Court of Appeal (WA)|2002-08-05|Before: Kechnie J, Smith J, Fitzgerald AJ

Fluor Daniel Constructors Pty Ltd v Zurich Australian Insurance Ltd [2002] WASCA 218 (5 August 2002)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : FLUOR DANIEL CONSTRUCTORS PTY LTD -v- ZURICH AUSTRALIAN INSURANCE LTD [2002] WASCA 218

Insurance - Exclusion clause - Extent of indemnity - Employer's liability to worker - Employer's expenses in connection with defence of worker's claim - Insured employer not entitled to indemnity if worker injured in the course of employment

Appellant : Mr R L Le Miere QC & Mr R J L McCormack

Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 28 IPR 561

Comcare v Mather & Mitchell [1995] FCA 1216; (1995) 56 FCR 456

Comcare v McCallum [1994] FCA 975; (1994) 49 FCR 199

Commonwealth of Australia v Lyon (1979) 24 ALR 300

Container Handlers Pty Ltd v Insurance Commission of Western Australia & Ors [2001] WASCA 304; (2001) 25 WAR 42

Goward v The Commonwealth [1957] HCA 60; (1957) 97 CLR 355

Gregory v Comcare Australia (1997) 72 FCR 196

Henderson v Commissioner of Railways (WA) [1937] HCA 67; (1937) 58 CLR 281

Humphrey Earl Ltd v Speechley [1951] HCA 75; (1951) 84 CLR 126

Hussain v New Taplow Paper Mills Ltd (1988) 1 All ER 541

Inverell Shire Council v Lewis (1992) 8 NSWCCR 562

Johnson v American Home Assurance Company [1998] HCA 14; (1998) 192 CLR 266

Kavanagh v The Commonwealth [1960] HCA 25; (1960) 103 CLR 547

McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 176 ALR 711

McCurry v Lamb (1992) 8 NSWCCR 556

Mendez v Telstra Corporation Ltd [2005] FCA 1483; (1998) 147 FLR 394

National Insurance Co of NZ Ltd v Espagne [1961] HCA 15; (1961) 105 CLR 569

Pearson v Fremantle Harbour Trust (1) [1929] HCA 19; (1929) 42 CLR 320

Peet v Workers' Rehabilitation and Compensation Corporation [1996] SASC 5757; (1996) 66 SASR 474

re Bond Corp Holdings Ltd (1990) 1 WAR 465

Sealcorp Holdings v Riddle, unreported; SCt of WA; BC 950264; 26 May 1995

Smith v Stages (1989) 1 AC 928

St Helen's Colliery Co Ltd v Hewitson [1924] AC 59

Workcover Authority of NSW v Walling [1998] ASWC 315

1 FITZGERALD AJ: The appellant Fluor Daniel Constructors Pty Ltd is liable to pay damages in respect of injuries to an employee, the plaintiff, which occurred on 23 August 1998. The respondent Zurich Australian Insurance Ltd is liable to indemnify Fluor under a policy of insurance unless the injured employee was injured in the course of his employment.

2 The matter proceeded to trial on the basis of agreed facts which may be briefly summarised as follows. The plaintiff was employed by Fluor as a pipe fitter and/or as a leading hand on the date on which he was injured. His employment with Fluor had commenced on 22 May 1998. The Fluor Daniel Murrin Murrin nickel cobalt project construction agreement, 1997 set out the terms and conditions of his employment with Fluor. The plaintiff's place of employment where he discharged his work-related duties was the Murrin Murrin mine site which is located approximately 60 kilometres from Laverton and about 650 kilometres from Perth.

3 The plaintiff initially availed himself of accommodation provided by Fluor at or near the mine site but approximately four weeks prior to the date on which he was injured chose to travel to and from the mine site to reside with his family at a temporary residence at the Laverton Caravan Park.

4 On the date on which he was injured, the plaintiff completed his work-related duties at the Murrin Murrin mine site at approximately 6.30 am and shortly thereafter departed in his motor vehicle to travel from the mine site to his place of residence. At approximately 7.10 am he was injured when, during the course of his journey, he lost control of his vehicle which rolled over. The accident occurred at a location approximately 55 kilometres from the mine site and approximately 5 kilometres east of Laverton.

