Victorian WorkCover Authority v Clarke
[2015] VCC 62
•6 February 2015
| IN THE COUNTY COURT OF VICTORIA AT Melbourne CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION LIST
GENERAL DIVISION
Case No. CI-13-06065
| VICTORIAN WORKCOVER AUTHORITY | Plaintiff |
| v | |
| LES CLARKE | Defendant |
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JUDGE: | HER HONOUR JUDGE MORRISH | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 23 and 30 January 2015 | |
DATE OF JUDGMENT: | 6 February 2015 | |
CASE MAY BE CITED AS: | Victorian WorkCover Authority v Clarke | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 62 | |
REASONS FOR JUDGMENT
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Subject: ACCIDENT COMPENSATION
Catchwords: Recovery application pursuant to s138 of the Accident Compensation Act 1985 – worker sustained workplace injuries involving two separate incidents – worker recovered compensation – whether plaintiff is entitled to an indemnity regarding the second incident – whether the plaintiff is entitled to be indemnified by a third person (the defendant) whose negligence was a cause of the worker’s injuries in the first incident but not in the second incident
Legislation Cited: Accident Compensation Act 1985, s138; Limitation of Actions Act 1958; Workers Compensation Act 1926 (NSW), s64(1); Workers’ Compensation Act 1987 (NSW), s151Z(1)(d); Law Reform (Miscellaneous Provisions) Act 1946, s5(1); Interpretation of Legislation Act, s35
Cases Cited:Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council (2009) NSWCA 59; Kornjaca v Steel Mains Pty Ltd & Ors; Steel Mains Pty Ltd (Cross-Claimant), Dillingham Constructions Pty Ltd (Cross-Defendant) [1974] 1 NSWLR 343; Dillingham Constructions Pty Ltd & Anor v Steel Mains Pty Ltd (1975) 132 CLR 323; Public Transport Commission of New South Wales v J Murray-Moore (NSW) Pty Ltd (1975) 132 CLR 336; McComb, Re (1999) 3 VR 485; Haydon’s Case, Re (1584) 3 Co Rep 7a; Victorian WorkCover Authority v Kenman Kandy Pty Ltd; Victorian WorkCover Authority v A V Jennings Ltd (2002) 6 VR 666; Esso Australia Ltd v Victorian WorkCover Authority & Anor [2000] VSCA 74; Victorian WorkCover Authority & Anor v Esso Australia Ltd (2001) 207 CLR 520; Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522; Wilson v Wilson’s Tile Works Pty Ltd (1960) 104 CLR 328; Dodd v Executive Air Services Pty Ltd [1975] VR 668; Bird v Commonwealth (Maralinga Case) (1988) 165 CLR 1; J Odlin Shopfitting International Pty Ltd v Kaljanac (1993) 29 NSWLR 632; Loizos v Carlton and United Breweries Limited (1994) 94 NTR 31; Grey v Pearson (1857) 6 HL Cas 61; Bull v Attorney-General (NSW) (1913) 17 CLR 370; Transport Accident Commission v Sweedman [2004] VSCA 162; Primary Health Care Ltd v Giakalis [2013] VSCA 75; Tickle Industries Pty Ltd v Hann & Richardson (1974) 130 CLR 321; Frank G O’Brien Ltd v Bain [1975] 1 NSWLR 373; Kempsey District Hospital v Thackham (1995) 36 NSWLR 492; Fuller v K & J Trucks Coffs Harbour Pty Ltd (2006) 67 NSWLR 516; Victorian WorkCover Authority v Jones Lang Lasalle (Vic) Pty Ltd [2012] VSC 412; Borg Warner (Australia) Ltd v Zupan [1982] VR 437; Tooth & Co Ltd v Tillyer (1956) 95 CLR 605; Watson v Newcastle City Council (1962) 106 CLR 426; Victorian WorkCover Authority v Venamis Group Pty Ltd & Lockwood (Ruling) [2011] VCC 954; Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 656; Victorian WorkCover Authority v Manildra Pty Ltd [1999] VSC 220; Victorian WorkCover Authority v Bennett [2003] VSCA 116.
Judgment: The plaintiff’s claim is dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C D N Griffin | Russell Kennedy |
| For the Defendant | Mr W C Grainger | Norris Coates |
HER HONOUR:
1 This is an action for recovery brought by the Victorian WorkCover Authority (“VWA”) against Les Clarke (“Clarke”) under s138 of the Accident Compensation Act 1985 (“the Act”).
2 The hearing commenced before me on 23 January 2015. Mr Griffin appeared on behalf of the VWA. Mr Grainger appeared on behalf of Clarke.
3 On the first day of hearing, counsel announced that they would be able to reach agreement about the facts, and that no evidence would be tendered. They indicated that there was only one issue to be determined by the Court. They agreed to file a statement of agreed facts. Counsel agreed to provide written submissions and return to make oral submissions on 30 January 2015. On the return date, the VWA tendered an Agreed Statement of Facts (exhibit A) and Plaintiff’s Outline of Submissions (exhibit B). Clarke tendered an Outline of Submissions (exhibit 1) and List of Authorities (exhibit 2).
4 As I mentioned, the parties have reached agreement about the facts. They further agree that they are each bound by those facts and, for the purposes of this case, they will not go beyond the four corners of those agreed facts.
Agreed Statement of Facts – Exhibit A
“The following facts are agreed between the parties in respect of proposed submissions to be made to Her Honour Judge Morrish in the above matter:
1At all material times, Ian Quarrell (‘the worker’) was employed by Rankin Transport Pty Ltd (‘the employer’) as a truck driver.
2At all material times, the worker was acting in the course of and/or scope of his employment with the employer.
3At all material times, the Defendant had an agreement with the employer for the employer to deliver three tractors to the Defendant.
4On or about 28 June 2005 (‘the said date’), the worker was lawfully at the Defendant’s farm in Garfield carrying out work for the employer (‘the services’).
5On the said date, the worker suffered injury as a consequence of the Defendant attempting to unload the third tractor whilst the worker was on the truck and in the course of which a hurdle, which was situated on the back of the truck, snapped free by the Defendant’s driving of the tractor, and struck the worker on the right side of his chest and back (‘the first accident’).
