Synergy Scaffolding Services Pty Ltd v Alelaimat

[2023] NSWCA 213

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Synergy Scaffolding Services Pty Ltd v Alelaimat [2023] NSWCA 213

Hearing dates:

11 November 2022

Date of orders:

Not applicable

Decision date:

07 September 2023

Before:

Meagher JA at [1];
Kirk JA at [2];
Simpson AJA at [3]

Decision:

1. Direct the appellant and the second respondent to notify, within 3 days of publication of these reasons, the State Insurance Regulatory Authority of these reasons and proposed orders.

2. Direct the parties to the proceedings to provide any further submissions on which they wish to rely on or before 29 September 2023.

3. Orders otherwise to be advised.

Catchwords:

NEGLIGENCE — breach of duty of care — non-delegable duty of care — employer and employee — labour-hire company — where services of employee contracted out — contractor failed to provide a safe system of work — relevance of steps by employer to ensure that the contractor instituted a safe system of work — relevance of opportunity for employer to intervene to prevent injury

WORKERS COMPENSATION — common law remedies — Workers Compensation Act 1987 (NSW) s 151Z — adjustment of damages under s 151Z(2)(c) — whether employer able to claim recovery of compensation payments from third party tortfeasor under s 151Z(1)(d) in circumstances where employer was joint tortfeasor — construction of s 151Z(2)(e) — whether worker “does not accept satisfaction of the judgment against that employer” — whether s 151A applies — liability of worker to repay compensation out of damages under s 151Z(1)(b)

TORTS — joint and several liability — contribution —Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5 — “just and equitable” — onus of proof — claim by tortfeasor against injured worker’s employer — where employer also a tortfeasor — where no evidence of responsibility of employer for injury suffered by employee — no contribution ordered

LIMITATION OF ACTIONS — torts — personal injury — LimitationAct 1969 (NSW) s 50C, s 50D — 3 year post discoverability limitation period — whether cause of action discoverable — where plaintiff unaware of true employer — where legal advisers advised a claim for workers compensation, but not common law damages — whether plaintiff knew the fact that the injury was caused by the fault of the defendant — whether plaintiff knew the fact that the injury was sufficiently serious to justifying the bringing of an action on the cause of action

WORDS AND PHRASES — Limitation Act 1969 (NSW) s 50D — “know” — “fact”

Legislation Cited:

Civil Liability Act 2002 (NSW) ss 5B, 5D, 5Q

Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) s 4

Corporations Act 2001 (Cth) s 601AG

Law Reform (Miscellaneous Provisions) Act 1946 (NSW) s 5

Limitation Act 1969 (NSW) ss 50C, 50D

Supreme Court Act 1970 (NSW) s 75A

Workers Compensation Act 1987 (NSW) ss 151A, 151Z

Cases Cited:

A V Jennings Construction Pty Ltd v Maumill (1956) 30 ALJ 100

Abdulle v QBE Insurance (Australia) Ltd [2010] NSWCA 6

Adams v Fletcher International Exports Pty Ltd [2008] NSWCA 238

Alelaimat v Synergy Scaffolding Services (No 3) [2022] NSWSC 536

Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28

Atkinson v Gameco [2005] NSWCA 325

Baden Cranes Pty Ltd v Smith [2013] NSWCA 136

Baker-Morrison v State of New South Wales (2009) 74 NSWLR 454; [2009] NSWCA 35

Brambles v Wail [2002] VSCA 150

CSR Timber Products Pty Ltd v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49

Dib Group Pty Ltd Trading as Hill & Co v Cole [2009] NSWCA 210

Endeavour Energy v Precision Helicopters Pty Ltd (No 2) [2015] NSWCA 357

Estate of the late M T Mutton v Howard Haulage Pty Ltd [2007] NSWCA 340

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Frizelle v Bauer [2009] NSWCA 239

Galea v Bagtrans Pty Limited [2010] NSWCA 350

Hossain v Unity Grammar College Ltd [2019] NSWSC 1313

Humphries v Shoalhaven City Council [2012] NSWDC 216

Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61

Lee v Lee (2019) 266 CLR 129; [2019] HCA 28

Leonard v Smith (1992) 27 NSWLR 5

Murgolo v AAI Ltd (t/as AAMI) (2019) 101 NSWLR 376; [2019] NSWCA 295

Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99

Pomare v Whyte [2019] NSWCA 317; 377 ALR 352

Prince Alfred College Incorporated v ADC (2016) 258 CLR 134; [2016] HCA 37

Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336; [1975] HCA 28

Robinson Helicopter Co Inc v McDermott [2016] HCA 22

Scott v Davis (2000) 204 CLR 333; [2000] HCA 52

Shoalhaven City Council v Humphries [2013] NSWCA 390

Smith v Commonwealth Oil Refineries Ltd (1938) 60 CLR 141; [1938] HCA 33

South West Helicopters Pty Ltd v Stephenson (2017) 98 NSWLR 1; [2017] NSWCA 312

State of New South Wales v Gillett [2012] NSWCA 83

TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47

Vines v Djordjevitch (1955) 91 CLR 512; [1995] HCA 19

Vinidex Tubemakers Pty Limited v Thiess Contractors Pty Limited [2000] NSWCA 67

Watson v The Council of the City of Newcastle (1962) 106 CLR 426; [1962] HCA 6

Wyong Shire Council v Shirt (1980) 146 CLR 40; [1980] HCA 12

Category:

Principal judgment

Parties:

Synergy Scaffolding Services Pty Ltd (Appellant)
Bilal Alelaimat (1st Respondent)
Workers Compensation Nominal Insurer (2nd Respondent)

Representation:

Counsel:
DA Priestley SC/D Southwood (Appellant)
D Toomey SC/D Morgan (1st Respondent)
PA Rickard (2nd Respondent)

Solicitors:
McCulloch & Buggy Lawyers (Appellant)
Garling & Co Lawyers (1st Respondent)
Moray & Agnew Lawyers (2nd Respondent)

File Number(s):

2022/144781

 Decision under appeal 

Court or tribunal:

Supreme Court of NSW

Jurisdiction:

Civil

Citation:

[2022] NSWSC 536

Date of Decision:

05 May 2022

Before:

Campbell J

File Number(s):

2017/208752

HEADNOTE

[This headnote is not to be read as part of the judgment]

On 10 October 2012, the first respondent, Mr Bilal Alelaimat, a truck driver, was directed by the appellant, Synergy Scaffolding Services Pty Ltd (“Synergy Scaffolding”), to attend a building site in the Sydney suburb of Artarmon to collect and remove scaffolding. Upon arriving at the site, Mr Alelaimat was instructed by a member of Synergy Scaffolding to assist in dismantling the scaffolding, which had been erected to a height of three storeys. While picking up and stacking scaffolding materials in preparation for loading them onto his truck, Mr Alelaimat was struck on the back, shoulder and upper arm by a falling piece of metal scaffolding and suffered serious injuries.

At the time of the incident, Mr Alelaimat was employed by DJ’s Scaffolding Services Pty Ltd (“DJSS”), but his day-to-day work was directed by the Operations Manager of Synergy Scaffolding, and he wore clothing and drove trucks emblazoned with Synergy Scaffolding’s name. Mr Alelaimat claimed and was paid compensation pursuant to the Workers Compensation Act 1987 (NSW). However, he did not seek legal advice until November 2013 and did not commence proceedings against Synergy Scaffolding in negligence until 10 July 2017. Mr Alelaimat ultimately relied on a pleading filed on 7 October 2020, by which he claimed damages for negligence against both Synergy Scaffolding and the second respondent, the Workers Compensation Nominal Insurer (“WCNI”), as the insurer of DJSS, which had been deregistered.

Both Synergy Scaffolding and WCNI denied liability. Amongst other defences, Synergy Scaffolding pleaded that Mr Alelaimat’s claim had been brought more than three years after the date on which his cause of action was discoverable, and was thus barred by the “3 year post discoverability limitation period” in s 50C of the Limitation Act 1969 (NSW). By s 50D(1), a cause of action in respect of an injury is discoverable on the first date that a person knows, or ought to know, (a) that the injury has occurred, (b) that it was caused by the fault of the defendant, and (c) that it was sufficiently serious to justifying the bringing of an action on the cause of action.

Synergy Scaffolding also pleaded that any damages payable to Mr Alelaimat should be reduced under s 151Z(2)(c) of the Workers Compensation Act. That provision relevantly provides that where a worker institutes proceedings to recover damages against both employer and a third-party in respect of an injury for which workers compensation is payable, the damages recoverable by the worker from the third-party tortfeasor:

“are to be reduced by the amount by which the contribution which the [third-party tortfeasor] would (but for this Part) be entitled to recover from the employer as a joint tortfeasor or otherwise exceeds the amount of the contribution recoverable…”.

In addition, Synergy Scaffolding and WCNI each brought cross-claims against one another seeking statutory contribution or indemnity under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (“the 1946 Miscellaneous Provisions Act”). That provision permits contribution between tortfeasors who are liable, or who if sued would be liable, “in respect of the same damage”, with contribution to be ordered in such amount as is “just and equitable having regard” to the tortfeasors’ respective responsibility for the damage. WCNI also sought indemnity from Synergy Scaffolding under s 151Z(1)(d) of the Workers Compensation Act of the compensation that had previously been paid to Mr Alelaimat. Section 151Z(1) does not apply where both the employer and the third party tortfeasor are liable to pay damages. WCNI sought to rely, if necessary, in this respect on s 151Z(2)(e), which provides that, where a worker takes, or is entitled to take, proceedings for common law damages against both a third party and his or her employer in respect of an injury for which workers compensation is payable, s 151Z(1) applies “as if the worker had not been entitled to recover damages from that employer”, if either (i) the worker either “does not take proceedings against that employer”, or (ii) “does not accept satisfaction of the judgment against that employer”.

The primary judge held that Mr Alelaimat’s claim against Synergy Scaffolding was not barred by the Limitation Act, upheld the claim and awarded substantial damages. The award of damages included a sum in respect of past compensation for medical expenses paid by WCNI on Mr Alelaimat’s behalf, on the basis that Mr Alelaimat would be liable to repay that compensation to WCNI out of the award of damages under s 151Z(1)(b) of the Workers Compensation Act. The claim against WCNI was dismissed on the basis that DJSS had not been shown to have breached its duty of care to Mr Alelaimat. WCNI’s cross-claim for the statutory indemnity under s 151Z(1)(d) was upheld, and the cross-claims were otherwise dismissed. The application of s 151Z(2)(c) and s 151Z(2)(e) did not need to be considered.

Synergy Scaffolding appealed. The issues on appeal were:

1. whether Mr Alelaimat’s cause of action against Synergy Scaffolding was “discoverable” more than three years prior to the date on which the proceedings were commenced, such that s 50C(1) of the Limitation Act barred his claim;

2. whether DJSS had breached the duty of care it owed to Mr Alelaimat as his employer;

3. if so, whether WCNI should be liable to Synergy Scaffolding for contribution, and if so, in what sum;

and, if WCNI was liable to Mr Alelaimat and/or Synergy Scaffolding:

1. whether s 151Z(2)(c) of the Workers Compensation Act applied to limit the damages recoverable by Mr Alelaimat from Synergy Scaffolding;

2. whether WCNI was entitled to the statutory indemnity under s 151Z(1)(d) of the Workers Compensation Act, including by operation of s 151Z(2)(e); and

3. whether Mr Alelaimat was required, by s 151Z(1)(b) of the Workers Compensation Act, to repay to WCNI the past medical expenses that it had paid on his behalf, such that a sum referrable to those expenses was properly awarded as a head of damages against Synergy Scaffolding.

