z(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 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,…”
Paragraph (c), standing on its own, is simply incomprehensible. However, paragraph (d) does, I think, render it comprehensible. In this regard, I might add that , respectfully, I agree with Young AJA’s observation:
“To my mind the whole of the words are predicated on there being a right outside the section to obtain contribution and how an arithmetical deduction from the plaintiff’s damages is to be made because of that external right.”
The obvious candidate for such an external right in Part 3 s.5 of the Law Reform (Miscellaneous Provisions) Act, 1946 (NSW).
But, for s.5 to operate, it is necessary to have a quantified verdict against all persons liable, who between themselves can dispute in what proportions each should share the liability. In the present case, all parties seemed to assume that a contribution process could begin where one party had a known verdict against it, and another party was hypothetically liable for some other figure. Contribution cannot begin to operate in such circumstances.
What, therefore, his Honour should have done was to take the figure he arrived at against the occupier ($297,588.75) and recalculated it as if Division 3 of the Workers Compensation Act applied. He should then have decided what proportion each of the branches of the Crown should bear of that recalculated sum. In my view, each should have been liable as to 50%; but it is not my business to decide this issue. Having arrived at the answer to that calculation, he should have deducted from Mrs Kennelly’s verdict against the Crown as occupier, whatever figure represented the just and equitable percentage owing by the Crown as employer.
It will be observed that:
(a) in cases like the present the verdict against the employer outside the Act must necessarily be the same as the verdict against the occupier outside the Act. This is because the same act of negligence is relied upon in both cases, the damages sought will be the same, the evidence will be the same; and
(b) in cases like the present, the verdict calculated in accordance with Division 3 of the Act will be the same in both cases; and
(c) if, in any case (of which this is not one) the damages which would be awarded against the employer in the event that proceedings were brought against him to which s151Z(2) applied, and an anomalous result arose to the effect that the latter result (ie under s151Z(2)(b)) was different from the verdict against the occupier (ie under s151Z(2)(a)), as re-calculated, no contribution would be possible, and therefore no deduction made from the verdict.
I might add that his Honour came to the conclusion that no amount should have been deducted. No party was minded to support this conclusion in the form in which it was expressed. The appellant contended it was plainly wrong; the respondent said that it was, at least, infelicitously expressed. I think it must flow, from what I have said, that it must be mistaken.
In my view, the appeal should be upheld, the verdict below set aside, and a new trial ordered. The respondent should pay the appellant’s costs.
BEAZLEY JA: This appeal involves the proper construction of s 151Z(2) of the Workers Compensation Act 1987 (NSW) and the question whether it has any interaction with the provisions of s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).
The relevant facts are as follows. The respondent was employed by the Government Cleaning Service to clean at Hebersham Public School. Both the Government Cleaning Service (which was probably operated by the Department of Administrative Services) and the Department of Education are instrumentalities of the State of New South Wales.
On 10 February 1989, the respondent was injured whilst closing a window in one of the classrooms at the school. The incident gave rise to two causes of action in negligence. One against the State (as the Department of Education) as occupier of the school premises. The other against the State (as the Government Cleaning Service) as the respondent’s employer. The respondent confined her claim to one against the State as occupier. Her reason for doing so was clear. She sought to avoid the limiting affect of the Workers Compensation Act on her damages claim.
It is convenient to turn to that Act.
Part 5 of the Workers Compensation Act makes provision for the award of common law damages where a worker has sustained injury within the meaning of the Act, which also gives rise to a liability in the employer at common law. However, a worker is not entitled to both permanent loss compensation under the Act and common law damages and is required to elect between the two: s 151A. Common law damages payable by an employer are limited by s 151E(3), which provides:
“151E Application - modified common law damages
(1) This Division applies to an award of damages in respect of:
(a) an injury to a worker, or
(b) the death of a worker resulting from or caused by an injury,
being an injury caused by the negligence or other tort of the worker’s employer.
(2) This Division does not apply to an award of damages to which Part 6 of the Motor Accidents Act 1988 applies.
(3) This Division applies to an award of damages in respect of an injury caused by the negligence or other tort of the worker’s employer even though the damages are recovered in an action for breach of contract or in any other action.
(4) Subsection (3) is enacted for the avoidance of doubt and has effect in respect of actions brought before as well as after the commencement of that subsection.”
Section 151Z applies to the case where a person sustains injury in circumstances where compensation is payable by the employer under the Act and a third party is also liable to pay common law damages. Its terms are as follows:
“151Z Recovery against both employer and stranger
(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:
(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,
…
(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,
…
