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High Court of Australia |
TICKLE INDUSTRIES PTY. LTD. v. HANN. [1974] HCA 5; (1974) 130 CLR 321
Workmen's Compensation (N.T.)
High Court of Australia.
Barwick C.J.(1), McTiernan(2) and Menzies(3) JJ.
CATCHWORDS
Workmen's Compensation (N.T.) - Death of employee - Payment of compensation to dependants - Employer's right of indemnity from person liable to pay damages in respect of injury - Indemnity limited to "so much of the compensation paid to employee as does not exceed the damages for &which that person is liable"- Lord Campbell's Act action barred - Whether right of employer to indemnity affected - Workmen's Compensation Ordinance 1949-1968 (N.T.), s. 22 (1).*
* Section 22 (1) of the Workmen's Compensation Ordinance 1949-1968 (N.T.)
provides so far as material that: "If any injury in respect
of which
compensation is payable under this Ordinance 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 workman
has received compensation under
this Ordinance, but no damages or les than the
full amount of the damages to which he is entitled, the person liable to pay
the damages
shall indemnify the employer against so much of the compensation
paid to the workman as does not exceed the damages for which that
person is
liable."
HEARING
Melbourne, 1973, October 11.DECISION
1974, February 13.
2. An employee of the appellant, Harold Arnold Harriman, died as a result of
a motor car collision on a roadway in the Territory
whilst he was in the
course of his employment. The appellant, upon the employee's death, became
liable to pay compensation to the
widow and a child of the employee, pursuant
to s. 7 of the Workmen's Compensation Ordinance 1949-1968 (Northern Territory)
(the Compensation
Ordinance) and the 2nd Sch. thereto. The appellant duly paid
the amount of that compensation to the employee's dependants. It does
not
appear whether or not the death of the employee was instantaneous, if indeed
in the case of a road accident that is a medical
possibility, or deferred for
some time after the receipt of fatal injuries. Thus, if those injuries were
caused by a tortfeasor,
it may be that for a period the employee had a cause
of action against that person : a cause of action, however, which did not
survive
him. (at p323)
3. The respondent Richardson in this appeal was the driver and the respondent
Hann the owner of a car involved in the collision
out of which, by reason of
the employee's injuries and death, the liability to compensation under the
Compensation Ordinance arose.
(at p323)
4. The appellant in this action sought indemnity under the Compensation
Ordinance by the respondents in respect of the compensation
paid to the widow
and child of the deceased employee. (at p323)
5. Section 22 (1) of the Compensation Ordinance provides:
"If an injury in respect of which compensation is payable
under this Ordinance 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 -
(a) the workman may take proceedings against that person to
recover damages and may also make a claim against the
employer for compensation ;
(b) where the workman receives both compensation under this
Ordinance and damages from that other person, he shall
repay to the employer such amount of the compensation
as does not exceed the amount of the damages recovered
from that person ;
(c) upon notice to that person, the employer shall have a first
charge upon moneys payable by that person to the
workman to the extent of any compensation which the employer
has paid to the workman under this Ordinance ;
(d) where the workman has received compensation under this
Ordinance, but no damages or less than the full amount of
the damages to which he is entitled, the person liable to
pay the damages shall indemnify the employer against so
much of the compensation paid to the workman as does
not exceed the damages for which that person is liable ; and
(e) payment of money by that person to the employer under
the last preceding paragraph shall, to the extent of the
amount paid, be a satisfaction of the liability of that
person to the workman." (at p323)
6. It may be taken for the purposes of this appeal that the employee's
injuries were caused under circumstances which, at the time
of their receipt,
appeared to create a legal liability in the respondents in respect of them.
Whether or not they were legally responsible
for the injuries causing death
remains to be decided in the action. (at p324)
7. Section 5 of the Compensation (Fatal Injuries) Ordinance 1938 (Northern
Territory) (the Fatal Injuries Ordinance) provides that
the person who would
have been liable to an action for damages at the suit of the deceased person
because of a wrongful act, default
or neglect will be liable to an action for
damages notwithstanding the death of the injured person, the action to be for
the benefit
of the wife, husband, parent or child and be brought by and in the
name of the executor or administrator of the deceased person.
(at p324)
8. Section 7 of the Fatal Injuries Ordinance provides :
"Not more than one action shall be brought in respect of(at p324)
the same cause of action, and every action shall be commenced
within a period of twelve months after the death of the person
injured."
9. This Court decided in Maxwell v. Murphy [1957] HCA 7; (1957) 96 CLR 261 that a
provision in terms of s. 7 of the Fatal Injuries
Ordinance
meant that when the
time fixed by the section
expired the right of action which provisions
comparable to ss. 5 and 6 of
the Fatal
Injuries Ordinance gave was "terminated
or defeated".
