(c) the opinion or report may not be disclosed to an approved medical specialist or an Appeal Panel in connection with the assessment of a medical dispute under Part 7 of Chapter 7."
24 Section 120, which also appears in Div 7 of the 1998 Act, also provides for the medical examination of a worker who claims compensation under the 1998 Act, or is in receipt of weekly payments of compensation under the Act, in this instance at the direction of the Workers Compensation Commission or the WorkCover Authority.
25 Section 4 of the 1998 Act defines " 'weekly payment', in relation to compensation" to mean "a weekly payment of compensation under Division 2 of Part 3 of the 1987 Act in respect of a period of total or partial incapacity for work". Thus despite the textual clumsiness in the reference in both s 119(2) and s 120 to "weekly payments of compensation under this Act", it is apparent that the reference is to weekly compensation under the 1987 Act. The same conclusion can be reached by the application of s 2A of the 1987 Act. Thus while Pt 3 of the 1998 Act makes provision for weekly payments of compensation, provisionally within 7 days after notification of injury (s 267, s 274(2)) and within 21 days where liability is not disputed (s 274(1)(a)), it is apparent that the weekly compensation being paid is that referred to in the 1987 Act.
26 If a worker is required to submit himself or herself for examination pursuant to Div 7, the worker is entitled to recover from the worker's employer, in addition to any compensation otherwise provided, the amount of any wages the worker lost by reason of attending the examination and, in substance, expenses incurred in so attending: s 125(1). Those fares can, in certain circumstances, include the costs incurred because of the need for an escort: s 125(3).
27 Section 376 of the 1998 Act permits the WorkCover Authority to issue guidelines with respect to, inter alia, matters for which a provision of the Workers Compensation Act provides may be the subject of WorkCover Guidelines: s 376(1)(c). On 25 October 2006 WorkCover issued guidelines entitled "WorkCover Guidelines on Independent Medical Examinations and Reports" said to be issued under s 119 and s 376. Kurnell Transport sought to gain some assistance from those Guidelines in the interpretation of s 119. I agree with Basten JA (at [104]) that the Guidelines cannot impose a restriction on s 119 to which it was not otherwise subject.
Section 151Z(1)
28 Section 151Z(1) addresses the situation of an injured worker entitled both to compensation under the 1987 Act from an employer and to damages at common law from a tortfeasor. It regulates first the worker's rights against the employer and the tortfeasor and secondly, the ultimate burden for the worker's compensation as between the employer and the tortfeasor.
29 In the first sphere of operation, s 151Z reflects the overriding intention of Parliament that a worker's damages must be reduced so that a worker should not receive double compensation: Hickson v Goodman Fielder Limited [2009] HCA 11 (at [9]) per Bell J (Gummow, Hayne, Heydon and Kiefel JJ agreeing); see also Kempsey District Hospital v Thackham (1995) 36 NSWLR 492; Transfield Pty Limited v Mastrioanni (1998) 20 NSWCCR 193 (CA); Franklins Self Service Pty Limited v Wyber [1999] NSWCA 390; (1999) 48 NSWLR 249 per Mason P (Sheller JA and Cole AJA agreeing); Rooty Hill Medical Centre v Gunther [2002] NSWCA 60 (at [15]) per Handley JA (Mason P and Hodgson JA agreeing); Turner v George Weston Foods Ltd [2007] NSWCA 67; (2007) 4 DDCR 571 (at [37]) per Campbell JA (with whom Beazley and Hodgson JJA agreed).
30 In the second sphere of operation, the policy of s 151Z is to ensure that:
"[A]n 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."
Tickle Industries Pty Ltd v Hann & Richardson [1974] HCA 5; (1974) 130 CLR 321 (at 326) per Barwick CJ (McTiernan J agreeing); referred to with approval in Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53; (2001) 207 CLR 520 (at [13]) per Gleeson CJ, Gummow, Hayne and Callinan JJ.
31 To that end, s 151Z creates a "detailed legislative scheme designed to reimburse the party liable to pay compensation out of the fund provided by the party liable to pay damages" but it applies only where the "circumstances creating" liability for the compensable injury also create a liability in the tortfeasor to pay damages: Franklins Self Serve Pty Ltd v Wyber (at [52], [53], [99]).
