Harbrew became a third party pursuant to a third party notice issued by Suncorp claiming indemnity or contribution on the basis that Harbrew was vicariously liable for the negligent driving of Thatcher and negligent in its system of work. The allegations of negligence of Harbrew in its system of work were rejected by the trial judge and were not pursued on the appeal. Further, it was acknowledged that his Honour correctly dismissed Suncorp's claim to an indemnity against Harbrew. Nevertheless, as we have said, the trial judge of his own motion joined Harbrew as a defendant, gave judgment in the action for damages against Thatcher and Harbrew with costs, and ordered Harbrew to indemnify Thatcher with respect to damages and costs payable by him to the plaintiffs.

His Honour took this course because he concluded that:

(1) Harbrew was vicariously liable for the negligent driving by Thatcher;

(2) Harbrew was indemnified against that liability pursuant to a policy under the Workers Compensation Act 1916-1990;

(3) therefore neither Total McAleese nor Thatcher was indemnified pursuant to the policy under the Motor Vehicles Insurance Act of 1936.

Consequently he thought that it was necessary to join Harbrew as a defendant "in order to recover from the appropriate fund".

Because of the opinion which the Court has reached in relation to the proper construction of the Motor Vehicles Insurance Act of 1936, it is unnecessary to comment upon whether it was proper to join Harbrew as a defendant even if his Honour's view of the Act was correct or to consider the further order which was made that Harbrew indemnify Thatcher.

There is no reason to doubt the correctness of step (1) in that reasoning and it was not questioned on this appeal. Steps (2) and (3) involve the construction of s. 8(1)(b) of the Workers Compensation Act 1916-1990 and s. 3(1) and (2) of the Motor Vehicles Insurance Act of 1936.

Section 8(1) of the Workers Compensation Act 1916-1990 relevantly provided:

"Every employer shall insure himself and keep himself insured with the Board against all sums for which in respect of injury to any worker employed by him, he may become legally liable by way of -

(b) in the case of injury as aforesaid suffered on or after the first day of July one thousand nine hundred and sixty-three, (except such an injury in respect whereof the employer is required by some other Act to provide against such liability as prescribed by such other Act) damages arising under circumstances creating also, independently of this Act, a legal liability in the employer to pay damages in respect of that injury."

Section 3(1) and (2) of the Motor Vehicles Insurance Act of 1936 provide as follows:-

3. (1) Subject to this Act, the owner of any motor vehicle shall at all times during the registration, or as the case may be, any renewal of the registration of such motor vehicle indemnify and keep indemnified the owner and every authorised agent of the owner by a contract of insurance with the State Government Insurance Office (Queensland) or with some licensed insurer against all sums for which the owner or his estate or any such authorised agent or his estate shall become legally liable by way of damages in respect of such motor vehicle for accidental bodily injury (fatal or non-fatal) to any person (including, in respect of such injury caused by any such other person, the owner himself) in any State or Territory of the Commonwealth of Australia where such injury is caused by, through, or in connection with such motor vehicle.

Liability by way of damages referred to in the first paragraph of this subsection includes the liability (either joint or several) of an insured person -

(a) to pay or to contribute to the payment of such damages;

(b) to make contribution to any other tortfeasor under the provisions of The Law Reform (Tortfeasors Contribution, contributory Negligence, and Division of Chattels) Act of 1952;

(c) to pay damages for breach of his contract of employment evidenced by his causing such injury.

Liability by way of damages referred to in the first paragraph of this subsection does not include the liability of an employer incurred on or after 22 September 1988 to pay damages on account of accidental bodily injury (fatal or non-fatal) caused by, through or in connection with a motor vehicle to his employee (being a worker within the meaning of the Workers Compensation Act 1916-1988) in circumstances such as would give rise to an entitlement to the payment of compensation under that Act.

(2) For the purposes of any such contract of insurance and of every claim for accidental bodily injury (fatal or non-fatal) to any person caused by, through, or in connection with a motor vehicle insured thereunder, every person, other than the owner, who at any time is in charge of such motor vehicle, whether or not with the owner's authority, shall be deemed to be the authorised agent of the owner, and to be acting in relation thereto within the scope of his authority as such agent:

Provided that if at the time when any such claim arose the motor vehicle was in charge of or being driven by any person for whose acts or omissions at such time the owner apart from the provisions of this subsection would not have been liable, the liability of the owner under this subsection shall be limited to the amount for which he shall be entitled to be indemnified against such claim under the said contract."

It was conceded by the third, fourth and fifth respondents that Harbrew was not the owner of the prime mover or low loader within the meaning of s. 3 of the Motor Vehicles Insurance Act of 1936. Consequently it could not be contended that it was required to provide against liability by such Act within the meaning of the words in parentheses in s. 8(1)(b) of the Workers Compensation Act 1916-1990. His Honour was therefore correct in step (2). Step (3) depends, in particular, on the construction of the third paragraph of s. 3(1) of the Motor Vehicles Insurance Act of 1936.

The phrase "liability by way of damages referred to in the first paragraph of this sub-section" in the third paragraph of s. 3(1) is a reference to the legal liability by way of damages of the owner or any authorised agent of the owner (or the estate of either) referred to in that first paragraph; that is, it is the legal liability by way of damages of the owner or his authorised agent which in the third paragraph is expressed not to include the liability of an employer to pay damages in circumstances which would give rise to an entitlement to the payment of compensation under the Workers Compensation Act 1916-1990. The only legal liability of the first kind which would otherwise include liability of the second kind is liability of the owner or authorised agent as an employer, which requires that the owner or authorised agent also be the employer. It must be this that is referred to in the third paragraph of s. 3(1).