(at p324)
10. On the assumptions made for the purpose of the hearing of this appeal,
the respondents could have been sued by the executors
of the deceased under
the Fatal Injuries Ordinance. However, no action was brought under that
Ordinance within twelve months of the
death of the employee. Therefore, on the
expiry of that period, the executors of the deceased had lost the cause of
action given
by ss. 5 and 6 of that Ordinance : and, assuming that there was a
person legally responsible for the death of the deceased, that
person ceased
to be liable to an action for damages at the suit of the executors of the
deceased workman : that is to say, on the
expiry of that period of twelve
months, the respondent could not have been successfully sued in respect of the
death of the employee
either by the deceased or by his executors. However,
after the expiry of that period of twelve months, the executors commenced an
action against the respondents in the original jurisdiction of this Court on
behalf of the employee's widow and child. But that action
was discontinued.
Thereafter the executors executed a release of all causes of action against
the respondents. The present action
was commenced by the appellant in the
Supreme Court of the Northern Territory in 1966, more than one year after the
death of the
employee. The discontinuance of the executors' action and the
release by them of the respondents did not occur until late in 1969.
(at
p325)
11. After the pleadings had been concluded in the action, the parties agreed
to state a case for the opinion of the Supreme Court.
The questions of law for
which answers were sought by the stated case were as follows :
"(a) Does the expiry of the right of action of the dependants of(at p325)
Harold Arnold Harriman under the Compensation (Fatal
Injuries) Ordinance, 1938 affect the rights conferred on the
plaintiff by s. 22 of the Workmen's Compensation Act
Ordinance and if so does the plaintiff's action thereby fail?
(b) Does the fact that the action which was commenced by
the executors of the estate of the late Harold Arnold
Harriman and discontinued on the 7th October 1969
afford a defence to these proceedings and if so does the
plaintiff's action thereby fail?
(c) Does the fact that the executors of the estate of the late
Harold Arnold Harriman entered into the release dated
16th October 1969 afford a defence to these proceedings
and if so does the plaintiff's action thereby fail?"
12. The Supreme Court (Blackburn J.) answered these questions as follows :
(a) Yes ; the action must fail. (b) No. (c) No. (at p325)
13. The Supreme Court was moved to answer the first question in the
affirmative because, as it construed s. 22, the indemnity of
the employer "is
expressly limited to" so much of the compensation "as does not exceed the
damages for which that person is liable".
The Court thought that (1969) 15
FLR, at p 137 "This limitation is an inherent characteristic of the indemnity
; the question must
be asked - 'indemnity against what?', and the answer is
expressed quantitatively - 'so much' - and its quantification entails the
assessment of the damages. If the damages cannot be assessed, then it is
impossible to determine what amount answers the description
of 'so much of the
compensation paid to the workman as does not exceed the damages', and
consequently it is impossible to state the
sum of payment against which there
is to be an indemnity, and the indemnity does not arise." (at p325)
14. The Court distinguished the decision of Bray J. in Smith's Dock Co. v.
John Redhead & Sons (1912) 2 KB 323 , because the
relevant
statutory
provisions in that case did not expressly limit the amount of the indemnity to
the amount of the compensation
paid and
did not further provide that the
amount of the indemnity was limited to so much of the compensation paid as did
not exceed
some other
sum. (at p325)
15. His Honour said (1969) 15 FLR, at pp 137-138 : "What convinces me is the
total effect of the words expressing the limitation
upon the indemnity. In
order to decide whether an indemnity arises (not merely to decide its extent)
it must be necessary to assess
the damages. Are the words of par. (d) apt to
include the establishment of an indemnity dependent on the assessment of
notional damages
which are not payable by the defendant but would be payable
if he had been liable at the critical time? I find it impossible to say
that
they are. The construction of the statute which was possible for Bray J. in
the Smith's Dock Case (1912) 2 KB 323 , based on
the policy that the employer
should be able to look to a wrongdoer for relief from his statutory burden, is
not possible for me.
The sub-section, as I have shown, does contemplate
various points of time, and this fortifies the conclusion that the references
to liability in par. (d) are more than merely descriptive of the defendant."
(at p326)
16. I am unable to agree with these conclusions or with the approach to s. 22
from which they stem. (at p326)
17. The basic question in the case is the construction of s. 22, particularly
s. 22 (1) (d) of the Compensation Ordinance. The provisions
of the section
have their origin in s. 6 of the Workmen's Compensation Act 1906 of the United
Kingdom as developed through the worker's
compensation legislation of the
Australian States. Section 6 did not cover all the eventualities for which s.
22 of the Ordinance
now caters. But the policy of s. 6 (2), the prototype of
s. 22 (1) (d) of the Ordinance, in my opinion, was quite clear : an employer
who paid the statutory compensation to an injured employee or, in the case of
his death, to his dependants, where the injury or death,
though occurring in
the course of employment, was caused by the wrongful act or omission of
another person was to be entitled to
be indemnified against the payment of
that compensation by that other person. Section 6 (2) did not spell out in
full the extent
of the obligation to indemnify. It did not expressly limit it
to the amount of the damage caused : perhaps because in general, the
statutory
compensation was likely to be less than the damages properly recoverable for
the injury or death. But such a limitation
was implicit. The reasoning of
members of this Court in Watson v. Newcastle Corporation (1962) 106 CLR 426 ,
would,
in my opinion,
support that conclusion. In s. 22 the limitation is made
explicit. But, as will appear in these reasons,
no ground
for differentiating
the two provisions is afforded by the presence of the express limitation in s.
22. (at p326)
18. There is obvious and necessary justice in giving the employer, who has
been involved in the payment of compensation by the wrongful
act of another, a
right of recovery against that other but only up to the amount of damage which
that other has caused and for which
he was legally responsible. It is also
necessarily just that the employee shall not be able to defeat that right of
recovery. Clearly,
the right to indemnity given by s. 6 (2) was a right of the
compensating employer, in no sense in the control of the injured employee
or
of his dependants. (at p327)
19. It is not without interest in this connexion to recall some of the
observations of members of the Court of Appeal in England
in relation to s. 6.
(at p327)
20. Vaughan Williams L.J. in Cory & Son Limited v. France, Fenwick & Co. Ltd.
(1911) 1 KB 114, at p 124 said " . . . the
Legislature
is anxious, because it
thinks it just, that the wrong-doer . . . shall not get off scot free : . . .
Would the workman",
assuming
his survival, "have a good cause of action
against this person other than his employer?" (at p327)
21. In Tuckwood v. Rotherham Corporation (1921) 1 KB 526 , Bankes L.J., in
expressing the obligation of the employer in establishing
his right of
indemnity, said (1921) 1 KB, at p 532 : "It is a statutory right of indemnity
which only arises under that sub-section,
and in order to establish the right
to that indemnity the person claiming it has to establish that the workman has
recovered compensation
under the Act, that he is the person by whom
compensation was paid, and that the person against whom he claims the
indemnity was
liable to pay damages to the workman. Therefore the plaintiff,
in order to establish his right to the statutory indemnity, has to
show that
the workman had a right of action for damages . . . " (at p327)
22. In considering whether a notice of action provision was applicable to the
proceedings by the employer, Bankes L.J. observed
that compensation
proceedings may well take more than twelve months to resolve, a remark
apposite in the present case, where the
period of time limitation for the
commencement of proceedings under the Fatal Injuries Ordinance is twelve
months. (at p327)
23. Scrutton L.J. said that s. 6 (2) of the English legislation, the
counterpart as I think of s. 22 of the Compensation Ordinance,
"provides that,
if the employer has to pay compensation to the workman under the Act, he shall
be entitled to be indemnified by the
person who was guilty of the negligence"
(1921) 1 KB, at p 534 . (at p327)
24. Atkin L.J. pointed out that the employer derives his right to indemnity
not because of the act or default of the other person
but because the Act has
imposed a liability upon that other to indemnify the employer if the employer
has had to pay compensation
to his injured workman by reason of that neglect
or default (1921) 1 KB, at p 538 . (at p327)
25. Two things are apparent from this treatment of the English provision :
first, that the right of the employer is regarded as
independent of the action
or inaction of the employee ; it is a right given to the employer who has paid
compensation for an injury
to his employee which has been caused by the
neglect or default of another : second, that the right of the employer is a
right against
the wrong-doer. As Atkin L.J. pointed out, that is not an action
of negligence against the wrongdoer but for a cause of action created
by the
statute against the wrongdoer. What Atkin L.J. had to say is well worthy of
notice in the context of the present case (1921)
1 KB, at pp 539-540 . (at
p328)
26. Notwithstanding changes in the language of comparable provisions in the
legislation of the Australian States in the interim,
the policy to which their
Lordships advert, in my opinion, evidently remained throughout. There is no
need to set out here the development
of the workers' compensation legislation
in Australia. But having traced it through, none of the verbal variants of the
statutory
provisions derived from s. 6 of the Act of 1906 was the result of or
indicated, in my opinion, any change in that policy. (at p328)
27. I turn now to consider the language of s. 22 both to find its meaning and
to ascertain whether it evidences any intended departure
from the policy of
workers' compensation legislation to which I have referred. (at p328)
28. To identify the tortfeasor who occasioned the compensable injury or
death, the draftsman in the opening paragraph of s. 22 (1)
has referred to the
"creation of a legal liability". With some degree of needless nicety he has
provided for circumstances which
"appear to create" such a liability. But the
meaning is clear, if a compensable injury is received in circumstances which
indicate
that it may have been caused by a tortfeasor, i.e. a person legally
responsible for an act or omission causing the injury, then the
various
alternative situations are provided for. (at p328)
29. In pars. (b) and (c) of s. 22 (1) the tortfeasor is identified as "that
person". Little difficulty arises in respect of pars.
(a) and (b) in the case
where the workman or his representative sues and recovers damages from the
tortfeasor whether by judgment
or by agreement. Having obtained damages, he
must to the extent of them repay the amount of compensation received by him.
(at p328)
30. In par. (c) "that person" is the person who appears to be legally
responsible for the damage caused by the injury or death.