32 The right which is given to the employer who has paid compensation rests on the existence for however brief a time of a true liability to pay damages to some person or persons in respect of the injury for which compensation was payable and has been paid and, in that sense, has been described as "derivative": Tooth & Co Ltd v Tillyer [1956] HCA 49; (1956) 95 CLR 605 (at 612) per Dixon CJ, Williams, Webb and Fullagar JJ; QBE Workers Compensation (NSW) Limited v Dolan [2004] NSWCA 458; (2004) 62 NSWLR 42 (at [43]) per Beazley JA (Mason P and Tobias JA agreeing).
33 However, as Winneke P, said in Esso Australia Ltd v Victorian WorkCover Authority [2000] VSCA 74; (2000) 1 VR 246 (at [28]) speaking of s 138 of the Accident Compensation Act 1985 (Vic), which for relevant purposes is in substantially the same terms as s 151Z(1)(d), in a passage approved in the joint judgment in the High Court (Victorian WorkCover Authority (at [14], footnote added):
"…the statutory right of indemnity conferred by the [Compensation] Act upon the person who has paid the compensation is not to be equated to the cause of action which the worker would, but for the [Compensation] Act, have had against the person liable to pay damages to him. This is so notwithstanding the fact that it is an ingredient of the statutory right, sought to be enforced, that the person from whom the indemnity is sought was liable to pay damages to the worker. The claim to enforce the entitlement to indemnity is not a claim in tort. It is a cause of action created by statute for an indemnity against a person liable to pay damages to another: Tuckwood v Rotherham Corp [1921] 1 KB 526 at 540 per Atkin LJ." (emphasis added)
34 Thus, as was explained in Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207 (at 215-216) per Mahoney JA (Kirby A-CJ agreeing); (at 220) per Meagher JA, the employer's right to pursue the statutory indemnity is not, in form or substance, a claim for damages. Section 151Z(1)(d) passes the employer's liability for compensation payments to the tortfeasor, not any liability for the damages.
35 The liability of the tortfeasor to indemnify the employer also arises under the statute and is limited to the damages for which the former would, if sued, have been liable to the worker: see generally Howard Rotavator Pty Ltd v Wilson (1987) 8 NSWLR 498 (at 500) per Hope JA, speaking of s 64(1)(b) of the Workers' Compensation Act 1926 (the "1926 Act") (the precursor of s 151Z(1)(d)); Kwanchi Pty Ltd v Kocsis (1996) 40 NSWLR 270 (at 276) per Clarke JA (Priestley and Handley JJA agreeing).
36 The joint judgment in Victorian Workcover Authority (at [15] - [16]) explained that although "the use in the Compensation Act of the term 'indemnity' invoked an institution of the general law … the obligation imposed by contract or by the relation of the parties to save and keep harmless from loss … the statute created incidents of the obligation which differed from those found in the general law". Thus, the joint judgment explained (at [16]) (footnotes omitted):
"At common law, the party asserting a legal right to indemnity has first to discharge the liability the subject of the indemnity and, having done so, may recover from the indemnifier under the common indebitatus count for money paid by the plaintiff for the defendant at the defendant's request. It is here that the statutory entitlement to indemnity necessarily departs from the requirement of the common money count that the payments made by the plaintiff have exonerated the defendant from liability. This is because the statutory obligation, in respect of which the entitlement to indemnity is conferred by the section, may be a continuing one to pay compensation to the worker. That continuing obligation may not have been spent at the time action is brought on the entitlement to indemnity. (emphasis added) "
37 Consistently with that passage, and subject to the limitation created by the determination of the damages the tortfeasor would have been liable to pay the worker, it is accepted that a new cause of action accrues each time the employer makes a payment of compensation: Attorney General v Arthur Ryan Automobiles Ltd [1938] 2 KB 16 (CA); Marks v Roads and Traffic Authority of New South Wales [2004] NSWCA 43; (2004) Aust Torts Reports ¶81-732 (at [3]) per Handley JA (Stein AJA agreeing); South Eastern Sydney Area Health Service v Gadiry and Anor [2002] NSWCA 161; (2002) 54 NSWLR 495 (at [16], [48]) per Stein JA (Giles JA and Pearlman AJA agreeing); see also Victorian WorkCover Authority v Esso Australia Ltd (at [18]) per Gleeson CJ, Gummow, Hayne and Callinan JJ.
