Victorian Workcover Authority v Esso Australia Ltd

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HIGH COURT OF AUSTRALIA

GLEESON CJ,
GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

VICTORIAN WORKCOVER AUTHORITY & ANOR      APPELLANTS

AND

ESSO AUSTRALIA LTD   RESPONDENT

Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53
13 September 2001
M101/2000

ORDER

1.Appeal allowed with costs.

2.Set aside order of the Court of Appeal of the Supreme Court of Victoria.

3.Matter remitted for consideration by the Court of Appeal of the Supreme Court of Victoria, consistently with the reasons of this Court, of any remaining grounds of appeal.

On appeal from the Supreme Court of Victoria

Representation:

R P Gorton QC with M F Wheelahan for the appellants (instructed by Wisewoulds)

A G Uren QC with G A Lewis for the respondent (instructed by Middletons Moore & Bevins)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

  1. The first appellant is the Victorian WorkCover Authority ("the Authority") which was established as a body corporate by s 18 of the Accident Compensation Act 1985 (Vic) ("the Compensation Act"). By force of s 64(1) of the Accident Compensation (WorkCover) Act 1992 (Vic), which came into force on 1 December 1992, the Authority is the successor in law of the Accident Compensation Commission ("the Commission"), whose property, rights and assets vested in the Authority and whose liabilities became liabilities of the Authority. At various times and pursuant to the Compensation Act, the Authority, its predecessor, the Commission, and the second appellant, FAI Workers' Compensation (Vic) Pty Ltd ("FAI"), made payments to Mr Kazimer Wsol in respect of a back injury he sustained in 1989.

  2. Mr Wsol sustained his injury whilst he was an employee of AFCO Industrial Services Group Pty Ltd ("AFCO").  That company, since in liquidation, had been engaged by the respondent, Esso Australia Ltd ("Esso"), to provide, among other things, the services of its employees to perform a variety of tasks on the oil platform in Bass Strait which was known as Kingfish West Oil Platform and was occupied by Esso.  Mr Wsol worked on the platform pursuant to that arrangement.  He injured his back on 10 January 1989, his condition deteriorated and he has not worked since September of that year.

  3. In the period to 30 June 1993, compensation payments, the total of which was in the order of $115,000, were made by the Authority (after 1 December 1992) and its predecessor (before 1 December 1992). FAI was the authorised insurer of AFCO and liable to pay compensation to Mr Wsol pursuant to the provisions of the Compensation Act. In the period from 1 July 1993 to 22 October 1998, a week before the commencement of the trial in the Supreme Court of Victoria, FAI made compensation payments, the total of which was in the order of $220,000.

    The trial and the appeal

  4. The trial was of an action commenced by the Authority and FAI in 1995. By the Amended Statement of Claim filed on 26 May 1998,…

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Details
Case
[2001] HCA 53
Decision Date

CaseChat Overview and Summary

The Victorian WorkCover Authority (VWA) and FAI Workers' Compensation (Vic) Pty Ltd (FAI) appealed to the High Court of Australia against a decision of the Court of Appeal of the Supreme Court of Victoria. The dispute concerned whether VWA and FAI were entitled to recover damages in the nature of interest under section 60(1) of the *Supreme Court Act 1986* (Vic) on amounts they had paid, or were liable to pay, as statutory indemnity to Esso Australia Ltd. Esso Australia Ltd had been found negligent in circumstances that caused injury to an employee, Mr Kazimer Wsol, who was working on its oil platform.

The central legal issue before the High Court was whether a proceeding to establish an employer's or insurer's entitlement to indemnification under section 138 of the *Accident Compensation Act 1985* (Vic) constituted a "proceeding for the recovery of debt or damages" within the meaning of section 60(1) of the *Supreme Court Act 1986* (Vic). The Court of Appeal had held that such proceedings were for the recovery of a statutory indemnity, not for debt or damages, and therefore section 60(1) did not apply.

The High Court allowed the appeal, holding that the reasoning in English decisions concerning the construction of similar legislation was applicable. The Court concluded that section 60(1) should be construed broadly to encompass any proceeding in which a claim for money is made, as distinct from claims for purely declaratory or specific forms of equitable relief. The Court reasoned that the phrase "any proceeding for the recovery of debt or damages" should be understood as a composite expression covering claims for money, and the fact that additional relief, such as a declaration, was sought did not remove the money claim from the operation of section 60(1).

Consequently, the High Court set aside the order of the Court of Appeal and remitted the matter for consideration of any remaining grounds of appeal, consistent with the High Court's reasons. This outcome meant that VWA and FAI were entitled to pursue their claims for interest awarded at trial.

Orders

Orders of the court

1. Appeal allowed with costs.

2. Set aside order of the Court of Appeal of the Supreme Court of Victoria.

3. Matter remitted for consideration by the Court of Appeal of the Supreme Court of Victoria, consistently with the reasons of this Court, of any remaining grounds of appeal.

