The issue in this case arose in the context of an employee’s claim for statutory compensation against WorkCover for mesothelioma. WorkCover then brought a claim for a statutory indemnity under s 207B Workers’ Compensation and Rehabilitation Act 2003 against the supplier of asbestos. The asbestos supplier then sought to claim equal contribution against the State of Queensland, which had been the employer. At first instance, the State unsuccessfully sought summary dismissal. In allowing the appeal and dismissing the asbestos supplier’s claim, the Court of Appeal explained that WorkCover’s claim pursuant to s 207B of the, was an independent statutory cause of action. There was no coordinate liability. WorkCover’s claim was to recover compensation paid, whereas the State’s liability (if any) would be for common law damages.
Fraser and Morrison and McMurdo JJA
12 November 2019
Mr Stillaway was an employee of the State of Queensland (“the State”), working in the Queensland Housing Commission. He received compensation from WorkCover for mesothelioma, which he developed as a result of exposure to asbestos during his employment. . This judgment arises out of proceedings brought by WorkCover to recover the compensation from Seltsam Pty Ltd, a supplier of asbestos, pursuant to s 207B of the Workers’ Compensation and Rehabilitation Act 2003 (“WCRA”). .
In the WorkCover proceedings, Seltsam sought to join and make a claim for equitable contribution against the State. Seltsam alleged that the State’s negligence had contributed to the injury sustained by Mr Stillaway. –. The State unsuccessfully applied for summary dismissal of that claim. The State then sought leave to appeal against that dismissal of that application. .
The issue on the appeal
Morrison JA (with whom Fraser and McMurdo JJA agreed) began by observing that at the heart of the appeal was the question: “can a claim for equitable contribution be maintained by Seltsam against the State of Queensland for any liability which Seltsam may have to WorkCover pursuant to s 207B(7) of the WCRA”. . Before answering that question, his Honour considered two key issues: firstly, the nature of the right under s 208B; secondly, when equitable contribution is available.
On the first issue, his Honour outlined a number of settled principles about the right given to WorkCover by s 207B of the WCRA. The conclusion to be drawn from those principles was the entitlement under that provision is “not tortious in character, nor is it a claim for damages or subrogation claim. It is not a claim derivative of any claim of the worker.” Instead, a claim under s 207B is a “sui generis cause of action for a statutory indemnity”. . Importantly, it only provides for recovery “against persons who are not the employer”. .
In relation to the second issue, his Honour outlined the principles applicable to equitable contribution, as summarised in HIH Claims Support Limited v Insurance Australia Limited (2011) 244 CLR 72. . Most importantly, those principles revealed that “equity only intervenes if there is coordinate liability in respect of the one loss.” . As McHugh J explained the rationale in Burke v LFOT Pty Ltd (2002) 209 CLR 282 (quoted at ):
“An order of contribution prevents the injustice that would otherwise flow to the plaintiff by the defendant being enriched at the plaintiff’s expense in circumstances where they have a common obligation to meet the liability which the plaintiff [for contribution] has met or will have to meet.”
Resolution of the appeal
His Honour considered that a claim for equitable contribution could not be made against the State for a number of reasons. Those reasons can be grouped under two core reasons: firstly, there was no coordinate liability; and secondly, it would be inconsistent with the WCRA to allow the claim.
Firstly, his Honour reiterated that s 207B WCRA provides an independent statutory entitlement to Workcover. . Under that provision, WorkerCover’s claim is to recover compensation paid, whereas any liability of the State would be for common law damages. . In other words, there was “no coordinate liability, and no common burden”. . That “lack of mutuality” was also demonstrated by the fact that any payment of damages by the State would not discharge Seltsam’s liability under s 207B. . Similarly, any discharge of the s 207B liability by Seltsam would not benefit the applicant (so as to enliven equity’s intervention, for the reason identified by McHugh J in Burke). .
Secondly, as noted, s 207B provides an avenue of recovery against “persons who are not the employer”. . WorkCover could not sue the State for indemnity in respect of the compensation it paid, yet the claim for equal contribution made by Seltsam would, if successful, achieve that result. That would be “a result for which the statute does not provide”. A claim for equitable contribution is to be denied in such a circumstance (citing Burke). .
Accordingly, the appeal was allowed and Seltsam’s claim against the applicant was summarily dismissed. .