6In the circumstances, the Defendant owed a duty to the worker to take reasonable care in relation to the removal of the tractor from the trailer of the worker’s truck, so as not to cause injury to the worker.
7On or about 12 October 2005, in the course of the worker’s employment with the employer, the worker, whilst handling the curtains of a tautliner truck, suffered injury (‘the second accident’).
8As a result of the first accident and the second accident, the worker sustained personal injury and damage.
PARTICULARS
(a) Significant soft tissue injury to the right thoracic region.
(b) Mild compression fracture in the thoracic region due to predisposed constitutional osteoporosis and compression fracture of L2-3 (central and plate depression of L2-3).
(c) Anterior and posterior end plate depression at lower thoracic vertebral particle at T7, T8 and T9.
(d) Aggravation, exacerbation and acceleration of asymptomatic constitutional osteoporosis leading to fracture of the right tenth rib with probable and associated muscle tearing and scarring in the right lumbar muscles.
(e) Permanent serious aggravation, exacerbation and acceleration of soft tissue injury to the right thoracic region.
(f) Permanent serious aggravation, exacerbation and acceleration of mild compression fracture in the thoracic region due to predisposed constitutional osteoporosis and compression fracture of L2/3 (central end plate depression of L2-3).
(g) Permanent serious aggravation, exacerbation and acceleration of anterior and posterior and end plate depression at the lower thoracic vertebral particle at T7, T8 and T9.
(h) Permanent serious aggravation, exacerbation and acceleration of constitutional osteoporosis leading to fracture of the right tenth rib with probably (sic) and associated muscle tearing and scarring in the right lumbar muscles.
(i) Permanent serious aggravation, exacerbation and acceleration of fracture to the right tenth rib.
(j) Permanent serious aggravation, exacerbation and acceleration of torn muscle and scarring in the right lumbar muscles.
(k) Permanent serious aggravation, exacerbation and acceleration of constitutional osteoporosis to the thoracic and lumbar spine, including general thoracic region.
(l) Anxiety and depression.
(m) Pain and shock.
9The worker subsequently made a claim for compensation in respect of the first accident, which was received by the employer on or about 22 July 2005.
10The worker subsequently made a claim for compensation in respect of the second accident on 25 October 2005, which was accepted.
11The Plaintiff, the employer and the authorised insurer, pursuant to their obligations under the Accident Compensation Act 1985, made payments of compensation in respect of the second accident to and on behalf of the worker, the non statute barred amount is, $51,530.
12It is agreed if it is found that the Plaintiff has an entitlement to indemnity pursuant to Section 138, the amount of the indemnity is $51,530.00.
13If the Plaintiff is found to be entitled to an indemnity by the Defendant pursuant to Section 138 of the Act in respect of payments that the Plaintiff might be required to make in the future pursuant to the provisions of the said Act, [it] is to a maximum of $60,000.00.
14Injuries suffered by the Plaintiff in the first accident and the second accident satisfy the definition in Section 5 of the Act and satisfy the requirements of Section 93 of the Act.
15There was as (sic) causal connection between the two injuries.”
5 As can be seen, the worker sustained two workplace accidents. The first accident occurred on 28 June 2005. Clarke’s negligence or breach of duty caused or contributed to the worker’s injury, loss and damage. The VWA accepted the worker’s claim and paid compensation under the Claim Form that pertained to that accident.[1] The worker apparently returned to work after the first accident.
[1]The Claim Form was included as item 8 in the Plaintiff’s Court Book, but it was not tendered.
6 The worker was involved in the second accident almost four months later, on 12 October 2005. Clarke had nothing to do with the second accident and there was no negligence or breach of duty on his part that was a cause of the worker’s accident and consequent injury, loss and damage.
7 The worker filed a separate claim in respect of the second accident.[2] The VWA accepted the second claim and from that date on, made payments to or on behalf of the worker under that Claim Form, not the first Claim Form. In other words, no further compensation was paid by the VWA in respect of the Claim Form pertaining to the first accident and the compensable injury arising therefrom. All payments the subject of the present application were paid under the second Claim Form. There has been no attempt to disentangle the consequences of the first accident from the second. Any compensation payable under the first Claim Form is statute barred.
[2]The second Claim Form was item 10 in the Plaintiff’s Court Book, but it was not tendered
The question for determination
8 The plaintiff has posed the question for determination in the following way:
“[D]oes ‘injury’ in Section 138(1) [of the Act] apply to two injuries caused by the first and second accidents?”[3]
[3]See Exhibit B paragraph A.1
9 I would reformulate the question for determination as:
“Has the VWA satisfied the Court on the balance of probabilities that the elements of s138 of the Act are made out?”
10 For reasons that follow, I would answer the question in the negative.
The elements
11 Section 138 of the Act provides:
“(1)Where an injury … for which compensation has been paid, or is or may be payable, by the Authority, a self-insurer or an employer was caused under circumstances creating a liability in a third party to pay damages … in respect of the injury …, the Authority, self-insurer or employer is entitled to be indemnified by the third party in accordance with this section.
…
(3)The amount which a third party is required to pay as indemnity under subsection (1) is the lesser of—
(a)the amount of compensation paid or payable under this Act in respect of the injury …; and
(b)the amount calculated, were it not for the provisions of this Act, …, in accordance with the formula—
where—
X is the extent, expressed as a percentage, whereby the third party's act, default or negligence caused or contributed to the injury …;
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 …) for pecuniary loss and non pecuniary loss which the third party is or would have been liable to pay in respect of the injury …;
B …
C is the amount paid by the third party in respect of the injury … to the worker … under any settlement of, or judgment in, an action by the worker or dependants of the worker against the third party.
… .”
12 The parties agree that there a five elements, all of which must be established by the VWA on the balance of probabilities, before the VWA can succeed. The five elements are:
·The worker sustained an injury;
·The injury is one for which compensation is payable under the Act;
·The injury was caused under circumstances creating a liability in a third party [Clarke] to pay damages in respect of the injury;
·The worker has recovered compensation or may recover compensation under the Act for that injury from [the VWA]; and
·[The VWA] has paid the compensation so recovered.[4]
[4]The parties agree that the elements listed by McColl JA regarding similar legislation in New South Wales, at paragraphs [39] – [40] in Kurnell Passenger & Transport Services Pty Ltd v Randwick City Council (2009) NSWCA 59, with necessary modification, apply here.
