Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Izzard v Dunbier Marine Products (NSW) Pty Ltd [2012] NSWCA 132
• Hearing dates: 5 March 2012
• Decision date: 10 May 2012
• Before: Basten JA at [1]; Macfarlan JA at [54]; Barrett JA at [138]

Decision

(1) Allow the appeal and set aside:

(a) orders 1 and 5 of the orders made in the District Court on 1 April 2011, and

(b) orders 1 and 2 made in the District Court on 28 April 2011.

(2) In place of those orders:

(a) give judgment for the cross-claimants (Izzard and Haulage) against the cross-defendant (Dunbier) on the basis that Dunbier should bear 40% of the liability for the injuries suffered by the plaintiff;

(b) order that the cross-defendant pay the cross-claimants' costs of the cross-claim;

(c) remit the proceedings to the District Court for it to determine the contribution recoverable by the cross-claimants from the cross-defendant, and the amount, if any, by which the judgment in favour of the plaintiff must be reduced in accordance with s 151Z(2) of the Workers Compensation Act 1987, on the basis of the material before the trial judge, subject to leave to adduce further oral evidence or cross-examination, or to tender further documents, if the judge be satisfied that such a step is necessary, given the lapse of time since the trial;

(d) unless the defendants file submissions within 14 days seeking a different order, order that the TACV pay 20% of the first and second defendants' costs of the plaintiff's claim.

(3) Order that the TACV pay one-third of the appellants' costs in this Court.

(4) Order that the first respondent (Dunbier) pay two-thirds of the appellants' costs in this Court.

(5) Direct that each of the respondents have a certificate under the Suitors' Fund Act 1951 (NSW), if not disqualified pursuant to s 6(7).

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: TORTS - negligence - duty of care - employer-employee relationship - employee injured whilst assisting in unloading contractor's vehicle - employer knew or should reasonably have known of risk of injury - failure to provide a safe system of work; TORTS - workplace injury - apportionment between tortfeasors - employee injured whilst assisting in unloading contractor's vehicle - risk of injury in unloading operations - contractor 60% and employer 40% responsible for employee's injuries; TORTS - workplace injury - action by employee against third party - s151Z Workers Compensation Act 1987 - reduction of damages by reason of contribution recoverable from employer - calculation of reduction - s 151H Workers Compensation Act 1987 - degree of permanent impairment of injured worker - whether need for medical assessment under Workplace Injury Management and Workers Compensation Act 1998; TORTS - compulsory third party motor vehicle insurance - plaintiff injured whilst assisting in unloading trailer attached to prime mover - metal frames on trailer unsecured during unloading operations - whether defect in vehicle for purposes of Motor Accidents Compensation Act 1999 - whether accident occurred in use or operation of vehicle
• Legislation Cited: Civil Liability Act 2002; Law Reform (Miscellaneous Provisions) Act 1946; Motor Accidents Act 1988; Motor Accidents Amendment Act 1995 (NSW); Motor Accidents Compensation Act 1999; Road Transport (General) Act 1999; Suitors' Fund Act 1951; Workers Compensation Act 1987; Workplace Injury Management and Workers Compensation Act 1998
• Cases Cited: Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568; AMP General Insurance v Brett (1998) 27 MVR 492; Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28; 217 CLR 424; Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; 160 CLR 301; Czatyrko v Edith Cowan University [2005] HCA 14; 79 ALJR 839; Ferraloro v Preston Timber Pty Ltd (1982) 56 ALJR 872; Firth v Sutton [2010] NSWCA 90; Forstaff Blacktown Pty Ltd v Brimac Pty Ltd [2005] NSWCA 423; (2005) Aust Torts Rep 81-814; Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; 67 NSWLR 516; Goodman Fielder Ltd v Hickson [2008] NSWCA 69; Grljak v Trivan Pty Ltd (In liq) (1994) 35 NSWLR 82; J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142; Johnson v Perez [1988] HCA 64; 166 CLR 351; Kondis v State Transport Authority [1984] HCA 61; 154 CLR 672; Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council [2009] NSWCA 59; 230 FLR 336; Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174; McLean v Tedman & Brambles Holdings Ltd [1984] HCA 60; 155 CLR 306; NRMA Insurance Ltd v NSW Grain Corporation (1995) 22 MVR 317; Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; 59 ALJR 492; State of New South Wales v Maxwell [2007] NSWCA 53; Walfertan Processors Pty Ltd v Dever [2006] NSWCA 289; 47 MVR 140; Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40; Zerk v Finemores Tansport (Qld) Pty Ltd [1994] SASC 4531; 62 SASR 333; Zotti v Australian Associated Motor Insurers Ltd [2009] NSWCA 323; 54 MVR 111; Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193
• Category: Principal judgment
• Parties: Rod Izzard (First Appellant); RBI Haulage Pty Ltd (Second Appellant); Dunbier Marine Products (NSW) Pty Ltd (First Respondent); Matthew Buckley (Second Respondent); Transport Accident Commission of Victoria (Third Respondent)
• Representation: Counsel: P M Morris SC/C Purdy (Appellants); S G Campbell SC/P A Rickard (First Respondent); M McAuley (Second Respondent); J Turnbull (Third Respondent); Solicitors: Moray & Agnew (Appellants); Goldbergs Lawyers (First Respondent); Everett Evans Solicitors (Second Respondent); Holman Webb (Third Respondent)
• File Number(s): CA 2011/115462

Decision under appeal

• Citation: Matthew Buckley v Rod Izzard & Ors
• Date of Decision: 2011-04-01 00:00:00
• Before: Delaney DCJ
• File Number(s): DC 2008/321951

Judgment

1 BASTEN JA: On 20 July 2005, Mr Matthew Buckley ("the plaintiff") was injured in the course of his employment with Dunbier Marine Products (NSW) Pty Ltd ("the employer"). As part of its business, the employer arranged for galvanized steel boat trailers to be transported from Melbourne to its premises at Ingleburn on the outskirts of Sydney. The employer had a contract with RBI Haulage Pty Ltd ("the carrier") to undertake the transport of the boats and various accessories. The vehicle was a prime mover with two trailers. Mr Rod Izzard was the driver employed by the carrier. The third respondent to the proceedings was the Transport Accident Commission of Victoria ("the TACV"), which was the compulsory third party motor vehicle insurer for the prime mover and trailers. It had been joined as a defendant to the proceedings below. (It will generally be convenient to refer to Mr Izzard and the carrier as "the appellants".)

2 The matter went to trial before Delaney DCJ in the District Court. His Honour found that the driver and the carrier were both negligent, and that the plaintiff was contributorily negligent to the extent of 20%. The plaintiff did not sue his employer, but the appellants brought a cross-claim for contribution or indemnity in respect of the damages claimed by the plaintiff. The cross-claim was dismissed because the judge found the employer not to have been negligent.

3 The trial judge assessed the plaintiff's damages in the sum of $658,119, as against the appellants jointly, after allowing for a reduction of 20% for contributory negligence. That assessment was made under the general law as varied by the Civil Liability Act 2002 (NSW). Because the employer was found not to be liable, no calculation was made of the damages which would have been recoverable had the plaintiff sued his employer. That figure would probably have differed from the assessment made under the Civil Liability Act because it would have been made under the more restrictive regime of Part 5 of the Workers Compensation Act 1987 (NSW). That hypothetical assessment would have been necessary to calculate the amount by which the appellants' liability would have been reduced had they been entitled to a contribution from the employer.

4 The appellants' do not seek to challenge any aspect of the judgment obtained by the plaintiff against them at trial. Rather, they challenge the dismissal of their cross-claim against the employer and the finding that the injuries were not suffered as the result of a motor accident, within the meaning of the Motor Accidents Compensation Act 1999 (NSW).

5 By their notice of appeal, the appellants sought to raise three broad issues, namely:

(1) the negligence of the employer, as raised in their cross-claim;

(2) the contribution payable by the employer, and

(3) the liability of the TACV.

6 Before addressing these issues in turn, it is necessary to note the circumstance by which the TACV became a respondent to the appeal.

Role of the TACV

7 According to the fifth amended statement of claim, the TACV was joined as the third party motor vehicle insurer of the prime mover and the trailers pursuant to orders made by Delaney DCJ on 24 March 2010. In his judgment, the trial judge noted that the TACV was "added to the proceedings to argue the question of whether or not the accident was a motor accident in the terms of the relevant provisions of the Motor Accidents Compensation Act" at [9]. That language reflects the terms of s 79 of the Motor Accidents Compensation Act, which permits an insurer to apply to the court to be joined as a party to proceedings against a defendant with whom it has a third party policy, "in order to argue that in the circumstances of the case it has no obligation under the policy to indemnify the defendant".

8 Judgment was delivered on 24 March 2011, orders being made on 1 April 2011. The trial judge considered the submissions of the TACV under the heading "Was this incident a motor accident?": at [86]-[103]. He concluded that "[t]he injury was not caused by any defect in the trailer": at [103]. It followed, although there was no specific finding or declaration to this effect, that the TACV had no obligation to indemnify the defendants under the policy.

9 Although no order was made in respect of the TACV, order 4 made on 1 April reserved an application by the TACV for the plaintiff to pay its costs to 28 April 2011 and the question of a Bullock order. On 28 April 2011 the plaintiff was ordered to pay TACV its costs, but the appellants were required to indemnify the plaintiff in that regard. A stay of execution was ordered on condition that the appellants pay the plaintiff $350,000.

10 Why the plaintiff joined the TACV is unclear: he sought no relief against it. The history of the joinder appears from the transcript of the hearing on 24 March 2010. In the course of opening the case for the plaintiff, the trial judge asked what statutory regime governed the claim: Tcpt, 24/03/10, p 3(40). Counsel for the plaintiff responded:

"The Civil Liability Act. Initially my instructing solicitors made a claim under the motor accidents legislation and that was rejected on the basis that this was not a motor accident. There is no suggestion that the vehicle, for instance, was in movement, it was simply stationary and being unloaded using the forklift together with manual means."

11 Counsel for the plaintiff referred to a letter from the TACV denying liability on the basis that the accident did not give rise to an injury under the Motor Accidents Compensation Act: Tcpt, p 5(5). He then sought to file in Court a fourth amended statement of claim. Counsel for the defendants took no objection but noted that, it was "clearly being asserted" that there had been a "motor accident": Tcpt, p 9(49). He raised the possibility that if the plaintiff contended there was a motor accident, there might be a defence based on s 108 of the Motor Accidents Compensation Act which bars a claimant from commencing court proceedings unless a certificate had been issued under s 92 or s 94 of the Act.

12 It later appeared that a certificate had been issued under s 92 (Tcpt, p 17) which led counsel for the defendants to seek an adjournment to join the motor vehicle insurer, or have the insurer apply to be joined as a party, presumably pursuant to s 79 (although the transcript refers to s 47): Tcpt, pp 17-18 and p 21.

