1 MEAGHER JA: In this case I have had the privilege of reading the judgment of Young AJA. Unfortunately I find myself unable to agree with it. This is not wholly surprising, however, in view of the fact that anyone who plunges into the murky waters of s.151Z of the Workers Compensation Act, 1987 (NSW) might well be expected to reach a different destination from other explorers of these waters.
2 On 10 February 1989 Mrs Kennelly, the respondent, a 49 year old school cleaner, injured her back whilst attempting to close a window during the course of her employment at Hebersham Primary School. The windows of the school were difficult to close because most, if not all, lacked counter weights and were held in position by pins, a fact which was well known to the principal of the school and to his predecessor and about which several complaints were made.
3 The school was conducted by the New South Wales Department of Education, an emanation of the Crown. She was employed by the Government Cleaning Service, another emanation of the Crown.
4 The principle that the Crown is indivisible does not apply to proceedings governed by the Workers Compensation Act. That was decided by this Court in Haines v Tempesta (1995) 37 NSWLR 24, a curious decision, leave to appeal against which was refused by the High Court. In the present case, it enabled Mrs Kennelly to sue the Crown either as occupier of the school or as employer, or both. In fact, she chose to sue the Crown only as occupier.
5 The learned District Court judge, Goldring DCJ, found all the facts relied upon by Mrs Kennelly in her favour. He awarded her a verdict in the sum of $297,588.75.
6 He also found that the Crown as employer was also negligent. His Honour's words in this regard deserve repetition:
"It is quite clear that an employer has a non-delegable duty to provide a safe system of work …, and I bear that duty in mind.
It is also true that an occupier of land has a duty of care also. The occupier must take reasonable care to prevent injury to those who may reasonable come onto the land…"
7 Bearing in mind His Honour's findings of primary fact, one would have thought it followed that both the Crown as occupier and the Crown as employer would have been equally liable to Mrs Kennelly, the former as sued in this action, and the latter if it had been sued by Mrs Kennelly, which it was not.
8 In these circumstances, one must consider the application of s.151Z(2) of the Act, which, insofar as relevant, reads as follows:
151Z(2) If, in respect of an injury to a worker for which compensation is payable under this Act:
(a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker's employer, and
(b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer,
the following provisions have effect:
(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 a joint tortfeasor or otherwise exceeds the amount of contribution recoverable,
(d) the amount of the contribution that the person is entitled to recover from the employer as a joint tortfeasor or otherwise is to be determined as if the whole of the damages were assessed in accordance with provisions of Division 3 as to the award of damages,…"
9 Paragraph (c), standing on its own, is simply incomprehensible. However, paragraph (d) does, I think, render it comprehensible. In this regard, I might add that , respectfully, I agree with Young AJA's observation:
"To my mind the whole of the words are predicated on there being a right outside the section to obtain contribution and how an arithmetical deduction from the plaintiff's damages is to be made because of that external right."
10 The obvious candidate for such an external right in Part 3 s.5 of the Law Reform (Miscellaneous Provisions) Act, 1946 (NSW).
11 But, for s.5 to operate, it is necessary to have a quantified verdict against all persons liable, who between themselves can dispute in what proportions each should share the liability. In the present case, all parties seemed to assume that a contribution process could begin where one party had a known verdict against it, and another party was hypothetically liable for some other figure. Contribution cannot begin to operate in such circumstances.
12 What, therefore, his Honour should have done was to take the figure he arrived at against the occupier ($297,588.75) and recalculated it as if Division 3 of the Workers Compensation Act applied. He should then have decided what proportion each of the branches of the Crown should bear of that recalculated sum. In my view, each should have been liable as to 50%; but it is not my business to decide this issue. Having arrived at the answer to that calculation, he should have deducted from Mrs Kennelly's verdict against the Crown as occupier, whatever figure represented the just and equitable percentage owing by the Crown as employer.
13 It will be observed that:
(a) in cases like the present the verdict against the employer outside the Act must necessarily be the same as the verdict against the occupier outside the Act. This is because the same act of negligence is relied upon in both cases, the damages sought will be the same, the evidence will be the same; and
(b) in cases like the present, the verdict calculated in accordance with Division 3 of the Act will be the same in both cases; and
(c) if, in any case (of which this is not one) the damages which would be awarded against the employer in the event that proceedings were brought against him to which s151Z(2) applied, and an anomalous result arose to the effect that the latter result (ie under s151Z(2)(b)) was different from the verdict against the occupier (ie under s151Z(2)(a)), as re-calculated, no contribution would be possible, and therefore no deduction made from the verdict.