5 The critical issue is whether or not the plaintiff was injured in the course of his employment. The phrase "in the course of employment" in the policy of insurance which is presently material is also to be found in the workers' compensation legislation which was considered by the High Court in Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; (1992) 173 CLR 473. It was not argued that the phrase in the legislation bears a different meaning from the phrase in the policy.

6 Whether or not the observations in the joint judgment of four members of the High Court in Hatzimanolis are exhaustive of the meaning of the phrase "in the course of employment," cases such as this fall principally to be decided by reference to their Honour's statement.

7 There are a number of passages to which our attention was specifically directed. I propose to refer only to some of those which are to be found in 173 CLR at pages 483 - 484. Mason CJ, Deane, Dawson and McHugh JJ said at those pages, commencing with the passage about halfway down page 483:

"For the purposes of workers compensation law, an injury is more readily seen as occurring in the course of employment when it has been sustained in an interval or interlude occurring within an overall period or episode of work than when it has been sustained in the interval between two discrete periods of work."

"There are cases where an employee is required to embark upon some undertaking for the purpose of his or her work in circumstances where, notwithstanding that it extends over a number of daily periods of actual work, the whole period of the undertaking constitutes an overall period or episode of work."

9 The judgment then goes on to use as an example the situation in which an employee "is required to go to a remote place and live in accommodation provided by his or her employer for the limited time until a particular undertaking is completed". Later again their Honours continued:

"An injury occurring during the interval between periods of actual work in such a case is more readily perceived as being within the current conception of the course of employment than an injury occurring after working hours to an employee who performs his or her work at a permanent location or in a permanent locality."

10 At the top of page 484 their Honours went on after reference to a number of cases:

"Moreover, an interval or interlude in an overall period or episode of work will ordinarily be seen as being part of the course of employment if the employer expressly or impliedly has induced or encouraged the employee to spend the interval or interlude at a particular place or in a particular way."

11 Omitting a further passage, the judgment continued:

"An injury sustained in such an interval will be within the course of employment if it occurred at that place or while the employee was engaged in that activity, unless the employee was guilty of gross misconduct taking him or her outside the course of employment. In determining whether the injury occurred in the course of employment regard must always be had to the general nature, terms and circumstances of the employment and not merely to the circumstances of the particular occasion out of which the injury to the employee has arisen."

12 As will be seen, part of the passage last quoted came from the decision of the High Court in Danvers v Commissioner for Railways (NSW) (1969) 122 CLR 537, and the earlier part of the last sentence will be seen to relate to something that was said by Sir Owen Dixon in Whittingham v Commissioner of Railways (WA) [1931] HCA 49; (1931) 46 CLR 22 to which I will make brief reference in due course.

13 To turn back to the present case, the plaintiff was injured after actual working hours. He had finished his tasks for the day and his injuries occurred in an interval between his completion of those tasks and his anticipated return to work on the following day or when next he was rostered for duty. The mere fact that the mine site at which he worked was remote does not without more mean that that interval between discrete periods of work was encompassed by the course of his employment. Remoteness without more does not mean that the plaintiff's employment was for a single extended period.

14 Subject to one matter to which I will come, a closer scrutiny of the facts does not advance Zurich's argument. When he was injured the plaintiff was returning of his own volition in his own vehicle to private off-site accommodation. There is no indication that Fluor, which provided camp accommodation at or near the mine site, had arranged for or encouraged him to live where he did or to travel where or when or in the manner that he did.

15 The only circumstance that links Fluor to the activity in which the plaintiff was engaged when he was injured was that he was only there at that time because Fluor employed him at the remote mine. If it had not done so, he would not have been living in Laverton and travelling to and fro between the mine site and Laverton and thus, but for his employment, he would not have been where he was when he was injured.

16 Zurich drew attention to the following statement by Lord Loreburn in Low or Jackson v General Steam Fishing Co (1909) AC 523 at 532:

"A man may be within the course of his employment not merely while he is actually doing the work set before him, but while he is where he would not but for his employment and is going what a man so employed might do without impropriety."

17 That statement was cited with apparent approval by Dixon CJ in Commonwealth v Oliver [1962] HCA 38; (1962) 107 CLR 353 at 356. However, when it is divorced from its context the statement is so general and vague as to be not only ambiguous but confusing. It would be quite incompatible with Hatzimanolis and deprive the concept of course of employment of any real content to conclude that any activity in a locality where an employee is living is in the course of his or her employment or any activity in the course of any travel between the employee's place of residence and the place of work is in the course of employment merely because a worker lives where he or she does because he or she works where he or she does.

