Tran v Vo

[2017] NSWCA 134

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:	Tran v Vo [2017] NSWCA 134
Hearing dates:	28 April 2017
Decision date:	15 June 2017
Before:	Macfarlan JA at [1]; Leeming JA at [2]; Payne JA at [7].
Decision:	(1) Appeal dismissed. (2) Appellants to pay respondent’s costs as agreed or assessed.
Catchwords:	WORKERS COMPENSATION – employer injured by sugarcane juicing machine while visiting work premises on rostered day off – successful claim for occupiers liability – whether employee's injury in course of employment – injury occurred during an interval – whether employer induced or encouraged the employee to spend the interval at a particular place or perform a particular activity – whether employee's injury arose out of employment – whether a causal connection established between the injury and the respondent’s employment – payments by workers compensation insurer in respect of the injury – undertaking to repay workers compensation – whether double compensation
Legislation Cited:	Civil Liability Act 2002 (NSW) Limitation Act 1969 (NSW) Workers Compensation Act 1987 (NSW) Workplace Injury Management and Workers Compensation Act 1998 (NSW)
Cases Cited:	2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479; [1987] HCA 7 Badawi v Nexon Asia Pacific Pty Limited trading as Commander Australia Pty Limited (2009) 75 NSWLR 503; [2009] NSWCA 324 Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32 Clancy v Department of Public Health [1962] NSWR 2 Comcare v PVYW (2013) 250 CLR 246; [2013] HCA 41 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48 European Bank Ltd v Robb Evans of Robb Evans & Associates (2010) 240 CLR 432; [2010] HCA 6 Franklins Self Serve Pty Ltd v Wyber (1999) 48 NSWLR 249; [1999] NSWCA 390 Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473; [1992] HCA 21 Lawrence v George Matthews (1924) Limited [1929] 1 KB 1 Pioneer Studios Pty Ltd v Hills [2012] NSWCA 324 Smith v The Australian Woollen Mills Ltd (1933) 50 CLR 504; [1933] HCA 60 Stewart v Metropolitan Water, Sewerage and Drainage Board (1932) 48 CLR 216; [1932] HCA 45 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35 Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57 Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62 Vo v Tran (No 2) [2016] NSWSC 1198 Vo v Tran (No 3) [2016] NSWSC 1199
Category:	Principal judgment
Parties:	Hung Vien Tran (First Appellant) Thuy My Le (Second Appellant) Thi Ngoc Hien Vo (Respondent)
Representation:	Counsel: N Polin SC (Appellants) H Marshall SC and D E Baran (Respondent)   Solicitors: Curwoods Lawyers (Appellants) Shine Lawyers (Respondent)
File Number(s):	2016/285466
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Civil Citation: [2016] NSWSC 1043 Date of Decision: 29 July 2016 Before: Hall J File Number(s): 2014/242686

headnote

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

The respondent was a casual employee of the appellants at a shop in Cabramatta. One afternoon (on a day the respondent was not rostered to work) she visited the shop with the intention of purchasing a drink and meeting her friend, who was working there at the time. On her arrival the friend asked the respondent to assist in cleaning up. As the respondent was cleaning the floor, she slipped on the wet tiles and came into contact with a sugarcane juicing machine. The respondent sustained serious injuries.

The respondent was paid workers compensation and later commenced proceedings for common law damages against the appellants as occupier of the premises. She succeeded at trial in obtaining common law damages against the appellants as occupiers of the premises. The primary judge accepted an undertaking to repay the workers compensation the respondent had received from that award of damages.

An issue at trial was whether respondent’s injury arose out of or was in the course of her employment, and whether her right to commence proceedings for common law damages against the appellants was thus restricted by Ch 7, Pt 6 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW).

The appeal raised the following issues:

(i) whether the respondent’s injury was suffered “in the course of” her employment or whether the respondent’s injury was one “arising out of” her employment;

(ii) whether the workers compensation payments made to the respondent gave rise to any question of double compensation.

In relation to issue (i), per Payne JA (Macfarlan and Leeming JJA agreeing)

(1) the respondent’s friend was not acting under any implied or ostensible authority, conferred by the appellants, in asking the respondent to assist in cleaning the premises: at [75]-[79]

(2) the respondent’s performance of cleaning at the premises, on a day she was not rostered to work, was not the result of any encouragement or inducement by the appellants: at [88]-[89]

Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473; [1992] HCA 21; Comcare v PVYW (2013) 250 CLR 246; [2013] HCA 41 applied.

(3) the respondent’s injury was not suffered “in the course of” her employment: at [96]

(4) the requisite causal connection between the respondent’s employment and the injury she suffered was not established: at [102]

Smith v The Australian Woollen Mills Ltd (1933) 50 CLR 504; [1933] HCA 60 at 511-512; Badawi v Nexon Asia Pacific Pty Limited trading as Commander Australia Pty Limited (2009) 75 NSWLR 503; [2009] NSWCA 324; Pioneer Studios Pty Ltd v Hills [2012] NSWCA 324 applied.

(5) it is not sufficient that “but for” the employment the respondent would not have been at the place of the accident: at [104]

Stewart v Metropolitan Water, Sewerage and Drainage Board (1932) 48 CLR 216; [1932] HCA 45 applied.

(6) the respondent’s injury was not one “arising out of” her employment: at [105]

In relation to issue (ii), per Leeming and Payne JJA (Macfarlan JA agreeing)

(7) the respondent has not been doubly compensated; she is liable to repay the workers compensation paid under a mistake and, by reason of her undertaking to the Court, has no defence to a claim by the appellants’ workers compensation insurer to be repaid: at [3]-[4] per Leeming JA; at [126] per Payne JA

Franklins Self Serve Pty Ltd v Wyber (1999) 48 NSWLR 249; [1999] NSWCA 390 considered.

Judgment

1. MACFARLAN JA: I agree with Payne JA.

2. LEEMING JA: I agree with Payne JA that this appeal should be dismissed with costs. I agree with what his Honour’s reasons, and without detracting from them, I wish to add observations on two matters.

3. First, the fact that Ms Vo has received payments from the appellants’ workers’ compensation insurer does not give rise to any question of double compensation. Those payments are required to be repaid, and indeed Ms Vo has undertaken to the Court to do so. It is not to the point to submit, as the appellants submitted, that s 151Z of the Workers Compensation Act 1987 (NSW) had no application. That does not stand in the way of the workers’ compensation insurer having a right to recover the monies paid. There can be no suggestion of a limitation defence under s 14(1)(a) of the Limitation Act 1969 (NSW), and even if there were a defence at general law, the undertaking ensures Ms Vo’s obligation to repay.

4. The appellants’ response is to assert that “The question still remains as to who may now enforce that undertaking”. I see no reason why, as a matter of its ordinary construction, the workers’ compensation insurer – which is after all explicitly identified in the undertaking – could not enforce it directly. It is to be recalled that such an undertaking is not some contract between parties or some other cause of action upon which one party can sue the other: cf European Bank Ltd v Robb Evans of Robb Evans & Associates (2010) 240 CLR 432; [2010] HCA 6 at [14] (in relation to the usual undertaking as to damages). But in any event, it is also to be recalled that although doubtless the submission was being made in accordance with submissions from the (presumably different) public liability insurer of the appellants, counsel making it was doing so on behalf of the appellants – the parties who raised this point at trial. If, as the appellants contend, there is some question over the workers’ compensation insurer enforcing the undertaking in its favour because it is not a party in this dispute, there can be no difficulty in the appellants doing so. I respectfully struggle to see how the appellants can be heard to say that there is a difficulty in their being able to enforce the undertaking.