Synergy Scaffolding did not challenge the finding that it was negligent.

The Court (Simpson AJA, Meagher and Kirk JJA agreeing) held, allowing the appeal in part:

As to issue (i) (application of the Limitation Act)

1. To know that an injury was “caused by the fault of the defendant” for the purposes of s 50D(1)(b) of the Limitation Act, the plaintiff need not know the capacity in which a putative defendant might be liable. It suffices that the plaintiff knows that the circumstances in which the injury occurred are such that legal liability could be established. Accordingly, Mr Alelaimat’s mistaken belief that he was employed by Synergy Scaffolding, rather than DJSS, was not material to the s 50D(1)(b) inquiry: [80].

2. The primary judge erred in concluding that Mr Alelaimat did not know, more than three years prior to bringing his claim, that his injury was caused by the fault of Synergy Scaffolding, for the purposes of s 50D(1)(b): [81]-[83].

3. Mr Alelaimat’s ignorance as to his true employer was material to whether he knew that his injury was sufficiently serious to justify the bringing of an action on the cause of action, for the purposes of s 50D(1)(c): [84]. Accordingly, the primary judge was correct in finding that Mr Alelaimat did not have the knowledge required by s 50D(1)(c): [84]-[86]. Synergy Scaffolding’s Limitation Act defence was correctly rejected: [87].

4. Consideration of the meaning of “knowledge” and the meaning of “fact” in s 50D of the Limitation Act: [63]-[74].

Vines v Djordjevitch (1955) 91 CLR 512; [1995] HCA 19; Baker-Morrison v State of New South Wales (2009) 74 NSWLR 454; [2009] NSWCA 35; Murgolo v AAI Ltd (t/as AAMI) (2019) 101 NSWLR 376; [2019] NSWCA 295; Pomare v Whyte [2019] NSWCA 317; 377 ALR 352; State of New South Wales v Gillett [2012] NSWCA 83, considered.

As to issue (ii) (whether DJSS breached its duty of care to Mr Alelaimat)

5. An employer is a under a non-delegable duty to take reasonable care to provide a safe system of work for its employees: [95]. Where the employer is a labour-hire company, this duty will be breached by injury negligently inflicted by a client to whom the employer has contracted the services of the employee: [102]. It is no answer to a claim by the employee against his or her employer that the employer took what steps it could to ensure that the contracting party acted reasonably in the provision of a safe system of work, or that it did not have the opportunity to intervene to prevent the injury: [106].

Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61; TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47; Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99; Galea v Bagtrans Pty Limited [2010] NSWCA 350, applied.

Dib Group Pty Ltd Trading as Hill and Co v Cole [2009] NSWCA 21; Estate of the late M T Mutton v Howard Haulage Pty Ltd [2007] NSWCA 340; Atkinson v Gameco [2005] NSWCA 325; Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28, distinguished.

Shoalhaven City Council v Humphries [2013] NSWCA 390, explained, distinguished.

6. Accordingly, the finding of the primary judge that Synergy Scaffolding had negligently failed to provide Mr Alelaimat with a safe system of work was sufficient to establish that DJSS was liable to Mr Alelaimat for that negligence: [109]. The primary judge erred in dismissing Mr Alelaimat’s claim against DJSS: [129].

As to issue (iii) (contribution payable by WCNI to Synergy Scaffolding)

7. The onus of establishing that a tortfeasor is entitled to contribution or indemnity from another tortfeasor under s 5 of the 1946 Miscellaneous Provisions Act lies on the tortfeasor seeking to establish the entitlement: [128]. Synergy Scaffolding did not discharge its onus of establishing an entitlement to any contribution from DJSS: [149]. That DJSS was liable to Mr Alelaimat under the principles laid down in Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61 was, at most, a first step on the path to determining the contribution payable between DJSS and Synergy Scaffolding: [127]-[128], [143]-[163].

As to issue (iv) (s 151Z(2)(c) of the Workers Compensation Act)

8. Expressed as an equation, the effect of s 151Z(2)(c) of the Workers Compensation Act is that, where a worker has a cause of action for damages against both employer and a third party tortfeasor, the sum of damages (D) ultimately recoverable by the plaintiff worker from the third party tortfeasor is equal to the total damages which would be recoverable from the third party tortfeasor but for the operation of s 151Z(2) (T), minus the difference between the sum that the third party tortfeasor would be entitled to recover from the employer tortfeasor as contribution under s 5 of the 1946 Miscellaneous Provisions Act but for the operation of s 151Z(2)(d) (C), and the amount of contribution that is actually recoverable under s 5 once s 151Z(2)(d) is taken into account (X): [139]-[140].

That is, D = T – (C – X), where:

D =   the sum of damages ultimately recoverable by the plaintiff worker from the third party tortfeasor;

T = the sum of damages which would be recoverable by the plaintiff worker from the third party tortfeasor but for the operation of s 151Z(2);

C = the sum that the third party tortfeasor would be entitled to recover from the employer tortfeasor as contribution under s 5 of the 1946 Miscellaneous Provisions Act but for the operation of s 151Z(2)(d); and

X = the amount of contribution that is actually recoverable under s 5 of the 1946 Miscellaneous Provisions Act once s 151Z(2)(d) is taken into account.

9. Given Synergy Scaffolding did not establish that it would be just and equitable to require WCNI to make any contribution to Synergy Scaffolding, s 151Z(2)(c) does not affect the damages payable by Synergy Scaffolding. To use the language of the equation above, C and X are both zero, such that D simply equals T: [142].

As to issue (v) (indemnity under ss 151Z(1)(d) and 151Z(2)(e))

10. Section 151Z(1) of the Workers Compensation Act does not apply, of its own force, where a worker’s employer is a tortfeasor liable to pay the worker damages: [91], [169].

Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336; [1975] HCA 28; CSR Timber Products Pty Ltd v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49; Endeavour Energy v Precision Helicopters Pty Ltd (No 2) [2015] NSWCA 357; South West Helicopters Pty Ltd v Stephenson (2017) 98 NSWLR 1; [2017] NSWCA 312, followed.

11. Nevertheless, s 151Z(2)(e) applies s 151Z(1) “as if” the employer was not a tortfeasor, provided that one of the two negative conditions in par (2)(e) is satisfied; that is, if the worker either (i) “does not take proceedings against that employer”, or (ii) “does not accept satisfaction of the judgment against that employer”: [170].

12. Neither of the conditions to the application of s 151Z(2)(e) has been met: Mr Alelaimat has taken proceedings against his employer, and the occasion for him to choose whether to accept satisfaction of the judgment against WCNI has not yet arisen. Accordingly, s 151Z(1), including subs (d) thereof, does not apply, and the indemnity ordered by the primary judge in favour of WCNI under s 151Z(1)(d) must be set aside: [170]-[189].

As to issue (vi) (damages for medical expenses)

13. For the reasons above, s 151Z(1) does not apply, both of its force or by operation of s 151Z(2)(e). Accordingly, Mr Alelaimat was not obliged under s 151Z(1)(b) to repay WCNI for the medical expenses paid on his behalf, and to award damages referable to those medical expenses would constitute a windfall in Mr Alelaimat’s favour. Arguably, the amount of medical expenses paid by WCNI on Mr Alelaimat’s behalf should thus be deducted from the award of damages against Synergy Scaffolding: [190]-[193].

JUDGMENT

1. MEAGHER JA: I have had the advantage of reading in draft the judgment of Simpson AJA. I agree with her Honour’s reasons for the making of the orders suggested at [194]. I also agree with her Honour that these orders should not be made without first giving an opportunity to the parties to make further submissions and to the State Insurance Regulatory Authority to seek leave to intervene.

1. KIRK JA: This appeal raises numerous issues of significant complexity. I have had the privilege of reading the judgment of Simpson AJA, with which I agree.

2. SIMPSON AJA: On 10 October 2012, in circumstances to be more fully described below, the first respondent, Mr Bilal Alelaimat, was seriously injured on a building site in the Sydney suburb of Artarmon. At the time, scaffolding, which had been erected to a height of three storeys, was being dismantled by workmen wearing orange shirts bearing the words “Synergy Scaffolding”. Mr Alelaimat was struck by a piece of metallic scaffolding that had fallen from above. He claimed and was paid compensation pursuant to the Workers Compensation Act 1987 (NSW).

3. On 10 July 2017 Mr Alelaimat filed a Statement of Claim in the Supreme Court, claiming damages for the injury and consequent loss and damage suffered by reason of the falling scaffolding. He named Synergy Scaffolding Services Pty Ltd (“Synergy Scaffolding”) as the defendant. His claim was ultimately formulated in a Further Amended Statement of Claim, filed on 7 October 2020, in which Synergy Scaffolding was named as first defendant and the Workers Compensation Nominal Insurer (“WCNI”) was named as second defendant.

4. After a five-day trial in the Common Law Division of the Supreme Court, Synergy Scaffolding was ordered to pay Mr Alelaimat the sum of $1,356,533.39 by way of damages for the injury and consequential loss and damage suffered, and to indemnify WCNI in relation to certain payments made by it under the Workers Compensation Act: Alelaimat v Synergy Scaffolding Services (No 3) [2022] NSWSC 536. Synergy Scaffolding appeals against those, and other, consequential, orders.

The pleadings

6. Mr Alelaimat pleaded that, as at the date of injury, he was employed by DJ’s Scaffolding Services Pty Ltd (“DJSS”) but that his work was directed, coordinated and supervised by Synergy Scaffolding, who, he alleged, was in a position in relation to him analogous to that of employer. He pleaded that both Synergy Scaffolding and DJSS owed him a duty of care, that each was in breach of that duty, and that the breaches were the cause of his injury. He alleged that the scaffolding was being dismantled by employees of Synergy Scaffolding, or, alternatively, by employees of DJSS. As DJSS was deregistered on 20 March 2014, Mr Alelaimat sued WCNI as its insurer for the purposes of the Workers Compensation Act: Corporations Act 2001 (Cth) s 601AG; Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) s 4. He alleged that, as his employer, DJSS failed to take reasonable care to provide him with a safe place of work and was in breach of (unspecified) provisions of the “Workplace Health & Safety Act and Regulations”.

7. Each claim was a common law claim, but they were subject to different statutory regimes. The claim against Synergy Scaffolding was governed by the provisions of the Civil Liability Act 2002 (NSW). The claim against DJSS was governed by the Workers Compensation Act, specifically Pt 5 Div 3 thereof.

8. Each defendant filed a defence. Synergy Scaffolding denied that its position in relation to Mr Alelaimat was analogous to that of employer, did not admit that the falling scaffolding was caused by its negligence or that of its employees or agents, denied that the scaffolding was being dismantled by its employees and denied that it was the negligence of its employees that caused the scaffolding to fall and injure Mr Alelaimat. It invoked Pt 1A Div 4 of the Civil Liability Act (which deals with assumption of risk) and asserted that Mr Alelaimat’s injury was wholly or partly caused by his own negligence: Civil Liability Act, Pt 1A Div 8. Synergy Scaffolding pleaded that any damages to which Mr Alelaimat was entitled should be reduced pursuant to the provisions of s 151Z(2)(c) of the Workers Compensation Act. Finally, Synergy Scaffolding pleaded that Mr Alelaimat’s claim was statute barred pursuant to the provisions of the Limitation Act 1969 (NSW).

