Skilled Engineering Ltd v Glaxo Wellcome Australia Pty Ltd

[2005] TASSC 39

[2005] TASSC 39

CITATION:Skilled Engineering Ltd v Glaxo Wellcome Australia Pty Ltd 

[2005] TASSC 39

PARTIES:  SKILLED ENGINEERING LTD
  v
  GLAXO WELLCOME AUSTRALIA PTY LTD

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  154/2004
DELIVERED ON:  23 May 2005
DELIVERED AT:  Hobart
HEARING DATE:  4 May 2005
JUDGMENT OF:  Blow J

CATCHWORDS:

Workers Compensation – Alternative rights against employer and/or third parties and consequences thereof – Actions for damages against employer – Statutory constraint on actions for damages – Generally – Whether no constraint unless and until compensation claimed – Principal deemed to be employer – Whether cause of action arises despite statutory constraints.

Workers Rehabilitation and Compensation Act1988 (Tas), s138AB.
Hewitt v Benale Pty Ltd (2002) 27 WAR 91; Swannell v Farmer [1999] 1 VR 267; Bonser v Melnacis [2002] 1 Qd R 1, followed.
Aust Dig Workers Compensation [237]

Workers Compensation – Alternative rights against employer and/or third parties and consequences thereof – Rights of and against third parties – Right of employer to indemnity or contribution from third party – Generally – Employer/contractor and principal each liable for compensation – Employer/contractor paying compensation – Claim for indemnity against principal – Whether "liability in some person other than the employer" – Whether extended definition of "employer" applicable.

Workers Rehabilitation and Compensation Act1988 (Tas), ss29, 132, 134.
Aust Dig Workers Compensation [279]

REPRESENTATION:

Counsel:
             Plaintiff:  P L Jackson
             Defendant:  K E Read
Solicitors:
             Plaintiff:  Jackson & Tremayne
             Defendant:  Hunt & Hunt

Judgment  Number:  [2005] TASSC 39
Number of paragraphs:  47

Serial No 39/2005
File No 154/2004

SKILLED ENGINEERING LIMITED v
GLAXO WELLCOME AUSTRALIA PTY LTD

REASONS FOR DETERMINATION  BLOW J

23 May 2005

The scope of the present determination

1. The Master has made an order that the issues raised in pars13 – 19 of the amended defence herein be tried before any other questions in the action.  If the issues so raised are determined in favour of the defendant, the plaintiff will not be able to succeed in the action.

1. In 2002 the plaintiff was the employer of a worker named Steven James Keeley ("the worker").  On 9 March 2002 the worker was injured in the course of his employment.  He subsequently claimed compensation from the plaintiff in respect of his injury pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act"). He was entitled to such compensation. The plaintiff paid it.

1. The plaintiff contends that the worker's injury was caused by the negligence of the defendant. It has brought this action to claim an indemnity from the defendant in respect of the compensation paid by it to the worker. It claims to be entitled to such an indemnity pursuant to the Act, s134. That section reads as follows:

   "(1)   Subject to this section, where an injury for which compensation is payable to a worker is caused under circumstances creating a liability in some person other than the employer to pay damages in respect of that injury to that worker, the employer may recover indemnity against that person in respect of the compensation paid by the employer to the worker in respect of that injury.

   (2)     Subject to subsection (3), where the circumstances referred to in subsection (1) create the liability to pay damages both in the employer and some other person, whether arising as a result of a tort or otherwise, the employer has the like right of indemnity or contribution against that other person in respect of the compensation paid by the employer as if that compensation were part of those damages.

   (3)     Where an injury to a worker arises partly by his or her own fault and partly by the fault of another person, the amount recoverable by the employer under this section by way of contribution or indemnity is reduced to such extent as the Supreme Court thinks just and equitable having regard to the degree of the worker's responsibility for the injury."

2. The defendant contends that, because of the wording of certain provisions of the Act, particularly ss29 and 138AB, it cannot be liable to indemnify the plaintiff pursuant to s134, even if the worker's injury was caused by its negligence, which it denies.

