QBE Insurance (Australia) Ltd v Insurance Australia Ltd
[2011] ACTSC 40
•11 March 2011
QBE INSURANCE (AUSTRALIA) LTD v INSURANCE AUSTRALIA LIMITED
[2011] ACTSC 40 (11 March 2011)
INSURANCE – double insurance – right of contribution – requirement for co-ordinate liability – where there is no negligence – no co-ordinate liability.
CONTRACT – construction of contract – document filed in court – party asserting terms of contract not in accordance with expressed terms – parol evidence rule.
Workers Compensation Act 1951 (ACT), s 23, r 9
Road Transport (General) Act 1999 (ACT), ss 163, 63, 171
Court Procedures Rules 2006 (ACT), r 1616
Albion Insurance Co Ltd v Government Insurance Office of New South Wales (1969) 121 CLR 342
Portavon Cinema Co Ltd v Price and Century Insurance Co Ltd [1939] 4 All ER 601
Allianz Australia Workers Compensation (NSW) Ltd v NRMA Insurance Ltd (2008) 1 ACTLR 272
Burke v LFOT Pty Ltd (2002) 209 CLR 282
Accident Compensation Commission v Baltica General Insurance Co Ltd [1993] 1 VR 467
Bovis Construction Ltd v Commercial Union Assurance Co Plc [2001] 1 Lloyd’s Rep 416
Mercantile Mutual Insurance (Australia) Ltd v QBE Workers Compensation (NSW) Ltd (2004) 61 NSWLR 655
Nominal Defendant v GLG Australia Pty Ltd & Ors (2006) 228 CLR 529
Government Insurance Office (NSW) v R J Green & Lloyd Pty Ltd (1966) 114 CLR 437
NRMA Insurance Ltd v NSW Grain Corporation (1995) 22 MVR 317
Commercial Building Centre v NRMA Insurance Ltd (2004) 40 MVR 370
Allianz Australia Insurance Ltd v Insurance Australia Ltd [2011] ACTSC 19
Czatyrko v Edith Cowan University (2005) 214 ALR 349
English v Rogers [2005] NSWCA 327
Wyong Shire Council v Shirt (1980) 146 CLR 40
Estate of the Late M T Mutton by its Executors & R W Mutton trading as Mutton Bros v Howard Haulage Pty Ltd [2007] NSWCA 340
Bourke v Victorian Workcover Authority [1999] 1 VR 189
DIB Group Pty Ltd Trading as Hill & Co v Cole [2009] Aust Torts Reports 82-022
Vairy v Wyong Shire Council (2005) 223 CLR 422
Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301
Haber v Walker [1963] VR 339
Mahoney v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522
Watts v Rake (1960) 108 CLR 158
Mercantile Mutual Insurance (Australia) Ltd v QBE Workers Compensation (NSW) Ltd (2004) 61 NSWLR 655
Zurich Australian Insurance Ltd v GIO General Ltd (2010) 55 MVR 149
Australian Iron & Steel Pty Ltd v Government Insurance Office (NSW) [1978] 2 NSWLR 59
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd and Ors (2004) 219 CLR 165
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507
No. SC 518 OF 2006
Judge: Refshauge J
Supreme Court of the ACT
Date: 11 March 2011
IN THE SUPREME COURT OF THE )
) No. SC 518 of 2006
AUSTRALIAN CAPITAL TERRITORY )
QBE INSURANCE (AUSTRALIA) LIMITED
v
INSURANCE AUSTRALIA LIMITED
ORDER
Judge: Refshauge J
Date: 11 March 2011
Place: Canberra
THE COURT ORDERS THAT:
There be judgment for the defendant.
On 27 November 2000, Nicholas John Rice was injured when unloading a bus he had driven to the Canberra Airport.
Mr Rice was employed by Murrays Chartered Coaches and Travel Service Pty Ltd (Murrays) and the plaintiff had issued to Murrays a worker’s compensation insurance policy under the Workers Compensation Act 1951 which indemnified Murrays for any damages or payments it was liable to pay under the Territory’s scheme of workers compensation for injuries suffered by its employees under the relevant defined circumstances, particularly where the injuries arise out of or occurred in the course of their employment with Murrays, as well as for damages payable, independently of the Workers Compensation Act, under the common law where Murrays were negligent and the negligence caused injuries to an employee.
As a result of his injuries, Mr Rice made a claim on Murrays and the plaintiff, under the insurance policy, made certain payments to Mr Rice in indemnification of Murrays.
On 16 December 2002, Mr Rice’s claim for compensation for his injuries and the damages he had sustained were settled by agreement registered under the Workers Compensation Act. The total amount of the agreement was $379,400.34, which included payments already made to Mr Rice and the agreed sum to be paid on settlement of the agreement.
Murrays also had, as it was required to do, taken out a compulsory third party insurance policy in respect of the bus being driven by Mr Rice. That policy, issued by the defendant, indemnified Murrays for any damages it was liable to pay arising out of the use of the bus.
The plaintiff now claims that as the money it has paid to Mr Rice was in respect of a loss for which Murrays was also indemnified by the defendant, Murrays had double insurance and so it is entitled to a contribution of one half of the sum it has paid, together with pre-judgment interest under r 1616 of the Court Procedures Rules 2006 (ACT).
The defendant has resisted the claim on several bases, including that the injuries suffered by Mr Rice were not a result of any negligence of Murrays and did not arise out of, or were not caused by, the use of the bus.
The facts
Mr Rice gave evidence and was cross-examined. He was a credible witness. I also had tendered to me a bundle of documents. The documents to which my attention was drawn were tendered out of this bundle. They included the plaintiff’s standard policy of insurance at the time, the list of workers compensation payments made, various reports of treating medical practitioners and other medical experts, and some correspondence between the plaintiff and Mr Rice’s solicitor. This material enables me to make the following findings of fact.
Mr Rice had been employed by Murrays since 1994. By 2000, he had been promoted to the position of coach captain. This involved him driving coaches which were 14.5 m long and 15 tonne in weight, registered to carry a maximum of 63 passengers. He also had been a supervisor for Murrays, overseeing and training other drivers.
On 27 November 2000, Mr Rice had been enjoying a rostered day off when he was called by his employer, who required him urgently to take the members of a sporting team from the Australian Institute of Sport in Bruce, ACT, to the Canberra Airport. Mr Rice had to collect the bus from the Murray’s depot in Mugga Lane, Symonston, and he suggested that it be warmed up and prepared for departure while he was driving there.
When he arrived at the depot, the bus was ready to go and he drove it to the Australian Institute of Sport. The members of the team, apparently a male soccer team, were waiting with their luggage at the kerbside.
The bus had a luggage compartment under the bus, spanning the area between the front and rear axles, the whole width of the bus, and accessible by raising three doors on each side of the bus. Mr Rice opened the doors nearest the kerb. There were no slides or rollers to assist putting the luggage in or out of the luggage compartment, as existed on some of Murray’s buses.
The luggage consisted of a sports bag for each team member, 3 trunks about 1.5 m wide, 1m deep and 1m high and some “residual luggage”, namely “soft baggage” not individually owned.
Mr Rice loaded the trunks first. They had rope handles at each end, which he used to lift and drag them to put one end into the luggage compartment. He then lifted the other end and pushed the trunks into the luggage compartment. He does not recall receiving any assistance in the operation.
Mr Rice was asked about the weight of the boxes. He gave evidence of his experience in lifting luggage on a daily basis and of noting that some luggage disclosed its weight on it, which gave him experience of the weight of such luggage. He estimated the weight of the trunks as at least 100 kilos. He relied on his experience and also the reason that “they had four handles on them. They’re designed to be lifted by multiple individuals.”
