Foster v Skilled Communication Services Pty Ltd
[2003] QCA 363
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- Notable Unreported Decision
- Appeal Determined (QCA)
- Foster v Skilled Communication Services Pty Ltd[2003] QCA 363
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Foster v Skilled Communication Services Pty Ltd[2003] QCA 363
Foster v Skilled Communication Services Pty Ltd[2003] QCA 363
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Court of Appeal | |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | |
DELIVERED ON: | 29 August 2003 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 8 May 2003 |
JUDGES: | McMurdo P, Williams JA and Holmes J |
ORDERS: | 1. Allow the appeal to the extent of setting aside the declaration made at first instance
|
CATCHWORDS: | WORKERS’ COMPENSATION – ENTITLEMENT TO AND LIABILITY FOR COMPENSATION – PERSONS LIABLE TO PAY COMPENSATION – LIABILITY FOR INDEMNITY – QUEENSLAND – where plaintiff employed in Queensland but was performing work for defendant in New South Wales – where injury occurred while working in New South Wales – where plaintiff paid workers’ compensation by WorkCover – where plaintiff claimed against defendant for damages for personal injuries – where WorkCover assumed conduct of proceedings on behalf of defendant – where WorkCover later maintained it was not liable to indemnify defendant – where learned primary judge summarily gave declaration that WorkCover was estopped from denying liability – whether New South Wales insurer was obliged to indemnify – whether sufficient evidence to establish estoppel – whether estoppel issue suitable for resolution on summary basis WorkCover Queensland Act 1996 (Qld), s 11, s 140, s 306 Bonython v Commonwealth (1950) 81 CLR 486, cited |
COUNSEL: | R J Douglas SC, with K F Holyoak, for the appellant |
SOLICITORS: | Hopgood & Ganim for the appellant |
[1] McMURDO P: I agree with Williams JA’s reasons for concluding that the declaration should be set aside and with the orders proposed by him.
[2] WILLIAMS JA: In circumstances to which reference will be made subsequently, proceedings were commenced by claim in the District Court on 5 June 2001 (D2697 of 2001) between IC Foster as plaintiff (he is the present first respondent but will be referred to in these reasons as “the plaintiff”) and the defendant, Skilled Communications Services Pty Ltd (the present second respondent but will be referred to herein as “the defendant”). In those proceedings the plaintiff claimed “damages for personal injuries … arising out of the breach of contract, negligence and/or breach of statutory … duty by the Defendant”. Matters pleaded in the Statement of Claim allege that the plaintiff was employed by the defendant and sustained personal injuries in an incident which occurred in the course of his employment on 8 August 1999.
[3] The plaintiff was paid workers’ compensation by WorkCover Queensland (the present appellant but referred to herein as “WorkCover”) with respect to those injuries, and WorkCover pursuant to s 306(5) of the WorkCover Queensland Act 1996 (“the Act”) assumed the conduct of proceedings D2697 of 2001 on behalf of the defendant. Then, some twelve months after those proceedings were commenced, on 11 June 2002 WorkCover informed the plaintiff that it “expressly reserves its rights in regards to whether it will indemnify the employer with respect to your client’s claim for damages.” WorkCover maintained in subsequent correspondence that it was not liable to indemnify the defendant, and in consequence the plaintiff by an Originating Application filed 27 June 2002 sought, inter alia, a declaration that the defendant “is indemnified by [WorkCover] in relation to a claim for damages for personal injuries arising out of an injury suffered by the [plaintiff] in the course of his employment with the [defendant] on 8 August 1999”. Alternatively the application sought a declaration that WorkCover was estopped from denying its obligation to indemnify the defendant with respect to that claim. The defendant and WorkCover were made respondents to that application.
[4] That application came before a District Court judge and in reasons delivered on 26 July 2002 he concluded “that it would be quite unconscientious for WorkCover now to retreat from the position which its actions assumed – that Mr Foster could sue for damages, in Queensland, with WorkCover as the insurer.” The formal declaration was not, however, in those terms. The formal declaration made was as follows:
“Declare that the respondents are estopped from asserting that the first respondent was required to provide against its liability to the plaintiff, according to the law of New South Wales.”
[5] From that decision WorkCover has appealed to this court. In the proceedings at first instance WorkCover asserted that NRMA Workers’ Compensation (NSW) Pty Limited (hereinafter “NRMA”) was the insurer obliged to indemnify the defendant with respect to any judgment for damages in the plaintiff’s favour because it was the defendant’s insurer pursuant to the provisions of the Workers Compensation Act 1987 (NSW), hereinafter referred to as the “1987 Act”. Though NRMA was not a party to the application as filed, counsel appeared on its behalf on the hearing at first instance presumably because the application was served on the defendant. On the hearing of the appeal the same counsel appeared for both the defendant and NRMA; each was named as a respondent.
[6] WorkCover sought an order that the declaration made at first instance be set aside primarily because in its submission NRMA was the relevant insurer liable to indemnify the defendant and the evidence was insufficient to establish an estoppel. Alternatively, it was submitted that the estoppel issue was not suitable for resolution on a summary basis. In the further alternative WorkCover sought an amendment to the wording of the declaration on the basis that as it stood it was too wide.
[7] All respondents supported the conclusion of the learned judge at first instance, though it was conceded that some variation to the wording of the declaration was appropriate. In essence it was submitted on behalf of the defendant (adopting submissions of the plaintiff) that WorkCover was estopped from denying liability to indemnify the defendant.
[8] The material discloses that the defendant is a company, incorporated in Victoria, but carrying on business in most Australian States; critically for present purposes it carries on business in both Queensland and New South Wales. It has a “Queensland Division” with an office and depot in Brisbane. As required by the Act it has taken out appropriate insurance covering its Queensland employees. It can be readily inferred from all the material that its New South Wales division has taken out insurance under the 1987 Act with NRMA covering its New South Wales employees.
[9] The plaintiff commenced employment with the defendant in Queensland on 22 December 1998. It appears that at all material times the plaintiff was a resident of Queensland. After his engagement as an employee he worked out of the Brisbane depot located at 106 Robinson Road, Virginia, until 12 July 1999. Then, because of lack of work in Queensland whilst the defendant was negotiating further contracts, he and some other employees of the defendant were required “to travel down to and work in various regional areas of northern New South Wales on a daily basis” until early August 1999.
[10] It should be noted that some of the material suggests that this work in New South Wales commenced on 12 June 1999, but the primary documents of the defendant, and the evidence of the plaintiff, clearly indicate that in fact it was 12 July 1999.
[11] The affidavit of the Queensland office manager of the defendant states that while the plaintiff was working in New South Wales he was based at the Murwillumbah work depot under the control of the Queensland state office. It was said that such arrangement was only temporary and was being reviewed on a fortnight to fortnight basis.
[12] It was on 8 August 1999, and whilst working at Ballina in northern New South Wales, that the plaintiff claimed he injured his back whilst assisting in lifting a generator into the back of a motor vehicle.
[13] By notice dated 12 August 1999 the plaintiff claimed workers compensation, and that was paid by WorkCover up until 17 February 2000. Section 140 of the Act covered the situation in which the plaintiff was injured and WorkCover was in consequence obliged to pay compensation.
[14] The Act provides that an employee seeking damages with respect to a work related injury must comply with a number of “pre-court procedures” specified in the Act. The Act then makes express provision for starting proceedings and provides for such steps as the having of a compulsory conference. The plaintiff complied with all those necessary steps before commencing the proceedings on 5 June 2001, and in the defence filed on 28 August 2001 the only failure to comply with a provision of the Act alleged related to the claim for psychological injury. That defence was filed by solicitors retained by WorkCover in consequence of their having the carriage of the action. There was therein no denial of WorkCover’s obligation to indemnify the defendant.
[15] It is also not irrelevant to note that a number of steps taken by WorkCover (for example issuing a Damages Certificate and attending a compulsory conference) were only relevant to legal proceedings commenced against WorkCover pursuant to the provisions of the Act; the taking of those steps necessarily involved some acknowledgement that WorkCover was indemnifying the defendant.