(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 joint tortfeasor or otherwise exceeds the amount of contribution recoverable …”
The operation of subs 2 is the point of this appeal.
The first question which arises is whether subs (2) applies to the respondent’s circumstances. On first glance it does not because of the doctrine of the indivisibility of the Crown. However, in Haines v Tempesta (1995) 37 NSWLR 24, Kirby P stated at 34:
“It has not been unusual in New South Wales legislation to treat State Government employment as differentiated and not unitary for the purposes of the legislation … So it is in the case of s 151E(1) of the Workers Compensation Act 1987.
… for a very long time workers compensation legislation in this State has recognised the division in State Government service which has reflected the common understanding of the community and the realities of modern public administration. It is simply not possible, for the purposes of the Act, to adhere to a theory of indivisible Crown service in State government employment in New South Wales consistent with the definition of ‘government employer’ in s 3 of the 1987 Act.”
His Honour concluded at 35:
“When, therefore, s 151E(1) refers to ‘negligence or other tort of the worker’s employer’ it refers, in the case of a ‘government employer’ to the negligence or other tort of the worker’s applicable ‘department, person or body exercising executive or administrative functions on behalf of the government of the State’.
I do not accept the argument that this construction of the Act permits the worker, merely by an enterprising pleading, to escape the operation of s 151E(1) of the Act and its policy to limit the recovery of common law damages in employment injury cases. It is still necessary for the worker to establish that the relevant ‘negligence or other tort’ can be attributed to some person other than the worker’s own department or agency. It is enough in this case to say that the word ‘employer’, as used in s 151E and 151Z, imports, in the case of ‘government employers’, the special definition with its enlarged meaning to include departments etc. This does not involve adding any words to either s 151E(1) or s 151Z. No words should be added. In this, I agree with the master. All that this case establishes is that the reference to ‘employer’ imports, in the case of government employment, the special statutory definition provided by the Act.”
The appellant submitted that as the State had a relationship with the respondent both as non-employer (the Department of Education) and as employer (the Government Cleaning Service), it was entitled to the benefit conferred on a non-employer tortfeasor by the section. It submitted that the contribution amount, the benefit to which it was entitled, was to be assessed either pursuant s 5(1) of the Law Reform (Miscellaneous Provisions) Act or by way of contribution at common law or equity.
Section 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act provides:
“Any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought.”
The respondent submitted however, that s 5(1)(c) has no application to the present proceedings. Put more precisely, it was submitted that Haines v Tempesta was confined in its operation to s 151Z(1) so as to permit a person employed by a Department of the Sate who suffered injury at the hands of another Department of the State to recover damages from that other Department in accordance with the provisions of s 151Z, but that the principle in Haines v Tempesta does not extend to s 151Z(2) to permit the reduction of those damages.
Three reasons were advanced for this construction. First, Haines v Tempesta, on its facts, involved the construction of s151Z(1) only. It was submitted that, although Kirby P did not confine his statement of principle to subs (1), the judgment must be read in that context. Secondly, s 151Z(2) is a calculation provision, which for its operation, requires recourse to s 5(1) of the Law Reform (Miscellaneous Provisions) Act. Thirdly, if the appellant’s argument was correct, it would be necessary to extend the Haines v Tempesta principle to that section and that nothing in Kirby P’s judgment permits that extension.
Senior counsel for the respondent conceded that the consequence of his submission was that a plaintiff in the position such as the plaintiff here - injured in the course of employment with one Government department, in circumstances giving rise to causes of action, both against the employer/Government department and the non-employer Government department - was in a more favourable position than a plaintiff where the employer and non-employer tort feasor were different.
I cannot agree with the respondent’s submission. The introductory words of subs (2) do not permit the application of Haines v Tempesta to be so confined and the Crown is to be treated as divisible for the purposes of the calculation required in subs (2)(c).
That then leaves the question of how subs (2) is intended to operate. In my opinion, the word “contribution” as used in subs (2) is not used in the strictly technical sense it has at law or under the Law Reform (Miscellaneous Provisions) Act. Rather, it has the operation described by Meagher JA in para 12 of his judgment.
It follows that the section does not operate in the way contended for by the appellant which would have placed it in a position far more advantageous than any other employer.
I agree with the orders proposed by Meagher JA.
YOUNG AJA: This is an appeal from a decision of his Honour Judge Goldring in the NSW District Court.
The facts of the case are extremely simple. On or About 10 February 1989 the plaintiff was employed by the Government Cleaning Service, an emanation of the Crown. She was cleaning at the Hebersham Public School, the occupier of which was the Department of Education, another emanation of the Crown. The plaintiff attempted to close a window in the school premises, but, because of the poor condition of the window, she was unable to move it, and, in attempting to close it, sustained injury, loss and damage.

