State Government Insurance Office (Qld) v Brisbane Stevedoring Pty Ltd

[11]

The learned primary judge found negligence against both defendants treating the crane driver, notwithstanding the terms of the hiring agreement, as the employee of the second-named defendant whilst operating the crane for and under the control and direction of the respondent. Apparently on the footing that the particular conduct of the driver of the crane and the respondent's faulty system of work each equally contributed to the result, and notwithstanding the terms of s. 5 (c) of The Law Reform Act, he apportioned the responsibility for the injury to the plaintiff equally between the two defendants though he did not actually make an order for contribution. He found the indemnity contained in the hiring contract to be operative in the circumstances and ordered the respondent to indemnify the second defendant against the verdict returned for the plaintiff in the action. He ordered the appellant as third party to indemnify the respondent completely "in respect of all sums payable by the first defendant under this judgment in respect of damages including sums payable by the first defendant to the second defendant by way of indemnity against the second defendant's liability under this judgment for damages or contribution ". My earlier reference to s. 5 (c) of The Law Reform Act was to call attention to the fact that once it was decided that the indemnity between the respondent and the second defendant was operative no apportionment of responsibility was called for and no order for contribution under The Law Reform Act could be made. The effect of the order that the appellant completely indemnify the respondent was that the plaintiff became entitled to be paid the whole amount of the verdict out of the Workers' Compensation Fund set up by s. 5 of the Act. This is so because a finding that the respondent's liability for damages fell within the terms of the indemnity of the policy, provided the basis for a payment out of the Fund under s. 9A of the Act. The situation thus created was that the whole verdict became payable out of the Fund without any recourse against the respondent, because, having a policy conforming to s. 8, he was not liable to recoup the Fund under s. 8 (5) for any amount paid out of it to the plaintiff.

[20]

The appellant submits that the terms of s. 3 of the Acts require that any person who falls within the description of "owner" as defined in s. 2 must, during the time he satisfies that qualification, keep on foot a policy of insurance fulfilling the requirements of s. 3 (1); and this notwithstanding that there is on foot the policy of insurance taken out by the registered owner of the vehicle covering the period of the registration of the vehicle and without which the registration may not be effected or maintained. In my opinion, this submission should be rejected. The obligation of s. 3 is, in my opinion, placed upon the owner, whichever one of the categories to be found in the definition of owner he may satisfy. But in effect, if there is a registered owner, who, of course, may be a person in any one of these categories, it is only upon an owner who is the registered owner that an obligation is cast to obtain and maintain the policy of indemnity described in the subsection. That policy must cover the period of registration of the vehicle. There is no warrant for reading the section as requiring a policy of insurance to cover any other, and particularly any lesser, period such as the appellant submits, i.e., for the period of the hiring. But if there is no registered owner, as for example, in the case of a vehicle which has not been registered, it may be that the owner is obliged by s. 3 to insure even before he becomes registered. But whether this be so or not, and there is no present need to decide that point, in my opinion, in the case of a registered vehicle no person falling within the description of "owner" in s. 2 who is not registered as owner, is bound by s. 3 to take out a policy of insurance of the described kind. Consequently, in my opinion, the exception to be found in s. 8 (1) of the Act does not apply to the circumstances of the respondent and the indemnity in that policy conforming to s. 8 (1) (b) of the Acts does operate with respect to those circumstances. Consequently, as I earlier indicated, the whole verdict becomes payable out of the Workers' Compensation Fund.

[24]

I will deal first with the second matter. The situation supposed was that a verdict for a plaintiff in respect of personal injuries caused to an employee of A by negligence in or in connexion with the use of a machine has been found against two defendants, A and B. A has by a binding agreement made prior to the commission of the relevant acts of negligence indemnified B against the consequences of the use by A of that machine. A has been indemnified by an insurer in the terms of s. 8 of the Act. B asserts against A his right of indemnity in respect of the verdict found against him (B). That right may be asserted before B has paid the amount of the verdict and an order may be made that A indemnify B. Such an order calls, not of course for a payment by A to B, but for the payment by A of the verdict. When A thus complies with an order to indemnify, he undoubtedly, in my opinion, is paying a sum of money which precisely falls within the indemnity described in s. 8 of the Act. Of course, on the other hand, the indemnity may be enforced by B after he has paid the amount of the verdict. But, though B's right to recover the amount which he has thus paid and A's obligation to pay it is derived from the contract of indemnity, the sum paid by A to B would none the less, in my opinion, constitute damages arising under circumstances creating a legal liability in A to pay damages in respect of the injury to A's employee. I cannot think that the circumstances that the indemnity is enforced after payment by B rather than before such payment can make any difference to the relevant quality of what A pays in performance of the contract of indemnity. Thus, in the situation supposed, in my opinion, any sum paid by the respondent to the second defendant under the indemnity in the hiring agreement would be properly included in the indemnity which the appellant may be ordered to afford the respondent under The Workers' Compensation Act policy. A different result might possibly follow if no verdict had been found against A, but I have no need to discuss that possibility in connexion with this case.

[66]

against all sums for which, in respect of injury to any worker employed by him, he may become legally liable by way of damages arising under circumstances creating a legal liability in the employer to pay damages in respect of that injury. This indemnity is expressed to attach to his liability to pay, and not to sums which have actually been paid. The judgment in the action made the respondent liable to the plaintiff to pay the damages awarded. It also declared that there was a liability in the respondent to indemnify the second defendant in respect of that defendant's liability to the plaintiff under the judgment. No doubt it was true, in a practical sense, that the occasion was not likely to arise when the respondent would be called upon to pay any sum to the second defendant, because the plaintiff's right to payment would be satisfied out of the State Accident Insurance Fund, in accordance with s. 9A of The Workers' Compensation Acts. In any event, if it became necessary for it to do so, the second defendant could insist as between it and the respondent that the latter should pay the full amount of the judgment, so as to secure the second defendant against recourse by the plaintiff to it for payment. Nevertheless, I do not think that these considerations render it unnecessary to consider the question whether or not a sum of money, assumed to be payable by the respondent to the second defendant in pursuance of the indemnity in the hiring agreement, would satisfy the description in s. 8 of The Workers' Compensation Acts, and also in the policy issued in pursuance of that section, of a sum for which the respondent was legally liable by way of damages arising under circumstances creating a legal liability in the employer to pay damages in respect of the injury to the plaintiff worker. This was a question raised by the respondent's third party claim against the appellant. It was litigated between those parties. The respondent obtained an order that the appellant should indemnify the respondent completely "in respect of all sums payable by the first defendant under this judgment in respect of damages including sums payable by the first defendant to the second defendant by way of indemnity against the second defendant's liability under this judgment for damages or contribution ". It is the contention of the appellant that that order, in so far as it includes the words I have italicized, is founded upon an erroneous construction of the policy defining its obligation to the respondent. If that contention is made out, I think that the appellant is entitled to claim that that order should not be allowed to stand in that form. Therefore, I think the question is one with which this Court should deal.

State Government Insurance Office (Qld) v Brisbane Stevedoring Pty Ltd - [1969] HCA 59 - HCA 1969 case summary — Zoe

At a glance

Court

Decision date

Before

Source

Judgment (71 paragraphs)

Parties

Cited By (2)