1. Section 29 applies to the situation where a "principal" contracts with a "contractor", and a worker is employed by the contractor to execute work undertaken by the principal.  It enables the worker to recover workers compensation from the principal, as an alternative to recovering it from his or her employer, ie the contractor.  It is common ground that the defendant and the plaintiff were in a relationship of principal and contractor for the purposes of s29.

1. Section 138AB restricts the availability of common law damages for negligence in actions by workers against their employers to workers who have lodged elections to claim damages with the Workers Rehabilitation and Compensation Tribunal ("the Tribunal"), after their employer having agreed, or the Tribunal having held, that they have a degree of impairment of not less than 30 per cent of the whole person. It is common ground that the worker has neither lodged such an election nor become entitled to do so.

1. The defendant's contentions concerning ss29 and 138AB are the subject of pars13 – 19 of its amended defence and of the Master's order as to the separate trial of the issues raised thereby.

The pleadings

1. Paragraphs 13 - 19 of the amended defence read as follows:

"13The Defendant in the course of, or for the purpose of, its trade or business entered into a contract with the Plaintiff for the execution by or under that contract of the whole or any part of any work undertaken by the Defendant.

14The injury to the worker occurred on, in, or about the place on which the Defendant had undertaken to execute the work the subject of the contract referred to in the preceding paragraph.

15The injury for which compensation is payable to the worker has not produced a whole person permanent impairment of not less than 30% within the meaning of the Workers Rehabilitation and Compensation Act 1988 ('the Act').

16The worker has not lodged with the Workers Rehabilitation and Compensation Tribunal an election to claim damages within the meaning of the Act.

17By reason of sections 29 and 138AB the worker is not entitled to pursue a claim for damages independently of the Act against the defendant.

18The defendant is therefore not, for the purposes of section 134(1) of the Act a person in whom the circumstances of the injury created a liability to pay damages to the worker.

19The plaintiff may therefore not recover indemnity against the defendant in respect of the compensation paid by the plaintiff to the worker in respect of the worker's injury."

1. The facts pleaded in pars13 and 14 relate to s29. The plaintiff has admitted the allegations in those paragraphs. The facts pleaded in pars15 and 16 relate to s138AB. The plaintiff has also admitted the allegations in those paragraphs. The plaintiff has denied the allegations in pars17, 18 and 19, which are pleas of law.

1. The defendant contends that, as a result of it being a principal from whom the worker could have recovered workers compensation pursuant to s29, and/or as a result of the worker's common law rights being restricted by s138AB, the plaintiff cannot recover an indemnity or contribution from it pursuant to s134. The plaintiff contends that those circumstances provide no defence to its claim.

Section 29

1. This section reads as follows:

"29    (1)     Where a person (in this section referred to as 'the principal') in the course of, or for the purposes of, his trade or business contracts with any other person (in this section referred to as 'the contractor') for the execution by or under the contractor of the whole or any part of any work undertaken by the principal, the principal is liable to pay to a worker employed in the execution of the work any compensation under this Act that he would have been liable to pay if that worker had been immediately employed by him.

(2)     Where compensation is claimed from, or proceedings are taken against, the principal, then, in the application of this Act, a reference to the principal shall be substituted for a reference to the employer, and the amount of compensation shall be calculated with reference to the earnings of the worker under the employer by whom he is immediately employed.

(3)     In the construction of the provisions of this section, the expression 'the principal' includes a contractor who enters into a sub-contract with any other person for the whole or any part of the work undertaken by him, and the expression 'the contractor' includes a person who takes such a sub-contract.

(4)     Where the principal is liable to pay compensation under this section, he is entitled to be indemnified by any person other than the Nominal Insurer who would have been liable to pay compensation to the worker independently of this section, and the right to that indemnity is available against every contractor standing between the principal and the worker.

(5)     Nothing in this section shall be construed as preventing a worker recovering compensation under this Act from the contractor instead of the principal.

(6)     This section does not apply in any case where the injury occurs elsewhere than on, in, or about the place on which the principal has undertaken to execute the work or that is otherwise under his control or management."

