Welcome to the June 2014 issue of the Edwards Michael eBulletin

New Approach to Contributory Negligence

In Boral Bricks Pty Limited v Cosmidis (No. 2) [2014] NSWCA 139 the Court of Appeal overturned the trial judge’s finding that there was no contributory negligence on the part of a Plaintiff who was struck by a forklift on a site whilst delivering a tanker load of fuel.

The Court distinguished the previous authority of Talbot-Butt v Holloway (1990) 12 MVR 70, concluding that the provisions of the Civil Liability Act now requires that people should take responsibility for their own lives and safety, effectively overriding the previous common law position that the speed, size and weight of vehicles in contributing to the severity of the damage should be taken into account.  Basten JA stated:-

“… no distinction is made between the fact that from one perspective the driver is in control of a vehicle that could cause serious harm to a pedestrian, whilst from the perspective of the pedestrian, it was the likelihood of serious harm which was to be considered.  If the Plaintiff were aware, or ought to have been aware, of the presence of a large forklift operating in the area and if the forklift driver were aware, or should have been aware, of the likely presence of pedestrians, and if each were equally careless, liability should be shared equally”.

The Court noted that the driver’s view was obstructed by machinery but that the Plaintiff was aware forklifts were operating in the area and he would have observed the forklift if he had kept a proper lookout.

The Plaintiff’s damages were reduced by 30% to account for his contributory negligence.

Disease Claims: Determining Date of Injury

When deciding an application for leave to appeal from a decision of Deputy President Roche, the Court of Appeal reviewed the deeming effect of Section 16 of the 1987 Act.

Section 16 provides:-

“(1)      If an injury consists in the aggravation, acceleration, exacerbation or deterioration of a disease:

(a)          the injury shall, for the purposes of this Act, be deemed to have happened:

(i)        at the time of the worker’s death or incapacity, or

(ii)      if death or incapacity has not resulted from the injury – at the time the worker makes a claim for compensation with respect to the injury…”

Deputy President Roche held that because there had been no economic loss and no claim for weekly compensation, there could not have been an incapacity sufficient for the Arbitrator to find a deemed date of injury.

The Court of Appeal effectively decided that this approach was incorrect:-

“ …the authorities do not stand for the proposition that “the incapacity” referred to in Section 16(1)(a) is one which gives rise to an entitlement to weekly compensation payments; rather, the authorities stand for the proposition that the existence of an incapacity must depend upon an entitlement to compensation, being an entitlement of the kind the subject of a claim, that is, one encompassing economic loss”.

The Court rejected the notion that “incapacity” in Section 16(1)(a) is only satisfied where there is a claim, or an entitlement to claim, weekly compensation.

Reduced Common Law Liability for Employer

In Waco Kwikform Limited v Parigo and Workers Compensation Nominal Insurer [2014] NSW CA 140, the Court of Appeal has confirmed an apportionment of 75% to a scaffolding company and 25% to its subcontractor who was also the worker’s employer.

The Court did not accept an argument that by virtue of the High Court’s decision in Leighton Contractors Pty Limited v Fox [2009] HCA 35 the scaffolding company was entitled to avoid liability.

The Court endorsed the statement of the High Court that “in some circumstances a principal will come under a duty to use reasonable care to ensure that a system of work for one or more independent contractors is safe”.

It was of critical importance that as a result of its previous experience with the Plaintiff’s employer, the scaffolding company was no longer satisfied as to the employer’s competence and had therefore positively assumed control of the system of work.  By virtue of these actions, the scaffolding company’s general law obligation to exercise reasonable care extended to the prescribing of a safe system of work to be employed by the Plaintiff’s employer.

The appeal was eventually allowed only in relation to the failure of the trial judge to find that the Plaintiff was contributorily negligent for his injuries.  The Court found that the worker’s actions were incompatible with the conduct of a reasonably careful scaffolder and reduced damages by 20%.

Section 151AB – Insolvent Insurers

In University of New South Wales v AAI Limited [2014] NSWCA 153, the Court of Appeal was required to consider the operation of Section 151AB and Section 151AC of the Workers Compensation Act 1987 in circumstances where only one of a number of implicated insurers remained solvent at the time the dispute arose.

Section 151AB and Section 151AC prescribe mechanisms to effectively appoint one responsible insurer to manage common law claims for damages in circumstances where injury is in the nature of an occupational disease.

By majority (Leeming JA and Ball J) the Court determined that the provisions do not apply unless more than one solvent insurer is a party to a dispute at the time the dispute concerning which insurer is liable under Section 151AB arises.

Basten JA delivered a dissenting judgment, concluding that the relevant time to consider the application of Section 151AB and Section 151AC is the time when the injury occurred, rather than the time when the dispute concerning which insurer is liable under Section 151AB arises.

Common Law: Failure to Mitigate Damages

In ECS Group (Australia) Pty Limited v Hobby [2014] NSWCA 193 the Court of Appeal upheld a Plaintiff’s Cross Appeal in relation to a finding that her failure to undergo surgery was unreasonable.

The worker suffered an anterior cruciate ligament injury and the trial judge found that the real reason for her refusal to undergo surgery on three occasions was on the basis of her fear of a poor outcome.The trial judge found that the Plaintiff’s fear was unreasonable given that the surgery was relatively safe and that it was likely to significantly improve her condition.

The Court of Appeal observed that the onus of establishing the mitigation defence was on the Defendant and that the trial judge had failed to apply the correct test, being that “the reasonableness or otherwise of a worker’s refusal of treatment must depend upon the worker’s state of knowledge at the relevant time”.  The Court was persuaded by the fact that there was no evidence that treating doctors had explained the risks and benefits of the operation and there was no evidence that the doctors considered the Plaintiff’s refusal to be unreasonable.

The Cross Appeal was therefore upheld and damages were assessed on the basis that the Plaintiff’s refusal to undergo surgery prior to the trial was not unreasonable.

Medical Appeal Panel error

An employer has successfully argued that a Medical Appeal Panel Decision should be quashed on the basis of its misinterpretation of the terms of referral.

In Greater Western Area Health Service v Austin [2014] NSWSC 604 the Supreme Court considered an application for judicial review from a Medical Appeal Panel decision to overturn an Approved Medical Specialist’s finding that there was no permanent impairment resulting from Ross River Fever.

The terms of the referral requested the Approved Medical Specialist to decide whether the worker had suffered any permanent impairment resulting from Ross River Fever contracted on 1 December 1998.

The Medical Appeal Panel concluded that the Approved Medical Specialist should have accepted from the terms of referral that the parties had agreed that the worker’s losses had indeed been caused by Ross River Fever.

Campbell J of the Supreme Court referred to the Court of Appeal decision in Haroun v Rail Corporation (NSW) & Ors [2008] NSWCA 192 and to the statement that a Medical Panel is not only entitled to treat a finding of a medical issue as irrelevant, they are bound to do so if they independently come to a different conclusion.

Campbell J ultimately decided that the Medical Panel had misinterpreted the terms of the referral and that it was not open to find that there was agreement that any permanent impairment had resulted from Ross River Fever:-

“…the implicit finding that liability and causation matters are within  the powers of Arbitrators in the bifurcated system and not of Approved Medical Specialists is clearly contrary to the Court of Appeal in Haroun and the considered dictum of Leeming JA in Tolevski “.

The decision of the Medical Panel was therefore set aside and the matter was remitted to the Registrar for further referral to a Medical Appeal Panel for the issues to be decided according to law.