VWA v Jones Lang LaSalle (Vic) Pty Ltd
[2011] VCC 1169
•26 August 2011
| IN THE COUNTY COURT OF VICTORIA | Revised |
| AT MELBOURNE CIVIL DIVISION DAMAGES & COMPENSATION LIST GENERAL DIVISION |
Case No. CI-09-00311
| VICTORIAN WORKCOVER AUTHORITY | Plaintiff |
| v | |
| JONES LANG LASALLE (VIC) PTY LIMITED | First Defendant |
| and | |
| ISPT PTY LTD | Second Defendant |
| and | |
| GOUGH BAY GROUP PTY LTD | Third Defendant & Third Party |
| JUDGE: | HER HONOUR JUDGE HOGAN |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 29 March, 6 April, 23-27, 30 and 31 May, 8-10, 16 and 17 June 2011 |
| DATE OF JUDGMENT: | 26 August 2011 |
| CASE MAY BE CITED AS: | VWA v JONES LANG LASALLE (VIC) PTY LTD & ORS |
| MEDIUM NEUTRAL CITATION: | [2011] VCC 1169 |
REASONS FOR JUDGMENT
Catchwords: Section 138 Accident Compensation Act 1985 – claim for indemnity by VWA against negligent third party (occupier of premises).
| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr J Simpson | Wisewoulds Mahony |
| For the First Defendant | Mr R Dyer with | Marque Lawyers |
| Ms A Ryan | ||
| For the Second Defendant | Mr C Grainger | McCabe Terrill Solicitors |
| For the Third Defendant & | Mr J Gorton | Wotton Kearney |
| Third Party HER HONOUR: |
1 In this proceeding the plaintiff, the Victorian WorkCover Authority (VWA), seeks recovery pursuant to s.138 of the Accident Compensation Act 1985 (the Act) of past payments of compensation made to a worker, Miho (Michael) Korlevski, (“the worker”) following a workplace injury suffered by him on or about 12 July 2004 (“the accident”). The plaintiff also seeks an indemnity in respect of any future payments of compensation to the worker.
2 In common law proceedings the worker succeeded in obtaining damages for injury which he received in the course of his employment as a cleaner at Barkly Square Shopping Centre in Brunswick (“the shopping centre”) on or about 12 July 2004. The damages were awarded against Lea Group North (Vic) Pty Ltd (“Lea”), which admitted that it employed the plaintiff at the relevant time, and Jones Lang Lasalle (Vic) Pty Limited (“JLL”), which was the manager of the shopping centre.[1]
[1] Korlevski v Lea Group North (Vic) Pty Ltd & Ors [2011] VCC 1168, 26 August 2011.
3 In this proceeding, JLL is the first defendant. ISPT Pty Ltd (“ISPT”), the second defendant, was at all relevant times the owner of the shopping centre. Gough Bay Group Pty Ltd (“Gough Bay”), the third defendant, is a company which had contracted with ISPT to provide cleaning services for the shopping centre. It was apparently via Gough Bay that Lea obtained the contract to clean the shopping centre. The VWA has settled this proceeding with ISPT and Gough Bay. However, Gough Bay remains joined as a third party by JLL.
4 The court has been told by Mr Dyer for JLL and Mr Gorton for Gough Bay, that, in the event that the court finds JLL to be liable to the plaintiff, then JLL’s claim for contractual indemnity against Gough Bay as a third party fails.
5 The question of whether the VWA is entitled to indemnity is governed by the provisions of s.138 of the Act.
6 Section 138(1) states:
“Where an injury or a death 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 or that would have created such a liability if the injury or death had been caused in Victoria or that would, but for section 134A, create such a liability in respect of the injury or death, the Authority, self-insurer or employer is entitled to be indemnified by the third party in accordance with this section.”
7 In the worker’s common law proceeding, Lea and JLL were each found to have contributed 50 per cent to the injury, loss and damage of the worker flowing from the accident on or about 12 July 2004. However, a preliminary point has been raised in this proceeding by Mr Dyer on behalf of JLL. He submits that the VWA has no entitlement to indemnity pursuant to s.138 because it purports to recover indemnity for liabilities of Lea, but Lea was not, in fact, the employer of the worker at the time of the accident.
PRELIMINARY ARGUMENT OF JLL THAT THE VWA HAS NO STATUTORY
RIGHT TO BE INDEMNIFIED8 Mr Dyer submits that it is clear that the VWA’s action seeking indemnity is not an action in tort or founded on tort[2] but rather a statutory right to indemnity pursuant to s.138 of the Act. He submits that in order for the VWA to be able to recover under this section it needs to satisfy the court that a contract of service existed between Lea and the worker at the time of the worker’s accident on or about 12 July 2004. He submits that all the evidence is to the contrary, namely, that the employer of the plaintiff was Reflections Group Services Pty Ltd (Reflections) which had formerly owned the business name Shopping Centre Cleaning Services by which the worker was formerly employed. Reflections, subsequent to the accident, became Gough Bay.
[2] Accident Compensation Commission v Haynes (1992) 1 VR 691.
9 In support of his submission that at the relevant time Reflections, and not Lea, was the relevant employer, Mr Dyer relies upon the following evidence:
(i)
The worker, in his proceeding gave evidence that initially, his employer was Shopping Centre Cleaning Services but by the date of the accident had changed to Reflections. He said that the managers of this company were Brian Crewes and his sons, Stephen and Wayne. He said that he wore a Reflections uniform when he did his work at the shopping centre and had never heard of Lea. Moreover, when he submitted a WorkCover claim form in respect of the accident he stated on it that his employer was “Reflection(sic) Group”.[3]
(ii)
The worker’s payslips for the period from 28 January 2003 to 3 October 2004[4] show that his employer was Shopping Centre Cleaning Services, which business name was owned and registered by Reflections in 2000/2001.