5. Secondly, this Court was told that it had been common ground throughout the trial that the proceedings were not maintainable if, as the appellants contended, the proceedings were “for the recovery of work injury damages” and the requirements of ss 315 and 318 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) had not been complied with. Two things may be noted as to that common ground. The first is that it would appear to follow from Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32, as well as first principle, that Ms Vo’s statement of claim (i) was not a nullity, (ii) properly invoked the jurisdiction of this Court, and (iii) therefore invoked this Court’s procedural rules for dealing with the issues to which it gave rise. See also 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 at [2]-[5] and [90]-[105]. The second is that it by no means follows automatically, or at least without further analysis, that a breach of a requirement pre-trial, the consequence of which was to limit the matters capable of being put in issue in litigation, is one which may be saved up by the defendant and relied upon at the hearing, so as to disentitle an otherwise successful plaintiff from a judgment in her favour. It seems unlikely that that consequence would be a purpose readily inferred from ss 315 and 318, especially when, as a matter of substance, both parties had conducted the litigation in a way that was untrammelled by the requirements imposed by those sections.

6. That said, the foregoing, although raised by the Court during argument, was not the subject of any submissions and should be treated as no more than preliminary observations on a point that may arise for determination in some future appeal.

7. PAYNE JA: This is an appeal from a decision of the primary judge delivered on 29 July 2016 (Vo v Tran [2016] NSWSC 1043). Final orders were made on 30 August 2016 (Vo v Tran (No 2) [2016] NSWSC 1198). A stay was granted pending the outcome of this appeal (Vo v Tran(No 3) [2016] NSWSC 1199).

Background facts

8. The respondent, Ms Vo, was born in Vietnam in 1980. In 1998, she finished high school. In 2002, she completed an undergraduate degree at Ho Chi Min University of Information and Technology. In 2004, she completed an accounting course in Vietnam. In 2004 to 2006, she undertook accountancy work in Vietnam.

9. In October 2008, the respondent came to Australia on a student visa. That visa was due to expire in August 2013. The student visa allowed the respondent to work 20 hours per week in Australia.

10. The respondent was introduced to the appellants’ retail shop, “Thu Phung Desserts”, by a friend who knew one of the appellants, who were the owners of the business.

11. In July 2011, the respondent commenced a part-time casual job with Thu Phung Desserts as a shop assistant. Her supervisor was the second appellant who conducted the business in partnership with her husband, the first appellant. The respondent worked one to two hours on the days she was rostered to work, being Wednesday, Thursday and Friday of each week. At the time the respondent suffered her injuries, she attended Central College, Redfern on Monday and Tuesday of each week.

12. On Monday 13 February 2012, the respondent finished her classes at the Central College at about 12:00 pm. She travelled to Cabramatta, arriving at approximately 1:00 to 1:30 pm. She met a friend for lunch and the two spent the afternoon walking in Cabramatta.

13. The respondent went to Thu Phung Desserts at approximately 5:00 to 5:30 pm with the intention of buying a drink at the shop. On arrival her friend, Ms Hoa, who also worked as a casual employee at Thu Phung Desserts, asked her if she would help her with cleaning the floor and with the last stage of cleaning a sugarcane juicing machine.

14. At the time, a tiled area of the shop floor was wet and slippery. The respondent walked on the wet and slippery tiled surface and slipped. As she did so, she came into contact with the sugarcane juicing machine which was operating. Her left hand entered a void in the juicing machine used to insert sugarcane and other items for crushing, causing her to sustain significant injuries to her left hand.

15. The respondent was admitted to Liverpool Hospital and underwent surgical and other medical treatment. She was treated by her general practitioner, Dr Harry Pope and later her consultant psychiatrist, Dr Son Nguyen, and psychologist Dr Linda Nguy.

16. In October 2012, by reason of depression and post-traumatic stress disorder arising from her injuries, the respondent attempted to commit suicide. However, subsequently she recovered to the point whereby she continued her studies.

17. In March 2013, the respondent completed all her accounting subjects in her Diploma of Accounting course. In July 2013, she commenced a Bachelor Degree course in Accounting Studies at Central College, which was due to be completed in February 2016.

Decision of primary judge

Did the respondent’s injury arise out of or was it in the course of her employment with the appellants?

18. An important issue before the primary judge was whether Ms Vo’s injury had arisen out of or was in the course of her employment with the appellants.

19. The appellants’ position was that as the respondent’s injury had arisen out of or in the course of her employment with the appellants, then her right to commence proceedings seeking common law damages against the appellants was restricted by Pt 6 of Ch 7 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIMA). The respondent’s position was that these proceedings were not subject to the WIMA, and it was thus unnecessary for her to comply with the preconditions in that Act before commencing a claim for common law damages.

20. It was common ground before the primary judge that as Ms Vo did not comply with the preconditions for the commencement of proceedings seeking common law damages set out in the WIMA, if that Act applied, the proceedings were improperly commenced and would need to be started again.

21. The primary judge found that the respondent’s status as at the date of the accident was not as an employee of the appellants. This was because she had fixed rostered working days (Wednesday, Thursday and Friday) on which she worked limited fixed hours each day as a casual employee. The appellants did not ask or direct her to work on the Monday she was injured.

22. The primary judge found that:

“There is no basis, in my respectful opinion, for the submission that Ms Vo was working ‘overtime’. The word ‘overtime’ has a well-accepted meaning as work performed by an employee at the express or implied request of an employer additional to ordinary hours of work. In this case, the evidence established that no request had been made by or on behalf of the appellants to Ms Vo to engage in work for them on the day of her accident and indeed the evidence suggests that they were completely unaware of her presence on their premises on that day. The rostered hours of work defined her hours of attendance for the purposes of performing work as a casual employee. There is no evidence of any practice or inducement by the appellants for Ms Vo to work hours other than the casual hours for which she was paid. Indeed the conclusion from the evidence was that Ms Vo was not paid for the work she performed on the day of the accident nor did she have any expectation of being paid for having assisted her friend.”

23. The primary judge also found that the relationship of employer/employee had no bearing upon the respondent’s presence at the shop premises on the day she was injured. Her presence was not due to any obligation owed by her as an employee. Her attendance when injured was not pursuant to any employment related practice. The primary judge concluded that at the time of the accident the respondent was not working as an employee, that is to say, that she was not injured in the course of her employment with the appellants. There was no basis for the contention that the activity she was assisting with when her accident occurred arose out of her employment.

Ms Vo’s claim for common law damages – occupier’s liability

24. The primary judge then addressed the occupier’s liability claim made by the respondent. As these findings were not challenged on this appeal, it is sufficient to set out the primary judge’s findings only briefly. His Honour concluded:

1. the relationship of occupier and entrant is one of the established categories of relationships in relation to which the common law of negligence imposes a duty on the occupier to take care of the entrant: Vairy v Wyong Shire Council (2005) 223 CLR 422; [2005] HCA 62;

2. the scope of an occupier’s duty is one to take reasonable care in the circumstances for the entrant’s safety, and to protect him/her from risks of injury that can be foreseen and avoided: Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479; [1987] HCA 7;

3. Ms Vo was both honest and reliable in her account of the circumstances in which she attended the premises and the circumstances in which she was injured. The primary judge had no hesitation in accepting her evidence in relation to those matters;

4. the evidence established that the juicing machine represented a hazard that was capable of causing an accident such as that which occurred on the date of the respondent’s injury. The nature of the risk of injury and the circumstances giving rise to it were properly identified in the expert engineering report of Ms Pok, dated 13 June 2014, which was not challenged by the appellants;

5. the risk that existed on the date of the respondent’s accident was foreseeable to any persons who were in proximity to the machine, whether they were employees, delivery personnel or anybody else lawfully on the shop premises;

6. there was no evidence that the appellants provided any warning, by notices or otherwise, of the potential risk or hazard associated with the juicing machine. There was no evidence that the appellants gave instructions to Ms Hoa in respect of the machine and its safety or otherwise, or the need to take precautionary steps in her interests or in the interests of others lawfully upon the shop premises;

7. the evidence established that the only person other than the respondent on the shop premises on the day of the accident was Ms Hoa. There was no evidence suggesting the presence of either the appellants themselves or any other person supervising the shop premises. The respondent was lawfully present as a customer who had responded to Ms Hoa’s request for assistance. The appellants, of course, were vicariously liable in respect of any negligent act or omission by Ms Hoa arising from or consequent upon her request to the respondent to assist her in completing the cleaning operations on the date of the accident. The appellants were also directly liable for the inadequately guarded machine;

8. the rollers of the juicing machine presented a danger to persons who might be in proximity to the machine if there was not adequate guarding or a mechanism that would ensure that the machine could not operate;

1. the primary judge found that the risk from the combination of circumstances he described was one that was readily foreseeable and preventable by cost-effective precautions. There was a clear obligation on the appellants to people who were on the shop premises to ensure that the plant and equipment used in the course of the business and the premises were safe. This was particularly so in the case of machinery involving moving parts capable of drawing a person’s hand into the machine;

2. accordingly, the primary judge found that the risk of having a hand stuck in the juicing machine was, on the evidence, including the expert evidence, foreseeable and a risk that a reasonable person ought to have appreciated (s 5B(1)(a) of the Civil Liability Act 2002 (NSW) (CLA). The risk was not insignificant where the machine was regularly used (s 5B(1)(b), CLA) and where, in the event of injury from it, the likely consequences were serious. In the circumstances, a reasonable person in the appellants’ position would have taken available precautions against the risk of harm, such as the fitting of interlocking guarding (s 5B(1)(c), CLA);

3. the primary judge found that there was a high probability of harm from the juicing machine in the absence of such precautions (s 5B(2)(a), CLA), that the harm was likely to be of a serious nature (s 5B(2)(b), CLA) and that the burden of taking the precautions was minimal (s 5B(2)(c), CLA);

4. on causation, the primary judge found that the respondent’s physical and psychiatric injuries arose directly from the appellants’ failure to take steps to render the juicing machine safe; but for such failures, the respondent’s injuries would not have occurred: ss 5D and 5E of the CLA.

Miscellaneous issues

25. The primary judge also made findings about an estoppel claim made by the appellants, based upon the claim made for workers compensation. That claim was not pressed on appeal. His Honour also made findings about contributory negligence which are not the subject of the appeal.

Damages

26. The primary judge then dealt with the question of damages. For present purposes the critical findings addressed the topic of double compensation in relation to the payments of workers compensation.

27. Although the circumstances in which the claim was made were controversial before the primary judge, it was common ground that workers compensation payments were made to the respondent as a result of her injuries. It was common ground on the appeal that those payments were not repayable by the respondent in this case pursuant to s 151Z of the Workers Compensation Act 1987 (NSW) (WCA) or any other provision of the WCA or the WIMA.

28. It was accepted by the respondent that she could not retain the benefit of both those workers compensation payments and common law damages. The respondent proposed to the primary judge resolving that issue by giving an undertaking to the Court, as a condition of any damages award, to repay the full amount of those workers compensation payments to the workers compensation insurer.

29. The primary judge accepted that the undertaking offered by the respondent to repay the compensation she received out of any award of damages was sufficient. As the primary judge stated in the reasons for judgment delivered on 29 July 2016 at [258]:

“I note and confirm that from the damages to be awarded the plaintiff has undertaken to repay monies paid by the workers’ compensation insurer. The total amount of those monies requires confirmation given the conflicting amounts referred to in the evidence.”

30. It is this aspect of the primary judge’s damages award which was the subject of ground 5 of the appeal.

31. On 30 August 2016, orders were made entering verdict and judgment in favour of the respondent in the amount of $512,764.94: Vo v Tran(No 2). No ground of appeal addressed the calculation of damages and it is unnecessary to consider this issue.

Issues on appeal

32. The notice of appeal raised seven grounds. Only five of those grounds were addressed in the appellants’ written submissions in chief. In the written submissions in reply it was stated that “the issues for determination of the appeal” were grounds 1 - 5. The appellants expressed those grounds as follows:

1. Does the respondent’s claim for damages need to be determined with reference to the WCA or the WIMA and in particular with reference to the definition of “injury” contained therein? (grounds 1 - 4)

2. If so, did the respondent’s injury arise out of or was it in the course of her employment with the appellants? (grounds 1 - 4)

3. If not, how should the Court deal with the past payments of workers compensation made to the respondent by the appellants’ workers compensation insurer? (ground 5)

33. Grounds 1 - 4 were each addressed to particular aspects of the primary judge’s finding that the respondent’s injuries did not arise out of and was not in the course of her employment with the appellants:

“1. Hall J erred in finding that the respondent’s injury did not arise out of and/or was not in the course of her employment with the appellants.

2. Hall J erred in finding that there was no basis for the contention that the activity the respondent was performing at the time of her injury arose out of her employment with the appellants.

3. Hall J erred in failing to give adequate reasons for finding that the respondent’s injury did not arise out of or was not in the course of her employment with the appellants.

4. Hall J erred in failing to find that the respondent’s proceedings were not maintainable and were commenced in non compliance with the provisions of ss 315 and 318 of the Workplace Injury Management and Workers Compensation Act 1999.”

34. Ground 5 addressed damages. The issue was whether the primary judge had erred when awarding damages in accepting the undertaking by the respondent to repay any workers compensation she had received, rather than deducting that sum from the damages award:

“5. Hall J erred in finding that the respondent had suffered loss and in particular medical expenses and economic loss in circumstances where at the time, the appellant’s workers compensation insurer had paid her medical expenses and wages.”

35. Two grounds of appeal were not addressed in writing or orally by the appellants. The first ground asserted the making of inconsistent findings of fact about requests made to the respondent to engage in work for the appellants on the day of the injury (ground 6) and the other asserted that the primary judge erred in not finding that the respondent had been asked “through its employee” to engage in work for them on the day of the accident (ground 7).

36. It is possible that the submissions advanced about Ms Hoa’s alleged agency (addressed below) were thought by the appellants to arise under these grounds 6 and 7. I will address that allegation of agency when dealing with the substance of grounds 1 - 4.

Grounds 1- 4 of the appeal

37. I will deal with grounds 1 - 4 and the issue of Ms Hoa’s agency together as this was the way the issues were approached by the parties.

Relevant statutory provisions

38. It is important first to sketch the statutory background relating to this appeal. The first matter to notice is that, subject to various procedural and substantive restrictions, an injured worker has the right to sue an employer for common law damages. Section 151 of the WCA provides:

“151 Common law and other liability preserved

This Act does not affect any liability in respect of an injury to a worker that exists independently of this Act, except to the extent that this Act otherwise expressly provides.”

39. The commencement of proceedings seeking common law damages for “work injury damages” is circumscribed in various respects. In particular, a “pre-filing statement” setting out various matters must be filed. Such a statement cannot be served unless various conditions are satisfied. Section 315 of the WIMA states:

“315 Requirement for pre-filing statement before commencing court proceedings

(1) Before a claimant can commence court proceedings for the recovery of work injury damages, the claimant must serve on the defendant a

‘pre-filing statement’ setting out such particulars of the claim and the evidence that the claimant will rely on to establish or in support of the claim as the Rules may require.

Note : Section 314 prevents a pre-filing statement being served if there is a dispute as to whether the degree of permanent impairment is sufficient for an award of damages.