14 I might add that his Honour came to the conclusion that no amount should have been deducted. No party was minded to support this conclusion in the form in which it was expressed. The appellant contended it was plainly wrong; the respondent said that it was, at least, infelicitously expressed. I think it must flow, from what I have said, that it must be mistaken.
15 In my view, the appeal should be upheld, the verdict below set aside, and a new trial ordered. The respondent should pay the appellant's costs.
16 BEAZLEY JA: This appeal involves the proper construction of s 151Z(2) of the Workers Compensation Act 1987 (NSW) and the question whether it has any interaction with the provisions of s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).
17 The relevant facts are as follows. The respondent was employed by the Government Cleaning Service to clean at Hebersham Public School. Both the Government Cleaning Service (which was probably operated by the Department of Administrative Services) and the Department of Education are instrumentalities of the State of New South Wales.
18 On 10 February 1989, the respondent was injured whilst closing a window in one of the classrooms at the school. The incident gave rise to two causes of action in negligence. One against the State (as the Department of Education) as occupier of the school premises. The other against the State (as the Government Cleaning Service) as the respondent's employer. The respondent confined her claim to one against the State as occupier. Her reason for doing so was clear. She sought to avoid the limiting affect of the Workers Compensation Act on her damages claim.
19 It is convenient to turn to that Act.
20 Part 5 of the Workers Compensation Act makes provision for the award of common law damages where a worker has sustained injury within the meaning of the Act, which also gives rise to a liability in the employer at common law. However, a worker is not entitled to both permanent loss compensation under the Act and common law damages and is required to elect between the two: s 151A. Common law damages payable by an employer are limited by s 151E(3), which provides:
"151E Application - modified common law damages
(1) This Division applies to an award of damages in respect of:
(a) an injury to a worker, or
(b) the death of a worker resulting from or caused by an injury,
being an injury caused by the negligence or other tort of the worker's employer.
(2) This Division does not apply to an award of damages to which Part 6 of the Motor Accidents Act 1988 applies.
(3) This Division applies to an award of damages in respect of an injury caused by the negligence or other tort of the worker's employer even though the damages are recovered in an action for breach of contract or in any other action.
(4) Subsection (3) is enacted for the avoidance of doubt and has effect in respect of actions brought before as well as after the commencement of that subsection."
21 Section 151Z applies to the case where a person sustains injury in circumstances where compensation is payable by the employer under the Act and a third party is also liable to pay common law damages. Its terms are as follows:
"151Z Recovery against both employer and stranger
(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect:
(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,
…
(2) If, in respect of an injury to a worker for which compensation is payable under this Act:
(a) the worker takes or is entitled to take proceedings independently of this Act to recover damages from a person other than the worker's employer, and
(b) the worker also takes or is entitled to take proceedings independently of this Act to recover damages from that employer,
…
(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 …"
22 The operation of subs 2 is the point of this appeal.
23 The first question which arises is whether subs (2) applies to the respondent's circumstances. On first glance it does not because of the doctrine of the indivisibility of the Crown. However, in Haines v Tempesta (1995) 37 NSWLR 24, Kirby P stated at 34:
"It has not been unusual in New South Wales legislation to treat State Government employment as differentiated and not unitary for the purposes of the legislation … So it is in the case of s 151E(1) of the Workers Compensation Act 1987.
… for a very long time workers compensation legislation in this State has recognised the division in State Government service which has reflected the common understanding of the community and the realities of modern public administration. It is simply not possible, for the purposes of the Act, to adhere to a theory of indivisible Crown service in State government employment in New South Wales consistent with the definition of 'government employer' in s 3 of the 1987 Act."
24 His Honour concluded at 35:
"When, therefore, s 151E(1) refers to 'negligence or other tort of the worker's employer' it refers, in the case of a 'government employer' to the negligence or other tort of the worker's applicable 'department, person or body exercising executive or administrative functions on behalf of the government of the State'.