13 In short, although I am satisfied that the worker was injured in the second accident, I am not satisfied that the injury was caused under circumstances creating a liability in Clarke to pay damages in respect of the injury sustained in that second accident. He was no tortfeasor in respect of that accident and he is not responsible for any injury, loss or damage arising from it. He was a tortfeasor in respect of the first accident, and no compensation was paid by the VWA or recovered by the worker in respect of the first accident after the VWA accepted the claim and paid the worker under the second Claim Form. Any payments under the first claim made prior to acceptance of the second claim are statute barred.
14 I now turn to the submissions made by the parties:
The VWA’s submissions – Exhibit B
“PLAINTIFF’S LIST OF AUTHORITIES
A.Cases:
Konjaca (sic) v. Steel Mains Pty Ltd & Ors;
Steel Mains Pty Ltd (cross claimant) Dillingham Constructions Pty Ltd (cross defendant) 1974 1 N.S.W.L.R. 343;
Dillingham Constructions Pty Ltd v. Steel Mains Pty Ltd (1974-75) 132 CLR 323;
Public Transport Commission of New South Wales v. J Murray-More (NSW) Pty Ltd (1974-75) 132 CLR 336;
McComb (1999) 3VR 485;
Victorian Workcover Authority v. Kenman Candy (sic) Pty Ltd;
Victorian Workcover Authority v. AV Jennings Limited [2002] VSC 190;
Esso Australia Limited v. Victorian Workcover Authority & Anor [2000] VSCA 74; (2000) 1VR 246;
Mahoney v. J Kruscich Demolitions Pty Ltd (1984-1985) 156 CLR 522.
B.Legislation:
Accident Compensation Act 1985 (Vic) Section 138;
Workers Compensation Act 1926 Section 64(1);
Law Reform (Miscellaneous Provisions) Act 1946 Section 5(1).
A.INTRODUCTION
1.The question of law can be formulated in terms of ‘does ‘injury’ in Section 138(1) apply to two injuries caused by the first and second accidents’.
B.JUDICIAL INTERPRETATION OF SECTION 138(1)
2.During the agitation with Her Honour on Friday 3 January 2015, Counsel for the Plaintiff stated that there was law on this issue but not in this State (T12, lines 1 and 2). Counsel for the Plaintiff stated that his understanding was that the authority relied upon by the Defendant was a decision in the New South Wales jurisdiction and that there was a difference in the statutes.
3.Plaintiff’s Counsel understands that the Defendant’s Counsel was referring to Konjaca (sic) v. Steel Mains Pty Ltd & Ors; Steel Mains Pty. Ltd. (cross claimant), Dillingham Constructions Pty. Ltd. (cross defendant) 1974 1 N.S.W. L.R. 343.
4.The relevant facts of this case were as follows:
· K sued Dillingham for negligence in respect of a back injury suffered in an accident on 1 August 1968.
· Settlement on 27 February 1973 resulted in a verdict for damages in favour of the worker. The terms of settlement limited any contribution from Dillingham through the period from 1 August 1968 to 8 August 1969.
· K sued Steel Mains in negligence causing an injury to his low back in an accident on 27 October 1970.
· On 28 February 1973 Steel Mains cross claimed against Dillingham for contribution/indemnity for any sum K might receive from Steel Mains together with $7,348.43 received by K from Steel Mains as workers compensation.
· An application was issued by Dillingham for an order striking out the cross claim as disclosing no reasonable cause of action was dismissed by Master Cantor Q.C. An appeal was allowed and the cross claim was struck out by Collins, J.
· This decision was appealed and considered by Reynolds, Bowen and Glass, JJA.
5. At page 347, paragraph (d), Glass JA says as follows:
‘The Defendant in its cross claim also sought to recover from [the] third party under Section 64 of the Workers Compensation Act a sum of money paid to the Plaintiff by way of compensation for the injury in 1970. This claim depends upon the provisions of Section 64 which read as follows:
‘64(1) [W]here the injury for which compensation is payable under this Act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect [there]of - … (b) if the worker has recovered compensation under this Act, the person by whom the compensation was paid shall be entitled to be indemnified by the persons (sic) so liable to pay damages as aforesaid;’
It is necessary for the employer to prove against the party from whom the indemnity is sought that the injury occurred under circumstances which created a liability in damages to the worker. It does not seem possible to regard a pre-existing liability, which became more extensive on the happening of the injury, as one which was then not then (sic) created. Accordingly, the claim to recover an indemnity under Section 64 was properly struck out.’
6.Glass, JA gave a further reason at (f) on page 347 as follows:
‘It has been held that the provision in Section 64(1)(b) only applies where compensation has been paid and the worker has not obtained damages or a judgment for damages against the third party. …. the recovery of a judgment by the Plaintiff against the third party appears in a way to which this Court ought to give effect. It constitutes therefore a second reason why the indemnity claimed under Section 64 of the Workers Compensation Act is no longer enforceable.’
7.The substantial issue in Kornjaca pertained to the right of a tortfeasor to recover contribution from another tortfeasor given by Section 5(1) of the Law Reform Miscellaneous Provisions Act 1946.
8.The submission of the Plaintiff is that this is not a case where ‘its pre-existing liability had become more extensive on the happening of (a second) injury.’ Whilst there have been two accidents, both are in the same employment unlike Kornjaca, the two accidents involve the same injury (agreed fact 8) and for the purposes of Section 138 are the same injury.
9.Dillingham Constructions, the third party in Kornjaca appealed to the High Court. That matter Dillingham Constructions Pty Ltd (appellant) and Steel Mains Pty Ltd (defendant cross claimant) was heard by the High Court and reported in 1974-75 CLR 132 at page 323. At page 326 Barwick, CJ said as follows:
‘The cross defendant now appeals to this Court, but there is no cross appeal by the cross claimants (sic) as to the claim to be indemnified in respect of the payments (sic) of workers compensation. That is therefore a matter with which I am not presently concerned. It may be that the Court’s decision in an appeal pending judgment Public Transport Commission (NSW) v. J Murray-More (NSW) Pty Ltd will bear [up]on the question raised in that part of the proceeding between the parties in the Supreme Court.’