Mr Rice then drove the bus to the Canberra Airport where the passengers, who appear to have been a little anxious because their flight was boarding as they arrived, grabbed their sports bags and ran to catch the plane. The leaders of the team went to organise the ticketing. Mr Rice was left to empty the remaining luggage.
The trunks were on the near side and on the far side of the luggage compartment. Mr Rice described how he took them out as follows:
MR RICE: I reached under the bin doors and grabbed the handles of the trunks, dragged them to the edge of the bin so I could, you know, brace to lift and then I lifted the trunks up and walked them from the middle lane to the pavement.
...
Basically my shins were braced against the floor of the coach, near to the floor, so I had a purchase, and then I reached the whole of my top half of my body in...
MR STRETTON: So can you tell his Honour the approximate angle on which you were leaning in?
MR RICE: 90 degrees from the waist up.
As to the second trunk, he had to climb into the luggage compartment in a crouched position. He explained:
MR STRETTON: Now describe what you did with the second one?
MR RICE: The second one I climbed into the luggage bins in a crouched position, and I crabbed my way to get to the position where the first one originally was, where I could get my feet on the ground and lift it.
MR STRETTON: So were your shins any longer resting against the edge, or were they in a fallen position as...?
MR RICE: No, no, I was on my knees, only probably less than four feet headroom under the bins.
Murrays, he said, did not provide him with a long pole with a hook which would have enabled him to stand outside and reach and simply pull the trunk.
As he was unloading the second trunk, he felt a pain down the right-hand side of his neck, shoulder and arm and “a general weakness mainly on the right-hand side”. He proceeded to the kerb and dropped the trunk and went back for the third trunk which was also on the far side of the luggage compartment. He again was on his knees and had to try and pull it back into a position where he could manoeuvre it while standing on the road. As he was doing this, another coach driver came over and assisted him.
The leader of the team then returned with some trolleys to take the trunks to the airline’s check-in facility. Mr Rice closed the doors, went back into the bus and returned to the depot. He drove conservatively, mostly with his left hand, perhaps with less gear changes than normal.
At the depot he reported the incident and completed the necessary paperwork. He then drove home. His condition worsened overnight to the point where his head was tilted almost to his right shoulder. The pain had increased and his mobility had decreased. He visited his general practitioner the next day who assessed him as unfit for work as well as referring him to a physiotherapist.
Mr Rice’s general practitioner assessed him as unfit for work for seven weeks and he then resumed work.
His report of 4 April 2001 referred to Mr Rice as having consulted him for “mild pain in his right neck and shoulder the previous day while pulling luggage from a coach”. He noted that the symptoms had responded to medication and physiotherapy, but that there was “ongoing limitation”. He considered Mr Rice fit to continue driving with normal hours of duty but noted that he should take care with any heavy lifting. He felt the condition was likely to resolve after some months.
His pain became worse, however, and on 3 May 2001 he had a bone scan and, on 15 May 2001, an MR arthrogram of his right shoulder. He saw Dr Mark Porter of the Sports Medicine Centre in that month who, he thought, gave him some cortisone injections which gave some temporary relief.
In March 2001, Dr Porter made the following diagnosis:
I feel that Mr Rice’s pain is originating from his cervical spine in the form of a nerve root entrapment/irritation for which there is some underlying cervical spondylosis and, on top of this, the injury which occurred while lifting the luggage.
He confirmed that, before this, he was “able to continue driving coaches safely” and that he has been lifting luggage, but with his left arm. His progress was described as follows:
I feel that Mr Rice’s symptoms will settle with conservative treatment, however, this can often take some time and, in some cases, up to six months.
In June 2001, he saw Dr Kevin Woods, Orthopaedic Surgeon, who recommended an operation on his right shoulder, an arthroscopic decompression, which Dr Woods performed on 4 July 2001. He was referred to a Mr Tim Morton at the Erindale Active Leisure Centre for an exercise program, which he undertook.
On 5 March 2002 an MR scan was performed on his cervical spine and he was referred to a neurosurgeon, Dr John W Fuller. Dr Fuller recommended urgent surgical intervention and on 28 March 2002 performed a C4-5 and C5-6 anterior cervical decompression and fusion. This resulted in a lot of pain and was followed by a period of rehabilitation. He was unable to resume work.
Mr Rice was also referred to a consultant in Rehabilitation, Pain and Musculoskeletal Medicine, Dr Geoffrey Speldewinde. Dr Speldewinde reported improvement after the operation, especially in hand function and a good recovery over the subsequent months with a minor setback in August 2002.
Finally, in October 2002, Mr Rice was asked to resign his employment, which he did, and he moved to Gympie in Queensland, partly to escape the cold weather in Canberra.
In Gympie he gained employment for about 10 to 12 hours a week until he had a fall down the back stairs of his house. As a result he had a disc removed and he ceased work, now receiving a disability pension.
Under cross-examination, Mr Rice acknowledged that he had worked as a truck driver for about nine years and that he was accustomed to lifting heavy weights and stacking the truck. He was familiar with proper lifting techniques. He agreed he was always conscious of adopting what he regarded as proper manual handling techniques. He felt comfortable lifting items with a weight of a standard 25 kilos.
He also acknowledged that he had worked for Murrays supervising other drivers and agreed that he was conscious of the need for the drivers to exercise good manual handling techniques when lifting items into or out of coaches. He believed they should not lift items weighing more than 25 kilos.
His advice to drivers faced with lifting was to lift what they were comfortable with and, if not, to get assistance from a passenger or fellow driver. He said he had no difficulty in asking a customer to help lift their own luggage.
Mr Rice acknowledged that, apart from some who had injuries, the passengers he was driving to the airport on the day in question were for the most part fit, strong, young men. There were about 20 passengers in all.
He explained that he did not ask them to help him because they jumped straight off the coach as soon as he opened the door, there being a sense of urgency about them.
Mr Rice agreed that he had never before had to lift items as large or as heavy as these trunks on his own. He acknowledged that when assistance was available he used it. He also admitted that this was the only time that he had taken it upon himself to load something as heavy as these trunks without assistance.
He was concerned about the urgency of the situation and noted that when heavy luggage was to be loaded, he was usually able to take time to organise it, especially by arriving early to a job.
He conceded he did not ask for assistance in loading the trunks and that there was nothing to stop him from asking the team members, though he did suggest “I could have and they could have missed their flight as a result”. That did seem unlikely, especially as some of the passengers returned to collect the trunks and could have then assisted him in unloading them.
Mr Rice also expressed concern about using the similar method to unload the trunks as he had loaded them because “you don’t put customer’s luggage on the ground” because of “oil and condensate residue”. I assumed by “the ground” he meant the roadway and not the kerb, because he had parked a laneway from the kerb, also, perhaps, in an awkward spot.
When it was suggested that he could have obtained a trolley, he explained why that was not desirable, adding “[i]ts the customer’s responsibility to get that trolley”.
He accepted that when he loaded the trunks he had formed the view that they were awkward to manoeuvre and were really supposed to be lifted by more than one man. He also accepted that while the team members had left to check-in urgently, they would have to return to the bus for the luggage. He did say that he was double-parked and blocking other vehicles, so he had a responsibility to leave as soon as he could. That, however, did not mean that he would leave before the passengers had returned to collect their luggage.
He acknowledged that he was saving the team time by getting the trunks out. He also acknowledged that by doing so, he was acting otherwise than in accordance with his regular habits, knowing that assistance was warranted to move these trunks. He confirmed that he could have asked for assistance.