(2) The pre-filing statement cannot be served unless:

(a) the person on whom the claim is made wholly disputes liability for the claim, or

(b) the person on whom the claim is made has made an offer of settlement to the claimant pursuant to the determination of the claim as and when required by section 281 and 1 month has elapsed since the offer was made, or

(c) the person on whom the claim is made has failed to determine the claim as and when required by section 281.

Note : The determination of a claim in accordance with section 281 requires the making of a reasonable offer of settlement (if liability is wholly or partly accepted). Failure to make a reasonable offer of settlement constitutes a failure to determine the claim. Section 74 requires notice of a dispute as to liability to be given.”

40. The conduct of proceedings for “work injury damages” is also affected by s 318 of the WIMA which provides:

“318 Parties limited to pre-filing statement and defence

(1) For the purposes of court proceedings on a claim for work injury damages:

(a) the claimant is not entitled to file a statement of claim that is materially different from the proposed statement of claim that formed part of the pre-filing statement served by the claimant, except with leave of the court, and

(b) the defendant is not entitled to file a defence that is materially different from any defence served on the claimant in response to the claimant’s pre-filing statement within 42 days after service of the pre-filing statement, except with leave of the court, and

(c) the defendant is not entitled to file a defence that wholly or partly disputes liability for the claim if the defendant has failed to serve on the claimant a defence to the claim as required by this Division within 42 days after the claimant served the pre-filing statement on the defendant, and

(d) a party to the proceedings is not entitled to have any report or other evidence admitted in the proceedings on the party’s behalf if the report or other evidence was not disclosed by the party in a pre-filing statement or defence served under this Division, except with leave of the court.

(2) The court is not to grant leave under this section unless satisfied that:

(a) the material concerned was not reasonably available to the party when the pre-filing statement or defence was served, and

(b) the failure to grant leave would substantially prejudice the party’s case.

(3) The regulations may provide for exceptions to this section.”

41. An important substantive difference between claims for common law damages generally and those relating to the “injury” to a “worker” is that s 151H of the WCA provides that an injured worker is entitled to damages only if the injury results in the death of the worker or a degree of permanent impairment that is at least 15%. There are also important limitations upon the recovery of certain types of damages in the case of common law claims for work injury damages however they are unnecessary to consider for the purposes of this appeal.

42. Section 151H of the WCA provides:

“151H No damages unless permanent impairment of at least 15%

(1) No damages may be awarded unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15%.

Note : Section 322 of the 1998 Act provides that the assessment of the degree of permanent impairment is to be made in accordance with Workers Compensation Guidelines. That section also provides that impairments that result from the same injury are to be assessed together.

(2) In assessing whether the 15% threshold has been met (that is, whether the degree of permanent impairment resulting from an injury is at least 15%):

(a) impairment resulting from physical injury is to be assessed separately from impairment resulting from psychological injury, and

(b) in assessing impairment resulting from psychological injury, no regard is to be had to impairment that results from a secondary psychological injury, and

(c) the 15% threshold is not met unless the degree of permanent impairment resulting from physical injury is at least 15% or the degree of permanent impairment resulting from psychological injury is at least 15%.

Note : This does not prevent an award of damages in respect of both psychological and physical injuries together once the 15% threshold has been met for one or the other.

(3) In assessing the degree of permanent impairment that results from a physical injury, no regard is to be had to any impairment or symptoms resulting from a psychological injury.

(4) The degree of permanent impairment that results from an injury is to be assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.

(5) In this section:

‘psychological injury’ includes psychiatric injury.

‘secondary psychological injury’ means a psychological injury to the extent that it arises as a consequence of, or secondary to, a physical injury.”

43. The critical question in this case is whether the claim made by the respondent is for “work injury damages”, which is the precondition to the application of ss 315 and 318, set out above.

44. Section 250 of the WIMA provides relevantly for the purposes of a common law claim:

“250 Interpretation

(1) In this Chapter:

…

‘work injury damages’ means damages recoverable from a worker’s employer in respect of:

(a) an injury to the worker caused by the negligence or other tort of the employer, or

(b) the death of the worker resulting from or caused by an injury caused by the negligence or other tort of the employer,

whether the damages are recoverable in an action for tort or breach of contract or in any other action, but does not include motor accident damages.

…

(2) In the definition of

‘work injury damages’ in subsection (1), a reference to a worker’s employer includes a reference to:

(a) a person who is vicariously liable for the acts of the employer, and

(b) a person for whose acts the employer is vicariously liable.”

45. Section 4 of the WCA provides relevantly:

“4 Definition of ‘injury’

…

‘injury’:

(a) means personal injury arising out of or in the course of employment

(b) includes a

‘disease injury’, which means:

(i) a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease, and

(ii) the aggravation, acceleration, exacerbation or deterioration in the course of employment of any disease, but only if the employment was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease, and

(c) does not include (except in the case of a worker employed in or about a mine) a dust disease, as defined by the Workers’ Compensation (Dust Diseases) Act 1942, or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined.”

46. The definition of “injury” under s 4 of the WIMA is in relevantly identical terms:

“4 Definitions

…

‘injury’ :

(a) means a personal injury arising out of or in the course of employment, and

(b) includes:

(i) a disease contracted by a worker in the course of employment, where the employment was a contributing factor to the disease, or

(ii) the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to the aggravation, acceleration, exacerbation or deterioration, but

(c) does not include (except in the case of a worker employed in or about a mine):

(i) a dust disease, or

(ii) the aggravation, acceleration, exacerbation or deterioration of a dust disease.”

47. Accordingly, if the respondent’s injury met the description of “work injury damages”, being a personal injury “arising out of” or “in the course of” employment as defined in s 4 of the WCA and s 4 of the WIMA, it would be a claim falling within the provisions of ss 315 and 318 of the WIMA.

Appellant’s submissions    

48. It was submitted that the respondent’s injury met the description of a personal injury “arising out of” or “in the course of” her employment which was thus a claim for “work injury damages” as defined, which attracted the provisions of ss 315 and 318 of the WIMA. Although on the evidence the respondent’s injuries were significant, the appellants submitted that the respondent had not established that she suffered a degree of permanent impairment that is at least 15%. It was submitted that she may be entitled to bring a claim for work injury damages, but only after the various pre-conditions set out in the WIMA are met, including serving a pre-filing statement and attending a compulsory mediation.

49. It was submitted that the word “injury” is used in both the WIMA and the WCA and had the same defined meaning in both. The word “injury” can only mean personal injury arising out of or in the course of employment.

50. It was submitted that an activity can be within the “course of employment” even though voluntary and unremunerated if the employer derives benefit from the activity and the employer encourages employees to join such an activity: Clancy v Department of Public Health [1962] NSWR 2.

51. “In the course of employment” requires consideration of whether the respondent, at the time she suffered her injury, although not engaged in actual work, was at a place the appellants induced or encouraged her to be or was engaged in an activity the appellants induced or encouraged her to engage in: Hatzimanolis v ANI Corporation Ltd (1992) 173 CLR 473; [1992] HCA 21 at [16]; Comcare v PVYW (2013) 250 CLR 246; [2013] HCA 41 at [38].

52. It was submitted that in this case, the respondent’s injuries were suffered by reference to both an activity and a place. Of significance is the fact that the accident occurred at the respondent’s workplace. The “injury” was suffered whilst she was engaged in undertaking her normal duties at her employer’s premises. The appellants submitted that the relevant question was: “did Tran and Le either expressly or impliedly induce or encourage Vo to engage in the activity at her employer’s premises on 27 March 2012?”.

53. At the time of her injury the respondent was undertaking a task that she normally performed as part of her employment. She had been requested to undertake it by another employee. She undertook that task at her employer’s premises. She had previously undertaken a similar cleaning task on her rostered days off. The task was ultimately for her employer’s benefit.

