Wallaby Grip (BAE) Pty Limited (in liq) & Anor v WorkCover Queensland; CSR Limited v WorkCover Queensland

The outcome of these significant appeals turned on the meaning of the words “has … taken proceedings to recover, damages” in the chapeau to s 207B(8) Workers’ Compensation and Rehabilitation Act 2003. The worker had filed a claim and statement of claim against the employer in the District Court but that claim was never served. Kelly J (Morrison and Mullins JJA agreeing) held that a person cannot be said to have “taken proceedings” until the proceeding has been served. Kelly J further explained that if a person to whom compensation has been paid takes proceedings to recover damages then the insurer’s entitlement to be indemnified will have to await the determination of that proceeding. But “no action or inaction by the person to whom compensation has been paid” will affect or extinguish the right of the insurer to be indemnified.

Morrison and Mullins JJA and Kelly J

21 October 2022

The respondent paid compensation to an injured worker who had developed malignant mesothelioma which was attributed to his having inhaled asbestos dust during the course of his employment. The respondent claimed an indemnity under s 207B(8)(a) Workers’ Compensation and Rehabilitation Act 2003 against the three appellants. Prior to the Supreme Court Proceeding, the injured worker had filed a claim and statement of claim (albeit they were not served and are now stale). [3].

Section 207B(8) provides:

“(8)  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) 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

(b) to that end, the insurer is subrogated to the rights of the person for the injury.”

The appellants unsuccessfully applied to strike out the respondent’s statement of claim or for summary judgment. On appeal, they contended that the primary judge ought to have found that, on the Act’s proper construction, the insurer was not entitled to claim the indemnity since the worker had taken proceedings to recover damages for his injury from another person other than his employer within the meaning of that language as it appears in the chapeau to s 207B(8) of the Act. In addition, CSR Limited argued that when the worker commenced proceedings, the respondent’s cause of action was lost against any alleged wrongdoer. [4]. Conversely the respondent argued that in circumstances where the worker had filed but not served proceedings, he had “not recovered damages” for his injury and accordingly the insurer was entitled to claim the indemnity. The respondent submitted that that is because the first limb of the chapeau to s 207B(8) “has not recovered damages” is an alternative to the second limb “has not … taken proceedings to recover, damages”. [20].

The Court’s interpretation of the critical words in the chapeau

The Court preferred a construction which was aligned with the purpose of s 207B(8), noting that in WorkCover Queensland v Amaca Pty Ltd (2010) 241 CLR 420, 438 [48] the High Court recognised that the policy of the Act “indicates that [the insurer] is entitled to be indemnified for moneys if paid in compensation…”. In the lead judgment, Justice Kelly commented that:

1.  The expression “taken proceedings” as it appears in s 207B(8) should not be taken to be a literal reference to the mere filing of an originating process; [38];

2. A plain meaning of “to take” includes “to conduct”, “to use”, “to get the use of”, “to make use of”, “to avail oneself of” and “to have recourse to”; [39];

3. It is not until the originating process is served and jurisdiction is thereby conferred upon the court that a person is able to be properly described as having taken or as taking, in the sense of using, proceedings to recover damages; [42];

4. The fact that “taken” as it appears in s 207B(8) is in the form of the past participle is noteworthy since when one considers the purpose of the Act and the rights of subrogation conferred by paragraph (b) of s 207B(8), it would follow that “taken” is intended to refer to an existing state of affairs, namely a proceeding which is being taken to recover damages. A proceeding which has been served will come within that description whilst it remains subject to the supervision of the court and has not been determined, dismissed or discontinued; [43];

5. In accordance with the policy of the Act, no action or inaction on behalf of a recipient of compensation should nullify the insurer’s statutory right to indemnity. [47].

The Court held that the words “has … taken proceedings to recover, damages” refer to an existing proceeding that is being used by the person to whom compensation has been paid to recover damages. Accordingly, whilst that is the case, the insurer is unable to pursue the statutory right of indemnity. His Honour clarified:

“The mere fact that a person who has received compensation has taken proceedings to recover damages does not extinguish or defeat the insurer’s right of indemnity. Rather, that proceedings are not being used to recover damages, is a condition of the enforcement of the right or a contingency upon which the right is dependent.” [48]. 

Disposition 

The appeals were dismissed with costs. [53], [54].

A Jarro