Workers compensation insurer entitled to recover payments from a blameless motor accident insurer

State of NSW v Wenham [2016] NSWCA 336

The appellant was the employer of Ms Goddard. Ms Goddard was driving behind a truck driven by the first respondent and owned by the second respondent. A wheel assembly disconnected from the truck, collided with the vehicle Ms Goddard was driving, and caused her injury.

The respondents conceded that the accident satisfied the definition of a “blameless motor accident” contained in s 7A of the Motor Accidents Compensation Act 1999 (NSW) (MACA). Section 7B of the MACA relevantly provides:

(1) The death of or injury to a person that results from a blameless motor accident involving a motor vehicle that has motor accident insurance cover for the accident is, for the purposes of and in connection with any claim for damages in respect of the death or injury, deemed to have been caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle.

Ms Goddard claimed and received worker’s compensation payments from the appellant under the Workers Compensation Act 1987 (NSW). Section 151Z of that Act relevantly provides:

(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: …

(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages), …

The appellant sought indemnity from the respondents under s 151Z(1)(d). The primary judge determined as a separate question whether the appellant was entitled, in an action under s 151Z(1)(d) of the Workers Compensation Act, to rely upon the “blameless motor accident” provisions of the MACA. His Honour held that the appellant could not rely on those provisions.

The Court held, allowing the appeal:

(1) Section 151Z does not require that the person who is liable, within the meaning of that section, to be a “wrongdoer” or “tortfeasor”: Beazley A/CJ at [1]; Meagher JA at [2], [15]; Payne JA at [52]-[58].

Workers Compensation Nominal Insurer v Nominal Defendant [2013] NSWCA 301 considered.

(2) Upon satisfaction of s 7A of the MACA, and the deeming of fault by s 7B, there is “liability” within the meaning of s 151Z of the Workers Compensation Act: Beazley A/CJ at [1]; Meagher JA at [2], [15]; Payne JA at [63]-[69].

(3) There is no textual warrant for reading the word “liability” in s 151Z of the Workers Compensation Act as “liability at common law”: Beazley A/CJ at [1]; Meagher JA at [2], [15]; Payne JA at [70]-[73].

(4) The correct construction of s 151Z(2) is inconsistent with the respondents’ arguments. Notwithstanding the difference in the language of sub-ss 151Z(1) and (2)(a), the employer or its insurer by whom compensation has been paid is entitled to be indemnified by the third party liable, independently of the Workers Compensation Act, for damages in respect of the same injury: Beazley A/CJ at [1]; Meagher JA at [9]-[12].

(5) The legal mechanism by which the “person other than the worker’s employer” becomes liable to pay damages is not relevant for the purposes of s 151Z. Provided the liability to pay damages is a liability in respect of the same injury and arises out of the same circumstances as those that caused that injury, the payments are recoverable under s 151Z(1)(d): Beazley A/CJ at [1]; Meagher JA at [2], [17]; Payne JA at [74]-[77].

(6) The text and history of s 151Z of the Workers Compensation Act support the conclusion that the section is to be understood as addressing any liability which arises in the circumstances, not simply a liability which arises at common law: Beazley A/CJ at [1]; Meagher JA at [2], [15]; Payne JA at [79]-[80].

CSR Timber Products v Weathertex Pty Ltd (2013) 83 NSWLR 433; [2013] NSWCA 49 considered.

(7) Policy considerations support the conclusion that the language of s 151Z of the Workers Compensation Act is to be understood as addressing any liability which arises in the circumstances, not simply one which arises under common law: Beazley A/CJ at [1]; Meagher JA at [2], [15]; Payne JA [81]-[90].

Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321 considered.