He said that the pain he had felt with the second trunk was as high as 7 on a scale to 10. He conceded that he was nevertheless going to attempt to get the third trunk out, though he actually had assistance from another bus driver.
There was cross-examination about the extent of the pain Mr Rice felt and what he told his doctor. It does seem to me he probably did say to his general practitioner that the pain he had experienced when lifting the second trunk was “mild”. I did not, however, form the view that he was exaggerating the description of the pain he felt when giving evidence.
Mr Rice also confirmed that after the initial seven weeks, he returned to work for about twelve months. Although that work did not involve a lot of driving, it did include lifting a lot of luggage. He also recalled an incident where he had a recurrence of neck pain due to handling some heavy luggage, apparently full of books. He described this as aggravating his existing symptoms. He said that he attended on Dr W McDonald of the Deakin Sports Therapy Centre, telling him that he had discomfort in his neck following days of heavy driving and lifting a lot of luggage. This led to problems in his leg resulting in a limp. There had, however, been no earlier connection between the injury on 27 November 2000 and leg pain. This was a new complaint.
Mr S Campbell SC for the defendant, tendered reports from Dr McDonald. In one, Dr McDonald reported to Mr Rice’s general practitioner of the success of his early treatment, both the arthroscopy performed by Dr Woods and the cortisone injections Dr McDonald had administered. He noted that “his symptoms ... settled quite nicely”. He also reported the return of symptoms in November 2001 when lifting luggage from the coach, possibly the incident with the heavy load of books. A further cortisone injection gave immediate improvement.
Later reports referred to degenerative changes, with no evidence of disc protrusion. Exercise and, when necessary, cortisone injections were recommended.
In early 2002, Dr McDonald referred to “discomfort following days of heavy driving and lifting a lot of luggage”. He noted right leg symptoms, now daily, with difficulty in lifting his leg and walking more than a couple of hundred metres. Dr McDonald was concerned about these symptoms and a colleague suggested an MRI scan which was done. That showed evidence of disc protrusion and of cervical myelopathy. He referred him to Dr Fuller who operated, as noted above (at [29]).
Dr Fuller reported, following the operation (see [29] above), that Mr Rice noted immediate “improvement in the sensory disturbance of his hands and power to his lower limbs.” This, he added, “has continued since discharge”. Walking and writing had improved “considerably”. In August 2002, Dr Fuller reported that Mr Rice was continuing to improve, though with weakness in his upper limbs and some right-sided cervical pain.
Dr Fuller reviewed Mr Rice on 4 September 2002 and reported he was experiencing increased symptoms in his arms and legs and some more right-sided neck pain. An MRI scan showed adequate decompression of the spinal cord at C4-5 and C5-6. Dr Fuller referred to a congenitally narrowed canal and unaltered myelomalacia at C5-6. None of Dr Fuller’s reports addressed the causation of Mr Rice’s symptoms, other than to refer to “myelopathic changes within his spinal cord”.
Mr Rice did see Dr Geoffrey Speldewinde, who found quite restricted neck movement range, particularly into flexion. He considered Mr Rice was recovering from his right-sided C5-6 cervical myelopothy, with good neurological recovery and substantially restricted neck function. He also reported that Mr Rice had a sense of fatigue, weakness and clumsiness with work issues to be addressed.
A Driving Assessment Report of September 2002 found Mr Rice to be a safe driver and made recommendations that would accommodate his restricted neck movement and reduce potential aggravation of his injury.
A brief report of 14 May 2003 from the medical practitioner at the Gympie Medical Centre referred to the neck pain as “worse at times”.
I had no more recent medical material.
Double insurance
Double insurance occurs when two or more indemnity contracts of insurance cover the identical loss that the identical insured has sustained: Albion Insurance Co Ltd v Government Insurance Office of New South Wales (1969) 121 CLR 342 (at 352) (Albion Insurance). The general nature of each policy need not be identical so long as each provides indemnity in respect of the relevant risk: Portavon Cinema Co Ltd v Price and Century Insurance Co Ltd [1939] 4 All ER 601 (at 604).
Double insurance is the basis upon which an insurer which has met indemnity for the loss occasioned by the happening of the relevant risk can seek contribution from the other insurer or insurers. As was said in Allianz Australia Workers Compensation (NSW) Ltd v NRMA Insurance Ltd (2008) 1 ACTLR 272 (at 283):
The doctrine is bottomed and fixed on general principles of justice. The reason for contribution is that “in equali jure the law requires equality; one shall not bear the burthen in ease of the rest, and the law is grounded in great equity” (per Lord Chief Baron Eyre in Dering v Early of Winchelse (1787) 1 Cox 318 at 321; 29 ER 1184 at 1185).
As Barwick CJ, McTiernan and Menzies JJ put it (at 345) in Albion Insurance:
There is double insurance when an assured is insured against the same risk with two independent insurers. To insure doubly is lawful but the assured cannot recover more than the loss suffered and for which there is indemnity under each of the policies. The insured may claim indemnity from either insurer. However, as both insurers are liable, the doctrine of contribution between insurers has been evolved.
In Burke v LFOT Pty Ltd (2002) 209 CLR 282, Gaudron A-CJ and Hayne J said
(at 292-4; [14] to [16], [22]):
Equitable contribution
[14]In general terms, the principle of equitable contribution requires that those who are jointly or severally liable in respect of the same loss or damage should contribute to the compensation payable in respect of that loss or damage, either equally where they are liable in the same amount or proportionately, where the amount of their liability differs. The principle has regularly been applied between co-sureties, co-insurers, partners, co-owners, where payment is made by one in discharge of a common liability, and co-trustees who are in pari delicto.
[15]The doctrine of equitable contribution applies both at common law and in equity. It is usually expressed in terms requiring contribution between parties who share “co-ordinate liabilities” or a “common obligation” to “make good the one loss”. More recently, in BP Petroleum Development Ltd v Esso Petroleum Co Ltd, the right to contribution was said to depend on whether the liability was “of the same nature and to the same extent”.
[16]The notion of “co-ordinate liability” is one that depends on common interest and common burden. Perhaps because, at common law, there was no general right of contribution between tort-feasors, the notion of “co-ordinate liability” has not traditionally been expressed in terms requiring equal or comparable culpability or a requirement that the acts or omissions of the persons in question be of equal or comparable causal significance to the loss in respect of which contribution is sought. However, the requirement that liability be “of the same nature and to the same extent”, as stated in BP Petroleum, is apt to include notions of equal or comparable culpability and equal or comparable causal significance.
...
[22]It is unnecessary in this case to further explore the relevance of culpability and the causal significance of the acts and omissions of persons claiming equitable contribution. Similarly, it is unnecessary in this case to further explore how doctrines of equitable contribution operate in connection with particular provisions of Pt VI of the Act [referring to the Trade Practices Act 1974 (Cth)]. That is because the doctrine of equitable contribution is founded on concepts of fairness and justice – ‘natural justice’, as that term was explained by Kitto J in Albion Insurance Co Ltd v Government Insurance Office (NSW). In this context, ‘natural justice’ requires that if ‘one of several persons has paid more than his proper share towards discharging a common obligation’ he is entitled to be recompensed by those who have not ...
(Footnotes omitted.)
The liabilities of insurers are co-ordinate when the insurers are each liable to insure the same insured against the same loss: Accident Compensation Commission v Baltica General Insurance Co Ltd [1993] 1 VR 467 (at 481). It does not affect this principle if the cover that the two policies offer are not co-extensive: Bovis Construction Ltd v Commercial Union Assurance Co Plc [2001] 1 Lloyd’s Rep 416.