38 Thus, if the amount claimed by way of indemnity is less than the amount of damages so determined, the employer or insurer making continuing payments of compensation can further claim under the indemnity at a later point in time up to the limit of the sum determined as the amount of damages which the injured worker would have recovered at common law: Grant v Royal Rehabilitation Centre Sydney [1999] NSWCA 250; (1999) 47 NSWLR 263 (at [8]) per Cole A-JA, (Mason P, Sheller JA agreeing); see also Teuma & Anor v C P & P K Judd Pty Ltd [2007] NSWCA 166 (at [102]) per Basten JA (Hodgson JA agreeing).
What is in issue in s 151Z(1)(d) proceedings?
39 Determining the compensation the employer can recover from the tortfeasor pursuant to s 151Z(1)(d) involves a "trial within a trial": Hickson (at [44]). The employer must establish five separate constituent elements: (a) that a worker was injured; (b) that the injury was one for which compensation is payable under the 1987 Act; (c) that it was caused under circumstances creating legal liability in the tortfeasor; (d) that the worker has recovered compensation under the 1987 Act for that injury from the employer; (e) that the employer has paid the compensation so recovered: Frank G O'Brien Ltd v Bain [1975] 1 NSWLR 373 (at 381) per Glass JA (with whom Reynolds and Hutley JJA agreed); see also Kornjaca v Steel Mains Pty Ltd [1974] 1 NSWLR 343 (at 347) per Glass JA; Kempsey District Hospital v Thackham (at 507) per Handley JA; Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; (2006) 67 NSWLR 516 (at [10]) per Bryson JA (Handley JA agreeing).
40 As to the damages element, the employer must establish the amount of damages properly assessable in respect of the injury caused to the worker by the tortfeasor: Tickle Industries Pty Ltd (at 334). That involves a determination of all of the constituent elements in such a damages claim including general damages, and all forms of economic loss including loss of past and future income earning capacity: Grant (at [9] - [10]); Turner v George Weston Foods Ltd (at [20]) per Campbell JA (Beazley and Hodgson JJA agreeing).
41 At common law, damages are assessed once and for all: Franklins Self Serve (at [45]). Accordingly, there is only one determination of the quantum of common law damages the worker would have recovered, which binds the employer paying compensation to the worker, and the tortfeasor: Grant (at [9]). That figure establishes the "fund" to which the employer can have recourse to recoup compensation paid to the worker. As I have explained, if the fund is not exhausted in the first s 151Z(1)(d) suit, the employer can bring further proceedings to recoup subsequently paid compensation in respect of the cause of action which arises every time a compensation payment is made.
42 Because the s 151Z(1)(d) proceedings are not a claim for damages, court rules such as Uniform Civil Procedure Rules 2005, r 15.12, which makes specific provision for particulars in a claim for damages "in respect of personal injuries arising from any event", do not apply. Nevertheless the employer is obliged to give particulars enabling the tortfeasor to know the case it has to meet in relation to, amongst other things, the damages the worker would have obtained in proceedings against the tortfeasor: Allianz Australia Insurance Ltd v Newcastle Formwork Constructions Pty Ltd [2007] NSWCA 144 (at [21] - [25]) per Giles JA (Mason P and Santow JA agreeing).
The ambit of s 119
43 The primary judge dismissed the motion primarily because she concluded that the employer could not compel the worker to submit to medical examinations for the purpose of the s 151Z(1)(d) proceedings and, it followed, that the appellant was not at any disadvantage in the proceedings such as may attract the discretionary remedy of a stay. It is necessary to determine whether her Honour's primary conclusion was correct.
44 The worker's absence of an interest in assisting either party in the s 151Z(1)(d) proceedings was one of the matters which the primary judge took into consideration (at [28]). However, as Mason P observed with customary acuity, the "legal system … virtually guarantees that the separate interests of victims, employers, tortfeasors and insurers are not individually represented at each stage of litigation flowing from a work injury" (emphasis in original): Franklins Self Serve (at [49]). The particular tension which emerges in this case is that the worker, whose attendance at medical examinations is sought, is not a party to the s 151Z(1)(d) proceedings and may be perceived to have no immediate interest in their outcome. I say no "immediate interest" because it is conceivable that amounts the tortfeasor pays the employer after successful s 151Z(1)(d) proceedings can be brought to bear in proceedings by a worker against the tortfeasor: s 151Z(1)(e) and (e1). It is unnecessary to elaborate on this prospect.
