Victorian WorkCover Authority v A & S Close Pty Ltd

[2005] VSC 338

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 7464 of 2004

VICTORIAN WORKCOVER AUTHORITY	Plaintiff
v
A & S CLOSE PTY LTD AND AARON BOOKER	Defendants

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JUDGE:	CUMMINS J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 June 2005
DATE OF JUDGMENT:	29 June 2005
CASE MAY BE CITED AS:	Victorian Workcover Authority v A & S Close Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2005] VSC 338

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PRACTICE COURT – accident compensation – indemnity – s.138(1) and (3) Accident Compensation Act 1985 – pleading.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A. Sandbach	Wisewoulds
For the First Defendant	Mr J. Gorton	Deacons

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HIS HONOUR:

1. This is a summons, heard by leave which I granted yesterday, filed 17 June 2005 on behalf of the first defendant A & S Close Pty Ltd for the striking out, or alternatively, amendment of the plaintiff’s statement of claim herein.  The proceedings were issued by writ filed on 9 August 2004, the plaintiff being Victorian Workcover Authority, the first defendant being  A & S Close Pty Ltd and the second defendant being Mr A. Booker.  The statement of claim relevantly alleges that the first defendant was a contractor for works being carried out at a Safeway distribution centre in Campbellfield, Victoria.  The second defendant was working at the site and was a servant or agent of the first defendant.  At the relevant times in August 1998  Mr Keith Freeman was a worker and Alan Webb Management Services Pty Ltd trading as ESP Taskforce was an employer within the meaning of the Accident Compensation Act 1985. The worker, Mr Freeman, was performing work at the named site in the course of his employment with the employer, ESP Techforce. On 14 August 1998 the worker was seated on a chair outside a lunchroom shed at the site when the second defendant attempted to jump over the worker and collided with him. As a result of the incident, the worker fell heavily onto the floor and sustained personal injury, loss and damage, and in particular, lower back injury. Paragraph 9 of the statement of claim pleads:

“The incident and the worker’s injury were caused by the act, default or negligence of the first  defendant.”

Nine particulars are set out.  Relevantly, particular (a) is:

“Ignoring or failing to heed the worker’s complaints of horseplay by its employees at the site.”

Particular (h) is:

“The first defendant knew or ought to have known that its employees were engaged in horseplay at the site, that horseplay was a risk to health and safety to the worker, and failed to take appropriate precautions to ensure that appropriate warnings were given and risks were minimised or eliminated.”

1. Paragraph 10 pleads that further and in the alternative the incident and the worker’s injury were caused “by the act, default or negligence” of the second defendant.  Particulars are set out in four respects, including engaging in horseplay at the site.

1. The pleadings proceed that the sum of almost $250,000 has been paid pursuant to the obligations under the Act;  and that pursuant to s.138 of the Act the plaintiff is entitled to indemnity from the defendants.  Indemnity is sought, and like relief.

1. The plaintiff submits that its pleading follows the words of the Act - “act, default or negligence” - contained in s.138(3).  The plaintiff rightly contends that Winneke P delivering the leading judgment in the Court of Appeal in Victorian Workcover Authority & Anor  v. Esso Australia Ltd[1] said:

“The statutory right of indemnity conferred by the Act upon the person who has paid the compensation is not to be equated to the cause of action which the worker would, but for the Act, have had against the person liable to pay damages to him.”

That passage was cited with approval by the majority in the High Court in VWA & Anor v Esso Australia Ltd[2].  Thus the plaintiff says that its plea is competent.

[1](2001) 1 VR 246 at 257.

[2](2001) 207 CLR 520 at 527.

1. In a formal sense what the plaintiff says is correct.  The pleading does follow in the terms of sub-s.(3) – “act, default or negligence” - and it does conform with what Winneke, P. said in Esso and which was approved by the High Court. However, I do not consider that as a sufficient answer to the complaint of the first defendant in this case. First, the pivotal subsection is not s.138(3) but s.138(1). Section 138(3) is merely a quantification division. Section 138(1) is the relevant provision which provides:

“Where an injury ... for which compensation has been paid ... by an employer was caused by circumstances creating a legal liability in the third party to pay damages ... the Authority ... is entitled to be indemnified by the third party in accordance with that section.”