In this case, there was no contention that, subject to the matters referred to below, the two parties had not issued policies that did not relevantly constitute double insurance, from which arose the claim of contribution made by the plaintiff.
Challenges to the claim
In these circumstances, it is appropriate to address at once the challenges that the defendant made to the plaintiff’s claim, for the latter is relatively straight forward in the circumstances. These challenges were:
(a) That the incident on 27 November 2000 did not itself arise out of or was caused by the use of a motor vehicle;
(b) That the insured was not negligent;
(c) That the disabilities and damages claimed by Mr Rice did not, in large part, arise out of the incident on 22 November 2000;
(d) There was no co-incidence of cover, arising out of the decision of Mercantile Mutual Insurance (Australia) Ltd v QBE Workers Compensation (NSW) Ltd (2004) 61 NSWLR 655.
I shall deal with each of these issues in turn.
Use of a motor vehicle
The facts surrounding the incident are set out extensively above. Mr Rice had driven a bus of his employer, Murrays, to the Canberra Airport and parked it while the passengers alighted. He then proceeded to unload some heavy luggage that the alighting passengers had not removed. It was, he said and there seems to be no real contention about it, while he was unloading that he felt a pain in his right side and that led to him attending his general practitioner the next day and being assessed as medically unfit for work for seven weeks.
The basis on which the challenge was made was that the unloading of the bus was not a use of the motor vehicle in the sense that gave rise to an indemnity under the policy of insurance issued by the defendant.
The policy issued by the defendant was a compulsory third party policy in respect of the bus. Under s 163 of the Road Transport (General) Act 1999 (ACT), as it was at the relevant time, such a policy is one that:
(a)Insures the owner of the motor vehicle to which the policy relates, and anyone else who drives the vehicle (whether or not with the owner’s authority), against liability in relation to the death of, or bodily injury to, a person caused by, or arising out of the use of, the vehicle anywhere in Australia (whether or not on a road or road related area); and
(b)Is in the terms prescribed under the regulations.
Accordingly, unless the injury was “caused by, or arising out of the use of, the [insured] vehicle”, the defendant is not liable to indemnify Murrays. In that event, there is no double insurance and no right of contribution.
The issue here clearly raises a question of the degree of connection with the bus that is necessary to bring it within its use. Injury while driving is clearly within the concept of use, but injury sustained while engaged in more remote connections with the actual operation of the bus would not. Thus, as the plurality pointed out in Nominal Defendant v GLG Australia Pty Ltd & Ors (2006) 228 CLR 529 (at 541; [29]) (GLG), it would exclude:
...instances of fault in the planning which led to [the vehicle’s] deployment and which may have taken place at points of time and place remote from those of the injury.
While this is helpful, the policy there was in somewhat different terms and, in my view, relevantly different. It referred to indemnity for damages relating to the death of or injury to a person “caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle”. In particular, the wider concept of “arising out of” the use of the motor vehicle is not included.
Mr Campbell SC submitted that if, as here was, inter alia, alleged, the injury arose because Murrays had not provided a safe system of work or insufficient training, that would have been too remote from the actual use of the vehicle.
In GLG, however, the fault lay not in the use of or incidental to the vehicle but in the system of work whereby the boxes that fell and injured the worker were stacked and caused to vibrate when the vehicle was used.
That is a very different situation to here. The unloading was an inseparable part of the use of the vehicle for the purpose for which Murrays employed it on that day. As Windeyer J said (at 447) in Government Insurance Office (NSW) v R J Green & Lloyd Pty Ltd (1966) 114 CLR 437 (Green & Lloyd):
I consider that the kind of use of a motor vehicle that is covered by the policy is driving it or doing something to it or with it that is incidental to its normal use as a motor vehicle. ... The loading of a vehicle designed to be used, and ordinarily used, for the carriage of goods is a necessary element in its ordinary use. Loading it is incidental to the use of it in the normal way.
Barwick CJ (with whom McTiernan and Taylor JJ agreed) said in the same case (at 442):
I do not think that every act in loading a vehicle for the conveyance of what is loaded upon it is necessarily a use or a part of the use of the motor vehicle. But the act of actually placing the load on the part of the vehicle designed to bear it during transport and for the purposes of its transportation, must, in my opinion, be a use of the motor vehicle in the sense relevant to the Act and to the terms of the policy. In my opinion, the relevant use of the vehicle cannot be confined to the periods it is in motion, or its parts moving in some operation. It may be in use though stationary.
There is, of course, no reason to distinguish “loading” and “unloading”: NRMA Insurance Ltd v NSW Grain Corporation (1995) 22 MVR 317 (at 322).
This approach, which has been followed since in many cases, seems to me to cover this situation.
Mr Campbell SC, however, did rely also on the decision of the ACT Court of Appeal in Commercial Building Centre v NRMA Insurance Ltd (2004) 40 MVR 370. In that case, the Court held that the plaintiff’s injuries were not caused by or arising out of the use of a motor vehicle, notwithstanding that the plaintiff had engaged in work that was connected with the loading of a truck.
In that case, however, the facts were that the plaintiff was one of a team helping to move bags of plaster from a pallet onto a stationary delivery truck. The plaintiff was what might be called “the middle man”. He was passed a bag from the team member who picked it up from the pallet, he took a small step and then handed it over to the man who placed it on the tray of the truck.
The trial judge held that this was “too remote from the use of the vehicle, and the responsibility should properly lie with the employer”. The Court of Appeal referred to passages from Green & Lloyd, citing from the judgment of Barwick CJ (with whom McTiernan and Taylor JJ agreed) and which included the following (at 442-3):
It may be that an association of the injury with the use of the vehicle while it cannot be said that that use was causally related to the injury may yet be enough to satisfy the expression “arise out of” as used in the Act and in the policy.
On the other hand, injuries received away from the vehicle but in the course of bringing goods or things to it to be loaded upon it ought not, if no more appears, to be regarded as having arisen out of the use of the motor vehicle. To say that the operation of loading and unloading a transport vehicle is part of its use is to state the matter too widely. ...
The passage cited from the judgment of Windeyer J included the following (at 447):
Loading it is incidental to the use of it in the normal way. But that does not mean that whatever is done that is incidental or ancillary to such loading is itself a use of the vehicle in the relevant sense. Therefore, if a person suffers bodily injury when engaged upon some task connected with loading, the question whether his injury was caused by or arose out of the use of the vehicle depends upon whether it was a consequence, direct and not remote, of the operation of loading.
But the question that arises in cases such as this is not answered simply by asking was the vehicle being used.
The Court of Appeal judgment continued (at 373; [14]):
[14]The observations of Barwick CJ and Windeyer J in Green v Lloyd at 442-3 and 447 were cited with approval in State Government Insurance Commission (SA) v Stevens Bros Pty Ltd as authority for the proposition that the expression ‘arising out of’ must be taken to require a less proximate relationship of the injury to the relevant use of the vehicle than is required to satisfy the words ‘caused by’: at 555. However, the majority judgment (Murphy, Wilson, Brennan and Deane JJ) did not doubt that some proximate relationship must still exist, and that although a broad view should be taken as to what amounts to the use of a vehicle in terms of the risk insured under the compulsory third party insurance policy, there are limits to the acts which constitute ‘use’ for the purpose of the policy: see also Dawson J at 559.
In my view, this case is not of assistance to the defendant. Indeed, it seems to me to be authority that would support a finding of fact that in the circumstances of this case, the incident described by Mr Rice did arise out of or was caused by the use of a motor vehicle. See also Allianz Australia Insurance Ltd v Insurance Australia Ltd [2011] ACTSC 19 (at [51]).