[3] Exhibit D3-1 in the worker’s proceeding.
[4] Exhibit “JLL-6”.
However, I here interpolate that Mr Dyer conceded that the details on these payslips corresponded precisely with payslips or payroll advices in Exhibit “VWA-4”. These payslips or pay advices comprising Exhibit “VWA-4” were faxed to QBE, Workers Compensation Insurance (Vic) Ltd (“QBE”), the WorkCover insurer handling the worker’s claim, on 12 October 2004. The face sheet for the fax states “Reflections Group Services”, however, the name of the employer on the payslips or payroll advices is SCCS (North) Vic Pty Ltd.[5] (This company later became Lea.)[6] Moreover, the claim number which is handwritten on the top of the payslips or payroll advices, 12040022242, is the same as that appearing in Exhibit “VWA-2”, which is a claim for impairment benefits signed by the worker on 15 November 2005 in which the employer’s details are stated to be “Shopping Centre Cleaning Services North”. Further, Ms Hoggan, a senior dispute resolution officer from QBE, gave evidence that this matched the details of Exhibit “VWA-9”. The latter is a printed copy of the computer record from the VWA’s “ACCtion screen” on 18 May 2011. This shows the relevant employer to be “Shopping Centre Cleaning Services North (Vic) P/L” and the employer number of that company to be “8376037”. Ms Hoggan said that it was her understanding that the employer number shown on this document, namely, number 8376037, was one and the same as on Exhibit “D3-1” (in the worker’s proceeding), which is the worker’s claim form in respect of the accident. This form appears to have been signed by the worker on 16 August 2004 and signed on behalf of the employer by a person called Sam Matthews on 30 August 2004. (Unfortunately, only a photocopy, not the original, of that document is available and three of the digits forming the employer number are not very clear.) On the same date, a person who appears to be “S Matthews”, has signed an employer claim report,[7] which names the employer as “Reflections Group Service”. Although the WorkCover employer number on that form is not clear, the evidence makes it likely that it is the same number, 8376037, as that for Shopping Centre Cleaning Services (North) Vic Pty Ltd. However, on that claim form, the head office of the employer is said to be 35 Connell Road, Oakleigh, 3166, whereas on Exhibit VWA-9, it is said to be Unit 9, 435 Williamson Road, Port Melbourne. According to Ms Hoggan, Exhibit “VWA-9” shows that the date from which QBE was the relevant insurer was 1 January 2003, although there had been a policy in existence with another insurer from 18 November 1997.
(iii) In Exhibit “VWA-5”, which comprises QBE’s premium documents relating to Shopping Centre Cleaning Services North (Vic) Pty Ltd, the employer number, namely, 8376037, is one and the same as the print- out from the VWA “ACCtion screen”[8] but the employer’s address is 35 Connell Road, Oakleigh, and the workplace address is 16 High Street, Glen Iris. These documents include a certificate signed by Wayne Crewes, the person nominated by the worker as one of the managers of Reflections. These certifications are signed on 25 July 2002 and on 21 July 2004, the latter of which again has the address of 35 Connell Road, Oakleigh. It is apparent from the documents constituting this exhibit that Bentleys, auditors appointed on behalf of QBE, on 30 March 2005 reported to the then WorkCover agent that Shopping Centre Cleaning Services North (Vic) P/L, employer number 8376037, was shown to have overstated remuneration declared for the 2002/2003 financial year and unstated remuneration declared for the 2001/2002 financial year. As a consequence of the under-declared remuneration, there was a recommended 25 per cent penalty rate applied to the employer’s premium which appears to have been approved in April 2005. Thereafter, a declaration of rateable remuneration for the financial year ending 30 June 2005 notes that Shopping Centre Cleaning Services North (Vic) Pty Ltd of 35 Connell Road, Oakleigh, Victoria, ceased to trade at 30 June 2005 and as at that date had no full-time or part-time employees. The certification is made by Wayne Crewes and singed on 10 July 2005. This declaration contrasts with the one for the previous year ending 30 June 2004 in which there had been 10 full-time and 27 part-time employees.[9]
[5] This entity is named on some other documents tendered as Shopping Centre Cleaning Services North (Vic) Pty Ltd.
[6] Exhibit VWA-8.
[7] Exhibit “VWA-3”.
[8] Exhibit “VWA-9”.
[9] Exhibit “VWA-8”, a company search of Lea, shows that on “Notification of Appointment of Liquidator (Creditors’ Voluntary Winding Up) was effective from 28 July 2005 and ultimately Lea was deregistered on 24 February 2010.
10 Mr Dyer submits that the various documents to which he has referred, in combination with the worker’s evidence, point to the employer of the worker at the time of the accident being Reflections, formerly Shopping Centre Cleaning Services. He submits that, following the understatement of remuneration and the imposition of a 25 per cent penalty premium by the WorkCover insurer, Reflections ceased business in order to avoid the penalty premium. He submits that it is likely that in the context of this “sham”, at some stage subsequent to the accident, Lea took over Reflection’s business. Mr Dyer submits that, although the VWA has apparently made payments to Lea, there is no evidence that a contract of service existed between Lea and the worker. Thus, there was no legal obligation for payments of compensation to be made in accordance with the Act and, correspondingly, there can be no right to indemnity by VWA.
