SUPREME COURT OF QUEENSLAND

Transcription

1 SUPREME COURT OF QUEENSLAND CITATION: WorkCover Qld v AMACA P/L & Anor [2009] QCA 72 PARTIES: WORKCOVER QUEENSLAND (plaintiff) v AMACA PTY LTD ACN (first defendant/first respondent) SELTSAM PTY LTD ACN (second defendant/second respondent) FILE NO/S: Appeal No 8872 of 2008 SC No 5399 of 2007 DIVISION: PROCEEDING: ORIGINATING COURT: Court of Appeal Case Stated Supreme Court at Brisbane DELIVERED ON: 27 March 2009 DELIVERED AT: Brisbane HEARING DATE: 24 November 2008 JUDGES: ORDER: CATCHWORDS: de Jersey CJ, McMurdo P and Muir JA Separate reasons for judgment of each member of the Court, de Jersey CJ and Muir JA concurring as to the orders made, McMurdo P dissenting in part The questions in the Amended Case Stated are answered as follows: Question 1: The damages are to be assessed as at the date of judgment in that proceeding. Question 2: No Question 3: On the assumption to be made, the extracted words refer to the respective respondent s liability for the whole of the damages. Question 4: Yes Question 5: The plaintiff WorkCover Queensland should pay three-quarters of the respondents costs, to be assessed on the standard basis, if not agreed. WORKERS COMPENSATION APPEALS, JUDICIAL REVIEW AND CASES STATED CASE STATED WorkCover paid compensation to a worker who contracted and died from mesothelioma worker did not commence damages actions against manufacturers and suppliers of the

2 2 COUNSEL: SOLICITORS: asbestos WorkCover sued those entities for the amount of the compensation nature of insurer s indemnity under s 272(7) Workers Compensation and Rehabilitation Act 2003 (Qld) date at which damages fall to be assessed whether that assessment is affected by s 66 Succession Act 1981 (Qld) where worker died before proceeding commenced to enforce indemnity whether s 272(7) Workers Compensation and Rehabilitation Act 2003 (Qld) converts common law solidary liability of concurrent wrongdoers into proportionate liability Civil Liability Act 2003 (Qld), s 31 Law Reform Act 1995 (Qld), s 7 Succession Act 1981 (Qld), s 66 Uniform Civil Procedure Rules 1999 (Qld), r 781 Workers Compensation and Rehabilitation Act 2003 (Qld), s 207B(7), s 272(7) (renumbered and relocated) Government Insurance Office (NSW) v C E McDonald (NSW) Pty Ltd (1991) 25 NSWLR 492, considered J Blackwood & Son v Skilled Engineering [2008] NSWCA 142, considered Smith's Dock Co v John Readhead & Sons Ltd (1912) 81 LJKB 808; [1912] 2 KB 323, considered Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321; [1974] HCA 5, considered Tooth & Co Ltd v Tillyer (1956) 95 CLR 605; [1956] HCA 49, considered Transport Accident Commission v Murray (2005) 12 VR 314; [2005] VSCA 174, considered Turner v George Weston Foods Ltd (2007) 4 DDCR 571; [2007] NSWCA 67, approved VWA v Kenman Kandy Pty Ltd (2002) 6 VR 666; [2002] VSCA 190, considered WorkCover Queensland v Seltsam Pty Ltd (2001) 53 NSWLR 518; [2001] NSWCA 457, considered Workers Compensation Board of Queensland v The Nominal Defendant (Queensland) (1989) 1 Qd R 356, considered Xpolitos v Sutton Tools Pty Ltd (1977) 136 CLR 418; [1977] HCA 25, considered W Sofronoff QC, with K Holyoak, for the plaintiff S L Doyle SC, with R Morton and C K George, for the respondents Bruce Thomas Lawyers for the plaintiff Holman Webb Lawyers Brisbane for the first respondent CLS Lawyers for the second respondent [1] de JERSEY CJ: The parties have joined in stating a case under Rule 781 of the Uniform Civil Procedure Rules 1999 (Qld). The case principally concerns the proper construction of s 272(7) of the Workers Compensation and Rehabilitation Act 2003 (Qld) (now numbered 207B(7)).

3 3 Factual circumstances [2] Rex Noel Thomson contracted mesothelioma as the result of exposure to asbestos in the course of his employment in Queensland between 1947 and Mr Thomson was a worker for the purposes of the legislation applicable from time to time, which was the Workers Compensation Act 1916 (Qld), the Workers Compensation Act 1990 (Qld), the WorkCover Queensland Act 1996 (Qld), and the Workers Compensation and Rehabilitation Act 2003 (Qld). He applied to WorkCover Queensland for payment of compensation in respect of his injury. [3] On 18 April 2006 WorkCover paid Mr Thomson the sum of $340,000, being the amount of compensation to which he was entitled under the statutory scheme. On 20 June 2006 Mr Thomson died in consequence of the mesothelioma. He had not commenced any proceeding in relation to any available cause of action concerning his injury and disability. [4] Section 272(7) of the Workers Compensation and Rehabilitation Act 2003 (Qld) (now s 207B(7)) provides as follows: (7) If a person who has received compensation has not recovered, or taken proceedings to recover, damages for the injury from another person, other than the worker s employer (a) (b) the insurer is entitled to be indemnified for the amount of the compensation by the other person to the extent of that person s liability for the damages, so far as the amount of damages payable for the injury by that person extends; and to that end, the insurer is subrogated to the rights of the person for the injury. In that provision, the reference to the insurer is for present purposes to be read as referring to WorkCover Queensland. [5] The asbestos to which Mr Thomson was exposed had been manufactured and supplied by the respective respondents, Amaca Pty Ltd and Seltsam Pty Ltd. [6] On 22 June 2007 WorkCover commenced a proceeding against the first respondent Amaca and the second respondent Seltsam to recover the amount of the compensation paid to Mr Thomson, relying on s 272(7) of the Act. The issues [7] Two broad issues have emerged in that proceeding. [8] The first is the date at which the damages for which the other person (that is, the respondent) is liable, fall to be assessed [9] The respondents contend for the date of trial of (or more strictly, judgment in) WorkCover s proceeding to enforce its right to be indemnified. The respondents are concerned to invoke s 66 of the Succession Act 1981 (Qld), which, if applicable, would exclude, from damages assessed at that time, damages for pain and suffering, for curtailment of life expectancy, and in respect of probable future earnings had Mr Thomson survived. [10] Section 66 is in these terms:

