Victorian WorkCover Authority v BlueScope Steel

[2013] VSC 562

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. SCI 2012 04953

VICTORIAN WORKCOVER AUTHORITY	Plaintiff
v
BLUESCOPE STEEL LTD (ACN 000 011 058)	Defendant

---

JUDGE:	KAYE J
WHERE HELD:	Melbourne
DATE OF HEARING:	15 October 2013
DATE OF RULING:	15 October 2013
CASE MAY BE CITED AS:	Victorian WorkCover Authority v BlueScope Steel
MEDIUM NEUTRAL CITATION:	[2013] VSC 562

---

ACCIDENT COMPENSATION – Evidence – Claim by plaintiff for indemnity for compensation payments to injured worker – Plaintiff alleging that defendant liable for worker’s injury – Admissibility details of settlement by defendant of worker’s common law proceeding – Whether relevant – Whether probative value outweighed by risk of undue waste of court’s fine – Evidence Act 2008 (Vic) s 135(c).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N Bird	Wisewould Mahoney
For the Defendant	Mr I McDonald	Sparke Helmore

HIS HONOUR:

1. At the times which are material to this proceeding, Mr Brett O’Driscoll was employed as an electrician by Downer EDI Engineering Electrical Pty Ltd. On 12 April 2009 he was injured in the course of his employment while working at the premises of the defendant, BlueScope Steel Ltd at Hastings. The plaintiff, the Victorian WorkCover Authority, has brought this proceeding pursuant to s 138(1) of the Accident Compensation Act 1985 claiming an indemnity against the defendant in respect of compensation payments which have been made, and which it may be liable to make, to Mr O’Driscoll in respect of that injury.

1. Following his injury, Mr O’Driscoll also commenced common law proceedings claiming damages against his employer, Downer EDI Engineering and against the defendant.  Those proceedings have resolved.  I have been told accordingly that the figure for Factor C in the formula set out in s 138(3) of the Act is $345,000.  I have also been told that Factor A, as specified in that formula, is settled, and in effect the only issue in the case is the determination of Factor X.

1. Mr Bird, who appears on behalf of the plaintiff, wishes to adduce evidence as to the amount of damages which have been agreed to be paid to Mr O’Driscoll by both defendants, in order to establish the proportion of the liability for those damages which has been assumed by the defendant to Mr O’Driscoll.  In that way, Mr Bird seeks to rely on the agreement to pay $345,000 by the defendant to Mr O’Driscoll as an admission by it of its liability for the injury to Mr O’Driscoll.

1. In response, Mr Ian McDonald, who appears on behalf of the defendant, has objected to the admissibility of that evidence.  He submitted that the evidence as to those matters would have no probative value, or at best would have only slight probative value.  On the other hand, if that evidence were adduced, the defendant would be required to lead evidence from a number of persons, including his instructing solicitors, as to the facts, reasons and circumstances upon which the common law action was settled.

1. In that way, he has submitted that the admission of the evidence sought to be adduced by Mr Bird would result in an undue waste of the court’s time and that that would substantially outweigh any probative value of the evidence upon which Mr Bird seeks to rely. Accordingly, Mr McDonald submitted that the evidence should be excluded pursuant to s 135(c) of the Evidence Act 2008.

1. In an appropriate case, evidence as to the payment of, or agreement to pay, compensation or damages to an injured person may be an admission of a fact or matter in issue in subsequent proceedings, and thus may have probative value in respect of that fact or matter.  See for example Ansett Australia Ltd v Taylor.[1]

   [1][2006] VSCA 171 at paragraphs [40] to [46].

1. However, in determining whether such a payment of compensation or damages or an agreement to pay such compensation or damages may be admissible for that purpose, it is first necessary to identify the particular facts or matters in issue in the proceeding, and to assess whether the agreement to pay, or the payment of, that compensation or damages may have any logical probative value in respect of those facts or matters that are truly in issue in the proceeding.  See Transport Accident Commission v Florrimell.[2]

   [2][2013] VSCA 247 at paragraphs [44] to [45].

1. In general, in a case such as this, where an injured worker’s claim for damages at common law have been settled against two or more defendants, it is readily perceived that there would conceptually be a number of limitations to the weight, if any, of the evidence of an agreement by one of those parties to pay damages to the injured worker.  In such a case, it must be borne in mind that the settlement that was achieved in the common law proceeding occurred in the context of a claim which was to take place before a jury and was no doubt based on an assessment of the risks and costs of such a trial by each of the parties concerned.

