WorkCover Queensland v Electricity Assets Ministerial Holding Corporation and Ors [2025] QDC 110

• [3] WorkCover commenced these proceedings seven years ago. The claim is for recovery of $572,675 under s 207B(8) Workers' Compensation and Rehabilitation Act 2003 (Qld) (the Act) in respect of compensation paid to a Mr Sidney Walsh (now deceased) over eleven years ago for personal injuries alleged to have been caused by the negligence of the three defendants.
• [4] WorkCover alleges that Mr Walsh was employed by the third defendant (Wallaby) and that he worked at the Vales Point Power Station from 1965 to 1966. It alleges that in the course of that employment, Mr Walsh handled, cut, drilled, ground, installed and otherwise worked with asbestos insulation products manufactured and supplied by Wallaby.
• [5] WorkCover alleges that the second defendant, FMP, was the manufacturer, supplier and distributor of brake, clutch and other mechanical products containing asbestos in Australia up until in or about 2003.
• [6] WorkCover alleges that the first defendant, the Electricity Assets Ministerial Holding Corporation (Electricity Holding Corporation), has all the rights and liabilities of the owner and operator of all former New South Wales (NSW) power stations, and that as the occupier and operator of the power station at Vales Point it owed a duty of care to persons working there to avoid exposing them to a risk of injury.
• [7] WorkCover alleges that Mr Walsh was employed as a mechanic in two positions in NSW between 1967 and 1972, and then later in Cairns from 1974 to 1975. It alleges that during those periods he handled, cut, drilled, ground, installed and otherwise worked with brake and mechanical products containing asbestos manufactured and supplied by FMP.
• [8] WorkCover alleges that Mr Walsh contracted mesothelioma as a consequence of inhaling asbestos at Vales Point Power Station and using the products manufactured and supplied by FMP. WorkCover alleges that Mr Walsh was a worker under the Act, that he applied for compensation by WorkCover pursuant to that Act and that WorkCover accepted and paid compensation in the sum of $572,675 on 15 January 2016.

• [9] The Electricity Holding Corporation admits it owned the land on which the Vales Point Power Station was constructed, but denies it was the occupier or controlled the site at the relevant time. It denies that it engaged Wallaby to supply and install installation materials and says that the contractors did that. Unsurprisingly, given the passage of time and its own position, Electricity Holding Corporation does not otherwise admit the allegations relating to the employment of Mr Walsh.
• [10] Similarly, Wallaby does not admit that Mr Walsh was employed by it, or the other employment alleged by WorkCover.
• [11] Both admit that Mr Walsh ultimately contracted mesothelioma but say that mesothelioma is the ultimate result of initial molecular changes occurring in the mesothelial cells of the pleura soon after inhalation of toxic carcinogenic asbestos fibres, leading to aberrant and abnormal cell growth in a person with a predisposition to mesothelioma, such as Mr Walsh.[2]
• [12] Both deny that this injury was a relevant injury within the meaning of s 32 and s 207B of the Act.[3] Both say that, if there was mesothelioma, it was caused by the employment of Mr Walsh in Queensland.[4] Both also say, in reliance upon s 113(1) of the Act, that compensation was only payable in relation to employment connected with Queensland.[4] Both allege that on a proper construction of s 207B of the Act, if the worker's Queensland employers were tortfeasors, WorkCover was barred from recovery of compensation payments against them because the injuries were caused by the Queensland employers of Mr Walsh.[5]

• [13] Section 207B(8) of the Act entitles WorkCover to indemnity for compensation paid to a worker for injuries to the extent of another person's liability for damages for those injuries. It provides as follows:

"(8) If a person who has received compensation has not recovered, or taken proceedings to recover, damages for the injury from another person, other than the worker's employer -

(a) the insurer is entitled to be indemnified for the amount of the compensation by the other person to the extent of that person's liability for the damages, so far as the amount of damages payable for the injury by that person extends; and

(b) to that end, the insurer is subrogated to the rights of the person for the injury."

