Burns v Crispino [2006] ACTSC 74 (25 July 2006)

Last Updated: 13 February 2007

SUSANNE ELIZABETH BURNS v ROBERTO CRISPINO

[2006] ACTSC 74 (25 July 2006)

CIVIL LAW - claimant exempted from giving notice of claim - subrogation - whether party exercising subrogation rights is also exempted - Civil Law (Wrongs) Act 2002.

WORKERS COMPENSATION - compensation of Commonwealth employees - right to bring common law claim - Comcare claiming in name of employee - notice of claim required by claimant by Civil Law (Wrongs) Act 2002 (ACT) - Comcare exercising subrogated rights under Safety, Rehabilitation and Compensation Act 1988 (Cth) - whether Comcare required to give notice where employee not.

Safety, Rehabilitation and Compensation Act 1988 (Cth), s 50

Civil Law (Wrongs) Act 2002 (ACT), s 49, s 50, s 51, s 60, s 225, Pt 5.2 Ch 5

WorkCover Queensland v Seltsam Pty Ltd [2001] NSWCA 457

Tickle Industries Pty Ltd v Hann [1974] HCA 5; (1974) 130 CLR 321

Victorian Workcover Authority v Esso Australia Ltd [2001] HCA 53; (2001) 75 ALJR 1513

S R Derham, Subrogation in Insurance Law (1985)

Macquarie Dictionary (4^th edition) 2005

No. SC 654 of 2005

Judge: Gray J

Supreme Court of the ACT

Date: 25 July 2006

IN THE SUPREME COURT OF THE )

) No. SC 654 of 2005

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: SUSANNE ELIZABETH BURNS

Plaintiff

AND: ROBERTO CRISPINO

Defendant

ORDER

Judge: Gray J

Date: 25 July 2006

Place: Canberra

THE COURT ORDERS THAT:

1. The defendant's amended notice of motion dated 13 December 2005 be dismissed with costs.

1. These proceedings are brought in the name of Susanne Elizabeth Burns, a Commonwealth employee, who has been in receipt of compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the Safety Rehabilitation and Compensation Act) as a result of injury she sustained as a pedestrian when struck by a motor vehicle driven by the defendant and who is insured by NRMA Insurance Limited (the insurer). Comcare is responsible for the payment of compensation under the Safety Rehabilitation & Compensation Act. The proceedings are really to resolve a dispute that has arisen between Comcare, which has taken these proceedings in the plaintiff's name, and NRMA Insurance Ltd, the compulsory third party insurer of Robert Crispino, the defendant to these proceedings, as to whether the proper notice required by s 51 of the Civil Law (Wrongs) Act 2002 (ACT) (the Civil Law (Wrongs) Act) had been given.

2. The originating application in this court on behalf of the plaintiff was made in reliance upon s 50(1) of the Safety Rehabilitation & Compensation Act. That section provides:

Common law claims against third parties

(1) Where:

(a) an amount of compensation under this Act:

(i) is paid to an employee in respect of an injury to the employee or in respect of the loss of, or damage to, property used by the employee; or

(ii) is paid for the benefit of a dependant of a deceased employee in respect of an injury that resulted in the death of the employee;

(b) the injury, loss, damage or death occurred in circumstances that appear to create a legal liability in a person to pay damages in respect of the injury, loss, damage or death; and

(c) a claim against the person for the purpose of recovering such damages has not been made by the employee or by or for the benefit of the dependant, or, having been made, has not been prosecuted;

Comcare may make a claim or a fresh claim against the person in the name of the employee or dependant for the recovery of damages in respect of the injury, loss, damage or death or may take over the conduct of the existing claim, as the case requires.

Agreed facts

3. The parties agreed the following facts:

1. The plaintiff was born on 5 February 1954 and suffers from no legal incapacity.

2. On 13 June 2003 the plaintiff was involved in a motor vehicle accident when, as a pedestrian, crossing Reed Street in Greenway, ACT she was struck by a motor vehicle driven by the defendant.

3. At the time of the accident the plaintiff was a Commonwealth employee on her lunch break.

4. The plaintiff was injured in the accident and was entitled to and received Comcare benefits in respect of her injuries.

5. In November 2003 the plaintiff consulted a lawyer at Pamela Coward & Associates to obtain advice about seeking damages for the injury suffered on 13 June 2003.

6. The plaintiff decided not to seek damages from the defendant at that time.

7. Comcare first consulted a lawyer on a date after 8 March 2004.

8. After consulting a lawyer Comcare instructed the lawyer to make a claim under Section 50 of the Safety Rehabilitation and Compensation Act 1988 (Commonwealth) for recovery of damages from the defendant.

9. Proceedings were commenced by the filing of an Originating Application on 16 September 2005.

10. The defendant (including the insurer) was not given a complying notice of claim (within section 51 of the Civil Law (Wrongs) Act 2002) prior to 9 December 2004.