The paragraph
enables the employer to give notice to the tortfeasor of the payment of, and,
presumably, of a claim for, statutory
compensation. In my opinion, the notice
may be given before action is brought by the workman against the tortfeasor,
though the charge
will not mature until the damages are assessed or agreed.
The employer will have a first charge on the damages payable by the tortfeasor
up to the amount of the compensation paid. The notice, however, would be
effective, in my opinion, to prevent payment by or on behalf
of the tortfeasor
to any person other than the employer of so much of the damages as equalled
the compensation paid or payable. (at
p329)
31. The result of these three paragraphs is that the workman may receive both
compensation and damages but must, in that event,
repay the compensation paid
or so much thereof as is equal to the amount of the damages received either
directly or by deduction
from the damages. If the damages exceed the
compensation received, the workman must refund the whole of that compensation.
If the
employer is able to identify the person in whom a legal liability in
respect of the compensable injuries appears to have been created,
he may, by
giving the appropriate notice, protect himself against the possibility of his
employee, who can receive both compensation
and damages, failing to refund the
compensation paid by the employer. If the workman has sued the tortfeasor, the
employer will no
doubt give his notice to the defendant and await the
termination of the workman's action. (at p329)
32. But the workman may not choose to sue, being content with the receipt of
the statutory compensation : or he may compromise with
the tortfeasor for less
than the amount of damages which ought properly to be assessed in respect of
the compensable injury received.
The compromise may be effected without any
action being commenced, or during the pending action or even after judgment
recovered.
In the case of the death of the workman, it may be that his
representative may not sue, or may compromise for an inadequate amount.
The
workman or his representative is, of course, entitled to compromise his claim
for damages in any manner he may see fit : but,
as will appear from these
reasons, not so as to affect the employer's right to an indemnity. (at p329)
33. Paragraph (d) is designed, in my opinion, to cover these situations as
well as the case where judgment has been recovered by
the workman against the
tortfeasor but has not been satisfied wholly or in part. If the workman has
not been paid by or on behalf
of the tortfeasor the full amount of the damages
properly assessable in respect of the compensable injury, the compensating
employer
may not be fully protected by pars. (a), (b) and (c). If the workman
has not sued at all, or received any damages, he will be under
no obligation
to refund the compensation which he has received. Of course, he is not bound
to sue the tortfeasor. (at p329)
34. Paragraph (d) gives the compensating employer a right of indemnity to
protect him in these situations. This right is conditioned
on either of two
circumstances : first, that the workman has received no damages and, second,
that the workman has received inadequate
damages, i.e. an amount for damages
which is less than the sum which ought properly to be assessed in respect of
the compensable
injury. (at p330)
35. In identifying the person against whom the employer's right of indemnity
is given, the draftsman has described him as "the person
liable to pay the
damages". The use of the word "liable" can cause difficulty in construction
because of the various senses in which
the word is or has been from time to
time employed. The word takes its particular significance, however, from the
context in which
it appears and the subject matter and evident policy of the
legislation in which it is found. No doubt on occasions difficulty has
been
experienced in assigning its meaning. But, in my opinion, if the evident
policy of the present legislation is appreciated and
allowed to take its
proper place in the process of interpretation, much of the difficulty, caused
so often by undue literalism, can
be avoided and in reality disappears. (at
p330)
36. It is clear that the workman's failure to recover damages cannot defeat
the compensating employer's right to an indemnity :
indeed, it is the
employee's failure to obtain the full amount of damages which conditions the
employer's right to the indemnity.
I have indicated that, in my opinion, the
paragraph is not intended to provide only for the case in which the workman
has an unsatisfied
judgment for damages. It covers as well the case where no
action for damages has been brought. In that case there will have been
no
assessment of the damages : yet there is a right of indemnity. In that
context, the description "the person liable to pay the
damages" cannot be
confined to a person liable by judgment, or after assessment of the damages.
(at p330)
37. Further, par. (d) covers a case where less than the full amount of
damages properly payable for the injury was received. It
is clear that the
workman, by accepting less than the full amount of such damages, cannot
foreclose the employer's right to indemnity
from the tortfeasor. It is evident
from the language of the paragraph that, by releasing the tortfeasor or
compromising his claim
to damages for a sum less than the full amount properly
assessable for the injury received, the workman cannot prevent the
compensating
employer obtaining an indemnity for the compensation he has paid
up to the amount of the damages properly payable, or for the difference
between the full amount of those damages and the amount of damages actually
received by the workman. Having been released, the tortfeasor
is no longer
liable for damages to the workman : but, in my opinion, by the very language
of the paragraph he remains subject to
the compensating employer's claim to an
indemnity. "Liable" must therefore be given a meaning consistent with the
evident purpose
of the legislation and cannot be confined to meaning liable to
be sued by the workman or his dependants. In other words, both in
the
expression "the person liable to pay the damages" and in the expression "for
which that person is liable" the reference is to
the tortfeasor, the person
who, in the circumstances of the occurrence out of which the compensable
injuries arose, appeared at that
time to be the person responsible therefor
and thus liable to pay damages. "Liable" is used in the description, in my
opinion, as
meaning legally responsible, that is to say, it describes the
person who by his act or omission caused the compensable injury and
thus was
legally responsible for it and for the payment of damages appropriate to it.