13 In substance the dispute so identified was not between the plaintiff and the insurer so much as between the appellants and their insurer. Although the trial judge found that the accident was not a motor accident for the purposes of the Act, the appellants now seek to pursue the assertion that it was. The TACV has appeared in the appeal and has filed submissions in support of the finding in the District Court in respect of this issue. It is appropriate to act on the basis that the proceedings are properly constituted and that the issue is a live issue. It will be necessary to consider in due course what orders should be made in that respect, no appropriate order having been sought in the notice of appeal. The history of the joinder of the TACV will be relevant to the appropriate order with respect to its costs.

Whether accident a "motor accident"

14 The appellants asserted that the injuries suffered by the plaintiff occurred in the course of a motor accident, to which their compulsory third party policy responded. The answer to that question, it was accepted by all parties, depended on the operation of the Motor Accidents Compensation Act as in force at the date of the accident, namely 20 July 2005. The Act has since been amended in significant respects.

15 The insurance under a third party policy covered the owner and driver of the motor vehicle "against liability in respect of ... injury to a person caused by the fault of the owner or driver of the vehicle ... in the use or operation of the vehicle": s 10. The term "motor vehicle" was defined to mean "a motor vehicle or trailer within the meaning of the Road Transport (General) Act 1999", since repealed ("the Road Transport Act"). The trailer was not a "motor vehicle" because that phrase was defined to mean a vehicle "that is built to be propelled by a motor that forms part of the vehicle": Road Transport Act s 3(1). It was however a "trailer" which was defined to mean "a vehicle that is built to be towed, or is towed, by a motor vehicle". As explained below by Macfarlan JA, the defect in the present case was said to reside in the trailer and particularly in the large movable bracket which was used to hold the load in place during transport.

16 The term "injury" was, at the relevant time, defined in the Motor Accidents Compensation Act, s 3 in the following terms:

"injury:

(a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during:

(i) the driving of the vehicle, or

(ii) a collision, or action taken to avoid a collision, with the vehicle, or

(iii) the vehicle's running out of control, or

(iv) such use or operation by a defect in the vehicle ...."

17 As the cases explain, the definition of "injury" may operate differentially depending on whether the injury is a result of driving, a collision, or the vehicle running out of control, on the one hand or, on the other, a defect in the vehicle within par (iv): see, generally, Zotti v Australian Associated Motor Insurers Ltd [2009] NSWCA 323; 54 MVR 111.

18 The emphatic language of the definition requires that the injury must be caused "in the use or operation of" the vehicle. On one view, the relevant "fault" of the owner or driver must also be in the use or operation of the vehicle. However, as fault is defined to mean "negligence or any other tort", a purposive reading of the provision would include injuries caused by a defect in the vehicle if the defect were due to the fault of the owner or driver. It does not follow, however, that all injuries caused by defective vehicles will be "a result of" and "caused during" the use or operation of the vehicle. In Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568, the High Court considered whether an injury to a worker manually manoeuvring containers on the back of a truck suffered an "injury" for the purposes of the Act where the defect involved the unavailability of the mechanical unloading system with which the truck was fitted. The Court (McHugh, Gummow, Hayne, Callinan and Heydon JJ) unanimously held that the operative cause of the employee's injury was not the defect in the vehicle but the negligent system adopted by the employer for unloading the containers. Although there was a defect in the vehicle, the Court concluded that the defect merely gave rise to the occasion for the worker to use a different method for moving containers: at [95] (Gummow, Hayne and Heydon JJ). The plurality held that the language of the definition and in particular "the emphatic and intensive phrase 'if, and only if' directs attention to notions of predominance and immediacy rather than to more removed circumstances": at [102].

19 In reaching the same conclusion, McHugh J referred to cases which had arisen prior to the introduction of the definition in force in 2005 by the Motor Accidents Amendment Act 1995 (NSW). The earlier cases treated the use or operation of the vehicle as covering the loading and unloading of the vehicle, so that the adoption by an employer of an unsafe system of work in that regard could be described as constituting the fault of the owner in the use or operation of the vehicle: at [27]-[29]. McHugh J continued at [30]:

"The amendments effected by the 1995 Act do not result in the Act automatically excluding acts of loading and unloading a vehicle from the concept of 'use or operation' of the vehicle. The Act restricts the circumstances in which the Act governs an injury sustained during loading and unloading operations (the injury must be 'a result of and is caused during ... such use or operation by a defect in the vehicle'). However, the Act neither expressly nor inferentially excludes all loading and unloading activities from the expression 'use or operation' of the vehicle. Its application is governed by the cause of the injury, but not by the activity in which the person injured was engaged when the injury was sustained."

At [47]-[52], McHugh J added:

"However, the amendments bring about the result that the Act does not apply to injuries sustained during loading and unloading operations where there is no defect in the vehicle."

20 Callinan J was of the opinion (not shared by other members of the court) that the word "such" in par (iv) of the definition referred back to pars (i)-(iii), thus contemplating that the vehicle was being driving or was running out of control, in circumstances in which the driver had not been at fault: at [133]. The majority held that the word "such" referred back to the phrase "use or operation" in the chapeau, which words were repeated for emphasis in par (iv). (The approach of Callinan J appears to be close to that adopted by the current version of the Act, following an amendment made in 2006: how the amendment applies in relation to trailers need not be considered in this case.)

21 In determining whether a vehicle is defective, it is appropriate to consider its fitness for its intended use: Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193 at [68] (Spigelman CJ) in a passage approved in Allianz at [32] (by McHugh J). In Zurich, the worker was injured whilst lifting a loading ramp which formed part of a trailer attached to a truck, unassisted by any hydraulic or any mechanical lifting mechanism. This was held to be a defect in the design of the vehicle. McHugh J distinguished Zurich from Allianz at [64]:

"In both Zurich and the present case, the worker was instructed to do something which led to the worker being injured. In Zurich, however, the instruction was to use the vehicle for the purpose and in the manner for which it was intended. In the present case, Mr Oliver was instructed to use the vehicle in a manner other than its intended use. And he was instructed to use the vehicle in a way that did not involve the use of the defective part ...."