4. Part 5.2 of Chapter 5 of the Civil Law (Wrongs) Act sets out the procedural requirements for the bringing of proceedings based on a claim in relation to a personal injury.

The procedural provisions

5. Section 51(1), which is in Chapter 5 of the Civil Law (Wrongs) Act, provides:

Notice of claim

(1) Before a claimant brings a proceeding against someone else (a respondent) based on a claim in relation to a personal injury, the claimant must give the respondent written notice of the claim.

6. The definitions relevant to this provision are in s 49 of the Civil Law (Wrongs) Act and they are:

claim means a claim (however described) for damages based on a liability for personal injury, whether the liability is based in tort or contract or on another form of action (including breach of statutory duty), and, for a fatal injury, includes a claim for the dead person's dependants or estate.

claimant means a person by whom, or on whose behalf, a claim is made.

7. As can be seen from the agreed facts, no notice of claim was given before the proceedings were instituted.

8. The transitional provisions for the application of the section to which I have referred in the Civil Law (Wrongs) Act are those contained in s 225 of that Act. The relevant provision is in s 225(2) which, in effect, provides that Chapter 5 of the Act does not apply to a claim if, before 8 March 2004 (the date upon which Chapter 5 of the Act commenced), "the claimant" had consulted a lawyer to obtain advice about seeking damages for the personal injury. As can be seen from the agreed facts, Ms Burns fell within the ambit of this provision because in November 2003 she consulted a lawyer to obtain advice about seeking damages for the injury she suffered on 13 June 2003. Comcare did not consult a lawyer to obtain advice about this particular claim before 8 March 2004. The proceedings were instituted by way of the originating application to this court on 16 September 2005 without there being given to the party against whom the proceedings were brought, the notice of claim required by s 51 of the Civil Law (Wrongs) Act.

The issue

9. Accordingly, the issue for determination in these proceedings is whether Comcare was a claimant for the purposes of s 51 of the Civil Law (Wrongs) Act and required to give a notice of claim.

The defendant's submissions

10. Mr Elkaim SC, who appeared as counsel for the defendant, placed emphasis on the fact that s 50(1) of the Safety Rehabilitation & Compensation Act enables a claim to be made by Comcare. In his submission, the effect of s 50(1) of the Safety Rehabilitation & Compensation Act is to make Comcare, as far as s 51(1) of the Civil Law (Wrongs) Act is concerned, the claimant for the purposes of the latter Act.

11. The submission stressed that an overall view of the whole of s 50 of the Safety Rehabilitation & Compensation Act reflected an approach that put Comcare in the position of a claimant in respect of a claim for damages based on a liability for personal injury.

12. Mr Elkaim made the point that s 50(1) of the Safety Rehabilitation & Compensation Act enabled a "claim" to be made and accordingly that satisfied the definition of "claimant" in s 49 of the Civil Law (Wrongs) Act. He specifically referred to s 50(2) and (3) of the firstmentioned Act which provides:

(2) If Comcare takes over the conduct of a claim, it becomes liable to pay all costs of and incidental to that claim that would otherwise be payable by the person who originally made the claim other than costs unreasonably incurred by that person.

(3) If Comcare makes, or takes over the conduct of, a claim under this section, Comcare may:

(a) take whatever steps are appropriate to bring the claim to a conclusion; and

(b) if the claim is before a court--settle the proceedings either with or without obtaining judgment; and

(c) if the claim is before a court and judgment has been obtained in favour of the plaintiff--take such steps as are necessary to enforce the judgment.

These subsections were said to be clear indications that the claim became a claim by Comcare once it made or took over the conduct of the claim.

The plaintiff's submission

13. Mr Crowe SC, who appeared as counsel for the plaintiff, sought to have the provision in the Safety Rehabilitation & Compensation Act construed against the background of the general law. His contention was that the statutory scheme was a protection given that fell within the operation of the law of equity and that it created a species of fiduciary obligation. That argument seems to me to rely upon a somewhat more esoteric view of the provision than is necessary. It seems to me that the true effect of a provision like s 50 of the Safety Rehabilitation & Compensation Act is to give statutory authority to the application of doctrine of subrogation to the payment of compensation by Comcare to a person employed by the Commonwealth in circumstances where liability for the injury giving rise to the payment of compensation may be attributed to a third party.

Subrogation

14. The concept of subrogation in law simplistically involves the substitution of one person in the place of another and that is clearly the effect of s 50 of the Safety Rehabilitation & Compensation Act. The section provides for Comcare to make a claim in the name of the employee or dependant. The question of whether the doctrine of subrogation that the law has embraced arose at common law or in equity and whether it is more properly described as a remedy rather than as right is of little consequence in the resolution of the issue before me (see the discussion S R Derham, Subrogation in Insurance Law, Ch 1 - "The Nature of the Right of Subrogation" (1985) pp 4-22).