(at p331)
38. The independence of the compensating employer's right to be recouped the
compensation he has paid is thus apparent : and it
is obvious that, to
determine whether or not the full amount of damages has been paid, an
assessment of damages must be made, clearly
not in an action by the workman
but in an action by the employer. (at p331)
39. The Supreme Court's view would deny par. (d) any operation except in a
case where the workman has sued the tortfeasor to judgment.
It construed par.
(d) as requiring the assessment of damages as a condition precedent to the
right of indemnity. His Honour, having
regard to his construction of the
section, concluded that if an assessment of damages at the instance of the
workman or his representative
could not be made, e.g. by reason of the lapse
of time or because of a release of claims by the workman, no right to
indemnity could
arise. But such a result is both obviously unjust to the
compensating employer and capricious as placing it in the hands of the
compensated
workman to prevent or defeat any right of the employer to recover
from the tortfeasor the whole or any part of compensation which
he has paid.
(at p331)
40. It is, in my opinion, a sound rule of statutory construction that a
meaning of the language employed by the legislature which
would produce an
unjust or capricious result is to be avoided. Unless the statutory language is
intractable, an intention to produce
by its legislation an unjust or
capricious result should not be attributed to the legislature. Here, not only
is the language "the
person liable to pay the damages" not intractable but, in
my opinion, bearing in mind the long-standing policy of Workers' Compensation
Acts and the particular context, par. (d) intends to give the compensating
employer a right of indemnity against the tortfeasor as
the person in whom a
legal liability appeared to be created by the circumstances in which the
compensable injury was received. (at
p332)
41. For the purpose of preparing these reasons I have reread the judgments of
North J. in James v. Young (1884) 27 Ch D 652 , and
of Stirling J. in In re
Loftus-Otway ; Otway v. Otway (1895) 2 Ch 235 ; the judgments of Kekewich J.
in In re Chapman ; Cocks v.
Chapman (1896) 1 Ch 323 and in In re Hill ; Hill
v. Pilcher (1896) 1 Ch 962 ; the remarks of Lord Reid in Koufos v. C.
Czarnikow
Ltd. [1967] UKHL 4; (1969) 1 AC 350, at p 389 ; the judgments of their Lordships
in George Wimpey & Co. Ltd. v. British Overseas
Airways Corporation
(1955) AC
169 ; the judgment of this Court in O'Keefe v. Calwell [1949] HCA 6; (1949) 77 CLR 261 ,
and Bitumen
& Oil Refineries (Australia) Ltd.
v. Commissioner for Government
Transport [1955] HCA 1; (1955) 92 CLR 200 ; also Hall v. Bonnett
(1956) SASR 10 . However, I
have derived no specific
benefit or guidance from these various
discussions so
far as they relate to
the meaning to be attributed to the word in the context
of the Compensation Ordinance. Perhaps,
to some degree, all of these cases
illustrate the fundamental consideration that the word
"liable", being a word
of variable meaning,
must take its meaning from the
context in which it is
used. (at p332)
42. The discussions most useful for present purposes are to be found in
Tuckwood v. Rotherham Corporation (1921) 1 KB 526 , Smith's
Dock Co. v. John
Redhead & Sons (1912) 2 KB 323 and Shirvell v. Hackwood Estates Co. Ltd.
(1938) 2 KB 577 . Tooth and Co. Ltd.
v.
Tillyer [1956] HCA 49; (1956) 95 CLR 605 , was a case
in which the wrongdoer could not have been legally responsible for the
compensable injury
because
he was the husband of the injured employee. This
lack of legal responsibility was held to be a matter
of substance and not
merely
a lack of remedy. Had it been the latter, the case may well have been
differently decided. In this connexion,
the Court said
(1956)
95 CLR, at p 612
: "But it is the existence of a liability which s. 64 (b) postulates, not a
remedy, nor as
already has appeared,
the continuance or persistence of the
liability". Section 64 (b) of the Workers' Compensation Act 1926-1954
(N.S.W.)
was the equivalent
of the English legislation under consideration in Smith's
Dock Co. v. John Redhead & Sons (1912)
2 KB 323 . As I have indicated
earlier,
I do not think the difference in expression between such a provision and s. 22
of the Compensation
Ordinance is of any significance
in connexion with the
matter presently in hand. (at p332)
43. Whilst the paragraphs of s. 22 (1) do provide for different situations,
they do not, in my opinion, refer to different periods
of time in the sense in
which the Supreme Court expressed itself. It contemplates various situations
and seeks to provide for them.
See, in this connexion, the discussion of a
comparable provision of the Workmen's Compensation Act (N.S.W.) : Watson v.
