Phung v Advanced Arbor Services Pty Ltd - [2010] NSWCA 215

New South Wales

Court of Appeal

CITATION: Phung v Advanced Arbor Services Pty Ltd [2010] NSWCA 215

HEARING DATE(S): 17 August 2010

JUDGMENT DATE:
30 August 2010

JUDGMENT OF: Beazley JA at 1; Basten JA at 45; Handley AJA at 46

DECISION: The appeal is dismissed with costs.

CATCHWORDS: EMPLOYMENT – trainees – deemed workers compensation insurance for trainees – Workers Compensation Act 1987, s 158(3) – identity of employer of trainee under Australian Traineeship Scheme - CONTRACT – formation – oral – contract for performance of service for benefit of third party - CONTRACT – mistake – whether entitled to restitution for payment made under a mistake of fact - INSURANCE – deemed statutory insurer under Workers Compensation Act, s 158(3) – subrogation – whether statutory insurer entitled to be subrogated to such rights as the employer had to the recovery of moneys paid under a mistake of fact for breach of contract

LEGISLATION CITED: Civil Procedure Act 2005
Fair Trading Act 1987
Government Insurance Act 1927
Government Insurance Office (Privatisation) Act 1991
NSW Self Insurance Corporation Act 2004
Trade Practices Act 1974 (Cth)
Workers Compensation Act 1987
Workers Compensation (General) Regulation 1995
Workers Compensation Legislation Amendment (Trainees) Act 2003

CATEGORY: Principal judgment

CASES CITED: Banque Financiere de la Cite v Parc (Battersea) Limited [1999] 1 AC 211
Kelly v Solari (1841) 9 M & W 54
Mahony v J Kruschich (Demolitions) Pty Ltd [1985] HCA 37; (1985) 156 CLR 522
Scottish Equitable Plc v Derby [2000] 3 All ER 793

TEXTS CITED: Mason and Carter, Restitution Law in Australia, 2nd ed, 2008

PARTIES: Dr Mark Phung (Appellant)
Advanced Arbor Services Pty Ltd (Respondent)

FILE NUMBER(S): CA 2010/65521

COUNSEL: D G T Nock SC; A Hourigan (Appellant)
S G Campbell SC; M J Walsh (Respondent)

SOLICITORS: Guild Lawyers (Appellant)
Turks Legal (Respondent)

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): 2008/289087

LOWER COURT JUDICIAL OFFICER: Johnson J

LOWER COURT DATE OF DECISION: 17 December 2009; 9 March 2010

LOWER COURT MEDIUM NEUTRAL CITATION: Advanced Arbor Services Pty Limited v Phung [2010] NSWSC 158

- 2 -

2010/65521

BEAZLEY JA
BASTEN JA
HANDLEY AJA
30 August 2010

Dr Mark Phung v Advanced Arbor Services Pty Ltd

Judgment

: This is an appeal from orders made by Johnson J in which his Honour gave a verdict for the respondent against the appellant in the sum of $220,302, plus interest and costs. At the conclusion of the hearing of the appeal, the Court made orders that the appeal be dismissed with costs. My reasons for dismissing the appeal are as follows.

Background

2 The appellant is a registered dentist. Between 2002 and 2003, the appellant provided dental services to a Mr Todd Dean in the circumstances explained below.

3 In December 2001, Mr Dean had signed a certificate and indenture of traineeship with the respondent as his employer. There was no dispute that Mr Dean’s traineeship had been approved by the Industrial and Commercial Training Council…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2010] NSWCA 215
Decision Date: 30 August 2010

CaseChat Overview and Summary

The appeal concerned the identity of the employer of a trainee under the Australian Traineeship Scheme and the consequent liability for workers' compensation insurance. The primary dispute involved a claim for restitution of payments made under a mistake of fact, and whether the statutory insurer, deemed under section 158(3) of the *Workers Compensation Act 1987* (NSW), was entitled to be subrogated to the employer's rights to recover those payments. The matter was heard in the Court of Appeal of New South Wales.

The central legal issues before the court were: firstly, who was the employer of the trainee for the purposes of the *Workers Compensation Act 1987*; secondly, whether the payments made by the plaintiff were recoverable on the basis of a mistake of fact; and thirdly, whether the statutory insurer, having indemnified the employer, could be subrogated to the employer's rights to recover those payments from the party who had received them.

The court considered the nature of the contract for the trainee's services and the arrangement between the parties. It was held that the contract was for the performance of services for the benefit of a third party, and that the payments made were indeed recoverable as having been made under a mistake of fact. Crucially, the court affirmed that the statutory insurer, by virtue of section 158(3) of the *Workers Compensation Act 1987*, was entitled to be subrogated to such rights as the employer had to the recovery of moneys paid under a mistake of fact for breach of contract.

The appeal was dismissed with costs.

Orders

Orders of the court

The appeal is dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Phung v Advanced Arbor Services Pty Ltd [2010] NSWCA 215
HEARING DATE(S):	17 August 2010
JUDGMENT DATE:	30 August 2010
JUDGMENT OF:	Beazley JA at 1; Basten JA at 45; Handley AJA at 46
DECISION:	The appeal is dismissed with costs.
CATCHWORDS:	EMPLOYMENT – trainees – deemed workers compensation insurance for trainees – Workers Compensation Act 1987, s 158(3) – identity of employer of trainee under Australian Traineeship Scheme - CONTRACT – formation – oral – contract for performance of service for benefit of third party - CONTRACT – mistake – whether entitled to restitution for payment made under a mistake of fact - INSURANCE – deemed statutory insurer under Workers Compensation Act, s 158(3) – subrogation – whether statutory insurer entitled to be subrogated to such rights as the employer had to the recovery of moneys paid under a mistake of fact for breach of contract
LEGISLATION CITED:	Civil Procedure Act 2005 Fair Trading Act 1987 Government Insurance Act 1927 Government Insurance Office (Privatisation) Act 1991 NSW Self Insurance Corporation Act 2004 Trade Practices Act 1974 (Cth) Workers Compensation Act 1987 Workers Compensation (General) Regulation 1995 Workers Compensation Legislation Amendment (Trainees) Act 2003
CATEGORY:	Principal judgment
CASES CITED:	Banque Financiere de la Cite v Parc (Battersea) Limited [1999] 1 AC 211 Kelly v Solari (1841) 9 M & W 54 Mahony v J Kruschich (Demolitions) Pty Ltd [1985] HCA 37; (1985) 156 CLR 522 Scottish Equitable Plc v Derby [2000] 3 All ER 793
TEXTS CITED:	Mason and Carter, Restitution Law in Australia, 2nd ed, 2008
PARTIES:	Dr Mark Phung (Appellant) Advanced Arbor Services Pty Ltd (Respondent)
FILE NUMBER(S):	CA 2010/65521
COUNSEL:	D G T Nock SC; A Hourigan (Appellant) S G Campbell SC; M J Walsh (Respondent)
SOLICITORS:	Guild Lawyers (Appellant) Turks Legal (Respondent)
LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S):	2008/289087
LOWER COURT JUDICIAL OFFICER:	Johnson J
LOWER COURT DATE OF DECISION:	17 December 2009; 9 March 2010
LOWER COURT MEDIUM NEUTRAL CITATION:	Advanced Arbor Services Pty Limited v Phung [2010] NSWSC 158