54. It was submitted that, “on the basis of the evidence it is clear that it was something that was not only authorised by the employer but it was something her employer (at very least through another employee) had actively encouraged Vo to take part in”.

55. It was submitted that whilst the respondent’s motives and beliefs may provide some evidentiary support as to whether she was in the course of her employment, they do not form the relevant test. The employer determines the course of employment. It was submitted that the characterisation of the occasion will depend upon an objective assessment of the conduct of persons in authority with the employer. Pioneer Studios Pty Ltd v Hills [2012] NSWCA 324 per Allsop P at [45] was referred to.

56. It was submitted that “arising out of employment” means arising out of the work that the respondent had been employed to do, and what was incidental to it. This denotes a causal relationship: Lawrence v George Matthews (1924) Limited [1929] 1 KB 1 at 19; Smith v The Australian Woollen Mills Ltd (1933) 50 CLR 504; [1933] HCA 60 at 511-512. The appellants accepted that in order to support a finding that the respondent’s injuries arose out of her employment it is necessary that a causal relationship be established between the accident and her employment.

48. Had the respondent’s injuries been attributable to some feature of the premises which bore no relationship to her employment, there would have been much to be said for an argument that it did not arise out of her employment. In this case however, according to the appellants, the respondent’s injuries were directly related to the work which she and Ms Hoa performed as part of their normal duties. Her slip brought her into contact with the juicing machine that was in the process of being cleaned by her and Ms Hoa. It was this contact that caused her injury.

49. It was submitted that the nature of the respondent’s employment contributed to a material extent to her injury. It was submitted that this conclusion would be sufficient to establish that the respondent’s injuries arose out of her employment.

50. On the basis that the respondent’s injury was one in the course of her employment or was one arising from her employment, it was submitted that the claim brought by the respondent, in its current form, should have been dismissed.

Respondent’s submissions

60. Mr H Marshall SC, who appeared for the respondent with Mr Baran, submitted that the factual circumstances that were not in dispute were determinative. Those circumstances were:

1. the respondent was a casual employee, working on rostered days. The day of her accident was not one of those days. She was not required to work by the employer on the day of the accident;

2. the respondent went to the appellants’ premises, not to perform work but to buy a drink and meet her friend who was working there at that time;

3. whilst at the premises, the friend asked the respondent to help her “clear up” so that she could finish earlier and leave with the respondent;

4. the help provided involved performing some duties which she, the respondent, would ordinarily perform when she was rostered on for duty;

5. the day of the accident was not the only occasion when her friend had asked the respondent to assist. On previous occasions the respondent had been asked and had agreed;

6. there was no evidence to suggest that on the day of the accident or, for that matter, on any previous occasion, the appellants were aware of the voluntary assistance provided by the respondent to her friend. Equally, there was no evidence that the appellants endorsed this voluntary assistance by the respondent or any other employee;

7. the respondent was not paid by, nor did she request payment from the appellants for this voluntary assistance, either with respect to the day of the accident or on any previous occasion.

Consideration of grounds 1 - 4

A preliminary issue

61. There is no doubt that, subject to the effect of any restrictions or conditions in the WIMA and the WCA, the respondent was able to bring a damages claim for personal injury. The High Court in Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32 stated at [18]:

“The restoration effected by Part 5 did not involve altering the common law source of the worker’s cause of action against the employer by transforming that right into one with a statutory foundation. The right of the worker to sue the employer for damages in any Court of competent jurisdiction remains a right sourced at common law, albeit with its enjoyment regulated by Part 5.”

62. The parties approached this case on the basis that if the appellants were correct that the “injury” suffered by the respondent “arose out of” or was “in the course of her employment” with the appellants, it necessarily followed that the orders of the primary judge should be set aside and the respondent should be forced to commence again any common law damages claim against the appellants.

63. While this result was common ground, for my part I express no view about whether the assumption made by the parties was correct. In Berowra Holdings Pty Limited v Gordon, the High Court made clear that proceedings commenced without regard to s 151C of the WCA which applied and where a settlement was obtained following an offer of compromise which was made, were not invalid for want of jurisdiction. In that case s 151C was not referred to until 18 months after the proceedings had been commenced and only after the offer of compromise had been made.

64. A similar question might arise here. Whether, properly construed, the provisions relied upon by the appellants lead to any different outcome is not in issue here.

65. In the present case the proceedings were litigated to finality on all issues. Although, by reason of the non-compliance with ss 315 and 318 of the WIMA, the issue of whether the respondent had suffered greater than 15% impairment as a result of her injuries was not litigated, her injuries were extremely serious.

66. This case does not determine the question whether, in the case of proceedings which both parties have participated in the litigation to finality, and where an unsuccessful party has not sought interlocutory relief prior to the trial about the bringing the proceedings alleging a failure to comply with the preconditions in ss 315 and 318 of the WIMA, the proceedings are necessarily invalid for want of jurisdiction because of a failure by the respondent to comply with those requirements of ss 315 and 318 of the WIMA.

67. The way the parties in the present case approached the issue makes it unnecessary to say any more about it.

Agency issue

68. The starting point for a consideration of grounds 1 - 4 is that Mr Pollin SC, who appeared for the appellants, submitted at the commencement of his oral address that Ms Hoa was acting within her implied or ostensible authority, conferred by the appellants, in asking the respondent to assist in cleaning the premises. Thus, it was submitted, the Court should infer that the appellants induced or encouraged the respondent to attend the premises and assist in cleaning on the Monday she was not rostered to work.

69. It was submitted on behalf of the respondent that the question of Ms Hoa’s implied or ostensible authority to induce or encourage Ms Vo to assist in cleaning the premises was never raised at trial. That submission should be accepted.

70. In considering this issue, the starting point is that the defence was amended on day one of the trial to allege for the first time that these proceedings were not maintainable because of a failure to comply with ss 315 and 318 of the WIMA. Paragraph 7(c) of the appellants’ amended defence stated:

“The Defendants say that at all relevant times the Plaintiff was a worker or deemed worker within the meaning of the WCA and WIM and that, in the premises, these proceedings are not maintainable as the Plaintiff has not complied with the relevant sections of the WCA and WIM.”

71. The amended defence is silent about Ms Hoa’s implied or ostensible authority to act on behalf of the appellants to encourage the respondent to assist with the cleaning of the shop on the day she was injured.

72. While the pleading may have been broad enough to permit the question of Ms Hoa’s implied or ostensible authority to be litigated, there was no finding by the primary judge about Ms Hoa’s implied or ostensible authority to induce or encourage the respondent to act as she did, because the primary judge was not asked by the appellants to make such a finding.

73. The primary judge dealt with the issue of “overtime”, which is the way the case was argued below. The way the case was put was set out in writing by the appellants before the primary judge:

“[41] At the time of her injury Vo was clearly undertaking a task that she normally performed as part of her employment. The only issue is that she was doing it on her rostered day off. She had decided to assist a friend and fellow worker and was therefore was in the essence performing ‘overtime’ work at a time of her own choosing for which she may or may not have been paid.

[42] This work is generally considered to be the type of work that is ‘reasonably required or expected’ of an employee. It is the kind of work that Vo had done on several occasions. On the basis of the evidence it is clear that it was something that was authorised by the employer.”

74. There would be obvious prejudice in permitting the appellants to rely on Ms Hoa’s implied or ostensible authority for the first time on appeal. The precise content of the respondent’s and Ms Hoa’s contracts of employment were not explored in evidence as no doubt they would have been if this issue had been raised. If this argument had been raised at trial there would have been important forensic options available to the respondent including tendering some or all of the statements apparently filed by the appellants but not tendered at the trial, calling additional evidence from the respondent and other employees about the terms of her employment and seeking a Jones v Dunkel inference about the failure of the appellants to give evidence. The loss of those forensic opportunities means that the appellants should not be permitted to rely upon this argument for the first time on appeal: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35.