[16] The provision of the Act on which the submissions of WorkCover is based is s 11; it is in these terms:
“(1)“Damages” is damages for injury sustained by a worker in circumstances creating, independently of this Act, a legal liability in the worker’s employer to pay the damages to –
(a)the worker; or
(b)if the injury results in the worker’s death – a dependant of the deceased worker.
(2)A reference in subsection (1) to the liability of an employer does not include a liability against which the employer is required to provide under –
(a)another Act; or
(b)a law of another State, the Commonwealth or of another country.”
[17] There was a similarly worded provision in the Workers’ Compensation Act 1990; it was originally designated s 10.1(2), but it became s 182A(2) on the renumbering. That section was considered by this court in Burrows v Workers’ Compensation Board of Queensland [1997] QCA 182. It is sufficient to say for present purposes that the facts of Burrows were broadly similar to the present. Without reference to s 4 of the 1990 Act this court held in an ex tempore judgment that as the injury occurred in New South Wales the employer was indemnified by the New South Wales insurer and not the Workers’ Compensation Board. In the reasons it was said that in some circumstances, such as where the employment in New South Wales was “fortuitous, fleeting or sufficiently unusual”, the Queensland insurer and not the New South Wales insurer may be obliged to indemnify the employer.
[18] There are significant differences between the 1990 Act and the Act (and also there have been changes to the New South Wales legislation) and in consequence it may be necessary at some stage to reconsider the decision in Burrows. However, there was no challenge to the reasoning in Burrows before the learned judge at first instance, and he held that it applied in the circumstances of the present case so that WorkCover was not “obliged to indemnify this employer against a claim for damages arising out of any such injury at Ballina.” On the hearing of the appeal the plaintiff did not ask this court to reconsider Burrows, but the submissions on behalf of NRMA questioned whether the facts here established that NRMA was obliged to indemnify the defendant with respect to the plaintiff’s claim.
[19] After the decision at first instance this court handed down its judgment in Busst v Lotsirb Nominees Pty Ltd [2003] 1 Qd R 477. The basic facts of that case were broadly similar to those here. There the employee commenced employment with the employer at its store at Southport. At all material times the employee was resident in Queensland and her salary was paid into her bank account in Queensland. Thereafter a vacancy occurred as manager of the employer’s store at Tweed Heads in New South Wales. The employee applied for that position and was successful. Thereafter her work was carried out at Tweed Heads. In the course of her employment at Tweed Heads she suffered an injury and ultimately sued the employer in Queensland for damages both in contract and in tort. The learned judge at first instance in that case held that New South Wales law was the substantive law with respect to the employee’s cause of action in tort and that law included the 1987 Act. It was also held at first instance that with respect to the cause of action in contract the applicable substantive law was that of Queensland. This court upheld the latter finding; the contract retained its closest and most real connection with Queensland, and therefore Queensland law was the proper law of the contract. This court did not consider, as it was not necessary to do so given the way in which the question arose for determination, whether that meant that if the employee succeeded in the action based on the contract of employment WorkCover was obliged to indemnify the employer.
[20] In the present case counsel for the plaintiff submitted that it was necessarily inherent in the reasoning in Busst that the employee would continue to have the benefit of both compensation and common law rights under the Act notwithstanding the work was temporarily being performed in New South Wales. That submission was challenged by counsel for WorkCover; in his submission the reasoning in Busst was but a conventional application of the reasoning in Bonython v Commonwealth (1950) 81 CLR 486 at 498 and no more. It is not necessary to resolve those competing submissions at this stage of this proceeding, but if the submission of counsel for WorkCover is correct then the decision in Busst is of no practical benefit to the employee suing for damages in such circumstances.
[21] As already noted the critical finding of the learned judge at first instance for present purposes was that WorkCover was estopped from denying liability to indemnify the defendant with respect to the plaintiff’s claim. Before this court, as stated in the outline of submissions on behalf of WorkCover, there was no contest on the appeal to the proposition that the doctrine of estoppel could apply to preclude or circumvent WorkCover’s reliance upon s 11(2) of the Act. As the written and oral submissions indicate, the issue raised by WorkCover was as to the applicability of the law of estoppel to the facts as found, and in particular whether there was evidence of detriment such as would give rise to an estoppel. It followed that the submissions of counsel for WorkCover concentrated almost solely on the judgments of the High Court in Commonwealth v Verwayen (1990) 170 CLR 394.