• [14] The section applies in the circumstances set out in sub-section (1). It provides as follows:

(a) an injury sustained by a worker in circumstances creating -

(i) an entitlement to compensation; and

(ii) a legal liability in the worker's employer, or other person, to pay damages for the injury, independently of this Act; and

(b) damages that an employer is not indemnified against under this Act."

• [15] An injury, by s 32 of the Act, is a personal injury or disease arising out of, or in the course of, employment, if the employment is a significant contributing factor to the disease.

• [16] The further amended application filed by WorkCover attacks the pleas made in the paragraphs of the defences that relate to the nature of the condition, the construction of s 207B and the reliance on the negligence of the Queensland employers.
• [17] WorkCover principally relies upon, for its application, the construction given to s 207B(1) of the Act by the Court of Appeal in WorkCover Queensland v Wallaby Grip Limited & Anor.[6] That case similarly involved a claim for indemnity for monies paid to the worker for malignant mesothelioma. In that case, WorkCover alleged that Wallaby manufactured, supplied and distributed insulation products containing asbestos in NSW and Queensland, and that the worker (Mr Coveos) worked with that product in Queensland and NSW. Wallaby contended in its defence, in reliance upon s 113 of the Act, that compensation was not payable in respect of any injury arising from the worker's employment in NSW and that therefore, having regard to s 207B(1) of the Act, WorkCover was not entitled to indemnity with respect to that employment.
• [18] Crow J, with whom the others agreed, held that this contention required the opening words in subsection (1)(a) to be read as if it referred to the "same" circumstances; that is that the right of action given by the section applied only where the injury was sustained by a worker where there was an entitlement to compensation and (at the same time) where there was legal liability to pay damages. His Honour referred to the definitions of event (which includes a latent onset injury and repeated exposure to the same conditions) and injury (which includes an aggravation of an injury and injuries caused by multiple events) and held that this construction would undermine the policy of the Act.
• [19] The court upheld the appeal against the refusal of the primary judge to strike out the relevant paragraphs and struck them out.
• [20] Wallaby sought to appeal that decision to the High Court. During the course of argument counsel for Wallaby referred to the factual question underlying the background to the dispute and that was whether there was uniformity of injury. Gageler J remarked that this was the difficulty with the issue arising on a strike out application and proceeded to remark that the word "circumstances" could vary with the injury and that there had been no exploration of the injury in this case. Counsel responded that his client was deprived of the opportunity to even argue the point. His Honour said that this was because of the course procedurally taken. In the end, the High Court refused special leave saying that having regard to the procedural history and the nature of the worker's injury it was not a suitable vehicle for the court to consider the proper construction of the provision.[7]
• [21] The Electricity Holding Corporation and Wallaby respectively submit that the construction of the Court of Appeal was wrong and that they ought to be entitled to have it dealt with by the High Court. They point out that when they sought special leave to appeal the decision, it was refused at least partly based on the fact that it was a construction dealt with on a strike out application and not after a trial. They submit that the correctness of the pleadings should be determined at a hearing in the context of findings of fact.
• [22] The Electricity Holding Corporation and Wallaby submit that similar considerations apply to other judgments of the Court of Appeal upon which WorkCover rely in response to their pleas as regards the responsibility of the Queensland employers and their rights in that respect, and which they wish to challenge; namely that they should not be deprived, because WorkCover wishes to run the case in a particular way, of the opportunity to have the issues of law decided by the High Cort based upon the evidence and proper findings of fact.
• [23] The effect of a successful application by WorkCover in this case would similarly likely be to deny the Electricity Holding Corporation and Wallaby the opportunity to have the construction determined by the High Court. Not only has the issue been dealt with by the Court of Appeal, but special leave has previously been refused in relation to a similar argument as that which would be raised in this case, and on the basis that an appeal against a strike out application was not a suitable basis for the High Court to consider the legal issues in dispute.[8]
• [24] This submission is consistent with the often-stated view of the High Court in deciding whether to grant special leave to appeal; particularly from interlocutory orders. Albeit that in Wallaby the Court of Appeal appears to have proceeded on the basis that there were no relevant factual disputes and it could decide the legal issue, there remains good reason why the High Court will generally refrain from dealing with appeals arising from decisions in interlocutory matters.
• [25] In Marsden v Amalgamated Television Services Pty Ltd, Gummow J explained that in such a case the High Court is denied the benefit of the considered views of the intermediate court formed upon a final not provisional view of the relevant factual substratum. He went on:

"That deficiency would impede the court in settling any legal issue of general public importance that may be involved and thus not assist the maintenance and development of Australian law."[9]

• [26] Obviously, the reasons for refusal of special leave ought not to be given binding status, and I am bound by the decision of the Court of Appeal.
• [27] Nevertheless, it is inconsistent with public confidence in the system of justice for a summary determination to be made on the basis of what is said to be a question of law when there are factual issues in dispute and the final court of appeal in Australia has indicated that it would not hear argument on the legal question without the factual issues being determined in the ordinary way. Warnings against attempts by parties to resolve their disputes by means other than a full trial have previously been given by the High Court.[10]
• [28] It is perhaps surprising that a public authority would approach litigation in this way; particularly given the inordinate time it took to issue proceedings, the slow pace of the present proceedings (which have been stalled for a significant period and which are not yet passed the pleadings stage) and the slow pace of even this application. But for the fact that the parties have not yet undertaken pre-trial procedures, this court would have been able to have listed the matter for a trial within months.
• [29] I appreciate the attraction of having particular matters resolved on an interlocutory basis, thereby avoiding the preparation and expense of a trial on those matters. However, the position is different if there are underlying facts in dispute and difficult legal questions to be decided based upon that factual dispute. This is particularly relevant in the present context given that there are a number of proceedings which will depend upon the result of this case and a large number of issues and facts in dispute, apart from those the subject of this application, which will necessitate a trial in any event.
• [30] In submitting there are no factual disputes, Mr Holyoak, Counsel for WorkCover, relied upon a document, tendered as an exhibit, entitled "Submitted Common Ground or Uncontroversial Facts and Contentions." It was accepted in that document by all parties that mesothelioma is an indivisible disease. He submitted that this means that every exposure to asbestos is, at law, a cause of mesothelioma. In tendering the document, Mr Holyoak acknowledged that, whilst there was acceptance that mesothelioma is an indivisible disease, the legal consequences of indivisibility are controversial.
• [31] On behalf of Wallaby, Mr Hooke SC submitted that the dispute about the legal consequences arise from the fact that the term indivisibility is a legal fiction designed to address the way that a plaintiff in a dust case is compensated. He submitted that how the legal fiction translates into an operation for which it was not designed, particularly in the statutory context, is what is controversial.
• [32] In making oral submissions, Mr Hooke SC relied upon the expert report of Professor Klebe dated 25 February 2025 which had been tendered by WorkCover. Professor Klebe refers to the concept of mesothelioma being an indivisible disease and recognises that it is a legal construct; not a medical term.
• [33] Nevertheless, Professor Klebe was asked to provide an opinion on the subject and the professor concluded that mesothelioma is an indivisible disease. Professor Klebe, a professor of pathology, explains that this is because once initiated the disease is not influenced by the total dose of the agent that has caused the disease and a further exposure does not aggravate the diseases severity. The sum of all exposures culminates in a singular event, namely the malignant tumour.
• [34] Professor Klebe was not asked to examine the evidence of the asbestos exposure of the deceased, nor any relevant facts or circumstances relating to the proceeding and did not do so. The evidence is limited to an explanation of the nature of the disease and in answering the question sought by WorkCover. The evidence does not establish when the biological insult occurred which led to the disease in this case or its progression, or any of the circumstances relating to the exposure to asbestos of the deceased.
• [35] The absence of this evidence emphasises, rather than diminishes, the potential insignificance of whether the disease is indivisible or divisible. The evidence of Professor Klebe emphasises the significance of evidence as to when the lesion occurred. The applicant, WorkCover, has not adduced any evidence on this, or any other factual matter.
• [36] The Electricity Holding Corporation and Wallaby submit that a critical issue is whether Mr Walsh had an injury caused by the inhalation of asbestos in the mid-1960s in NSW or whether the relevant injury (mesothelioma) only developed during and as a result of his employment in Queensland. In submissions, they explain the plea as being based on the fact that not everyone will contract mesothelioma as a result of the inhalation of asbestos.
• [37] Professor Klebe in her report and in the annexures to it explains that the genetic disposition to mutation is a significant factor in causation of a mesothelioma tumour cell. Mr Hooke SC submitted that their argument that there was a factual dispute of importance in this regard was supported by the denial by WorkCover that Mr Walsh was predisposed to mesothelioma.
• [38] Absent an injury in the 1960s there would be no room for s 207B to operate against the Electricity Holding Corporation or Wallaby.
• [39] I am not prepared to accept the submissions on behalf of WorkCover that there is no factual dispute as to whether there is an injury within the meaning of the Act.
• [40] If the nature of the condition is more subtle or nuanced than WorkCover contends, and the issues cannot be decided simply on the basis that the injury is indivisible, or the evidence does not establish that it is indivisible in the way Workover contends, s 207B(8) may operate differently to the way previously identified. At any rate, for the reasons previously given in relation to s 207B(1), the Electricity Holding Corporation and Wallaby should have an opportunity to have the proper construction of the section dealt with by the final court of appeal in this country on facts established in the usual way.

