Workers Rehabilitation and Compensation Act 1986; Workers Compensation Act 1971; Workmen's Compensation Act 1932; Wrongs Act 1936 and Supreme Court Act.

Martin v Stratman and Anor (1992) Aust TR 61, 732 and Public Transport Commission of NSW v J. Murray-More (NSW) Pty Ltd [1975] HCA 28; (1975) 132 CLR 336, distinguished. Burke v Yurilla SA Pty Ltd Judgment No. 3027; Glover v Macdougall (1976) 2 NSWLR 359; Johanson v Dixon [1978] VicRp 23; (1978) VR 243; Merriweather v Nixan [1799] EngR 669; (1799) 8 TR 186; Weld-Blundell v Stephens (1920) AC 956; Bakker v Joppich and Bitumax Pty Ltd (1980) 25 SASR 468 and James v The Workers Compensation Corporation (1991) 56 SASR 414, considered.

Counsel for plaintiff: Mr D N Bamford

Solicitors for plaintiff: Duncan Hannon

Counsel for defendants Ziersch: Mr D M Quick QC with

Solicitors for defendants Ziersch: Gun and Davey

Counsel for defendants Koch: Ms R A Layton QC with Mr A Battiston

JUDGE1 LEGOE ACJ This is a case stated. Three specific questions of law have been reserved in the case for consideration of this court pursuant to s.49 of the Supreme Court Act. This court will generally confine its answers and reasons to the questions posed in the special case: Burke v Yurilla S.A. Pty Ltd, Judgment No.3027, unreported published on 18 September 1991. By virtue of Rule 72.05 the special case shall (a) be divided into paragraphs numbered consecutively and (b) state concisely the facts including reference to any documents as may be necessary to enable the questions to be answered: Glover v Macdougall (1976) 2 NSWLR 359; Johanson v Dixon [1978] VicRp 23; (1978) VR 243. "The case stated reads: 1. The plaintiff issued proceedings against the defendants on 5th December 1991 seeking damages for negligence, for breach of contract and statutory duty. The Statement of Claim alleges that:- (a) The plaintiff was employed by the first defendant as a cabinet maker. (b) The first defendant being cabinet makers contracted to install built in kitchen furniture for the second and third defendants. (c) The fourth defendant was an electrician engaged to

perform electrical work on the kitchen for the second and third defendants. (d) The plaintiff whilst performing work in the kitchen of the second and third defendants, suffered an electric shock from exposed wires which resulted in injury and loss.

A copy of the said Statement of Claim is annexed hereto and marked 'Annexure 1'.

2A. The first defendant filed a Defence to the said Statement of Claim. A copy of the said Defence is annexed hereto and marked 'Annexure 2'.

The second and third defendants filed a Defence to the said Statement of Claim. A copy of the said Defence is annexed hereto and marked 'Annexure 3'.

On 31st March 1992 the first defendant issued Contribution Notices against the second and third defendants. Copies of the said Notices are annexed hereto and marked 'Annexure 4'.

On 17th July 1992 the second and third defendants issued a Contribution Notice against the first defendant. A copy of the said Notice is annexed hereto and marked 'Annexure 5'.

On 23rd July 1992 the first defendant issued an Application to strike out the Contribution Notice issued by the second and third defendants being Annexure 5. A copy of the said Application is annexed hereto and marked 'Annexure 6'.

On 21st August 1992 the said Application came on for hearing before The Honourable Justice Cox who after hearing submissions considered the matter suitable to be referred to the Full Court of this Honourable Court.

The first, second and third defendants agree for the purposes of this case stated that the first defendant was an

employer of the plaintiff and that compensation has been paid by the first defendant to the plaintiff pursuant to the provisions of the Workers Rehabilitation and Compensation Act 1986 ('the Act') in relation to an alleged compensable disability being the injury referred to in the said Statement of Claim.

The issues arising for determination of the Full Court are:- (a) Are the second and third defendants prevented from issuing a Contribution Notice against the first defendant by virtue of sub-section 54(4b) of the Workers Rehabilitation and Compensation Act, 1986 ('the Act')? (b) Do the words 'other than' in the phrase 'other than the employer' in sub-section 54(4b)(b) mean 'as well as' so that sub-section 54(4b) applies even if the employer is a party to the action. (c) Do the words 'other than the employer' appearing in sub-section 54(5)(b) have the same meaning as in sub-section 54(4b)(b) of the Act?"

Annexure 1 may be summarised for the purpose of the case stated as a claim by the worker (Mr Andrews) alleging: (1) negligence or breach of contract against the employers (Mr and Mrs Ziersch); (2) negligence against the owners (Mr and Mrs Koch) of the premises where the alleged negligence and breach of statutory duty occurred; and (3) negligence against the electrical sub-contractor (Mr Wapper) engaged by the owners prior to the time when Mr Andrews did his work at the premises.

Mr and Mrs Ziersch are the first defendants in the action. Mr and Mrs Koch are the second and third named defendants.

Annexure 2 is the defence of the first defendants who disputed the claim in negligence and breach of contract.

Annexure 3 is the defence of the second and third defendants who also disputed the claims against them for negligence and breach of statutory duty.

The first defendants issued a separate Contribution Notice (Annexure 4) against each of the second and third named defendants. The second and third named defendants issued a Contribution Notice against the first defendants (Annexure 5) which is the subject of the case stated.

The second and third defendants' notice to the first defendants reads: "TO: The abovenamed defendants DAVID and GLENDA ZIERSCH trading as D M and G M ZIERSCH 24 Julia Terrace KADINA S A 5554 TAKE NOTICE that in this action the defendants TREVOR

KOCH ('the second defendant') and SHYLIE KOCH ('the third defendant') claim relief against you as follows:- Contribution in respect of any sum which the plaintiff may recover against the second and third defendants to the extent of such amount as may be found by the Court to be just and equitable having regard to your responsibility for such damages on the grounds that your negligence and/or breach of statutory duty contributed to the incident described in paragraph 7(h) of the Statement of Claim."

The first-named defendants' application dated 23 July 1992 (Annexure 6) includes:- "3. That the Court grant the first defendants' Application herein pursuant to Rule 55.11(w) to strike out the Contribution Notices of the second and third defendants filed herein on or about the 17th day of July 1992 and served upon the first defendants on the 20th day of July 1992."

This application is made pursuant to Rule 55.11(w) which reads:- "On any hearing of an application for directions the Court may give such directions as are then proper with respect to: ... (w) the striking out of any pleading, affidavit or document filed in the action;".

The real issue which was argued before this court turns on the proper answer to issue 9(a) of the case stated, namely, what meaning should be given to the words in s.54(4b)(b) of the Workers Rehabilitation and 5 Compensation Act 1986 (hereinafter referred to as the "Compensation Act") i.e. "(b) action is taken against a person other than the employer for damages in respect of the disability" and whether - "the other person has no right to recover contribution from the employer".

Clearly, the notice that was issued by the second and third defendants and served on the first defendants is a "contribution notice". Rule 37 of the Supreme Court Rules states that where a defendant who has filed an appearance

"claims

against another party ... (a) that he is entitled to contribution or indemnity; ... the defendant may issue against a person not already a party to the action in the same manner as a summons a third party notice in Form 10 and may file and serve on a third party who is already a party to the action a contribution notice in the Form 11."

There must be a right to contribution or indemnity other than by virtue of the rule which is purely procedural in its operation, see Lunn Civil Procedure South Australia p.8260.

Contribution occurs where a tortfeasor who has paid the whole, or more than his fair share, of a plaintiff's damages, receives payment of the whole or part of the sum so paid from the other tortfeasor. Where the contribution is for the whole of the sum paid, it is referred to specifically as an indemnity, see Joint Torts and Contributory Negligence - A Study of Concurrent Fault by Professor Glanville Williams (1951) (Stevens Publication) Ch 4, para.25 on p.80. The general rule at common law that "there is no contribution between tortfeasors" was taken to be settled by Merriweather v Nixan [1799] EngR 669; (1799) 8 TR 186; 101 ER 1337, approved in Weld-Blundell v Stephens (1920) AC 956 at 976 (HL). Professor Glanville Williams states that this rule apparently rested on the maxim ex turpi causa non oritur actio. As Professor Glanville Williams goes on to point out at pp.80 and 81 (supra), this rule applied not only to claims for contribution towards damages, but also to claims for contribution towards the costs of defending proceedings, and was extended from joint tortfeasors to several concurrent tortfeasors; see the numerous authorities referred to in footnotes 3 and 4 on p.81.

The common law prohibition against contribution between joint tortfeasors was swept away by the apportionment legislation introduced in England in the mid-1930's and in South Australia in 1939 when s.25 was added to the Wrongs Act of 1936. Section 25(1)(a) and (b) was introduced in that year. That section followed the English provision in Acts No.25 and 26 of George V Ch 30 s.6(1). By sub-sections (a) and (b) of s.25(1), damage suffered by any person as a result of a tort, whether a crime or not, and judgment recovered against any tortfeasor liable in respect of that damage was no longer a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage. Sub-section (b) deals with the case where more than one action is brought in respect 7 of that same damage and is not relevant in this stated case.

In 1959, s.25(1)(c), (ca) and (d) were inserted into the Wrongs Act of 1936. Section 25(1)(c) reads: "Any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would at any time have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought."

By sub-s.(ca) the tortfeasor becoming liable in respect of the damage was empowered to recover from the third party or commence proceedings for such recovery by enacting a number of enabling provisions contained in that sub-section.

Sub-section (d) of s.25 enabled the third party to recover on contribution even where the tort or torts causing the damage was or were committed by the husband or wife of the person suffering the damage.

In Bakker v Joppich and Bitumax Pty Ltd (1980) 25 SASR 468 at 473, Wells J summed up the effect of these provisions in any claim for contribution by stating that the court should determine the contribution claimed by asking three questions. First, "has the defendant the right to institute a claim at all - that is, has he satisfied the conditions precedent to institution?"

Secondly, "if he has the right, is the third party called on to make a contribution of any amount - that is, is the third party properly described as one who 'is, or would at any time, have been liable in respect of the same damage'?" And thirdly, "if it is proper so to describe the third party, what amount ought to be found by the court to be a 'just and equitable' contribution by the third party?" Wells J added that in answering the first question it "depends upon whether the defendant is a 'tortfeasor liable in respect of (the) damage' 'suffered by' the plaintiff; (c) of sub-s.(1) of s.25."

For the purpose of determining the questions of law in this case, I shall proceed on the basis that the three questions posed by Wells J in Bakker v Joppich and Anor (supra) are answered in the affirmative. Workers Compensation Legislation. For the purpose of answering the questions in this case, it is not necessary, in my opinion, to go further back than the Workers Compensation Act of 1971 which repealed the 1932 Workmen's Compensation Act. Section 71 of the 1932 Act was in similar terms to s.84 of the 1971 Act. Part VI of the 1971 Act preserved alternative remedies (s.82), whereby inter alia except as expressly provided in the Act, nothing in the Act affected any liability which existed independently of the Act. Some limitations to this general preservation of common law rights were contained in the further sub-sections to s.82 which are not relevant in this case.

Section 84 of the 1971 Act made provision for claims where remedies were sought by the worker against the employer and a stranger. By that section, where the injury for which compensation is payable under the Act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof, then the provisions in the sub-sections of s.84 applied. The worker could take proceedings both against the third party to recover damages and against the employer for compensation. Where the worker received money from a third party in respect of any injury and compensation under the Act, the worker shall repay to the employer such amount of that compensation as does not exceed the amount recovered from the third party (sub-s.(b) of s.84). By sub-s.(c), the employer had a first charge on moneys payable by the third party to the worker to the extent of any compensation payable by the employer. Sub-s.(d) provided the employer with a statutory indemnity for so much of the compensation paid to the worker as did not exceed the damages to which the worker was or was entitled but had not received to recover against the third party. Finally, by sub-s.(e) the payment by the third party to the employer, of money pursuant to the previous paragraph should be a satisfaction of the third party's liability to the worker. The section was silent on the rights of third parties to claim contribution from any other tortfeasor.

In 1986 the Compensation Act was passed whereby the right of the worker to pursue common law remedies in addition to claims for compensation was considerably reduced. The 1986 Compensation Act also encompassed certain provisions designed to protect the employer in respect of those liabilities. Compensation in the 1986 Act was defined in s.3 to include "any monetary benefit payable under this Act". Damage or damages were not defined (except in s.54(8) to which I will come back later). A body known as the Workers Rehabilitation and Compensation Corporation was established under Part II of the Act. "Non-economic loss" was defined in s.3 to mean: "(a) pain and suffering; (b) loss of amenities of life; (c) loss of expectation of life; (d) any other loss or detriment of a non-economic nature."

Part IV made provision for compensation under the Act including in Division I - conditions under which a disability is compensable. The right to compensation is provided for in s.30. Certain evidentiary provisions are contained in s.31. Division II made provision for compensation for medical expenses. Separate provision is made in Division III for compensation for property damage, e.g. to therapeutic appliances, clothes, personal effects or tools of trade and the like. Division IV is an important provision relating to compensation after 1986 which is provided for as income maintenance. Weekly payments are provided for in s.35. The statutory conditions for payment are discussed in James v The Workers Compensation Corporation (1991) 56 SASR 414 at 421-422 per Mullighan J. Discontinuance of weekly payments is provided for in s.36. Suspension of weekly payments is provided for in s.37. Review of weekly payments is provided for in s.38, and economic adjustments to weekly payments in s.39. Division V is important in relation to this case where provision is made for non-economic loss. Section 43 provides that where a worker suffers a permanent disability and the disability is compensable under the Act then the worker is entitled (in addition to any entitlement apart from the section) "to compensation for non-economic loss by way of a lump sum". The lump sum is restricted in quantum to the percentage of the prescribed sum determined by reference to the Third Schedule. The Third Schedule lists a number of disabilities with percentages of a prescribed sum payable in the last column. The prescribed sum is defined in s.43(11) of the Compensation Act. That sum varies according to the formula in the sub-section.

Section 46(1) provides for liability to pay compensation and states that "subject to this section, the Corporation is liable to make all payments of compensation to which any person is entitled under this Act". The Act also contains provisions for exempt employers.

Exempt employers do not have to register under the Act. Exempt employers have a liability to make all payments of compensation to which any person becomes entitled in consequence of the occurrence of compensable disability - s.46(2).

The notices required to be given of disabilities and the form in which claims for compensation are to be made are set out in Division VIII, see ss.51-53.

Section 54 of the Act provides: (1) Subject to sub-s.(2), no liability attaches to an employer in respect of a compensable disability arising from employment by that employer except - (a) a liability under this Act; or (b) a liability at common law for non-economic loss or solatium."

Sub-section (2) does not affect the liability of an employer arising out of the use of a motor vehicle being a liability against which the employer was or ought to have been insured under the law of compulsory third-party motor vehicle insurance. By sub-s.(3) of s.54, the court before which action is brought against an employer for non-economic loss is to make due allowance for any lump sum paid or payable under Division V or VI to the person by or on whose behalf the action is brought. Sub-s.(4) provides that where an action is brought at common law against an employer for non-economic loss arising from a compensable disability which is not a claim in respect of the use of a motor vehicle then "the damages awarded in respect of that loss must not exceed 1.4 times the prescribed sum".

In 1988, important amendments were made to s.54 by adding sub-s.(4a) and sub-s.(4b). Sub-section (4a) is of no particular relevance in this case as it is concerned with prohibiting a worker from taking action against another worker where the compensable disability is attributable to the negligence of that other worker who is acting in the course of employment with the same employer and the negligence does not arise from or in the course of serious and wilful misconduct. The only relevance, in my opinion, is that the sub-section cuts cutting down on the pre-existing rights of a worker to sue, in that case, another worker. Sub-s.(4b) provides for the situation where if a worker suffers a compensable disability, not arising out of the use of a motor vehicle, which gives rise to liability of the employer as provided in sub-s.(2), and action is taken against a person "other than the employer for damages in respect of the disability, then the other person has no right to recover contribution from the employer".

Sub-section (5) was enacted in 1986. In 1988 a significant amendment was also made to sub-s.(5). The sub-section provides for the entitlement of the person paying or by whom compensation is payable, to recover that amount of compensation in accordance with sub-s.(7) of s.54. However, sub-s.(5) varies from sub-s.(4b) in that para.(b) of sub-s.(5)states - "Where ... (b) a right of action exists against a person other than the employer for damages in respect of the disability". Sub-section (4b)(b) by contrast states "Where ... (b) action is taken ...". Then in the substantive part of sub-s.(5) it states that the person by whom compensation is paid or payable is entitled to recover "from that other person", i.e. the person other than the employer, the amount of compensation in accordance with sub-s.(7). The words underlined have been added in the 1988 amendment to the section.

By amending s.54 in 1988, Parliament has unequivocally prohibited any "right to recover contribution from the employer". Whether there was any such right prior to 1988 is not a matter which concerns this court. Section 54(5) and (7) give the person who has paid or by whom the compensation is payable (usually the Corporation) an entitlement to recover that amount of compensation. Since the 1988 amendment that compensation can be recovered from "that other person" (the third party). Sub-section (4b) expressly prohibits recovery of any contribution from the employer.

The prohibition in sub-s.(4b) expressly denies recovery of contribution, whereas sub-s.(5) expressly entitles the person by whom compensation has been paid or is payable to recover that compensation from "that other person", i.e. the person other than the employer.

Sub-section (6) provides that where a compensable disability arises out of the use of a motor vehicle which the employer should have insured and "compensation is paid or payable by the Corporation is entitled to recover the amount of the compensation under (the) Act in respect of the disability ..." then "the Corporation in accordance with sub-s.(7)" of s.54. The machinery provisions for claims under sub-ss.(5) and (6) are provided in sub-s.(7). Sub-section (7) in paragraphs (d)(i)(ii) and (iii), (e), (f) and (g) entitle the person claiming under sub-ss.(5) or (6) to recover the compensation subject to the qualifications therein.