11 Mr Dyer submits that the failure by the VWA to lead any evidence from a person who had actual knowledge of the worker’s claim or to explain how it was that Reflections, as the employer, somehow came to be Lea subsequent to the accident, should be grounds for an adverse inference to be drawn against VWA. He notes that Exhibit “VWA-13”, a print-out from the VWA “ACCtion screen” on 19 May 2011 shows “Reflections Group Services P/L” to have an employer number 11539078 and to be in liquidation. The start date of the policy is 15 October 2004 (that is, subsequent to the accident) and the cessation date of the policy is 4 February 2007. Exhibit “VWA-15” is a letter addressed to Ms Samantha Matthews of Reflections Group Services Pty Ltd at 35 Connell Road, Oakleigh, Victoria dated 15 October 2004 seeking further information about the worker’s claim and is signed by Rachel Saracino for and on behalf of VWA. Mr Dyer submits that Rachel Saracino appears to have been a person handling the worker’s claim, and in correspondence with Reflections, yet she was not called to explain how the worker’s employer changed from being Reflections to Lea. Accordingly, an adverse inference pursuant to the principles of Jones v Dunkel[10] should be drawn against the VWA for failing to call Rachel Saracino.
[10] (1959) 101 CLR 298.
THE VWA’S RESPONSE TO JLL’S PRELIMINARY POINT
12 Mr Simpson on behalf of the VWA submits that it is wrong in law to say that the VWA must establish there has been a contract of service between the worker and Lea before the VWA has an entitlement to indemnity pursuant to s.138. In any event, he submits that the court could not conclude on the evidence before it that the worker had a contract of service with Reflections at the date of his injury. Nor is there any evidence to support JLL’s assertion that Lea engaged in some sort of “sham”.
13 He submits that the evidence demonstrates that the company, Shopping Centre Cleaning Services North (Vic) Pty Ltd, is now known as Lea Group North (Vic) Pty Ltd. Exhibit “VWA-5” demonstrates that as at 30 June 2004, Lea’s predecessor in law had a predominant activity of performing cleaning services and employed 10 full-time and 27 part-time employees for which it declared rateable remuneration of $804,737. Further, the worker’s income tax returns for the years 2001-2005[11] disclose the Australian Business Number for Lea (74079117285) as indicated by the relevant company search.[12] This same Australian Business Number appears in the workers’ payslips or payroll advices faxed to QBE on 12 October 2004. These records also bear the name of Lea’s predecessor in law, SCCS (North) Vic Pty Ltd.[13] Moreover, SCCS (North) Vic Pty Ltd held a WorkCover policy of insurance with QBE from 18 November 1997 for which the employer number is 8376037.[14] Ms Hoggan said that she understood that same employer number, 8376037, to be the relevant employer number in respect of which compensation payments were made for the worker relating to the accident.
[11] Exhibit “A” in the worker’s proceeding, Korlevski v Lea Group North (Vic) Pty Ltd & Ors.
[12] Exhibit “VWA-8”.
[13] Exhibit “VWA-4”.
[14] Exhibit “VWA-9”.
THE ISSUE OF WHETHER IT IS A PRE-REQUISITE FOR THE VWA’S ENTITLEMENT TO INDEMNITY PURSUANT TO S.138 TO ESTABLISH A CONTRACT OF SERVICE BETWEEN THE WORKER AND LEA
14 It is something of an understatement to say that in the many exhibits tendered in this proceeding, there appears to be a corporate mesh which makes it difficult to clearly delineate the precise corporate identity of the worker’s employer at any one time. Although the worker gave evidence that he believed he was employed by Reflections, his tax return for the year of the accident (and indeed, going back to 2001) shows the Australian Business Number for Shopping Centre Cleaning Services North (Vic) Pty Ltd which, according to a company search, became Lea.[15] As previously mentioned, Shopping Centre Cleaning Services North (Vic) Pty Ltd held a WorkCover policy of insurance from 18 November 1997 for which the employer number is 8376037. Ms Hoggan’s evidence was that she regarded this as the number of the employer to whom compensation for the worker was being paid. This number would appear to correspond closely with the WorkCover employer number on the poor photocopy of the claim form signed by the worker in respect of the accident on 16 August 2004 albeit that the employer’s name is given by the worker as “Reflection Group”.[16] It is certainly not the employer number for Reflections Group Services Pty Ltd (11539078), which had no policy of insurance with QBE until 15 October 2004 (that is, after the accident).[17]
[15] Exhibit “VWA-8”.
[16] Exhibit “D3-1” in the worker’s proceeding.
[17] Exhibit “VWA-13”.
15 Although, as Mr Dyer submits, it may well be that the imposition of a 25 per cent premium penalty prompted Shopping Centre Cleaning Services North (Vic) Pty Ltd to cease to trade on 30 June 2005,[18] this in no way helps clarify any connection between Reflections and Lea. Indeed, the worker’s payslips or payroll advices from 2 July 2003 until 22 September 2004 appear to record Lea’s legal predecessor, namely, SCCS (North) Vic Pty Ltd as the worker’s employer. However, from 5 October 2004 the payslips or payroll advices record SCCS (West) Vic Pty Ltd as the worker’s employer.[19]
[18] Exhibit “VWA-5”.
[19] Exhibit “VWA-4”, “JLL-2” and “JLL-5”.
16 Given the foregoing, although I am puzzled as to what, if any, relationship existed between Reflections and Lea, I do not consider that there is evidence which would enable me to determine that, contrary to its admission in the worker’s proceeding, Lea (or its predecessor in law) was not the employer of the worker at the date of the accident. However, as will be apparent from my findings below, I do not find it to be a pre-requisite to VWA’s entitlement to recovery under s.138 that it establish that Lea was the actual employer.
17 It is clear that there can be no entitlement to indemnity from a third party pursuant to s.138 unless compensation has been paid. There is no definition of compensation in the Act. Section 82(1) states:
“If there is caused to a worker an injury arising out of or in the course of any employment, the worker shall be entitled to compensation in accordance with this Act.”