"The sufficiency of the connection between the employment and the thing done by the employee cannot but remain a matter of degree in which time, place and circumstance as well as practice must be considered together with the conditions of employment."

19 That is the passage to which I earlier made reference when citing from Hatzimanolis at page 484 where the joint judgment referred to the need, in determining whether the injury occurred in the course of employment, to have regard to the general nature, terms and circumstances of the employment.

20 The circumstances in which the plaintiff was injured do not support the conclusion at trial that the plaintiff was injured in the course of his employment. I can find nothing in those circumstances which justifies such a conclusion consistently with the decisions which are binding on this Court. Accordingly, the appeal should be allowed with costs.

21 There is agreement as to most of the relief to be granted if the judgment of the Court is as I propose, that the appeal be allowed. However, it seems that there is a further issue as to Fluor's entitlement to an indemnity from Zurich in respect of Fluor's own costs of defending and compromising the plaintiff's claim, a step which it apparently took with the consent of Zurich.

22 The policy contains a number of different sections dealing with different indemnities. Under the heading Public Liability, Section C, Insuring Clause, part of the indemnity extends to all expenses incurred by Fluor by or with the permission of Zurich for investigation, negotiation and defence of claims and suits as well as all costs taxed against Fluor in any suit for damages on account of any judgment in such suits. The Court did not hear lengthy argument on the effect of these provisions, Zurich's preferred position being that the outstanding issue should be returned to the Commissioner who determined the trial for decision.

23 I can see no purpose in doing so. In the absence of any suggestion that there is authority inconsistent with such a view, the language of the policy seems to me clear and to entitle Fluor to be indemnified by Zurich in respect of all expenses incurred by Fluor in connection with the defence and compromise of the claim brought against Fluor by the plaintiff and I would declare accordingly.

24 McKECHNIE J: For the reasons given by Fitzgerald AJ, I too would allow the appeal and make the orders generally proposed by him.

25 ROBERTS-SMITH J: I too agree with the reasons by Fitzgerald AJ. The agreed facts, looked at in light of the other material before the learned Commissioner, including that evidence showing the terms of the plaintiff's employment, including notably regular hours of work with provision for hours worked outside, those to be paid as overtime, lead inevitably to the conclusion that the nature of the plaintiff's employment was by way of discrete periods of employment.

26 This was not a case in which he was required nor encouraged by his employer to be at a particular place for a specific period of time, nor attended by other circumstances of the kind referred to in the authorities which would show his employment was of an overall kind. Put shortly, it was not an indefinite overall period of employment.

27 Further, even if it had been, there was insufficient evidence to enable a finding that the employer induced or encouraged the plaintiff, during an interval or interlude of his employment, to be at a particular place or do something in a particular way.

28 It is no doubt true that the plaintiff's temporary place of residence, being the Laverton Caravan Park, was a matter of choice, going to the satisfaction of his reasonable wants. However, it did not meet the purposes of the employer any more than would the circumstances of an employee who lived permanently in Laverton by living in that place.

29 There is a danger, I think, in seeking to extrapolate too much from the particular facts of individual cases. I agree that in the circumstances of this case the plaintiff was engaged to work daily hours as discrete periods of employment and that his travel to and from the Laverton Caravan Park was not an activity in the course of his employment.

30 The learned Commissioner in fact, as I read his reasons, made no specific finding on the issue whether or not the employer had induced or encouraged the plaintiff to be at a particular place or to do a particular thing in a particular way. The conclusion at par 25 of his reasons, that the circumstances and nature of the plaintiff's employment was such that it was reasonable for him to travel to and from the mine site to reside with his family, does not go far enough.

31 I acknowledge that those questions are not to be determined narrowly by reference only to the particular circumstances of the particular occasion out of which the injury arose, but by having regard to the general nature, terms and circumstances of the employment. That, I think, in the end is the governing factor in the case.

32 I too would allow the appeal, with costs, and I agree generally with the orders proposed.

Fluor Daniel Constructors Pty Ltd v Zurich Australian Insurance Ltd [2002] WASCA 218

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Fluor Daniel Constructors Pty Ltd v Zurich Australian Insurance Ltd [2002] WASCA 218 (5 August 2002)

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