In our view, therefore, his Honour's construction of s. 3(1) was incorrect. It assumed that, if Harbrew was indemnified against liability for negligence of its servants pursuant to a policy under the Workers Compensation Act 1916-1990, that was sufficient to exclude the liability in respect of which Total McAleese and Thatcher would be indemnified pursuant to a policy issued under the Motor Vehicles Insurance Act of 1936. However, for reasons stated in the preceding paragraph, the effect of the third paragraph of s. 3(1) would be to exclude the liability of the second kind in the present case only if Total McAleese or Thatcher were also liable as an employer.

It was agreed between the parties to this appeal that if this Court adopted the above construction, the proper course would be to set aside the order for joinder of Harbrew as a defendant and all orders made consequent thereto and to give judgment for the plaintiffs against Total McAleese and Suncorp for damages assessed by his Honour. We would also allow interest on the judgment sum in accordance with s. 73 Common Law Practice Act 1867-1981 from 31 March 1992. We would accordingly allow the appeal, make those orders and give that judgment.

The order made below as to the costs of the third party proceedings ought to be set aside and Suncorp ought to pay Harbrew's costs of those proceedings and of the appeal.

An indemnity certificate pursuant to s. 15(1) Appeal Costs Fund Act 1973 was sought by the third, fourth and fifth respondents. That application ought to be refused. The third party proceedings were without foundation and the erroneous construction adopted by his Honour was contended for by them, both at trial and in this appeal.

The first and second respondents also sought such a certificate. They sued only the parties ultimately liable and did not raise or argue the question of construction of s. 3(1) of the Motor Vehicles Insurance Act of 1936 except to contend correctly that on either view they must succeed. In the circumstances that application ought to be granted.

SET ASIDE ORDER FOR JOINDER OF HARBREW AS A DEFENDANT AND ALL ORDERS MADE CONSEQUENT THERETO.

JUDGMENT ENTERED FOR THE PLAINTIFF AGAINST TOTAL MCALEESE AND SUNCORP FOR DAMAGES ASSESSED BY HIS HONOUR WITH INTEREST IN ACCORDANCE WITH S. 73 COMMON LAW PRACTICE ACT 1867-1981 FROM 31 MARCH 1992.

THE ORDER MADE BELOW AS TO THE COSTS OF THE THIRD PARTY PROCEEDINGS IS SET ASIDE AND SUNCORP IS TO PAY HARBREW'S COSTS OF

THIRD, FOURTH AND FIFTH RESPONDENTS' APPLICATIONS FOR AN INDEMNITY CERTIFICATE REFUSED.

FIRST AND SECOND RESPONDENTS' APPLICATIONS FOR AN INDEMNITY CERTIFICATE GRANTED

CATCHWORDS: MOTOR VEHICLES - COMPULSORY LEGISLATION - appellant/third party employer joined as defendant by trial judge prior to judgment having concluded appellant vicariously liable for negligent driving of defendant 1 who was not indemnified per s. 3(1) of Motor Vehicles Insurance Act - whether correct construction of s. 3(1)

MOTOR VEHICLES INSURANCE ACT 1936, s. 3(1), (2)

INSURANCE MOTOR VEHICLE - COMPULSORY LEGISLATION - appellant/third party employer joined as defendant by trial judge prior to judgment having concluded appellant vicariously liable for negligent driving of defendant 1 who was not indemnified per s. 3(1) of Motor Vehicles Insurance Act - whether correct construction of s. 3(1)

MOTOR VEHICLES INSURANCE ACT 1936, s. 3(1), (2)

Counsel: Cullinane Q.C. with him D. Reid for the Appellant

S. Jones Q.C. with him Baulch for the First and Second Respondents

Fleming Q.C. with him Stenson for the Third, Fourth and Fifth Respondents

Solicitors: Watkins Stokes Templeton t/a for John Taylor & Co. for the Appellant

Quinlan Miller & Treston t/a for Macrossan & Amiet for the First and Second Respondents

Sly & Weigall Cannan & Peterson t/a for Barry Beaverson & Stenson for the Third, Fourth and Fifth Respondents

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Reasons for Judgment of the Court delivered the 26th day of June 1992

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2. SET ASIDE ORDER FOR JOINDER OF HARBREW AS A DEFENDANT AND ALL ORDERS MADE CONSEQUENT THERETO.

3. JUDGMENT ENTERED FOR THE PLAINTIFF AGAINST TOTAL MCALEESE AND SUNCORP FOR DAMAGES ASSESSED BY HIS HONOUR WITH INTEREST IN ACCORDANCE WITH S. 73 COMMON LAW PRACTICE ACT 1867-1981 FROM 31

THE ORDER MADE BELOW AS TO THE COSTS OF THE THIRD PARTY PROCEEDINGS IS SET ASIDE AND

4. SUNCORP IS TO PAY HARBREW'S COSTS OF THOSE PROCEEDINGS AND OF THIS APPEAL.

5. THIRD, FOURTH AND FIFTH RESPONDENTS' APPLICATIONS FOR AN INDEMNITY CERTIFICATE REFUSED.

6. FIRST AND SECOND RESPONDENTS' APPLICATIONS FOR AN INDEMNITY CERTIFICATE GRANTED