Onus of proof: liability of employer
62 The uncertainties relating to the contractual arrangements and the practical steps which might have been taken, or which arguably should have been taken, by Dee Why, give rise to a real issue as to the party on whom lies the burden of proof with respect to factual matters relevant to the liability of the employer.
63 Restrictions on the ability of an injured worker to sue his or her employer, in circumstances where a cause of action may be available against joint tortfeasors, have given rise to significant issues of statutory construction, particularly in relation to hypothetical proceedings and transitional issues upon amendments to the Workers Compensation Act: see Clout Industrial Pty Ltd (In liq) v Baiada Poultry Pty Ltd (2004) 61 NSWLR 111. Amendments to the Workers Compensation Act, introducing a threshold, came into force on 27 November 2001. The present proceedings appear to have been commenced, in some form, on 26 November 2001, against the employer, but possibly not against other parties. As already noted, the plaintiff discontinued against his employer. In any event, no transitional issue is raised in argument in the present case, the matter being dealt with on the basis that the 15% permanent impairment threshold applied.
64 The question as to the party bearing the onus of proof in determining any reduction of the amount payable by the joint tortfeasor pursuant to s 151Z(2)(c) has not been authoritatively determined. In Forstaff Blacktown Pty Ltd v Brimac Pty Ltd [2005] NSWCA 423 (5 December 2005) a view as to the party bearing the burden of proof was expressed by McColl JA, in a passage to which reference will be made below. Hodgson JA, however, expressed a contrary view and Ipp JA expressed no opinion on the issue. Hodgson JA held that it was not necessary to determine the matter in those proceedings and Ipp JA implicitly agreed with that view.
65 The issue, as identified by McColl JA in Forstaff at [82] and [83] concerned the onus of proof in assessing what the plaintiff worker's damages would be if assessed under Part 5, Div 3 of the Workers Compensation Act for the purposes of s 151Z(2)(d). That provision requires that the amount of contribution that the joint tortfeasor is entitled to recover from the employer is to be determined as if the whole of the damages were assessed in accordance with the provisions of Part 5, Div 3. However, once it is accepted that the plaintiff does not reach the threshold under Part 5, Div 3, there is no issue as to contribution.
66 Under s 151Z(2)(c), that which must be assessed is the contribution which the joint tortfeasor would be entitled to recover from the employer, but for Part 5. That does not raise an issue as to the quantum of damages, because, absent Part 5, they may be assumed to be the same common law quantification which would be made in relation to both the employer and the joint tortfeasor. The question of burden of proof in that case is solely related to the respective liabilities of the tortfeasors, a matter which is, arguably, of no interest to the plaintiff. The plaintiff is entitled to a judgment against each joint tortfeasor for the full amount of his or her loss; questions of apportionment may arise, but only in proceedings for contribution: see Timberland Property Holdings Pty Ltd v Bundy [2005] NSWCA 419.
67 In Forstaff, at [91] McColl JA concluded:
"The effect of s 151Z(2), if applicable, is that a plaintiff worker cannot recover damages against the non-employer tortfeasor unless (assuming that person is entitled to contribution from the employer) the s 151Z(2)(c) and (d) calculations are undertaken. The plaintiff worker is at risk of not having discharged the onus of proving damages if that calculation cannot be performed. In such circumstances, in my view, the plaintiff worker bears both the legal and evidentiary onus of establishing what, if any, damages would be assessed for the purposes of the hypothetical s 151Z(2)(d) exercise."
68 Although there is a suggestion in the second sentence of this extract that there is only one "calculation" to be performed, it is clear from the previous sentence that there are in fact separate calculations to be undertaken pursuant to paragraphs (c) and (d). For present purposes it is not necessary to consider whether the burden of proof would be the same in each case, but it is clear that the terminology differs. Thus, paragraph (c) commences with an assumed amount of damages, being the loss established by the worker, and requires that amount to be "reduced" by another amount which takes account of an hypothetical contribution recoverable from the employer. Paragraph (d) is solely concerned with the calculation of the contribution.
69 The reasoning of McColl JA was directed to establishing the correct approach by analogy with common law principles. Because s 151Z(2) is silent as to where the burden of proof lies, her Honour assumed that there was no intention to vary the analogous common law principle. By contrast, as her Honour noted, when it was intended to place the burden of proof of mitigation on the plaintiff, contrary to the common law position, that was expressly done in s 151L(3). As her Honour then reasoned, an analogous situation at common law was a claim by a dependant upon the death of a worker. In that case, the loss to be compensated was the loss resulting from the death of the individual reduced by any benefits flowing from his or her death, from whatever source. The principle espoused was that set out in Stewart v Dillingham Constructions Pty Ltd [1974] VR 24 at 28, applying, in turn, Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601.