4 4 66 Survival of actions (1) Subject to the provisions of this section and with the exception of causes of action for defamation or seduction, on the death of any person after the 15 October 1940 all causes of action subsisting against or vested in the person shall survive against, or, as the case may be, for the benefit of, the person s estate. (2) Where a cause of action survives pursuant to subsection (1) for the benefit of the estate of a deceased person, the damages recoverable in any action brought (2A) (a) (d) shall not include damages for pain and suffering, for any bodily or mental harm or for curtailment of expectation of life; and where the death has been caused by the act or omission which gives rise to the cause of action shall be calculated without reference to (i) (ii) loss or gain to the estate consequent upon the death save that a sum in respect of funeral expenses may be included; or future probable earnings of the deceased had the deceased survived. Despite subsection (2)(a), damages for pain and suffering, for any bodily or mental harm or for curtailment of expectation of life, may be recovered if (a) (b) (c) the cause of action related to personal injury resulting from a dust-related condition; and the deceased person commenced a proceeding in relation to the cause of action before the deceased person died; and the deceased person died as a result of the dustrelated condition or the dust-related condition was a contributing factor to the deceased person s death. [11] While WorkCover originally contended, in its written outline, that the relevant time for the assessment is the time of the occurrence of the compensable injury, at the hearing it acknowledged the correctness of the respondents contention. It will remain necessary to refer to some of the authorities bearing on that. WorkCover contended that s 66 of the Succession Act 1981 (Qld) was nevertheless inapplicable to the calculation of damages envisaged by s 272(7). [12] The second broad issue is whether s 272(7), especially noting its words to the extent of that person s liability for the damages, operates to limit the amount recoverable by WorkCover from the respective respondents to such amount as the (respondent) would have paid taking account of the contribution required from the worker s former employer (or other tortfeasor).

5 5 [13] WorkCover s contrary position is that the statutory provision does not work any variation to the position at common law, which is that concurrent wrongdoers, whether joint or several, each causing the same damage, have solidary liability: each is answerable in full for the whole damage caused to (Mr Thomson). The questions [14] These are the questions for determination as set out in the Case Stated. 1. Whether, upon the proper construction of Section 272(7) of the Workers Compensation and Rehabilitation Act 2003 ( the Act ) the damages referred to in the expression liability for damages in Section 272(7)(a) refer to damages in an amount to be assessed at the date of trial of or judgment in the proceedings between the Plaintiff (the insurer) and the Defendants or at some (and if so what) other dates? 2. Whether, upon the proper construction of Section 272(7) of the Act the indemnity (if any) to which the Plaintiff is entitled against each of the Defendants is limited to that proportion which that Defendant (if liable to the worker) would be required to contribute to an assessment of damages in favour of the worker after taking into account the contributions which would have been required to be made by all tortfeasors (and in particular the other defendant and the workers employer)? 3. Alternatively to 2, what is the proper construction of the expression to the extent of that person s liability of the damages, so far as the amount of damages payable for the injury by that person extends in Section 272(7)(a) of the Act in relation to the indemnity (if any) to which the Plaintiff is entitled against the Defendants? 4. Is the quantum of the indemnity the Plaintiff is entitled to recover pursuant to Section 207B(7) (previously Section 272(7)) of the Workers Compensation and Rehabilitation Act 2003 (Qld) reduced by the operation of Section 66 of the Succession Act if the worker dies after compensation is paid and before the trial of the Plaintiff s action to recover the indemnity? 5. By whom should the costs of the Case Stated be paid? [15] Relevantly to questions 2 and 3, the Case Stated did not record, as agreed, that the negligence of each respondent materially contributed to the injury suffered by Mr Thomson. That would have to be the position were the respondents to be severally liable. By way of response, WorkCover proposed an amendment of question 2 to include, after the word whether, the words in the event that each defendant is liable to the worker. There was no opposition expressed in relation to that amendment on behalf of the respondents. The question should therefore be treated as amended in that way, as will emerge from my final recitation of the questions when I answer them under the heading Conclusion.