I do not accept the argument that this construction of the Act permits the worker, merely by an enterprising pleading, to escape the operation of s 151E(1) of the Act and its policy to limit the recovery of common law damages in employment injury cases. It is still necessary for the worker to establish that the relevant 'negligence or other tort' can be attributed to some person other than the worker's own department or agency. It is enough in this case to say that the word 'employer', as used in s 151E and 151Z, imports, in the case of 'government employers', the special definition with its enlarged meaning to include departments etc. This does not involve adding any words to either s 151E(1) or s 151Z. No words should be added. In this, I agree with the master. All that this case establishes is that the reference to 'employer' imports, in the case of government employment, the special statutory definition provided by the Act."
25 The appellant submitted that as the State had a relationship with the respondent both as non-employer (the Department of Education) and as employer (the Government Cleaning Service), it was entitled to the benefit conferred on a non-employer tortfeasor by the section. It submitted that the contribution amount, the benefit to which it was entitled, was to be assessed either pursuant s 5(1) of the Law Reform (Miscellaneous Provisions) Act or by way of contribution at common law or equity.
26 Section 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act provides:
"Any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as joint tort-feasor 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."
27 The respondent submitted however, that s 5(1)(c) has no application to the present proceedings. Put more precisely, it was submitted that Haines v Tempesta was confined in its operation to s 151Z(1) so as to permit a person employed by a Department of the Sate who suffered injury at the hands of another Department of the State to recover damages from that other Department in accordance with the provisions of s 151Z, but that the principle in Haines v Tempesta does not extend to s 151Z(2) to permit the reduction of those damages.
28 Three reasons were advanced for this construction. First, Haines v Tempesta, on its facts, involved the construction of s151Z(1) only. It was submitted that, although Kirby P did not confine his statement of principle to subs (1), the judgment must be read in that context. Secondly, s 151Z(2) is a calculation provision, which for its operation, requires recourse to s 5(1) of the Law Reform (Miscellaneous Provisions) Act. Thirdly, if the appellant's argument was correct, it would be necessary to extend the Haines v Tempesta principle to that section and that nothing in Kirby P's judgment permits that extension.
29 Senior counsel for the respondent conceded that the consequence of his submission was that a plaintiff in the position such as the plaintiff here - injured in the course of employment with one Government department, in circumstances giving rise to causes of action, both against the employer/Government department and the non-employer Government department - was in a more favourable position than a plaintiff where the employer and non-employer tort feasor were different.
30 I cannot agree with the respondent's submission. The introductory words of subs (2) do not permit the application of Haines v Tempesta to be so confined and the Crown is to be treated as divisible for the purposes of the calculation required in subs (2)(c).
31 That then leaves the question of how subs (2) is intended to operate. In my opinion, the word "contribution" as used in subs (2) is not used in the strictly technical sense it has at law or under the Law Reform (Miscellaneous Provisions) Act. Rather, it has the operation described by Meagher JA in para 12 of his judgment.
32 It follows that the section does not operate in the way contended for by the appellant which would have placed it in a position far more advantageous than any other employer.
33 I agree with the orders proposed by Meagher JA.
34 YOUNG AJA: This is an appeal from a decision of his Honour Judge Goldring in the NSW District Court.
35 The facts of the case are extremely simple. On or About 10 February 1989 the plaintiff was employed by the Government Cleaning Service, an emanation of the Crown. She was cleaning at the Hebersham Public School, the occupier of which was the Department of Education, another emanation of the Crown. The plaintiff attempted to close a window in the school premises, but, because of the poor condition of the window, she was unable to move it, and, in attempting to close it, sustained injury, loss and damage.
36 The Government Cleaning Service was cleaning the school by some arrangement with the people in charge of the school, but just what that arrangement was never came out in the evidence before his Honour.
37 The way the plaintiff put her case was that she was solely suing the State as the authority responsible for the occupier of the premises on which the accident occurred. She was not suing her employer.
38 The trial came on before Goldring DCJ on 23 and 24 March 1999. His Honour gave judgment at 10 am the next morning, giving a verdict for the plaintiff for $238,071.03.
39 The State of New South Wales has appealed, but that appeal is only pursued with respect to a limited aspect of the case. That limited aspect is whether the learned Judge was in error in not making any allowance for the contribution factor pursuant to section 151Z(2) of the Workers Compensation Act 1987 as amended. Although the facts are simple the problems of construction of the relevant legislation is complex. I regret that on the construction issues I differ from the conclusion reached by Meagher and Beazley JJA.
40 It is necessary to make some general observations to put this ground of appeal in context.
41 Under workers compensation legislation as it has existed for most of the 20th century, a person who is injured at work is given the choice of: