Victorian Workcover Authority & FAI Workers' Compensation (Vic) Pty Ltd v Esso Australia Ltd
[1998] VSC 150
•23 November 1998
SUPREME COURT OF VICTORIA
CAUSES JURISDICTION
Not Restricted
No. 8279 of 1995
THE VICTORIAN WORKCOVER AUTHORITY First Plaintiff and F.A.I. WORKERS’ COMPENSATION (VIC) PTY LTD Second Plaintiff v ESSO AUSTRALIA LTD Defendant
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JUDGE: Cummins, J. WHERE HELD: Melbourne DATES OF HEARING: 29 October, 2 and 4 November 1998 DATE OF JUDGMENT: 23 November 1998 MEDIA NEUTRAL CITATION: [1998] VSC 150
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Accident compensation - tort - negligence - work safety - occupiers’ liability - employers’ liability - indemnity - circuity - s.138 Accident Compensation Act 1985
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APPEARANCES: Counsel Solicitors For the Plaintiffs Mr R. Stanley QC Wisewoulds Mr M. Wheelahan For the Defendant Mr B. Collis QC Middletons Moore & Bevins Mr G. Lewis
HIS HONOUR:
THE PROCEEDING
This is a recovery action pursuant to the provisions of s. 138 Accident Compensation Act 1985. That section provides:
“138. Indemnity by third party
(1) Where an injury or a death for which compensation has been paid, or is or may be payable, by the Authority, an authorised insurer, a self-insurer or an employer was caused under circumstances creating a legal liability in a third party to pay damages or that would, but for section 134A, create such a liability in respect of the injury or death, the Authority, authorised insurer, self-insurer or employer is entitled to be indemnified by the third party in accordance with this section. (2) In determining for the purposes of sub-section (1) whether an injury or death was caused under circumstances creating a legal liability in a third party to pay damages in respect of the injury or death, Division 9 of Part IV must not be taken into account. (3) The amount which a third party is required to pay as
indemnity under sub-section (1) is the lesser of -(a) the amount of compensation paid or payable under this Act in respect of the injury or death; and
(b) the amount calculated in accordance with the formula -
[A - (B+C)] x X/100
where -
X
is the extent, expressed as a percentage, whereby the third party’s act, default or negligence caused or contributed to the injury or death;
A
is the amount of damages (disregarding the extent, if any, whereby any other person’s act, default or negligence caused or contributed to the injury or death) for pecuniary loss and non pecuniary loss which the third party is or would have been liable to pay in respect of the injury or death were it not for the provisions of this Act and the Transport Accident Act 1986;
B
is the amount recovered or recoverable by the Authority, the authorised insurer, the self-insurer or the employer under section 137 from the Transport Accident Commission (otherwise than under a settlement);
C
is the amount paid by the third party in respect of the injury or death to the worker or the dependants of the worker under any settlement of, or judgment in, an action by the worker or dependants of the worker against the third party.
(4)
Judgment against or settlement by a third party in an action by a worker, or dependants of a worker, in respect of an injury or death referred to in sub-section (1) does not eliminate or diminish the right of indemnity given by this section, except to the extent provided in this section.”
It is alleged that on 10 January 1989 a worker, Mr Kazimer Wsol (“the worker”), was injured on the Kingfish West Oil Platform in Bass Strait. At that time and place he was employed by AFCO Industrial Services Group Pty Ltd (now in liquidation). The oil rig was owned and operated by the defendant. The worker was employed as a camp attendant on the platform. By reason of the platform being offshore, the worker in the course of his employment slept there seven nights a week in a bunkroom, he working seven days on and seven days off. His bunk was an upper bunk. On 10 January 1989 he alighted from his bunk and fell to the floor (“the accident”). It is alleged he thereby suffered spinal injuries and ultimately became totally incapacitated for work.
The defendant was the owner and operator of the platform including the bunkroom. It is alleged the accident on 10 January 1996 was a consequence of the negligence of the defendant in not providing a safe place of work (including overnight provision). The defendant denies that it was negligent and says that if there was any negligence the worker was negligent and so too was his employer AFCO. The defendant also denies that the worker was injured and that the consequences now asserted have not in truth flowed from the accident.
It is alleged that the worker is totally incapacitated from work as a consequence of the accident. A substantial sum (of the order of $115,000) has been paid by the first plaintiff, The Victorian WorkCover Authority, as compensation therefor for the period to 30 June 1993. Likewise a substantial sum (of the order of $220,000) has been paid by the second plaintiff, F.A.I. Workers’ Compensation (Vic) Pty Ltd, as compensation therefor for the period 1 July 1993 to 22 October 1998 and is continuing and will continue into the future. The second plaintiff was the authorised insurer of AFCO and liable to pay compensation to the worker pursuant to the provisions of the Accident Compensation Act 1985.
The plaintiffs, pursuant to s. 138 Accident Compensation Act 1985, seek an indemnity from the defendant in the amounts paid and to be paid to the worker as a consequence of the accident and a declaration that the defendant shall indemnify the plaintiffs to the extent fixed by the Court in respect of future payments. The plaintiffs also claim interest. Thus, by reason of the provisions of s. 138, the first matters to be determined are the traditional common law issues of liability and quantum arising from the accident.
THE COMMON LAW CLAIM: LIABILITY
Mr Kazimer Wsol, of Longford, unemployed, is now 50 years of age, having been born on 22 August 1948. At the time of the accident he was 40 years of age. He had commenced working on oil rigs of the defendant in 1980, previously having been a motor mechanic in Sale. Kingfish West was one of the first rigs he worked on. It was a fixed (non-floating) rig. The work was seven days on and seven days off, with twelve hour shifts, either day or night shift. Sleeping on the platform was always part of the system of work. The worker had been working on the Kingfish West Platform for some two years immediately preceding the accident. The arrangement in the bunkroom (top floor, room 6) was that there were four bunks, a set of two vertically arranged on each side of the bunkroom. On the rest period for each (day and night) shift, the cook would sleep in the lower bunk and the other occupant in the top bunk diagonally from the cook. Only two persons slept in the bunkroom at any one time. In order to sleep the room was kept dark. There was a small window but it was permanently covered with a black plastic bag and painted out. There was a small fluorescent light under a small radio and which shed light directly above each upper bedhead but not to the floor below. There was a torch placed in a fixture on the wall between the head of the two top bunks. A curtain could be pulled across the side of the bunks, running along a rail. There was no grab rail to assist entering or leaving the top bunk, although grab rails have now been installed in the bunkrooms beside each top bunk. There was no side rail along the bunk. The method of ingress to and egress from the upper bunk was by a normal chair placed backwards against a small table. In the bunkroom there was little space. The worker and other top bunk users would enter the bunk by stepping onto the chair, then onto the table, and then climbing into bed. Leaving the bunk involved the reverse operation. The floor of the bunkroom was timber covered by carpet. It was hard. There is now an improved method of access to the top bunks, stated in the defendant’s newsletter “The Tiger” of 1 December 1997 to be “a new facility for accessing top bunks. Following calls for improved access getting in and out of top bunks offshore...”. The present method of access to the top bunk involves a stool and table. The stool is now square and is clearly marked “Top bunk step: Do not remove” and is not merely a normal chair. The table is now marked “keep desk clear when top bunk is in use” and has a non-slip strip.
The plaintiffs called in evidence the worker, an ergonomist, a psychologist and three medical witnesses. The defendant called no witnesses.
The worker gave evidence that he had been airlifted to the rig on the afternoon of Monday, 9 January 1989, had performed the night shift (7 pm to 7 am) that night, and on Tuesday, 10 January shortly after 7 am went to bed in the top bunk. About three hours later he awoke, needing to go to the toilet, and commenced alighting from the top bunk. He fell heavily from about five feet to the hard floor below, perhaps hitting the table first, and landing on his back. He does not remember the precise actions he took after awakening. The room as usual was dark. He did not turn on the small fluorescent tube above his bedhead (which would not have illuminated the table, chair and floor below) nor did he use the torch on the wall nearby. It was no-one’s practice to use the torch for routine functions. The torch was reserved for emergencies (more on this below). After laying on his back and collecting his thoughts, the worker got up and went to the toilet. He was pretty sore. Later that day he saw that his leg was lacerated and his back and head were sore. The radio operator checked him and told him that there was no helicopter available to take him to shore until the next morning. He worked the night shift Tuesday night and was airlifted off the next morning. He went to his local doctor, Dr Bergin, who told him he had bruising and would be right in a couple of days. After two or three days he returned to work. He had headaches and a backache which became worse. He got by at work by lying down and having other workers covering for him. Ultimately, the liaison officer with AFCO on shore told him “Unless you’re 100% fit, you’re finished”. The worker kept trying. In the end the pain beat him and his employment was terminated in September 1989. He has not worked since.
The defendant by amended defence says the worker negligently contributed to the accident, essentially by failing to take care and by failing to turn on the small light and failing to use the torch. That defence clearly fails. The purpose of the bunk was to sleep in. When the worker awoke he had first been asleep. The small fluorescent light would not have helped. And the torch, by reason of the policy of the defendant as deposed by the worker, was there for emergencies such as loss of power on the rig or fire, not for routine purposes. True it is that the worker was familiar with the darkened room and its appurtenances and had slept there for two years. But he had just awoken from sleep. The crude and dangerous place of rest - cramped, unlit and hazardous - involving the use of an ordinary chair and table instead of a specialist stool as now is provided, and especially the absence of any grab rail as now is provided, all clearly establish that the place of rest was dangerous and unsafe. The worker did not negligently contribute to the accident.
The next question is the responsibility for the accident of the defendant or AFCO or both. The peculiar situation of the place of work being offshore and accessible only by helicopter is significant. Likewise, that the method of work was seven days on and seven days off, with twelve hour shifts. The rig was owned and operated by the defendant. It controlled the bunkroom offshore. Plainly it is primarily liable. However, the worker was employed by AFCO. It sent him to the rig to work. It has a responsibility not to require employees to work in unsafe places and in unsafe conditions. In the agreement between AFCO and the defendant dated 21 January 1988, paragraph 5.2 of appendix B (page 31) it was provided “Esso will provide accommodation for contractors’ personnel of the same standard as that provided to Esso’s workforce of similar status”. By paragraph 1.2.2 was provided that services not included to be provided by AFCO were (amongst others) “general maintenance to Esso owned plant and equipment on platform”. By the agreement AFCO indemnified the defendant against all proceedings and damages arising out of the performance of the employment in respect of injury (clause 13.1) but not that resulting from the sole negligence of Esso (clause 13.2). AFCO had access to the rigs. The liaison officer, Mr Preycott, and other officers of AFCO came out to the rig from time to time and indeed would sometimes sleep in the bunkroom (on the more convenient lower bunk as befitted their status, like the cooks). Simple remedial processes such as the installation of grab rails were open to be proposed by AFCO to the defendant and would not have involved much expense. By paragraph 3.3 of Appendix B to the Agreement of 21 January 1988 is provided: “ The personnel and industrial relations manager shall make regular visits to each platform (at least each platform once per month) including overnight stays to observe work conditions and to provide an avenue of communication for industrial relations topics between employees and contractor”. I have regard to relevant authority on the interface of responsibility of employer and of occupier: generally, Pennington v Norris (1956) 96 CLR 10 at 16 per curiam; Australian Safeway Stores Pty Ltd v Zaluzna (1987) 162 CLR 479 especially at 488, per Mason, Wilson, Deane and Dawson JJ.; Kondis v State Transport Authority (1984) 154 CLR 672 especially at 680-681 per Mason J. (as then he was); Spargo v Haden Engineering Pty Ltd & Anor (1993) 60 SASR 39 per Legoe J. at 43; and Bourke v Hassett & Ors (Court of Appeal, Victoria, 31 October 1998, especially paras. 34-48 per Winneke P. and in whose judgment Brooking and Buchanan JJ.A. agreed). Applying the principles there stated, I find the defendant 80% liable and AFCO 20% liable for the accident.
QUANTUM
Since the accident the plaintiff’s odyssey has been a steadily deteriorating one. He attended doctor after doctor but slowly got worse. He says he now cannot work. He has not worked since September 1989.
A number of doctors were called by the plaintiff: Dr J.M. Bergin, general practitioner, of Sale, who has been the worker’s ordinary doctor since 1983; Mr B.M. Barrett, orthopaedic surgeon, of the Cabrini Medical Centre, Malvern who performed a lumber discogram on the worker on 9 August 1995; and Mr D.S.B. Brownbill, neurosurgeon, of the Epworth Medical Centre, Richmond who examined the worker on a number of occasions. Also a consulting psychologist, Mr R.H. Anderson of Alphington was called by the plaintiffs. The evidence of the doctors, and the numerous investigations conducted by them or at their behest, is eloquent of a sad decline in the work capacity of a once motivated, competent and hardworking employee. In evidence Dr Bergin traced the history of the disability sustained by the worker from its inauspicious beginnings in consultation on 11 January 1989 and review on 13 January, 9 February (locum who arranged X-ray of lower back and neck), 19 February and many occasions since. Treatment of the worker bifurcated: the physical symptoms were taken up by surgeons and the psychological symptoms by psychiatrists and psychologists. Dr Bergin thus referred the worker to Dr B. Barrett and he continued to see Dr Lis, psychiatrist. Dr Bergin gave evidence that the worker’s physical symptoms initially were mainly neck related but included the lower back. By report dated 21 February 1992 Dr Bergin stated the worker remained incapacitated to perform his previous work duties. By report dated 14 March 1996 Dr Bergin reviewed the data upon the worker’s lower lumbar back pain, lower cervical neck pain, depression and current status. Sale Hospital plain lumbar spinal X-rays on 9 February 1989 and 10 March 1994 and Sale Hospital C.T. scan of 9 March 1994 did not reveal any significant abnormality. Ultimately, a lumbar discogram performed by Mr Barrett at Cabrini Hospital on 9 August 1995 revealed that all four lower lumbar discs were seriously disrupted. Mr Barrett by reports dated 20 February 1996, 17 June 1996 and 27 August 1998 and confirmed in evidence stated that:
“(b)ecause of the extensive nature of this man’s lower lumbar disc injuries, I consider he is not fit for even light and limited work...” (Report, 17 June 1996).
The lumbar discogram of 9 August 1995 conclusively revealed why the worker is in such pain and has such incapacity. Mr D.S.B. Brownbill, a distinguished neurosurgeon, examined the worker on a number of occasions (12 June 1990, 11 August 1994, 15 February 1996 and 15 October 1998). He noted (paragraph 3, page 4 of his report of 16 February 1996) that the lumbar discogram of 9 August 1995 was “an investigation with different sensitivities from earlier investigations”. Likewise Dr Barrett in evidence. Mr Brownbill found no neurological abnormality. The psychologist, Mr R.H. Anderson in evidence and by reports dated 6 March 1996 and 9 April 1997 reviewed the psychological state of the worker, having assessed him on 6 March 1996 and 26 March 1997. He concluded that the worker has developed a severe depressive illness and “is obviously physically unfit for most gainful occupations which are obtainable at his age and with his educational background and is psychologically unfit for any form of work”. The worker has disabling headaches three or four times a week and is on morphine for relief. Simple but important former pleasures such as fishing and jogging no longer are available to him.
Mr Collis of Her Majesty’s counsel valiantly sought to defeat or at least delimit the body of evidence called by the plaintiffs on the sequalae of the accident. First, he relied upon a previous accident on 28 June 1987 when the worker injured his back lifting a bag of potatoes on the rig. He underwent a myelogram on 2 September 1987. But the myelogram showed no damage: report of Mr R. Parkington dated 7 September 1987. And the worker resumed work on 19 October 1987 and successfully worked in heavy work thereafter until 10 January 1989. The worst he had was a twitch and some discomfort in his back. That defence fails. Next Mr Collis relied upon the pre-existing psychiatric problems that the worker had. Certainly he did. Dr Bergin gave evidence that the worker had suffered depressive illness prior to the accident. At the time of the breakdown of the worker’s first marriage in 1985 he consulted Dr Jewell, psychiatrist (February 1985), primarily for marriage counselling. By November 1987, the Morwell psychiatrist, Dr Lis, diagnosed the worker to be suffering from a depressive illness which had worsened over the previous 16 months. The worker was on antidepressant medication. Significantly Dr Lis found the worker to be a “perfectionist and workaholic”. But those problems did not prevent Mr Wsol being a hard-working, competent and motivated worker until the accident. Indeed it is the very type of personality the worker had - motivated and driven by attention to detail - which most would benefit the defendant on an oil rig in Bass Strait. That defence fails. Finally, Mr Collis submitted that the worker was not a witness of truth, in part because he gave evidence that prior to the accident he did not have any psychiatric problems and had said likewise to Mr Anderson. I had the benefit of observing the worker in evidence over some time. I was most impressed with him as a decent and honest man. Sadly he has been defeated by pain and by his incapacity to work and to provide for his wife and child. He intended to work until he was 65 years of age. One can understand how he might now consider all his psychiatric difficulties started after the accident because they have now overwhelmed him. But he has not imagined his problems and I find he has not exaggerated them. He is effectively now unfit for available work and will remain so indefinitely.