6 6 [16] It is convenient to set out in full the text of s 207B: 207B Insurer s charge on damages for compensation paid (1) This section applies to (a) (b) an injury sustained by a worker in circumstances creating (i) (ii) an entitlement to compensation; and a legal liability in the worker s employer, or other person, to pay damages for the injury, independently of this Act; and damages that an employer is not indemnified against under this Act. (2) An amount paid as compensation to a person for an injury, to which there is an entitlement to payment of damages at a time or for a period before the person becomes entitled to payment of damages by an employer or another person, is a first charge on any amount of damages recovered by the person to the extent of the amount paid as compensation to the person. (3) An employer or other person from whom the damages are recoverable must pay the insurer the amount of the first charge or, if the damages are not more than the amount of the first charge, the whole of the damages. (4) Payment to the insurer under subsection (3), to the extent of the payment, satisfies the liability of the employer or other person for payment of the damages. (5) A person can not settle, for a sum less than the amount that is a first charge on damages under subsection (2), a claim for damages had by the person independently of this Act for an injury to which there is an entitlement to payment of damages without the insurer s written consent. (6) If, without the insurer s consent, a settlement mentioned in subsection (5) is made, then to the extent that the damages recovered are insufficient to meet all payments due to the insurer under this section (a) the insurer is entitled to be indemnified by the employer or other person who is required by the settlement to pay the damages; and

7 7 The first issue (b) to that end, the insurer is subrogated to the rights of the person who has sought the damages, as if the settlement had not been made. (7) If a person who has received compensation has not recovered, or taken proceedings to recover, damages for the injury from another person, other than the worker s employer (a) (b) the insurer is entitled to be indemnified for the amount of the compensation by the other person to the extent of that person s liability for the damages, so far as the amount of damages payable for the injury by that person extends; and to that end, the insurer is subrogated to the rights of the person for the injury. (8) Payment made as indemnity under subsection (7), to the extent of the payment, satisfies the person s liability on a judgment for damages for the injury. (9) In addition to all rights of action had by the insurer to give effect to its right to indemnity under this section, all questions about the right and the amount of the indemnity may, in default of agreement, be decided by an industrial magistrate if all persons affected by the indemnity consent. (10) In this section damages includes damages under a legal liability existing independently of this Act, whether or not within the meaning of section 10. [17] There is substantial authority for the view that under materially similar legislation in other States, the assessment of damages contemplated by provisions like s 207B(7) must be made as at the date of judgment in the proceeding brought to enforce the right to indemnity. [18] I refer first to the decision of New South Wales Court of Appeal in Turner v George Weston Foods Ltd [2007] NSWCA 67. Campbell JA said (paras 33, 34): [T]he right is a statutory right for indemnity, not itself a claim for damages. Such an action of indemnity can be (and frequently is) brought in circumstances where the worker in question has not sued the person who is liable to pay the damages such an action for indemnity can be brought in circumstances where the worker in question never had the slightest intention of suing the person who is liable to pay those damages. The assessment of damages is an essential part of the calculation of the amount of the indemnity to which the person by whom the compensation was paid is entitled, in

8 8 the sense that the total amount for which indemnity is ordered can never exceed that amount of damages. But, subject to that upper limit, it is the amount of the employer s payments of compensation that is recovered by the action. Thus, an assessment of the damages that the worker would have got at some earlier time is not an essential part of the proof of the cause of action of the plaintiff in a way analogous to that in which proof of the damages that the plaintiff would have got if litigation he wished to bring against a third party had been tried is an essential part of proof of the cause of action of a plaintiff against a solicitor whose negligence has caused that action against the third party to be incapable of being tried. Further, the damages that are being assessed are damages that would be awarded in an action for personal injury. Prima facie, damages for personal injury are assessed as at the date of the trial: O Brien v McKeane (1968) 118 CLR 540 at 545. No reason has been shown to depart from that usual practice in the present case. [19] I refer also to Victorian WorkCover Authority v Kenman Kandy Pty Ltd [2002] VSCA 190, paras 39, 40 per Batt and Vincent JJA. [20] Mr Sofronoff QC, who appeared for WorkCover, correctly acknowledged that question 1 should be answered the damages are to be assessed as at the date of judgment in that proceeding. [21] One travels then to question 4, which gives the resolution of the case its practical significance. The applicability of s 66 of the Succession Act [22] Mr Sofronoff emphasized that WorkCover s entitlement to be indemnified under s 207B(7), and Mr Thomson s right of action against the tortfeasor, were always separate and distinct. Consistently, the courts have regarded as irrelevant to the calculation of the amount of any indemnity, under comparable legislation, circumstances such as the expiration of the limitations period requisite to the worker s cause of action, or the worker s failure to satisfy procedural requirements under legislation regulating the pursuit of claims for damages for personal injuries. Mr Sofronoff submitted that the calculation of damages for the purpose of subsection (7) should proceed on the basis that the deceased notionally survived but had not himself sued the tortfeasor. [23] A number of cases refer to the independence of the insurer s entitlement to the indemnity. See, for example, Tickle Industries Pty Ltd v Hann & Richardson (1974) 130 CLR 321, 326, 327-8, 333; Government Insurance Office of New South Wales v C E McDonald (NSW) Pty Limited (1991) 25 NSWLR 492, 495, 496; Smith's Dock Co Ltd v John Readhead & Sons Ltd [1912] 2 KB 323, 327; Transport Accident Commission v Murray [2005] VSCA 174 para 12; and Workers Compensation Board of Queensland v The Nominal Defendant (Queensland) (1989) 1 Qd R 356, 358. [24] Mr Doyle SC, who appeared for the respondents, submitted that those cases dealt only with what he termed the threshold question, whether a right to indemnity arose, and did not touch upon the calculation of damages which goes to define the extent of recovery under the indemnity. He pointed to the provisions within the section limiting the recovery under an indemnity to the amount of the damages.