[22] It was submitted by counsel for WorkCover in the present case that the plaintiff has suffered no detriment because the preceding D2697 of 2001 has been commenced against the defendant and may be prosecuted to a judgment in circumstances where NRMA would be obliged to indemnify the defendant. It was therefore said, consistently with the views of Mason CJ and Brennan J in Verwayen, that reimbursement of costs thrown away by complying with the requirements of the Act was a sufficient recompense for any detriment suffered. But before this court counsel for NRMA referred to arguments which NRMA could raise in support of the contention that it was not bound to indemnify the defendant with respect to such a judgment. If NRMA was not obliged to indemnify the defendant the argument in favour of an estoppel would be much stronger.
[23] Given the lapse of time it is clearly too late for the plaintiff to commence fresh proceedings in a New South Wales court against NRMA. However the reference to “court” in s 151C of the 1987 Act is very general and there is no reason for concluding that a District Court in Queensland may not in an appropriate case be a “court” for purposes of that section. There has been compliance with the 6 month period of notice therein referred to.
[24] Counsel for NRMA submitted that it was seriously arguable that his client was not an insurer of the defendant with respect to the claim of the plaintiff. The compulsory insurance which the defendant in its capacity as an employer of persons in New South Wales was obliged to take out pursuant to the 1987 Act covered “all workers employed by the employer and for an unlimited amount in respect of the employer’s liability independently of this Act (but not including a liability for compensation in the nature of workers compensation arising under any [other] Act . . .) for any injury to any such worker.” The contention appears to be that as the plaintiff’s entitlement to compensation was pursuant to s 140 of the Act the defendant as a New South Wales employer was not obliged to take out insurance covering him. If that argument be correct then there may be a basis for saying that the plaintiff is not for purposes of s 151C of the 1987 Act a “person to whom compensation is payable under this Act” and therefore is not a person entitled to commence proceedings for damages for which the New South Wales insurer would be obliged to indemnify the employer. Aspects of that submission were rejected by this court in Burrows, but the court then did not have the benefit of submissions from the New South Wales insurer.
[25] Questions such as that were not argued at first instance in this matter, and though they were alluded to on the hearing of the appeal it is not appropriate that this court determine such issues before there have been findings of fact made on all relevant matters which might affect the determination.
[26] It may well be that ultimately the question who is to indemnify the defendant with respect to any damages awarded in favour of the plaintiff will be dependent upon findings made at trial. In so far as the plaintiff has a claim in tort, New South Wales law will be the proper law of the tort because it occurred in New South Wales. That does not mean necessarily that NRMA and not WorkCover is bound to indemnify the defendant. Further, that does not necessarily mean that the assessment of quantum of damages will be governed by the provisions of the 1987 Act. Clearly the 1987 Act contains provisions limiting the quantum of damages recoverable by an employee against his employer in an action brought pursuant to its provisions in respect of which a compulsory insurer thereunder is obliged to indemnify the employer, but it is not an Act having general application to claims in tort. If WorkCover is the indemnifying insurer of the defendant with respect to a tort which occurred in New South Wales those limiting provisions may not apply. That is a matter which was not argued at first instance, but was vaguely alluded to in the course of submissions in this court. In the circumstances it is not appropriate for this court to express a final opinion on that issue.
[27] As already noted the plaintiff also alleges a cause of action in contract. Following the decision in Busst v Lotsirb, if appropriate findings of fact are made, it will be held the proper law of the plaintiff’s contract of employment was Queensland. If that is so then it may well follow that for purposes of assessing quantum limitations to be found in the 1987 Act would be irrelevant. It may follow, if Queensland is the proper law of the contract, that the Act applies and WorkCover is obliged to indemnify the defendant, and the plaintiff would have to comply with the requirements thereof.
