SS Family Pty Ltd v WorkCover Queensland

In the matter of SS Family Pty Ltd v WorkCover Queensland, the applicant employer sought to compel the insurer, WorkCover Queensland, to indemnify it against the legal liability for damages claimed by a former employee who had been a trustee of a trust at the time of his injury. The insurer had previously allowed the former employee’s application for compensation under chapter 3 of the Workers’ Compensation and Rehabilitation Act 2003 (Qld). However, WorkCover now contended that the former employee was not a “worker” within the meaning of the Act, as he performed his work under a contract of service with a trust of which he was a trustee, and therefore, WorkCover was not obliged to indemnify the applicant employer against the former employee’s damages claim. The primary judge rejected the applicant’s application to strike out the insurer’s defence, which denied its obligation to indemnify the applicant employer against the former employee’s damages claim. The applicant sought to appeal the primary judge’s decision, arguing that the insurer’s decision to allow the former employee’s compensation application precluded the insurer from later contending that the former employee was not a worker as a ground for denying the applicant employer’s entitlement to an indemnity against legal liability for damages for the injury.

The court was required to decide whether an insurer’s decision to allow an application for compensation by a person claiming to have been a worker who sustained an injury in the course of working for an employer precluded the insurer from subsequently contending that the person was not a worker as a ground for denying that the alleged employer is entitled to an indemnity against legal liability for damages for the injury. The court considered the relevant provisions of the Workers’ Compensation and Rehabilitation Act 2003 (Qld), particularly the definition of “worker” and the distinction between the insurer’s obligation to pay compensation to a worker and its obligation to indemnify an employer against legal liability for damages claimed by a worker. The court held that the differences between the insurer’s obligations in relation to compensation and damages claims meant that the definition of “worker” should not be extended beyond the subject matter of compensation claims to affect the insurer’s obligation to indemnify an employer against legal liability for damages.

The court found that the applicant’s argument was not supported by the relevant provisions of the Act. The court held that the insurer’s decision to allow the former employee’s compensation application did not preclude the insurer from later contending that the former employee was not a worker as a ground for denying the applicant employer’s entitlement to an indemnity against legal liability for damages for the injury. The court dismissed the applicant’s appeal and granted leave to appeal, but dismissed the appeal with costs. The court’s decision emphasised the importance of distinguishing between the insurer’s obligations in relation to compensation and damages claims and the need to interpret the Act in a way that does not extend the effect of determinations implicit in an insurer’s decision to allow compensation beyond the subject matter of compensation claims.