Sheward v Toowoomba City Council
[1998] QDC 376
To print this judgment please return to the case and click on the PDF icon
next to the
case name. For court use, a full PDF copy is required or preferred.
Exit Distraction Free Reading Mode
Please Note: You are about to print a copy of the onscreen
version of
this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please
return to
the case for PDF printing options.
- Unreported Judgment
- Sheward v Toowoomba City Council[1998] QDC 376
- Add to List
Sheward v Toowoomba City Council[1998] QDC 376
Sheward v Toowoomba City Council[1998] QDC 376
IN THE DISTRICT COURT HELD AT TOOWOOMBA QUEENSLAND | Plaint No 56 of 1997 |
[Before McGill DCJ]
[Sheward v. Toowoomba City Council and Anor]
BETWEEN
SPENCER CHARLES SHEWARD | Plaintiff |
AND
TOOWOOMBA CITY COUNCIL | Defendant |
AND
TYRE MARKETERS (AUSTRALIA) LIMITED ACN 004 098 346 | Third Party |
JUDGMENT - McGILL D.C.J.
Judgment Delivered: | 15 December 1998 |
Catchwords: | EMPLOYMENT LAW – injury of employee – action against party not employer – whether certificate required – whether deemed employer – Workers Compensation Act 1990 ss. 182A, 182D. |
Counsel: | D. J. Kelly for the plaintiff M. Grant-Taylor for the defendant R.C. Morton for the third party |
Solicitors: | Shine Roche McGowan for the plaintiff Minter Ellison for the defendant Hede Byrne and Hall for the third party |
Date of Hearing: | 9 December 1998 |
IN THE DISTRICT COURT HELD AT TOOWOOMBA QUEENSLAND | Plaint No 56 of 1997 |
BETWEEN
SPENCER CHARLES SHEWARD | Plaintiff |
AND
TOOWOOMBA CITY COUNCIL | Defendant |
AND
TYRE MARKETERS (AUSTRALIA) LIMITED ACN 004 098 346 | Third Party |
REASONS FOR JUDGMENT - McGILL D.C.J.
Delivered the 15th day of December 1998
By plant filed in the Toowoomba Registry on 25 March 1997, the plaintiff claimed damages for personal injury which he alleged he suffered on or about 2 December 1996. The plaintiff alleges that he was then employed as a tyre fitter and in the course of his employment set about the repair of a punctured right front tyre on a tractor owned by the defendant which had been delivered to the premises of his employer for that purpose. He alleges that while pumping air into the tyre to remove water which was in it, the tyre burst, striking him in the face and causing injury to him, and that this was caused by the negligence of the defendant, in various ways particularised in the plaint.
On 23 April 1998, the defendant filed a third party notice alleging that the third party was the employer of the plaintiff and that any injuries suffered by the plaintiff were caused by the negligence and/or breach of statutory duty of the third party (of which particulars were given), and claiming an indemnity and/or contribution in respect of the damages, interests and costs awarded to the plaintiff pursuant to the provisions of the Law Reform Act 1995. A claim is also made for damages for negligence assessed in a sum equivalent to the plaintiff's claim, but no facts are pleaded in support of such a claim. On 5 June 1998, the third party entered an appearance and admitted that it was the employer of the plaintiff.
By an amended Entry of Appearance and Defence filed on 25 August 1998, the third party alleged that the plaintiff was not entitled to commence proceedings or maintain a claim as the provisions of Part 11 of the Workers Compensation Act 1990 (“the Act”) had not been complied with, so that the plaintiff's claim was bad in law. Possibly in response to this allegation, the defendant filed a further amended Entry of Appearance and Defence on 6 November 1998 which inserted paragraph 4B:
“The defendant denies that the plaintiff is entitled to commence proceedings or continue the claim due to non-compliance with the provisions of Part 11 of the Workers' Compensation Act 1990 and the plaintiff's claim thereby is bad in law.”
By a summons filed 13 November 1998, the defendant sought an order pursuant to r. 231 A that the question of whether the facts alleged in that paragraph amounted to a good defence to all or part of the plaintiff's claim in the action be tried separately in advance of the trial and on affidavit on the hearing of the summons. Subsequently the third party filed an application seeking to have the third party proceedings against it struck out. It is convenient to deal with the defendant's application first. On the hearing of the summons there was no argument about whether the question should be determined as a preliminary point, and argument was presented as to the merits of the issue. It is desirable in principle for suitable questions to be decided summarily: State of Queensland v. Multiplex Constructions Pty Ltd (Appeal 1863/97, Court of Appeal, 19.12.97, unreported).
The defendant's argument is that the plaintiff's action is barred by s. 182D of the Act. This section relevantly provides:
“182D(1) A workers who has not received an offer of lump sum compensation under s. 132 may seek damages at law for an injury suffered after the commencement only if the Board gives to the worker a certificate under this section”.
This section appears in Part 11 of the Act, and was inserted (with others) by the Workers' Compensation Amendment Act (No 2) 1995, and commenced on 1 January 1996. It has proved a helpful contribution from the legislature to the financial well-being of the legal profession in Queensland, having been the basis of argument in a number of matters in this court. As a result, it seems clear that where it has not been complied with it operates as an absolute bar to an action in a case where it applies. In such a case, the appropriate course is to dismiss or strike out the action.
By s. 182A(1), s. 182D applies to a worker who suffers an injury other than an a serious injury in circumstances creating independently of the Act a legal liability in the worker's employer in relation to which the worker's employer is indemnified or required to be indemnified by a policy under the Act. There is no dispute that the plaintiff was a worker and suffered an injury which was not a serious injury, although it was submitted that the circumstances did not create independently of the Act a legal liability in the employer because the employer had not been sued by the plaintiff, and such a legal liability would arise only if the claim for contribution were successful. This assumes that where the Act is speaking of “a legal liability”, it is speaking of a liability which has been found to exist or established by a decision of the Court. Although the expression “a legal liability” could be confined to a liability which has been established by a court of law, I think that it would more usually be understood as a reference to a liability which in fact exists according to law, the existence of which is then found by the court if there is some dispute as to its existence. The formulation in s. 182A(1) is similar to that in s. 183(1). This provision is the modern equivalent of s. 9A of the Workers' Compensation Act 1916, which also spoke of “a legal liability in the employer to pay damages in respect of that injury”. It was clear from the terms of subsection (2) of that section that what was contemplated there was not a legal liability established by a court, because the existence of the obligation to serve the State Government Insurance Office with a copy of the writ or plaint depended upon whether the claim so commenced was one in respect of an injury which was received in circumstances creating a legal liability in the employer to pay damages.
For these reasons I think that s. 182A is not talking about a legal liability in the sense of a liability established according to law, but rather one which in fact arises as a result of particular circumstances, the existence of which, if disputed, will subsequently be determined by a court. The “legal liability” is created by the circumstances surrounding the injury, being those circumstances which constitute a cause of action for damages which is independent of the Act. Such liability will be the subject of indemnity under a policy of accident insurance unless it is a liability against which the employer is required to provide by some other Act of Queensland or law of another State or Territory or the Commonwealth: see the definition of accident insurance in s. 5(1). The same exclusion appears to be provided by s. 182A(2); this is worrying, since it suggests that I may be misinterpreting the provision, but I cannot see any other meaning for the section. It is not alleged that there is any other Act of Queensland or elsewhere which imposed on the employer any other relevant obligation, so whatever the exclusion it does not apply here.
It is not disputed that the plaintiff worker suffered an injury, nor is it alleged that this was a serious injury as defined. If the present plaintiff had suffered his injury in circumstances which gave him a cause of action for damages against his employer, I think the matter falls within s. 182A, and s. 182D applies to him.
It is not disputed that the plaintiff has not received an offer of lump sum compensation under s. 132, and has not received a certificate under s. 182D. The injury alleged in the action was suffered after the commencement of the section, and therefore the plaintiff, who is the worker, may not “seek damages at law” for that injury. That would certainly prevent him from seeking damages at law from the employer, if he sued the employer he would allege the legal liability in the employer arising independently of the Act that makes s. 182A apply, so it would necessarily be an answer to his claim that he had failed to comply with the requirements of s. 182D. If an action had been brought against the employer in these circumstances, it would be easy to see that that section was a bar to the action, and to decide on the basis of an application such as this that there was necessarily a good defence so that the action should be dismissed.
In the present case, assuming that s. 182D extends to an action by which the plaintiff seeks damages at law against someone other than the employer, there is the difficulty that it is not common ground that the plaintiff has a cause of action for damages against the employer. The plaintiff does not allege this; he alleges a cause of action for damages against someone else. The defendant alleges it, but the third party, the employer, denies it: amended Entry of Appearance and Defence, para. 3. I cannot decide on this application and this material whether or not the plaintiff has a good cause of action for damages against the third party. If liability remained in issue, that was a matter which would have to be found at the trial on the basis of evidence, dealing with the circumstances under which the accident happened. I have no evidence as to those circumstances.
Assuming however that the plaintiff has a good cause of action for damages against the third party, it was argued on behalf of the plaintiff that s. 182D(1) nevertheless did not apply, because on its true interpretation it was concerned only with a situation where a worker was seeking damages at law from an employer. This would involve reading subsection. (1) as if the words “against the employer” were inserted after the words “damages at law”. Whether it should be so read depends, I think, on the scope and operation of the section in the context of the Act, particularly part 11.
Section 182A, by making these provisions operate in circumstances where there is a cause of action against the employer, suggests that these provisions are concerned with an entitlement to damages against the employer existing independently of the Act. There is not much in s. 182B which suggests that its operation is confined to a situation where the claim for damages is made against the employer, and the section could work logically on the broader basis. The one possible exception to this is that subsection (6) contemplates that one could seek damages at law either by starting proceedings or by seeking to negotiate a damages settlement with the Board, but if the claim for damages were to be made against someone other than the employer, there would ordinarily be no reason to be negotiating such a claim with the Board. On this basis, if it were possible to negotiate a damages settlement with someone other than the Board in respect of a claim for damages for the injury, the worker would not be taken to be seeking damages at law for that injury and therefore would not be taken to have made a choice to reject lump sum compensation pursuant to subsection (4). It would seem therefore that on the broad view if the worker does not give notice of a choice of damages, and negotiates a settlement with someone other than the Board without starting proceedings, it would be open to change the choice and obtain lump sum compensation for the injury. That, I suspect, is not how the section was intended to operate.
Section 182C starts off speaking in terms which are wide enough to include seeking damages at law against someone other than the employer, but subsection (7) clearly contemplates that the employer (or the Board) will be a defendant in the proceedings, because it speaks of a different entity being “joined as the defendant”, an expression which would ordinarily only be used if there were more than one defendant.
There is nothing in the text of s. 182D which indicates one way or the other whether it applies only in an action against an employer. The same applies to s. 182E.
There is no doubt that the Workers' Compensation Act contemplates the possibility that someone other than the employer may be liable for damages to a worker who is entitled to compensation under the Act. That appears expressly in s. 90. Section 90(2) provides expressly that ss. 1 does not limit s. 182D, but that in itself does not mean s. 182D has to apply to actions against persons other than the worker's employer as well as actions against the employer. Where compensation has been paid to a worker, damages assessed in an action against an employer indemnified or required to be indemnified by the Board will be reduced by the amount paid or payable from the Fund by way of compensation: s. 183. On the other hand, if an action is brought against someone other than an employer, the damages are subject to a charge in favour of the Board to the extent of the amount paid as compensation under the Act: s. 190(2). I am not aware of any relevant authorities. In Short v. Michaliczac (Plaint 3951/97, McMurdo DCJ, 22.5.98, unreported), her Honour noted that on its face, s. 182D(1) was wide enough to apply to an action against someone other than an employer, but did not come to a concluded view on whether it did.
The explanatory memorandum dealing with the Bill which became the 1995 Act does not expressly indicate whether s. 182D was intended to apply to actions against persons other than the employer, although it does say:
“Where there is an entitlement to lump sum compensation, an offer under s. 132 would be made by the Board. The worker would then proceed with their common law action under the provisions outlined in s. 182B.”
As noted earlier, s. 182B does contain some provisions which suggest that what was contemplated was an action at law against the employer. The other point of significance in the explanatory memorandum is that it states the general objective of the Bill as being “to introduce a series of immediate measures to ensure that the Workers' Compensation Scheme is returned to a fully funded position over the next five years ...” Restricting actions for damages at law against employers would provide some assistance in this way, but it is not immediately obvious that much assistance of this kind would be provided by restricting the ability of employees to sue persons other than the employer. In such a situation any damages awarded would usually not be paid by the Board, and indeed the Board would have the opportunity to recover the compensation paid pursuant to s. 190.
The second reading speech on the amendment bill contains some reference to these provisions in a general way. The Minister said: (see Queensland Hansard, 2 November 1995, p. 944.)
“As well as statutory payments being increased, all workers will retain their common law right to sue negligent employers. However, the Bill introduces an irrevocable choice between common law action and the improved statutory lump sums for workers with less serious injuries where the statutory lump sum payable is below 20% of the new maximum statutory compensation ... The Bill will introduce new administrative procedures to support the irrevocable choice, including a certificate being issued on offer or acceptance of a statutory lump sum. If a lump sum has not been previously offered, as in the case of where a statutory claim has not been lodged, the injured worker would have to apply to the Board for a certificate. A certificate detailing the injured worker's lump sum entitlement is required prior to commencement of common law proceedings. The certificate for those with less serious injuries will make the consequences of the choice very clear, including cost implications.”
This passage not only throws some light on the purpose of introducing the certificate as a pre-condition to a common law action, but also places the mechanism in the context of such an action against an employer. In so far as this provides any guidance on the point, I think it tends to favour the narrower interpretation of s. 182D(1).
That brings me to a further consideration. If s. 182D is given its wider application, it will still not apply in all cases where an employee who has obtained workers' compensation also wishes to sue for common law damages. By s. 182A, it only applies where there is a good cause of action against the employer. This is a reasonable restriction in a case where the section applies to an action against an employer, but is an arbitrary restriction where action is proposed against someone else. I can think of no logical reason why an action against someone other than the employer should be subject to the restriction imposed in s. 182D if the employer would have been liable if sued, but not if the employer would not have been liable to be sued. Indeed, in a particular case, it may be very difficult to know whether or not there is an obligation to obtain such certificate before suing someone other than the employer, and if a certificate has not been obtained, the plaintiff may have to be able to prove not only that the defendant is liable, but also that if he had sued his employer, the employer would not have been liable. The duties on employers, both at common law and under statute, have now become so onerous that it is very difficult for an employer to escape liability if sued by an injured employee, so it may be very difficult for an employee who wants to sue someone else to establish that the employer was not liable.
There are no difficulties of this kind if s. 182D(1) is restricted to actions against the employer; if the employer is liable, then the section applies and it is necessary to obtain a certificate. If the employer is not liable, the action fails anyway. Section 182D therefore makes sense in context if it is confined to an action against an employer, but presents a strange, impractical and probably in some cases unfair result if it extends to actions against persons other than the employer, given that it is limited to situations where the employer is legally liable.
In my opinion, therefore, in its true construction s. 182D only applies to restrict a workers' right to seek damages at law from an employer. I think that s. 182A(1), making the section apply in circumstances where the employer is liable, indicates that the relevant provisions were intended to operate by reference to and in respect of the legal liability of the worker's employer arising independently of the Act. Although it is unnecessary for me to go so far, I think that all of sections 182B to s. 182E, where they speak about seeking damages at law, are concerned with a situation where such damages are sought from the worker's employer.
It follows that s. 182D is not a bar to an action against the present defendant, even if the employer (the third party) is legally liable to the plaintiff for damages in respect of the plaintiff's injury. This, however, is subject to a further argument raised by Mr. Grant-Taylor for the defendant, that the defendant is properly characterised as an employer for the purposes of the Act because of s. 47. That section provides relevantly as follows:
“47(1) In this section -
“contractor” means a person who by a contract undertakes to carry out, or to secure the carrying out of, work for another.
“principal” means a person for whom work is to be carried out by another under a contract to which the person is a contracting party.
(3) When a contract is made between a principal and a contractor for work to be carried out and workers are used in carrying out the work, or any part of it, -
- (a)the principal is declared to be an employer of every such worker used in carrying out work in performance of the contract, or in performance of any other contract made with the view to carrying out the work for which the first contract is made, or any part of that work; and
- (b)the cover of a policy maintained by the principal with the Board extends to indemnify the principal against the principal's legal liability existing independently of this Act to pay damages in respect of injury to any such worker while used in carrying out work for which the contract is entered into, or any part of that work”.
There is a further provision that if the principal is not indemnified against such liability under a policy maintained with the Board or an independent contract of insurance, the cover of a policy maintained with the Board by the contractor extends to indemnify the principal against the principal's legal liability referred to in ss. (3)(b). The section appears to be more or less the equivalent of what was clause 25 in the schedule to the Workers' Compensation Act 1916 considered by the Court of Appeal in Boyne Smelters Ltd v. Workers' Compensation Board of Queensland [1998] 1 Qd.R. 20, where Pincus J A said at p. 23 that a contract “under which the contractor promises to execute any work” is accurately described as one for the execution of any work. I think essentially s. 47 expresses the same concept in more modern terms, and that the decision in that case, that a contract which fell within clause 25 even if it was essentially or predominantly a contract for sale of goods, so long as it was one under which the contractor promised to execute any work, applies also to s. 47. In the same way the section will not be limited to work which could be characterised as the principal's work rather than the contractor's work: Maroochydore Black Swan Rugby League Ltd v. Workers' Compensation Board of Queensland [1994] 2 Qd.R. 531.
It appears to follow from those authorities that, where s. 47 applies, the principal is deemed to be the employer of the injured worker, and is entitled to be indemnified by the Board in respect of its liability to pay damages to the injured worker while carrying out the relevant work. What it is alleged the plaintiff was doing in the present case, repairing a tyre, would involve doing work for the purpose of s. 47, and the work was being done for the defendant. There is, however, no allegation by the plaintiff that that work was being done under a contract to which the defendant was a contracting party. Nor indeed is there any allegation in the third party notice to that effect. I think it highly likely that that was the case, but the matter should be the subject of evidence (unless agreed).