Sub-section (8) defines "damages" to include "any form of compensation payable apart from this Act in respect of a compensable disability". This sub-s.(8) clearly restricts the "damages" referred to in sub-s.(4b) to the amounts in respect of which "action is taken against a person other than the employer".

Section 64 of the Compensation Act provides that the Corporation shall establish and maintain a fund entitled the "Compensation Fund". Sub-section (2) states that the compensation fund is to consist of a number of financial sources. Sections 65 and 66 provide for the imposition of levies on employers who are registered under the Act. Exempt employers are dealt with separately in Part V Division II (s.63). The levies payable by exempt employers are provided for in s.68.

Under the 1971 Workers Compensation Act employers were required to be insured in respect of their liability to pay compensation. Section 105 of the 1986 Compensation Act provides: "105 (1) An employer who is registered under this Act, and an employer who is not required to be registered because of an exemption under the regulations, is insured by the Corporation, subject to terms and conditions prescribed by regulation, against any liability that may arise apart from this Act in respect of a compensable disability arising from employment (being employment to which this Act applies) by the employer."

Thus it is readily apparent that the 1986 Act and the 1988 amendments have made substantial alterations and restrictions to the pre-existing rights of workers to make claims for damages at common law as well as restrictions on third parties to recover contribution from employers and others in respect of which compensation payable under the 1986 Act has been made or in respect of which there is a liability to make such a payment.

In summary, the changes brought about in 1986 for the recovery of compensation and the prohibition to recover any contribution include the following highlights. 1. At common law where joint tortfeasors are sued together no more than a single judgment can be entered against those who are held liable. The judgment may be executed in full against any of the defendants who are named in the judgment - Glanville Williams on Joint Tort and Contributory Negligence (1951) p.63 para.21, and p.67 ibid, "no more than one judgment can be given in the plaintiff's favour in the one action".

2. At common law there is no right to contribution between joint tortfeasors, Glanville Williams (supra) at p.80, para.26.

3. Rights of indemnity may arise from any obligation created by statute, Halsburys Laws of England Vol.18, para 9740.

4. These common law rules were changed for any torts committed after 22 November 1939 when s.25(1)(a) and (b) and ss.26 and 27 of the Wrongs Act were enacted. Section 25(1) stated "where damage is suffered by any person as a result of a tort ... (a) judgment recovered against any tortfeasor liable in respect of that damage suffered shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage" - Halsbury 3rd edn, vol.37,

5. After 10 December 1959 "any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would at any time have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise ..." s.25(c) of the Wrongs Act and Halsbury (supra), vol.37, para.247. Further rules substantive and procedural were added in 1959 to enable contribution claims to be made.

6. Workers compensation legislation in South Australia had always preserved the right of workers to take action against employers and other persons such as "third parties" for any rights at common law. Section 71 of the 1932 Workmen's Compensation Act, enabled the employer to claim an indemnity to recover the statutory amount from persons other than the employer who were liable under Part III of the Wrongs Act; Price v Commissioner of Highways (1968) SASR 329. Section 84 of the 1971 Worker's Compensation Act was the successor to s.71 of the 1932 Act; see Martin v Stratman and Anor (1992) Australian Torts Reports 61,732 at 61,739 to 61,742 where Cox J discusses generally s.84 of the 1971 Act, the

rights of an employer to claim an indemnity and the right of an employer to set-off amounts paid by way of compensation from the amounts ordered to be paid as 18 damages for negligence. Cox J concludes at p.61,742 that "it is not open to an employer who has paid workers compensation to a successful plaintiff to claim indemnity or contribution towards those compensation payments under s.27a(3) of the Wrongs Act from a tortfeasor who is concurrently liable to the worker, whether in a damages action brought by the worker against the two tortfeasors or in some separate proceedings". Cox J applied the law in Public Transport Commission of New South Wales v J. Murray-More (NSW) Pty Ltd [1975] HCA 28; (1975) 132 CLR 336 per Gibbs J (as he then was) at p.351, and expressly disagreed with Bray CJ that compensation payments are damages, see Martin v Stratman (supra) at p.61,742.

7. In 1986 substantial changes were made to the rights of persons to pursue common law remedies when compensation payments had been paid or were payable by the Corporation. Relevant changes made by the 1986 Act include: (a) The creation of the statutory Corporation was created; (b) The empowering of the Corporation to deal with injured workers both in terms of their rehabilitation and compensation payments pursuant to the Act. (c) The creation of a statutory fund pursuant to s.64 of the Act. (d) The abolition of compulsory insurance by employers pursuant to s.105 of the Act. For certain limited purposes the Corporation became the insurer.

Further observations that can be made of the legal implications arising out of the 1986 Act include: (i) The Corporation can not in any sense be described as a "tortfeasor"

• compare the statutory liabilities and duties of the Corporation under the 1986 Act to the provisions of s.25(1)(c) and (ca) and (d) of the Wrongs Act. (ii) Liability to contribution arises under s.25(1)(c) of the Wrongs Act where two (or more) tortfeasors are liable for that damage. Damages in that section do not mean a sum of money. Damages encompass the hurt, the deprivation of working and recreation abilities but do not include compensation payable to a worker, which since 1986 is the responsibility of the Corporation. I gratefully adopt the submissions of counsel for the first defendants, Mr David Quick QC for this summary of the relevant changes and comments on the effect of the 1986 legislation so far as the rights of persons to claim contribution or indemnity are concerned. Conclusion. Counsel for the second and third defendants, Ms Robyn Layton QC presented the court with submissions in her traditionally forceful and carefully analytical manner. She urged the court to answer the issues in the negative and to find that the second and third defendants did have a right in law to pursue the contribution claim in the circumstances of this case.

First, Ms Layton QC submitted that where action is taken by a worker against both an employer and a wrongful third party there is no restriction on those parties to claim contribution and or indemnity against each other. Section 54(4b)(b) of the Compensation Act 1986 as amended in 1988 should be interpreted in her submission as referring only to a situation in which an injured worker who has been paid compensation, sues a person(s) which do(es) not include the employer. Authorities cited to support this fundamental submission seeking negative answers by this court to all these issues are Public Transport Commission of New South Wales v J. Murray-More (NSW) Pty Ltd (supra) and Price v Commissioner of Highways (supra).

The Murray-More case was a decision which turned on whether an employer could claim indemnity against a concurrent tortfeasor pursuant to the New South Wales counterpart to the South Australian Workers Compensation Act 1971, s.84(1)(d). As per Cox J in Martin v Stratman (supra) at p.61,739 (second column), the High Court in Murray-More held that an employer's claim to an indemnity "was given only to an employer who had no liability to the worker in relation to the compensable injury other than a statutory liability to pay workers compensation".

Cox J in Martin v Stratman (supra) applied the High Court decision to the South Australian s.84(1)(d) of the 1971 Act. But the issues before this court are concerned with a completely different legislation scheme and different prohibitions (since 1988) as to the relief which may be recovered by persons "other than the employer" as well as different persons (namely the Corporation or exempt employer) who can now recover against persons "other than the employer". The whole structure for compensation entitlements has been radically altered, e.g. limited common law claims by employees (non-economic loss only which is now part of the compensation payable by the Corporation), rights of recovery of compensation payments restricted to persons who paid or by whom such compensation is payable, and a total prohibition against recovery by contribution claims to any damages sought by persons "other than the employer". Both the Murray-More case and Martin v Stratman (supra) which applied the High Court decision and Price v Commissioner of Highways (supra) are distinguishable from the relevant provisions in s.54 of the 1986 Compensation Act as amended in 1988. Price v Commissioner of Highways (supra) was neither followed nor applied by Cox J in Martin v Stratman (supra).

I accept that part of Ms Layton QC's submission that s.54(1)(a) and (b) restricts the employer's liability in respect of a compensable disability arising from employment by that employer to: (a) a liability under this Act - (weekly income maintenance, medical expenses, rehabilitation services and the like); or (b) a liability at common law for non-economic loss or solatium.

This restriction is further qualified by any liability of an employer in respect of liability arising out of the use of a motor vehicle when the employer has a liability to insure the motor vehicle or ought to have done so (sub-s.(2) of s.54). Sub-s.(3) makes provision for due allowance by the court in assessing non-economic loss "for any lump sum paid or payable under Division V or VI" of the Act. Sub-s.(4) restricts the quantum of damages for non-economic loss to a maximum of 1.4 times the prescribed sum (see sub-s.(1) of s.54 and s.43(11) of the Act for the formula fixing the "prescribed sum")

I further accept and agree with Ms Layton QC when she submits that the Wrongs Act is a general Act. The Wrongs Act enables tortfeasors if sued either singly or jointly to seek contribution or indemnity from the other or each other (s.25(1)(c) of the Wrongs Act and s.26 which empowers the court to make contribution orders between the parties to the action).

But I do not accept, on the contrary, I would reject, that part of Ms Layton QC's argument where she contends in point 7 of her submissions, that the modification of the Wrongs Act entitlements to claim contribution as contained in s.54(4b) of the Compensation Act "only affects a situation in which a wrongdoer not being the employer, is sued for damages by a worker in which case that wrongdoer is unable to institute proceedings either at common law or pursuant to the Wrongs Act against the employer for contribution". First of all, as I pointed out above, there was no right at 23 common law for joint or concurrent tortfeasors to claim contribution against each other. Secondly, on the plain and ordinary meaning of s.54(4b)(b) of the Compensation Act 1988, there is no ambiguity nor could the sub-section be read or understood to confine the prohibition against contribution claims by persons "other than the employer" to actions where only the third party or persons other than the employer have been sued. I reject the argument that because in a case where "the employer alone is sued by the worker, and the employer may issue third party proceedings to obtain contribution from the wrongdoer" (sub-ss.(5) and (7) of s.54) therefore it follows that "there is no prohibition on either the employer or a wrongdoing third party taking contribution or indemnity proceedings against each other where an action is taken by the injured worker against both the employer and the third party". Ms Layton QC further submitted that in such a case the Wrongs Act still applies and enables both (employer and third party) to claim contribution and or indemnity against each other as s.54(4b) is limited to actions which are taken against a third party alone not including the employer.

In my judgment this argument overlooks and totally disregards the fact that on a true construction of s.54(4b)(b) there is no reason to construe the words "where ... action is taken against a person other than employer for damages ..." to mean that sub-s.(4b)(b) in the context of the whole section in "Division IX - Miscellaneous" of "Part IV - Compensation", is restricted 24 to an action taken against the wrongdoer alone. The sub-section does not say that. In my judgment the prohibition against contribution claims by a person "other than the employer" is clear and unqualified. The third party cannot recover contribution "from the employer".

This construction of s.54(4b)(b) is in my judgment consistent with the overall scheme of the 1986 changes made to the compensation payable under that Act, and the definition of damages in s.54(8) of that Act.

Furthermore, it is in my opinion consistent with the different wording in sub-s.(4b) "action is taken", to the wording in sub-s.(5) "a right of action exists". The action taken under sub-s.(4b) is for "damages" in respect of the disability, which must be read with an action brought at common law against an employer "for damages" in sub-s.(4) of the section. Those "damages" have a defined meaning, sub-s.(8), and are restricted to the employer's liability under sub-s.(1) and further restricted under sub-s.(4) to the ratio of 1:4 times the prescribed sum. On the other hand, the "compensation" which has been paid or is payable (by the Corporation or exempt employer) is different from the "damages" referred to in sub-s.(4), (4b)(b) and (5)(b) of s.54. Under sub-s.(5) the compensation which the person who paid or by whom that compensation is payable is by definition and meaning in the context of sub-s.(4), (4a) and (5), totally different. There is no right to contribution from anyone to compensation as defined by the Act. The 25 employer's entitlement is to recover compensation as restricted by sub-s.(7), see paragraphs (d)(i), (ii) and (iii), (e), (f) and (g).