9. In its defence WCNI expressly admitted that Mr Alelaimat was employed by DJSS. WCNI denied that the scaffolding was being dismantled by employees of DJSS and asserted that it was employees of Synergy Scaffolding who were undertaking that task. It relied on payments it had made to Mr Alelaimat in accordance with the requirements of the Workers Compensation Act. It did not plead a defence of contributory negligence.

10. Each of the defendants filed a cross-claim, naming the other as cross-defendant. Synergy Scaffolding pleaded that Mr Alelaimat was employed by DJSS and that his injury, and consequent loss and damage, were caused by DJSS’s negligence. It claimed that WCNI was the insurer of DJSS under a policy of workers compensation insurance. The cross-claim did not make any express assertion about the identity of the employer of the workmen undertaking the dismantling of the scaffolding. Synergy Scaffolding claimed that, but for the deregistration of DJSS, it (Synergy Scaffolding) would have been entitled to indemnity or contribution from DJSS in respect of Mr Alelaimat’s claim. Although the pleading did not descend to identification of the legal and/or statutory basis for its claim for contribution or indemnity, it is apparent that Synergy Scaffolding invoked the provisions of s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (“the 1946 Miscellaneous Provisions Act”). Synergy Scaffolding also relied on s 601AG of the Corporations Act and s 4 of the Civil Liability (Third Party Claims Against Insurers) Act to fix WCNI with the liability that would otherwise have attached to DJSS.

11. By way of defence to Synergy Scaffolding’s cross-claim, WCNI denied that Mr Alelaimat’s injury, loss and damage were caused by the negligence of DJSS, and asserted that the injury, loss and damage were caused or contributed to by Mr Alelaimat’s own negligence (a plea it had not made in its defence to Mr Alelaimat’s claim against it). It admitted that, but for the deregistration of DJSS, Synergy Scaffolding would have been entitled to indemnity and/or contribution from DJSS in respect of Mr Alelaimat’s claim.

12. By its cross-claim WCNI claimed against Synergy Scaffolding contribution and/or complete indemnity pursuant to s 5(1)(c) of the 1946 Miscellaneous Provisions Act, and indemnity pursuant to s 151Z(1)(d) of the Workers Compensation Act. It asserted that Mr Alelaimat’s injury, loss and damage were caused by the negligence of Synergy Scaffolding. It pleaded that it had made payments pursuant to the Workers Compensation Act.

13. By way of defence to WCNI’s cross-claim, Synergy Scaffolding repeated the allegation it had made in its cross-claim that Mr Alelaimat’s injury, loss and damage were caused by the negligence of DJSS by its employees (a plea it had not made in response to Mr Alelaimat’s claim).

Relevant factual background

14. Although Mr Alelaimat filed an evidentiary statement, his evidence was taken orally. I do not understand what follows to be controversial. It is drawn from evidence that was not disputed, or findings of fact by the primary judge that are not challenged.

15. Mr Alelaimat was born in Jordan in 1978. In 2001 he graduated from the University of Jordan with a Bachelor of Economics degree. In 2008 he came to Australia on a student visa. At some point he was granted permanent residency status. In 2010 he was employed as a truck driver.

16. In about March 2011 Mr Alelaimat answered an advertisement he saw on Gumtree for a truck driver for a scaffolding company. He was interviewed by Mr Ali Hamka, the Operations Manager of Synergy Scaffolding. After consulting Mr El Jarrar (a director of Synergy Scaffolding), Mr Hamka offered Mr Alelaimat employment. Mr Alelaimat was given a Synergy Scaffolding uniform which bore the Synergy Scaffolding logo and number, some personal protective clothing and some equipment.

17. For two weeks Mr Hamka trained Mr Alelaimat in how to drive trucks, first a smaller truck, and then a larger one, each of which bore on its side the Synergy Scaffolding logo and signage.

18. Thereafter Mr Hamka directed Mr Alelaimat with respect to his work. His work involved assisting others (“yardies”) to load the truck with scaffolding and then to deliver scaffolding to the relevant job sites. Mr Alelaimat worked in accordance with Mr Hamka’s directions.

19. In about July 2011, in a meeting with Mr Hamka and Mr El Jarrar, Mr Alelaimat was asked to obtain an Australian Business Number. He was told that it would be better for him and for Synergy Scaffolding if he did so. He agreed, considering that he had no choice.

20. Ms Nada Hamka (the sister of Ali Hamka) provided Mr Alelaimat with a book of blank invoices, which she told him to sign, and told him that “we” (Synergy Scaffolding) would complete the invoices. A number of the completed invoices were in evidence. On their face the invoices are invoices from Mr Alelaimat for labour. The invoices in evidence commence on 4 August 2011. Until 22 December 2011 they showed the recipient as “Scaffhire” or “Scaffhire Aust” (which may be inferred to be a related or associated company of Synergy Scaffolding). From 29 December 2011 the invoices show “DJ Scaffolding Services” or “DJ’s” as the recipient. Mr Alelaimat said that the handwriting on the completed invoices was not his. He was unaware that invoices were being made out to DJSS.

The injury on 10 October 2012

21. Mr Alelaimat said that on 9 October 2012 Mr Hamka gave him his instructions for the following day. He told Mr Alelaimat to load the truck and deliver scaffolding to a worksite at North Sydney, which Mr Alelaimat did on the morning of 10 October 2012. Mr Alelaimat then telephoned Mr Hamka for further instructions. Mr Hamka told him to go to a worksite in Artarmon, to pick up scaffolding from that site, and return it to Synergy Scaffolding’s premises at Kingsgrove. When Mr Alelaimat arrived at the Artarmon site the scaffolding was not stacked and ready to pick up and load onto the truck, and there were few workmen doing what was “a big job”. Mr Alelaimat recognised those who were present as people he had seen working on Synergy Scaffolding worksites. They were wearing Synergy Scaffolding clothing. He called either Mr Hamka or Mr El Jarrar and was instructed to assist the workmen. The workmen were passing the scaffolding down from 3 levels. Mr Alelaimat assisted by manually receiving some of the materials and picking up others from the ground, and stacking them in preparation for loading onto the truck.

22. Three additional scaffolders arrived in a Synergy Scaffolding utility and wearing Synergy Scaffolding clothing. The work was then moving more quickly. Mr Alelaimat bent to pick up an item from the ground. He was struck by “a big force” on his back, his upper arm and his lower left shoulder. He saw that what had struck him was a metal plank that was caked in cement render.

23. Mr Alelaimat had telephone conservations with both Mr Hamka and Mr El Jarrar. Both told him (in words he attributed to Mr El Jarrar):

“If anyone asks you who do you work for, just say DJ’s Scaffolding, for the insurance purposes.”

Mr Alelaimat had never previously heard of “DJ’s Scaffolding”.

24. Mr Alelaimat was taken to a nearby medical centre. On 15 November 2012 he consulted a general practitioner he had previously consulted, Dr Ismail Mohammed.

Events following the injury

25. After what seems like a short time, Mr Alelaimat attempted to return to work on “suitable duties”, for which he was certified fit by Dr Mohammed. The duties he was provided with by Synergy Scaffolding were unsuitable and involved lifting, handling and driving. After one or two weeks he left work.

26. On 12 October 2012 Nada Hamka submitted to CGU Workers Compensation (NSW) Limited (said to be “Agent for the NSW Work Cover Scheme”) an “Initial Notification of Injury”. The notification gave, as a description of the incident giving rise to the claim: “A 12Kg steel scaffold fell from the 3^rd floor onto [Mr Alelaimat’s] upper arm and over shoulder onto lower back”. The injury was described as: “Left arm, shoulder and back injured”. The notification named DJSS as Mr Alelaimat’s employer. Although the evidence of what happened thereafter with respect to a claim made by Mr Alelaimat under the Workers Compensation Act is scant, it is clear that a claim was made under DJSS’s workers compensation policy and was accepted by DJSS’s workers compensation insurer and that medical expenses and weekly payments were made.

27. Thereafter, Mr Alelaimat was referred to a variety of medical practitioners, including a psychiatrist. On 7 March 2013 he was referred to Dr Darweesh Al-Khawaja, a neurosurgeon. Dr Al-Khawaja recorded that Mr Alelaimat presented with neck, left shoulder and lower back pain. He appears to have attributed much of the pain to the nature of Mr Alelaimat’s work, and expressed the opinion that:

“…the work injury and the type of work are the main contributing factors to his new symptoms at this stage.”

He recommended surgery to “open the canal and try to free the nerves”, and said that there was “a good chance” that this would help the symptoms but he could not guarantee it. He said that he was seeking approval from CGU Workers Compensation for lumbar decompression and Rhizolysis. (This was apparently refused.) Dr Al-Khawaja recommended that Mr Alelaimat see a shoulder specialist.

28. As far as the evidence disclosed, it was not until November 2013 that Mr Alelaimat sought legal advice. Although the precise circumstances in which he did this were not elucidated in the evidence, he said that he did so when DJSS’s workers compensation insurer rejected the claim for the costs of spinal surgery. (The transcript records Mr Alelaimat saying that he sought legal advice when the insurer “predicted” the surgery. It was not in dispute that this was a transcription error and that it was rejection of a claim for compensation for the costs of spinal surgery that prompted Mr Alelaimat to seek legal advice.)

29. In any event, the evidence shows that on 31 January 2013 Mr Alelaimat had a telephone conference with Ms Samantha McRae, a solicitor then employed by Slater & Gordon Lawyers. By November 2013 Ms McRae had left the employ of Slater & Gordon and was employed by another law firm, Law Partners. Ms McRae then had a conference with Mr Alelaimat on 27 November 2013. During the course of that conference Ms McRae completed a pro forma questionnaire, which, it may be inferred, was standard practice in the law firm for taking initial instructions from a new client seeking advice about remedies for personal injury. The form bears the heading: “Workers Compensation New Client Instructions”.

30. On the first page of the document is a series of boxes, to be marked to signify the nature of the advice sought. The first five boxes are all clearly related to potential claims under the Workers Compensation Act. Ms McRae inserted crosses in the boxes against “Initial Lump Sum Claim” and “Medical/Treatment Expenses Dispute”. The sixth box, against “Possible Common Law”, is not marked.

31. The following pages in the questionnaire may be taken to represent Ms McRae’s handwritten notes of her conference with Mr Alelaimat. The notes include:

“Scaffolding was being dismantled.

…

Client instructs employer negligent.

• not enough workers

• some workers didn’t have tickets.”

32. On p 3 of the document, against “Liability Status” a cross is inserted in the box that signifies that liability is admitted. Immediately following that, the insurer is identified as “CGU”. I infer from this that the liability that was said to be admitted was liability under the Workers Compensation Act.

33. On p 7 of the document the name of Mr Alelaimat’s employer is recorded as “Synergy Scafolding” (sic).

34. On 6 December 2013, over the name of Chantille Khoury as a Law Partners’ managing solicitor, Law Partners sent to Mr Alelaimat a detailed letter, referring to the conference with Ms McRae of 27 November. The letter opened by thanking Mr Alelaimat for instructing Law Partners to act on his behalf “in relation to your workers compensation claim arising out of the injuries sustained by you on 10 October 2012”. The letter goes on to give detailed advice concerning the benefits that may be available under the Workers Compensation Act, including “lump sum compensation” and compensation for permanent impairment (s 66). Brief mention is made of possible “compensation for pain and suffering”.

35. It is apparent that Mr Alelaimat did make an application for compensation for permanent impairment pursuant to s 66 of the Workers Compensation Act. On 20 January 2017 Dr John Dickson-Hughes issued a medical assessment certificate certifying a “whole person impairment” of 17%.