18 Tendered as Exhibit “VWA-1” is a certificate under s.239A of the Act issued on 23 May 2011 setting out amounts of compensation paid by the VWA to the worker. Section 239A states that such certificate “is evidence of the matters
stated in the certificate and, in the absence of evidence to the contrary, is
proof of those matters”.
19 There is no suggestion that the weekly payments, medical and like expenses and the statutory and non-economic and other benefits, as set out in the s.239A certificate, have been paid other than directly to the worker or to others on his behalf. Indeed, it records the “injury employer” and the “managing employer” to be: “8376037 Shopping Centre Cleanings Services North (Vic) P/L.” As previously noted, a company search shows this company to be Lea’s predecessor in law.[20]
[20] Exhibit “VWA-8”.
20 I adopt the commonsense approach of Her Honour Judge Davis in Victorian WorkCover Authority v Bruck Textiles Pty Ltd in which she stated:
“As ‘compensation’ is not defined in the Act, the word should be given its ordinary and natural meaning, that is ‘payment to make amends for loss of injury to personal property, or as recompensed for some deprivation’.” [21]
[21] [2011] VCC 141 (18 March 2010) at paragraph 68
I am thus satisfied that compensation has been paid to the worker by the VWA for the injury suffered by him on or about 12 July 2004 arising out of or in the course of his then employment, but in circumstances which I have found in the worker’s proceeding to create a liability in JLL. It seems to me that the plain reading of s.138(1) is that in those circumstances, whether the compensation has been paid or may be payable by the Authority or a self- insurer or an employer, then any one of those three entities is entitled to be indemnified by the third party, in this case JLL.
21 I can find nothing in the scheme of the Act which makes it a precondition of the VWA’s right to indemnity that it be able to prove that there has been a contract of service between a particular employer and the worker in respect of whom it has paid compensation. I consider that I can take judicial notice of the fact that it is common practice for there to be a change in the identity of a corporation which owns or runs a particular business but, nevertheless, continuity of employment of workers within that business. Indeed, it is not uncommon when a business is sold that liabilities attaching to employees of that business are part of the sale to the new owner. I do not know how it is that in some documents tendered in evidence Reflections is stated to be the worker’s employer, yet payslips or payroll advices record that Shopping Centre Cleaning Services North (Vic) Pty Ltd (later Lea) is his employer. However, it would appear to be contrary to the spirit of s.138 that the VWA should be denied indemnity when there is no doubt that the compensation has found its way to the worker or to others on his behalf.
22 My approach appears to be in accordance with other authorities:
• In Bruck Textiles, Davis J stated: “Once payments are payments as compensation, s.138(1) and (3)(a) are satisfied, and the court is required to address the apportionment aspect of liability.”[22]
[22] Paragraph 69.
• McInerney J in VWA v Stawell Gold Mines Pty Ltd held that it was not appropriate for this Court to review the administrative decisions which had led to payments of compensation being made or to determinations as to who was the appropriate employer to bear liability for payment of compensation.[23] • In VWA v Concept Hire Limited Beach J noted that in that case the arguments of the third party, MC Labour Services Pty Ltd, “were all premised upon the proposition that it is the employer who is liable to pay compensation in respect of an injury arising out of or in the course of any employment …” and, therefore, the VWA was not the correct plaintiff in a s.138 recovery proceeding. Beach J held: [23] County Court of Victoria, 20 October 2000 at page 17.
“The terms of s138(1) are plain. Where compensation has been paid, or is or may be payable, by the Authority, the Authority is entitled to be indemnified by a third party (in this case Concept Hire) if the injury was caused under circumstances creating a legal liability in the third party to pay damages. There is nothing in the text of s138(1) (or indeed the Accident Compensation Act) which limits the VWA’s ability to recover indemnity only to those cases where the employer was not principally liable (or only to cases where the VWA has paid “directly” rather than by way of an indemnity to an employer). Neither the text of the sections relied upon by the third party nor the purposes of the Act tell against a straightforward application of s138(1) entitling the VWA to bring a recovery proceeding in its own name in respect of amounts it has paid “directly” or amounts it has paid as the insurer of the employer. To accept the third party’s submission concerning the operation of s138 would be to put a gloss on the statute for which there is no justification.”
Beach J went on to emphasise:
“The words in s.138 are unambiguous. They do not limit the VWA’s right to indemnity to only those cases where the employer was not principally liable or the VWA has paid other than by indemnifying the employer.”[24]
In that same decision Beach J had earlier stated that, although the Accident Compensation Act imposed the principal obligation to pay compensation on the employer, that did not deny “the additional direct liability imposed upon the VWA”.[25] Thus, it is clear that, even if an employer were to cease to exist, the VWA would still have a statutory obligation to pay the worker because it is a statutory co-insured with the employer.
[24] (2009) 24 VR 695 at paragraph 10.
[25] At paragraph 6.
• In DSG Pty Ltd v VWA, Pagone AJA stated: “The purpose of the section is to ensure that the burden of payment for the injury is borne by those with a
legal liability for it.”[26] This is consistent with the approach of Ashley JA in the same case in which he identified that one of the purposes of the Act is to enable the party that has paid compensation, whether it be the employer, the VWA or a self insurer, to recoup it from a negligent third party.[27]
[26] (2008) VSCA 42 (3 April 2008) at paragraph 85.
[27] At paragraph 72.
23 It seems to me that in the light of the foregoing authorities, Mr Dyer’s submission that if I am satisfied that Lea was not the employer, then
“notwithstanding good money has been paid by the WorkCover Authority, in the circumstances of this case they should not be able to recover under
s.138”[28] is untenable.
[28] T1273.