1. The legislative policy underlying s29 and its counterparts in other legislation was explained by Cox J (as he then was) in Reardon v Scolyer [1984] Tas R 69 at 75 as follows:

"It was said of the forerunner of s6 [the forerunner of s29] that its object was to prevent an employer from escaping liability by contracting with someone else to provide labour or to execute work and to give a workman employed by a contractor a double security for his compensation which but for this provision he might lose through the poverty of his direct employer (Willis' Workman's Compensation, 31st edn, p191).  Another object it was said by Lord Brampton in Cooper & Crane v Wright [1902] AC 302, at p308, 'was to impose the obligation of providing such statutory compensation upon those to whom good sense would naturally point as the fittest persons to bear it, and to define for the convenience of injured workmen seeking compensation the persons from whom they are entitled to claim it'."

1. Because of the facts pleaded in pars13 and 14 of the amended defence and admitted by the plaintiff, the defendant is a principal to whom s29 applies. The worker had the right to claim compensation from it. Instead, he recovered compensation from the plaintiff, ie the contractor, as contemplated by s29(5).

1. Another relevant section of the Act is s132, which includes the following provisions:

"In this Part, unless the contrary intention appears –

…

'employer', used in relation to an injury suffered by a worker, includes any person who, in respect of that injury, is liable, under section 29, to pay compensation or to indemnify any other person for any compensation paid by that other person."

1. The defendant's argument in relation to s29 can be summarised as follows:

· "Proceedings" have been taken against the defendant, within the meaning of s29(2), in that this action has been brought against it.

· Therefore, by operation of s29(2), "in the application of this Act, a reference to the principal shall be substituted for a reference to the employer".

· Therefore, in s134(1) and (2), the references to "the employer" must be read as references to "the principal".

· By virtue of s132 as well, the references in s134(1) and (2) to "the employer" must be read as referring to "the principal".

·   Section 134 only confers a right to claim an indemnity or contribution against a "person other than the employer". 

·   It follows that, when s29 is applicable, s134 only confers rights against a person other than the employer and the principal, and does not confer on the employer any right against the principal.

1. The plaintiff contends that the purpose or object of s134 is to adjust the responsibilities arising from the co-existence of two liabilities to a worker so as to place the ultimate burden of compensating an injured worker upon a tortfeasor, and not upon a person with a liability to pay statutory compensation.  Mr Jackson submitted on behalf of the plaintiff that the references to "the employer" in s134 should therefore be interpreted as referring only to the party who has paid the compensation. 

1. Because of the definition of "employer" in s132, I think it is clear that the references to "the employer" in s134 should be interpreted as also referring to any principal or person liable under s29 to pay compensation, or to indemnify another person for any compensation paid by that person. Thus, when compensation has been paid by a principal, the ultimate burden of the payment of compensation can be placed upon a tortfeasor. That interpretation would promote the purpose or object of s134, and should therefore be adopted in accordance with the Acts Interpretation Act 1931, s8A.

1. Because of the introductory words of s132, the extended definition of "employer" in that section applies throughout PtX of the Act "unless the contrary intention appears". In my view it cannot be said that any relevant contrary intention appears in relation to s134. Obviously it was intended that a principal who has paid compensation under s29 would have the right to recover an indemnity or contribution from a tortfeasor under s134. The argument that "employer" in s134 should be given a limited meaning, confined to those who have paid compensation, thus cannot be based on the "contrary intention" proviso at the beginning of s132. That argument is really an argument that the word "employer", which is extended by s132 to include a deemed employer, should then be limited as if the words "who has paid compensation" are added. In my view, such an interpretation places too great a strain upon the language of s134, and should therefore be rejected. Parliament obviously did not contemplate the possibility of an employer in the strict sense wanting to recover an indemnity or contribution from a negligent principal. Otherwise some provision would have been made as to whether the right of indemnity conferred by s134 was intended to prevail over the right of indemnity conferred by s29(4) on a principal who has paid compensation, whereby the amount paid may be recovered from the employer, or whether s29(4) was to prevail over s134. In the circumstances I think the only appropriate course is to interpret s134 in accordance with the express provisions of s132.

1. It follows that, for the purposes of s134, the defendant is not "a person other than the employer"; that the plaintiff cannot recover an indemnity or contribution from the defendant in this action; and that I should make a determination in the defendant's favour to that effect. 