I agree with Mr Quick QC that Parliament could not have intended that the expression in sub-s.(4b)(b) "person other than the employer" has the meaning contended for by counsel for the second and third defendants. If Ms Layton's submission be accepted then the liability of an employer to contribute to a third party's liability for "damages in respect of the disability" would depend on whether the injured party (the worker) sued both the employer and the third party or just the third party. That liability of the employer can only be a liability to pay "damages" as defined by the Act, and the third party must establish the threshold issue, namely, the right to issue a claim for contribution, cf. Bakker v Joppich (supra) at p.473 per Wells J. Clearly, sub-s.(4b) prohibits any such right. It says "the other person" (i.e. the third party) "has no right to recover contribution from the employer".

In my judgment this leads me to reject the submissions that issue 9(a) in the case stated should be answered in the negative. In my opinion this court can only answer issue 9(a) - "Yes".

Ms Layton QC put to this court a number of examples suggesting unfair results if the court were to answer issues 9(a) and (b) in the affirmative. In my opinion the wording in the substantive provisions of s.54(4b) of the Act are so clear that examples of inequitable results 26 do not assist. The sub-section is clear. No aids to interpretation are required. Both Mr Quick QC and Ms Layton QC submitted that issue 9(b) should not be answered affirmatively. I would reject Ms Layton's submission that we answer issue 9(b) in the negative. I agree with Mr Quick QC that if this court were to answer question 9(b) in the affirmative it may lead to a misunderstanding in another case. Mr Quick suggested that the words "as well as so" be deleted from the question. I agree. I would be prepared to answer 9(b) in the affirmative if those words were deleted. From what I have said on issue 9(a) and the reasons I have given for rejecting the suggested negative answers submitted on behalf of the second and third defendants I would answer question 9(c) in the affirmative. The identical words "other than the employer" appear in both sub-ss.(4b) and (5) of s.54. The section as a whole can only be read consistently if the words underlined in sub-s.(4b) "(b) action is taken against a person other than the employer for damages ..." mean the same as the words underlined in sub-s.(5) "(b) a right of action exists against a person other than the employer for damages".

To read the words in sub-s.(4b)(b) "other than the employer" to mean that no contribution is recoverable only when the worker sues the third party alone and does not sue both the employer and the third party, would in my opinion be not only inconsistent, but contrary to the plain and ordinary meaning of the words. The changes effected by the 1986 Act from the provisions in the 1932 and 1971 Workers Compensation legislation can only lead to one answer, namely, that those words mean the same in both sub-s.(4b) and (5) of s.54.

I would answer the issues arising for determination of the Full Court as follows: Q. 9(a) Are the second and third defendants prevented from issuing a Contribution Notice against the first defendant by virtue of sub-section 54(4b) of the Workers Rehabilitation and Compensation Act, 1986 ("the Act")? A. Yes.

Q. Do the words "other than" in the phrase "other than the employer" in Subsection 54(4b)(b) mean that Subsection 54(4b) applies even if the employer is a party to the action? A. Yes.

Q. 9(c) Do the words "other than the employer" appearing in sub-section 54(5)(b) have the same meaning as in sub-section 54(4b)(b) of the Act? A. Yes.

JUDGE2 PERRY J This case concerns certain questions of law reserved for the hearing and determination of the Full Court pursuant to s.49 of the Supreme Court Act 1935.

In his Statement of Claim the plaintiff alleges that the fourth defendant performed electrical work in the kitchen of a farmhouse occupied by the second and third defendants at Kadina on 2 December 1988. It is alleged further that on completing his work on that day, the fourth defendant left "exposed electrical wires protruding from the walls of the kitchen", only some of which were covered at the ends with insulating tape, the inference being that a number of the wires were not so covered.

The plaintiff alleges that on Monday 5 December 1988 in the course of his employment by the first defendant, a firm of cabinet makers, and while he was working in the kitchen, he suffered an electric shock when he accidentally came in contact with the exposed wires. He goes on to allege that the injuries which he suffered in consequence of the shock (putting the allegations very shortly) were caused by the negligence of the first defendant as the employers of the plaintiff in failing to ensure that the workplace was safe, by the second and third defendants as the occupiers of the premises in failing to take reasonable care to avoid risk of injury to the plaintiff, and as against the fourth defendant for leaving the wires exposed.

In their defences, the first, second and third defendants put in issue the various allegations of negligence against them. A defence of the fourth defendant does not appear in the documents accompanying the Case Stated.

Contribution Notices issued by the first defendant against the second and third defendants, and by the second and third defendants against the first defendant, seek contribution with respect to any sum which the plaintiff might recover against them to the extent of such amount as "might be found by the Court to be just and equitable", having regard to the alleged negligence of the respective parties to whom the Contribution Notices are directed.

The Case Stated poses the following questions: "(a) Are the second and third defendants prevented from issuing a Contribution Notice against the first defendant by virtue of Sub-Section 54(4b) of the Workers Rehabilitation and Compensation Act, 1986 ("the Act")?

(b) Do the words "other than" in the phrase "other than the employer" in Subsection 54(4b)(b) mean "as well as" so that Subsection 54(4b) applies even if the employer is a party to the action. (c) Do the words "other than the employer" appearing in Subsection 54(5)(b) have the same meaning as Subsection 54(4b)(b) of the Act?"

The Case Stated raises the question of the validity of the Contribution Notice issued against the first defendant by the second and third defendants, but does not raise any question as to the validity of the Contribution Notice issued by the first defendant against the second and third defendants.