70 However, the analogy is by no means complete: the loss suffered by the plaintiff in a dependency claim required the calculation of two elements, one of which was to be offset against the other. Each was, in the language of Walsh J in Currie v Dempsey (1967) 69 SR(NSW) 116, an essential element in the cause of action. The various provisions of s 151Z do not affect the plaintiff's cause of action. They depend entirely upon reapportionment of the contributions as between an employer and a non-employer joint tortfeasor. The general principle is that a plaintiff is entitled to a judgment in full against each concurrent tortfeasor, whatever the contribution one might be entitled to recover from the other: see Speirs v Caledonian Collieries Ltd [1957] SR (NSW) 483 at 503 (Street CJ and Herron J) and at 511-512 (Myers J). That principle has not been varied by s 151Z of the Workers Compensation Act: see Oxley County Council v MacDonald [1999] NSWCA 126 at [51] (Sheller JA), applied in Timberland Property Holdings Pty Ltd v Bundy [2005] NSWCA 419 at [57]. If the statutory scheme provides that the judgment against one tortfeasor must be adjusted, on account for example of workers compensation payments, the amounts may not be the same. Nor has it ever been held that an injured worker cannot succeed unless he or she can establish with precision the amount received on account of workers compensation payments, which must be offset against the liability of the employer.
71 Thus, in respect of the statutory reduction on account of possible liability of the employer, pursuant to s 151Z(2)(c), the preferable approach is that adopted by Hodgson JA in Forstaff at [5], where his Honour concluded that different questions may arise depending on whether there is or has been a proceeding against the employer. Thus his Honour stated:
"However, in my opinion the position concerning onus of proof may be different if the proceedings brought by the worker against the person other than the employer are heard on their own, in the absence of or prior to the hearing of contribution proceedings brought by that person against the employer. It seems to me that that person, as defendant in the proceedings brought by the worker, must have the onus of proving the elements set out in par. (c) in order to obtain any reduction of damages: that is, there will be no reduction of damages … unless the defendant proves that it would, but for Part 5 of the Workers' Compensation Act, be entitled to recover an amount from the employer and that the contribution actually recoverable is nil."
72 Applying that principle, no question arises in the present case as to whether the plaintiff suffered a degree of permanent impairment of 15% or more: it is conceded on all sides that he did not. However, if the present Respondents seek to establish that the employer bore a particular level of liability, they would need to establish the facts to support that conclusion. In the present case, the Appellant conceded (as he appears to have done at trial) that Dee Why might bear 10% of the responsibility for the accident. The Respondents contended on appeal for a far higher percentage, Bovis submitting an apportionment to the employer of between 50% and 60%, whilst Dalma submitted that the employer's responsibility was "at least 50%".
73 As noted above, at the hearing the Respondents reneged on the position taken in their written submissions, namely that this Court should apportion liability as between either or both of them and the employer. For reasons already noted, this Court should apportion liability.
74 In other cases involving labour hire employers, including TNT v Christie, the liability of the employer has been fixed at 20%: see also Emoleum (Aust) Pty Ltd v Bond [2004] NSWCA 352 at [74]-[78] (Mason P, Giles JA and Santow AJA agreeing). However, that should not be treated as a standard; rather the liability of the employer must be assessed on the facts of each case. A high percentage was suggested in the present case because Dee Why had supplied the supervisor as well as the labourers. If, to a significant extent, the supervisor had been negligent in allowing the penetration to remain unmarked and uncovered, that liability should be treated as the liability of his employer as well as that of Dalma. On the other hand, it was not established that Mr Uremovic had any position in Dee Why other than that of a supervisor available for appointment to a building contractor.
75 Nevertheless, the knowledge of the supervisor should be attributed to Dee Why because he was supplied by Dee Why to carry out that function. Having recently taken over employment of the men working for Dalma who had knowledge of the work to be undertaken and the means available to them to do it, in circumstances where there was some urgency in continuing the work following the collapse of Emerson, it is not clear what specific steps could reasonably have been taken by Dee Why. No doubt one might infer that a senior manager from Dee Why might have inspected the site with Mr Uremovic during the two or three weeks between the time it took over the employment of the men and the date of the accident. Had that step been taken, it might have been reasonable to expect that the penetration, and the potential risk it created, might have been identified. By contrast, Dalma and Bovis were in control of the site on a daily basis and must between them bear the bulk of the responsibility. In the circumstances an apportionment of 20% liability to the labour hire company is appropriate.
76 It may be seen as something of an irony that the division of responsibility between subcontractor and employer results in the subcontractor not obtaining the benefit of the threshold under the Workers Compensation Act. However, that is no doubt a factor to be weighed in the balance against the benefits which otherwise flow from the division of functions between contractor and employer. It was not suggested that the Workers Compensation Act should apply otherwise than as discussed above.