While the cases in this area do not provide a clear rationale for how a court should determine what is proximate so as to amount to the use of a motor vehicle and some are hard to reconcile with each other, I am satisfied that, as a matter of fact in this case, what Mr Rice was doing involved the use of the motor vehicle and that his injury was caused by or arose out of the use of the motor vehicle.
I reject this challenge by the defendant to the plaintiff’s claim.
Negligence of Murrays
A third party policy of the type required by s 63 of the Road Transport (General) Act 1999 (ACT) will only indemnify the owner of the motor vehicle where the employee’s injury is caused by or arising out of the use of a motor vehicle and where the insured, in this case Murrays, was liable to the employee, such as because of its negligence.
The plaintiff pleaded a long list of particulars of negligence of which it alleged Murrays was guilty. Some were semantic variations on others. They can, perhaps, be summarised without doing too much violence to the sometimes subtle distinctions, as failing to provide a safe system or place of work, especially by failing to provide mechanical assistance, adequate instruction or training, proper supervision and adequate care or measures in relation to loading and unloading luggage and requiring Mr Rice to load and unload luggage beyond his physical capacity, especially without sufficient staff to assist.
It is, of course, a well-known principle of law that an employer owes to its employees a non-delegable duty of care and that this includes the provision of a safe place to work and a safe system in which to work. The principles were summarised by the High Court in Czatyrko v Edith Cowan University (2005) 214 ALR 349 where (at 353) the Court held:
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 a 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. The employer must take into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in a case of repetitive work.
(Footnotes omitted.)
The duty is not absolute: English v Rogers [2005] NSWCA 327 (at [73]). As Mason J (as his Honour then was) said in Wyong Shire Council v Shirt (1980) 146 CLR 40 (at 47 - 48):
In deciding whether there has been a breach of the duty of care the tribunal of fact must first ask itself whether a reasonable man in the defendant’s position would have foreseen that his conduct involved a risk of injury to the plaintiff or to a class of persons including the plaintiff. If the answer be in the affirmative, it is then for the tribunal of fact to determine what a reasonable man would do by way of response to the risk. The perception of the reasonable man’s response calls for a consideration of the magnitude of the risk and the degree of the probability of its occurrence, along with the expense, difficulty and inconvenience of taking alleviating action and any other conflicting responsibilities which the defendant may have. It is only when these matters are balanced out that the tribunal of fact can confidently assert what is the standard of response to be ascribed to the reasonable man placed in the defendant’s position.
In this case, I had a good deal of evidence about Mr Rice and his experience and knowledge but little evidence about the circumstances under which he worked and his employer managed his working conditions and circumstances.
As to Mr Rice and the circumstances of the journey on 27 November 2000, I had the following evidence:
· he was an experienced driver of trucks and buses, having driven trucks for eight years and worked at Murrays as a bus driver and then as a supervisor for six years;
· in his jobs he had had to load vehicles on a daily basis;
· he had learnt “on the job” before he joined Murrays about how to lift items properly and manual handling techniques;
· he had often loaded individual items and made an assessment of their weight either by the marked weight or by the dimensions of the item;
· he was conscious in his job of adopting proper manual handling techniques;
· he was comfortable lifting items weighing up to 25 kilos, having had plenty of experience in lifting such weights and knew that he should not lift more than 25 kilos;
· he had, when he worked for Murrays, also been in a supervisory position and as such was conscious of the need for drivers to exercise good manual handling techniques and knew that drivers should not lift luggage weighing more than 25 kilos; he had told drivers of that and that, if they were not comfortable with the weight of items to be lifted, they should get assistance, usually from passengers as they would be driving alone;
· when he had a heavy or difficult luggage to deal with he would arrive to a job early to negotiate arrangements for managing the luggage;
· he had never before lifted luggage as heavy as the luggage on this occasion; on prior occasions when heavy items were involved, he obtained assistance if available, as it generally was and, in any event, he was adept at getting it if he had time to negotiate;
· on this occasion, he was told that the job was urgent, reinforced by the fact that the passengers were waiting for him at the kerb;
· the passengers were a soccer team, consisting for the most part of fit, strong young men;
· he estimated the trunks to weigh about 100 kilos each;
· each trunk had four handles and it occurred to him, and he assumed, that they were designed and supposed to be lifted by more than one man;
· he did not ask for assistance either in loading or unloading the bus;
· there was no reason why he could not have asked for assistance, though he thought there may be resistance to such a request, as the bus arrived late, but he, nevertheless, assumed they would have assisted if asked;
· when he arrived at the airport, the passengers left in a hurry, but he knew some of them would have to come back and he could not move the coach and leave the luggage, even unloaded, until they did;
· he pulled the first trunk out without difficulty;
· the other trunks were on the other side of the bus and there was a door on the other side of the bus, but he climbed into the luggage compartment to get the luggage out;
· there were also other people whom he could have asked for assistance as another bus driver gave him help to get the third trunk out;
· he considered it his responsibility to get the luggage out and move the bus, which was awkwardly parked, as soon as possible;
· he was trying to save time by getting the trunks out by himself;
· he thought assistance was warranted on this occasion; and
· he broke the rules he has always followed in dealing with luggage on this occasion.
In contrast, I had little evidence of the systems or lack of it employed by Murrays and the circumstances of their management of risk. The evidence I had was:
· the bus used by Mr Rice did not have slide rollers to enable luggage to be pulled out of the bus for easy access;
· some of Murrays buses did not have such slide rollers; and
· Mr Rice was not aware whether Murrays had a policy about the maximum weight of luggage a driver could lift, but there was no arrangement for weighing luggage at the bus side.
Thus, I did not know:
· whether Murrays knew that the passengers were a soccer team and whether the team had, or was likely to have had, heavy luggage;
· whether slide rollers would have meant that a driver could by himself manage trunks of 100 kilos or should still be limited to 25 kilo luggage.
· whether it was reasonable to have required Murrays to have installed slide rollers or to have used a bus in this case with slide rollers.
· whether provision of a long pole with a hook would have assisted in this case;
· whether Murrays had a policy on the safe manual handling of luggage, though I did know that Mr Rice did not know of such a policy;
· what training, in detail, Murrays provided to its drivers about safe manual handling of luggage, though I knew that Mr Rice provided some such training as a supervisor;
· whether there was any impediment to Mr Rice getting at the trunks from the other side of the bus, where there were also doors and through which it appeared that he could have used the technique he successfully used on the first trunk.
Mr Campbell SC referred me to a decision of the Court of Appeal of New South Wales, Estate of the Late M T Mutton by its Executors & R W Mutton trading as Mutton Bros v Howard Haulage Pty Ltd [2007] NSWCA 340 (Mutton). The court there considered the position of an employee who was required to unload grain from his employer’s truck at various farm sites. He was injured when his shirt became caught in an unguarded auger used in the unloading process.