22 The plurality also stated that they "would not be prepared to differ from the decision in Zurich": at [89], presumably referring to the result, rather than the point of statutory construction discussed in that and the preceding paragraph of the joint judgment.

23 In Walfertan Processors Pty Ltd v Dever [2006] NSWCA 289; 47 MVR 140, this Court considered an injury caused when the drawbar of a trailer used to transport sullage fell onto the respondent's foot, crushing it. The Court held that the absence of a jockey wheel mounted on the drawbar of the trailer, allowing it to be coupled and uncoupled without requiring the use of a forklift and avoiding the risk that it might fall freely to the ground, was a defect in the trailer. If the injury had been caused by the absence of the jockey wheel, the claim fell within the scope of Act. If, on the other hand, the injury arose from the failure to adopt a safe system of work in the absence of a jockey wheel, arguably it fell outside the scope of the Act. Giles JA concluded at [32]:

"The circumstances were different from those in Allianz .... In that case the employer directed an unsafe method of unloading containers without using the defective T-bar mechanism, and it was the unsafe method which brought the injury. The respondent was not injured through an equivalent unsafe method, for example using a forklift when it was unsafe to do so because of the risk that the drawbar would slip off the tines. The appellant had a trailer in which there was a defect, and when Mr Harper removed the pin the defect, the absence of a jockey wheel, meant that there was a risk that the drawbar would fall to the ground even without the tractor being driven away. The risk came home and the respondent was injured. The appellant used a piece of defective equipment and, because of the defect, the respondent was injured."

24 In the circumstances of the present case, I agree with Macfarlan JA that the upright brackets or frames on the trailer were insecure when the chains holding them in place were released, and the frames remained in an upright position. I agree that their design was negligent and that they constituted a defect in the trailer due to the fault of the owner.

25 The next question is whether the injury occurred in the "use or operation" of the vehicle. The vehicle being a trailer designed to carry goods, and in particular boat trailers and parts, the loading and unloading of the trailer was an essential part of its use and operation. Although the trailer was not in motion at the time of the accident, the injury was caused during its use or operation by a defect in the trailer. That conclusion is consistent with the reasoning of this Court in Zurich and Walfertan and with the distinction between a defect causing injury and one leading to the adoption of an alternative negligently devised system of work not involving the defective mechanism, accepted in Allianz. Accordingly, it was an injury within the meaning of the Motor Accidents Compensation Act.

Calculation of contribution

26 I agree with Macfarlan JA that the employer was negligent in failing to play its part in either requiring the appellants to vary the design of their vehicle to remove the defect, or to instruct its employees not to climb onto the trailer. I also agree with the attribution of responsibility, after reduction for contributory negligence, of 60% to the appellants and 40% to the employer. There remains an issue as to the manner of calculating the deduction from the damages payable by the appellants, having regard to the liability of the employer.

27 Because the Workers Compensation Act 1987 (NSW), Part 5, Div 3, limits the damages which can be recovered from an employer on a claim for a work injury, the damages assessed against a third party tortfeasor under the general law will generally be greater than those assessed as against the employer. The disparity gives rise to an issue of principle when the damages are apportioned, having been calculated on different bases. Where the injured worker brings a claim against a third party tortfeasor, which in turn seeks contribution from the employer determined at, say, 30% of the loss payable by it, assessed under general law principles, the employer will lose, in part, the protection given by the Workers Compensation Act. If, on the other hand, the third party tortfeasor recovers 30% of the damages, as assessed against the employer, it will lose the full benefit of its entitlement to contribution. The policy of the Act is that "the burden of the reduction that it makes in the amount of contribution recoverable should fall on the worker, not on the non-employer wrongdoer": J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142 at [38] (Campbell JA).

28 A further difficulty arises where, as in this case, the plaintiff has not brought proceedings against his or her employer. The worker, not being entitled to recover and retain both workers compensation and work injury damages, must choose the appropriate remedy. The limits on the recovery of work injury damages, combined with the benefits which may flow from continued entitlement to workers compensation, especially in circumstances where the long term effects of an injury are unpredictable, not infrequently leads a worker not to sue the employer. In that circumstance, the question is how the hypothetical assessment of the liability of the employer is to be undertaken.

29 The calculation required by s 151Z(2) of the Workers Compensation Act (set out by Macfarlan JA at [112] below) is based on a finding that the employer was liable, proportionately, for the accident. On that assumption, the employer's financial liability needs to be assessed. The damages recoverable by the plaintiff have already been assessed under the general law, as modified by the Civil Liability Act. As a proportion of those damages, the employer would be liable to pay the appellants approximately $263,000, being 40% of the damages assessed as payable by the appellants, after reduction for contributory negligence.

30 However, the damages payable by the employer would be assessed as work injury damages, in accordance with Pt 5, Div 3 of the Workers Compensation Act. Under that statutory regime, no damages may be awarded unless the injury resulted in "a degree of permanent impairment of the injured worker that is at least 15%": s 151H(1). If the plaintiff cannot satisfy that threshold, the damages recoverable from the employer would have been nil. In such a case, for the purposes of s 151Z(2)(d), the amount of the contribution that the appellants would be entitled to recover from the employer, determined as if the whole of the damages were assessed in accordance with Pt 5, Div 3, would be nil, because no damages would be recoverable under those provisions. It follows that, for the purposes of s 151Z(2)(c), the amount of the contribution which the appellants would be able to recover, but for Pt 5, from the employer would exceed the amount actually recoverable by the full amount of $236,000. Accordingly, the damages recoverable by the plaintiff from the appellants would necessarily be reduced by that amount.