9 9 [25] Mr Doyle referred to a number of cases for the contention that in calculating the damages, as at the date of trial of the indemnity proceeding, a court is confined by any statutory limitation on the damages an injured worker, or the personal representatives of a deceased worker, may have recovered were he or she to have brought a proceeding. [26] The first is J Blackwood and Son v Skilled Engineering [2008] NSWCA 142 where, after the worker s injury, the New South Wales workers compensation legislation was amended (in 2001) to limit the damages which might be awarded to an injured worker. Dealing with comparable legislation, Cambell JA observed (para 127): It is possible for a right of indemnity to be an accrued right, even though the amount for which the indemnity exists has not yet been quantified it is right to approach the application of section 151Z in the present case on the basis that the Appellant had an accrued right to indemnity before the 2001 amendments became operative, even though the precise quantum of that indemnity had not been established. He went on to conclude that the amending provisions bore upon the assessment of damages for the purpose of delineating the extent of the indemnity. [27] A similar approach was taken by the Victorian Court of Appeal in Victorian WorkCover Authority v Kenman Kandy Pty Ltd, supra, paras 30, 39, 40. [28] The High Court considered the matter in Xpolitos v Sutton Tools Pty Ltd (1977) 136 CLR 418. As summarized in the head note, an employer paid compensation to the dependant of an employee killed in the course of his employment. The employer then sought to recover the amount paid from the persons negligently responsible for the death. The amount which the dependant would have recovered as damages against the tortfeasors would have been substantially less than the amount of compensation paid to him. It was held that the amount recoverable by the employer (under comparable legislation) was limited to that which the dependant would have recovered in proceedings commenced by him against the tortfeasors. [29] Observations in that case confirm that the calculation of damages, for the purpose of determining recovery under the indemnity, proceeds in accordance with the law regulating the availability of damages as between injured worker and tortfeasor, or injured worker s dependant and tortfeasor. As said by Barwick CJ (p 423): [T]he indemnity is only for the amount which the tortfeasor was legally liable to pay the injured worker or, in the case of death, his dependants. Gibbs J said (pp ): There is no decision of this Court governing the present question. The balance of opinion, as expressed in dicta, favours the view that under a provision in the terms of s 62(1)(b) a tortfeasor is not to be required to pay more by way of indemnity than he would have been required to pay by way of damages if an action had been brought against him by the worker to whom the compensation was paid I hold therefore that the respondent was not entitled to recover from the appellants an amount greater than that which the infant would have recovered from them by way of damages.

10 10 [30] While the submission for WorkCover seeks to elide the crystallization of the indemnity and the calculation of its reach, distancing that calculation from the limitations upon the computation of damages for the worker, were he or she alive, or the worker s personal representatives (especially those arising under s 66 Succession Act 1981 (Qld)), the respondents submission, in treating those two matters as distinct, is consistent with the language of the section. [31] The section treats the existence of the indemnity, and the calculation of damages to determine how far it goes, as two quite separate matters. [32] Further, the damages to be calculated are those recoverable by the worker, or his estate in the event of death, as at judgment in the indemnity proceeding. Naturally read, that calculation must be made in accordance with the law then obtaining, including s 66 of the Succession Act 1981 (Qld). [33] The WorkCover submission sought to avoid that consequence by emphasizing the independent statutory nature of the entitlement to an indemnity, a right which is unaffected by bars to a worker s recovery, such as the expiration of a limitations period. [34] But that cannot negate the need to address the other exercise independently arising, and that is the calculation of the damages to which the worker or his estate would be entitled, in the event of a suit to recover them, and that calculation falls to be done in accordance with the relevant law. [35] One can readily accept that the independence of the indemnity from the worker s cause of action must mean the indemnity cannot be frustrated by the worker s failure to sue, or the worker s cause of action being time barred. Indeed subsection (7) specifically contemplates that the worker will not have sued. But that feature cannot sever the calculation of the extent of the indemnity from the law which bears on calculating the amount the worker would have recovered had he or she sued. Again, the sub-section deals with the matter expressly, contemplating a calculation of the extent of the liability in damages to the worker (had he or she sued). That calculation would necessarily be subject to such provisions as s 66 of the Succession Act 1981 (Qld). Had the legislature intended that that legal framework not apply, it would have said so in so many words. [36] Mr Sofronoff sought to avoid that consequence by recourse to the independence of the right to the indemnity. But the calculation of the extent of the indemnity, notwithstanding that independence, is coterminous with the calculation of the damages to which the worker would have been entitled. The indemnity is tied to the latter calculation. Where, by law, the worker s cause of action survives the worker s death, but the recoverable damages are consequently limited, it is unduly subtle to ignore that consequence by concentrating on the independence of the right to be indemnified. That right has an independent existence, but as I have said a number of times, its extent falls to be calculated by reference to the worker s right to damages assessed according to law. [37] Mr Sofronoff would nevertheless ultimately challenge the applicability of s 66 of the Succession Act 1981 (Qld), on the basis that provision is not concerned with a proceeding brought by an injured worker, or by the dependant of a deceased worker, but is concerned only with the survival of the worker s cause of action for the benefit of the (worker s) estate.