24 I am thus satisfied that the VWA does have a right to indemnity from JLL pursuant to s.138. I am not satisfied that the calling of evidence from Samantha Matthews, who was identified as the employer’s contact in Exhibit “VWA-3”, or from Mr Wayne Crewes, who signed two of the premium declarations comprising Exhibit “VWA-5”, or from Rachel Saracino, who handled the worker’s claim at QBE in 2004, would have altered my decision. Hence, I do not believe it is appropriate to draw an inference adverse to the VWA in accordance with the principles of Jones v Dunkel[29] and O’Donnell v Reichard[30] as sought by Mr Dyer.
[29] (1959) 101 CLR 298.
[30] (1975) VR 916.
QUANTIFICATION OF THE ENTITLEMENT OF THE VWA TO INDEMNITY
PURSUANT TO S.13825 Pursuant to s.138(3) the amount which JLL is required to pay as indemnity 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 in accordance with the formula in s.138(3)(b). 26 The formula is as follows: [A – (B + C)] x X
10027 Factor B has no application in this case.
28 Factor 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.
29 Factor 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 against the third party.
30 Factor X is the extent expressed as a percentage whereby the third party’s act, default or negligence caused or contributed to the injury.
31 Following the discharge of the jury in the worker’s proceeding, this proceeding was heard together with the worker’s proceeding. An order was made that the evidence in the worker’s proceeding form part of the evidence in this proceeding. In this proceeding, evidence additional to that which had been called in the worker’s proceeding was called by the VWA from the aforementioned Ms Hoggan on the preliminary point raised by Mr Dyer. Also, the VWA adduced additional evidence from the worker on the issue of damages pursuant to the principles in Griffiths v Kerkemeyer[31]
[31] (1977) 139 CLR 161.
FACTOR A
32 This factor comprises the following matters:
• pain and suffering damages for the worker; • past economic loss (inclusive of superannuation) damages; • past medical and like expenses; • past Griffiths v Kerkemeyer damages; • future economic loss (inclusive of superannuation) damages; • future medical and like expenses; • future Griffiths v Kerkemeyer damages. Pain and suffering damages
33 Mr Simpson submitted that these damages should be $225,000, as sought by Mr Jewell of Senior Counsel for the worker in his proceeding. Mr Dyer submitted on behalf of JLL that they should be between $100,000 and $120,000. In the worker’s proceeding I assessed this component of damages at $200,000 and gave reasons for such assessment which I adopt in this judgment. Accordingly, this component of Factor A is $200,000.
Past economic loss (inclusive of superannuation) damages
34 The arithmetic of what was claimed by the worker in his proceeding for past wages, past superannuation and the Fox v Wood component was not disputed by either of the parties. Mr Simpson, on behalf of VWA, adopted the submission of Mr Jewell in the worker’s proceeding that there should be a five per cent discount for vicissitudes. However, Mr Dyer submitted that this discount should be 50 per cent. He relied particularly upon the fact that both Reflections and Lea had ceased to operate their business as cleaning contractors and, hence, regardless of the injury, the plaintiff could not have been employed by them. Moreover, he submitted that the worker’s concurrent health problems, and the fact that he was already 54 years of age at the date of injury made it unlikely that he would continue in the physically demanding work as a cleaner. He also submitted that there was no evidence of what a comparable employee would have earned.
35 It is common, where employer’s have gone out of business, that there is no evidence as to the earnings of comparable employees. In my view, the manner in which Mr Jewell calculated wage increments from 1 July 2004 to 22 May 2011 as detailed in Exhibit “O” in the worker’s proceeding, appears to be reasonable. Indeed, that exhibit was tendered as arithmetic which was agreed upon by the parties.
36 As for the other reasons advanced by Mr Dyer, I have addressed those at various stages in the worker’s proceeding. I concluded in that proceeding that a discount rate of five per cent was appropriate as submitted by Mr Jewell on behalf of the worker. Accordingly, that is the appropriate discount to apply in this proceeding.
37 The relevant calculations in accordance with what was awarded in the worker’s proceeding are as follows:
Loss of nett weekly income from 08/09/2004 to $253,261.00 22/05/2011
Loss of superannuation at nine per cent from $23,633.00 08/09/2004 to 22/05/2011
Income tax claimable on WorkCover payments $15,881.00 pursuant to the principle in Fox v Wood
$292,775.00
Less five per cent discount for vicissitudes = $278,136.00 Past medical and like expenses 38 According to the s.239A certificate dated 23 May 2011, the total of such expenses incurred between 12 July 2004 and 21 May 2011 is $25,820.[32] Mr Dyer, on behalf of JLL submitted that a discount of approximately 30 per cent should apply on the basis that the worker was likely, on some occasions, to have attended his doctor for his concurrent medical conditions. Mr Simpson submitted that a discount of five per cent for such vicissitudes was appropriate.
[32] Exhibit “VWA-1” at page 44.
39 There is no doubt that, according to the worker and his general practitioner, Dr Ristevski, the worker has suffered a number of other medical conditions requiring treatment. These include hypertension, which was probably the cause of his stroke or transitory ischemic episode causing him to be debilitated for a couple of months last year, together with elevated cholesterol, diabetes and symptoms of depression and sleep disturbance following the death of his wife. The cross-examination of Dr Ristevski does not reveal that any of the particular medical and like expenses, for which the VWA has paid, relate to occasions where treatment was for any of these other conditions. However, it is clear that the plaintiff did have grief issues and understandable depression following the death of his wife in 2002 for which he was prescribed Stilnox, albeit at a lower and less frequent dosage than that required after the accident. Thus, in relation to the psychological symptoms of the worker, it may be that there is some blurring of medical and like expenses. However, in the absence of specific evidence I do not think that I could simply assign a discount of 30 per cent as suggested by Mr Dyer. I consider that five per cent for vicissitudes suggested by Mr Simpson is appropriate to allow for those occasions where not only the ankle problem and its sequelae but some other unrelated health condition may have been canvassed in the treatment paid for by the VWA.