The court was there concerned with the fact that the accident occurred at a place which was not under the control of the employer. Ipp JA referred to what was said by Winneke P (with whom Brooking and Buchanan JJA agreed) in Bourke v Victorian Workcover Authority [1999] 1 VR 189 (at 200-1; [41] to [42]):
True it is that, where an employer sends his employee to work at or in premises occupied or controlled by another, that occupation and control by another person may be a relevant fact in considering whether the employer had been in breach of his own independent duty to the employee. But the fact that the employee’s work is required to be done on premises of another does not absolve the employer of his duty. Its impact upon whether he has breached his duty will depend upon all the circumstances. As Lord Denning said in Smith v Austin Lifts Ltd [1959] 1 WLR 100:
Notwithstanding what was said in Taylor v Sims & Sims [(1942) 167 LT 414; [1942] 2 All ER 375], it has since been held, I think rightly, that employers who send their workmen to work on the premises of others cannot renounce all responsibility for their safety. The employers still have an overriding duty to take reasonable care not to expose their men to unnecessary risk. They must, for instance, take reasonable care to devise a safe system of work ...; and, if they know or ought to know of a danger on the premises to which they send their men, they ought to take reasonable care to safeguard them from it. What is reasonable care depends, of course, on the circumstances.
(See also Wilson v Tyneside Window Cleaning Co [1958] 2 QB 110 at 121-2 per Pearce LJ; Sinclair v William Arnott Pty Ltd (No 2) (1963) 64 SR (NSW) 88 at 91-2 per Walsh J)
One can conceive of a multitude of circumstances where workmen are sent to work upon premises controlled by others in which the impact upon the discharge of the employer’s duty will vary. It will depend no doubt upon such matters as the employer’s opportunity to inspect the premises, the length of time the employer has put his employees to work on the premises, the awareness in the employer of the danger, his capacity to shield his employees from the danger and various other factors.
His Honour then noted (at [146]):
146Devising and implementing a safe system of work would ordinarily not be an overly difficult task where the worker is working in the employer’s own premises. The situation is different where the employee delivers materials over vast distances to several different farms where workplaces, working conditions and equipment differ from farm to farm and where changes can be made at any time by the farmers concerned. In the latter situation, the employer has no real control over the circumstances in which each delivery is made. Due regard must be had to this absence of control when determining what amounts to the taking of reasonable care to avoid exposing employees to unnecessary risks or injury, and what amounts to a safe system of work.
After analysing the allegations and in the context of what was not alleged by the employer, his Honour considered the facts of the case and held the employer not to have been negligent.
Hodgson JA agreed with Ipp JA and for the reasons his Honour gave, though he added some reasons of his own. Spigelman CJ would have held the employer liable in negligence.
Hodgson JA expressed the principle as follows (at [53]):
The facts of this case are similar in many respects to those in Czatyrko v Edith Cowan University [2005] HCA 14, (2005) 79 ALJR 839; but as both Spigelman CJ and Ipp JA have noted, there is the important difference that the accident in this case occurred at a property not under the control of the employer, by reason of a danger also not under the control of the employer, of which the employer had no knowledge.
The case is by no means on all fours with the present case, but it does require me to consider as an additional fact that the incident occurred at a place other than the employer’s place of business and in circumstances of which Murrays had, on the evidence, no notice.
As Basten JA (with whom Beazley and McColl JJA agreed) said in DIB Group Pty Ltd Trading as Hill & Co v Cole [2009] Aust Torts Reports 82-022 (at 63,388-9; [54] to [58]):
The employer’s duty, however effected, to adopt safe systems of work and to provide proper plant and equipment, will operate differently on its own premises and in circumstances over which it has full control, as compared with premises under the control of others and circumstances over which it does not have control. Where the safety of premises is at stake, as in this case, it is appropriate to ask quite specific questions with respect to what may be expected of an employer exercising reasonable care for the safety of its employees. For example, is it reasonable for the employer to request or require access to premises to carry out its own safety inspection? Is it necessary (and sufficient) if the employer inquires of the occupier what steps it has taken to conduct such an assessment? Is it necessary (and sufficient) for the employer to inquire in specific terms of its own employees as to the nature of the conditions they encounter at other premises?
These questions are analogous to the approach to be adopted with respect to the acquisition of plant and equipment discussed in Davie. In such a case, it is not sensible, nor consistent with the requirement to take reasonable care, to treat the employer as ‘delegating’ its duty to provide safe equipment to the manufacturer or supplier. So long as it has acted reasonably, the employer will not be liable for injury to its employee resulting from a defect in equipment or plant not identifiable by reasonable care on the part of the employer, even though the defect is the result of negligent manufacture.
Here there is no evidence that Murrays knew or should have known that the soccer team had large trunks weighing 100 kilos. It is not something that is so obvious that I could take judicial notice of it. Further, there was no evidence that the use of slide rollers would have prevented this injury, particularly as the trunks appear to have been able to be successfully and safely unloaded from the side of the bus where they were stacked at the nearest to the edge. Nor was there evidence that the use of a long pole with a hook would have been useful and prevented this injury. That is something that would have to be proved ergonomically.
On the evidence, I am prepared to find that Mr Rice did not know of any safe manual handling policies of Murrays but whether that is because there were none, he had not been told of them, or he had been told of them and had forgotten, I cannot say.
I had no evidence that it was reasonably possible to have another employee on the bus to assist with loading and unloading or that some other system of loading and unloading was appropriate. There was, in fact, a paucity of evidence about all these issues. I have no evidence of what an adequate training would have been for Mr Rice. See Vairy v Wyong Shire Council (2005) 223 CLR 422 (at 461; [126]) per Hayne J.
It would seem, however, that there may have been some breach of the duty of care. The duty I consider the evidence shows has been breached is the duty to require Mr Rice not to lift luggage that weighs or is reasonably estimated to weigh more than 25 kilos without assistance. That would amount to a safe system of work. It is to be noted that there was no evidence given of what the appropriate provisions about manual handling should be, no standards or other regulatory material was provided. That may have made a difference.
The difficulty for the plaintiff, however, is that this breach bears no causal connection with the injury suffered. While the system of work should have provided this limit, Mr Rice already knew that and, indeed, had made it a rule he always followed. He not only knew what to do, he regularly behaved in this way. In addition, he failed to use the alternatives that he knew were available, such as asking the passengers or another driver to assist or pulling the trunk from the other side of the bus.
His motivation seemed not only admirable but clear. He was keen to make up for what he saw as the failure of his employer to provide the service for which his passengers had contracted. He felt uncomfortable about that and wanted to ensure he did not add to his passengers’ delay. Accordingly, he threw aside the habits he had learnt and which he always followed and which he had taught other drivers to follow and tried to be helpful and efficient. It was this, not the absence of a safe system of work (for he had his own safe system of work which he ignored and set aside) which caused the injury.
Mr Stretton submitted that the employer, knowing that this was a circumstance of urgency, failed property to supervise. There was no evidence about what supervision there should have been, bearing in mind that Mr Rice was very experienced, had, indeed, trained other drivers, and knew about manual handling. It also has to be borne in mind that Mr Rice was, as he was accustomed to doing, to go to a venue off his employer’s site and on his own. There was no evidence to suggest that this was unreasonable or that another system should have been implemented.
What is important is, it seems to me, that there was no evidence to say that Mr Rice was obliged by his employer to lift luggage more than 25 kilos. It was not suggested in evidence that he had that obligation or that he could not have required the passengers to load or assist him to load the heavy equipment.
Given that this was an offsite work place, there were circumstances which required that he had to use his discretion. It would, of course, have been ordinarily a discretion informed or even limited by his employer’s work system. Here, however, he knew what was safe, he knew how to avoid taking on unsafe tasks and he nevertheless proceeded. It is not a case of mere inadvertence, inattention or misjudgement: Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301 (at 310).
In my view, his employer’s negligence did not cause the injury that Mr Rice suffered.
Cause of disabilities
Mr Campbell SC next submitted that the causation of the injuries and disabilities of Mr Rice had to be looked at critically.
He did not fundamentally challenge his condition at present or, indeed, at the time of the settlement made with the plaintiff. What he did challenge, however, was the cause of that.
