Welcome to the June 2011 issue of the Edwards Michael Lawyers eBulletin.

Stay of Judgment Pending Appeal

In Woolworths Limited v. Strong (2) [2011] NSW CA 72, the NSW Court of Appeal emphasised the importance of seeking a stay of judgment pending appeal in circumstances where restitution in the event of a successful appeal might cause hardship. In that case, Woolworths Limited had paid $285,768.66 to a successful Plaintiff, however its liability was subsequently reversed on appeal. It was therefore necessary for Woolworths to commence proceedings for restitution in order to recover the amount paid plus interest.

The Court endorsed an approach that stays on execution of judgments will generally be granted where there is a risk that the Plaintiff will be unable to repay the money without difficult or delay if an appeal is to succeed:

“Adherence to this principle would have prevented the present embarrassing situation where the Court has enforced interim payment to the Plaintiff but repayment cannot or will not be made without further litigation in the Federal Court with a risk that the opponent will be made bankrupt without the claimant recovering its money”.

It is therefore prudent, where an appeal is contemplated, to request a stay of judgment from the Trial Judge and, if that is refused, to consider renewing the application in the Court where the appeal is to be prosecuted.


Employers Mutual Wins First Round in Section 151Z Test Case

Employers Mutual has succeeded on two preliminary legal questions in a test case which will clarify whether an employer who has attracted 100% deemed liability pursuant to the Disease provisions of the Act, can recover from an earlier (self-insured) employer who negligently caused or contributed to development of the disease.

In Weathertex Pty Limited v. CSR Limited (District Court No. 10/101169 – 1 April 2011), Kearns DCJ rejected arguments by CSR that the Section 151Z recovery action could not succeed on the bases that:

  • Findings in the Workers Compensation Commission, attributing 100% liability to Weathertex, were conclusive; and
  • Section 151Z did not allow Section 151Z recoveries against other employers.

His Honour decided:

  • The Workers Compensation Commission findings served only to determine liability for payment of statutory compensation and did not prevent Weathertex from bringing its claim for indemnity; and
  • Notwithstanding the fact that Section 4 of the Workplace Injury Management Act defines “employer” as including “former employer”, as the context of the Act clearly evinces a contrary intention there is no obstacle to bringing a Section 151Z recovery action against a former employer.

CSR has filed an Application for Leave to Appeal.


Medical Appeal Panel Rejects 100% Section 323 Deduction

In Phillip Oliver v. Young Roller Flour Mill Co (N2-006388/10) a Medical Appeal Panel determined that once an Arbitrator had accepted injury in the nature of aggravation of a degenerative or arthritic condition, it was incorrect to apportion all of the impairment to the pre-existing arthritic condition.

This Decision is inconsistent with the Judgment of Price J of the Supreme Court in Zeineddine v. Mater [2009] NSW SC 646:

“It seems to be that an AMS (and MAP) in assessing the degree of permanent impairment resulting from an injury under Section 323(1) is required to deduct the extent of the impairment that is due to any previous injury, pre-existing condition or abnormality. If the extent of that impairment amounts to all of the permanent impairment, then there is to be a deduction of 100%. To adopt the construction advocated by the Plaintiff would, in my opinion, produce the peculiar result of prohibiting an AMS from deducting all of the pre-existing impairments. I do not accept the Plaintiff’s argument”.

Relevantly, His Honour also observed that it does not necessarily follow from a finding of injury that the injury found to have been sustained will result in a permanent impairment, and that when assessing the degree of permanent impairment an AMS is not precluded from considering issues of causation.


Work Injury Damages Workshop: Reviewing two important defences

Contributory Negligence

Section 151N of the Workers Compensation Act 1987 makes it clear that the common law in relation to contributory negligence applies to awards of Work Injury Damages.

This means that damages are to apportioned between the worker and employer of their respective shares in responsibility for the damage. This involves a comparison of both culpability and the relative importance of the acts of each party in causing the damage.

For example, if there is an apportionment of 20% of liability to a worker, then the assessment of Work Injury Damages is reduced by that percentage.

The authorities clearly establish that mere carelessness, thoughtlessness or inadvertence by a worker within the system of work that the employer has established does not constitute contributory negligence; it is assumed that a “safe” system of work will make allowances for lapses in concentration, carelessness etc. Some authorities even suggest that before an employee can be found guilty of contributory negligence, there must be an element of wilful misconduct, with an employer having an onus of proving that the employee knew and fully appreciated a danger before acting.

In the absence of evidence of deliberate misconduct, the best way to establish contributory negligence is to prove that the worker’s injury was sustained as the result of departure from a safe system of work devised by the employer.

For example, in Bankstown Foundry Pty Limited v. Braistina (1986) 160 CLR 301 the worker’s damages were reduced by 10% on the basis that the worker had ignored a foreman’s (safe) instruction to use a hoist and instead adopted his own (unsafe) method of stacking pipes. The employer was found liable on the basis that the foreman did not insist that workers use the hoist, however the Plaintiff’s damages were reduced by 10% for contributory negligence on the basis that his method of stacking increased the amount of lifting and twisting involved. The High Court refused an appeal from the modest finding of contributory negligence because the Plaintiff had not been defiantly careless for his own safety and that it was not established that the worker had deliberately disobeyed the foreman’s instructions.