Assuming however that the defendant is in a position to establish that there was a contract with the defendant pursuant to which the work the plaintiff was doing was being done, it seems to me that s. 47 applies and the defendant is “declared” (i.e., deemed) to be an employer of the plaintiff by ss. (3)(a). It follows that the first defendant is entitled to an indemnity from the Workers' Compensation Board. In these circumstances it is appropriate that s. 182D apply. Assuming that that factual issue can be made out therefore, I think that s. 182D did apply in the present case, and the consequence is that the matter raised in para. 4B of the Further Amended Entry of Appearance and Defence of the defendant is necessary a good defence to the plaintiff's action. Failure to obtain the certificate is a bar to the action: Short v. Michaliczac (supra); Hermann v. Buzza (Plaint 4561/97, Wylie DCJ, 12.6.98, unreported); and my decision in Wilkie v. Doce Pty Ltd (Plaint 2137/97,17.9.97, unreported). That case was relied on by the defendant in support of the argument that s. 182D(1) applied to an action against someone other than the employer because of a statement at p. 10:
“In my opinion when s. 182D(1) speaks of seeking damages at law, that is a reference to pursuit of the right recognised by s. 90(1)(b) of the Act. That is the natural meaning of the words used, reinforced by the terms of s. 90(2).”
That statement, however, must be understood in the context of that case, which involved an action against the employer. Although s. 90(1)(b) expressly extends to actions against persons other than employers, it does apply to an action against an employer, and in that respect it covers the same ground as s. 182D(1). I do not consider that anything I said on that occasion justifies or involves the proposition that s. 182D(1) extends to an action other than an action against an employer.
By Rule 231A(4) a judge may dismiss the proceedings in the light of the determination of the question tried separately if that is appropriate. Assuming that it be established that there was a contract with the defendant pursuant to which this work was being done, the appropriate course is to answer the question in the affirmative, and as a consequence dismiss the plaintiff's action. In these circumstances it is appropriate also to dismiss the third party proceedings. The plaintiff was invited to discontinue the action on the basis of failing to comply with s. 182D(1), but declined to do so. It follows that the costs should follow the event, and the plaintiff should pay the defendant's costs of and incidental to the application and the action to be taxed. With regard to the third party proceedings, they are really dependent on the claim brought by the plaintiff in the action, and they should therefore also be dismissed. Since both the defendant and the third party are entitled to an indemnity from the Workers' Compensation Board, the third party proceedings were a waste of time, and there should be no order for the costs of those proceedings. The costs recoverable by the defendant from the plaintiff would not, I think, involve any costs associated with the third party proceedings anyway, but for the avoidance of doubt I will expressly exclude from those costs any costs associated with the third party proceedings.
Summary
My conclusions in relation to the issues ventilated in this application may be summarised as follows:
- (1)Section 182A(1) applies when there is a legal liability in fact created, and is not dependent upon the legal liability being established in proceedings in a court;
- (2)Section 182D(1) on its true construction only applies to the seeking of damages at law from the employer of the worker;
- (3)Employer for that purpose includes a person declared to be an employer by s. 47(3)(a).
Fortunately for the plaintiff, the limitation period has not yet run in respect of his claim; he can now apply for a certificate from the Board, and then commence fresh proceedings. The fact that this is so however does not affect the question of whether or not the action is barred by s. 182D(1), or whether, if it is so barred, the appropriate course is to dismiss the action.
The orders on the defendant's summons will therefore be as follows:
- Order that the following question that arises in these proceedings be tried separately in advance of the trial and on affidavit upon the hearing of this summons:
“Do the facts alleged in para. 4B of the Further Amended Entry of Appearance and Defence of the defendant amount to a good defence to all or part of the plaintiff's claim in this action?”
- Answer that question “Yes”.
- Order that the plaintiff's action be dismissed.
- Order that the plaintiff pay the defendant's costs of and incidental to the action and of this application as agreed, or failing agreement, to be taxed.
On the third party's summons, I order:
- That the third party proceedings be dismissed.
- That there be no order as to costs.
Counsel: | D.J. Kelly for the plaintiff M. Grant-Taylor for the defendant R.C. Morton for the third party |
Solicitors: | Shine Roche McGowan for the plaintiff Minter Ellison for the defendant Hede Byrne and Hall for the third party |
Date of Hearing: | 9 December 1998 |