The attack on the validity of the Contribution Notice issued by the second and third defendants is based on the construction and application of s.54 of the Workers Rehabilitation and Compensation Act 1986 ("the Act"). Relevantly, that section provides as follows: "54.(1) Subject to subsection (2), no liability attaches to an employer in respect of a compensable disability arising from employment by that employer except - (a) a liability under this Act; or (b) a liability at common law for non-economic loss or solatium. (2) Subsection (1) does not affect a liability arising out of the use of a motor vehicle, being a liability against which the employer was or ought to have been insured under the law of compulsory third-party motor vehicle insurance. (3) A court before which an action is brought against an employer for non-economic loss arising from a compensable disability shall make due allowance for any lump sum paid or payable under Division V or VI to the person by or on whose behalf the action is brought. (4) Where an action is brought at common law against an employer for damages for non-economic loss arising from a compensable disability (not being a disability that arises out of the use of a motor vehicle and gives rise to a liability of a kind referred to in subsection (2)), the damages awarded in respect of that loss must not exceed 1.4 times the prescribed sum. (4a) Where

(a) a worker suffers a compensable disability (not being a
disability that arises out of the use of a motor vehicle and
gives rise to a liability of a kind referred to in
subsection (2));
and
(b) the disability is attributable to the

negligence of another worker - (i) who was acting in the course of employment with the same employer; and (ii) whose negligence did not arise from, or in the course of, serious and wilful misconduct, the worker has no right of action against the other worker. (4b) Where - (a) a worker suffers a compensable disability (not being a disability that arises out of the use of a motor vehicle and gives rise to a liability of a kind referred to in subsection (2)); and (b) action is taken against a person other than the employer for damages in respect of the disability, the other person has no right to recover contribution from the employer. (5) Where - (a) compensation is paid or payable under this Act in respect of a compensable disability; (b) a right of action exists against a person other than the employer for damages in respect of the disability, the person by whom the compensation is paid or payable is entitled to recover from that other person the amount of compensation in accordance with subsection (7). (6) Where - (a) a compensable disability arises out of the

use of a motor vehicle; (b) the employer was or ought to have been insured against liability for the disability under the law of compulsory-5-third-party motor vehicle insurance; (c) compensation is paid or payable by the Corporation under

this Act in respect of the disability, the Corporation is entitled to recover the amount of the compensation in accordance with subsection (7). (7) Where - (a) compensation is paid or payable to a person ("the injured party") under this Act; (b) the injured party has received or is entitled to, damages from another person ("the wrongdoer") in pursuance of rights arising from the same trauma as gave rise to the rights to compensation under this Act; (c) the person by whom the compensation is paid or payable under this Act ("the claimant") is entitled to recover the amount of the compensation by virtue of subsection (5) or (6), then the following provisions apply: (d) the claimant is entitled to recover the amount of compensation paid or payable under this Act from the wrongdoer or the injured party but subject to the following qualifications: (i) no amount may be recovered from the wrongdoer in excess of the wrongdoer's unsatisfied liability to the injured party; (ii) the claimant must exhaust its rights against the

wrongdoer before recovering against the injured party; and (iii) no amount may be recovered from the injured party in

excess of the amount of the damages received by the injured party; (e) the claimant shall, on giving notice to a wrongdoer of an entitlement to recover compensation under this section, have a first charge, to the extent of the entitlement, on

damages payable by the wrongdoer to the injured party; (f) any amount recovered by the claimant against a wrongdoer under this subsection shall be deemed to be an amount paid in or towards satisfaction of the wrongdoer's liability to the injured party; (g) an action for the recovery of compensation under this subsection - (i) may be heard and determined by the Industrial Court, (ii) must be commenced within 3 years after the date of the trauma referred to in paragraph (b).

(7a) This section is intended to apply in relation to any action that arises out of the occurrence of a compensable disability

(a) irrespective of where the disability occurred;
and
(b)
  (i) irrespective of whether the action is brought

before a court of this State or before a court of some other state, territory or country; and (ii) notwithstanding that the court before which the action is brought would not (but for this subsection) apply, or take into account, South Australian law. (7b) If - (a) an action is brought in respect of a compensable disability in a court that is not a court of the state; (b) notwithstanding subsection (7a), the court awards an amount against an employer that is in excess of the amount (if any) that would have been awarded in a similar action before a court of the State; and (c) the Corporation is liable to pay the amount awarded by virtue of insurance provided under this Act, the Corporation is entitled to recover the excess from the person to whom the amount is awarded. (7c) In the course of proceedings under subsection (7b) a court may - (a) receive in evidence any transcript of evidence in proceedings before the court by which the amount was awarded and draw any conclusions of fact from the evidence that it considers proper; or (b) adopt any of the court's findings of fact. (8) In this section - "damages" includes any form of compensation payable apart from this Act in respect of a compensable disability; "employer" includes - (a) any person for whose torts an employer is vicariously liable;

(b) any person who is vicariously liable for the torts of an employer; "the law of compulsory third-party motor vehicle insurance" means - (a) Part IV of the Motor Vehicles Act, 1959 (including a policy of insurance under that Part);

or (b) the law of another State or a Territory of the Commonwealth that corresponds to Part IV of the Motor Vehicles Act, 1959 (including a policy of insurance under such a law); "prescribed sum" means the amount that, at the time of the occurrence of the disability that gave rise to a liability at common law from non-economic loss, was the prescribed sum for the purposes of Division V."

The critical question for the purposes of the present case is as to whether or not the prohibition against recovery of contribution against the employer in subsection (4b)(b) precludes the issue of the proceedings which have been issued by the second and third defendants claiming contribution against the first defendant.

It has been a recurrent feature of worker's compensation legislation, including the precursors to the 1986 South Australian Act, that such legislation includes provisions dealing with the effect of the payment of compensation on the right of the worker to claim damages at common law as against the employer and third parties other than the employer, and the related question of the right of the employer to recover compensation which it has paid from a negligent third party.

No useful purpose would be served by canvassing the differences between the various Workers Compensation Acts passed in this jurisdiction, namely the Acts passed in 1932 and 1971, and the 1986 Act which is presently in force, with respect to those matters.

It is sufficient to observe that one of the important differences between the present Act and its immediate precursor, the 1971 Act, is that whereas the former preserved rights of action in full against the employer at the suit of the worker with respect to the worker's rights to damages at common law or for breach of statutory duty resulting in the compensable injury, any action by the worker against the employer for such damages is, pursuant to the 1986 Act, severely curtailed.

No doubt as a result of that change, there are significant changes in the terms of the legislation with respect to the manner in which any right of recovery at common law, either against the employer or against third parties, is to be brought into account against the compensation payable under the legislation.