75. Even on the assumption there was no prejudice to the respondent in permitting the appellant to raise this point on appeal for the first time, I would not conclude that Ms Hoa’s request of the respondent was within Ms Hoa’s implied or ostensible authority.

76. There was no basis in the evidence to conclude that Ms Hoa had actual, implied or ostensible authority to act on behalf of the appellants so as to induce or encourage the respondent to be at the place of employment on the day she was injured or to engage in the activity she was engaged in at the time she was injured.

77. The evidence given by the respondent was that she worked on her rostered days, Wednesday, Thursday and Friday, and occasionally worked at the shop on call and at the direction of the second appellant. When asked to work, she would receive a telephone call from the second appellant who would ask “[c]an you come in and work?” She had visited the shop on other occasions when she was not working and had helped clean the premises before. On those occasions she would provide such help with cleaning as she was asked. She agreed that “no-one ever told you not to come and help your friend when she was working there”. No evidence was adduced from the respondent in cross-examination from which it could be inferred that the appellants were aware of Ms Vo visiting the shop when she was not working or that they had induced or encouraged her to do so.

78. The other evidence was essentially silent on this issue. The appellants chose not to give evidence. Ms Hoa did not give evidence. There was no documentary evidence touching upon this issue.

79. The appellants’ argument based on the terms of s 250(2) of the WIMA takes the matter no further. That section does not have the effect that Ms Hoa’s inducement or encouragement of the respondent to assist her in cleaning the shop became an inducement or encouragement offered by the employer within the meaning of Comcare v PVYW. To have this effect, the other employee must be the agent of the employer in making the request. For the reasons given, the appellants did not seek such a finding below and, even if permitted to raise this argument on appeal, failed to establish that Ms Hoa had the actual, implied or ostensible authority of the appellants for this purpose.

80. To the extent that this argument arises under grounds 6 and 7 of the appeal, those grounds should be dismissed.

Was the injury one that was in the course of the respondent’s employment?

81. The appellant’s case was principally focussed on the submission that the respondent’s injury was one that was in the course of her employment.

82. To determine this question it is necessary to consider the decisions in Hatzimanolis and Comcare v PVYW, where the High Court described in detail the meaning of the phrase “course of employment”.

83. In Hatzimanolis the Court (at [14]) identified as a striking feature of the cases dealing with an injury to a worker which occurred in an interval between periods of actual work, that “the employer has authorised, encouraged or permitted the employee to spend his time during that interval at a particular place or in a particular way”. The Court went on to say at [16]:

“Moreover, Oliver and the cases which follow it show that an interval or interlude in an overall period or episode of work will ordinarily be seen as being part of the course of employment if the employer, expressly or impliedly, has induced or encouraged the employee to spend the interval or interlude at a particular place or in a particular way. Indeed, the modern cases show that, absent gross misconduct on the part of the employee, an injury occurring during such an interval or interlude will invariably result in a finding that the injury occurred in the course of employment. Accordingly, it should now be accepted that an interval or interlude within an overall period or episode of work occurs within the course of employment if, expressly or impliedly, the employer has induced or encouraged the employee to spend that interval or interlude at a particular place or in a particular way. Furthermore, an injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity unless the employee was guilty of gross misconduct taking him or her outside the course of employment. In determining whether the injury occurred in the course of employment, regard must always be had to the general nature, terms and circumstances of the employment ‘and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen’.”

84. This focus on encouragement and inducement given to an employee to engage in an activity or be at a particular place, outside of the worker’s working hours, is at the heart of the present case.

85. In Comcare v PVYW, where the injury occurred away from the worker’s usual place of employment and at a time outside her usual working hours, the Court returned to this question. Critically for present purposes, the High Court in Comcare v PVYW stated at [35]-[36] and [38] (footnotes omitted):

“Because the employer's inducement or encouragement of an employee, to be present at a particular place or to engage in a particular activity, is effectively the source of the employer's liability, the circumstances of the injury must correspond with what the employer induced or encouraged the employee to do.  It is to be inferred from the factual conditions stated in Hatzimanolis that for an injury to be in the course of employment, the employee must be doing the very thing that the employer encouraged the employee to do, when the injury occurs.

Moreover, it is an unstated but obvious purpose of Hatzimanolis to create a connection between the injury, the circumstances in which it occurred and the employment itself. It achieves that connection by the fact of the employer's inducement or encouragement. Thus, where the circumstances of the injury involve the employee engaging in an activity, the question will be whether the employer induced or encouraged the employee to do so.

…

The essential enquiry is then: how was the injury brought about? In some cases, the injury will have occurred at and by reference to the place. More commonly, it will have occurred while the employee was engaged in an activity. It is only if and when one of those circumstances is present that the question arising from the Hatzimanolis principle becomes relevant. When an activity was engaged in at the time of injury, the question is: did the employer induce or encourage the employee to engage in that activity? When injury occurs at and by reference to a place, the question is: did the employer induce or encourage the employee to be there? If the answer to the relevant question is affirmative, then the injury will have occurred in the course of employment.”

86. The plurality, French CJ, Hayne, Crennan and Kiefel JJ, stated at [50] and [52] (footnotes omitted):

“It has earlier been observed that the Hatzimanolis principle, when it is appropriate to be applied, effects a connection between the circumstances in which the employee sustains injury and the employment. The principle may create a temporal element, in the notion of an interval, but it also creates a factual association or connection with the employee's employment. It does so by the fact of the employer's inducement or encouragement.

…

The relevant connection or association created by the Hatzimanolis principle is between that activity and the employer's encouragement to engage in it. Likewise, when an injury is sustained by an employee at a place and by reference to that place, in the sense earlier discussed, the connection between that circumstance and the employment is provided by the fact that the employer induced or encouraged the employee to be present at that place.”

87. An injury occurring during an interval between normal working hours, such as that suffered by the respondent, may be regarded as one arising in the course of her employment in circumstances where the employer has induced or encouraged the employee to spend the interval at a particular place or perform a particular activity. This is because, as the High Court explains in Comcare v PVYW, the effective source of the employer’s liability is the inducement or encouragement of the employee.

88. In my view, at the time of the accident the respondent was not acting in the course of her employment. The evidence was that when asked to work, the respondent would receive a telephone call from the second appellant, not Ms Hoa, and would be asked “[c]an you come in and work?”.

89. The activity engaged in at the time of injury, assisting her friend with cleaning, was not induced or encouraged by the appellants. When analysing the injury by reference to a place, the shop premises, the appellants did not induce or encourage the respondent to be there.

90. At the time of the injury the respondent had attended the shop premises to purchase a soft drink. This was not as a result of any encouragement or inducement by the appellants. As earlier noted, the argument advanced by the appellants on the appeal for the first time, that Ms Hoa, as agent, encouraged or induced the respondent to be at the place or engage in the activity leading to her injury, should be rejected.

91. In this case, there was virtually no evidence about the terms and conditions of the respondent’s employment. There was no evidence of written terms. The appellants were not called to give evidence about any oral terms.

92. The respondent’s evidence, which I have summarised at [77] above, was that she was required to work on her rostered days, Wednesday, Thursday and Friday and was otherwise “on call’, in that the second appellant would telephone her and ask if she was free to work in the shop on that day.