The Government Cleaning Service was cleaning the school by some arrangement with the people in charge of the school, but just what that arrangement was never came out in the evidence before his Honour.
The way the plaintiff put her case was that she was solely suing the State as the authority responsible for the occupier of the premises on which the accident occurred. She was not suing her employer.
The trial came on before Goldring DCJ on 23 and 24 March 1999. His Honour gave judgment at 10 am the next morning, giving a verdict for the plaintiff for $238,071.03.
The State of New South Wales has appealed, but that appeal is only pursued with respect to a limited aspect of the case. That limited aspect is whether the learned Judge was in error in not making any allowance for the contribution factor pursuant to section 151Z(2) of the Workers Compensation Act 1987 as amended. Although the facts are simple the problems of construction of the relevant legislation is complex. I regret that on the construction issues I differ from the conclusion reached by Meagher and Beazley JJA.
It is necessary to make some general observations to put this ground of appeal in context.
Under workers compensation legislation as it has existed for most of the 20th century, a person who is injured at work is given the choice of:
(a)          proceeding against his or her employer for statutory compensation under the relevant Act;
(b)          suing his or her employer at common law; and/or
(c)          suing another person responsible for the injury or damage.
Although the exact provisions have changed from time to time, the legislation has usually provided for some form of payback to the workers compensation insurers if common law damages have been obtained by a plaintiff who has had the benefit of an award of compensation. There have usually been provisions to prevent what is these days called “double dipping”.
The scheme of the Workers Compensation Act 1987 as amended in 1989 appears to have been adopted with an eye to the convenience of insurers. It prescribes a scheme which, at first blush, one would think prevents “double dipping” and provides for equitable sharing of the risk amongst the insurers concerned. However, as the case law has shown, it does produce considerable anomalies in individual cases.
Essentially, since 1989, under the scheme if the plaintiff seeks common law damages from her employer, the damages will be on a modified scale as prescribed by Part 5.3 of the Workers Compensation Act, and out of those damages, workers compensation is to be paid back to the workers compensation insurer. If, however, a third party is sued rather than the employer, s 151Z comes into play. Section 151Z(2) so far as is relevant is as follows:
“(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 may 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 the provisions of Division 3 as to the award of damages,
…”.
A complication in the instant case is that both the employer and the occupier of the premises concerned were emanations of the Crown.
In Haines v Tempesta (1995) 37 NSWLR 24, this Court held that under s 151E of the Workers Compensation Act 1987, referring to negligence etc of an employer, “employer” in the case of a Government employer meant the department, person or body exercising the executive or administrative functions on behalf of the Government and the theory of indivisibility of the Crown was negated accordingly. Kirby P, who gave the decision of the Court consisting of himself, Clarke and Handley JJA, said at 35:
“It is enough in this case to say that the word ‘employer’, as used in s 151E and s 151Z, imports, in the case of ‘government employers’, the special definition with its enlarged meaning to include departments etc. This does not involve adding any words to either s 151E(1) or to s 151Z. No words should be added. … All that this case establishes is that the reference to ‘employer’ imports, in the case of government employment, the special statutory definition provided by the Act. The pre-existing prerogative and common law notions of Crown employment are, to that extent, modified for the purposes of the Act.”
Both parties in the present case accepted the correctness of the decision in Haines v Tempesta in the Court below and in this Court. Mr L King SC who appeared with Mr J Kernick for the respondent reminded us that the High Court had in fact refused special leave to appeal from that decision on 5 February 1996.
Accordingly, when a person is injured where both the employer and a non-employer are liable to pay the plaintiff damages, and the person sues the non-employer, the verdict is rebated by the “contribution factor”, if I can call it that, assessed in accordance with s 151Z(2) of the Act.
The way in which Goldring DCJ approached this point was to say that the contribution factor was zero because the employer and the occupier were not at arm’s length, the ordinary contractual relationships did not apply between them and it would not be just and equitable to require one to contribute to the damages payable by the other. The underlying cause of the injury was the failure of the Department of Education as occupier to warn of dangers in the premises.