Conversely, a worker who suffered injury as a result of being complicit in an unsafe system of work devised by his workmates, contrary to the specific direction of a foreman, had damages reduced by 50% for contributory negligence: Williams v. Port of Liverpool Steveadoring Co Limited (1956) 2 All ER 69.

Similarly, the High Court refused to disturb a finding of 60% contributory negligence in circumstances where a Plaintiff had used a system requiring him to bend his back even though he had been specifically warned against that system to lift heavy objects: Liftronic v. Unver (2001) 75 ALJR 867.

The considerable range of allowances for contributory negligence can be explained on the basis of the principle that questions of contributory negligence and apportionment are always questions of fact, and that such questions are notoriously difficult to overturn on appeal.

It is essential to note that the employer has the onus of proving contributory negligence and that the defence must be specifically pleaded.

Finally, Section 151N(2) provides that damages cannot be reduced by virtue of contributory negligence below an estimated commutation amount.

Section 151D Applications to Extend Time

With the recent and increasing trend of workers bringing Work Injury Damages claims out of time, usually after “deterioration” or “additional impairment” claims allowing the 15% WPI threshold to be satisfied, it is timely to review the legal principles relating to applications to extend time.

In order for Court proceedings for Work Injury Damages to be validly commenced, a Pre-Filing Statement must be filed within three years of the date of injury.

There is a discretion, however, provided by Section 151D(2) of the Workers Compensation Act 1987 which allows the Court to grant leave for Court proceedings to be commenced out of time.

The exercise of the discretion should be viewed against the four broad rationales for the enactment of limitation periods identified by McHugh J in Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541 (at 552):

  • As time goes by relevant evidence is likely to be lost.
  • It is oppressive to a Defendant to allow an action to be brought long after the circumstances that gave rise to it have passed.
  • It is desirable for people in the community to be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Many in the community have a significant interest in knowing that they have no liabilities beyond a definite period.
  • The public interest requires that disputes be settled as quickly as possible.

The test for exercising the discretion to grant leave under Section 151D(2) is whether, in the circumstances of each individual case, the Applicant for leave has demonstrated that it is fair and just that leave should be granted.

In Salido v. Nominal Defendant (1993) 32 NSW LR 524 Powell JA said at (541) that two questions needs to be determined by the Court:

  • Whether a sufficient explanation has been given for the failure to commence proceedings in time; and
  • If so, whether, having regard to all the circumstances of the case, it is fair and just to grant, or to refuse, the application.

The two most important considerations can therefore be identified as “delay” and “prejudice”.

A deliberate decision to allow a statutory limitation period to expire is a powerful factor against the grant of leave. Ordinarily, a Court would require a worker to demonstrate special circumstances, satisfactorily explaining his or her conduct, before granting leave where there has been a deliberate decision to allow a limitation period to expire. In any event, a worker must always satisfy the onus of adequately explaining why proceedings were not brought within time before leave can be granted.

The existence of prejudice is a relevant factor, but not a decisive factor, in relation to whether leave should be granted. Conversely, the fact that there is no prejudice does not mean that leave should automatically be granted.

The employer bears an evidentiary onus of proving that there is prejudice. Once proved, it is up to the worker to persuade the Court that the prejudice is immaterial or insignificant, or that all the circumstances of the case warrant a grant of leave notwithstanding the existence of prejudice. By way of illustration, in United Church in Australia Property Trust (NSW) v. Lea [2002] NSW CA 55 leave to commence proceedings out of time was refused on the basis that the only witness to the incident had returned to China and could not be located and that other possible witnesses, who were patients in a nursing home, were deceased. Another example is Taouk v. Maroun Taouk & Anor (t/as E M T Plumbing) where leave was refused on the basis that the claim was brought so late that the employer was statute barred (seven years from the date of injury) from bringing a cross claim for indemnity or contribution from another party.

Accordingly, when considering a claim being brought outside the three year limitation period, the following questions should be asked:

  • How significant is the delay?
  • What is the explanation for the delay?
  • Did the worker deliberately allow the limitation period to expire?
  • Was the worker aware of all relevant facts and circumstances at the time the limitation period expired?
  • Has the worker diligently advanced the claim since becoming aware of all relevant facts and circumstances? If not, are all lapses in time adequately explained?
  • How will the delay affect a fair trial?

Prejudice

  • What is the prejudice?
  • What is the evidence of prejudice?
  • Can the prejudice be overcome?
  • How will the prejudice affect a fair trial?

When considering late Work Injury Damages claims following further WPI payments, for either deterioration or further permanent impairment, it is essential to consider whether, at the time the limitation period expired, the injury was sufficiently stable and sufficiently serious to satisfy the 15% WPI threshold regardless of any further (recent) WPI allowances.

Click here to view these articles in Adobe Portable Document Format (‘PDF’).

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