State of New South Wales v Kennelly

State of New South Wales v Kennelly - [2001] NSWCA 472 - NSWCA 2001 case summary — Zoe

[17]

Should the Court Review its Reasons? 13 That leaves the question whether the Court should review its reasons. 14 In the affidavit in support of the respondent's Notice of Motion the respondent's solicitor stated: "4. It had not been contended by either party or argued in the appeal that the calculation of damages under s 151Z(2)(c) was other than as laid down in Leonard v Smith (1992) 27 NSWLR 5 and Grljak v Trivan Pty Limited (unreported, Court of Appeal 19 April 1996). The suggested operation of the provision in the judgment, to the extent that this is contrary to the decisions in Leonard v Smith and Grljak would appear to be inadvertent." 15 This point is reiterated in the written submissions, the respondent contending that the interpretation given to s 151Z(2) of the Workers Compensation Act 1987 (NSW) in para 12 of Meagher JA's judgment "is so clearly wrong as to call for correction". 16 The appellant accepts that the Court has power to review the judgment under Pt 40 r 9, Supreme Court Rules 1970 (NSW). It submits in the first instance that the practical result reached in the case by Meagher JA is no different than under the approach required by the construction given to the section in Leonard v Smith and Grljak v Trivan Pty Limited. However, appropriately, it has taken the alternative position that if the Court is of the view that the judgment as it stands may cause confusion in the courts below, the appellant does not oppose a variation of or addendum to the judgment. 17 For my part, I consider there has been error in the construction given to s 151Z(2) by Meagher JA and myself and accordingly, I consider that the judgment should be reviewed. 18 I should add at this point that the approach taken by Young AJA in his judgment did not require him to consider this construction point. 19 Finally before turning to the proper construction of s 151Z(2), it should be made clear that the respondent does not, on the application that the Court review its judgment, seek to review the question of whether the decision in Haines v Tempesta (1995) 37 NSWLR 24 applies to subsection 2.

[24]

(c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) are to be reduced by the amount by which the contribution which the person would (but for this Part) be entitled to recover from the employer as joint tortfeasor or otherwise exceeds the amount of contribution recoverable …" 21 Part 5 restricts the entitlements of a worker to recover damages from an employer or others in circumstances where there are concurrent tortfeasors. The restrictions relate to the amount of damages recoverable and determines the proportion in which concurrent tortfeasors are to bear damages. 22 In Leonard v Smith Allen J analysed the operation of the section in the following way, considering it convenient to deal with para (d) first because to make the calculation required by (c) it is necessary to apply the figure derived from para (d). He said at 11: "What par (d) does is to apply the percentage of the employer tortfeasor's share in the responsibility for the accident not to the amount of the damages payable to the plaintiff by the other tortfeasor but to what the worker damages would have been if the plaintiff sued the employer … ('damages … assessed in accordance with the provisions of Division 3' of Pt 5). So the financial burden upon the employer tortfeasor is calculated as being his fault proportion applied to the damages he would have had to pay the plaintiff if sued alone - not that fault proportion applied to damages to which the other tortfeasor is liable." 23 As to para (c) his Honour concluded at 12: "This paragraph deals with the damages which the plaintiff worker may recover from the tortfeasor other than the employer tortfeasor in the proceedings which the plaintiff has taken for damages against that tortfeasor - be that tortfeasor an ordinary tortfeasor or a motor accident tortfeasor. Paragraph (c) provides for a reduction in the damages otherwise recoverable." 24 Cole J took the same approach to the construction of the section in Grljak v Trivan Pty Limited (except for one matter not presently relevant and which only arises in circumstances where different limitation periods apply in relation to the relevant causes of action). His Honour said at 13 -14: "Section 151Z(2) is directed to determining the amount of common law damages which a third party who has been sued must pay to the plaintiff worker. It is not addressing the amount of common law damages payable by the employer, if sued. That is dealt with by Division 3 (section 151E - 151T). It is addressing a legislative requirement that in determining the amount of common law damages which a third party sued in respect of an injury must pay, regard must be had to the circumstance that workers compensation is payable under the Act, and further that regard is to be had additionally to any entitlement, whether exercised or not, to sue the employer for common law damages.

[26]

Subsection (2)(d) then addresses the amount of the contribution which is recoverable from the employer, whether as a joint tortfeasor or otherwise. The amount entitled to be recovered is to be determined as if the whole of the worker's common law damages were assessed in accordance with the provisions of Division 3. Subsection (2)(d), in addressing the amount that the third party 'is entitled to recover' from the employer, is not addressing the first integer in subsection (2)(c), namely, the amount of the contribution which the third party 'would (but for this Part) be entitled to recover from the employer', whether as joint tortfeasor or otherwise. Accordingly, one must assess the amount of contribution which, absent Part 5, the third party would have been entitled to recover from the employer, and deduct from that sum the amount which is in fact recoverable upon the basis that the contribution recoverable is calculated by reference to damages assessed in accordance with Part 5, and in particular Division 3." 25 The reference by his Honour to Part 5 and "damages assessed in accordance with Part 5" is of course, a reference to the assessment of damages under the Act which, as explained previously, are limited in amount. 26 Senior counsel for the respondent, in his helpful submissions as to the operation of the section, sought to illustrate the operation of the section in the following terms: "For practical purposes this can be illustrated in the present case by saying that given that damages at common law were assessed at $297,588.75, had they been calculated under the Act they must have been somewhat lower. That has not been done but for the sake of illustrating the correct operation of s 151Z(2) let it be assumed that damages under the Act come in at $250,000. Then for the sake of illustration let it be assumed that the Department of Education and Government Cleaning Service were each liable as to fifty per cent upon a proper apportionment of blame between them. Section 151Z(2) would work in this way:

At a glance

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Judgment (32 paragraphs)

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Legislation Cited (4)

Cases Cited (2)