31 If, however, the plaintiff does satisfy the threshold test, and the assessment of his damages, calculated under Pt 5, Div 3 of the Workers Compensation Act, is less than the amount assessed under the general law, he will suffer some diminution of the damages recoverable from the appellants, but they will be able to recover 40% of the diminished damages from the employer.

32 The consequence of this analysis is relevant to what follows for the future conduct of these proceedings, from the conclusion that the employer was liable for the injury. That question will be addressed below. There are, however, two antecedent questions which affect the position of the appellants.

33 First, the assumption underlying the analysis set out above is that the provisions of s 151Z(2) apply to a case where the employer is not in fact liable to pay work injury damages, because the threshold is not satisfied. Subsection (2) is conditioned upon the satisfaction of two elements, each of which contains two limbs. The first is that the worker takes proceedings to recover damages from the third party tortfeasor: sub-s (2)(a). That happened in this case. The second element is that the worker also takes "or is entitled to take" proceedings to recover damages from his employer: sub-s (2)(b). The plaintiff did not take such proceedings and, for sub-s (2) to operate, he must be a person who was "entitled to take" such proceedings. A finding of liability on the part of the employer demonstrates that the employer owed a duty, which it breached, causing loss to the plaintiff. The fact that no damages would be payable by the employer, if sued, is beside the point; the language of par (b) involves an entitlement "to take proceedings" not an entitlement "to recover damages". Accordingly, the preconditions to the engagement of sub-s (2) were satisfied. This construction of the section was adopted by this Court in Grljak v Trivan Pty Ltd (In liq) (1994) 35 NSWLR 82 at 88 (Mahoney JA, Kirby P and Priestley JA agreeing).

34 Secondly, there is a question as to how the assessment of damages which would have been recoverable in the event that the plaintiff had brought proceedings against his employer, which he did not, should be assessed. In particular, there is an issue as to satisfaction of the threshold in s 151H, which requires that the degree of permanent impairment that results from an injury be assessed "as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act": s 151H(4). The 1998 Act is the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the Workplace Injury Act"). In its terms, Pt 7 only applies to claims for compensation or work injury damages. There was no such claim in the present case. The consequence of that fact for the hypothetical assessment required under s 151Z(2) has been considered in a number of cases in this Court. The conclusion reached is that the Court must make the assessment according the principles established by Pt 7, but without the benefits provided (and the constraints imposed) by the procedural mechanisms. Accordingly, the assessment of the degree of permanent impairment is to be made in accordance with the WorkCover Guidelines, as required by s 322 of the 1998 Act, but need not be made by an approved medical specialist appointed for the purpose under Pt 7.

35 In dealing with statutory regimes, analogous circumstances may provide limited assistance. However, as reference is made elsewhere to the reasoning of this Court in Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; 67 NSWLR 516, it is desirable to identify the issues in that case. Mr Fuller was the driver of a motor vehicle which collided with a motorcycle driven by the injured worker (Mr Kearney). The respondent was Mr Kearney's employer. Each driver was held equally liable for the accident. No claims were made for damages, but Mr Kearney received workers compensation from his employer. The employer sought to recover such compensation from Mr Fuller, pursuant to the statutory indemnity conferred by s 151Z(1)(d) of the Workers Compensation Act. For that purpose, the limit of recovery was the amount of damages which would have been payable by Mr Fuller, had he been sued in tort. The trial judge in the indemnity proceedings was therefore required to assess those damages. She included an amount on account of non-economic loss in that assessment, being a head of damages not available in respect of a motor accident unless there had been a threshold assessment as to the degree of permanent impairment of the injured person of at least 10%: Motor Accidents Compensation Act, ss 131 and 132. The Court (Bryson JA, Handley JA agreeing and Ipp JA relevantly agreeing) held at [46] that the unavailability of the statutory machinery did not preclude the judge undertaking the relevant assessment.

36 Bryson JA noted that the Court had been referred to Forstaff Blacktown Pty Ltd v Brimac Pty Ltd [2005] NSWCA 423; (2005) Aust Torts Rep 81-814, but found it of no assistance: at [44]. In Forstaff, McColl JA noted that the claimant had not undergone a medical assessment pursuant to s 322 of the Workplace Injury Act and noted counsel's submission that he could not be compelled to do so. She doubted whether that was correct: at [105]. For the reasons given by Macfarlan JA and Barrett JA, I agree that the machinery is not available for the purposes of the hypothetical exercise required by s 151Z(2)(d). Nevertheless, that fact does not preclude an assessment of the degree of permanent impairment being undertaken at trial in order to determine whether the threshold in s 151H is satisfied.

37 A related issue arose in Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council [2009] NSWCA 59; 230 FLR 336. In that case the injured worker, employed by the respondent, had been injured on the way to work by a bus owned by the appellant. The employer paid compensation to the injured worker and sought to recover the amount of the compensation from the appellant, pursuant to the statutory indemnity; as in Fuller, an assessment of damages was required to determine the limit of the recoverable amount. The defendant tortfeasor wished to have the injured worker examined for the purposes of the assessment of damages. It recognised that there was no mechanism available to require that result directly, but sought a stay of the Council's indemnity proceedings until the Council (as employer) took the necessary steps under s 119 to have the injured employee medically examined. For the purposes of a claim for worker's compensation, the employer to whom notice of an injury had been given, could require an injured worker to undergo a medical examination, by a doctor provided and paid by the employer: Workplace Injury Act, s 119(1). A worker who refused to undergo such an examination could suffer suspension of his or her weekly payments. The Court held that the procedural mechanism was not available in the indemnity proceedings but that the damages could be assessed without such assistance as might have been obtained from a medical examination of the injured worker.

38 A consideration of the indemnity cases reveals the caution which must attend reasoning from analogous circumstances. In a claim for indemnity under s 151Z(1)(d), the employer has an interest in maximising the seriousness of the injury suffered and the damages which might have been awarded, in order to maximise its recovery of compensation payments. By contrast, in contribution proceedings under s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) and s 151Z(2), the employer will, on one view, have an interest in minimising the seriousness of the injury, so as to limit its contribution. On the other hand, it may also intend to recover compensation payments and therefore take a different stance. In contribution proceedings, the non-employer tortfeasor may have no interest in the sum of damages calculated for the purposes of the hypothetical claim against the employer. The plaintiff will, of course, have an interest in maximising the damages which would have been awarded against the employer, in order to minimise the gap between those damages and the damages otherwise recoverable from the non-employer tortfeasor. It is not necessary in this case to consider whether these considerations affect the burden of proof.

39 Curiously, the appellants' defence to the plaintiff's claim, to which the employer was not a party, sought a reduction of damages under s 151Z(2), but the cross-claim, to which only the employer was joined, sought contribution but no assessment of the amount. Both the plaintiff and the employer had an interest in the assessment of the hypothetical work injury damages. Indeed, depending on the attitude of the employer to the recovery of compensation, the plaintiff may have been the only party with an interest in maximising the assessment of work injury damages.

40 In State of New South Wales v Maxwell [2007] NSWCA 53 this Court reviewed an assessment of permanent impairment carried out by the trial judge in circumstances on all fours with the present case without adverse comment, although the process was not challenged by the appellant.

41 I agree with the conclusion reached by Macfarlan JA that an assessment of work injury damages must in the circumstances be made by the trial judge for the purposes s 151Z(2), including the assessment required under s 151H, although the mechanism provided by Part 7, Div 7 of the Workplace Injury Act has not been invoked, for example, for the purpose of a compensation claim, and cannot be invoked for the purposes of these proceedings. I also agree with reasons of Barrett JA for the same conclusion.

Orders

42 There is a question as to the appropriate orders which should be made to give effect to the findings of the Court. As Macfarlan JA explains, the evidence upon which damages were assessed was not before this Court. Whether or not it should have made its own assessment of the damages payable by the employer, in accordance with Pt 5, Div 3 of the Workers Compensation Act, had such material been available, is not a question that need be considered.

43 Although this Court does not have the relevant material, it appears that there was evidence before the trial judge that the plaintiff suffered a permanent impairment of more than 15%, although other medical reports may have supported a lesser figure: Tcpt, 11/08/10, p 256(25). There appears, therefore, to have been a live issue in that respect. In the circumstances the proceedings must be returned to the District Court for that issue to be determined. There having been no challenge to the assessment of damages under the general law, it would no doubt be convenient if the matter were to return to the trial judge, even though a significant period will have elapsed since the original assessment.

44 There are other provisions which could limit the assessment of work injury damages. The only damages recoverable are those for past and future economic loss (s 151G), the calculation of which may be subject to limitations (ss 151I and 151J) and limits on the interest payable (s 151M).

45 In my view it would be appropriate to condition the further hearing of the matter by requiring that it be undertaken on the basis of the material before the trial judge, without further evidence, subject to a grant of leave in respect of further oral evidence or cross-examination, or the tender of further documents, if the judge be satisfied that such a step is necessary, given the lapse of time since the trial.

Costs

46 There remains a question as to the appropriate orders with respect to costs.

47 The first respondent to the appeal was the employer, the primary issue in the appeal being the finding of the trial judge that the employer was not in breach of its duty to the plaintiff. On a finding of breach, one consequential issue involved the appropriate apportionment of liability. On those issues the appellants were successful.

48 The second major issue on the appeal concerned the liability of the TACV in respect of the judgment suffered by the appellants. Again the appellants were successful.

49 The issue raised by the appellants with respect to the TACV was also confined in its scope, although it did depend to some extent upon the argument with respect to the way in which the injury occurred. The bulk of the submissions in this Court were directed to the way the injury occurred and the liability of the employer. In my view it is appropriate to make a costs order in favour of the appellants, distinguishing between the payments due from the employer and the TACV. The employer should pay two-thirds of the appellants' costs in this Court; the TACV should pay one-third of the appellant's costs.

50 The plaintiff played no significant role in the appeal. If he suffers some reduction of his damages, it will be as a result of the further hearing in the District Court. In accordance with the condition of the stay, he has presumably received an amount of $350,000. Given the apportionment determined by this Court, on any view he will be entitled to retain that amount. The appellants' request that such amount should be repaid should be refused. Nevertheless, because there may be some reduction in the amount of his judgment, it must be set aside. In the circumstances, he should bear his own costs of the appeal, subject to any benefit to which he may be entitled from the Suitors' Fund.

51 So far as the costs of the trial are concerned, the submissions did not demonstrate any basis on which this Court should interfere with the order made below that the appellants pay the plaintiff's costs on the ordinary basis. As already noted, the only challenge to the judgment in favour of the plaintiff was the consequential reduction which might be achieved upon a reconsideration of the appellants' success against the employer on their cross-claim.