11 11 [38] But it is the survival of the worker s cause of action which the legislation ensures. That cause of action is not by force of the legislation transformed into some other cause of action: it remains the worker s cause of action, though available to be pursued by personal representatives. It is the assessment of damages under that cause of action which delineates the extent of the indemnity. That being so, the statutory limitations arising under s 66 of the Succession Act 1981 (Qld) necessarily bear upon the calculation envisaged by s 207B(7) of the Workers Compensation and Rehabilitation Act 2003 (Qld), in the same way as did the 2001 amendments considered in Blackwood. [39] I would therefore answer question 4 yes. The second issue [40] This arises on the assumption the court is invited to make, that each respondent is held liable for Mr Thomson s injuries. The question for consideration is whether s 207B(7) posits the apportionment of their respective liability, so that the extent of WorkCover s indemnity enforceable against each is limited to that respondent s proportionate liability. [41] Mr Doyle submitted that that limitation followed from the use in subsection (7) of the words, to the extent of that person s liability for the damages, so far as the amount of damages payable for the injury by that person extends. On the assumption we are invited to adopt, the respondents are respectively liable for the whole of the loss to Mr Thomson, their respective negligence having materially contributed to it. The liability of each, in terms of the sub-section, is for the whole. [42] Had the legislature intended that a respondent s liability could be assessed at less than 100 per cent of an injured party s loss, or that the overall liability be apportioned between or among more than one respondent, then it could be expected to have said so clearly, including specifying the touchstone by which the extent of the liability would fall to be assessed. [43] A contrast may be drawn with the comprehensive proportionate liability provisions in Part 2 of Chapter 2 of the Civil Liability Act 2003 (Qld). The touchstone specified there (s 31(1)(a)) is the proportion of the loss or damage claimed that the court considers just and equitable having regard to the extent of the defendant s responsibility for the loss or damage. [44] Where the legislature contemplates an erosion of otherwise well-established rights, it may be expected to accomplish the change with clarity (cf. Shrimp v Landmark Operations Ltd [2007] FCA 1468 para 59). [45] Mr Sofronoff referred to the right of contribution between tortfeasors under s 7 of the Law Reform Act 1995 (Qld). That is not this situation, but it is interesting to note that s 7 expresses a criterion similar to that under s 31 of the Civil Liability Act 2003 (Qld) for determining the basis for any contribution. [46] In my view question 2 should be answered no, and question 3 should be answered: On the assumption to be made, the extracted words refer to the respective respondent s liability for the whole of the damages.

12 12 Costs [47] In view of the respondents level of success under this determination, WorkCover should pay three-quarters of the respondents costs of the proceeding, to be assessed on the standard basis, if not agreed. Conclusion [48] I would answer the questions asked as follows: 1. Whether, upon the proper construction of Section 272(7) of the Workers Compensation and Rehabilitation Act 2003 (Qld) ( the Act ) the damages referred to in the expression liability for damages in Section 272(7)(a) refer to damages in an amount to be assessed at the date of trial of or judgment in the proceedings between the Plaintiff (the insurer) and the Defendants or at some (and if so what) other dates? Answer: The damages are to be assessed as at the date of judgment in that proceeding. 2. Whether, in the event that each Defendant is liable to the worker, upon the proper construction of Section 272(7) of the Act the indemnity (if any) to which the Plaintiff is entitled against each of the Defendants is limited to that proportion which that Defendant (if liable to the worker) would be required to contribute to an assessment of damages in favour of the worker after taking into account the contributions which would have been required to be made by all tortfeasors (and in particular the other defendant and the workers employer)? Answer: No 3. Alternatively to 2, what is the proper construction of the expression to the extent of that person's liability for the damages, so far as the amount of damages payable for the injury by that person extends in Section 272(7)(a) of the Act in relation to the indemnity (if any) to which the Plaintiff is entitled against the Defendants? Answer: On the assumption to be made, the extracted words refer to the respective respondent s liability for the whole of the damages. 4. Is the quantum of the indemnity the Plaintiff is entitled to recover pursuant to Section 207B(7) (previously Section 272(7)) of the Workers Compensation and Rehabilitation Act 2003 (Qld) reduced by the operation of Section 66 of the Succession Act 1981 (Qld) if the worker dies after compensation is paid and before the trial of the Plaintiff s action to recover the indemnity? Answer: Yes 5. By whom should the costs of the Case Stated be paid? Answer: The plaintiff WorkCover Queensland should pay three-quarters of the respondents costs, to be assessed on the standard basis, if not agreed. [49] McMURDO P: I would answer the questions for determination on the Amended Case Stated in this way: "1. Whether, upon the proper construction of Section 272(7) of the Workers' Compensation and Rehabilitation Act 2003 ("the Act") the damages referred to in the expression "liability for damages" in

13 13 Section 272(7)(a) refer to damages in an amount to be assessed at the date of trial of or judgment in the proceedings between the Plaintiff (the insurer) and the Defendants or at some (and if so what) other dates?" ANSWER: The damages are to be assessed as at the date of judgment in the proceedings. ANSWER: "2. Whether, in the event that each Defendant is liable to the worker, upon the proper construction of Section 272(7) of the Act the indemnity (if any) to which the Plaintiff is entitled against each of the Defendants is limited to that proportion which that Defendant (if liable to the worker) would be required to contribute to an assessment of damages in favour of the worker after taking into account the contributions which would have been required to be made by all tortfeasors (and in particular the other defendant and the workers' employer)?" No. "3. Alternatively to 2, what is the proper construction of the expression "to the extent of that person's liability for the damages, so far as the amount of damages payable for the injury by that person extends" in Section 272(7)(a) of the Act in relation to the indemnity (if any) to which the Plaintiff is entitled against the Defendants." ANSWER: On the assumption to be made, the extracted words refer to the respective defendant's liability for the whole of the damages. ANSWER: "4. Is the quantum of the indemnity the Plaintiff is entitled to recover pursuant to Section 207B(7) (previously Section 272(7)) of the Workers' Compensation and Rehabilitation Act reduced by the operation of Section 66 of the Succession Act if the worker dies after compensation is paid and before the trial of the Plaintiff's action to recover the indemnity." No. "5. By whom should the costs of the Case Stated be paid?" ANSWER: The defendants, AMACA Pty Ltd and Seltsam Pty Ltd, should pay three-quarters of the plaintiff's, WorkCover Queensland, costs of the Case Stated, to be assessed on the standard basis if not agreed. [50] These are my reasons for those answers. [51] Rex Noel Thomson worked in the building industry in Queensland for about 36 years between 1947 and In the course of that employment, he was exposed to asbestos manufactured and supplied at different times by each defendant. As a result, he contracted mesothelioma. He applied to the plaintiff for compensation. The plaintiff paid Mr Thomson $340,000 compensation for his mesothelioma injury under the Workers' Compensation and Rehabilitation Act 2003 (Qld) on 18 April Mr Thompson died from mesothelioma two months later, on 20 June He did not commence any proceeding in relation to any cause of