40 Accordingly the allowance under this head is as follows:
Total of medical and like expenses as per s.239A certificate $25,820.00
Less five per cent for vicissitudes $1,291.00
Total $24,529.00 Past Griffiths v Kerkemeyer damages
41 The evidence of the worker is that, after his wife died on 13 November 2002, his son and daughter-in-law came to live with him, and his daughter-in-law took care of the laundry and they would share shopping as a family. There was not much maintenance required on the house as it had been purchased new in 2000. Subsequently, his son and daughter-in-law remained living in the house and he moved to live in a unit. This was probably a year after his wife’s death, that is, prior to the accident. He said that his daughter and his son and daughter-in-law now come on average about four or five hours a week to help him with things, such as vacuuming, that he is not able to do because of his ankle injury. However, under cross-examination by Mr Dyer, he said that, on average, he thought that the children had come and helped him for four or five hours a week since his wife had passed away (my emphasis). In re-examination, he said that, following his ankle injury in July 2004, the pain had stopped him from performing a lot of duties and doing a lot of things and he would not have been able to vacuum or hang washing on the line. He said he finds it difficult to do any household activities which require bending, stooping and twisting because of the pain in his ankle and he cannot walk too much.
42 I found it difficult to get a very clear picture of the precise nature of assistance provided to the worker by his family members before and after the accident. The impression I gained was that he was very understandably distressed by his wife’s death and perhaps was not used to doing some household tasks, like washing, and that is why his son and daughter-in-law moved in to help him. Nevertheless, he gained sufficient independence to be able to move from his house with his son and daughter-in-law to living in a unit on his own prior to the occurrence of the accident in July 2004.
43 Dr Ristevski gave evidence that the worker was assessed by a specialist physician in July last year and was found to have recovered from his mild stroke and not to require any community support services.[33] It may be that this was because his family was helping him, because Dr Ristevski had expressed his view that the worker was totally incapacitated for work. He said that his ankle injury had markedly restricted his long-term ability to be physically active and to fully enjoy life in terms of activities of daily living and social functioning in the same way as he did prior to the accident.
[33] T337.
44 It seems that following the accident the worker has needed assistance from his family for such things as vacuuming and washing, specifically because of his ankle injury. He said also that since the accident, his daughter, who works at Safeway, buys his food or other shopping and comes in and cleans the unit to help him. His son comes around to do sweeping and a general clean-up around the front of the unit and he has an agreement with the next door neighbour to cut the lawn. He said that he had got approval from WorkCover to get a cleaning company to come in two hours each week to clean the unit, but they never turned up, so he just relied upon the family.
45 WorkCover’s approval for two hours home help is probably a conservative assessment of the level of assistance needed by the worker at the present time. However, I find it difficult to be satisfied that he has necessarily required two hours every week since the accident occurred. It seemed to me that he was not totally incapable of doing such things as supermarket shopping but, as a mater of convenience, and because he had a caring family, this was done for him. It may be that his needs at the present time require more like three or four hours home help per week, but it is not clear that he has consistently required that help in the past. Doing the best I can, I think it reasonable to allow past voluntary care at two hours per week. It has been agreed by Mr Simpson and Mr Dyer that an appropriate hourly rate for such assistance is $30. Mr Simpson has conceded a five per cent discount for vicissitudes and I consider that this is appropriate as, at times, assistance in the past may have been required because of conditions unrelated to the worker’s ankle injury or its psychological consequences.
46 Accordingly, the allowance is as follows:
Two hours per week at $30 per hour for 361 weeks $21,660.00
Less five per cent vicissitudes $1,083.00
Total $20,577.00 Future economic loss (inclusive of superannuation) damages
47 In the worker’s proceeding I found that he was totally incapacitated for any employment. In that case Mr Dyer had argued on behalf of JLL, as he does in this case, that the allowance for any future economic loss should be discounted by 50 per cent because of the unlikely event that the plaintiff would have obtained employment, particularly given his other health conditions and the fact that his employer had ceased to operate its business. For the same reasons that I have given in the worker’s proceeding, I do not accept that such a discount is appropriate, particularly given that the worker is now 61 years of age and there is only a four year period to age 65.
48 As was the case in the worker’s proceeding, I consider a five per cent allowance for vicissitudes is appropriate.
49 According to Dr Ristevski, the worker’s transient ischemic episode suffered last year has not had any lasting effect on his work capacity. It involved transient blurring of vision and dizziness but no sensory or motor loss. He has fully recovered and, last year, was assessed as having normal heart function.[34] Dr Ristevski also said there was no long term impact on the worker’s capacity for employment from his alcoholic pancreatitis (which had passed), his diabetes, high cholesterol, or the fact that he only had one kidney. He said it was the ankle injury, and his consequent psychiatric state, which caused the worker to be incapacitated for employment.
[34] T337.
50 The additional medical material tendered as Exhibit “VWA-18”, namely reports from Mr Love, Dr Entwisle and Dr Jackson, reinforce the findings that I made in the worker’s proceeding, that he has no future work capacity, which is primarily due to his ankle injury and its psychological sequelae.
51 Mr Simpson and Mr Dyer agreed that, in this proceeding, it is appropriate to adopt a three per cent multiplier rather than the six per cent applied in the worker’s proceeding.[35]
[35] VWA v Prolift Fleet Management [2009] VSC 96, a decision of Kay J on 20 March 2009.
52 Accordingly, the future economic loss calculation is as follows:
Loss of earning capacity at $854.10 per week using a
multiplier of 196.9 (being a three per cent discount rate for a $168,172.00 61 year old man to age 65 years).