52 Of the orders made on 28 April 2011, it is necessary to set aside the first order requiring the plaintiff to pay the costs of TACV and the second order, requiring the appellants to indemnify the plaintiff in respect of those costs. On the understanding that the heart of the dispute involving the TACV was between it and the appellants, it has been unsuccessful. It should pay a portion of the appellants' costs of the trial. No submissions have been made to this Court as to what proportion that should be and, unless agreement can be reached, the parties should have liberty to put brief submissions before the Court in that regard. In the absence of such agreement or further submissions, the TACV should pay 20% of the appellants' costs of the plaintiff's claim. (The TACV will presumably play no part in any further hearing in the District Court.)

53 The Court should make the following orders:

(1) Allow the appeal and set aside:

(a) orders 1 and 5 of the orders made in the District Court on 1 April 2011, and

(b) orders 1 and 2 made in the District Court on 28 April 2011.

(2) In place of those orders:

(a) give judgment for the cross-claimants (Izzard and Haulage) against the cross-defendant (Dunbier) on the basis that Dunbier should bear 40% of the liability for the injuries suffered by the plaintiff;

(b) order that the cross-defendant pay the cross-claimants' costs of the cross-claim;

(c) remit the proceedings to the District Court for it to determine the contribution recoverable by the cross-claimants from the cross-defendant, and the amount, if any, by which the judgment in favour of the plaintiff must be reduced in accordance with s 151Z(2) of the Workers Compensation Act 1987, on the basis of the material before the trial judge, subject to leave to adduce further oral evidence or cross-examination, or to tender further documents, if the judge be satisfied that such a step is necessary, given the lapse of time since the trial;

(d) unless the defendants file submissions within 14 days seeking a different order, order that the TACV pay 20% of the first and second defendants' costs of the plaintiff's claim.

(3) Order that the TACV pay one-third of the appellants' costs in this Court.

(4) Order that the first respondent (Dunbier) pay two-thirds of the appellants' costs in this Court.

(5) Direct that each of the respondents have a certificate under the Suitors' Fund Act 1951 (NSW), if not disqualified pursuant to s 6(7).

54 MACFARLAN JA:

SUMMARY OF CASE AND CONCLUSIONS

55 On 20 July 2005 Mr Matthew Buckley, the second respondent to this appeal, was severely injured when a steel perimeter frame fell on him as he was dismounting from a trailer owned by the second appellant ("Haulage") and insured as to third party liability by the third respondent ("TAC"). At the time of the accident Mr Buckley was the manager of the business premises at Ingleburn in Sydney of the first respondent ("Dunbier"). Dunbier manufactured boat trailers of various sizes at its premises in Victoria and for two and a half to three years prior to Mr Buckley's accident had engaged Haulage to transport (by semi-trailer) boat trailers and associated equipment from its premises in Victoria to those at Ingleburn. Haulage used heavy metal perimeter frames to keep the vehicles' loads in place during transit. Mr Buckley had been assisting Haulage's driver, Mr Izzard, the first appellant, to unload the vehicle immediately prior to his accident, which occurred when he used one of the frames as a hand-hold to dismount from the vehicle.

56 Mr Buckley brought proceedings in the District Court claiming damages against Mr Izzard and Haulage upon the basis that they had breached duties of care owed to him. As well as denying negligence, Mr Izzard and Haulage pleaded that Mr Buckley had been contributorily negligent. They also pleaded that Mr Buckley's injuries had been caused or contributed to by the negligence of Dunbier, Mr Buckley's employer, and that, as a result, any judgment otherwise recoverable by Mr Buckley from Mr Izzard and Haulage should be reduced in accordance with s 151Z(2)(c) of the Workers Compensation Act 1987. In addition Mr Izzard and Haulage cross-claimed against Dunbier alleging that if Mr Izzard and Haulage were liable to Mr Buckley, Dunbier was a joint tortfeasor who would have been liable to Mr Buckley if sued (see s 5 of the Law Reform (Miscellaneous Provisions Act 1946).

57 TAC, the compulsory third party motor vehicle insurer of the prime mover and its trailer, was joined as a defendant as it denied that Mr Buckley's injuries fell within the definition of "injury" in the Motor Accidents Compensation Act 1999. As a result, TAC disclaimed liability to indemnify Mr Buckley. It contended that his injuries had not been caused by a defect in the vehicle during its use or operation.

58 In a judgment dated 24 March 2011 Delaney DCJ found that:

(a) Mr Izzard and Haulage were liable in negligence to Mr Buckley.

(b) Dunbier would not, if sued by Mr Buckley, have been found liable to him in negligence, with the consequence that Mr Izzard and Haulage's defence under s 151Z(2)(c) and cross-claim both failed.

(c) Mr Buckley was guilty of contributory negligence, assessed at 20 per cent.

(d) Mr Buckley's injuries were not suffered in a manner that attracted the provisions of the Motor Accidents Compensation Act, with the consequence that TAC was not liable to indemnify Mr Izzard and Haulage in respect of Mr Buckley's claim.

(e) Mr Buckley was entitled to damages from Mr Izzard and Haulage in the sum, quantified later in an order made on 1 April 2011, of $658,119.

59 The issues on appeal are as follows:

(a) Was Dunbier negligent?

(b) If so:

(i) In what proportion should Mr Izzard and Haulage on the one hand and Dunbier on the other be held responsible for Mr Buckley's injuries?

(ii) What is the effect in the present context of the stipulation in s 151H(1) of the Workers Compensation Act that "[n]o damages may be awarded [against an employer] unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15 per cent"?