14 14 action he may have had against either defendant. The plaintiff has commenced proceedings under s 272(7) Workers' Compensation and Rehabilitation Act (now renumbered as s 207B) against both defendants to recover the $340,000 it paid in compensation to Mr Thomson. [52] Mr Sofronoff QC, who appears with Mr Holyoak for the plaintiff, conceded at the commencement of the hearing that question 1 should be answered in the way set out above. That concession appears to have been rightly made and is consistent with a large body of authority: cf Johnson v Perez; 1 Turner v George Weston Foods Ltd 2 and Victorian WorkCover Authority v Kenman Kandy Pty Ltd. 3 [53] I agree with the Chief Justice's reasons for answering questions 2 and 3 in the way set out above. 4 I wish only to add the observation that, should the plaintiff be successful in its indemnity action against both defendants, s 272(7) does not permit the plaintiff to recover any more than the $340,000 paid by it as compensation to the deceased. Answering questions 2 and 3 in this way does not entitle the plaintiff to double compensation: cf Turner v George Weston Foods Ltd. 5 [54] The most difficult question is question 4, which concerns the relationship, if any, between s 272(7) (now s 207B(7)) Workers' Compensation and Rehabilitation Act and s 66 Succession Act 1981 (Qld). The plaintiff contends that s 66 has no effect on the damages it may recover in its indemnity action against the defendants because the action is the plaintiff's cause of action, not the deceased's cause of action. The defendants submit that as the damages in the plaintiff's action are to be assessed at the date of judgment (when the injured worker is dead), s 66(2) must be considered in determining the extent of the defendants' liability to the deceased worker, and therefore the extent of the defendant's liability to the plaintiff. [55] It is helpful to commence the discussion of this question by reference to the relevant statutory provisions. [56] The Succession Act has the long title "An Act to consolidate and amend the law of succession and the administration of estates of deceased persons and for related purposes". It makes provision for wills, 6 distribution on intestacy, 7 family provision, 8 the administration of estates 9 and testamentary appointment of guardians of children. 10 The Succession Act provides for the property of a deceased person on death to vest in the executor or otherwise the Public Trustee. 11 The relevant portions of s are set out in the Chief Justice's reasons 13 and I will not repeat them (1988) 166 CLR 35, Wilson, Toohey and Gaudron JJ at , Dawson J at 391. (2007) 4 DDCR 571, Hodgson JA at [3], Campbell JA, with whom Beazley JA and Hodgson JA agreed, at [33]-[34]. [2002] VSCA 190, Batt and Vincent JJA, Ormiston JA agreeing, at [39]. See the Chief Justice's reasons at [40]-[46]. (2007) 4 DDCR 571, Campbell JA, Beazley and Hodgson JA agreeing, at [37]. Workers' Compensation Rehabilitation Act 2003 (Qld), Part 2. Workers' Compensation Rehabilitation Act 2003 (Qld), Part 3. Workers' Compensation Rehabilitation Act 2003 (Qld), Part 4. Workers' Compensation Rehabilitation Act 2003 (Qld), Part 5. Workers' Compensation Rehabilitation Act 2003 (Qld), Part 5A. Workers' Compensation Rehabilitation Act 2003 (Qld), Part 5, s 45. Workers' Compensation Rehabilitation Act 2003 (Qld), Part 6, "Miscellaneous". See [10] of these reasons.