[28] Given what has been said it can be seen that it is possible, after all the evidence has been considered, that the conclusion could be reached that WorkCover was obliged to indemnify the defendant in respect of any amount the plaintiff recovered by way of damages either in contract or tort. That conclusion could be reached either because of a statutory obligation to do so, or because it was estopped from denying such liability. WorkCover could not deny liability to indemnify on the ground that the plaintiff had not complied with the conditions precedent to recovery of damages under the Act (save perhaps with respect to the claim for psychological injury).
[29] It follows that this was not an appropriate case in which a declaration such as that made at first instance should have been made summarily. How the matter proceeds from here is for the parties to determine. The proceeding in the District Court as between the plaintiff and the defendant could proceed to judgment, and then the defendant could commence proceedings against either or both WorkCover and NRMA seeking indemnity. An alternative to that would be to have both insurers joined in the proceeding as third parties so that all relevant issues could be litigated at the one time. Other procedural strategies may also be available.
[30] Though it has to be conceded that this is an unfortunate result, the only realistic course open to this court is to set aside the declaration made at first instance and direct that the matter proceed to trial. The costs of the appeal should abide the finalisation of the litigation.
[31] The orders of the court should therefore be:
(1)Allow the appeal to the extent of setting aside the declaration made at first instance.
(2)Order that the costs of all parties of and incidental to the appeal be reserved to the trial judge.
[32] HOLMES J: I have read the judgment of Williams JA, and agree with his conclusion that a declaration was inappropriate given the questions of fact and law remaining to be resolved. I wish simply to make some observations about the issues as to whether the plaintiff was a person to whom compensation was payable under the Workers Compensation Act 1987 (NSW) (“the 1987 Act”), and whether, if so, he was placed in any worse position by amending legislation passed in 2001.
[33] The defendant, as an employer, was required by s 155 of the 1987 Act to maintain a policy of insurance in respect of its liability to its employees, under the Act or otherwise, for injury in New South Wales, with the exception of liability for workers’ compensation “arising under any Act … of another State” or liabilities under the laws of other countries. There were in the present case two possible sources of liability for workers’ compensation. Under the New South Wales legislation, the combined effect of ss 9 and 9A of the 1987 Act entitled a worker who had “received an injury” to compensation, as long as employment was a substantial contributing factor to the injury. At the same time, s 140 of the WorkCover Queensland Act 1996 provided for payment of compensation to a worker whose principal place of employment was in Queensland and who was injured out of the State in circumstances that, occurring in Queensland, would have entitled him to compensation. There was a limit to that entitlement; it would cease if he were paid compensation under an entitlement in another state, and any amount paid could be recovered (ss 141 and 142).
[34] On the basis of these provisions, counsel for the NRMA and counsel for the plaintiff contended that the plaintiff’s entitlement to benefits from WorkCover constituted a liability for compensation arising under an Act of another State for the purposes of s 155 of the 1987 Act, so as to exempt the defendant from any requirement to insure in New South Wales, and so as to preclude the plaintiff from being a person to whom compensation was payable under the 1987 Act. It is, I think, arguable that compensation remained payable to the plaintiff under both New South Wales and Queensland Acts, so that the defendant, while not obliged to insure against any liability WorkCover might assume, nevertheless remained under an obligation to insure in respect of its liability to the plaintiff in other respects, including any liability to pay him compensation should he seek it under the New South Wales regime, or damages; but I agree with Williams JA that the question is better left unanswered pending findings of fact.
[35] If, however, the plaintiff was a person to whom compensation was payable under the 1987 Act, its procedural requirements as it stood until 27 November 2001 were not onerous. Section 151C(1) provided for a statutory delay in commencement of proceedings:
‘A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until 6 months have elapsed since notice of the injury was given to the employer.’
(Section 149(2) made it clear that a reference to compensation payable includes a reference to compensation which would be payable if a claim for it were duly made.) According to his application for workers’ compensation, the plaintiff had reported the injury to his employer on 9th August 1999, almost two years before instituting proceedings; no difficulty arose here. The provisions of the 1987 Act which constituted a threshold for damages were a different matter: the restrictions on availability of damages for both non-economic and economic loss were such that it was doubtful that the plaintiff could recover at all.. However, given that notice of the claim had been duly furnished to his employer, there was at least no bar to his commencing an action.