15. I see no justification either in principle or from any words used in the provision to attribute a wider effect than that, in circumstances where compensation has been paid to an employee under the Act, Comcare is given the right to bring an action in the name of that employee. In my view, such a circumstance does not make the claim, so made, a claim by Comcare for the purposes of s 51 of the Civil Law (Wrongs) Act. Workers compensation legislation in Australia has generally adopted the approach of either requiring a person liable for damages for injury to the employee to indemnify the provider or, alternatively, to recognise that the compensation provider has right of subrogation in respect of the employee's claim against the person liable for damages. WorkCover Queensland v Seltsam Pty Ltd [2001] NSWCA 457 concerned an amendment to the Queensland legislation which supplemented the indemnity provision, that the legislation had previously contained, with a subrogation provision. Previous decisions had recognised that the legislative granting of a statutory right of indemnity permitted a workers compensation authority to sue in its own name (eg, Tickle Industries Pty Ltd v Hann [1974] HCA 5; (1974) 130 CLR 321, Victorian Workcover Authority v Esso Australia Ltd [2001] HCA 53; (2001) 75 ALJR 1513 at 1516-1517). Young CJ in Eq with whom Priestly JA and Ipp AJA agreed, commented that it was hard to see how a right of subrogation could be regarded as ancillary to an indemnity and that:

The right of subrogation requires suing in the name of someone else and thus it is a lesser right in many respects than an indemnity. (See at [25] supra).

16. It seems to me that the provisions contained in the other subsections of s 50 of the Safety Rehabilitation & Compensation Act indicate that Comcare does not completely subsume the claim or take an assignment of it but rather the effect of the section read as a whole gives Comcare a statutory right of subrogation which is not a separate action able to be brought in Comcare's name such as a claim for indemnity might be.

17. As I have earlier noted, the right given by s 50(1) of the Safety Rehabilitation & Compensation Act is only to make a claim "in the name of" the employee "for the recovery of damages in respect of the injury". Then, s 50(4), (4A) and (4B) provide the mechanism by which Comcare can compel the employee to sign documents (including the settlement of the claim). Such a provision would be unnecessary, or at least only facultative, if Comcare had a right of indemnity or had subsumed the claim or had the rights of an assignee. The same comment can be made concerning s 50(5) of the Safety Rehabilitation & Compensation Act which requires the employee to comply with Comcare's reasonable requirements for the purposes of the claim. Finally, although s 50(7) of that Act requires damages obtained as a result of the claim to be paid to Comcare the balance, after deduction for the compensation and costs paid by Comcare, must be paid to the employee. That seems to me to be a clear indication that the claim remains fundamentally that of the employee.

The definition of claimant

18. Although the definition of claimant in s 49 of the Civil Law (Wrongs) Act refers to a person "by whom or on whose behalf a claim is made", I also do not regard Comcare as bringing the claim on behalf of its employee. Because of the composite phrase "by or on behalf of", I take the expression to mean the bringing of a claim in the claimant's interest. The Macquarie Dictionary (4^th edition) 2005, defines "on behalf of" as:

a. as a representative of: to accept the prize on behalf of the team

b. in the interest of; in aid of: to work on behalf of the poor

This definition does not appear apt to include claims that proceed by way of the exercise of a right of subrogation.

19. Further, the definition of claimant is juxtaposed in s 49 with the definition of claim and that definition encompasses in the case of damages for fatal injury as including a claim for a dead person's dependants or estate. A claim in respect of an estate would clearly be made on behalf of the estate and this provides some reason why it is necessary in the definition of "claimant" in s 49 to provide for claims made on behalf of the claimant. It is of note that specific provision is made in s 60 of the Act to relieve persons under a legal disability from the requirement to comply with obligations under Chapter 5 of the Act whilst that disability appertains. These matters indicate that the expression "by or on whose behalf" should properly be limited to the claimant or to those acting in the representative capacity to which the legislation makes reference. Further, a provision that has been made for those acting on behalf of a claimant does not, of itself, indicate that the expression should include those who are exercising subrogated rights.

20. Unless it can be said that the employee is no longer a claimant by reason of the claim being subsumed by or assigned to Comcare, the exemption that s 225(2) of the Civil Law (Wrongs) Act makes to the procedural requirements is fulfilled by the employee's action in this case. In my view, the plaintiff in these proceedings remains the claimant notwithstanding that this action is brought in her name by Comcare pursuant to s 50 of the Safety Rehabilitation & Compensation Act and the provision for notice of claim to be given for which s 51(1) of the Civil Law (Wrongs) Act provides does not apply to her.

21. For these reasons, the defendant's amended notice of motion, seeking that the plaintiff's originating application be struck out due to non-compliance with Chapter 5 of the Civil Law (Wrongs) Act 2002 (ACT), should be dismissed with costs.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Gray.

Associate:

Date: 25 July 2006

Counsel for the plaintiff: Mr R Crowe, SC

Solicitor for the plaintiff: Australian Government Solicitor

Counsel for the defendant: Mr M Elkaim, SC

Solicitor for the defendant: Moray & Agnew

Date of hearing: 16 December 2005

Date of judgment: 25 July 2006