15 15 [57] The Workers' Compensation and Rehabilitation Act s 5 sets out the objectives of the Act, and s 4 states that the objects of the Act are an aid to its interpretation. Relevantly, the objects include: to establish a workers' compensation scheme for Queensland to provide benefits for workers injured in their employment; 14 to maintain a balance between providing fair and appropriate benefits for injured workers and ensuring reasonable premium levels for employers; 15 to provide for the protection of employers' interests in relation to claims for damages for workers' injuries; 16 and to provide for flexible insurance arrangements suited to the particular needs of industry. 17 Another stated object is that compulsory insurance against injury in employment should not impose too heavy a burden on employers and the community because it is in the State's interests that industry remain competitive. 18 Chapter 3 of the Workers' Compensation and Rehabilitation Act deals with compensation for injured workers. Chapter 5 deals with access to damages. Section 272 was contained, somewhat incongruously, in Chapter 5, Part 4 headed "Reduction of recoverable damages". As noted, it has been re-numbered as s 207B and is now contained, more logically, in Chapter 3A which is headed "Compensation Claim Costs". The Chief Justice has also set out the relevant portions of s 272 (now s 207B) 19 and I will not repeat them. [58] The following discussion is based on the assumption that the defendants are each liable in damages to the deceased for causing his lethal mesothelioma. Of course, that issue is yet to be determined. The terms of s 272(7) (now s 207B(7)) applied to the facts of the present case provide that, as the deceased received $340,000 compensation from the plaintiff and has not recovered or taken proceedings to recover damages from either defendant, the plaintiff is entitled to be indemnified from each defendant to the extent of each defendant's liability to the deceased for damages for his fatal mesothelioma, up to $340,000. [59] In determining whether s 66 Succession Act has any relevance to the plaintiff's claim under s 272(7), it is essential to understand that s 272(7) gives the plaintiff insurer a right of indemnity against the third party tortfeasor defendants. Although the plaintiff's damages will be assessed by finding the hypothetical amount of damages each defendant would have been liable to pay the deceased at the date of judgment of the plaintiff's claim, it is not the deceased worker's cause of action against the tortfeasor defendants. Although so much is clear from the terms of s 272(7), this construction is well supported by a substantial body of authoritative case law concerning similar legislation. [60] In Tickle Industries v Hann, 20 Barwick CJ (McTiernan J agreeing) discussed the policy of workers' compensation legislation in construing a provision broadly comparable to s 272(7). His Honour observed: "The section supposes a legal responsibility in another person for the compensable injury or death. Given the existence of that legal responsibility at the time of the occurrence of the compensable injury or death the section does not require the continuance or Workers' Compensation Rehabilitation Act 2003 (Qld), s 5(1)(a). Workers' Compensation Rehabilitation Act 2003 (Qld), s 5(4)(a). Workers' Compensation Rehabilitation Act 2003 (Qld), s 5(4)(c). Workers' Compensation Rehabilitation Act 2003 (Qld), s 5(4)(e). Workers' Compensation Rehabilitation Act 2003 (Qld), s 5(5). See these reasons at [16]. (1974) 130 CLR 321.

16 16 persistence of the liability. Granted initial responsibility at the time of the receipt of the injury or death, the section provides its own remedy to the employer by the creation of a right of indemnity by the person responsible for the injury or death." The majority concluded that neither the failure of the injured worker's dependants to sue, nor the release by them of the alleged third party tortfeasor, was relevant to the determination of the insurer's cause of action against the alleged tortfeasor for indemnity. [61] Others cases such as Smith's Dock Co Ltd v John Readhead & Sons Ltd, 21 Tooth & Co Ltd v Tillyer 22 and Transport Accident Commission v Murray, 23 which concern similar legislative provisions to s 272(7), have consistently emphasised that the plaintiff insurer's claim is the insurer's statutory claim against the tortfeasor defendant and is therefore completely separate from the injured worker's claim against the tortfeasor defendant. [62] The recent case of J Blackwood & Son Ltd v Skilled Engineering Ltd 24 reinforces the difference between a plaintiff insurer's indemnity claim under provisions like s 272(7) against third party tortfeasors as opposed to claims brought by injured persons against alleged third part tortfeasors. Campbell JA (Beazley and Giles JJA agreeing) noted that a right of indemnity broadly comparable to that vesting in the present plaintiff insurer under s 272(7) can be an accrued right, even though the amount for which the indemnity exists has not yet been quantified. The court held that retrospective legislation limiting the amount of damages able to be claimed by an injured claimant from the tortfeasor did not apply to the assessment of damages in the plaintiff insurer's indemnity claim. [63] The terms of s 272(7) and s 66 do not seem to me to support the respondents' contention in respect of question 4. It is true that s 66(1) Succession Act guarantees the survival of causes of action vested in a deceased person for the benefit of the estate. But in my view, a plaintiff insurer does not need to rely on s 66(1) to succeed in a claim under s 272(7) against an alleged third party tortfeasor defendant. The damages to which a plaintiff insurer is entitled under s 272(7) involve only a hypothetical assessment of the third party tortfeasor defendant's liability for damages to the injured worker to be assessed at the date of judgment in the plaintiff insurer's proceedings. The hypothetical nature of that assessment means that it is not dependent on the survival of a deceased worker's cause of action under s 66(1). This approach seems generally consistent with that taken by the New South Wales Court of Appeal in J Blackwood & Son Ltd v Skilled Engineering Ltd. 25 In any case, s 66(2) in its terms specifically relates to a cause of action which survives under s 66(1) for the benefit of the estate of a deceased person. A plaintiff insurer's claim under s 272(7) is not such a cause of action. [64] If the defendants are correct in their contentions, then the application of s 66(2) to a claim brought under s 272(7) would have an incongruous result. Tortfeasors who are liable for so severely injuring a worker that death ensues before the worker has brought an action against them, could limit their liability to indemnify the worker's (1912) 81 LJKB 808. (1956) 95 CLR 605. (2005) 12 VR 314, Buchanan JA, Charles JA and Osborn AJA agreeing, at [2008] NSWCA 142. [2008] NSWCA 142.