10.In fact, the next decision reported in CLR volume 32 was the matter of Public Transport Commission of New South Wales v. J Murray-More (NSW) Pty Ltd.
11.Section 64 of the Workers Compensation Act is set out in full at page 338 as follows:
‘(1) Where the injury for which compensation is payable under this Act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof–
(a)The worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for such compensation, but shall not be entitled to retain both damages and compensation.
If the worker recovers firstly compensation and secondly such damages he shall be liable to repay to his employer out of such damages the amount of compensation which the employer has paid in respect of the worker[’]s injury under this Act, and the worker shall not be entitled to any further compensation.
If the worker firstly recovers such damages he shall not be entitled to recover compensation under this Act;
(b)If the worker has recovered compensation under this Act, the person by whom the compensation was paid shall be entitled to be indemnified by the person so liable to pay damages as aforesaid;
(c)If the worker subsequently obtains judgment for damages against the person who has paid under such indemnity, such payment under the indemnity shall be, to the extent of the amount of such payment, a satisfaction of the judgment for damages;
(d)All questions relating to matter arising under this Section shall, in default of agreement, be settled by action, or with the consent of the parties, by the commission.
(2) In this Section ‘Damages’ does not include any sum ordered or directed pursuant to any provision of the Crimes Act [1900] as amended by subsequent Acts, to be paid by way of a compensation for an injury, but [any] such sums (sic) so paid to a worker shall be deducted from the compensation payable to him under this Act in respect of the injury.’
12.Barwick, CJ at page 340 (middle of the page) ‘It provides in s64, in my opinion, for the case where the employee sues a person or persons other than the employer. In my opinion, it intends to cover the case where the only liability of the employer to the worker is the statutory liability to pay compensation. …. The language contemplates and all its proper construction provides for, the case where a stranger, or strangers, so far as employer and workmen (sic) are concerned has or have caused the compensable injury. The person who is to indemnify the employer under Section 64(1)(b) is that person, that is to say, a person other than the employer, who is (sic) in the circumstances caused the injury in respect of which compensation has been paid’.
13.The Plaintiff submits that the compensation paid, for which indemnity is being sought in these proceedings was paid in respect of an injury caused by the Defendant.
14.At page 341 Barwick, CJ says ‘In my opinion, the proper construction of Section 64(1) would preclude the respondent, as an employer whose negligence has contributed to the occurrence out of which the right of (sic) compensation arose, from recovering an indemnity under para (b) of the subsection. The right to an indemnity under Section 64(1)(b) is only given to an employer who has no other liability to the worker in relation to the compensable injury than the statutory liability to pay compensation.’
15.Gibbs, J at page 348 said ‘The question for decision on this appeal is whether an employer from whom a worker has recovered compensation under the Workers Compensation Act, 1926 (NSW) as amended (‘The Act’) is entitled to be indemnified by a third person whose negligence was a cause of the worker’s injuries (the ‘stranger’) when the employer himself was also guilty of negligence which was a cause of those injuries.’ At page 352 Gibbs, J says ‘For these reasons I consider that the respondent employer, whose negligence was a cause of the workers injury, was not entitled to be indemnified by the appellant, whose negligence was also a cause.’
16.It is submitted by the Plaintiff that because [of] the entirely different construction of Section 4 of the New South Wales Act together with the different fact situation here that any precedent established in Kornjaca is of little assistance in the interpretation of Section 138(1).
C.SECTION 138(1)
17.In order to be successful in this application the Plaintiff has to establish the following:
(a) There was an injury which compensation has been paid or made be payable;
(b) That injury was caused under circumstances creating a liability in a third party to pay damages.
18.It has been agreed in a Statement of Facts that the third party, the Defendant in these proceedings, owed a duty to the worker to take reasonable care in relation to the removal of the tractor from the trailer of the worker’s truck so as not to cause injury to the worker. It is submitted that this satisfies the requirements of the liability in the third party to pay damages.
19.Damages in Section 138(1) must mean pain and suffering damages and pecuniary loss damages, which are referred to in the calculation of Factor A in Section 138(3)(b) and which are the subject of consideration elsewhere in the Act, e.g., 134AB(37).
20.Secondly, turning to the definition of injury, it is submitted that the following is relevant:
(a) On 28 June 2005 the worker sustained his first accident agreed facts 4 and 5.
(b) In the first accident the worker sustained the personal injuries set out in agreed fact 8.
(c) He suffered the second accident on 12 October 2005.
(d) As a result of the second accident, the Plaintiff suffered the injuries set out in agreed fact 8.
(e) The body parts injured in respect of both accidents are the same (agreed fact 8).
(f) Following the second accident, the worker made a claim for compensation which was accepted (agreed fact 10).
(g) The Plaintiff, the employer and the authorised insurer made compensation payments to the worker in respect of the second accident (agreed fact 11).
(h) Some of the payments made by the Plaintiff employer and authorised insurer were statute barred. The non statute barred amount is agreed at $51,530 (agreed fact 11).
21.Whilst it is conceded in the agreed facts that each of the injuries suffered in the first and second accidents, satisfy the requirements of Section 5, i.e., the definition of injury, and also the requirements of Section 93. The compensation which has been paid in respect of incapacity is one to which injuries sustained in two accidents in the Defendant’s employment contributed.
22.The injuries set out in agreed fact 8 are in fact the same in respect of each accident.
23.There was a causal link between the two injuries suffered in each accident (agreed fact 15). The body parts are the same in respect of each accident.
24.The injury suffered in the first accident is anatomically indivisible from the injury in the first accident.
25.In this context the injury in Section 138 must include both injuries.
26.The causal link between the two injuries is amply demonstrated by looking at the particulars of injury in agreed fact 8.
27.In injuries (b), (d), (e), (f), (g), (h), (i), (j) and (k) are all matters where an underlying condition has been aggravated, exacerbated or accelerated by both accidents. There is no evidence available that the Plaintiff recovered from any of the injuries suffered by him in the first accident.
C.(sic) STATUTORY INTERPRETATION
28.A remedial or beneficial provision is one that gives some benefit to a person and thereby remedies some injustice: Estate of McComb [1999] 3VR 485 at page 490.
29.A list of authorities is provided at page 294 ‘Statutory Interpretation in Australia’ (7 Edition) DC Pearce and RS Geddes which have considered workers compensation legislation to be remedial.
They are: Wilson v. Wilson[’s] Tile Works Pty Ltd (1960) 104 CLR 328 at 335; Dodd v. Executive Air Services Pty Ltd [1975] VR 668 at 679; Bird v. Commonwealth (1988) 165 CLR 1 at 9; 78 ALR 469 at 474; J Odlin Shopfitting International Pty Ltd v. Kaljanac (1993) 29 NSWLR 632; Louzos (sic) v. Carlton and United Breweries Limited (1994) 94 NTR 31 at 33.
30.In McComb 1999 3VR 485, Warren, J at page 490 paragraph 22 said:
‘It is always the function of the Court in interpreting legislation to seek to ascertain the intention of the legislature then to give effect to it. The primary source from which the intention of the legislature is to be ascertained is, of course, the legislation itself. If the words are completely clear and unambiguous, then they must be given effect to. But if, when the act in question is read as a whole, it appears that some part of it is open to alternative interpretations, then regard may be had to matters other than the mere words of the statute. Those matters include:
(a)the mischief which the statute was intended to remedy (Hayden’s (sic) case (1584) 3 Co. Rep. 7A at 7(b); 76 E.R. 637 at 638;
(b)any absurdity which will result from the adoption of one construction rather than the (sic) other (the golden rule) see e.g., Grey v. Pearson (1857) 6 H.L.C. 61 at 106; 10 E.R. 1216 at 1234 per Lord Wensley Dale (sic);
(c)extrinsic materials which shed light on the actual intention[s] of the legislature (Interpretation of Legislation Act Section 35).
A remedial or beneficial statutory provision which is one that gives some benefit to a person and thereby remedies some injustice. The view expressed by Isaacs, J in his dissenting judgment in Ball (sic) v. Attorney General (NSW) (1913) 17 C.L.R. 370 at [3]84 has long been regarded as the orthodox view of the approach to be adopted in relation to the interpretation of remedial legislation:
‘In the first place, this is a remedial Act, and therefore, if any ambiguity existed, like all such acts should be construed beneficially. ….This means, of course, not that the true significance (sic) of the provision should be strained or exceeded, but that it should be construed so as to give the fullest relief within (sic) the fair meaning of its language will allow.’
31.Section 138 of the Act provides a benefit by way of an indemnity being granted to the authority, a self-insurer or an employer who has paid compensation.
32.In Victorian Workcover Authority v. Kenman Candy Pty Ltd; Victorian Workcover Authority v. AV Jennings Limited [2002] VSC[A] 190 (29 November 2002) Vincent, JA who gave the judgment of the Court said at paragraph 11 ‘The entitlement to indemnity under Section 138 – a substantive right – arises where there has been death or injury sustained in circumstances where compensation ‘has been paid, or is or may be payable’; the section creates a statutory right and corresponding coextensive liability in respect of which, as Winneke, P. pointed out:
‘It must be steadily borne in mind what it is that Section 138 seeks to achieve. In a statutory scheme calculated to benefit injured workers, and to spread the cost impact of doing so, the section confers upon the authority, insurers and employers a statutory entitlement, exercisable at times to suit themselves, to be indemnified by negligent third parties against compensation which has been paid or is payable to injured workers up to, but not exceeding, a limit which if not agreed is to be established by the Courts.’ (Esso Australia Limited v. Victorian Workcover Authority & Anor [2000] VSCA 74; (2000) 1VR 246 at 256.
33.Assume a situation where a worker has lodged a claim in respect of a low back injury for which the employer pays compensation. That injury has been suffered in circumstances creating a legal liability with a third party to pay damages. Two years later the worker sustains a serious knee injury as a result of doing Pilates in the course of treatment for her low back injury. It has been accepted that in these circumstances the knee injury is a consequence of the original injury and one for which the third party would be liable to indemnify the employer for compensation payments. See Mahoney v. J Kruscich Demolitions Pty Ltd (1984-1985) 156 CLR 522 at page 531. If the employer got the worker to fill out a new claim and paid statutory benefits for the worker’s treatment, a second injury would have been created. The employer, if the Defendant’s analysis in this case were to be accepted, would not be entitled to claim indemnity for the treatment which clearly is a consequence of the initial injury. This is a situation analogous in some respects to the factual matrix here.
34.In the circumstances where two accidents have caused the same injury (agreed fact 8), it would be contrary to the intended purpose of Section 138(1), providing a remedy to a party who has paid compensation for the same injury incurred in a short time space in the employment of the Defendant were to be excluded by a narrow construction of injury. Furthermore, the fact that a second claim was processed pursuant to the provisions of Section 93, that is, an administrative act, in circumstances where given the nature of the two injuries the Defendant may simply have recommenced payments in respect of the first injury.
35.In the factual situation in this case, it is submitted that the indemnity provided by Section 138 in respect of ‘injury’ should be interpreted to cover both injuries consequent upon the first accident and the second accident in the context of the submissions made earlier.”
Clarke’s Submissions – Exhibit 1
“1. Overview.
1.1.The Plaintiff claims an entitlement to an indemnity pursuant to s.138 Accident Compensation Act 1985 (the Act) in respect of weekly payments of compensation paid pursuant to the Act to or on behalf of Ian Quarrell (the worker) in respect of injuries sustained by him in separate incidents occurring on 28 June 2005 (the first incident) and 12 October 2005 (the second incident).
1.2.The salient matters are reproduced in the Agreed Statement of Facts dated 27 January 2015 (AS).
1.3.The significant matters are noted as:
1.3.1.The worker suffered two separate injuries (AS 6, 7, 14 & 15).
1.3.2.The injury suffered as a result of the first incident ‘was caused under circumstances creating a legal liability in the Defendant to pay damages’. (AS 6)
1.3.3.The injury suffered as a result of the second incident was not caused in circumstances attributable to the negligent conduct of the Defendant. (AS 7)
1.3.4.The injury suffered in the second incident by reason of s. 5 Injury (c) of the Act was an aggravation, acceleration or exacerbation (AS 8 particulars) of the pre-existing injury suffered as a result of the first incident (AS 5, 6). The injury suffered in the first and second incident entitled the worker to compensation within the meaning of the Act (s. 82 (1) and s. 93). (AS 9, 10, 11, 14 & 15)
1.4.The amount of the compensation subject to the indemnity under s.138 (1) of the Act is, by reason of s. 5 (1) (d) of the Limitation of Actions Act 1958, limited to $51,530.03 being part of compensation paid by the Plaintiff following the second incident. Other amounts of compensation paid in respect of the first incident are time barred. (AS 11)
2. The issue.2.1The Defendant contends that the right and obligation created by s.138 (1) of the Act grants an indemnity only if first, the injury that gave rise to the liability to pay compensation under the Act is secondly, the same injury that ‘was caused under circumstances creating a legal liability in the third party to pay damages’.
2.2The satisfaction of both of these pre-conditions thus enlivens the right to indemnity ‘in accordance with the section’ as is prescribed by the concluding words of s. 138 (1) of the Act.
2.3If these pre-conditions are not established the right to indemnity is not justiciable.
2.4The Plaintiff is assumed to contend that the injury being the product of the first and second incidents engages the indemnity by the singular reason of the payment of compensation and an entitlement to damages under ss. 3, Factor A., damages, being assessable pursuant to common law principles.
3.Interpretation of s. 138 (1) of the Act.
Nature of Cause of Action
3.1Section 138 of the Act has been described as a provision which falls outside the traditional concepts of an action in tort or contract, which gives rise to a restitutionary entitlement. (See: Esso Aust. Ltd v VWA & Anor (2000) VSCA 74 at para 27-28 and TAC v Sweedman (2004) VSCA 162 at para 28-30.).
3.2Relevantly to this case, the claim to enforce the entitlement to indemnity is not a claim in tort. ‘It is a cause of action created by statute for an indemnity against a person liable to pay damages to another’ per Winneke P in Esso v VWA & Anor (op cit) approved in VWA v Esso Aust. Ltd (2001) HCA 53 at para 14.
Injury
3.3It is in this context, the plain words of s. 138 (1) provides that the genesis of the right and corresponding liability demands that the ‘injury’ (for which ‘compensation’ is ‘paid’ or ‘may be payable’) is also ‘caused under circumstances creating a legal liability to pay damages in the non-employer third party to the worker’ (See: 3.10).
3.4The determinative effect of ‘the injury’ in s. 138 (1) is acknowledged in VWA v Kenman Kandy (2002) VSCA 190 wherein the Court was required to consider whether the indemnity was quantified by reference to the formula in force at the time of injury or whether the right of indemnity attached to each individual payment and was thus subject to an amended formula.
In consideration of this issue Vincent JA said at para 11;
‘11. The entitlement to indemnity under s. 138 – a substantive right – arises where there has been a death or injury sustained in circumstances where compensation ‘has been paid, or is or may be payable’. The section creates a statutory right and corresponding co-extensive liability in respect of which, as Winneke, P. pointed out:
‘[i]t must be steadily borne in mind what it is that s. 138 seeks to achieve. In a statutory scheme calculated to benefit injured workers, and to spread the cost impact of doing so, the section confers upon the authority, insurers and employers a statutory entitlement, exercisable at times to suit themselves, to be indemnified by negligent third parties against compensation which has been paid or is payable to injured workers up to, but not exceeding, a limit which, if not agreed, is to be established by the courts.’
He concluded at para 17 as follows:
‘17.Contrary to the submission of the appellant, it does not follow from the fact that the statutory cause of action arises when each amount of compensation is paid or payable that the substantive law then in existence is the law to be applied to identify and evaluate the right of indemnity. Here, as already stated, an element in that cause of action is the formula in existence at the date of injury.’
3.5In Primary Health Care Ltd. v Giakalis (2013) VSCA 75, the Court, in the analysis of the legal liability under s. 138 (1), rejected an argument (at para 58) that the words ‘under circumstances creating a legal liability’ were solely descriptive of the general circumstances of the legal liability as opposed to the existence of an actual liability.
3.6In reaching its conclusion the Court per Kaye AJA at (para 61 thereof) adopted Barwick CJ’s observations in Tickle Industries Pty [Ltd] v Hann (1974) HCA 5 at para 37 thereof where he held the word ‘liable’ in the context of the statutory provision was used to mean, ‘legally responsible that is to say, it describes the person who by his act or omission caused the compensable injury and thus was legally responsible for it and for the payment of damages appropriate to it’.
3.7Legislation in substantially the same terms as s. 138 (1) of the Act and of the same purpose arises in s. 151Z (1) (d) Workers Compensation [Act] (NSW) 1987 which inter alia provides:
‘151Z Recovery against both employer and stranger
(1)If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect:
a)…,
b)…,
c)…,
d)if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),
e)…;
el)…,
f)...’
3.8In Kurnell Passenger & Transport Services (sic) Pty Ltd v Randwick City Council (2009) NSWCA 59 per McColl JA at para 39 – 40 observed with respect to the statutory entitlement to an indemnity;
‘39. Determining the compensation the employer can recover from the tortfeasor pursuant to s. 151Z (1)(d) involves a ‘trial within a trial’; Hickson (at 144) (sic). The employer must establish five separate constituent elements; (a) that a worker was injured; (b) that the injury was one for which compensation is payable under the 1987 Act; (c) that it was caused under circumstances creating legal liability in the tortfeasor; (d) that the worker has recovered compensation under the 1987 Act for that injury from the employer; (e) that the employer has paid the compensation so recovered; Frank G O’Brien Ltd v Bain [1975] 1 NSWLR 373 (at 381) per Glass JA (with whom Reynolds and Hutley JJA agreed); see also Kornjaca v Steel Mains Pty Ltd [& Ors] [1974] 1 NSWLR 343 (at 347) per Glass JA; Kempsey District Hospital v Thackham [(1995) 36 NSWLR 492] (at 507) per Handley JA; Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; (2006) 67 NSWLR 516 (at [10]) per Bryson JA (Handley JA agreeing).
(Note:Distinguished on a different point in VWA v Jones Lang Lasalle (Vic) Pty Ltd (2012) VSC 412 at para 64.
3.9In the Kornjaca case (cited in Kurnell op. cit. at 3.8 hereof) a worker injured his back at work due to the negligence of his employer. He later suffered an aggravation whilst working for another employer. The second employer claimed an indemnity from the first employer for compensation payments under s. 64 (1) Workers’ Compensation Act 1926 (NSW) (which used similar words to s. 138 (1)). The indemnity was rejected by Glass JA who said at p 347,
‘It is necessary for the employer to prove against the party from whom the indemnity is sought that the injury occurred under circumstances which created a liability in damages to the worker. It does not seem possible to regard a pre-existing liability, which became more extensive on the happening of the injury, as one which was then created.’
(It is noted that on Appeal in Dillingham Constructions Pty Ltd v Steel Mains Pty Ltd (1975) HCA 23 the High Court was not required to consider Glass J’s approach to s. 64 (1), deciding the case on different grounds.)
3.10In Borg Warner (Aust) Ltd v Zupan (1982) VicRp 44 (sic) per Murphy J who in consideration of a similar phrase and statutory right of indemnity under Workers’ Compensation legislation explained;
‘Nonetheless, the statutory right of indemnity given to the person paying compensation springs up on each payment of compensation, if it can be shown that the injury for which compensation is payable was at the time it happened ‘caused under circumstances creating legal liability in’ another person ‘to pay damages in respect thereof’. This means a legal liability arising at the time that the injury was caused to the worker: Tickle Industries v Hann [1974] HCA 5; (1974) 130 CLR 321; 48 ALJR 149; Tooth and Co. Ltd v Tillyer [1956] HCA 49; (1956) 95 CLR 605; Watson v Council of the City of Newcastle [1962] HCA 6: (1962) 106 CLR 426 at pp 432-3.
These considerations emphasize the fact that the statute gives a new cause of action to the employer, which depends upon the establishment of certain statutory ingredients and which is only derivative in that the injury, when caused, must be caused in circumstances creating legal liability in some person – to pay damages to the worker in respect thereof.
Without the statute, the person paying the compensation to the worker would have no right to an indemnity from the third party.
The ‘circumstances creating legal liability in some person to pay damages’ in respect of the injury need not involve a tort but may involve a breach of contract by the third party. Commonly, as in this case, the circumstances do involve a tort but the words of the section are so framed as to apply equally to a liability in damages for breach of contract or for breach of some statutory strict liability.’)
(Note:Distinguished in VWA v Kenman Kandy (op. cit.) on a different point. Followed in VWA v Venamis Group Pty Ltd (Ruling) (2011) VCC 954 Judge Parrish and followed in Esso v VWA (op. cit.) at para 27.)
Damages
3.11The use of the phrase ‘pay damages’ is descriptive of the legal liability so created by the circumstances productive of the injury. Thus described the statutory cause of action is not limited to an action in negligence. (See: Borg Warner op. cit. at 3.10). The word ‘damages’ is not otherwise defined and should attract its normal meaning being ‘an award as compensation for each item or aspect of damage suffered’.
3.12‘Damage’ is not to be equated with ‘damages’ which are claimed by way of a compensatory award. ‘Damage properly understood, is the injury and other foreseeable consequences suffered by a plaintiff (31)’ per French CJ, Hayne and Kiefel JJ in Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) HCA 10 at para 24. (See also : Mahony v J. Kruschich (Demolitions) Pty Ltd (1985) HCA 37 at para 4.)
3.13There is no warrant in s. 138 (1) of the Act to engage s. 138 (3) ‘A’ (Factor A) of the Act to define ‘damages’ or otherwise incorporate ss. 3 into the operation of s. 138 (1), its role being restricted, by its opening words, to quantification.
Conclusion
3.14The aforementioned elements identified under the NSW legislation being an injury that is productive of compensation which was also the injury caused by the circumstances creating legal liability to pay damages are equally identifiable within s. 138 (1) as being pre-conditions to the right to an indemnity ‘in accordance with the section’.
3.15The prescription requires that there be an identity between the compensable injury and the injury the subject of the legal liability to pay damages. An increase in ‘damage’ arising at a later time by reason of an aggravation does not ‘create’ a legal liability to pay damages.3.16In this case the injury as a result of the first incident (AS 6) was caused in circumstances creating a legal liability in the Defendant to pay damages to the worker (AS 6 & 3.6 and 3.8 hereof).
The first injury was productive of compensation (AS 9). The second injury (AS 7, 8 & 14) caused by the second incident (AS 7) was not caused in circumstances also creating a legal liability in the Defendant to pay damages as prescribed by s. 138 (1) of the Act.
3.17Accordingly, the pre-conditions prescribed by s. 138 (1) of the Act are not established, thus the cause of action is not established, and this proceeding should be dismissed.”
Defendant’s List of Authorities – Exhibit 2
“A. Cases
1. Esso v VWA & Anor (2000) VSCA 74.
2. TAC v Sweedman (2004) VSCA 162.
3. VWA v Esso Aust Ltd (2001) HCA 53.
4. VWA v Kenman Kandy (2002) VSCA 190.
5. Primary Health Care Ltd v Giakalis (2013) VSCA 75.
6. Tickle Industries Pty Ltd v Hann (1974) HCA 5.
7. Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council (2009) NSWCA 59.
8. VWA v Jones Lang Lasalle (Vic) Pty Ltd (2012) VSC 412.
9. Kornjaca v Steel Mains Pty Ltd (1974) 1 NSWLR 343.
10. Borg Warner (Aust) Ltd v Zupan (1982) Vic Rp 44. (sic)
11. VWA v Venamis Group Pty Ltd (Ruling) (2011) VCC 954.
12. Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) HCA
13. Mahony v J. Kruschich (Demolitions) Pty Ltd (1985) HCA 37.
B. Legislation
14. Accident Compensation Act 1985 (Vic). Section 138.
15. Workers’ Compensation Act 1987 (NSW). Section 151Z (1) (d).”
Is there evidence to satisfy the elements?
15 The VWA does not seek to recover payments made under the first Claim Form. I agree that it is no longer open to the VWA to recover compensation paid to the worker under the first Claim Form. I shall briefly explain why the VWA was correct to not seek recovery in respect of the first Claim Form, since this will assist in demonstrating why the recovery action in respect of the second accident must also fail.
The first accident, injury and accompanying Claim Form – the elements are not established
One – The worker sustained an injury
16 In accordance with the agreed facts, I am satisfied that the worker sustained an injury in the first accident
Two – The injury is one for which compensation is payable under the Act
17 In accordance with the agreed facts, I am satisfied that compensation was payable under the Act in respect of the injury sustained in the first accident.
Three – The injury was caused under circumstances creating a liability in a third party [Clarke] to pay damages in respect of the injury
18 In accordance with the agreed facts, Clarke breached the duty of care owed to the worker. Accordingly, the injury was caused under circumstances creating a liability in Clarke to pay damages in respect of that injury.
Four – The worker has recovered compensation or may recover compensation under the Act for that injury from [VWA]; and
Five – [The VWA] has paid the compensation so recovered
19 In accordance with the agreed facts and concessions made on behalf of the VWA, compensation was paid in respect of that first injury, covered by the first Claim Form until such time as payments to the worker commenced under the second Claim Form in respect of injury sustained in the second accident. Thereafter no payments were made in respect of the first Claim Form relating to the first accident and the resulting compensable injury. It is an agreed fact that any payments made under the first Claim Form are statute barred.[5] As such, the entire claim is statute barred, including a claim for damages due to consequences of injury that continue beyond the expiration period.
[5]See Victorian WorkCover Authority v Manildra Pty Ltd [1999] VSC 220. See also agreed fact 11.
The second accident, injury and accompanying Claim Form
20 Mr Griffin submits that the injuries sustained in both accidents gave rise to two Claim Forms, yet resulted in concurrent obligations in the VWA to pay the worker. In oral submission, he argued that the obligations “fused” or merged. No authority was cited for this doctrine of “fusion”.
21 In any event, Mr Griffin did not explain how a claim for damages can arise in respect of an action that is statute barred, even if there was “fusion” as postulated.
22 There is no evidence to support Mr Griffin’s submission that “the two accidents involve the same injury”.[6] This assertion of fact is beyond the four corners of the agreed facts. In any event, with all due respect to Mr Griffin, it makes little sense to say that harm caused in separate accidents, in separate circumstances, on separate days, caused by different people can constitute “the same injury”. True, similar consequences may flow from each discrete accident, but that does not make them “the same injury” in my view. Accordingly, I will proceed on the basis that the first accident resulted in one compensable injury and the second accident resulted in another compensable injury.[7]
[6]Exhibit B paragraph 8. Identical particulars of injury set out in agreed fact 8 does not equate to “the same injury”.
[7]See Victorian WorkCover Authority v Bennett [2003] VSCA 116, particularly observations as to the meaning of “in respect of the injury” in another context
23 As is clear from Victorian WorkCover Authority v Manildra Pty Ltd,[8] the statutory time limit to bring recovery proceedings under s138 of the Act is set out in the Limitations of Actions Act 1958 (“the LAA”).[9] No application has been made to extend the time within which to bring recovery proceedings in respect of the first accident and first compensable injury. Rather than pursue such a course, in my view the VWA has attempted to circumvent the consequences of the LAA by somehow suggesting that because there is a “causal connection”[10] between the worker’s injuries sustained in both accidents, there must also be a causal nexus in the circumstances creating a liability in Clarke to pay damages in respect of both. I agree with Mr Grainger that such a construction is not open. The compensable injury the subject of the first accident had already happened. The consequences flowing from that accident were known. Any fresh injuries arising from the second accident, even if they comprised aggravation or exacerbation of injuries sustained in the first accident,[11] did not create new circumstances creating a liability in Clarke to pay damages in respect of that second compensable injury.
[8]Supra
[9]Section 5(1)(d) of the Limitation of Actions Act 1958
[10]Agreed fact 15
[11]The VWA disavows any suggestion of aggravation or exacerbation – Exhibit B at paragraph 8
24 Turning to each of the elements in relation to the second accident:
One – The worker sustained an injury
25 In accordance with the agreed facts, I am satisfied that the worker sustained injury in the second accident.
Two – The injury is one for which compensation is payable under the Act
26 In accordance with the agreed facts, I am satisfied that compensation was payable in respect of the second injury under the Act.
Three – The injury was caused under circumstances creating a liability in a third party [Clarke] to pay damages in respect of the injury
27 In accordance with the agreed facts, Clarke was not responsible for the second accident. Thus any injury, loss or damage arising from the second accident does not create a liability in Clarke to pay damages in respect of injury resulting from that accident. In this regard, I agree with Mr Grainger. That the worker may still suffer consequences arising from the first accident does not mean Clarke is liable to pay damages referable to the second accident. A tortfeasor[12] is only liable to pay damages in respect of the injury, loss or damage caused by him. In regard to the second accident and injury, Clarke was not a tortfeasor. “The injury” referred to in s138(1) is the injury caused by the tortfeasor.[13] Put another way, the statute does not provide for recovery from a person who is not the tortfeasor.
Four – The worker has recovered compensation or may recover compensation under the Act for that injury from [the VWA]
[12]Recovery actions under s138 are not confined to tortfeasors. A “liability to pay damages may flow from the breach of contractual obligations” – see Borg Warner (Australia) Ltd v Zupan [1982] VR 437 at 442. I have used the term “tortfeasor” for convenience only.
[13]Borg Warner at 442
28 In accordance with agreed facts, I am satisfied that the worker has recovered and may continue to recover compensation under the Act for the second injury.
Five – [The VWA] has paid the compensation so recovered
29 In accordance with the agreed facts, I am satisfied that VWA has paid the compensation recovered by the worker.
Conclusion
30 The VWA cannot recover “through the back door” what it cannot recover through the “front door”. Any recovery proceedings against Clarke in respect of the first accident and consequent injury are statute barred. To allow recovery in the present circumstances would not only offend the natural construction of s138 of the Act, but it would also serve to undermine the operation of the LAA.
Order
31 The plaintiff’s claim is dismissed.
32 I will hear the parties on the question of costs.
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