45 While for present purposes the worker may have no immediate interest in the s 151Z(1)(d) proceedings, the worker's conduct (in the sense of the circumstances which may give rise to the tortfeasor's liability), injuries and disabilities (for quantifying the damages) are the focus of the "notional" trial those proceedings entail. The worker can be subpoenaed to give evidence on the liability issue in the proceedings. But the worker cannot be examined by medical practitioners in court. Is it a sensible construction of s 119, in the context in which it appears in the legislative scheme, to conclude that the employer has no power to compel the worker to submit to medical examinations to enable the determination of the damages "properly assessable" (Tickle Industries Pty Ltd (at 334)) in respect of the injury the tortfeasor caused to the worker? In my view it is not.
46 The Workers Compensation Acts should be construed in a "manner … most calculated to reflect the presumed intention of the legislators and to serve their interest in producing a practical working code": Frank G O'Brien (at 384) per Glass JA. Unless the statutory language is intractable, a court should not attribute to the legislature an intention to produce by its legislation an unjust or capricious result: Tickle Industries Pty Ltd v Hann & Richardson (at 331) per Barwick CJ (McTiernan J agreeing).
47 The Workers Compensation Acts address the same question of the financial consequences of an injury which has been the subject of a successful claim for workers compensation. I have already drawn attention to the inter-relationship between the provisions in the two Acts which emerges from the direction in s 2A of the 1987 Act, repeated at the commencement of Ch 4 (in which s 119 appears) to construe the 1987 Act as if it formed part of the 1998 Act. The effect of that direction is that "so far as possible the Acts are to be read together and as forming one document": Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1 (at 7) per Griffith CJ. So construed, the connection between the statutory indemnity created by s 151Z(1)(d), which depends on the payment of compensation under the 1987 Act, and the mechanism s 119 creates for medical examination of the worker receiving weekly compensation can readily be discerned.
48 Section 119 is the only provision of the Workers Compensation Acts which permits the employer to have the worker medically examined. Sub-section (1) deals with the position after notice of injury has been given and before an award is made. Sub-section (2) deals with the employer's ability to have the worker medically examined once an obligation to pay the worker weekly payments of compensation has arisen. Once the latter obligation commences, so too does the employer's cause of action under s151Z(1)(d) against the tortfeasor. The rights and liabilities created by s 151Z(1)(d) have their fons et origo in the employer's statutory obligation to pay compensation to the worker. To take the analogy with the concept of indemnity a step further, s 151Z(1)(d) in substance, works as a form of statutory subrogation. The employer stands in the worker's shoes to recover the compensation the employer has paid to the worker, by establishing the cause of action, if any, the worker had against the tortfeasor. If the worker had sued the tortfeasor successfully, the worker would have been liable to repay from the damages awarded the compensation: s 151Z(1)(b).
49 Section 119(2) does not refer expressly to s 151Z proceedings. But nor does it expressly proscribe the employer from requiring the worker to submit to medical examinations for the purpose of those proceedings. The precondition for its operation is that the worker is receiving weekly payments of compensation. That condition is satisfied in this case.
50 The primary judge concluded (at [24]) that s 119 was "designed to facilitate the resolution of [the worker's] claim [for compensation]" and that "[t]he legislators did not envisage its use for any extraneous purpose". Notwithstanding her conclusion (at [25]) that s 119(2) was not available to assist an employer in a s 151Z claim because to employ it to that end would be to use the power "for an extraneous and improper purpose", her Honour was of the view (at [29]) that the employer could use in its s 151Z proceedings the medical examinations and reports obtained for the purposes of the workers compensation proceedings. Her Honour no doubt contemplated that in this case, there having been Compensation Court proceedings, the reports would have been obtained under court rules for medical examinations.
51 But not all cases would be of that nature. It is conceivable that an employer might accept its liability to pay compensation to the worker under the 1987 Act from medical reports obtained pursuant to s 119(1). The employer may also have monitored the worker's medical condition, from time to time, by obtaining s 119(2) reports. The logical consequence of the primary judge's conclusion that s 119 could not be used to obtain reports for use in s 151Z proceedings because that would involve using it for an extraneous and improper purpose, appears to be that the employer could not use any reports obtained pursuant to either s 119(1) or s 119(2) for the purpose of determining the worker's compensation entitlements in the s 151Z proceedings. This may be either because to use them thus would engage the extraneous and improper purpose the primary judge identified or, where the reports were obtained for Commission proceedings, would breach the implied undertaking not to use documents obtained by compulsory court process for a purpose other than use in the proceedings for which they were obtained: Harman v Home Department State Secretary [1983] 1 AC 280; Hearne v Street [2008] HCA 36; (2008) 82 ALJR 1259. The s 151Z(1)(d) proceedings would, on that interpretation, be entirely frustrated.