17 17 insurer for compensation for those injuries. I would be reluctant to interpret s 272(7) and s 66(2) as having this unhappy effect unless it is either the clear legislative intention from the terms of the legislation or because of clearly binding legal authority. The full title and the scheme of the Succession Act suggest that s 66 is intended to have application to causes of action subsisting against or vested in a deceased person prior to the death. There is nothing in the Succession Act to suggest s 66 is intended to apply to hypothetical assessments of damages payable to a deceased person in an insurer's claim against the tortfeasor who injured the deceased person. The objects and scheme of the Workers' Compensation and Rehabilitation Act strongly favour the construction urged on behalf of the plaintiff. To limit the quantum of damages able to be recouped by an insurer who has paid compensation to a deceased worker from tortfeasors who wrongly caused that death in the way urged on this Court by the defendants would be to impose an unnecessary burden on employers and the community. Such an outcome has the potential to make Queensland industry less competitive by unfairly increasing insurance premium levels for employers. This would be directly contrary to the objectives of the legislation set out in s 4 and s 5 of the Act. [65] I should refer to two further cases which otherwise might be thought to contradict the view I have reached on this question. [66] In Xpolitos v Sutton Tools Pty Ltd, 26 Barwick CJ (Stephen and Jacobs JJ agreeing) and Gibbs J in separate reasons, held that the amount recoverable by an employer who had paid compensation to an injured worker and sought indemnity against a third party tortfeasor under a provision broadly similar to s 272(7) was limited to what the worker's dependants would have recovered in proceedings commenced by him against the tortfeasors. This at first appears to support the defendants' contentions in the present case. The construction of the legislation in Xpolitos, however, turned on the terms in which "worker" was defined: it included the worker's dependents if the worker was deceased. 27 There is no such extended definition of the term "worker" under the Workers' Compensation and Rehabilitation Act. 28 For the present purposes, Xpolitos is merely an example of the application of the well-established proposition that the amount recoverable against a third party tortfeasor by an employer who has paid compensation to an injured worker cannot exceed that which the worker would have recovered in proceedings commenced by the worker against that tortfeasor. [67] In WorkCover Queensland v Seltsam Pty Ltd, 29 the New South Wales Court of Appeal gave consideration to the interpretation of s 278(7) WorkCover Queensland Act 1996 (Qld), a provision in the same terms as s 272(7). The case concerned only whether the plaintiff insurer, claiming indemnity under the section, could sue the tortfeasor defendant in its own name. Observations by Young CJ in Equity as to the effect of s 66(2) Succession Act on the plaintiff insurer's indemnity claim seem to support the defendants' contentions. 30 Young CJ's observations were, however, specifically qualified by Priestley JA in further observations. 31 The case is not, in my view, helpful in answering question 4. It certainly does not persuade me of the validity of the defendants' contentions (1977) 136 CLR 418. (1977) 136 CLR 418, Gibbs J at 425 and Barwick CJ at 423. Workers' Compensation and Rehabilitation Act 2003 (Qld), see s 11 and Schedule 2. [2001] NSWCA 457. [2001] NSWCA 457 at [6]. [2001] NSWCA 457, Ipp AJA, agreeing with both Young J and Priestley JA, at [37].

18 18 [68] Although the alternative argument is well open, the intention of the legislature is apparent to me from the terms of both the Workers' Compensation and Rehabilitation Act and the Succession Act. It is that in the present case the plaintiff should be entitled to be indemnified for the $340,000 compensation it paid to the deceased to the extent of each defendants' liability for damages for injury suffered by the deceased, up to $340,000, without any reduction in the amount of damages through the operation of s 66. For those reasons, I have answered question 4 "No". [69] As I consider that the plaintiff has been successful on three of the four questions in the Case Stated, I would order that the defendants pay three-quarters of the plaintiff's costs of Case Stated to be assessed on the standard basis if not agreed. [70] MUIR JA: I agree with the reasons of de Jersey CJ and with the orders he proposes, but as there is a divergence of opinion on a difficult question of construction, it is desirable that I make some observations of my own. [71] It is plain, and it was common ground between the parties, that WorkCover's entitlement to be indemnified under s 207B(7) is a right which exists independently of a worker's cause of action against a person who caused his injury. For convenience, I will refer to such a person as an indemnifier. But the fact that WorkCover's right to an indemnity under s 207B(7) is independent of the worker's cause of action does not resolve the issue for determination. [72] Sub-section (7), as well as creating the right of indemnity, prescribes its extent. The indemnity is "to the extent of" the indemnifier's "liability for the damages" suffered by the injured worker. Consequently, the damages which must be assessed are the damages which the indemnifier would be liable to pay for the injury were the injured worker to obtain judgment against the indemnifier. Those damages are to be assessed at the date of judgment in the proceeding between WorkCover and the indemnifier. That too is common ground. [73] As a matter of general principle, a court, in assessing damages for personal injuries, must have regard to matters occurring between the date of the accident and the trial of the proceeding. 32 I am unable to discern in the language of sub-section (7) any qualification to the effect that, in assessing the "damages payable for the injury", an event such as the death of the worker after the date of injury, must be disregarded. [74] The conclusion that damages be assessed as if on a trial of a proceeding by the injured worker against the indemnifier is supported by the words "so far as the amount of damages payable for the injury by that person extends". It is supported also by the provision that "the insurer is subrogated to the rights of the person for the injury." 33 Those words, and in particular the reference to the right of subrogation, to my mind, are inconsistent with the notion that the "extent of [the indemnifier's] liability for the damages" is to be determined by reference to some unspecified construct rather than in the conventional way as if on a proceeding in which the injured worker claims damages against the indemnifier. [75] Support for this construction of sub-section (7) is to be found in sub-sections (5) and (6). Those sub-sections are capable also of operating after the death of an injured worker. If an injured worker's estate settled a claim against an indemnifier without the insurer's consent and recovered damages "insufficient to meet all payments due to the insurer" the insurer "would be entitled to be indemnified by the person Johnson v Perez (1988) 166 CLR 351, Dawson J at 387. Workers Compensation and Rehabilitation Act 2003 (Qld), s 207B(7)(b).