• [41] In summary, I am not convinced that these defences are so hopeless that they ought to be struck out at this stage of the proceedings or that it is just that the Electricity Holding Corporation and Wallaby be denied, because of the way WorkCover wishes to run its case, of the opportunity to have these defences considered by the High Court.
• [42] I am also mindful of the fact that it does not appear that the factual dispute identified in the present pleadings relating to the concept of the injury in this case has been the subject of consideration by the Court of Appeal in Wallaby.
• [43] For these reasons, I also consider that there should be a full trial of the claim, and of all the defences, and that the parties should be required to progress the matter to a full hearing.
• [44] There should be no separate question decided on a question of law, when there are not simply questions of law to be decided, and absent some evidence and opportunity to make factual findings relating to the factual disputes and issues between the parties. It is surprising that the parties have got to this stage without detailed expert evidence on the subject and disclosed it, and nor had a joint meeting of experts.
• [45] The application is dismissed.

[1] WorkCover brought similar applications in three other matters in which WorkCover is plaintiff (proceedings numbered 3561 of 2017, 4405 of 2017 and 2332 of 2018) and which raise similar questions for determination. An order made by consent dated 29 May 2025 provided for this application to proceed for determination first.

[2] Paragraph 1.8A and 10.3 of the Amended Defence of the first defendant and paragraph 12(b) of the Further Amended Defence of the third defendant.

[3] Paragraph 10.5 of the Amended Defence of the first defendant and paragraph 12(d) of the Further Amended Defence of the third defendant.

Paragraph 10.6 of the Amended Defence of the first defendant and paragraph 12(e) of the Further Amended Defence of the third defendant.

[4] Paragraph 19B of the Amended Defence of the first defendant and paragraph 23A of the Further Amended Defence of the third defendant.

[5] Paragraph 19 of the Amended Defence of the first defendant and paragraph 22 of the Further Amended Defence of the third defendant.

[6] [2021] QCA 11 (Wallaby).

[7] Wallaby Grip Limited & Anor v WorkCover Queensland [2021] HCATrans 128 (13 August 2021)

[8] [1996] HCA 13; (1996) 136 ALR 243 [249] (Marsden).

[10] Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 [56]; Tepko Pty Limited and Others v Water Board [2001] HCA 19; (2001) 206 CLR 1 [52], [168] - [170].