Loss of future superannuation (nine per cent of $854.10)
using the three per cent multiplier of 196.9 $15,136.00
Total $183,308.00
Less five per cent for vicissitudes $9,165.00
Total $174,143.00
Future medical and like expenses
53 Mr Simpson and Mr Dyer have agreed that, according to the expenses set out in the s.239A certificate dated 23 May 2011, the worker has incurred medical and like expenses averaging $43.78 per week. It is also agreed that the three per cent multiplier for a 61 year old man to death is $910.50.
54 Mr Dyer submits that a discount of 30 per cent would be reasonable in the light of the worker’s non-injury related health conditions. Certainly, Dr Ristevski said that the plaintiff was always at risk of a further stroke, although his current condition is stable and recent cardiac stress tests were favourable to the worker. He does have diabetes and hypertension, but these are likely to worsen because of his inability to exercise because of his ankle injury. I must also take into account that the prognosis for the ankle injury is for increasing degeneration and increasing pain. His prognosis is also for long-term psychological impairment, which is likely to worsen if the pain increases. For this reason, his medical and like expenses resulting from his injury are likely to increase. Thus, I consider that a 30 per cent discount for future medical and like expenses is too high, but I am mindful that the life expectancy for a 61 year old man is 24.53 years. This is a long time into the future. In those circumstances I consider that the ten per cent discount for vicissitudes suggested by Mr Simpson is probably too low. Doing the best I can, I consider that 20 per cent is probably a fair and reasonable discount.
55 Thus, the allowance for this component is as follows:
$43.78 per week x 910.5 $39,862.00
Less 20 per cent for vicissitudes $7,972,40
Total $31,889,60 Future Griffiths v Kerkemeyer damages
56 The worker’s evidence was that he felt that, because of his injury and the resultant inactivity, he was slowing down. He said that he had been working with his own doctor to try and get help from the city council in relation to meals delivered to his house and assistance to clean his house.[36] In the light of the worker’s prognosis for increasing degeneration in the ankle, which will mean increasing pain and decreasing mobility, I consider that his need for assistance at home will increase and that it is reasonable to allow four hours per week at the agreed future rate of $37 per hour for such assistance.
[36] T562.
57 As previously mentioned, the relevant three per cent multiplier for a 61 year old to death is agreed to be 910.5. However, given that a 61 year old male has a life expectancy of 24.53 years, which is a relatively long time to prognosticate into the future, and that the worker does have other health conditions which may also contribute to his need for future home help, I consider that I should discount the allowance by 20 per cent for vicissitudes.
58 Accordingly, the allowance is calculated as follows:
Four hours per week x $37 per hour x 910.5 $134,754.00
Less 20 per cent for vicissitudes $26,950.80
Total of allowance $107,803.20 59 Factor A is thus assesse0d as follows:
Pain and suffering $200,000.00 Past economic loss $278,136.00 Past medical and like expenses $24,529.00 Past Griffiths v Kerkemeyer $20,577.00 Future economic loss $174,143.00 Future medical and like expenses $31,889.60 Future Griffiths v Kerkemeyer $107,803.20 Total $837,077.80
FACTOR C
60 In the worker’s proceeding the amount payable by JLL is 50 per cent of the judgment sum of $642,638. Accordingly, Factor C is $321,319.
FACTOR X
61 On behalf of the VWA Mr Simpson submitted that the extent expressed as a percentage whereby JLL’s act, default, or negligence contributed to the worker’s injury should be in the range of 80 per cent (although he had opened the case suggesting a finding in the range of 60 per cent). Mr Dyer on behalf of JLL submitted that the employer of the worker had shown such a lack of care that it could properly be characterised as “breathtaking” and it should therefore bear a significantly higher proportion of liability than JLL in the event that the court found negligence on JLL’s part.
62 For the reasons expressed in the judgment in the worker’s proceeding, I have found there to be negligence on the part of JLL which caused or contributed to the worker’s injury. These comprise the fact that JLL had control over the stairway where the accident occurred, its factual knowledge (by virtue of the worker’s complaints) that the steps were slippery when wet and its failure to respond to the complaints by adopting practical and inexpensive measures to obviate the risk of injury (namely, competent repainting with paint containing evenly dispersed grit and/or placing slip-resistant strips on the steps).
63 Mr Simpson on behalf of the VWA pointed out that the definition of Factor X included JLL’s “act, default or negligence” contributing to the worker’s injury and, in that sense, involved a broader consideration of factors than mere negligence as in the worker’s proceeding. However, save for the reliance upon the evidence of Ms Vercoe, the current Centre Manager for the shopping centre, that the stairway where the accident occurred was an internal one used almost exclusively by JLL’s management staff, the arguments put by Mr Simpson were very similar to those which had been advanced by Mr Jewell in the worker’s proceeding. In essence, they focussed upon the factors of JLL’s control over the worker’s workplace, its actual knowledge that the steps were slippery when wet and the simple and inexpensive means of addressing the risk. Various authorities were relied upon to illustrate that, generally speaking, a non-resident employer like Lea, who had no control over the workplace of the worker, was found to have a 20 per cent contribution towards overall liability.
64 As against this, Mr Dyer, on behalf of JLL, submitted that Lea could not be equated with a non-resident employer or a labour hire firm, such as that in Esso Australia Ltd v Victoria WorkCover Authority.[37] He pointed out that, in this case, the employer had taken the worker to the shopping centre, where the employer had two supervisors employed on site. Also, there was a room where cleaning equipment supplied by the employer was kept and the worker had been told by one of the supervisors of the employer what he was required to do on site. Moreover, it had been submitted by Mr Stanley of Senior Counsel for Lea in the worker’s proceeding that there was no evidence that the worker was mopping the steps other than in accordance with the industry standard. Thus, Mr Dyer submitted that, in this case, it is clear that the employer controlled the process or system whereby the worker carried out the cleaning of the steps. He urged that this factor took it out of the range of cases where a labour hire company or employer had handed over an employee to an occupier and that occupier had designed the way in which tasks were to be performed.