Relying on Dr McDonald’s reports, he submitted that I should accept that by November 2001, Mr Rice had recovered from the injury in November 2000. He was back driving after the seven weeks off work. Not only was he driving, but he was lifting luggage.
In November 2001, however, he lifted a carton of what apparently were books and which was too heavy for him. This caused an aggravation of his injury and led to him ultimately leaving work and having an operation. More recently, he had fallen down some stairs and caused more damage.
Certainly, a careful perusal of the medical reports, especially those of Dr McDonald, does seem to draw that picture.
Of course, Mr Rice’s employer may have been responsible for all these injuries, especially given the stark similarities between the two incidents and the medical advice that he was to avoid heavy lifting.
In order for the November 2001 incident to be a break in the causation of Mr Rice’s injuries, it has to be “a new act which gives a fresh origin to the after consequences”: per Lowe J in Haber v Walker [1963] VR 339 (at 349). As the High Court said in Mahoney v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 (at 528):
A negligent tortfeasor does not always avoid liability for the consequences of a plaintiff’s subsequent injury, even if the subsequent injury is tortiously inflicted. It depends on whether or not the subsequent tort and its consequences are themselves properly to be regarded as foreseeable consequences of the first tortfeasor’s negligence. A line marking the boundary of the damage for which a tortfeasor is liable in negligence may be drawn either because the relevant injury is not reasonably foreseeable or because the chain of causation is broken by a novus actus interveniens: M’Kew v Holland & Hannen & Cubitts [1970 SC(HL) 20, at p25]. But it must be possible to draw such a line clearly before a liability for damage that would not have occurred but for the wrongful act or omission of a tortfeasor and that is reasonably foreseeable by him is treated as the result of a second tortfeasor’s negligence alone: see Chapman v Hearse [(1961) 106 CLR 112, at pp124-125]. Whether such a line can and should be drawn is very much a matter of fact and degree: [(1961) 106 CLR, at p122].
Where the injured person’s subsequent act is unreasonable, the original tortfeasor will not be held liable: Watts v Rake (1960) 108 CLR 158 (at 163) per Menzies.
Whilst it seems to me that the November 2001 incident has some hallmarks of a new cause of injury, I am left in doubt whether Mr Rice was unreasonable in lifting the carton apparently of books.
I note that fresh symptoms were detected by Dr McDonald in February 2002, namely a developed weakness, after he had seen Dr McDonald in December 2001. There is no evidence of a cause of that symptom. By inference and proximity, it can be arguably related to the book lifting incident. Until that time, Mr Rice seemed to have returned to work quite successfully.
It is, of course, the plaintiff’s onus to show that the injuries for which they paid compensation are attributable to the risk which is the subject of the double insurance. I do not consider that the plaintiff has discharged that onus.
In that event, the payments that were the subject of a contribution would be considerably less than that claimed. The weekly payments would be limited to $3,893.90, but an account would have to be taken of the medical and other expenses were there to be a contribution required.
Given the findings I have made elsewhere, this is not necessary.
Unclaimable damages
The final challenge is based on the way in which Mr Rice’s claim was settled. It was ultimately settled through the Magistrates Court where a compromise on settlement was recorded on Workers Compensation Forms 27 and 28 that were filed in the court so that the compromise was enforceable as a judgment.
These forms give effect to r 9 of the 4th Schedule to the Workers Compensation Act. That rule relevantly provides:
9.Where an agreement has been made before ascertainment of compensation between a worker and his or her employer for payment of a lump sum by way of compromise and satisfaction of all claims, or the amount of compensation has been ascertained, or any weekly payment varied or terminated, or any other matter decided, under this Act, either by a committee or by agreement, a memorandum thereof may be sent, in the manner (if any) prescribed by Rules of Court, who shall, subject to those Rules, on being satisfied as to its genuineness, record the memorandum in a special register without fee and thereupon the memorandum shall for all purposes be enforceable as a judgment of the Court ...
A number of provisos then follow, none of which are presently relevant.
The rules of the court at the time prescribed forms for registration of such a memorandum. They are generally called Forms 27 and 28. In this case, the settlement made by Mr Rice with Murrays, for which the plaintiff was liable to indemnify Murrays, was settled by completing and filing Forms 27 and 28 which were then filed, accepted by the Registrar and recorded in the special register.
Form 27 was relevantly in the following terms:
... on the 16th day of December 2002 the following agreement was come to by and between the said applicant and respondent, that is to say:
1.The respondent agrees to pay to the applicant the sum of $310,000 clear of payments made to date inclusive of costs in full and final settlement of the applicant’s entitlements for all injuries sustained to all parts of the body whilst employed with the respondent pursuant to the Workers’ Compensation Act 1951 (ACT) including all entitlements pursuant to Sections 10 and 11 of the Act.
2.The applicant will do all things reasonably required by the respondent to have this agreement registered under the provisions of the Workers Compensation Act 1951 (ACT) and any monies payable pursuant to this agreement shall not be payable until this agreement is registered. The respondent shall also be at liberty to deduct any payment from the said sum any moneys in respect of fees paid to medical practitioners as a result of non-attendance by the applicant at medical appointments scheduled by the respondent.
3.The respondent will pay the agreed or taxed applicants costs as agreed in the terms of this settlement.
4.The applicant to execute a Common Law Release.
5.Any monies repayable to the Department of Social Security and/or the Health Insurance Commission will be deducted from the settlement sum.
Save that Form 28 acknowledged that Mr Rice had received $69,400.34 in payments, allowances or benefits, its terms need not be further considered. Thus, the Form 27 set out the terms of the agreement between Mr Rice and Murrays whereby Mr Rice’s claims under the Workers Compensation Act (paragraph 1) and at common law (paragraph 4) were compromised.
Mr Campbell SC submitted that the result of the registration of this settlement was that there was no liability of the plaintiff that was co-ordinate with the defendant’s liability to Murrays. Hence, there was no relevant double insurance and could be no contribution as claimed by the plaintiff.
This submission was based on the principles enunciated in Mercantile Mutual Insurance (Australia) Ltd v QBE Workers Compensation (NSW) Ltd (2004) 61 NSWLR 655 (MMI Case). The point is a relatively short one. Where a worker is paid only workers compensation payments (including a lump sum in commutation of the right to continuing weekly payments) there is no identity of liability, for the compulsory third party policy does not cover workers compensation payments.
To make the position clear, s 171 of the Road Transport (General) Act 1999 (ACT) provided at the relevant time:
(1)A third-party policy does not insure the owner or driver of a motor vehicle against –
(a)a liability to pay compensation under the Workers Compensation Act 1951 (or any corresponding law of another jurisdiction) to a worker employed by the owner or driver ...
Of course, as noted above (at [2]), the workers compensation policy issued by the plaintiff indemnified Murrays for both workers compensation liabilities as well as common law liabilities. It is, however, only the latter that are co-extensive with the compulsory third party policy.
As noted by Barrett J in Zurich Australian Insurance Ltd v GIO General Ltd (2010) 55 MVR 149 (at 151; [7]), the question of double insurance must be approached by reference to actually crystallised liabilities, not to what would or might have been the position if the injured person had made other choices.
Applying the principles, Mr Campbell SC submitted that par 1 of the Form 27 made it clear that the sum of “$310,000 clear of payments made to date [set out in the Form 28] inclusive of costs” was payment for and only for “the applicant’s entitlements ... pursuant to the Workers Compensation Act 1951 (ACT)”. It was not, therefore, for the common law liabilities.