1. That is the source or font of the proceeding:  a legal liability in a third party to pay damages.  Further, the authority relied on behalf of the plaintiff, VWA v Esso, was primarily one dealing with s.60 Supreme Court Act 1986, not s.138; that is to say, dealing with what was a money claim under s.60.

1. It seems to me that the argument placed before me by Mr Gorton on behalf of the first defendant is a good argument.  His point is that in the particular circumstances of this case the formal argument of the plaintiff is inadequate to meet the real situation, because the real nub on the pleading issue is that there is here a potential for a direct duty and a battery liability or intentional tort as distinct from the usual negligence and vicarious liability foundation.  It is put on behalf of the first defendant that because lurking in this case is the potential for a direct duty or an intentional tort as distinct from merely vicarious liability in negligence, the first defendant is entitled to know with precision what it is that it is asserted by the plaintiff against it.  Does the plaintiff assert that the first defendant had a duty to control the acts of others, namely the second defendant, and if so, in what respect?  In my view that is a real question and it has significance in a number of ways.  First, it has significance inherently in the nature of the claim by the plaintiff against the first defendant.  Secondly, it has significance in relation to the defence which may properly be pleaded by the first defendant.  Thirdly, it may have other consequences as well including insurance consequences.

1. Mr Sandbach for the plaintiff submitted that there was a misconception in the logic of the first defendant, summarised in paragraph 9 of the affidavit in support of the summons sworn by Mr D. Neilson on 17 June 2005 that:

“The cause of action relied upon by the plaintiff is the same cause of action that the worker would have had.”

However, it seems to me that although analytically speaking that is correct, the flaw in the pleadings as they presently stand is that they do not expose the critical question as to vicarious or direct liability sufficiently for the first defendant to know what is asserted against it.  I do not consider the flaw can be remedied simply by further and better particulars as Mr Sandbach urged upon me last evening.  In my view it is inherent in the nature of the claim as presently pleaded.  For those reasons I consider that paragraph 9 and paragraph 10 ought be redrawn properly to reveal what it is that the plaintiff asserts and that a mere recitation or incantation of the terms of the quantification provision sub-s.(3) is insufficient in the particular circumstances of this case.  Normally it would be sufficient;  but here, because of the particular issue of intentional act as distinct from negligence, it is not sufficient.

1. I agree with Mr Gorton that it is appropriate to rely upon Smith v. Leurs and Others[3], and to a lesser extent (because it involved a criminal act) Modbury Triangle Shopping Centre Pty Ltd v. Anzil and Another[4].

   [3](1945) 70 CLR 256 particularly at 261-262 per Dixon, J. as then he was.

   [4](2000) 205 CLR 254.

1. For those reasons I uphold the summons.  I do not think it is appropriate, unless I am later persuaded, to grant the relief sought that the statement of claim be struck out;  rather I consider it is appropriate that 21 days be given to the plaintiff to file and serve an amended statement of claim.  I propose so to order subject to hearing counsel.  I propose also to order that the plaintiff pay the first defendant’s costs of the application.

O R D E R

(Following discussion)

1. I order that the plaintiff have leave to file and serve an amended statement of claim consonant with these reasons within 21 days.

1. I consider that the costs ought to follow the event.  I will come in a moment to the quantification aspect of them.  In my view Mr Sandbach is right, that there are some imperfections in the material and the logic advanced in support of the summons and the letters as well.  However, I consider that the pleading was inherently flawed for the reasons I have stated and I do not consider that costs should not follow the event simply because some of the letters were not perfectly formed or formulated or the summons.  The substance certainly goes in favour of the first defendant, and because I have dealt with the matter as a matter of substance and the substance goes in favour of the first defendant, I consider the costs ought follow the event.

1. However, I do not consider that the costs of the level of the Practice Court ought be paid by the plaintiff because the matter should have gone before the Master, and although I did hear it, I do not think that the higher costs, if they be such, ought be paid by the plaintiff. 

1. In all the circumstances, I consider the plaintiff ought to pay the costs of the first defendant of this summons, but at the level of a Master’s hearing, not the level of the Practice Court hearing and I so order.