1. If I am wrong about the effect of s132, I do not think that the wording of s29 can help the defendant. It is true that s29(2) provides that "in the application of this Act, a reference to the principal shall be substituted for a reference to the employer". However that subsection applies only where "compensation is claimed from, or proceedings are taken against, the principal". This is not a case in which compensation has been claimed from the principal. It must therefore be considered whether this is a case in which "proceedings" have been taken against the principal within the meaning of s29(2). I think it is not. In my view the purpose of s29(2) was to make all the procedural provisions of the Act applicable to compensation claims against principals, just as they are applicable to compensation claims against employers. That objective would be achieved if the word "proceedings" in s29(2) were interpreted as meaning "proceedings to obtain compensation". If that interpretation were adopted, a reference to "the principal" would be substituted for a reference to "the employer" by operation of s29(2) only in relation to compensation claims against a principal and compensation proceedings against a principal. In my view, that interpretation should be adopted. Parliament surely did not intend that, in a case where compensation had not been claimed from a principal, and the principal had not been sued for compensation, the principal was nevertheless deemed to be an employer for the purposes of any other legal proceedings that might be taken against it, eg for damages, an indemnity, or contribution. See Doxford & Sons Ltd v Furness Shipbuilding Co Ltd [1937] 4 All ER 334.

Section 138AB

1. If, as unsuccessfully argued by Mr Jackson, the word "employer" in s134(1) refers only to a person or entity who has paid compensation, it would not necessarily follow that the plaintiff could claim an indemnity or contribution from the defendant pursuant to s134. I say that because of a submission made by Mr Read, for the defendant, in relation to s138AB. That submission can be summarised as follows:

·The worker's injury has not produced a whole person permanent impairment of not less than 30 per cent.

·The worker has not lodged an election to claim damages.

·Because of those facts, s138AB(1) prevents the worker from commencing proceedings in court for an award of damages against his "employer".

·The definition of "employer" in s132 applies to s138AB. The word "employer" in s138AB(1) therefore refers both to the employer in the strict sense and to a s29 principal.

·Therefore the worker is not entitled to commence proceedings for damages against the defendant, never has been, and has never had a cause of action against the defendant.

·Therefore, for the purposes of s134(1), the worker's injury was not "caused under circumstances creating a liability in some person [the defendant] other than the employer [the plaintiff] to pay damages in respect of that injury to that worker".

·Therefore the employer/plaintiff is not entitled to recover indemnity or contribution from the defendant under s134.

1. For the plaintiff, Mr Jackson submitted that this argument should fail, on the basis that the worker has at all material times had a cause of action against the defendant, and that s138AB did not prohibit him from commencing damages proceedings against the defendant before he claimed compensation from the plaintiff.

1. Sections 138AA and 138AB, which form part of Div2 of PtX of the Act, read as follows:

"138AA     (1)  This Division applies to the awarding of damages against an employer independently of this Act in respect of an injury suffered by a worker if - 

(a)     the injury was caused by the negligence or other tort of, or a breach of contract or statutory duty by, the worker's employer; and

(b)     compensation has been paid or is payable in respect of the injury under this Act or would have been paid or be payable but for section 25(2).

(2)     This Division applies even if the damages resulting from the negligence or other tort of the worker's employer are sought to be recovered in an action for breach of contract or statutory duty or other action.

(3)     A reference in this section to the worker's employer includes a reference to a person for whose acts the employer is vicariously liable.

(4)     This Division extends to an employer's liability for a breach of statutory duty by a worker where the employer would have been liable for damages if the employer had committed the breach.

(5)     This Division does not apply to an action by a worker for damages for trespass, or any other cause of action for which the employer is not vicariously liable, committed against the worker by a person - 

(a)     employed by the employer under a contract of service at the time the injury was suffered; or

(b)     otherwise deemed to be a worker employed by the employer at that time.

138AB      (1)  Before commencing proceedings in court for an award of damages, a worker who intends to seek damages against his or her employer must lodge with the Tribunal an election to claim damages.

(2)     A worker is not to make an election unless the degree of his or her permanent impairment is agreed by the worker and the employer, or determined by the Tribunal, to be a percentage of the whole person of not less than 30%.

(3)     An assessment of the degree of the worker's impairment is to be carried out in accordance with section 72 or 73.