Mr Stretton submitted that this was a quite different situation, for in the MMI Case, there was no claim for common law damages and that distinguished the case from Australian Iron & Steel Pty Ltd v Government Insurance Office (NSW) [1978] 2 NSWLR 59 where payments for workers compensation were paid but included in the amount to which the compulsory third party insurer was required to contribute.
That case, however, is of no assistance here, for the circumstances were different. In the first place, it stands for the unexceptional principle that since payments of workers compensation entitlements are applied towards payment of any damages otherwise recoverable by a worker (see s 23(2) of the Workers Compensation Act), those payments, when common law damages are recovered, have a dual character, one of which is co-extensive with the amounts in respect of which both insurance policies indemnify the employer.
That principle would apply here if the sum paid to Mr Rice by the plaintiff included both common law damages and workers compensation entitlements for the crystallising of the liability for common law damages would change the character of the workers compensation payments so that they would be amenable to the contribution claim by the paying insurer.
That, however, begs the question which is relevant here, namely what is the character of the payment made by the plaintiff? If one looks alone at the Form 27, which purports to record the agreement between the parties, it states that the sum payable is in full and final settlement of Mr Rice’s entitlements under the Workers Compensation Act. There is no reference to any common law damages at all. Taken at face value, this agreement would fall precisely within the principles set out in the MMI Case.
In construing the agreement recorded in the Form 27, I note that the prescribed form at the time (AF 2002-152) did not prescribe the contents of the agreement at all. That is to say, the wording of none of the paragraphs, particularly par 1 are prescribed in the approved forms at all. This must reinforce the defendant’s submission that the paragraphs actually set out the true agreement and are not merely an attempt to manipulate its terms into a rigidly and limited prescribed form.
I also note that r 9 (set out at [123] above) permits, on its true construction, an agreement that is wider than just the redemption of workers compensation payments.
It seems to me tolerably clear that the reference in r 9 to “compromise and satisfaction of all claims” is not limited to those under the Workers Compensation Act. The words “under this Act”, in my view qualify only “or the amount of compensation has been ascertained, in any weekly payments varied or terminated, or any other matter decided” in the rule. If that were not so, the following words “either by a committee or by agreement” would not make sense and the reference there to agreement would be redundant. That also is consistent with the approved form. Thus, the agreement that can be made and registered under r 9 is not limited to a payment of a lump sum for the entitlements under the Act but for all claims. This the Form 27 in this case does not do in terms. It would, therefore, appear that a deliberate choice was made by the parties signing the Form 27, as indeed it had to be, as to the characterisation of the payments that were being made by Mr Rice.
Mr Stretton then referred to the Originating Application which had been prepared but not filed or issued by Mr Rice’s lawyers claiming damages for the injury suffered by Mr Rice on 27 November 2000 and letters from and to Mr Rice’s lawyer and to and from the plaintiff quantifying a settlement sum in terms that were consistent only with a common law claim. These documents, he submitted, showed that there was a component of common law damages in the final settlement sum. These documents were all tendered without opposition.
Despite not objecting to their tender, Mr Campbell SC submitted that they would not be used to construe the agreement recorded in the Form 27. He relied on the High Court’s decision in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd and Ors (2004) 219 CLR 165. He referred particularly to what the unanimous court said (at 179; [40]):
This Court, in Pacific Carriers Ltd v BNP Paribas [(2004) 218 CLR 451], has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction...
This approach and the parol evidence rule, which excludes evidence of extrinsic terms that “subtract from, add to, or vary or contradict the language of a written agreement” (Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 (at 347) per Mason J) would exclude these documents from being taken into account in construing the agreement set out in the Form 27.
Mr Stretton then submitted that the quantum of the settlement sum was so great that it could not reasonably be suggested to represent a redemption of workers compensation payments alone without some common law element in it. That may be so, but there was no evidence to support that contention. I had little evidence that would have provided a basis for that. The only evidence was in the correspondence which had been tendered and which showed the amount to be substantially more than the plaintiff’s offer and significantly less than the offer put by Mr Rice’s lawyer. There was no evidence about what sum Mr Rice was entitled to under the Workers Compensation Act, though I do note that Sch 1 does not provide particularly generous allowances under the Act.
I did have, also tendered without opposition, a document headed “Schedule of Payments. Workers Compensation Claim”. It showed that for the period 28 November 2000 to 29 June 2004, a total of $23,387.49 was paid by way of weekly compensation. Under the heading of “Medical and other expenses” a total of $355,639.65 was paid, though I do note that $279,000.00 was paid to Mr Rice’s lawyer. While that document does suggest that the sum agreed is a large one, it is also in its format consistent with a settlement that was in respect of entitlements under the Workers Compensation Act.
Mr Stretton then referred to the fact that the settlement included a common law release which, he submitted, was only consistent with a settlement of the common law damages for which Mr Rice may have been entitled. As I pointed out to him, however, this would inevitably be what a cautious lawyer for the plaintiff would wish to include so that there was no possibility that Mr Rice would make a further claim at any later stage. It is, perhaps, an indication in the agreement as a whole that more is intended in the payment of the settlement sum but it is difficult to see if overcoming the express and clear words in the first paragraph which hardly admit of ambiguity.
The difficulty I have with Mr Stretton’s argument is that he referred to “an agreement effected in a particular way”, that is a common law compromise for which the Forms 27 and 28 were simply a “vehicle” to give effect to it. There was, however, precise evidence in Form 27 of the terms of the agreement and no evidence of any other agreement. There was, therefore, nothing to show that there was really a prior collateral agreement which was said to be the common law compromise and which was to be effected by filing Forms 27 and 28 which would misdescribe the agreement. Evidence of such a collateral agreement is admissible. See, for example, Maybury v Atlantic Union Oil Co Ltd (1953) 89 CLR 507 (at 517). This, however, does not seem to be applicable here, for such a collateral contract cannot be inconsistent with the terms of the written contract and what Mr Stretton is positing would be inconsistent with the written terms.
It seems to me that those who saw the filing of Forms 27 and 28 as a quick and enforceable means of bringing Mr Rice’s claims to an end did not properly consider what they were doing and give thought to the consequences of their work.
On the state of the evidence before me, and taking into account the whole of the terms of the agreement set out in the Form 27, I am unable to say that the agreement set out in Form 27 was not what it was in fact expressed to be, namely only a redemption of the rights Mr Rice had under the Workers Compensation Act. That is what it clearly purports to be and it has been filed in court and tendered as such. It would be extraordinary if the lawyers involved intended that the documents filed in court and to be enforceable there were intended to be a sham and to disguise the true term of the agreement they purported to record.
Accordingly, I do not consider that there is a co-ordinate loss for which the defendant is liable to contribute under any double insurance with the plaintiff.
Conclusion
As a result of my findings, the plaintiff’s claim must be dismissed. I shall hear the parties as to costs.
It is extremely regrettable that the busy workload of the court has delayed the delivery of judgment and these reasons for longer than is desirable. Nevertheless, I have carefully read the whole of the transcript and the exhibits that were tendered at the hearing as well as perusing my contemporaneous notes. I found that I had a good recall of the proceedings and the demeanour of Mr Rice as he gave evidence, notwithstanding the passage of time.
I certify that the preceding one hundred and fifty-two (152) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.
Associate:
Date: 11 March 2011
Counsel for the plaintiff: Mr G Stretton
Solicitor for the plaintiff: Sparke Helmore
Counsel for the defendant: Mr S Campbell SC and Mr D Mossop
Solicitor for the defendant: Moray & Agnew
Date of hearing: 13 March 2008
Date of judgment: 11 March 2011
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