Newcastle
Corporation (1962) 106 CLR, at pp 432-433 (at p333)
44. The section supposes a legal responsibility in another person for the
compensable injury or death. Given the existence of that
legal responsibility
at the time of the occurrence of the compensable injury or death, the
wrongdoer is "that person" in par. (a)
and "the person liable to pay the
damages" in par. (d). As this Court pointed out in Tooth and Co. Ltd. v.
Tillyer
[1956] HCA 49; (1956) 95 CLR
605 , as I read the passage cited aided by the
discussion (1956) 95 CLR, at p 610 , the section does not require the
continuance
or persistence of the liability. Granted initial responsibility at
the time of the receipt of the injury or death, the
section provides
its own
remedy to the employer by the creation of a right of indemnity by the person
responsible for the injury
or death. (at p333)
45. This Court in Tooth and Co. Ltd. v. Tillyer [1956] HCA 49; (1956) 95 CLR 605 was
prepared to accept the decision in Smith's
Dock Co. v. John
Redhead & Sons
(1912) 2 KB 323 as deciding
so much and found no reason to dissent from the
decision in Shirvell
v. Hackwood Estates
Co. Ltd. (1938) 2 KB 577 which
approved
the decision in Smith's Dock Co. v. John Redhead & Sons (1912) 2
KB
323 . In my opinion,
the reasoning in that case was correct.
The case is not
distinguishable for the reasons given by the Supreme
Court. (at p333)
46. The limitation of the indemnity given by par. (d) to the amount of the
damages caused is but an expression of a limitation implicit
in the grant of
the right of indemnity and clearly, in my opinion, evidences no departure from
the settled policy of workers' compensation
legislation. (at p333)
47. The Compensation Ordinance was in fact enacted after that decision had
not only been given but, as observed in Shirvell v. Hackwood
Estates Co. Ltd.
(1938) 2 KB 577 , approved and frequently acted upon. However, I would not
press the decision in Smith's Dock Co.
v. John Redhead & Sons (1912) 2 KB 323
so far as to say that the meaning given to the English section should be taken
to have
been
adopted by the Governor-General in enacting the Compensation
Ordinance. For one thing, the language, though in my opinion of
the
same
substantial import, is not precisely the same and, for another, the decision
was of a court of first instance and not of
an
ultimate court of appeal. (at
p333)
48. Reading the description "the person liable to pay damages" as meaning the
tortfeasor, par. (d) makes an intelligible and just
provision. The
compensating employer must establish against the tortfeasor the condition of
his right of indemnity. He must establish
that the defendant was the
tortfeasor : that the injury he caused was a compensable injury : that the
amount paid and claimed in
the action was properly payable under the
Compensation Ordinance: and the amount of damages properly assessable in
respect of injury
caused by the tortfeasor. I see no difficulty in the
assessment of damages in the employer's action. Such damages will not be in
any sense "notional". Having established these matters. the employer will be
entitled to judgment for the amount of compensation
paid, if the damages equal
or exceed that amount. If not, he will have judgment for the amount of the
damages. (at p334)
49. This construction and this result are conformable to the policy of the
workers' compensation legislation as well as being just.
(at p334)
50. In my opinion, the Supreme Court ought to have given effect to the
evident policy of the section and to have reached the same
conclusion as did
Bray J. in Smith's Dock Co. v. John Redhead & Sons (1912) 2 KB 323 . There the
workman survived but a few days.
His illegitimate daughter was not within Lord
Campbell's Act : but the wrongdoer was liable under the section to the
compensating
employer, though of course when sued by the employer the
wrongdoer was not liable to be sued by the deceased employee. (at p334)
51. In the instant case, neither the failure of the deceased's dependants to
sue nor the release by them of the respondent is relevant
to the determination
of the appellant's cause of action against the respondents for indemnity. The
questions asked by the stated
case ought, in my opinion, to have been answered
: (a) No. (b) No. (c) No. (at p334)
McTIERNAN J. I have had the advantage of reading the reasons of the Chief
Justice in this case and I concur. I agree that the answers
to the questions
should be as he proposes. (at p334)
MENZIES J. This appeal by special leave from a judgment of the Supreme Court
of the Northern Territory is concerned with the construction
of s. 22 (1) (d)
of the Workmen's Compensation Ordinance (Northern Territory). Section 22 (1)
is as follows:
"22. (1) If an injury in respect of which compensation is(at p335)
payable under this Ordinance 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 -
(a) the workman may take proceedings against that person to
recover damages and may also make a claim against the
employer for compensation ;
(b) where the workman receives both compensation under this
Ordinance and damages from that other person, he shall
repay to the employer such amount of the compensation
as does not exceed the amount of the damages recovered
from that person ;
(c) upon notice to that person, the employer shall have a
first charge upon moneys payable by that person to the
workman to the extent of any compensation which the
employer has paid to the workman under this Ordinance ;
(d) where the workman has received compensation under this
Ordinance, but no damages or less than the full amount
of the damages to which he is entitled, the person liable
to pay the damages shall indemnify the employer against
so much of the compensation paid to the workman as does
not exceed the damages for which that person is liable ; and
(e) payment of money by that person to the employer under
the last preceding paragraph shall, to the extent of the
amount paid, be a satisfaction of the liability of that
person to the workman."