36. On 10 July 2017 Mr Alelaimat commenced the proceeding against Synergy Scaffolding.

Mr Alelaimat’s employment

37. At this point it is necessary to say more about Mr Alelaimat’s employment.

38. His initial interview was with Mr Hamka, who was Synergy Scaffolding’s Operations Manager. Mr Hamka consulted Mr El Jarrar, who was a director of Synergy Scaffolding. Mr Alelaimat was given training by Mr Hamka. He was given Synergy Scaffolding clothing by either Mr Hamka or Ms Hamka. He drove trucks emblazoned with the Synergy Scaffolding name. He was given day to day directions by Mr Hamka.

39. There was, in evidence, a series of emails addressed to Mr Alelaimat. The emails emanate from what appears to be the email account of Ms Nada Hamka or, in some cases, Mr El Jarrar or Synergy Scaffolding, all on stationery bearing, in large print, the name “Synergy Scaffolding”. Attached to each email is what purports to be a timesheet showing hours worked by Mr Alelaimat and his hourly rate of pay. The emails in evidence begin in April 2011; the last is in December 2011. Also in evidence were a series of tax invoices purporting to be invoices from Mr Alelaimat to Scaffhire or DJSS, consistent with the direction Mr Alelaimat had been given in about July 2011. There is some overlap with the invoices referred to above. The evidence thus points, not incontrovertibly, but strongly, to a conclusion that Mr Alelaimat was employed by Synergy Scaffolding.

40. Notwithstanding all of that, all parties went to trial on an agreed position that DJSS was Mr Alelaimat’s employer. CGU, DJSS’s then insurer for workers compensation claims, accepted that he was employed by DJSS, as did WCNI. The primary judge determined the issues on that agreed basis. This appeal must also be determined on that agreed basis.

41. As will be seen in due course, the issues of employment give rise to some complexity.

The Supreme Court proceedings

42. The proceedings came on for hearing before Campbell J (the primary judge) in the Common Law Division of the Supreme Court in October 2020.

43. Considering himself obliged to do so by the decision of the High Court in Prince Alfred College Incorporated v ADC (2016) 258 CLR 134; [2016] HCA 37 at [9]-[10] the primary judge addressed first the issue raised by Synergy Scaffolding’s defence under the Limitation Act, which he rejected. He therefore went on to address the issues of the liability of Synergy Scaffolding and the liability of DJSS, for which Mr Alelaimat was entitled, by s 601AG of the Corporations Act and s 4 of the Civil Liability (Third Party Insurance Claims Against Insurers) Act, to recover from WCNI.

44. Having rejected the Limitation Act defence, the primary judge upheld Mr Alelaimat’s claim in negligence against Synergy Scaffolding. He rejected Synergy Scaffolding’s defence of contributory negligence and entered judgment against Synergy Scaffolding in the sum of $1,356,533.39. His Honour held, notwithstanding that DJSS was accepted as Mr Alelaimat’s employer, that that company had not been shown to have been in breach of its duty of care to him (at [137]) and entered judgment in favour of WCNI against Mr Alelaimat. By reference to the quantification of damages under the individual heads claimed by Mr Alelaimat, it can be seen that, had Mr Alelaimat been successful in his claim against DJSS, the award of damages would, in accordance with Pt 5 Div 3 of the Workers Compensation Act, have been $917,686.00. His Honour declared that Synergy Scaffolding was bound to indemnify WCNI in accordance with the provisions of s 151Z(1)(d) of the Workers Compensation Act for compensation paid to Mr Alelaimat under that Act. His Honour otherwise dismissed each cross-claim. He ordered Synergy Scaffolding to pay the costs of Mr Alelaimat and of WCNI.

42. The primary judge found Synergy Scaffolding liable to Mr Alelaimat in negligence on two independent bases. His Honour accepted that it was reasonably foreseeable that, in the dismantling of the scaffolding, a piece or component of the scaffolding might drop or fall because of “systemic, as opposed to casual, negligence”: [117]. His Honour also accepted that there was a foreseeable risk that such a part or component might drop or fall in circumstances falling short of negligence. It is not necessary to pause to debate the validity of the latter conclusion, because his Honour went on to find that, in those circumstances, a reasonable person in charge of the operation at the Artarmon site would have taken the precaution of creating an exclusion zone at ground level into which others may not venture, and onto which the scaffolders could drop the scaffolding without risk to those on the ground. His Honour was clearly satisfied that Synergy Scaffolding was in charge of the operation and ought to have taken that precaution. Its failure to do so was the first basis on which liability was attributed to Synergy Scaffolding: [119]. It is of some significance that Synergy Scaffolding’s failure in this respect was characterised as a failure to institute a safe system of work: [134].

43. His Honour appears, however, not to have been satisfied, notwithstanding that they were wearing Synergy Scaffolding clothing, that the scaffolders on the site were employees of Synergy Scaffolding, and considered that they may have been sourced from a labour-hire company. There was good reason for that view, which reflected evidence given by Mr Hamka. For present purposes, it makes no difference whether the scaffolders were employed by, or hired to, Synergy Scaffolding. The primary judge was satisfied that the installation, maintenance and removal of the scaffolding was work undertaken by Synergy Scaffolding, whether using its own employees or contractors hired from labour-hire companies. That gave rise to the second basis on which Synergy Scaffolding was found to be in breach of its duty of care to Mr Alelaimat, which was failure to engage independent contractors competent to control their own system of work without external supervision, and failure to provide proper supervision. This also amounted to failure by Synergy Scaffolding to take reasonable care to institute and maintain a safe system of work: [129].

44. The primary judge concluded that DJSS had not been shown to have breached its duty of care to Mr Alelaimat: [134]-[137]. His Honour pointed to DJSS’s lack of control over the “premises and system of work” at the site where Mr Alelaimat was injured, and the spontaneous or ad-hoc nature of the task assigned to Mr Alelaimat. He concluded that DJSS had “no opportunity to make its own enquiries about the safety of the system”, and even if it had, it would have been told by Mr Hamka that the dismantling of the scaffolding was “in the hands of competent scaffolders”.

45. In light of these findings the primary judge made (inter alia) the following orders (as finally formulated and entered into JusticeLink):

“1.   Judgment for [for Mr Alelaimat] against [Synergy Scaffolding] in the sum of $1,356,533.39;

2.   Judgment for [WCNI] as against [Mr Alelaimat];

3.   [Synergy Scaffolding] to pay [Mr Alelaimat’s] costs of the proceedings;

4. Pursuant to s 151Z(1)(d) of the Workers Compensation Act 1989 (NSW) [Synergy Scaffolding] to indemnify [WCNI] … for compensation paid to [Mr Alelaimat] … in the sum of $246,202.54.

5. Pursuant to s 100 of the Civil Procedure Act 2005 (NSW) [Synergy Scaffolding] to pay [WCNI] interest in the sum of $68,234.19.

6.    [Synergy Scaffolding] to pay [WCNI’s] cost of the cross-claims;

7.   …”

The Appeal

49. By Notice of Appeal filed on 25 July 2022 Synergy Scaffolding appeals (as of right) against:

• the rejection of its defence under the Limitation Act (ground 1);

• the finding that DJSS had not been shown to have been in breach of the duty of care that it owed, as his employer, to Mr Alelaimat, and was therefore not liable either to him or to Synergy Scaffolding (grounds 2 and 3).

50. Pleaded grounds of appeal (grounds 6, 7, 8 and 9) challenging the rejection of the defence of contributory negligence and aspects of the quantification of damages were not pressed on appeal.

51. Grounds 4 and 5 of the appeal are framed as depending on the success of grounds 2 and 3. By ground 4 Synergy Scaffolding contends on the hypothesis that grounds 2 and 3 are upheld, that WCNI’s cross-claim against Synergy Scaffolding should have been dismissed. By ground 5, Synergy Scaffolding contends that, if grounds 2 and 3 are upheld, the primary judge ought to have held that it (Synergy Scaffolding) was not liable to pay damages in respect of medical expenses already paid by WCNI to or on behalf of Mr Alelaimat.

52. The orders sought are specified as follows:

“1.   Appeal allowed.

2.   Judgment for [Mr Alelaimat] against [Synergy Scaffolding] be set aside.

3.   Judgment for [Synergy Scaffolding] as against [Mr Alelaimat].

4.    In the alternative to 3, judgment for [Mr Alelaimat] against [Synergy Scaffolding] in such revised sum as this court determines.

5.   Judgment for [WCNI] against [Mr Alelaimat] be set aside.

6.   Judgment for [Mr Alelaimat] against [WCNI] in such sum as this Court determines.

7.   Dismissal of the First Cross-Claim [Synergy Scaffolding v WCNI] be set aside.

8.   Judgment for [Synergy Scaffolding] as against [WCNI] in such sum as this Court determines.

9.   Declaration that [Synergy Scaffolding] indemnify [WCNI] pursuant to the Second Cross-Claim [WCNI v Synergy Scaffolding] be set aside.

10.   Judgment for [Synergy Scaffolding] as against [WCNI] on the Second Cross-Claim.

11.   All costs orders below set aside.

12.   Costs of the proceedings below be as determined by this court.

13.   [Mr Alelaimat and WCNI] to pay [Synergy Scaffolding’s] costs of the appeal.”

(Proposed order 9 reflects an earlier version of the primary judge’s orders, as they appear in the reasons for judgment.)

53. It is to be emphasised that Synergy Scaffolding does not challenge the finding of negligence against it. Its challenge in this respect is to the exoneration of DJSS, with the result that WCNI is obliged to make no contribution to Mr Alelaimat’s damages, and Synergy Scaffolding is obliged, by s 151Z(1)(d) of the Workers Compensation Act, to indemnify WCNI for the compensation paid to Mr Alelaimat in accordance with that Act.

54. By s 75A of the Supreme Court Act 1970 (NSW) the appeal is to be by way of rehearing. By subs (6) this Court has the powers of the court at first instance, including, relevantly, the powers to draw inferences and make findings of fact. By subs (10) this Court may make any finding or assessment, give any judgment or make any order which ought to have been given or which the nature of the case requires. Exercise of those powers is subject to the constraints stated in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679; Lee v Lee (2019) 266 CLR 129; [2019] HCA 28.

Ground 1 of the appeal: the Limitation Act defence

55. It is convenient to begin, as did the primary judge, with Synergy Scaffolding’s defence under the Limitation Act.

56. It was common ground that the relevant limitation period was the “three year post discoverability limitation period” prescribed by s 50C(1)(a) of the Limitation Act as applicable to causes of action that relate to the death of or personal injury to a person. The “post discoverability limitation period” is the period of three years running from and including the date on which the cause of action is discoverable by the plaintiff. Mr Alelaimat’s action against Synergy Scaffolding was brought on 10 July 2017. Accordingly, if his cause of action were discoverable by him prior to 10 July 2014 it was, by s 50C(1)(a), not maintainable.

57. When a cause of action is discoverable is defined in s 50D, subss (1) and (2) of which provide:

“50D   Date cause of action is discoverable

(1)   For the purposes of this Division, a cause of action is discoverable by a person on the first date that the person knows or ought to know of each of the following facts—

(a)  the fact that the injury or death concerned has occurred,

(b)  the fact that the injury or death was caused by the fault of the defendant,

(c)  in the case of injury, the fact that the injury was sufficiently serious to justify the bringing of an action on the cause of action.