His Honour said a whole lot more, but, basically, that was the reason why he made a zero estimate of the contribution factor.
The State, as appellant, says that his Honour was in error on this and he should have fixed a substantial contribution, perhaps 50%, and that this Court should either fix the contribution factor, or alternatively, send the case back for a retrial on that point.
The respondent says that perhaps his Honour could have expressed his reasoning more felicitously, but that the bottom line is that his Honour’s decision that there is a zero contribution factor was correct.
It is clear that this submission is virtually that the learned Judge’s reasoning process was flawed, but that his decision can be upheld in any event.
Mr King SC and Mr Kernick basically made the point that when one reads the provisions of s 151Z(2) carefully, one can see that the section is merely providing a formula whereby a plaintiff’s verdict is to be discounted in certain circumstances. The subsection does not purport to be the instrument by which such discount is authorised, it merely picks up a factor that exists outside the subsection and then diminishes the plaintiff’s verdict by an arithmetical calculation according as to whether that factor exists or not.
There is some support for the proposition that the section only involves an arithmetical calculation and is not at all concerned with whether actual moneys are recoverable from the possible defendant in view: see Grljak v Trivan Pty Ltd (1994) 35 NSWLR 82, 88.
The gravamen of the submission for the respondent is that the question as to whether an employer is liable to make contribution is found outside section 151Z(2). The Court’s decision in Haines v Tempesta is clearly limited to the definition of “employer” in the Workers Compensation Act. If one looks to the statute dealing with compensation, in this sort of case, s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (“the 1946 Act”), one can see no warrant for reading into that statute the bizarre conception that a person can claim contribution from itself. That being so, when one looks to the law as to contribution one finds that there is no contribution payable and accordingly when one applies the arithmetical formulae in s 151Z(2) one deducts a contribution factor of zero as the learned trial judge did.
The riposte to this is twofold, viz:
(1) the liability to pay contribution is found within s 151Z(2) itself; and
(2) it is quite artificial to give the meaning which the Court of Appeal gave in Haines v Tempesta to s 151Z(1) (as Kirby P plainly did) and yet virtually adopt another interpretation in subsection (2) of the same section.
Before dealing with this riposte, it is necessary to spend some moments on the right to contribution.
There was some argument before us as to whether the words “or otherwise” after “joint tortfeasors” in various paragraphs of s 151Z(2) merely meant concurrent tortfeasors or similar or whether it extended to cover situations where contribution was payable as a matter of equity or contract.
This matter was addressed by Mathews J in Georgitsis v Lend Lease Interiors Pty Ltd (1989) 17 NSWLR 106. Her Honour was then considering an identical phrase in s 150(2) of the Workers Compensation Act 1987 as it existed in 1989 before the present amendments. Although there are some differences in the legislation, the general intent of the sections is the same. After hearing arguments from senior counsel on both sides and remarking that there were difficulties whichever construction one adopted, her Honour came to the view that the words “or otherwise” meant “or otherwise in tort”.
Nothing has been said in submissions that would weaken the authority of that decision and indeed, with respect, it seems to be perfectly correct. One would wonder why the legislature would employ the words “joint tortfeasor” if the wider interpretation were correct.
Before the 1946 Act (which was modelled on the English Act of 1935), the law as to contribution between tortfeasors was clear as to its general thrust though not as to the precise details. Modern books such as Fleming on Torts 9th Ed (LBC, 1998) p 292 merely say “The common law did not countenance contribution among tortfeasors”. The Australian courts appear to have taken the view of the right of contribution as expressed by Fleming: see Dall v The Blue Wren Taxi Co Pty Ltd [1926] VLR 365. However, contemporary English books published earlier last century such as the 11th edition of Pollock The Law of Torts (Stevens, London, 1920) pp 199-201, put the matter far more narrowly. The difference flows from how one reads Merryweather v Nixan (1799) 8 TR 186, 101 ER 1337.
However, for all intents and purposes the right of contribution between tortfeasors at the present day is governed by s 5 of the 1946 Act.
Section 5(1)(c) provides as follows:
“Any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect to the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by that person in respect of the liability in respect of which the contribution is sought.”
Section 5(2) provides:
“In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person’s responsibility for the damage: and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.”