52 A construction of s 119(2) which means the employer cannot use that provision to have a worker to whom it is paying compensation under the 1987 Act medically examined for the purpose of establishing the quantum of the fund against which it can exercise its s 151Z(1)(d) statutory indemnity would, in my view, be "capricious" and "unjust". It fails to have regard to the place s 119 takes in the scheme comprised by the Workers Compensation Acts.
53 I would not attribute to the legislature an intention to create a scheme requiring the employer to prove the damages the worker was entitled to recover from the tortfeasor without also equipping the employer with an ability to prove what those damages were at the time of trial. In my view, the legislature intended the s 119(2) power to form part of the bundle of rights and obligations which arose once the employer became liable to pay compensation for injuries for which the worker could recover damages against the tortfeasor. The language of s 119(2) is not so intractable as to exclude that outcome. It should be adopted to avoid the unjust alternative.
54 The conclusion that the worker can be required to submit to medical examination for the purpose of the s 151Z(1)(d) proceedings does not, in my view, subject the worker to harassment or arduous examinations: primary judgment (at [27]). He or she is already subject to a continuing obligation to be medically examined: ss 119(2), 120. The power could not be used unreasonably. The worker's costs of attending have to be reimbursed.
55 Reading s 119(2) to enable an employer to require the worker to submit to medical examination for the s 151Z proceedings gives that provision a meaning consistent with the purpose manifested by the creation of the s 151Z scheme. The primary judge, with respect, erred in reaching the opposite conclusion.
56 This conclusion leads to the question of what, if any, relief is available to the appellant.
57 It is curious that the legislature has not created an express power in the tortfeasor to require the worker to submit him or herself for medical examination for the purposes of defending the s 151Z proceedings. It seems to be a casus omissus (a matter which should have been, but has not been, provided for in a statute or in statutory rules).
58 However that does not mean the tortfeasor is without remedy. In my view the tortfeasor can, as the appellant has here, avail itself of the employer's right to require the worker to submit to medical examinations.
59 Such an approach was recognised in Thompson & Son v North Eastern Marine Engineering Co Ltd [1903] 1 KB 428. Thompson considered the question whether an employer could claim indemnity from a tortfeasor pursuant to s 6 of the Workmen's Compensation Act 1897 (UK) (the "1897 Act") (in substance, the precursor of s 151Z(1)(d)) (see Hickson (at [16])) where compensation had been paid pursuant to an agreement between the injured worker and the employer rather than a court order. Kennedy J held that the employer could seek indemnity in those circumstances, but (at 437) that it was open to the tortfeasor to put in issue in the s 6 proceedings, inter alia, the quantum of the compensation and whether it was "an amount which it was reasonable for the employer to agree to pay, having regard to the nature of the injury and the condition and circumstances of the workman". He added (at 437):
"One other consideration, to which the defendants' counsel has called my attention, has to be noticed. Happily, in some cases the workman recovers from the accident, and the Act in contemplation of that provides for a right of review of the amount of compensation; but while giving to the person entitled to the indemnity the right of having the man examined, it has not, so far as I can see, given to the person liable to pay the indemnity - except only in the case of insurers - the right to have the amount payable for compensation reviewed. It has been contended, therefore, that such a person might be liable on his indemnity, even after the workman was quite well, if the employer chose to go on paying him compensation under his agreement. The answer, I think, is that, according to the general law of indemnity, the person indemnifying could in such a case compel the employer to let him use his name in any proceedings to enforce a review." (emphasis added)
60 At the time Thompson was decided, Schedule 1(11) of the 1897 Act provided:
"Any workman receiving weekly payments under this Act shall, if so required by the employer, or by any person by whom the employer is entitled under this Act to be indemnified , from time to time submit himself for examination by a duly qualified medical practitioner provided and paid for by the employer, or such other person …" (emphasis added)