93. On the evidence before the primary judge, the appellants did not know the respondent was present on that day. There was no evidence that the appellants were ever aware that the respondent had attended the shop premises on days when she was not working. The appellants had not asked her to perform work on that day by the system established, namely a telephone call to the respondent from the second appellant. The fact that the respondent voluntarily provided some assistance to her friend Ms Hoa on days when she visited the shop does not mean that in doing so she was acting on any inducement or encouragement by the appellants.

94. The submission that the respondent was “performing the same duties” at the time of her injury does not lead to any different conclusion. The performance of the activity, cleaning, that preceded her injury was not the result of any inducement or encouragement by the appellants.

95. As Comcare v PVYW makes clear, in circumstances where the injury to a worker occurs at a time outside her usual working hours, a finding that the injury occurred in the “course of her employment” requires identification of an inducement or encouragement by the employer of the performance of the activity which led to the injury, or inducement or encouragement by the employer to be at the place where the injury occurred. Evidence of any such inducement or encouragement by the employer is absent in this case.

87. The primary judge was correct to conclude that the injury did not occur in the course of the respondent’s employment.

Was the injury one arising out of the respondent’s employment?

97. In Smith v Australian Woollen Mills Ltd Starke J, at 517-518, addressed the meaning of the phrase “arising out of” in the then existing workers compensation legislation as follows:

“1. The expression ‘arising out of’ imports some kind of causal relation with the employment, but it does not necessitate direct or physical causation. Was it part of the injured person's employment to hazard, to suffer, or to do that which caused his injury? It must arise out of the work which the worker is employed to do—out of his service (Stewart v. Metropolitan Water, Sewerage and Drainage Board, and the cases there cited).

2. An injury does not cease to arise out of the employment because its remote cause is the ideopathic condition of the injured man. The ideopathic condition must be dissociated from the other facts (Wicks v. Dowell & Co).

3. An injury which arises directly out of circumstances encountered because to encounter them falls within the scope of employment is an injury arising out of the employment. If the worker is injured by contact physically with some part of the place where he works, then, apart from questions of his own misconduct, he at once associates the injury with his employment (Upton v. Great Central Railway Co; Brooker v. Thomas Borthwick & Sons (Aus.) Ltd.).” (Citations omitted)

98. Starke J’s reference to Stewart v Metropolitan Water, Sewerage and Drainage Board (1932) 48 CLR 216; [1932] HCA 45 was a reference to his own judgment in that case. In Stewart, his Honour explained, by reference to six English decisions, that to show that an injury was one “arising out of” employment it was not sufficient merely to show that but for the employment, the worker would not have been at the scene of the accident.

99. In Badawi v Nexon Asia Pacific Pty Limited trading as Commander Australia Pty Limited (2009) 75 NSWLR 503; [2009] NSWCA 324 Allsop P, Beazley and McColl JJA at [72]-[79] summarised the relevant principles in determining if an injury is one “arising out of … employment ” thus:

“Section 4 defines injury as ‘personal injury arising out of or in the course of employment’. The use of the disjunctive is significant, in that two quite different tests are involved, one or other of which is sufficient to be satisfied for the purposes of s 9. It is established that the second limb of the definition “in the course of employment” involves a temporal element and does not of itself contain a causative element…

The meaning of ‘arising out of … employment’ is settled. In Nunan v Cockatoo Island Docks & Engineering Co Ltd (1941) 41 SR (NSW) 119 in what is sometimes still referred to as the authoritative decision on the phrase the Court (Jordan CJ and Roper J, Nicholas CJ in Eq agreeing) adopted a common sense approach to the application of the phrase, noting that it involved a causative element. In doing so, their Honours(at 123), endorsed the comments of Lord Wright in Dover Navigation Co v Craig [1940] AC 190 at 199 that the Workmen’s Compensation Act 1925 (UK) was a remedial Act intended to give rights to workers that were more extensive than common law rights and which used non-technical language in doing so. As Lord Wright said (at 199):

‘…Nothing could be simpler than the words ‘arising out of and in the course of employment.’ It is clear that there are two conditions to be fulfilled. What arises ‘in the course’ of the employment is to be distinguished from what arises ‘out of the employment’. The former words relate to time conditioned by reference to the man’s service, the latter to causality. Not every accident which occurs to a man during the time when he is on his employment, that is directly or indirectly engaged on what he is employed to do, gives a claim to compensation unless it also arises out of the employment. Hence the section imports a distinction which it does not define. The language is simple and unqualified.’

Their Honours also endorsed the comments of Lord Maugham at 193 in the same case in considering whether the death in that case arose out of applicant’s employment: ‘The authorities show, if authorities are needed on that point, that the words connote a certain degree of causal relation between the accident and the employment. It is impossible to define in positive terms the degree of that causal connection’.

Their Honours concluded (at 124) that a worker would have established that an injury arose out of employment: ‘if it appears … that the fact of his being employed in the particular job caused, or to some material extent contributed to, the injury”.

…

The necessity for there to be a causal element between the employment and the injury when determining whether a worker sustained injury arising out of employment, has been consistently confirmed by the High Court and this Court: see Tarry v Warringah Shire Council [1974] 48 WCR (NSW) 1 where Hutley JA endorsed the statements of principle in South Maitland Railways Pty Limited v James(1943) 67 CLR 496; Weston v Great Boulder Gold MinesLimited(1964) 112 CLR 30 and Kavanagh v Commonwealth (1960) 103 CLR 547. This is so regardless of whether s 4 (or its relevant equivalent) under consideration was in its present disjunctive form, or was in its previous form, where both ‘arising out of’, and ‘in the course of’ employment had to be established….”

100. In Pioneer Studios Pty Ltd v Hills [2012] NSWCA 324 Allsop P returned to this topic in a case where the injured worker had suffered the injury at a party held at the workplace after work had finished for the day. His Honour said at [27]-[29]:

“Secondly, the meaning of ‘employment’ was discussed in Badawi at 518-519 [61]-[67]. In that discussion at 519 [67], what Mason P said in Mercer at 745 [13] was approved:

‘It is common ground between the parties and well established by earlier authority that, when s 9A(1) speaks of ‘the employment concerned’ being a substantial contributing factor to the injury, the legislation is not referring to the fact of being employed, but to what the worker in fact does in the employment: see Federal Broom Co Pty Ltd v Semlitch (1964) 110 CLR 626 at 632-3, 641. In other words, one starts with the actual and not the hypothetical, with what (if anything) the worker was in fact doing in his or her employment that caused or contributed to the ‘injury’ as defined in s 4. See also Stanton-Cook [v TAFE Commission (NSW) [1999] NSWCC 5; 17 NSWCCR 632].’

The discussion of ‘arising out of ... employment’ in Badawi at 520-522 [72]-[79] did not qualify that. Indeed, the discussion of the judgment of Starke J in Smith v Australian Woollen Mills Ltd [1933] HCA 60; 50 CLR 504 reinforces it: see Badawi at 521-522 [71]-[78]; and see also Roncevich v Repatriation Commission [2005] HCA 40; 222 CLR 115 at 125 [22]-[25].

In circumstances where it is not expressly concluded that the injury arose in the course of employment and thus where, on this hypothesis, the injured worker was not at work, it is not apparent how the Deputy President could draw any conclusion about the injury arising out of employment or employment being a substantial contributing factor without considering the kinds of matters to which Mason P referred in Mercer at 745 [13]. This is not to confine ‘arising out of’ to what is required of an employee but rather what she in fact does in the employment. This would require focus upon what was the employment, not what Ms Hills thought was the employment.”

101. Returning to the present case, the respondent’s submission that the unchallenged factual findings lead to the conclusion that the injury suffered by the respondent was not one which “arose out of her employment” should be accepted.