2. For the purpose of this provision, reference to a workman where the
workman has died as the result of an injury is to be read
as a reference "to
any dependant of the deceased workman who has a legal claim in respect of the
death of the workman". See Ordinance,
s. 6 (5). For present purposes,
therefore, the word "workman" in s. 22 (1) (d) is to be read not as a
reference to the deceased workman
himself but as a reference to his
dependants. As will be observed later, s. 6 (5) differs substantially from the
relevant portion
of the English Act of 1906, s. 13, which was as follows :
"Any reference to a workman who has been injured shall,
where the workman is dead, include a reference to his legal
personal representative or to his dependants or other person
to whom or for whose benefit compensation is payable". (at p335)
3. What happened is that a workman, Harriman, was killed in a road accident
while in the course of his employment with the appellant,
which paid to his
widow and child a sum of $6,320 as workers' compensation. Harriman's death
occurred on 9th July 1964. The appellant,
on 6th July 1966, sued the
respondents for $6,320, the compensation paid as aforesaid, relying upon s. 22
(1) (d) of the Ordinance
and alleging that Harriman's death was caused by the
negligence of the respondents. In this action a special case was stated which
showed that no damages had been received from the respondents in respect of
Harriman's death and that no action had been brought
by his dependants within
twelve months from his death, twelve months being the period prescribed by the
Compensation (Fatal Injuries)
Ordinance 1938 as the time within which an
action thereunder must be brought. Any liability under the Ordinance had
therefore ceased
before the action for indemnity was commenced. See Maxwell v.
Murphy [1957] HCA 7; (1957) 96 CLR 261 , where Dixon C.J. said in
relation to the
Compensation of Relatives Act (N.S.W.), which corresponds with the
Compensation (Fatal Injuries) Ordinance (1957)
96 CLR, at p 268
:
"When the Compensation to Relatives Act gives rights top336)
those of the deceased man's family to whom injury results from
his death it does so in terms of remedy. The wrongdoer is to
'be liable in an action of damages' : s. 3 (1). 'Every such
action shall be for the benefit of the wife, parent and child' -
s. 4. The effect of these provisions, combined with s. 5 as it
stood, was, in the conditions defined, to confer a right of action
which is to endure for twelve months from the death. The
statement that every such action shall be commenced within
twelve months meant, of course, 'and not otherwise'. When
the time expired the right of action was terminated or defeated." (at
4. The questions asked by the special case were :
"(a) Does the expiry of the right of action of the dependants
of Harold Arnold Harriman under the Compensation (Fatal
Injuries) Ordinance 1938 affect the rights conferred on the
plaintiff by s. 22 of the Workmen's Compensation Ordinance and
if so does the plaintiff's action thereby fail?
(b) Does the fact that the action which was commenced by the
executors of the estate of the late Harold Arnold Harriman
and discontinued on 7th October 1969 accord a defence to
these proceedings and if so does the plaintiff's action thereby
fail?
(c) Does the fact that the executors of the estate of the late
Harold Arnold Harriman entered into the release dated 16th
October 1969 afford a defence to these proceedings and if so
does the plaintiff's action thereby fail?" (at p336)
5. The learned judge of the Supreme Court of the Northern Territory answered
these questions as follows : (a) Yes ; the action must
fail. (b) No. (c) No.
(at p336)
6. This appeal is concerned with the correctness of the foregoing answer to
question (a). (at p336)
7. Here the injury which caused the death of Harriman was caused under
circumstances appearing to create a legal liability in the
respondents to pay
damages in respect of the injuries which the workman suffered. Compensation,
but no damages, had been received.
Accordingly the respondents, if shown to be
liable to pay damages, became bound to indemnify the appellant "against so
much of the
compensation paid" to the dependants of the workman by the
appellant "as does not exceed the damages" for which the respondents are
liable to those dependants. (at p336)
8. The particular question is, did the obligation to indemnify continue
notwithstanding that the liability of the respondents to
the dependants had
come to an end twelve months from Harriman's death? (at p337)
9. In my opinion the terms of s. 22 (1) of the Ordinance point to a negative
answer to this question for the following reasons :
1. The obligation to indemnify is owed by "the person liable to pay the
damages" - i.e. presently liable.
2. The obligation to indemnify is limited to damages for which there is
legal liability - i.e. an existing liability.
3. Payment by the person liable to the employer is pro tanto "a satisfaction
of the liability of that person to the workman" -
i.e. here an existing
liability to the dependants of the workman who died : s. 22 (1) (e).
4. The words "or less than the full amount of the damages to which he is
entitled" in s. 22 (1) (d) indicate an existing liability
for damages.