[36] But the learned judge at first instance proceeded on the basis that the plaintiff had been prejudiced by the Workers Compensation Legislation Further Amendments Act 2001 (“the 2001 amending Act”) which substantially amended, from 27 November 2001, the 1987 Act in respect of the recovery of common law damages by workers. The 2001 amending Act introduced into the Workplace Injury Management and Workers Compensation Act 1998 (“the 1998 Act”) a new Chapter 7, ”New Claims Procedures”, which prescribed, among other things, certain steps to be taken before proceedings could commence, and required at least a 15% level of impairment. It seems unlikely that the plaintiff would meet the requirements of the New South Wales workers’ compensation legislation as it has stood since the 27 November 2001 so as to be able to commence proceedings or to receive damages.
[37] The position of those who had already instituted proceedings was, however protected by the 2001 amending Act. Schedule 4 inserted the following provision as clause 9(1) of Part 18C of schedule 6 of the 1987 Act:
‘An amendment made by Schedule 1 to the Workers Compensation Legislation Further Amendment Act 2001 applies in respect of the recovery of damages after the commencement of the amendment (and so applies even if the injury concerned was received before the commencement of the amendment) but does not apply in respect of the recovery of damages if proceedings for their recovery were commenced in a court before the commencement of the amendment.’
[38] Schedule 1 to the 2001 amending Act incorporated the limits on damages in the 1987 Act, including the requirement of at least 15% permanent impairment, as well as the pre-litigation steps prescribed in the 1998 Act, to which reference has already been made. By excluding the operation of the Schedule 1 amendments, Clause 9 specifically preserved from their effect proceedings for the recovery of damages commenced prior to 27 November 2001. It does not appear that the existence of Clause 9 in the 1987 Act (as amended by the 2001 Act) was brought to the attention of the learned judge at first instance.
[39] The reference in the clause to commencement of proceedings for the recovery of damages “in a court” is not expressed to be limited to proceedings commenced in New South Wales, consistent with the absence of any such limitation in other provisions dealing with the bringing of common law actions for damages.[1] The second reading speech for the Workers Compensation Legislation Further Amendment Bill makes it clear that its intention was a guillotine between existing and new claims: “The Government proposes, in view of the current extreme escalation of claim numbers for common law claims and the urgent need to curb costs, that no further claims under the current system be permitted other than those claims that have been filed at the date of the introduction of the bill into Parliament”.[2] There is no suggestion that any significance attached to the jurisdiction in which such claims had been filed.
[40] Legislation restricting the right of access to the courts must be read strictly;[3] there seems no warrant here for construing the reference to “the courts” as confined to the courts of New South Wales. In my view, if the plaintiff’s claim fell to be dealt with under the New South Wales workers’ compensation legislation, he was, because he had commenced proceedings for the recovery of damages in the District Court at Brisbane before the commencement of the 2001 amending Act, entitled to have his claim dealt with in accordance with the 1987 Act as it stood before amendment.
[41] There was not in this case any issue taken as to the jurisdiction of the District Court to hear the matter. There is no reason that a trial could not proceed in Queensland, with the court applying the law of New South Wales in relation to the claim in tort[4] and probably, although it remains to be determined on the facts, the law of Queensland as far as the claim of contract[5] is concerned.
[42] I agree with Williams JA that the declaration should be set aside, with the question of costs left for the trial judge’s determination.
Footnotes
[1] For example, s 312 of the Workplace Injury and Management and Workers Compensation Act 1998 provides that proceedings on a claim for work injury damages may be commenced “in any court of competent jurisdiction”.
[2] Hansard 27th November 2001.
[3] Neuss v Roche Bros Pty Ltd [2001] 2 Qd R 487 at 489.
[4] John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503.
[5] Busst v Lotsirb Nominees Pty Ltd [2003] 1 Qd R 477.