In the present case, there would have been two tortfeasors if there had been two separate persons fulfilling the positions of employer and occupier. The employer had the duty to warn the plaintiff of dangers in the workplace. The occupier had a duty to warn of the dangers in the premises. Both failed in their duty and the plaintiff could have sued either one. They were not joint tortfeasors. Each was independently at fault and liable for its own negligence, but the plaintiff could only recover one amount. The situation is such that contribution would ordinarily be payable under s 5(1)(c) between the employer and the occupier: see eg Braithwaite v South Durham Steel Co Ltd [1958] 1 WLR 986; Sinclair v William Arnott Pty Ltd (1963) 64 SR (NSW) 88.
However, what is the situation when each of the employer and the occupier is an emanation of the Crown?
Mr Giagios for the State, submits that one applies the same construction as one does to the Workers Compensation Act following Haines v Tempesta. On the other hand, Mr King SC and Mr Kernick say that there is no warrant for doing that. Section 5(1)(c) speaks of recovery of contribution from “any other tortfeasor”. One cannot say that (apart from the special situation brought about by the definitions in the Workers Compensation Act 1987) the employer was a person other than the occupier. There is no warrant for saying that the doctrine of indivisibility of the Crown must give way to some notional process.
Prima facie this argument must be correct. It is almost impossible to see how any action at law could be commenced by one emanation of the Crown as against another emanation of the Crown, because one cannot have the same juristic person on both sides of the record.
It is abundantly clear that this is so, so it is not necessary to delve into the additional complications caused by the fact that at common law the Crown could not be sued in tort and that the statutes which practically overcome this rule have changed from time to time.
Accordingly, I return to Mr Giagios’ riposte which, as I noted above, was in two parts: (1) that s 151Z(2) does in fact impose a liability for contribution itself; and (2) that it would be most surprising if one construed s 151Z(1) and s 151Z(2) differently.
As to the first of these propositions, I cannot see any justification for reading paragraphs (c) or (d) of s 151Z(2) as imposing an obligation to make contribution by the employer. To my mind the whole of the words are predicated on there being a right outside the section to obtain contribution and how an arithmetical deduction from the plaintiff’s damages is to be made because of that external right.
The second argument is more awkward. In the instant case the plaintiff, it seems, did take proceedings to obtain workers compensation from her employer. Were it not for s 151Z(1), she may not have been able also to have obtained damages against the occupier though this proposition was not put strongly.
The argument then proceeds:
(a) The right given by s 151Z(1) is a right both to take proceedings for workers compensation and to sue the occupier. For that purpose the definition in the Workers Compensation Act 1987 which was applied in Haines v Tempesta applies;
(b) One then reads subsection (2) as consequential, ie if damages are received from the occupier the arithmetical calculation needs to be made;
(c) Having made it apparent that separate government departments are separate persons for the purpose of the main thrust of section 151Z, it would be rather peculiar if the same interpretation did not follow for subsection (2).
Steps (a) and (b) are clearly correct. I have thought long and hard about step (c) because it does have logical attractions. However, in the end my view is that the wording of subsection (2) is just insufficiently wide to allow it to prevail. As Mathews J found in Georgitsis’ case (supra), there are some absurdities whichever way one reads the statute.
If one reads the statute the way the appellant wishes it to be read, then there is consistency between s 151Z(1) and (2) and the possibility of a worker “double dipping” by taking both workers compensation and a verdict against a third party is reduced. If on the other hand, one takes the view put forward by the respondent, one does away with the artificial and notional situation brought about by Haines v Tempesta and gives the words in subsection (2) their ordinary meaning.
Grljak v Trivan Pty Ltd (supra) at p 88 seems to recognise that the source of the power for making contribution is s 5 of the 1946 Act, or the 1946 Act as amended in 1965, rather than the Workers Compensation Act itself.
When one turns to s 5 of the 1946 Act, one cannot have a claim for contribution against oneself. Therefore there is no contribution factor to deduct.
Accordingly, in my view, although, as counsel for the respondent put it, the learned Judge perhaps could have expressed himself more felicitously than he did, the appeal should be dismissed with costs.
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LAST UPDATED: 10/04/2001

[2001] NSWCA 71

10 April 2001

Key Legal Topics

Areas of Law

Employment Law

Negligence & Tort

Legal Concepts

Appeal

Costs

Duty of Care

Negligence