Phung v Advanced Arbor Services Pty Ltd

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.