6 S 151Z(1) permits recovery if the injury for which compensation is payable under the Workers Compensation Act 1987 occurs under circumstances creating a liability in some person other than the worker's insurer. The arguments were as follows:
1. There were a number of authorities from which one could determine that policy considerations apply when dealing with recovery actions under s 151Z. On the basis of these decisions it was argued that it was necessary that I consider the policy behind the provisions of the recovery legislation in determining the extent of the rights of recovery and that I should give priority to the provisions of s 151Z over those of s 34(1) of the Motor Accidents Compensation Act . Thus it was argued that I should look only at whether the elements of s 151Z(1)(d) had been fulfilled and that due inquiry and search was an additional obligation placed on the insurer that was not provided for in that section.
2. The requirement for due inquiry and search was procedural rather than substantive and on the basis of Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207, procedural requirements of the motor accidents legislation do not apply to an employer's recovery action.
3. A claim under s 151Z was a claim for indemnity limited to the amount of the damages to which the worker was entitled and it was not a claim for damages. It was argued that the plaintiff in this action was not seeking damages and was not bringing an action for the recovery of damages and that since due inquiry and search was tied to an action for the recovery of damages it did not apply to the claim in this case.
4. Due inquiry and search was a requirement imposed upon a worker and it applies to the worker's claim and not to that of the employer. Thus it was said if due inquiry and search was necessary the question was whether the worker had made those enquiries and for that purpose the worker becomes the employer's agent. Since the employer has no control over the worker and could not compel the worker to undertake inquiry and search in a timely way it was argued that the section did not apply to the employer. The argument relied upon the reasons of Chief Justice Barwick in Tickle Industries Pty Limited v Hann (1974) 130 CLR 321 at 327-8 when he said: The right of the employer is regarded as independent of the action or inaction of the employee.
5. There were practical consequences of the requirement, namely:
(1) The claim may not come to the employer's attention at a time contemporaneous with the action. It was pointed out that it could be months or years before the employer becomes aware of the claim.
(2) A right of action does not accrue until each payment is made and thus the right of action may accrue much later than the date of the accident.
(3) It was a sensible and practical approach to commence proceedings when sufficient sums had been paid, necessarily involving time delays. This could be as much as six years from the date of the first payment.
6. Application of the requirement could cost an employer valuable and long standing rights.
7. There would be an anomaly if the focus were to be placed upon s 34(1) of the Motor Accidents Compensation Act , because the worker's right of action was limited to three years by s 109 of that Act and not the six years under s 14(1) of the Limitation Act 1969 which applied to the employer's right or recovery. Further it was said that this claim is not a cause of action for recovery of damages and therefore it did not attract the application of s 34(1) and s 109 and according to the decision in Tomassian the procedural requirements did not apply. On that basis it was argued that the provisions of s 151Z(1)(d) had always prevailed over the provisions of the motor accidents legislation.
8. The provisions of the motor accidents legislation in relation to medical disputes and assessments of whole person impairment to determine a worker's rights to non economic loss do not apply in relation to a s 151Z claim, the rationale being that it was not the worker who was making the claim. It was argued that the same philosophy ought apply to the s 34(1) requirement for due inquiry and search.