(4)     An election is to be in a form approved by the Tribunal.

(5)     An election is to be lodged within 2 years after the date on which the claim for compensation is given to the employer of the worker, or person designated by the employer, under section 34.

(6)     The Tribunal may extend the period within which an election is to be made if - 

(a)     there is a dispute as to the level of the worker's impairment; or

(b)     the injury is not stable and stationary.

(7)     If there is a dispute as to the degree of impairment, the worker may apply to the Tribunal for a determination of the degree of impairment.

(8)     An application under subsection (7) is to be -

(a)     accompanied by evidence from a medical practitioner that he or she is of the opinion that the degree of impairment is not less than 30% of the whole person; and

(b)     made not less than 21 days before the expiration of the period referred to in subsection (5).

(9)     If the Tribunal determines the degree of impairment to be not less than 30% of the whole person, the worker is to lodge his or her election within 21 days after the determination.

(10)   The Tribunal may refer the question of the degree of impairment to a medical panel in accordance with Part V.

(11)   An election to claim damages does not preclude a worker from receiving compensation under this Act.

(12)   This section does not apply to proceedings taken by a personal representative or dependant of a worker who has died as a result of an injury for which compensation is payable under this Act. "

1. As I have said, it is common ground that the worker is precluded by s138AB from commencing proceedings in court for an award of damages. Because s132 extends the meaning of the word "employer" to include a principal to whom s29 applies, the protection of s138AB extends not only to the plaintiff/employer, but also to the defendant as a s29 principal.

1. Support for that conclusion, if any is needed, can be found in two cases as to when statutory provisions deeming persons to be employers are applicable.  The earlier of them is a decision of the New South Wales Court of Appeal in OP Industries Ltd v MMI Workers Compensation (NSW) Ltd (1998) 17 NSWCCR 193, [1998] NSWSC 632. That appeal concerned a damages action brought by a worker who had been employed by one employer, but then been temporarily lent or let on hire to a second employer. A provision in the Workers Compensation Act 1987 (NSW) deemed the original employer to continue to be the employer of the worker. The majority (Beazley JA and Fitzgerald AJA, Meagher JA dissenting) took the view that the provision applied in the context of the damages action, so that the worker's common law entitlements against the deemed employer were restricted in accordance with provisions of the 1987 Act. In substance, the majority took the view that the words "for the purposes of this Act" in the relevant provision referred to the whole of the Act, including provisions as to the capping of common law damages, and not just to the provisions relating to statutory compensation.

1. A similar question was considered by the Western Australian Court of Appeal in Hewitt v Benale Pty Ltd (2002) 27 WAR 91. The Workers' Compensation and Rehabilitation Act 1981 (WA), s175(1), the counterpart of our s29, provides that "both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker …". Another section of that Act provided that proceedings in which damages were sought were not to be commenced without the leave of the District Court. That provision was in a division of that Act that applied to the awarding of damages in respect of a disability suffered by a worker if inter alia that disability was caused by the negligence or other tort of the worker's employer. The Court of Appeal concluded that s175(1) deemed the principal to be an employer for the purpose of those provisions.

1. Even if the word "employer" in s134 should be interpreted as referring only to an employer or principal who has paid compensation, there is no reason why such an interpretation should be adopted in relation to the meaning of "employer" in s138AB. There being nothing to indicate a contrary intention, s132 must apply, so that the word "employer" extends to include a principal "who, in respect of that injury, is liable, under s29, to pay compensation".

The rights of a worker before claiming compensation

1. It is common ground that the worker did not claim compensation from the plaintiff until 23 March 2002, some 14 days after he was injured. Mr Jackson submitted on behalf of the plaintiff that an injured worker retains his or her common law rights to sue for damages, free of the restriction imposed by s138AB, until such time as compensation under the Act is paid or claimed. His argument can be summarised as follows:

·Division 2 of PtX of the Act, which includes s138AB, is applicable only if, in the words of s138AA(1)(b), "compensation has been paid or is payable in respect of the injury under this Act or would have been paid or be payable but for section 25(2)."

·The worker was not paid compensation until after he claimed it.

·Compensation is not "payable" within the meaning of s138AA(1)(b) until it has been claimed.