102. In particular, the following findings strongly indicate that the requisite causal connection was not here present:

1. the respondent was a casual employee, working on rostered days. The day of her accident was not one of those days. If required to work she would be telephoned by the second appellant. She was not required to work by the appellants on the day of the accident;

2. the respondent went to the appellants’ premises, not to perform work but to buy a drink and meet her friend who was working there at that time;

3. at the time of the accident the respondent was not performing a task her employer had induced or encouraged her to perform.

103. On the factual findings of the primary judge, no conclusion that the injury was one arising out of employment can be drawn. The critical enquiry was what the respondent actually did in her employment. Nothing about what the respondent did as part of her employment caused the injury she suffered on this occasion.

104. Stewart makes clear that it is not sufficient, as the appellant submitted orally, that the injury was one “arising out of” employment because “but for” the employment, the worker would not have been at the scene of the accident.

105. The appellants fail in the challenge to the primary judge’s finding that the respondent’s injury was not one arising out of her employment.

Sufficiency of the primary judge’s reasons

106. Although a separate ground of appeal was addressed to an alleged failure by the primary judge to give adequate reasons for his conclusions, the appellants did not address any written or oral submissions to the topic.

107. The complaint should be rejected. The primary judge addressed all of the issues and authorities presented for determination by the parties and gave adequate reasons for his findings.

Conclusion on grounds 1 - 4

108. Grounds 1 - 4 of the appeal should be dismissed.

Ground 5

Appellant’s submissions

109. The appellants submitted that the primary judge erred in the manner in which he assessed the respondent’s damages.

110. Prior to these proceedings, the respondent made a claim against the appellants for workers compensation. That claim was accepted and the appellants’ workers compensation insurer, Employers Mutual Insurance, paid the respondent compensation. The evidence, which was not challenged by the appellants on this appeal, was that $183,811.36 was paid to the respondent as workers compensation.

111. The basis of the respondent’s claim for common law damages was inconsistent with an entitlement to be paid workers compensation. As noted above, an estoppel claim made by the appellants was rejected by the primary judge and there is no appeal from that decision.

112. The primary judge awarded the respondent a full indemnity for the losses she had suffered by reason of the appellants’ tortious conduct. His Honour also accepted an undertaking from the respondent to repay to Employers Mutual Insurance from the damages award the workers compensation payments she had received. The appellants submitted that it was unclear who had standing to enforce that undertaking.

113. It was common ground that neither s 151Z nor any other provision WCA had any application to this aspect of the matter and that there was no statutory requirement for the respondent to repay any compensation payments. The appellants submitted that there was no applicable “legislative signpost” to assist the Court in determining this issue.

114. It was submitted that the decision of this Court in Franklins Self Serve Pty Ltd v Wyber (1999) 48 NSWLR 249; [1999] NSWCA 390 at [109]-[110] had the effect the amount of the workers compensation payments should be deducted from the award of damages in a case such as the present.

115. Therefore, it was submitted, that in assessing the respondent’s damages the primary judge should have “deducted a sum representing the value of benefits received and receivable as compensation” as out of pocket expenses and past economic loss.

Consideration of ground 5

116. This ground raises a question about the proper operation of the relevant principles preventing double compensation in a factual situation which does not appear to have been addressed before. The content of the “rule against double compensation” was not controversial on the appeal. It was accepted by the respondent that she could not retain the benefit of both workers compensation payments she had received and common law damages for the full amount of her loss. The primary judge resolved the issue by accepting an undertaking to the Court in the following terms:

“In the event of judgment in her favour leading to an award of damages, she would deduct and pay to the defendant’s workers compensation insurer the amount of $183,811.36 being the amount set out in para [4] of the written submissions for the plaintiff dated 15 August 2016.”

117. There was no challenge on this appeal to the identification of the amount of $183,811.36 as being the sum paid as workers compensation or to the form of the undertaking.

118. The parties approached this problem as being one analogous to earlier cases where s 151Z of the WCA did not apply despite a payment of workers compensation having been made prior to a subsequent payment of common law damages. In Wyber, Mason P (with whom Sheller JA and Cole AJA agreed) pointed out that in such a case simply to state the legal policy against double compensation masked considerable practical difficulties. His Honour said:

“49    It is one thing to discern that legal policy sets its face against double compensation. It is another to give effect to this policy in a fair and rational way in a legal system that (for good reasons) virtually guarantees that the separate interests of victims, employers, tortfeasors and insurers are not individually represented at each stage of litigation flowing from a work injury. Options include:

• awarding “full” compensation or damages, leaving the plaintiff to reimburse the employer or the employer’s insurer; 

• deducting the value of compensation from damages awarded; 

• awarding judgment or compensation against two or more defendants, and treating moneys received by the plaintiff from one of them as discharging the obligation of the other(s). 

The end result may be the same for the plaintiff, but the procedural and substantive consequences may differ for the employers, tortfeasors and insurers ….” 

119. It is true, as the appellants submitted, that in Wyber workers compensation payments received by the worker from one employer, George Weston, prior to the award of common law damages and which were outside the relevant statutory regime for recovery of workers compensation payments, were deducted from the relevant common law damages award.

120. It is also correct, as the appellants submitted that Mason P said at [56], in analysing a number of cases that the response of this Court in a number of decisions to questions of double recovery in circumstances where a successful worker in a common law damages claim had previously received an award of workers compensation was:

“.. to apply the common law principle in the gap; and, in computing the plaintiff’s damages, to deduct a sum representing the value of benefits received and receivable as compensation”.

121. This conclusion, however appears to follow from the feature noted by Mason P, at [49], common to all of the cases cited, that “‘the end result may be the same for the plaintiff, but the procedural and substantive consequences may differ for the employers, tortfeasors and insurers”. (italics added). Mason P was not suggesting in Wyber that there was any fixed or immutable rule to be applied in addressing the question of preventing double compensation in an employment context.

122. In the present case, unlike in Wyber and the cases considered by Mason P in that decision, on the conclusion of this Court about the “injury” suffered, the respondent was not entitled to be paid workers compensation at all.

123. The respondent has been paid workers compensation, but on the mistaken basis that she was entitled to it. The appellants’ workers compensation insurer is entitled at common law to be repaid because of the mistake: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48. The workers compensation insurer is also entitled to rescission in equity, because of the respondent’s (innocent) misrepresentation that she was a worker who had suffered an “injury”: Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57 at [25].

124. Not only is the respondent required to repay the amounts of workers compensation she received, but her undertaking to the court means that she could not rely on any defence such as change of position: David Securities at 384-386.

125. In my view, on the facts of this case, the primary judge did not err in accepting the undertaking given to the Court by the respondent to repay the workers compensation insurer the amount of $183,811.36.

126. The suggestion that it is uncertain whether the undertaking given to the Court is enforceable is without merit. Breach of an undertaking to the Court may have serious consequences for the party who has given the undertaking. There is no reason to think that the undertaking will not be complied with by the respondent. The appellants are the parties responsible for paying common law damages and are also the parties who have made the payments of workers compensation. Presumably those payments, in each capacity, have been made or will be made by their insurers. The appellants are no doubt be in a position to inform each insurer of the undertaking which has been given to the Court. Any failure to comply with the undertaking will no doubt be brought to the attention of the Court by appropriate process. The suggested impracticability of the respondent’s undertaking given to the Court does not arise.

127. The respondent has not been doubly compensated by the earlier payment of workers compensation. She is now liable to repay those workers compensation payments and, by reason of her undertaking to the Court, has no defence to a claim by the workers compensation insurer to be repaid.

128. Ground 5 should be dismissed.

Conclusion and orders

129. For the forgoing reasons the appeal should be dismissed. I propose the following orders:

1. Appeal dismissed.

2. Appellants to pay respondent’s costs as agreed or assessed.

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Decision last updated: 15 June 2017