Against the background of those preliminary observations, the following comments may be made as to the scope and operation of s.54 of the Act: 1. S.54(1) and (2) operate to confine any liability of an employer with respect to a compensable disability to the liability imposed by the Act, and a liability at common law for non-economic loss or solatium, except in cases where the liability arises out of the use of a motor vehicle, in which event the employer remains liable at common law for damages at large (although subject to the various provisions in the Wrongs Act which serve to curtail the extent of an award of damages at common law).

2. S.54(3) obliges a court adjudicating upon a claim against the employer for non-economic loss to bring into account (by making "due allowance for") any lump sum paid or payable under Division V or VI of the Act. Under the subsection, the court must deduct any such lump sum from the

award for non-economic loss, or where the lump sum exceeds the claim for non-economic loss, it will operate to extinguish it.

3. S.54(4) places a further ceiling upon any claim against the employer at common law for non-economic loss. It limits the maximum damages which can be awarded upon such a claim to 1.4 times "the prescribed sum".

4. S.54(4a) operates in the case of a worker who has suffered a compensable disability and who might have a right of action at common law against a co-worker. In such a case, the common law action is extinguished (except in motor vehicles cases). The rationale behind this subsection would, at least in part, seem to be clear: to allow an action against the co-worker in such circumstances could give rise to a vicarious liability on the employer which had the potential to exceed the ceiling imposed by s.54(4).

5. S.54(4b) was inserted by way of amendment at the same time as subsection (4a), both subsections having been inserted by Act No 39 of 1988. Both sections are designed, at least in part, to achieve the same objective, namely, to ensure that the operation of the ceiling imposed by subsection (4) is not circumvented in the case of subsection (4b) by a claim for contribution against the employer by a third party who is sued for damages at common law by the worker. Although subsection (4b) uses the expression "Where ... an action is taken", it is hard to imagine circumstances in which such action could be brought other than by the worker.

6. Given what I perceive to be the purport or object of subsection (4b), I see no reason why it should not be regarded as of application where the third party is sued alone, or together with the employer. The evil to be avoided is the same, namely, to avoid the ceiling imposed by subsection (4) being circumvented by indirect actions. That evil would not effectively be avoided unless the section is taken to operate in the manner in which I perceive that it does, namely, so as to preclude a claim for contribution either by a co-defendant (not being the employer) where the employer is also a defendant, or by a third party claim by a defendant who is not the employer, against an employer who is not joined as a defendant. It follows that if the employer is sued for common law damages, and if liability at common law is established, he or she will be liable to pay damages not exceeding 1.4 times "the prescribed sum" under s.54(4). If a person other than the employer is sued as a co-defendant, or if such a person is sued alone, and liability against that person is established, he or she will be liable for the whole of the damages at common law, subject, no doubt, to reduction by any amount recovered by the worker from the employer by way of common law damages, having regard to the principle against double recovery.

15. From what I have said so far, it is clear that in the case where a person other than the employer is sued by a worker for damages at common law, that person's right of contribution under the Wrongs Act against an employer who otherwise might properly be regarded as "liable in respect of the same damages" within the meaning of s.25(1) of the Wrongs Act 1936, is extinguished by reason of the operation of the words "the other person has no right to recover contribution from the employer" in s.54(4b) of the Act. Any common law right of contribution (and I know of none) would likewise be extinguished.

16. It follows that in consequence, the negligent third party may become liable to pay a disproportionate amount of the total damages compared with what might have been the case if the apportionment provisions of the Wrongs Act had been of application. But that distortion is an inevitable result of the operation of s.54.

17. Subsection (5), and the remaining subsections of s.54, deal with the recovery of compensation paid or payable under the Act from third parties liable to pay damages to the worker. For present purposes it is unnecessary to go into those subsections. It is sufficient to observe that there is nothing in them which would operate to deflect me from the views which I have expressed as to the construction and application of the preceding subsections.

18. The result is in many respects anomalous. There is nothing to prevent an employer from recovering contribution from a negligent third party with respect to the liability of the employer for non-economic loss, but the negligent third party is precluded from obtaining contribution from the negligent employer by way of apportionment of liability. If, however, the employer has paid compensation, which would not commonly be the case, or if, as is more likely, the Corporation has paid compensation under the Act, contribution towards the liability to pay compensation is not recoverable under the Wrongs Act (as to which I agree with the opinion of Cox J in Martin v Stratman and Anor (unreported) 27.10.92, Judgment No S3645) but may be recoverable from a negligent third party in accordance with the provisions of s.54(6) and (7).

19. In my opinion, the observations of the High Court in Public Transport Commission of New South Wales v J. Murray-More (NSW) Pty Ltd [1975] HCA 28; (1975) 132 CLR 336, cited during the course of argument, do not throw any light on the question at issues in this case. They concern a different question of construction of a differently worded Act.

20. It is not clear to me how it is thought that question (c) in the Case Stated is a question which arises in the action. However, with some hesitation, I would be prepared to answer it. As to that question, there is no reason to think that the words "person other than the employer" in s.54(5) do not mean what they say, or that they do not have the same meaning as they bear in s.54(4b). I agree with Legoe J, whose reasons for judgment I have had the benefit of perusing, that to avert any possible misunderstanding in other cases, there should be deleted from question (b) the words "as well as so."

21. With that change to question (b) I would answer the questions posed in the Case Stated as follows: (a) Are the second and third defendants prevented Yes from issuing a Contribution Notice against the first defendant by virtue of Sub-Section 54(4b) of the Workers Rehabilitation and Compensation Act, 1986 ("the Act")? (b) Do the words "other than" in the phrase "other Yes than the employer" in Subsection 54(4b)(b) mean that Subsection 54(4b) applies even if the employer is a party to the action? (c) Do the words "other than the employer" Yes appearing in Subsection 54(5)(b) have the same meaning as in Subsection 54(4b)(b) of the Act?

JUDGE3 MULLIGHAN J I agree that the questions posed in the case stated with the suggested alteration to question (b), should be answered as proposed by Perry J, and I agree with the reasons which he has expressed.