Ralston v Burkinshaw
[2002] NSWSC 542
•4 June 2002
Reported Decision:
(2002) 12 ANZ Insurance Cases 61-531
New South Wales
Supreme Court
CITATION: Ralston v Burkinshaw [2002] NSWSC 542 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S): SC 20137/01 HEARING DATE(S): 4 June 2002 JUDGMENT DATE: 4 June 2002 PARTIES :
Christopher Robert Ralston (Plaintiff)
Kenneth William Burkinshaw t/as Amaroo Pastoral Company (Defendant / First Cross-Claimant)
Farmers Mutual Insurance Limited (First Cross Defendant to First Cross-Claim)
Commercial Union Workers Compensation (NSW) Limited (Second Cross Defendant to Second Cross-Claim)JUDGMENT OF: Dunford J
COUNSEL : MJ Cranitch SC / MB Inglis (Plaintiff)
ID Roberts (Defendant / First Cross-Claimant)
BMJ Toomey QC / AJ Black (First Cross Defendant to First Cross-Claim)
HN Kelly (Second Cross Defendant to Second Cross-Claim)SOLICITORS: Commins Hendriks (Plaintiff)
Creaghe Lisle (Defendant / First Cross-Claimant)
Pogson Cronin (First Cross Defendant to First Cross-Claim)
Leigh Virtue & Associates (Second Cross Defendant to Second Cross-Claim)CATCHWORDS: INSURANCE - shearer at employer's premises prior to commencing work - workers compensation & public liability insurers - which insurer liable - COSTS - insurer liable to indemnify employer - liability disputed - insurer liable for costs on an indemnity basis. DECISION: See para 20.
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISIONTuesday, 4 JUNE 2002DUNFORD J
20137/01 Christopher Robert Ralston v Kenneth William Burkinshaw t/as Amaroo Pastoral Company
JUDGMENT
1 His Honour: In these proceedings the plaintiff, Christopher Robert Ralston, has sued the defendant, Kenneth William Burkinshaw trading as Amaroo Pastoral Company, for damages for personal injuries sustained by him on 30 July 1997 when he slipped and fell on a metal stair way leading from the ground into the defendant's shearing shed at the property known as "Amaroo".
2 The defendant was insured pursuant to two policies of insurance, a public liability policy with Farmers Mutual Insurance Limited and a workers compensation policy with Commercial Union Workers Compensation NSW Limited.
3 Both insurers have denied their liability to indemnify the defendant against any damages recovered by the plaintiff and, accordingly, the defendant has brought a cross-claim against each of them.
4 Agreement has been reached between the plaintiff and the defendant for the plaintiff to recover the amount specified in a document headed Heads of Agreement signed by counsel for all the parties, and those Heads of Agreement also contain an acknowledgment from both cross-defendants that the agreement between the plaintiff and the defendant is reasonable on the part of the defendant.
5 That agreement having been reached, I excused the plaintiff and his counsel from the hearing and have proceeded to hear evidence on the cross-claim.
6 That evidence discloses that at the relevant time the plaintiff was one of a group of three shearers who generally worked together. They had formerly worked for a contractor some years prior to this accident, but had apparently ceased working for the contractor and were dealing with the farmers directly; that certainly was the case so far as their relationship with the defendant was concerned.
7 The defendant, Mr Burkinshaw, was in the habit of contacting one of them, usually the same one, not the plaintiff, but they came generally together and worked on the three stands in his shearing shed. He was always there except for minor absences, and regarded himself as in charge of the shearing operation. In fact, in evidence, he described himself as "the manager- boss".
8 He paid them individually by cheque. That is, he gave a separate cheque to each shearer based on the number of sheep he had shorn. He also deducted taxation and superannuation from their payments. He maintained wage records in respect of each of them, and at the end of each financial year he issued each of them with a group certificate. He also, each year, made a workers compensation declaration in which when estimating his wages for the year, he took into account the wages paid to the shearers.
9 In my view there could be no doubt that the plaintiff in particular was an employee of the defendant, and not an independent contractor.
10 Moreover, after the accident, having been contacted by the plaintiff's doctor, the defendant completed and signed an Employer's Injury Report (Ex X2) and through his wife supplied the plaintiff with a Worker's Report of Injury form, which the plaintiff completed (Ex Y1.)
11 These documents were forwarded to the second cross-defendant, Commercial Union, who replied by letter dated 10 September 1997 to the effect that the claim was accepted and the defendant was authorised to pay compensation. The defendant, having paid compensation, was reimbursed by Commercial Union for the compensation paid by him.
12 This arrangement apparently broke down and there was a period during which the plaintiff was not paid any compensation until he commenced proceedings in the Compensation Court following which an agreement was reached for reduced payments until what was expected to be the date of hearing of these proceedings at last year's sittings, when the matter was not in fact heard.
13 The form of policy prescribed by Form 4 of the Workers Compensation (General Regulation) 1995 provides in clause 3 that the insurer will indemnify the employer in respect of compensation, that the employer becomes liable to pay to any person who is a worker of the employer and "(b) any other amount that the employer becomes liable to pay independently of the Act (that is including common law damages) for any injury to any such person", subject to an exception relating to what might be termed rescue cases.
14 The first cross-defendant, Farmers Mutual Insurance Limited's insurance policy excludes the insurer from liability for claims in respect of bodily injury to any person arising out of or in the course of employment where insurance is or would have been provided under any Workers Compensation legislation applicable to the employer or for any other person.
15 In my view, on the construction of the relevant policies, the liability of Commercial Union to indemnify the defendant is clear. However, Mr Kelly has submitted two grounds on which he submits liability should be denied. One thing he submits is that the plaintiff was in fact an independent contractor. For the reasons already given, I reject this submission.
16 He also submits that at the time the plaintiff suffered his injuries, namely, about 7am on 30 July 1997, he was not on the premises as an employee because the starting time was not until 7.30am. He had not worked at this shed for this employer the previous week, as the two other members of his regular group had done, but he had arrived early and was in the course of taking his tools and other equipment from his vehicle into the shed. This required two trips and it was whilst he was returning to his vehicle from the first trip to collect the second load that he slipped and fell.
17 In my view, he was at the relevant time there for the purposes of his employment. He could only work as a shearer if he took his combs, blades, sling and other equipment into the work place. He was in the course of doing that at the time, and the fact that he was doing it at 7am rather than at 25 past 7 strikes me as totally irrelevant. In any event, the wording of the policy to which I have already referred makes it clear that it is the relationship between the worker and the employer that gives rise to Commercial Union's liability under the policy, not whether he was in fact at the relevant time actually engaged in the work. He had been engaged to work, the contract of employment was already in existence, the contract of employment required him to go to the shearing shed and take his equipment into the shearing shed. The relationship therefore was already in existence and Commercial Union is accordingly liable under the policy for the defendant and I so hold. It flows that Farmers Mutual Insurance Limited is not liable under the policy held with it.
18 The defendant has applied for indemnity costs on the ground that he should not have been required to incur his own expense in defending the plaintiff's proceedings but those proceedings should have been defended in his name by Commercial Union.
19 The policy to which I have referred to in clause 3(c) only refers to "costs and expenses incurred with the written consent of the insurer for the defence of any legal proceedings", but this is a case where I am satisfied the insurer should have either taken over the defence of the proceedings itself or given written consent for the defendant to defend the proceedings.
20 The whole concept of indemnity under an insurance policy is to avoid the insured being liable for any money arising out of a proper claim, and for this reason I am satisfied the defendant is entitled to his costs against Commercial Union on an indemnity basis.
(Proceedings stood over until 10am tomorrow for the making of final orders.)
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