·Therefore, until the worker made his claim for compensation 14 days after he was injured, s138AB did not prevent him from commencing proceedings for damages, and no question arises as to whether s138AB ever prevents a worker from having a cause of action.

·Therefore this is a case, in the words of s134(1), "where an injury for which compensation is payable to a worker [was] caused under circumstances creating a liability in some person other than the [compensation-paying] employer to pay damages in respect of that injury to that worker".

1. This argument depends on the proposition that, for the purposes of s138AA(1)(b), compensation is not "payable" until it is claimed. The Act provides in s25 that if "in any employment … a worker suffers an injury … arising out of and in the course of his employment … his employer is, except as is otherwise provided by this Act, liable to pay compensation …". It is provided in s32 that "a person shall not be entitled to compensation" unless certain requirements as to giving notice of the injury and making a claim for compensation are complied with. There is no express provision that compensation is "payable" in certain circumstances. However, it is expressly provided in s25(1A) that compensation is "not payable" in respect of diseases of the mind in certain circumstances, and it is expressly provided in s25(2) that compensation is "not payable" in respect of various sorts of injuries and diseases including, for example, intentional self-inflicted injuries. In my view, the terminology used in the other sections of the Act is of little assistance in interpreting the word "payable" in s138AA(1)(b).

1. The Acts Interpretation Act, s8A, requires an interpretation of a provision of an Act that promotes the purpose or object of the Act to be preferred to one that does not promote that purpose or object. I think the purpose or object underlying ss138AA and 138AB is very clear. Parliament decided to restrict the rights of workers injured in work-related accidents, to the advantage of insurers and negligent employers, with a view to making insurance premiums more affordable. It follows that an interpretation of s138AA(1)(b) that restricts workers' rights is to be preferred to one that does not.

1. If the interpretation suggested by Mr Jackson is correct, any injured worker who is not compelled by financial necessity to claim compensation under the Act can circumvent the provisions of s138AB by suing for common law damages, and having his or her action determined as if that section had never been enacted. That surely cannot have been the intention of Parliament. I think Parliament must have intended s138AB to apply not only when compensation had been claimed and was therefore payable to a worker, but also when compensation was payable to a worker in the sense that the employer had become liable to pay compensation to the worker, and the worker had the right to claim it and receive it.

1. It follows that the protection of s138AB existed from the moment the worker was injured. I therefore reject the argument that was based on the proposition that the worker had the right to bring an action for damages prior to making his claim for compensation.

The effect of s138AB on the creation of a liability to pay damages

1. Mr Jackson made a submission to the effect that s138AB does not extinguish a cause of action, but provides a defence that is available to a defendant only if pleaded. Thus, he argued, when a worker is injured as a result of negligence on the part of a person other than his or her employer, it is still the case that, within the meaning of s134(1), the worker's injury "is caused under circumstances creating a liability in some person other than the [compensation-paying] employer to pay damages in respect of that injury to that worker", despite the enactment of s138AB. In short, he submitted that negligence still creates a liability to pay damages, with s138AB barring the remedy but not extinguishing the cause of action, just as a limitation statute operates: Ronex Properties Ltd v John Laing Construction Ltd [1983] QB 398; Commonwealth v Verwayen (1990) 170 CLR 394 at 473, 482 – 486; Commonwealth v Newett (1997) 191 CLR 471 at 534 – 535. He submitted on behalf of the plaintiff that s138AB, rather than destroying a cause of action, goes no further than to prohibit the pursuit of the cause of action in certain circumstances.

1. It is useful to consider as an example the situation of a worker who, in spite of the provisions of s138AB, is able to pursue a cause of action for damages. If there is no agreement with the employer as to his or her degree of impairment, there needs to be a determination by the Tribunal. If there is an agreement that the worker is sufficiently impaired, or if there is a determination by the Tribunal favourable to the worker, he or she needs to lodge an election. Once any dispute as to the level of impairment has been determined, and the election has been lodged, the cause of action may be pursued. Until then, s138AB impedes the bringing of an action.