I assess the worker’s damages as follows:
(a) General damages for pain and suffering and loss of
enjoyment of life $150,000 (b) Special damages:
Past medical and like expenses and travel expenses etc. 47,000 Future medical and like expenses, estimated - 27,000 (c) Loss of earning capacity:
(i) Past -
9 years from October 1989 to October 1998. Exhibit “O” shows the net weekly wage of a night attendant to be $626.06 in 1989 and $745.15 in 1998. The mean of these figures is $685.60 per week net and on that basis the quantum for the past loss of earning capacity is - 320,863 (ii) Future -
On the basis that the plaintiff would have continued in employment on the oil platforms up until the age of 60 years but for his injuries, the present value of $745.15 per week net, using the appropriate discount rate and making a reduction of 15% for contingencies, is - 272,985
(d) Interest on Damages:
If calculated solely on the past loss of earnings and using an interest rate of 13% (the Penalty Interest rate having recently dropped from 13.2% to 12.5%) and then dividing by 2 to take into account the ongoing nature of the loss, amounts to -
187,000
Holistically, I assess the damages of the worker at $1,000,000.
CIRCUITY
The defendant relies upon the defence of circuity. The defendant submits that if the plaintiffs have a right of indemnity from the defendant pursuant to s. 138 Accident Compensation Act 1985, then the defendant would have a right to indemnity from AFCO pursuant to paragraph 13.1 of the 21 January 1988 Agreement between them; and AFCO would then have a right to indemnity from the plaintiffs pursuant to s. 134 of that Act. To that end the defendants relied upon Schenker & Co (Aust) Pty Ltd v Malpas Equipment & Services Pty Ltd & Anor (1990) VR 834 especially per McGarvie J. at 849-850 and Ormiston J. at 851-852. AFCO is now in liquidation and was not a party to these proceedings. Precisely because AFCO is not a party to this proceeding the court cannot and should not adjudge any rights the defendant has against AFCO nor any rights AFCO has against the plaintiffs: see Schenker above cited distinguishing Artieselskabet Ocean v B. Harding & Sons Ltd & Ors (1928) 2 KB 371; The Kafiristan (1937) p.63 at 68; and McCamley v Harris (1997) 8 BPR 15, 683 per Young J. at 15692 point (b) (“both the plaintiff and the defendant must be suing each other in the same right”). I have found AFCO 20% liable in order to finalise the necessary and antecedent question of the application of s.138 as between these plaintiffs and this defendant. I should proceed no further in the absence of AFCO as a party to the proceeding. Further, liability of AFCO to indemnify the defendant is not a liability “in respect of an injury to a worker” as provided by the statutory policy of insurance pursuant to s.134 and Regulation 26 Accident Compensation Regulations 1985 and Schedule 4 thereto. It arose by reason of the indemnity clause and was a liability voluntarily undertaken by AFCO before the accident. Finally, to accede here to the defence of circuity has the tendency to undermine the statutory right to recover compensation, the purpose of which is to reimburse a statutory fund. That defence fails.
CONCLUSION
Accordingly, I propose to grant the relief sought by the plaintiffs as to both the retrospective indemnity (Prayer A of the further amended statement of claim) and prospective indemnity (Prayer AA). Upon publication of this judgment I shall afford the parties the opportunity of making submissions as to the form of final orders.
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