(2)     A person ought to know of a fact at a particular time if the fact would have been ascertained by the person had the person taken all reasonable steps before that time to ascertain the fact.”

58. Synergy Scaffolding accepted, correctly, that it bears the onus of proving that, by 10 July 2014, Mr Alelaimat knew or ought to have known each of the subs (1) “facts”. Synergy Scaffolding expressly disclaimed reliance on constructive knowledge. Its case was that, at the relevant time, Mr Alelaimat had actual knowledge of each of the three subs (1) “facts”.

59. Subsection (2) nevertheless has significance because:

“…it contains implications that some facts may only be reasonably ascertainable [and thus known] with professional assistance and that there may be facts which involve an element of professional judgment”: Murgolo v AAI Ltd (t/as AAMI) (2019) 101 NSWLR 376; [2019] NSWCA 295 at [40] (Basten JA) (“Murgolo”).

Subsection (2) thus throws some light on the proper construction of, or approach to, subs (1).

60. It was not in issue that, prior to 10 July 2014 (and, indeed, from 10 October 2012) Mr Alelaimat knew that his injury had occurred. The first criterion of discoverability was satisfied.

61. What was in issue was whether, before or by 10 July 2014, Mr Alelaimat knew both:

1. that his injury was caused by the fault of Synergy Scaffolding (par (b)); and

2. that his injury was sufficiently serious to justify his bringing an action against Synergy Scaffolding (par (c)).   

It was Synergy Scaffolding’s case at trial and on appeal that, by 10 July 2014, Mr Alelaimat knew both of those “facts”.

62. Section 50D(1) is deceptively simple in its terms. Its application has been considered by this Court on a number of occasions: see, for example, Baker-Morrison v State of New South Wales (2009) 74 NSWLR 454; [2009] NSWCA 35 (“Baker-Morrison”); Frizelle v Bauer [2009] NSWCA 239 (“Frizelle”); State of New South Wales v Gillett [2012] NSWCA 83 (“Gillett”); Murgolo; Pomare v Whyte [2019] NSWCA 317; 377 ALR 352 (“Pomare”). Those cases show that the apparent simplicity of s 50D(1) is, indeed, deceptive. The complexities are exposed in the passages extracted below.

63. For present purposes, two concepts arising from s 50D call for consideration – the concept of “knowledge” and the concept of a “fact”.

Knowledge

64. In Vines v Djordjevitch (1955) 91 CLR 512; [1995] HCA 19, in the context of a statute that permitted a person injured by an unidentifiable motor car to recover damages against a nominal defendant, provided that “as soon as he knew that the identity of the motor car could not be established” the plaintiff gave notice of his intention to make a claim against the nominal defendant, the High Court (Dixon CJ, McTiernan, Webb, Fullagar and Kitto JJ) said at 522:

“The word ‘know’ is used in the provision in an ordinary sense, without any intention that it should be analyzed or refined upon. But of course there are gradations of knowledge or belief upon such a matter. The gradations extend from a slight inclination of opinion to complete assurance. Here it seems to amount to an awareness or consciousness that no reasonable probability exists of ascertaining the identity of the car satisfactorily or with any certainty. Complete assurance is by no means necessary. When the plaintiff has come to think that the identity cannot be established that is enough. If the expression ‘think’ must be refined upon, it may be said to mean that the steady preponderance of his opinion or belief is that it cannot be done.”

65. In Baker-Morrison, in the context of s 50D, Basten JA (with the concurrence of Ipp and Macfarlan JJA) said with respect to knowledge (at [45]):

“… s 50D refers, somewhat simplistically, to whether the person ‘knows’ (or ought to ‘know’) the identified facts. It is rare that facts will be known in any absolute sense: rather, as a practical matter, the person will have a belief that certain matters can be established, usually on the balance of probabilities, which is sufficient for the purposes of legal proceedings. Such a belief may be held on firm ground or on shaky grounds. The belief is likely to involve an assessment of various matters, none of which can be readily quantified. Questions involving causation, fault and assessment of damages are all susceptible to these kinds of uncertainty. Nevertheless, the chapeau of the subsection refers to knowledge of identified facts, and not to an assessment of prospects of success in the prospective proceedings.”

66. Later, in Murgolo, Basten JA said:

“41   Secondly, it follows that the concept of knowing a fact must be understood to include opinions or beliefs formed on the basis either of direct observation (and experiences) or of information supplied by others and accepted by the prospective claimant.

42   Thirdly, the concept of knowledge (that which is known) is inherently contextual. To a scientist, it may be the best current working hypothesis which has not been falsified. In the Limitation Act it obtains its colour from its purpose, which is (at a high level of generality) to define when, balancing the interests of the injured person and the putative wrongdoer, the limited time within which a claim may be made should begin to run. This requires the identification of a position on a spectrum from baseless speculation to rational conviction.

43   Further, the point on the spectrum of levels of conviction as to a particular fact must be determined by the purpose (more precisely identified) for which knowledge is required. That purpose is to identify the time at which it is reasonable to require that a person should consider the commencement of proceedings, within the ensuing three years. That means that the level of conviction need not be as high as that required to commence proceedings, because a limitation period based on discoverability specifies the time within which to decide whether or not to commence proceedings. On the other hand, to warrant further investigation there must also be a reasonable conviction that upon further investigation the factual basis of the claim is likely to be strengthened by the collection of evidence, rather than undermined by further enquiries. In some cases, particular features, such as the apparent seriousness of the injury, and the cost of further investigations, may affect that assessment.

44   Fourthly, the question identified in the section has a temporal element: it requires the identification of ‘the first date’ on which a person knows something. Where there is a process of investigation in order to determine a fact, the level of conviction as to the existence [of] the fact may vary over the course of the investigations. But even to state the issue in that way assumes there is a fixed process of investigation which will be completed at a particular point, rather than an ongoing process of inquiry which may give rise to fluctuating results, with no clear date at which the process is concluded.

…

46   The fact that s 50D(1) requires the court to determine the ‘first date’ that the plaintiff knew something does not necessarily mean finding the first date on which the plaintiff believed that he knew something. Especially may that be so where the ‘something’ is a composite fact, such as the identity of the defendant or a causal connection between the injury and the defendant’s act, or the characterisation of the defendant’s act as involving fault. …

47   Fifthly, the question of knowledge is to be assessed when the defence that the claim is out of time comes to be resolved. The question is whether, at that time, the evidence establishes that what the claimant firmly believed at one point in time was false; if so, can it be said that, at that point in time, he knew the particular fact? That question arises with some regularity in circumstances where the relevant fact is an inference drawn from other circumstances which were, at an earlier time, uncertain or unknown. …”

(emphasis added)

67. In the same case Leeming JA said:

“100   Secondly, the primary facts which contribute to the conclusions of causation, fault and identity may not all become known to a plaintiff at the same time. They may become known over a period of time. Where the primary facts point in different directions, the conclusion which is fairly to be drawn from those known at any particular point in time may differ from the conclusion to be drawn at a different time.

101 Thirdly, the ‘facts’ identified in s 50D include conclusions which are apt to be in issue in many cases. …

102 Fourthly, there are large questions as to the legal meaning to be given to ‘know’ in s 50D. …

103   In some contexts, knowledge may be contrasted with belief and expectation. …

…

107   Sometimes ‘know’ and ‘knowledge’ are binary. It is commonplace to say that a person either knows or doesn’t know a particular fact. A plaintiff may either know or not know the occupier of a building, or whether a structure which collapsed causing injury had been built in accordance with the applicable standards. But ‘know’ and ‘knowledge’ can also refer to an opinion or belief, and in such cases there may be considerable refinements. …”

The “facts”

68. As indicated above, s 50D(1) is directed to knowledge of three “facts”, only two of which are presently in issue. Those in issue are the “facts” that:

• Mr Alelaimat’s injury was caused by the fault of Synergy Scaffolding (s 50D(1)(b)); and

• the injury was sufficiently serious to justify the bringing of an action against Synergy Scaffolding (s 50D(1)(c)).

69. The fact contemplated by s 50D(1)(b) is:

“…a relationship between two things, namely, the injury … on the one hand and the fault of the defendant on the other. The relevant connection is one of causation.”: Baker-Morrison at [28].

To “know” that an injury is caused by the fault of the defendant is to know “the key factors necessary to establish liability”: Baker-Morrison at [39]. That may involve knowledge of a number of anterior facts, from which a conclusion that the injury was caused by the fault of the defendant may be drawn. The s 50D(1)(b) “fact” is, in reality, a conclusion drawn from known (or supposed) facts. The anterior facts sufficient to justify such a conclusion may, as Leeming JA said in Murgolo, became known to the plaintiff at different times.

70. Whether the anterior facts known to the putative plaintiff are such as to constitute knowledge that the injury was caused by the fault of the putative defendant depends upon a “legal evaluative judgment”: Baker-Morrison at [41]. In particular, having regard to the provisions of the Civil Liability Act, notably ss 5B and 5D, the putative plaintiff needs an appreciation of the principles applicable to a claim for damages based on negligence. Similarly, where the putative plaintiff is an employee of the putative defendant, an appreciation of the provisions of the Workers Compensation Act is necessary. Ordinarily, the lay person will not have either of those appreciations without legal advice, and sometimes specialist expert advice. That is not to say that legal advice will be required in every case: see, for example, Pomare at [19] (Basten JA).

71. The fact contemplated by s 50D(1)(c) is attended by even greater complexity. Although, having regard to the terms of s 50D(1), a judgment that an injury is sufficiently serious to justify the commencement of proceedings must be treated as a “fact”, it is a “fact” knowledge of which necessarily requires evaluation of both medical and legal issues, and which may not be able to be known to the lay person without appropriate medical and/or legal advice. The need for a “legal evaluative judgment … is even more explicit” with respect to s 50D(1)(c). The injury must not only be understood (by the putative plaintiff) to be serious, but “sufficiently serious to justify” bringing an action on the cause of action: Baker-Morrison at [41]. Inherent in that proposition is an appreciation of the causes of action that may be available. Also inherent in the proposition is an appreciation of the facts necessary to support such an action. Rarely is that likely to be understood – “known” – by a lay plaintiff without the benefit of both legal and medical advice.

70. In Gillett at [131], Campbell JA said:

“For a person to be in a situation where he or she knows or ought to know that an injury was sufficiently serious to justify the bringing of an action on the cause of action, they would have to know (or be in a position where they ought to know) that they have sufficient prospects of recovering enough damages for it to be worthwhile litigating. That would require, at the least, knowledge (whether derived from the plaintiff’s own knowledge, from friends or acquaintances, or from professional advice) that the injury in question is one for which the law would hold the defendant liable in damages, and that the damages that could be recovered are large enough to be worth the time and trouble of suing. Thus, knowledge of actionability is necessary before s 50D(1)(c) is satisfied. And, because it is involved in there being ‘fault’, actionability is likewise one of the ‘key factors necessary to establish liability’ that must be known before s 50D(1)(b) is satisfied.” (emphasis in original)

McColl, Young and Whealy JJA expressly agreed with these observations.

73. A particular complexity arises in respect of s 50D(1)(c) where an injured person (the putative plaintiff) is faced with a choice of bringing common law proceedings claiming damages from his or her employer, or contenting himself or herself with the lesser, but more certain, benefits provided under the Workers Compensation Act. This is a classic example where it might be said that a putative plaintiff does not have the necessary knowledge unless and until he or she has received appropriate legal advice.