[37] [2000] VSCA 74 (19 April 2000).
65 I agree with Mr Dyer’s submission that the system of work was the responsibility of the employer and there is no evidence that JLL played any role at all in directing the worker as to how he should clean the steps. However, none of the submissions that have been made to me by either Mr Simpson or Mr Dyer have caused me to alter the view expressed in the judgment in the worker’s proceeding that this is as equally a failure to provide a safe system of work by the employer as a failure to provide safe premises by the occupier. The common factor in the failure is the lack of an appropriate slip-resistant surface on the stairs when wet. This was fundamental to the system being safe and something which was never addressed by the employer, along with the failure to provide instructions, supervision and a system for complaints by the worker. However, JLL required the steps to be mopped daily and their slipperiness when wet was actually known to JLL via the complaints made by the worker to JLL’s Operations Manager, Mr Tom McAuliffe. For the reasons set out in my judgment in the worker’s proceeding, I have found that the degree by which the employer and JLL departed from the standard of conduct required of each of them was equally culpable and their respective failures had equal causal potency with respect to the worker’s injury.
66 Additional arguments as to why JLL’s proportionate contribution to liability should be reduced were put by Mr Dyer on the basis that the owner of the shopping centre, ISPT, had settled with the VWA on the basis of paying $35,345 (approximately 20 per cent of the amount of past compensation which had been paid by the VWA as at the settlement date) together with 20 per cent of costs at the date of settlement. A further argument was put that if the painting work on the stairs performed by Mr Carboni’s company, Hue Painting Pty Ltd, was found by the court to be defective, then JLL should not be held liable on their account in accordance with the principles in Leighton Contractors Pty Ltd v Fox.[38]
[38] [2009] HCA 35 (2 September 2009).
67 On the material before me I am satisfied that ISPT delegated its duty as occupier to JLL. I found the submissions of Mr Grainger, who appeared on behalf of ISPT prior to settlement with the VWA to be compelling.[39] Exhibit “N” in the worker’s proceeding is a property management and leasing agreement entered into on 11 September 2003 by ISPT and JLL. Clause 5.3 places the physical management of the shopping centre fairly and squarely in the hands of JLL. In particular, paragraph (g) gives it the power to administer and supervise performance by contractors in relation to maintenance and other contracts; paragraph (i) charges it with maintaining control of the physical operation of the property; paragraph (j) requires it to attend to any necessary inspections and keep records for services not included in service or maintenance contracts and paragraph (k) requires it to regularly inspect the property and to arrange for repairs and maintenance. Also, clause 5.4 of the agreement requires JLL to regularly review the risk management profile of the property and do all things reasonably necessary to eliminate or minimise identified risks.
[39] Page 940 to 960 of the transcript.
68 These contractual conditions, make it clear that ISPT delegated to JLL the duties of occupier concerning physical management of maintenance and risk management at the shopping centre. In these circumstances, I do not consider that any decision by ISPT to settle with the VWA is something which should lessen JLL’s proportionate burden in this case. The relatively modest contribution of ISPT is most probably the consequence of a cost benefit analysis when confronted with potentially expensive, protracted litigation. I find no evidentiary basis for making an apportionment of liability against ISPT as Mr Dyer has submitted. The same reasoning applies to the $10,000 contributed by Gough Bay in settlement with the VWA. (Although clearly both this sum and the $35,345 from ISPT are conceded by Mr Simpson to be appropriate deductions from the amount of compensation referred to in s.138(3)(a).)
69 As far as Hue Painters Pty Ltd are concerned, I made a finding in the worker’s proceeding that their work was carried out prior in time to the worker making complaints to Mr Tom McAuliffe that the stairs were slippery when wet. Mr Carboni’s evidence was that he had never had his mind directed to assessing the surface as being slip-resistant when wet and that, after the job had been completed by his company, there had been no further contact from Mr McAuliffe indicating that the job was in any way unsatisfactory. I have found in the worker’s proceeding that there were regular complaints by the worker to Tom McAuliffe from shortly after he commenced at the Shopping Centre in May 2004 right up until the time of his accident in July 2004. Tom McAuliffe did not draw the slipperiness of the steps when wet to the attention of Hue Painting Pty Ltd, and did not seek that that the surface be appropriately rectified. Thus, I cannot find any basis for diminishing the proportionate liability of JLL by reason of the conduct of the Hue Painting Pty Ltd.
70 In all of the circumstances, consistent with the judgment in the worker’s proceeding, I find that Factor X, the extent expressed as a percentage whereby JLL’s act, default or negligence contributed to the injury, is 50 per cent.
CONCLUSION
71 In this proceeding I have determined Factor A to be $837,077.80.
72 Factor C as determined in the worker’s proceeding is 50 per cent of $642,638, namely, $321,319.
73 In this proceeding I have found Factor X to be 50 per cent.
74 I will leave the parties to discuss the impact of these findings in the context of the provisions of s.138(3), given that an up-to-date certificate pursuant to s.239A will need to be filed.
75 I will then hear the parties as to any further orders they seek, including orders on the question of costs.
THIRD PARTY PROCEEDING BY JLL AGAINST GOUGH BAY
76 Given my finding of liability against JLL, I assume that Gough Bay will seek an order dismissing the third party claim by JLL. I will hear the parties on this and any consequential matters.
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