1. I have no doubt, as is a matter of common experience, that generally the amounts for which such claims are settled, and the proportions of the settlement borne by the defendants, are often determined by matters of hard negotiation and commercial considerations.  In addition, such a settlement often involves the subjective assessment by the practitioners of the potential quantum of the injured worker’s claim, that assessment often being made on no more than the medical reports contained in a particular brief.

1. In particular, I understand that the settlement of Mr O’Driscoll’s common law proceeding took place before the trial of that action commenced.  By way of contrast, in this case the plaintiff has now closed its case, subject to the question of the admissibility of the evidence to which I have just referred.  In the course of evidence the issues, which are at large between the parties, have become well defined, and indeed are particularly narrow.

1. To describe those issues it is not necessary for me to outline the facts in any detail.  In essence, at the time of his injury Mr O’Driscoll was changing cables in the control room of a substation, those cables leading between the battery charger and the distribution panel.  For that purpose, he was wearing leather gloves which were damp with perspiration.  Mr O’Driscoll’s hand touched a defect in a cable which was live underneath the distribution panel, and because his glove was wet with perspiration, he received an electrical shock and thereby suffered injury.

1. In the context of that background, there are two main issues it would seem that ultimately I will need to determine.  The first main issue will be whether the defendant, before Mr O’Driscoll was injured, knew or ought to have known of the defect in the cable which caused Mr O’Driscoll’s injury.

1. In this regard, evidence has been given that the substation log contained some entries in relation to the five earth fault alarms in the previous ten months.  Thus, issues will arise, which will be the subject of evidence by the defendant, as to whether it could have been perceived that those faults might have related to the area in which Mr O’Driscoll was working at the time he was injured, and if so, whether the defendant had reasonable grounds to believe that those faults had been rectified before the date on which Mr O’Driscoll was injured.

1. The second major issue is whether, in any event, the defendant ought to have advised, or indeed insisted, that Mr O’Driscoll wear voltage rated gloves while performing the work he was required to undertake in the control room.

1. The first issue, to which I have just referred, will necessarily be the subject of evidence of the employees of the defendant, and ultimately the determination of that issue will involve an assessment by me of the evidence of those witnesses.

1. I observe that I doubt that any of those witnesses played any key role in the formulation of the settlement offer that was ultimately accepted by Mr O’Driscoll in the common law proceeding.  But even if they were, I would have difficulty in perceiving the settlement offer to be an admission by them, or by the defendant, of any aspect of the issue to which I have just referred.  In that way, it is difficult to understand how the agreement by the defendant to pay damages to Mr O’Driscoll in the common law proceeding could have any probative weight in respect of the assessment of the evidence of the defendant’s witnesses on that issue.  At the very best, any probative value of the alleged admission made by the defendant would be slight. 

1. The second issue, that is, as to whether in any event Mr O’Driscoll should have been advised to wear voltage rated gloves in the work he was performing, is essentially an issue for the court to determine on the evidence.  That evidence of course will include an understanding of the type of work he was performing, the dangers to which he was then exposed, and the environment in which he was working.

1. It will also involve an assessment of evidence given, and to be given, as to what should have been proper safe working in such an environment.  It is difficult, at the very least, to see how the evidence of the payment, or agreement to pay, damages by the defendant to Mr O’Driscoll could assist in an assessment by me of the evidence pertaining to that issue and a determination of that issue.

1. In that way, the evidence upon which Mr Bird seeks to rely, is, I consider, at very best of slight probative value and thus would be of little assistance in the determination of the case.

1. On the other hand, if the evidence, which Mr Bird seeks to lead, were to be admitted, the defendant would be permitted to, and indeed I would apprehend, need to, give evidence as to why the particular settlement offer was made, the circumstances in which it was made, the basis upon which it was made and the context of the negotiations in which the offer was made and accepted.  Thus, if the evidence were to be admitted, it would necessarily involve the court embarking on an area of inquiry which would be entirely collateral to the main issues in the case, and would be of very little, or no, assistance to me in determining the issues, which have now been isolated for me to decide.

1. In my view, in that way, if the evidence sought to be adduced by Mr Bird has any probative value, which I doubt, that probative value is slight, and it is substantially outweighed by the danger that the admission of that evidence might cause or result in an undue waste of time. Accordingly I would reject the evidence, firstly on the basis that it is irrelevant, and secondly, that if it has any relevance, I would reject it under s 135(c) of the Evidence Act.