1. Injuries sometimes get worse. An injury that results in a degree of impairment of 30 per cent or more of the whole person might not result in such a degree of impairment immediately upon its occurrence. The worker's condition might deteriorate over a period, perhaps quite a lengthy period. Until an injured worker's condition becomes permanently stable, or deteriorates beyond a certain degree of impairment, one cannot say whether the injured worker will be able to pursue a cause of action for damages or not. The focus of s134 is on the circumstances under which an injury to a worker is caused. The prerequisites imposed by s138AB in relation to the bringing of an action relate to subsequent facts and circumstances: the lodging of an election, and the establishment of the degree of permanent impairment.

1. However there are a number of decisions of appellate courts in other Australian States that, in my view, compel the conclusion that s138AB results in an injured worker not having a cause of action unless and until there has been either an agreement or a determination as to his or her degree of impairment in accordance with s138AB(2), and he or she has lodged an election to claim damages pursuant to s138AB(1). Statutory provisions restricting the right to sue for damages in respect of work-related injuries and/or transport accidents have been enacted in most, if not all, Australian jurisdictions. As a result, there have been a number of decisions as to the impact of such legislation on statutory rights. The question whether legislation has destroyed a cause of action, or merely conferred a defence that a defendant may plead, has been litigated in a number of jurisdictions. The outcomes have, of course, depended upon the wording of the legislation in question in each case.

1. The Safety Rehabilitation and Compensation Act 1988 (Cth), s44, provides that, subject to s45 thereof, "an action … for damages does not lie against the Commonwealth … in respect of … an injury sustained by an employee in the course of his or her employment …". An exception is created by s45 whereby, where compensation is payable in respect of an injury, the employee, before compensation is paid, may elect to institute an action for damages. In Austral Pacific Group Ltd v Airservices Australia (2000) 203 CLR 136, the High Court considered the effect of s44 in relation to a statutory provision as to contribution between tortfeasors, namely the Law Reform Act 1995 (Qld), s6(c). It held that the words "any other tortfeasor who is, or would if sued have been, liable in respect of the same damage" could not apply to the respondent to that appeal, which was a Commonwealth authority to whom s44 applied. That result was hardly surprising, given that s44 expressly provides that "an action … does not lie ... ".

1. In Western Metals Zinc NL v Wesfarmers Transport Ltd [2003] WASCA 152, the Full Court of the Supreme Court of Western Australia considered the effect of the Workers Compensation and Rehabilitation Act (WA), s93C, which provided that, if Div2 of PtIV of that Act applied, a court was "not to award damages" contrary to that division.  By then, the provision to the effect that proceedings in which damages were sought were not to be commenced without the leave of the District Court had been repealed.  Their Honours took the view (at par30) that Parliament had deliberately chosen not to prevent the bringing of an action.  The appeal concerned a damages action in which the defendant had issued a third party notice against the plaintiff's employer.  The Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 (WA), s7(1)(c), provided for the recovery of contribution "from any other tortfeasor who is or would if sued have been liable in respect of the same damage". The Full Court held that the third party notice had been properly issued.

1. It is therefore necessary to consider whether s138AB, like the provision in the Commonwealth statute, deprives an injured worker of a cause of action in negligence or whether, like the Western Australian provision, it does not deprive an injured worker of a cause of action, but merely regulates the availability of a remedy. It is worth noting at this point that s138AB, when it applies, prohibits the commencement of proceedings, whereas the Western Australian provision under consideration in Western Metals Zinc did not do that.  It only prohibited the awarding of damages, a statutory provision restricting the commencement of proceedings having been repealed.

1. Legislation was enacted in Victoria in 1986 to restrict the availability of damages for injury or death resulting from a transport accident.  The Transport Accident Act 1986 (Vic), s93(1) provided, "A person shall not recover any damages in any proceedings in respect of the injury or death of a person … except in accordance with this section." The section went on to permit such proceedings if the Transport Accident Commission had certified that an injured person had suffered a "serious injury" as defined by s93(17), or if a court had given leave to bring such proceedings on the application of an injured person. Under s93(6), such leave could only be given if the court was satisfied that the injury was a "serious injury".