5. When the "workman" for the purposes of s. 22 (1) (d) is not the workman
who was injured but his dependants, it is not possible
to equate the liability
referred to in (d) with the liability arising at the time that the injury was
caused to the workman. (at
p337)
10. Accordingly, as a matter of construction and unaided by authority, it
appears to me that an employer is entitled to an indemnity
for compensation
paid only if, and so long as, the person from whom it is claimed is liable to
pay damages to the dependants of a
deceased workman. (at p337)
11. Counsel did, however, refer to certain decisions upon other provisions of
a like character, said to have a bearing upon the
construction of the
provision in question, which do require consideration. (at p337)
12. First there is Smith's Dock Co. v. John Redhead & Sons (1912) 2 KB 323 ,
where Bray J. decided that under s. 6 of the English
Workmen's Compensation
Act 1906 - a section corresponding, but not corresponding exactly, with s. 22
of the Ordinance - a legal liability
to pay damages to an injured worker
before his death was sufficient for the purposes of the section,
notwithstanding that the liability
had been abated by the death of the workman
and that an employer who had paid compensation to an illegitimate child of the
workman
could enforce the indemnity against a tortfeasor who had caused the
injury. (at p337)
13. It was a case, therefore, where there was no liability to pay damages
when the action for indemnity was brought. Section 6 of
the English Act,
however, granted an indemnity against "a person so liable to pay damages as
aforesaid". The words "so" and "as aforesaid"
referred back to earlier words
of the section, viz. "Where the injury for which compensation is payable . . .
was caused under circumstances
creating a liability in some person other than
the employer to pay damages in respect thereof". It was decided, therefore,
that the
reference was to the legal liability as it was created when the
workman was injured. Bray J. said (1912) 2 KB, at p 327 :
"Here the injury was so caused under circumstances creatingThat decision - which was, I think, open only because the relevant part of s. 13 of the English Act was in terms different from those of s. 6(5) of the Ordinance - does not assist in resolving the question here under consideration because of the difference in language between the two statutory provisions. Bray J.'s decision was referred to by this Court in Tooth and Co. Ltd. v. Tillyer (1956) 95 CLR, at p 610 , where, in a judgment of Dixon C.J., Williams, Webb and Fullagar JJ., it was said of the decision :
a legal liability in persons other than the employers, namely,
in the defendants, and the person to whom they were so liable
to pay damages was the workman whose injury was caused by
their negligence, and that liability was not the less created
because it subsequently came to an end by reason of the
man's death."
"All that it established is that if a cause of action once(at p338)
arises in the deceased workman the critical words of the
provision are satisfied although the liability soon afterwards
comes to an end by his death."
14. Watson v. Newcastle Corporation [1962] HCA 6; (1961) 106 CLR 426 was another case to
which reference was made. In the course
of the judgment
there was some
discussion of the
scheme of s. 64 of the Workers' Compensation Act (N.S.W.) -
which corresponds with
s. 6 of the English
Act - in which observations
were
made by Taylor J. that do have some bearing upon the present problems but are
perhaps at variance
with the observations of Bray
J. in Smith's Dock Co. v.
John Redhead & Sons (1912) 2 KB 323 . His Honour
said (1961) 106 CLR, at
p 441
:
"Turning to the language of sub-s. (b) it is of some importanceat p 897 . No doubt
to observe that the right to an indemnity is given against 'the
person so liable to pay damages as aforesaid'. Prima facie, at
least, this phrase is indicative of a person presently liable to
pay damages and not of a person who is no longer liable.
Ferguson J. adverted to this phrase but he was inclined to
discount the prima facie view which I have expressed thinking
that it 'might well be construed as being descriptive only of
the person liable to indemnify, that is to say the tortfeasor
referred to in the opening words of the section' (1961) 78 WN (NSW),
the phrase does require a reference back to the earlier words(at p339)
of the section but consideration of the phrase in the light of the
opening words of the section does not result in any weakening
of the view that is indicative of a person presently liable."
15. There is nothing in the cases to which I have referred that seems to me
to support a construction of s. 22 (1) of the Ordinance
other than that which
its language naturally bears. (at p339)
16. Other authorities were referred to, but it seems to me that the many
cases where in other contexts the word "liable" has received
judicial
consideration do not assist in construing s. 22 (1) of the Ordinance when the
real problem is to decide whether the sub-section
makes the tortfeasor's
liability to pay damages at the time of the proceedings for indemnity the
condition of the employer's right
to obtain an indemnity from that tortfeasor.
(at p339)
17. For the reasons which I have given it is my opinion that present
liability of the tortfeasor is a condition of the indemnity
conferred by s. 22
(1) (d). (at p339)
18. Accordingly, I would dismiss the appeal. (at p339)
ORDER
Appeal allowed with costs. Order of the Supreme Court of Northern Territory set aside and in lieu thereof order that the questions in the case stated to the Supreme Court be answered as follows :-Answer : No.the estate of the late Harold Arnold Harriman and discontinued on 7th October, 1969 afford a defence to these proceedings and if so does the plaintiff's action thereby fail? Answer : No.
(b) Does the fact that the action which was commenced by the executors of
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