74. In Gillett, in which a five-judge bench was convened in order to entertain an argument that Baker-Morrison was wrongly decided, Beazley JA, with whom McColl, Campbell, Young and Whealy JJA agreed, adopted the view expressed by Basten JA in Baker-Morrison that a proper view could not be formed about the justification for bringing an action absent appropriate legal and medical advice in respect of such matters. (The Court unanimously declined the invitation to declare that Baker-Morrison was wrongly decided.)

75. To establish that Mr Alelaimat knew the s 50D(1)(c) fact (that the injury was sufficiently serious to justify bringing an action), Synergy Scaffolding relied on evidence given by him in cross-examination to the effect that, by the time he consulted Law Partners (in November 2013), he was in sufficient pain that he agreed to Dr Al-Khawaja’s recommendation for surgery and that he had challenged CGU’s refusal to pay for the proposed surgery. To establish the s 50D(1)(b) fact – that his injury was caused by the fault of Synergy Scaffolding) – Synergy Scaffolding relied on evidence, from Ms McRae’s notes, that, at the time he consulted Law Partners he believed that he was employed by Synergy Scaffolding and that he had been injured because Synergy Scaffolding had insufficient workers on site, or the workers on site were not properly qualified, and that one of the workers he believed to be employed by Synergy Scaffolding had been responsible for dropping the piece of scaffolding that injured him.

76. The primary judge rejected each of Synergy Scaffolding’s contentions. He found that Synergy Scaffolding had failed to establish that, by 10 July 2014, Mr Alelaimat knew either the s 50D(1)(b) fact or the s 50D(1)(c) fact.

77. In finding that Synergy Scaffolding had failed to establish that Mr Alelaimat knew that his injury was caused by the fault of Synergy Scaffolding the primary judge took into account Mr Alelaimat’s mistaken belief that he was employed by Synergy Scaffolding (as disclosed in Ms McRae’s notes of her conference with Mr Alelaimat). His Honour considered that, had Mr Alelaimat been correct about that, the factors relevant to his cause of action, including the degree of disability or impairment necessary to bring proceedings, would have been different: [21].

78. In finding that Synergy Scaffolding had failed to establish that Mr Alelaimat knew that his injury was sufficiently serious to justify bringing an action, the primary judge took into account that Dr Al-Khawaja had advised Mr Alelaimat that his spinal condition might be amenable to surgery (that is, as relevant to the permanency or otherwise of the injury and thus its seriousness); that different thresholds and caps are applicable to damages that may be recoverable depending on whether the proceedings are subject to the Civil Liability Act or the Workers Compensation Act; and that, while Mr Alelaimat had sought legal advice, the advice he received was limited to his entitlements to compensation under the Workers Compensation Act (as distinct from common law damages). He had received no advice about any common law rights he might have had.

79. In written and oral submissions Synergy Scaffolding did not seek to identify any specific error in the reasoning of the primary judge to the conclusion that Synergy Scaffolding had failed to establish that Mr Alelaimat knew that his injury was caused by the fault of Synergy Scaffolding. Rather, it identified circumstances that point to a different conclusion. In other words (by implication) Synergy Scaffolding sought to have this Court exercise the powers conferred by s 75A(6) of the Supreme Court Act and draw its own inferences as to Mr Alelaimat’s knowledge of the par (c) fact.

80. In my opinion, for the purposes of s 50D(1)(b), the relationship between Synergy Scaffolding and DJSS was not material, and in taking into account Mr Alelaimat’s mistaken belief that he was employed by Synergy Scaffolding on the question of his knowledge that his injury was caused by the fault of Synergy Scaffolding, the primary judge was in error. Section 50D(1)(b) does not require knowledge of the capacity in which a putative defendant might be liable. It requires knowledge that the circumstances in which the injury occurred are such that legal liability could be established. Whether Synergy Scaffolding was Mr Alelaimat’s employer, or no more than an occupier of premises, had no necessary bearing on the question whether Mr Alelaimat’s injury was caused by Synergy Scaffolding’s fault.

81. The anterior facts relevant to the question posed by par (b) that were known to Mr Alelaimat prior to 10 July 2014 were:

• that Synergy Scaffolding was in occupation of the worksite;

• that workmen wearing Synergy Scaffolding clothing were dismantling scaffolding;

• that Mr Hamka (the Operations Manager of Synergy Scaffolding) directed Mr Alelaimat to assist in dismantling the scaffolding; and

• that a workman (or workmen) wearing Synergy Scaffolding clothing dropped the piece of scaffolding that struck and injured him.

Was knowledge of these facts sufficient to establish that, for the purposes of s 50D(1)(b), Mr Alelaimat knew that his injury was caused by the fault of Synergy Scaffolding – that is, fault in a legal sense, fault in relation to a cause of action?

82. With some hesitation I have come to the view that it was. That conclusion is reinforced by reference to Ms McRae’s notes in which she attributed to Mr Alelaimat an assertion that Synergy Scaffolding (as his employer, as he then believed it to be) was negligent.

83. In my opinion, Synergy Scaffolding established that, for the purposes of s 50D(1)(b), Mr Alelaimat knew, at least by the time he consulted Ms McRae in November 2013, that his injury was caused by the fault of Synergy Scaffolding.

84. It is otherwise, however, in relation to the s 50D(1)(c) “fact”, in relation to which the issues are more complex, and which, as indicated above, could not be properly evaluated by a lay person without adequate legal advice.

85. Mr Alelaimat had no realistic means of knowing the intricacies of the Civil Liability Act and the Workers Compensation Act and the bounds and limits of benefits to which he may have been entitled under whichever of those statutes was applicable to him. In this respect his unawareness of the identity of his employer is significant.

86. The advice Mr Alelaimat received from Law Partners did nothing to inform him of any rights he had to bring proceedings at common law (against either Synergy Scaffolding or DJSS). That advice was clearly focussed on and directed to his entitlements under the Workers Compensation Act.

87. I am satisfied that Synergy Scaffolding failed to prove that Mr Alelaimat knew the third of the s 50D(1) facts within the relevant period. For that reason I agree with the conclusion of the primary judge that the defence under the Limitation Act fails. It follows that ground one of the appeal must be rejected.

Grounds 2 and 3 of the appeal

88. As noted above, Synergy Scaffolding does not dispute the liability findings against it. By ground 2 it challenges the finding of the primary judge that DJSS was not liable to Mr Alelaimat in negligence. By ground 3 it asserts that the primary judge:

“… should have held that [DJSS] breached its duty of care as an employer, and was therefore liable to [Mr Alelaimat], and to [Synergy Scaffolding] as Cross-Claimant.”

89. The formulation of ground 3 is, as will be seen below, of some importance. The issue of DJSS’s liability to Mr Alelaimat has important and potentially complex implications in terms of apportionment of liability (although these were not spelled out with any clarity, either at first instance or in the written submissions filed in this Court).

90. Section 151Z(2) of the Workers Compensation Act makes elaborate provision with respect to awards of damages where a plaintiff has a cause of action for damages against a defendant who is an employer (the extent of whose liability is to be determined under the restrictive provisions of the Workers Compensation Act) and a concurrent cause of action against a defendant other than an employer (the extent of whose liability is to be determined, generally, by reference to the Civil Liability Act). One effect of s 151Z(2) is to reduce the liability to the plaintiff of the defendant who is not the employer (par (c)). Another is to modify any contribution the non-employer defendant may recover from the employer defendant (par (d)).

91. Section 151Z(1) of the Workers Compensation Act addresses the circumstance in which an employer, while liable to pay compensation under the Workers Compensation Act for an injury, is not a tortfeasor liable to pay damages, and the injury is caused in circumstances creating a liability in a third party tortfeasor to pay damages. It is not applicable where the employer is also a tortfeasor liable to pay damages: Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd (1975) 132 CLR 336; [1975] HCA 28 (“Murray-More”); CSR Timber Products Pty Ltd v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49 at [33] ("Weathertex”); Endeavour Energy v Precision Helicopters Pty Ltd (No 2) [2015] NSWCA 357 at [43] (“Endeavour Energy”); South West Helicopters Pty Ltd v Stephenson (2017) 98 NSWLR 1; [2017] NSWCA 312 at [170] (“South West Helicopters”).

92. One purpose of the 7 paragraphs of s 151Z(1) is to prevent double recovery by a plaintiff who is entitled to both compensation from the employer under the Workers Compensation Act and to damages from a third party tortfeasor (pars (a), (b) and (c)). Another purpose is to entitle an employer (or its insurer) to recover payments made under the Workers Compensation Act from the third party tortfeasor (par (d)).

93. As stated above, despite clear indications to the contrary, this Court must proceed on the basis that DJSS was Mr Alelaimat’s employer and had provided his services to Synergy Scaffolding by way of labour-hire. The question raised by ground 2 of the appeal is whether the primary judge was wrong in finding that DJSS had not been shown to be in breach of its undoubted duty of care to Mr Alelaimat. Both Mr Alelaimat in his Further Amended Statement of Claim and Synergy Scaffolding in its cross-claim against DJSS asserted that Mr Alelaimat’s injury was caused by the negligence of DJSS.

Ground 2: the liability of DJSS to Mr Alelaimat

94. The primary judge accepted, as he was obliged to do by the common position of the parties, that DJSS was Mr Alelaimat’s employer. His Honour treated DJSS as, in effect, a labour-hire company that supplied labour to entities with which it contracted.

95. It is uncontroversial that an employer is under a duty to take reasonable care to provide a safe system of work for its employees. It is equally uncontroversial that that duty cannot be delegated by, for example, engagement of an independent contractor: Kondis v State Transport Authority (1984) 154 CLR 672; [1984] HCA 61 (“Kondis”).

96. In Kondis, in common with the present case, the plaintiff (Mr Kondis) was struck on the back by an object (a metal rod) which had been dropped from above by another worker on the site as he (Mr Kondis) bent to pick up some items from the ground. There the commonality ends.

97. Mr Kondis was sent by his employer (the Victorian Railways Board) to assist in dismantling a large metal structure on property which, it seems a fair inference, was owned by the employer. For the purpose of the dismantling the employer had engaged a contractor to operate a crane. The jib of the crane needed to be extended. It was an employee of the contractor who was responsible for dropping the metal rod during the extension process. Mason J, with whom Brennan, Murphy, Deane and Dawson JJ agreed, held the employer to be in breach of its duty to provide a safe system of work. It could not escape liability by engaging an independent contractor to undertake the work. The duty of the employer was to ensure that reasonable care was taken by the contractor (at 686-687). The employer was liable to its employee for any negligence on the part of the contractor in failing to adopt a safe system of work (at 688). An employer bears liability for the negligence of its independent contractors in devising a safe system of work, and bears the consequences of requiring its employees to work according to an unsafe system. The liability is not vicarious but arises because the contractor’s omission to adopt a safe system of work is a breach of the employer’s duty.

98. Deane J agreed, adding:

“The obligation of an employer to provide a safe system and conditions of work for an employee is not discharged by mere delegation to an independent contractor any more than it is discharged by mere delegation to an employee. It ‘is one of those’ cases in which a person ‘remains liable to third parties for the consequences of the negligence of an independent contractor, just as he would be if it were his own negligence or that of his servant’: per Windeyer J in Voli v Inglewood Shire Council [(1963) 110 CLR 74 at 95; [1963] HCA 15]. The employer ‘may bargain with the contractor that he shall perform the duty, and stipulate for an indemnity from him if it is not performed but he cannot thereby relieve himself from liability to those injured by the failure to perform it’ …. The reason is that, in the context of the particular relationship of employer and employee and of the undertaking by the employee of the general obligation to work in the interests of the employer, the content of the employer’s duty to take reasonable care to provide a safe system and conditions of work for the employee is not discharged by delegation unless the delegate, be he employee or independent contractor, in fact provide the reasonable care which the employer was under an obligation to bring to bear.”

99. The duty of care owed by an employer to provide a safe system of work is therefore characterised as non-delegable. It has been said that the characterisation of a duty of care as non-delegable involves, in effect, the imposition of strict liability on the defendant (in this case DJSS) who owes the duty: Scott v Davis (2000) 204 CLR 333; [2000] HCA 52 at [248] (Gummow J).

100. Mason J would also have found the employer liable to Mr Kondis on an independent basis, that the employer’s foreman, who was on-site, had failed to give appropriate instructions or directions to Mr Kondis to avoid the area of the crane while the extension of the jib was in process.

101. Kondis was decided before the advent of labour-hire companies, or at least before labour-hire became commonplace. The arrangements attending employment under such contracts have raised questions that did not arise in Kondis. Some of these have been discussed in TNT Australia Pty Ltd v Christie (2003) 65 NSWLR 1; [2003] NSWCA 47 (“Christie”) by Mason P; in Pollard v Baulderstone Hornibrook Engineering Pty Ltd [2008] NSWCA 99 (“Pollard”) by McColl JA; in Dib Group Pty Ltd Trading as Hill and Co v Cole [2009] NSWCA 210 (“Dib Group”) by Basten JA; and in Galea v Bagtrans Pty Limited [2010] NSWCA 350 (“Galea”) by Allsop P and Hodgson JA.

102. Generally, it has been accepted that the reasoning in Kondis to the effect that an employer cannot escape liability for injuries negligently inflicted on an employee by an independent contractor applies equally to injury negligently inflicted by a client to whom the employer (a labour-hire company) has contracted the services of the employee. That was the effect of the decisions in Christie, Pollard and Galea. Indeed, it has been said that the duty of an employer in such cases may be greater – see Christie at [67], where Mason P said that the very fact that employees are despatched to external venues and placed under the de facto management of outsiders will, in some cases, have the practical effect of requiring the employer to take additional measures by way of warnings or training in order to discharge its continuing common law duty of care to employees.

103. In Christie at [63]-[64] Mason P, with whom Davies and Foster AJJA generally agreed, rejected a submission by a labour-hire employer that the non-delegable duty doctrine did not apply to it because “it [the employer] was no more than an employment agency/bureau or ‘body hire company’” and had handed over its employee (Mr Christie) into the control of the company (TNT) with which it contracted to supply labour. The Court found that the employer company was liable to Mr Christie for the failure of TNT (and another entity) adequately to maintain equipment.

104. Galea was also a case involving labour-hire. Mr Galea was employed by a labour-hire company and assigned to a transport company as a truck driver. The transport company required him to drive a truck that was fitted with an unsafe seat as a result of which he suffered injury. Allsop P found liability in the employer on the basis of the Kondis principles. His Honour said (at [5]-[6]):

“5   … [the employer] therefore was, and at all times remained, subject to a non-delegable duty to exercise reasonable care to provide and maintain its employee with a safe place of work, a safe system of work and safe plant and equipment [citing Kondis and Christie]. … The non-delegability of that duty means that the employer is liable for any breach of the duty whoever was retained by [the employer] to perform it. …

6   Of course, in examining whether an employer has breached the duty, notions of reasonableness as to what the employer can control are relevant. However, care should be taken not to confuse the assessment of whether an employer has personally exercised reasonable care with whether reasonable care was exercised. Here, the employer placed Mr Galea with [the transport company], in effect, to work for [the transport company]. The place of work, the system of work and the plant and equipment for work for Mr Galea’s employment with [the employer] were those of [the transport company]. Thus, [the employer’s] non-delegable duty was breached if [the transport company] failed to exercise care in their provision. It is not to the point to say that [the employer] could not control how [the transport company] maintained its equipment or what system it had for the repair of truck seats. [The employer] placed Mr Galea at [the transport company] for his employment with it, [the employer]. The plant and equipment (the seat on the truck) were not maintained with due care and the system of work and the plant and equipment were unsafe. That [the employer] might not be personally at fault … is not to the point [citing Christie]. This breach will include the negligent maintenance of equipment. …” (emphasis added)

156. In written submissions Synergy Scaffolding outlined the “reasonable steps” that it contended, in this case, DJSS could and should have taken. These were:

“(a)   ascertaining the range of duties that [Mr Alelaimat] was performing, either by enquiry of the worker himself or of the host employer, so as to determine what training and instruction may be required;

(b)   training [Mr Alelaimat] in relation to safe work practices when collecting scaffolding, including observing something in the nature of an exclusion zone when the material was being dismantled;

(c)   providing instructions to [Mr Alelaimat] about those matters;

(d)   occasionally inspecting sites at which [Mr Alelaimat] was required to collect scaffolding pieces whilst being dismantled to ensure that a safe system of work, including something in the nature of an exclusion zone, was being maintained, (by Synergy Scaffolding or others);

(e)   enquiring of [Mr Alelaimat] as to whether safe practices in these tasks were being followed at the sites he attended;

(f)   enquiring of [Synergy Scaffolding] as to whether these practices were being observed at sites [Mr Alelaimat] was directed to work.”

158. It may be accepted that this list sets out what might reasonably have been expected of DJSS. The difficulty is that the evidence does not establish that DJSS failed, for example, to ascertain the range of duties that Mr Alelaimat would be required to perform when assigned to work for Synergy Scaffolding or to impose conditions on the circumstances in which he would be deployed. Whether or not DJSS took such a step lay well within the knowledge of Synergy Scaffolding, and could have been adduced in evidence, through either Mr Hamka or Mr El Jarrar. That evidence was not forthcoming.

159. In oral submissions, senior counsel pointed to what he said was “the complete absence by the employer it seems to have done anything”. Again, the difficulty with the submission is that it is entirely unsupported by evidence. It is pure speculation. Evidence to support the speculative assertion was in the hands of Synergy Scaffolding, and not adduced.

160. It may also be accepted that occasional spot checks by DJSS was a reasonable precautionary step for DJSS to take. Again, whether that was done or not lay within the knowledge of Synergy Scaffolding, but no evidence was forthcoming.

161. The negligence on the part of Synergy Scaffolding that his Honour identified was failure to create an exclusion zone, and a failure to engage or adequately supervise its independent contractors. What is not known is whether either or both of these failings was or were part of Synergy Scaffolding’s modus operandi, or were aberrant conduct on the day of Mr Alelaimat’s injury. If the former, any failure by DJSS to correct them would clearly, independently of its liability to Mr Alelaimat for the negligence of Synergy Scaffolding on the Kondis principle, warrant attributing some responsibility for Mr Alelaimat’s injury to DJSS. But if the failings were aberrations from Synergy Scaffolding’s normal practices, it would be difficult to attribute to DJSS any significant share of the responsibility for the injury. Which is the position is not revealed by the evidence.

162. For these reasons Synergy Scaffolding has failed to establish that, for the purposes of s 151Z(2)(c) of the Workers Compensation Act, it was entitled to a contribution under s 5 of the 1946 Miscellaneous Provisions Act and thus to a reduction in the damages awarded to Mr Alelaimat. I would therefore reject Ground 3 of the appeal so far as it asserts that, by reason of DJSS’s liability to Mr Alelaimat, WCNI was also liable to Synergy Scaffolding.

163. As Synergy Scaffolding’s cross-claim against WCNI also depended on an apportionment of responsibility, the onus of proving which lay on it, it follows that its cross-claim against WCNI was correctly dismissed.

Grounds 4 and 5 of the appeal

164. As pleaded, grounds 4 and 5 of the appeal are predicated on the success of both grounds 2 and 3. Synergy Scaffolding has had success on ground 2, and partial success only on ground 3.

Ground 4: was WCNI entitled to indemnity under Workers Compensation Act s 151Z(1)(d)?

165. By ground 4 Synergy Scaffolding contends (on the hypothesis that grounds 2 and 3 are upheld), that WCNI’s cross-claim against it should have been dismissed.

166. By its cross-claim WCNI sought:

1. contribution or complete indemnity pursuant to s 5(1)(c) of the 1946 Miscellaneous Provisions Act; and

2. indemnity pursuant to s 151Z(1)(d) of the Workers Compensation Act.

   167. Because he found WCNI not liable to Mr Alelaimat, it was not necessary for the primary judge to address the question of contribution or indemnity under s 5 of the 1946 Miscellaneous Provisions Act. His Honour ordered Synergy Scaffolding to indemnify WCNI, in accordance with s 151Z(1)(d), for compensation paid by WCNI under the provisions of the Workers Compensation Act. That order also resulted from the finding that WCNI was not liable to Mr Alelaimat. Synergy Scaffolding contends that it should be set aside.

   168. Paragraph (d) of s 151Z(1) provides:

   “If the worker has recovered compensation under this Act, the person by whom the compensation was paid [here, WCNI] is entitled to be indemnified by the person so liable to pay those damages [here, Synergy Scaffolding] (being an indemnity limited to the amount of those damages).”

Thus, if s 151Z(1) applies, WCNI is entitled to the indemnity order made by the primary judge. The question is whether s 151Z(1) does apply.

169. As stated above (see [91]), s 151Z(1) does not apply (of its own force) where the employer (as well as the third party) is a tortfeasor liable to the plaintiff for damages. On the findings of the primary judge, therefore, the order was appropriately made. On the findings I make, because WCNI is liable to Mr Alelaimat for damages, s 151Z(1) can have no application unless by some route other than its own terms. Such a route potentially emerges in s 151Z(2)(e). That paragraph (subject to the presently immaterial exceptions stated in sub pars (i) and (ii)) applies subs (1) in relation to an employer who is also a tortfeasor in specified circumstances. It is worth repeating the substance of par (e), which is:

“if the worker does not take proceedings against that employer or does not accept satisfaction of the judgment against that employer, subsection (1) applies as if the worker had not been entitled to recover damages from that employer, except that –

(i)   …

(ii)   …”

170. There are thus two negative conditions, one of which must be satisfied for par (e) to apply: Endeavour Energy at [48]. If either condition is satisfied, the effect of par (e) is that the provisions of subs (1) come into effect, notwithstanding that the employer is also a tortfeasor. The first condition is that the plaintiff does not take proceedings (for damages) against the employer. In this case, Mr Alelaimat did take proceedings against WCNI (although unsuccessfully at first instance). That condition has not been satisfied. The second condition (that the plaintiff does not accept satisfaction of the judgment) is obscure. That condition assumes (by the words “satisfaction of the judgment”) that proceedings taken against the employer are successful, resulting in a judgment in favour of the plaintiff. To date there has been no judgment in favour of Mr Alelaimat, satisfaction of which he could accept or not accept (although, on the orders I propose, there would be such a judgment).

171. Assuming that there is such a judgment, Mr Alelaimat will have the opportunity of enforcing the judgment against Synergy Scaffolding (which is not challenged by Synergy Scaffolding other than as to quantum) or enforcing the judgment against WCNI. The words in s 151Z(2)(e) “if the worker … does not accept satisfaction of the judgment against the employer” may be taken to mean “if the worker [the plaintiff] does not enforce the judgment against the employer”.

