Mil Services Pty Limited v Alan Raymond Holland and the Commonwealth of Australia [1997] ACTSC 12 (7 March 1997)

SUPREME COURT OF THE ACT

MIL SERVICES PTY LIMITED v. ALAN RAYMOND HOLLAND and THE COMMONWEALTH
OF AUSTRALIA
No. SC471 of 1996
Number of pages - 4
Workers Compensation

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY MASTER T CONNOLLY

CATCHWORDS

Workers Compensation - Worker suffered personal injuries in motor vehicle accident - Reimbursement to plaintiff employer of workers compensation payments made to employee - Separate proceedings brought rather than relying on statutory right to recover - Interest on compensation payment.

Workers Compensation Act 1951 (ACT), s.22(1)(d) Supreme Court Act 1933 (ACT), s.69

Tichle Industries v Hann [1974] HCA 5; (1973) 130 CLR 321 Australian National University v Suharso (unreported, Supreme Court of the ACT, Higgins J, 19 January 1995) Kwanchi Pty Ltd v Kocsis (Unreported, NSW Court of Appeal, Priestly, Clarke and Handley JJA, 15 October 1996) Logudice: Re sec.130 of the District Court Act, 1972 (1982) 2 ANZ Insurance Cases 60-471 Cousins & Co Ltd v D & C Carriers Ltd (1971) 2 QB 230

Sutton, Insurance Law in Australia, 2nd ed, 1991, Law Book Company Ltd

HEARING

CANBERRA, 10-12 February 1997 7:3:1997

Counsel for the Plaintiff: Mr GJD Richardson SC Instructing Solicitors: Mallesons Stephen Jaques

Counsel for the First and Second Defendants: Mr G Stretton Instructing Solicitors: Australian Government Solicitor

ORDER

THE COURT ORDERS THAT:
Judgment be entered for the plaintiff in the sum of $56,275.97 together with interest in the sum of $12,652.38.

DECISION

MASTER T CONNOLLY
1. This is a claim by the plaintiff, a corporation trading in the Australian Capital Territory as a security services provider, brought against the first and second defendants, seeking reimbursement of workers compensation payments made by the plaintiff to an employee of the plaintiff who suffered personal injuries as a consequence of the alleged negligence of the defendants. The first defendant is a police officer, who was engaged in his duties at the time of the accident. The second defendant is the employer of the first defendant. The matter would not normally be within my jurisdiction as Master, but the matter was, by consent, ordered by a Judge to be heard by me. The matter was listed on the same day as the matter of Zedras v Holland, the claim by the injured worker against the police officer. The worker's injuries arose as a consequence of a motor vehicle accident, and that matter was properly and ordinarily within my jurisdiction.

2. This action is unusual. Counsel for the defendant in this matter, who also appeared for the defendant in Zedras v Holland, urged strongly that the matter was inappropriate, and that the court should discourage proceedings such as these. As he pointed out, the Workers Compensation Act 1951 (ACT) provides that where an employer has made compensation payments and the injured worker later recovers common law damages in respect of that accident, the employer has a right by way of a charge on the judgment, to recover those payments. As counsel pointed out, correctly, this is a daily aspect of personal injuries litigation in this Territory. Counsel argued that the costs of litigation will escalate significantly if, in all personal injuries actions where workers compensation payments have been made in respect of the claimed tort, separate and independent proceedings are brought against the tortfeaser by the employer, rather than relying upon the statutory right to recover.

3. As a public policy argument, I find much of what counsel said convincing. However, counsel for the plaintiff argued that there is provision in the legislation for an action such as the present to be commenced, and that, unless the legislature indicated otherwise, it is inappropriate for me to deny a form of action open to the plaintiff. This form of action has been described as an independent form of action quite apart from the injured worker's tort claim and subsequent liability to repay (Tichle Industries v Hann [1974] HCA 5; (1973) 130 CLR 321, referred to by Higgins J in Australian National University v Suharso (unreported, SC 743 of 1993, 19 January 1995). I must therefore accept the present plaintiff's argument, but as I indicated to counsel during the hearing of this matter, I will bring this matter to the attention of the Attorney-General, as this new form of action, or perhaps more fairly, this new exercise of a long-standing form of action, does have the potential to impact on the cost to the overall community of personal injuries litigation.

4. Counsel for the plaintiff did indicate that, having made his submissions, he would seek leave to withdraw from the proceedings rather than remain at the bar table incurring additional costs for the full length of the hearing. This seemed an appropriate course, and leave was granted.

5. The present plaintiff's claim is only sustainable so long as no common law damages have been awarded to the injured worker. This is because it is brought pursuant to s.22(1)(d) of the Workers Compensation Act which provides "If an injury in respect of which compensation is payable under this Act is caused under circumstances which appear to create a legal liability in some person other than the employer to pay damages in respect of the injury ... (d) where the worker has received amounts under this Act, but no damages or less than the full amount of the damages to which he or she is entitled, the person liable to pay the damages shall indemnify the employer against so much of the amounts paid to the worker as does not exceed the damages for which that person is liable."

6. The cause of action under this provision is clearly only available where the worker has received compensation payments but has not yet received damages. Accordingly, counsel for the plaintiff urged that this decision be handed down before the decision in Zedras v Holland, because otherwise the award of damages in that matter would render nugatory this present cause of action. To my mind that further demonstrates the artificiality and the undesirability of this type of proceeding. However, as counsel pointed out, it would not be an appropriate exercise of my discretion to render nugatory a cause of action created by the legislature by reason only of the timing of the handing down of decisions.

7. The evidence establishes that the plaintiff in the present case has made out payments of workers compensation in the sum of $56,275.97. The plaintiff claims this sum, plus interest pursuant to s.69 of the Supreme Court Act. In respect of the claim for interest counsel referred me to the decision of the New South Wales Court of Appeal in Kwanchi Pty Ltd v Kocsis (Unreported, Priestly, Clarke and Handley JJA, 15 October 1996) where the Court held that, where indemnity proceedings were brought pursuant to the Workers Compensation Act 1987 the employer is entitled as against the tortfeaser to an award of interest on compensation payment calculated from the date of payment of compensation until the date of reimbursement by the tortfeaser.

8. I feel that I must accept this as stating the law. The decision is consistent with a long line of authority in relation to subrogation cases (Logudice: Re sec.130 of the District Court Act, 1972 (1982) 2 ANZ Insurance Cases 60-471; Cousins & Co Ltd v D & C Carriers Ltd (1971) 2 QB 230; Sutton, Insurance Law in Australia Second Edition 1991, p837-838). As a matter of public policy, the prospect of these matters involving one set of statutory compulsory workers compensation insurers instigating and maintaining, at considerable expense, legal proceedings against another set of statutory compulsory third party insurers, is not an encouraging prospect, and can only impact adversely to the cost of motor vehicle compulsory third party insurance. This, however, is a matter for the legislature.

9. I find therefore that this matter may properly be brought, and that the plaintiff is entitled to recover against the defendants the amount paid by way of workers compensation payments, and interest pursuant to s.69 of the Supreme Court Act.

10. My reasons for finding liability are set out at length in the matter of Zedras v Holland (SC 630 of 1994).

11. The amount of payments made and interest was calculated by counsel and became an exhibit in these proceedings. I order judgment for the plaintiff in the sum of $56,275.97 with interest in the sum of $12,652.38, a total award of $68,928.35.