Background

Background to the litigation

The foundation for the recovery of such interest was said to be the Supreme Court Act 1986 (Vic) ("the Supreme Court Act"), s 60(1). That sub-section allows for recovery of damages in the nature of interest upon an application made in any proceedings in the Supreme Court of Victoria for "the recovery of debt or damages". The Court of Appeal held that the proceedings here in question, although in the Supreme Court and upon an application, were not for the "recovery of debt or damages" but for the recovery of a particular variety of statutory indemnity. The statutory authority and the insurer, by special leave, have appealed to this Court. They claim reversal of the judgment of the Court of Appeal and restoration of the interest which they were awarded at trial.The facts Esso Australia Ltd ("the respondent") was the occupier of an oil platform in Bass Strait. It contracted with a company to provide employees of that company to perform work on the platform for the respondent. The respondent agreed to provide accommodation on the platform for such employees. Pursuant to this arrangement an employee, Mr Kazimer Wsol, was present on the platform. On 10 January 1989, he fell from a bunk and injured his back. The resulting injuries caused him to be severely incapacitated. He made a claim for compensation. Under the Accident Compensation Act, Victorian WorkCover Authority ("VWA") (the first appellant) and FAI Workers' Compensation (Vic) Pty Ltd ("FAI") (the second appellant) were obliged to make payments of compensation to Mr Wsol in respect of his injuries. By the time the present action was tried, it was agreed that compensation of approximately $115,000 had been paid by VWA and approximately $220,000 by FAI. The appellants commenced proceedings in the Supreme Court against the respondent alleging that it was liable to indemnify them, in accordance with s 138 of the Accident Compensation Act, in respect of the payments made by them to or on behalf of Mr Wsol. The appellants also sought a declaration in respect of future payments. Their claims were based on the contention that the injuries suffered by Mr Wsol had occurred "under circumstances creating a legal liability" in the respondent to pay damages. The respondent denied liability. The matter went to trial. The primary judge (Cummins J) found that the respondent was negligent in the circumstances occasioning Mr Wsol's injuries. His Honour apportioned responsibility as to 80% against the respondent and as to the remaining 20% against Mr Wsol's employer. He found that there was no contributory negligence on the part of Mr Wsol. In respect of the compensation paid by the appellants to the date of the judgment, the primary judge ordered the respondent to pay VWA interest of $7,206.66 in addition to the sum paid by way of indemnity. He also ordered the respondent to pay FAI interest fixed at $80,600.22 in addition to the amount ordered to be paid as indemnity for the compensation paid to Mr Wsol. In relation to future payments of compensation, the primary judge made orders that were altered by the Court of Appeal. That aspect of the Court of Appeal's decision is not challenged in this Court. Nor is this Court concerned with a challenge in respect of the primary judge's apportionment of blame between the respondent and Mr Wsol's employer[76]; the calculation of the amounts of the respective indemnities recoverable under the statutory formula; or a concurrent dispute decided with the present matter[77]. The substantial agreement about the facts facilitates the consideration by this Court of the questions of statutory interpretation that alone have to be resolved.[76]Esso (2000) 1 VR 246 at 253-254 [20]-[21].[77]Victorian WorkCover Authority v Coats Paton Pty Ltd (2000) 1 VR 246.The applicable legislation

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GLEESON CJ, GUMMOW, HAYNE AND CALLINAN JJ KIRBY J
In the meantime, the English Court of Appeal had held in In re F P and C H Matthews Ltd (In Liquidation)[65] that a claim by a liquidator to recover a fraudulent preference under the Bankruptcy Act 1914 (UK) was a proceeding for the recovery of a debt within the meaning of the 1934 UK Act. The Court rejected the argument that the nature of the liquidator's right was purely statutory, that the only way the matter could come before the court was for a declaration, that the payment of money was consequential and that, as a result, there was no debt within the meaning of the 1934 UK Act[66].[65][1982] Ch 257.[66]See the argument of counsel [1982] Ch 257 at 265.Conclusions The Authority and FAI, as their preferred submission, contend that the reasoning in the English decisions respecting the construction of the 1934 UK Act is applicable to s 60 of the Supreme Court Act. That submission should be accepted, but is not necessarily determinative of this appeal in their favour. The meaning given by Brandon J in The Aldora[67] to the term "debt" in the 1934 UK Act is inconsistent with the proposition that what is identified in s 60 is an action for a fixed and certain sum as was required by the old action of debt. Section 60 should be construed without such a limitation to its scope.[67][1975] QB 748 at 751. However, Esso submits that, even if the reasoning in the English cases be accepted, the result is to exclude a negative without indicating in any positive sense the content of the phrase "any proceeding for the recovery of debt or damages" in s 60. That criticism may be well founded, but is not decisive of the outcome of this appeal. This is because the phrase should be understood as a composite expression. It embraces any proceeding in which a claim for money is made, in contrast to declaratory relief and claims for specific forms of relief such as mandatory injunctions, charging orders and orders for specific performance. The circumstance that relief of that description is sought in addition to a money claim does not deny the application of s 60 in respect of that money claim. The phrase in s 60 is not "in any proceeding only for the recovery of debt or damages"[68]. Thus, the claim in this litigation for declaratory relief to determine the "ceiling" did not take the case outside s 60 with respect to the money claims which were made.[68]cf Moon v Dickinson (1890) 63 LT (NS) 371 at 372. Some of the cases in which interest might be awarded at general law and independently of statute may not answer the description of a proceeding for the recovery of debt or damages. An account of profits or order for the payment of equitable compensation may be examples. However, as indicated earlier in these reasons, par (f) of s 60(2) preserves the operation of the general law in such cases. It is unnecessary to consider whether the reasoning of the House of Lords in Westdeutsche Landesbank Girozentrale v Islington London Borough Council[69] applies to s 60. That reasoning would suggest that, in a case where an order is made under s 60, equity, in its auxiliary jurisdiction, may not supplement the statute by providing for compound interest. Here, the statute in terms (par (a) of s 60(2)) provides that nothing in it authorises the granting of interest on interest.[69][1996] AC 669.

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, GUMMOW, HAYNE AND CALLINAN JJ, KIRBY J

Full text does not contain this section.