172. Although it may with some confidence be predicted that Mr Alelaimat will elect to accept satisfaction of (enforce) the judgment against Synergy Scaffolding and not accept satisfaction of (enforce) the judgment against WCNI (that, indeed, was Mr Alelaimat’s submission at trial), and it may with equal confidence be predicted that WCNI will not press the judgment against it on Mr Alelaimat, those predictions fall short of establishing that Mr Alelaimat “does not accept satisfaction of the judgment against [WCNI]”.

173. Neither condition for the application of s 151Z(2)(e) has been satisfied. As was the case in Hossain v Unity Grammar College Ltd [2019] NSWSC 1313 at [204], the occasion has not yet arisen for Mr Alelaimat to choose whether he will accept satisfaction of the judgment against WCNI. Synergy Scaffolding therefore argued that, neither of the conditions having been satisfied, and WCNI being liable to Mr Alelaimat for damages, none of the provisions of subs (1) (including par (d)) is applicable. Section 151Z(2)(e) does not have the effect of rendering subs (1), including par (d), applicable other than in circumstances where one of the two conditions is satisfied. No alternative statutory basis for an order that WCNI indemnify Synergy Scaffolding for the compensation paid has been identified.

174. I would accept that contention. Ground 4 of the appeal should be upheld and order 9 as sought (that the order that Synergy Scaffolding indemnify WCNI pursuant to s 151Z(1)(d) of the Workers Compensation Act be set aside) should be made.

175. This conclusion is consistent with those reached by Basten JA (with whom, in this respect, Leeming and Payne JJA agreed) in South West Helicopters. The issues in South West Helicopters were complex. The facts relevant for present purposes may be stated briefly.

176. Mr Stephenson was an employee of Parkes Shire Council. As part of his duties he took part in conducting, from a helicopter, an aerial noxious weed survey. The helicopter was owned and operated by South West Helicopters. The helicopter crashed, killing Mr Stephenson (and others on board). Mr Stephenson’s widow, Ms Stephenson, received from Parkes Shire Council payments of compensation.

177. Ms Stephenson then took proceedings in negligence against both South West Helicopters and Parkes Shire Council and succeeded in obtaining an award of damages against each. Parkes Shire Council paid the damages that had been awarded against it (and Ms Stephenson accepted the payment).

178. Parkes Shire Council then sought, from South West Helicopters, indemnity for the payments of compensation it had made to Ms Stephenson. It identified s 151Z(1)(d) as the statutory authority for the claim.

179. At first instance that claim was upheld. On appeal to this Court it was pointed out that, on the authority of Murray-More, Weathertex, and the cases mentioned in [91] above, subs (1) of 151Z was inapplicable because Parkes Shire Council was itself a tortfeasor: [169]-[172]. It was also pointed out that s 151Z(1) could be made applicable if one of the two conditions in s 151Z(2)(e) was satisfied. In South West Helicopters, neither condition was satisfied, because Ms Stephenson had both taken proceedings against Parkes Shire Council and had accepted satisfaction of the judgment against it. Subsection (1) of s 151Z, including par (d), did not apply. Parkes Shire Council was not entitled to indemnity from South West Helicopters in respect of the payment it had made to Ms Stephenson under the Workers Compensation Act.

180. Against that background Basten JA (at [182]) identified the purpose of par (e) of s 151Z(2) as:

“… that an employer which is also a tortfeasor is not able to recover compensation from another tortfeasor where it [the employer] has made a payment of damages to the worker. Where the worker does not take proceedings or does not accept satisfaction of a judgment obtained in such proceedings, no payment will have been made. Where the worker sues his or her employer, the proceedings will either succeed or fail. If they fail, that will be because the employer is not liable and s 151Z(1)(d) will apply. If they succeed, the worker will be awarded damages. The reason why the drafter may have thought it appropriate to exclude recovery from the third party tortfeasor in such circumstances is that the employer which is liable to pay damages will deduct the amount of compensation already paid from the award of damages, pursuant to s 151A. …”

181. In the present case, Mr Alelaimat did take proceedings against WCNI, and, if my conclusions above prevail, will have obtained judgment against WCNI. But it cannot be said that he has not accepted the judgment against WCNI because the occasion to accept or not accept satisfaction of the judgment has not yet arisen.

182. In South West Helicopters, Parkes Shire Council sought the s 151Z(1)(d) indemnity on the basis that the second condition (that the plaintiff does not accept satisfaction of the judgment against the employer) might be satisfied in the future (notwithstanding that, on the facts of that case, judgment against the employer had been satisfied). The Court (at [181]) rejected that proposition as inconsistent with pars (a), (b) and (e) of s 151Z(2), which, as Basten JA observed, are all framed in a “continuous present tense”. Further, his Honour said (again with the reference to the facts of that case):

“… once the first alternative in par (e) is not satisfied (because the worker has commenced proceedings) there is no reason to assume that the second alternative (the occasion for which has not yet arisen) will be satisfied so as to then engage par (e).”

183. In contrast, in this case, there is every reason to suppose that the second condition will, in due course, be satisfied. The judgment against Synergy Scaffolding is significantly greater than the proposed judgment against WCNI, and (even if the judgment against Synergy Scaffolding were to be reduced by reason of s 151Z(2)(c), which I have rejected) it would still necessarily be greater than the judgment against WCNI. But, at the time of determination of WCNI’s cross-claim, the condition, framed as it is in the present tense, has not, and will not have been, satisfied.

184. The difficulty arises, at least in part, because, in accordance with usual practice, WCNI’s cross claim was heard and determined concurrently with Mr Alelaimat’s claims. At the time of determination it is not, and cannot be, known that Mr Alelaimat will not accept satisfaction of judgment against WCNI (although the indications are that he will not). In some cases, that may depend on the solvency and/or insurance status of the third party tortfeasor.

185. Neither of the conditions in par (e) of s 151Z(2) that would render s 151Z(1)(d) applicable has been satisfied. WCNI’s cross claim, so far as it seeks indemnity from Synergy Scaffolding for compensation paid by it, depends on s 151Z(1)(d), which has not been shown to be applicable.

186. Section 151A of the Workers Compensation Act does not assist WCNI. Relevantly, that section provides:

“(1)   If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then (except to the extent that subsection (2), (3), (4) or (5) covers the case) –

…

(a)   the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and

(b)   the amount of any weekly payments of compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and

(c)   … .”

187. Subsections (2)-(5) are inapplicable. The effect of s 151A(1) is that, if Mr Alelaimat recovered damages from WCNI, then his entitlement to workers compensation payments would cease and such payments as had been made would be deducted from those damages. On the findings I have made, Mr Alelaimat is entitled to recover damages from WCNI. But he has not done so. In the event that Mr Alelaimat seeks to enforce judgment against WCNI, WCNI will be entitled to deduct from the damages the weekly payments it has made. It is well established that the words “recovers damages in respect of an injury from the employer …” require the actual receipt of the damages awarded: Smith v Commonwealth Oil Refineries Ltd (1938) 60 CLR 141 at 147; [1938] HCA 33; Watson v The Council of the City of Newcastle (1962) 106 CLR 426 at 445; [1962] HCA 6; Adams v Fletcher International Exports Pty Ltd [2008] NSWCA 238 at [19]; Abdulle v QBE Insurance (Australia) Ltd [2010] NSWCA 6 at [11]-[15].

188. As Mr Alelaimat has not recovered damages from WCNI s 151A does not apply.

189. These conclusions may have some curious and unexpected consequences. Paragraph (d) is only a small part of s 151Z(1). Paragraphs (a), (b), and (c) are directed to ensuring that a plaintiff who is entitled to compensation from his or her employer under the Workers Compensation Act and to damages from a third party tortfeasor is not entitled to retain both, and is required to repay, out of the damages awarded, any compensation paid. If subs (2)(e) of s 151Z does not apply to render subs (1) applicable, those provisions also will not apply. For that reason, I will propose that, before final orders are made, the parties have an opportunity to make further submissions with respect to the consequences of the findings proposed in these reasons.

Ground 5: was Synergy Scaffolding liable to pay damages representing Mr Alelaimat’s medical expenses?

190. By ground 5 Synergy Scaffolding contended that it was not liable to pay Mr Alelaimat damages in respect of medical expenses paid to or on his behalf by WCNI. This ground, too, invoked par (e) of s 151Z(2) and s 151Z(1).

191. Besides par (d), subs (1) of s 151Z contains a number of other important provisions, including notably that a plaintiff who recovers damages from a third party tortfeasor is required to repay out of the damages any compensation he or she has been paid under the Workers Compensation Act (par (b)). “Compensation” in that context includes medical expenses.

192. The award of damages in favour of Mr Alelaimat against Synergy Scaffolding included an amount of “past out of pocket” expenses, but did not identify what (if any) of this amount was constituted by medical expenses and what, (if any) had been paid by WCNI. The evidence sufficiently established that WCNI had paid a sum of $175,841.79 as medical expenses.

193. If, as I have concluded, subs (1) is not made applicable by s 151(2)(e), and Mr Alelaimat is not otherwise obliged to repay WCNI for the medical expenses paid on his behalf, then, arguably, the loss for which he was entitled to be indemnified did not include those expenses and the order in his favour so far as it includes a component representing medical expenses constitutes a windfall. Arguably, that amount should be deducted from the award of damages. If that is correct, ground 5 should be upheld.

194. On the basis of the conclusions I have reached the appropriate orders would appear to be:

1. Judgment for the first respondent against the appellant (Synergy Scaffolding) in the sum of $1,356,533.39 set aside;

2. In lieu thereof, judgment for the first respondent against the appellant in the sum of $1,180,691.60;

3. Judgment for the second respondent (WCNI) against the first respondent set aside;

4. In lieu thereof, judgment for the first respondent against the second respondent in the sum of $917,686.00;

5. The order that the appellant indemnify the second respondent pursuant to s 151Z(1)(d) of the Workers Compensation Act in the sum of $246,202.54 set aside;

6. Costs reserved.

195. However, the parties necessarily advanced their arguments and submissions on hypotheses not entirely consistent with the conclusions I have reached. The conclusion above with respect to s 151Z(2)(e) could have entirely unexpected consequences. It would mean, for example, that a plaintiff who succeeded in obtaining an award of damages against a third party tortfeasor and an employer, but who enforced only the judgment against the third party tortfeasor, would be protected from the provisions of s 151Z(1), which would otherwise terminate his or her rights under the Workers Compensation Act, and require repayment of the compensation paid. I am not aware of any provisions, other than s 151A and s 151Z(1)(b) that require such repayment.

195. I am reasonably confident that this does not represent the intention of the legislature. But it appears to be the consequence of what has been legislated.

196. These consequences, if they are correct, go beyond the particular circumstances of this case. Before final orders are made, the parties should have the opportunity of making submissions, in the light of these findings of fact, with respect the consequences of those findings, and the orders that follow. This is not an invitation to any party to canvass any of the findings of fact. The invitation is limited to the consequences of the findings.

197. Since the statutory construction question is of general application the organisation having responsibility for the administration of workers compensation legislation should have, if it wishes to avail itself of it, the opportunity to seek leave to intervene for the purpose of assisting the Court with respect to the construction issues.

198. Accordingly, I propose to publish my findings of fact with respect to all issues in the appeal and the cross appeals. I would direct the parties to the proceedings to provide any further submissions on which they wish to rely on or before 29 September 2023.

199. I direct the appellant and the second respondent to notify, within 3 days of publication of these reasons, the State Insurance Regulatory Authority of these reasons and proposed orders.

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Amendments

08 September 2023 - Correct citation CSR Timber Products Pty Ltd v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49

12 September 2023 - Formatting of heading at [121]

Decision last updated: 12 September 2023