1. In Wilson v Nattrass (1995) 21 MVR 41, the Full Court of the Supreme Court of Victoria held that s93(1) prevented a plaintiff from recovering damages in Victoria in respect of an injury suffered in a transport accident in another State. Ashley J concluded at 54 that "the common law right of action previously enjoyed by persons injured in transport accidents in this state is extinguished …". Hedigan J said at 59 that "the effect of s93(1) is contingently to extinguish the right to recover common law damages for personal injuries in Victoria in respect of a transport accident wherever occurring …", but that, once one of the criteria specified in s93 for the bringing of a proceeding for the recovery of common law damages was fulfilled, "the contingently extinguished right to bring common law proceedings springs into life …". The other member of the court, Brooking J, dissented.

1. In Swannell v Farmer [1999] 1 VR 267, a motorist was injured in a transport accident in 1989, and died from unrelated causes in 1994. His administrator applied for and obtained leave of the County Court to commence common law proceedings. The defendant appealed, contending that the deceased did not, at the time of his death, have a cause of action vested in him for the purposes of the Administration and Probate Act 1958 (Vic), s29. The appeal succeeded. The Court of Appeal unanimously held that the effect of s93 was that an injured person had no cause of action unless and until the Commission certified that the injured person had suffered a serious injury or a court gave leave to bring proceedings for damages.

1. Those Victorian cases were followed by the Queensland Court of Appeal in Bonser v Melnacis [2002] 1 Qd R 1. That case concerned the provisions of the WorkCover Queensland Act 1996 (Qld). The plaintiff was a traffic controller employed by a shire council. He was struck by a vehicle and injured. He sued the driver. The driver sought to issue a third party notice claiming contribution or indemnity from the council on the basis that it was a "tortfeasor who is, or would if sued have been, liable in respect of the same damage" within the meaning of the Law Reform Act (Qld), s6(c). The plaintiff was unable to sue the council, his employer, for damages for negligence because of the provision of the WorkCover Queensland Act.  Under s253(1) of that Act, a worker was entitled to seek damages only if he or she had received a notice of assessment from "WorkCover" stating that he or she had sustained a "certificate injury" or that he or she had sustained a "non-certificate injury"; or if he or she had made an application for compensation that had been allowed, and his or her injury had not been assessed for permanent impairment; or if he or she had not lodged an application for compensation for the injury.  At 11, their Honours commented that they "should have been inclined to hold that an injured worker obtains a right of action when injured through the fault of the employer and that only the remedy is precluded unless and until various steps are taken" if the matter had been "free from recent authority".  However, after reviewing various cases including the Victorian cases that I have just referred to, their Honours concluded that the effect of the WorkCover Queensland Act was to prevent a cause of action from accruing to an injured worker unless and until certain events occurred.

1. The Queensland Court of Appeal, differently constituted, followed that decision in Tanks v WorkCover Queensland [2001] QCA 103, in which it was held that, despite a worker having no cause of action for damages unless and until certain events occurred, the limitation period for the bringing of an action for damages by a worker against his employer for personal injuries sustained in the course of his employment commenced to run on the day of the injury. The WorkCover Queensland Act contains provisions as to limitation periods which bring about that result.

1. Were it not for the Victorian and Queensland authorities that I have referred to, I might have distinguished Austral Pacific Group Ltd v Airservices Australia (supra), and held that s138AB merely regulated the availability of a remedy, rather than preventing a cause of action from accruing to an injured worker. However, the decisions of the Victorian and Queensland Courts of Appeal in Swannell  and Bonser cannot legitimately be distinguished, and I think I should follow them.

1. I therefore hold that an injured worker, so long as he or she is precluded by s138AB(1) from commencing proceedings for an award of damages, does not have a cause of action against the employer or principal whom he or she could otherwise have sued. As the defendant is an employer for the purposes of s138AB, it is entitled to the protection of s138AB(1). The worker's injury was therefore not caused under circumstances creating a liability in the defendant to pay damages in respect of that injury to the worker. If, contrary to my earlier conclusion, s134(1) enables an employer who has paid compensation to proceed against a principal who has not paid compensation, this is not a case in which that can be done, because the injury was not caused under circumstances creating a liability in the defendant.

Conclusion

1. For these reasons, I determine that the plaintiff may not recover an indemnity or contribution against the defendant in respect of the compensation paid by the plaintiff to Steven James Keeley by reason of the matters pleaded in pars13 – 19 of the amended defence herein.