(c) Were Mr Buckley's injuries suffered in a manner that attracts the provisions of the Motor Accidents Compensation Act and renders TAC liable to indemnify Mr Izzard and Haulage in respect of Mr Buckley's claim?

60 The primary judge's findings that Mr Izzard and Haulage were liable in negligence and that Mr Buckley was contributorily negligent were not challenged. Nor was his Honour's quantification of damages challenged, other than by way of Dunbier's reliance on s 151H, referred to in [59](b)(ii) above.

61 My answers to the questions set out in [59] above can be summarised as follows:

(a) Dunbier was negligent (see [82] - [101] below).

(b)(i) Mr Izzard and Haulage were 60 per cent responsible for Mr Buckley's injuries and Dunbier was 40 per cent responsible (see [102] - [110] below).

(ii) The effect of s 151H(1) is set out in [114] - [122] below.

(c) TAC is liable in respect of Mr Buckley's claim because his injuries fell within the definition of "injury" in the Motor Accidents Compensation Act (see [125] - [136] below).

THE PERIMETER FRAMES

62 The frame which struck Mr Buckley was one of a number of moveable metal frames used on Haulage's vehicles to assist in the stacking and securing of boat trailers and associated equipment. The frames were comprised of posts of at least 1 - 1.2 m in height on each side of the vehicle trailer, with a cross bar joining them. It appears that the cross bar may have been vertically adjustable. The frames rested on the coaming rail of the vehicle trailer and could be secured by means of a chain attached at one end to the upright post of the frame and at the other end to the rope rail on the side of the vehicle trailer (Report of Dr Colin Wingrove at [6]). In the loading process, the frames were moved about in order to facilitate the stacking and securing of the load. On unloading, it was necessary to move the frames out of the way to permit the removal of boat trailers by forklift trucks and of other items by hand. The frames were undoubtedly heavy. Dunbier employee Mr Rakesh Nair stated that if a frame were lying on its side on the vehicle trailer it would "probably take two or three people to lift it up" (Transcript p 15). Dunbier's assistant manager Mr Greg Tucker estimated the weight of the frames as being "close to two to three hundred kilos" (Transcript p 53).

63 Dr Colin Wingrove, an expert called by Mr Buckley, gave evidence that the posts on either side of the frames only had "a base of about the equivalent of the post[,] so it looks like it is only extending probably about 100 millimetres either side of the post itself ... that's a very short base. It's got no way of offering a stable ... base to any post be it this post[,] or any post you design ... it is small to the point that it allows very little movement of the centre of gravity before it reaches a stage of tip over" (Transcript pp 166 and 176). Dr Wingrove said that he did not consider that an estimate of two to three hundred kilos as the weight of each frame was "an unreasonable estimation" and accepted that if a frame were unsecured and "any force was applied to it, realistically it was going to fall over" (Transcript pp 177 - 178).

64 After Mr Buckley's accident, Haulage modified the bases of the frames to improve their stability. Mr Tucker said that Haulage made "the bottom legs a lot wider, which meant that no matter how, if you are standing on the ground you could not pull that rack [that is, frame] down whatsoever" (Transcript p 65). Mr Izzard's evidence was not inconsistent with this evidence although he pointed out that if a frame were hit by a forklift truck it could still fall over (Transcript p 212).

MR BUCKLEY'S ACCIDENT

65 Due to head injuries suffered in the accident, Mr Buckley was unable to recall what occurred. The only other person present at the time of the accident was Mr Izzard.

66 Mr Izzard described what occurred as follows. He and Mr Buckley were on top of the vehicle trailer, sliding the frames away from the boat trailers so that they could be unloaded. Mr Buckley pulled one of the frames in such a way that it touched his forehead, without injuring him. Mr Izzard told him to leave the work to Mr Izzard but from the following evidence of Mr Izzard it appears that they both continued to complete it:

"A. ... I told him to 'For Christ's sake leave it to me' and that was basically it.

HIS HONOUR

Q. And what happened then?

A. Then the bottom, well the last part has got taken off and we went to get off the trailer basically. I've walked to the front of the B trailer to get down where we climb down again, similar to get on the back trailer-"

Mr Izzard then described the accident occurring as follows.

67 Mr Izzard walked to the back of the trailer to climb down at the place usually used for mounting and dismounting from the trailer. However Mr Buckley attempted to alight from the middle of the trailer, putting his foot on a tool box fixed underneath the level of the tray and holding on to one of the frames to steady himself. As he did so the frame toppled over and hit him forcefully on the head. The frames had been unlocked for the purpose of moving them to permit unloading.

UNLOADING ON PREVIOUS OCCASIONS

68 Mr Izzard was the only employee of Haulage who used to travel from Victoria with the vehicle. At Ingleburn, he required the assistance of one or more Dunbier employees to move the frames and unload delivered goods. This assistance was usually provided by Mr Greg Tucker or, in the period of about six months prior to Mr Buckley's accident, Mr Rakesh Nair. Mr Nair's predecessor, a man named Brett, had also assisted Mr Izzard. Mr Buckley said that he had seen Brett up on the back of Mr Izzard's truck "heaps of times" (Transcript p 106). Mr Buckley appears to have helped occasionally.

69 Dunbier employees usually assisted Mr Izzard by remaining standing on the ground and pushing or pulling one side of the frame whilst Mr Izzard, on top of the vehicle trailer, moved the other side of the frame. Mr Buckley said that he had been involved in unloading Mr Izzard's truck on occasions prior to the accident but could not recall whether he had previously been on top of the trailer. Mr Nair gave evidence that "[Mr Buckley] used to always get up onto the back of the truck to unload things" (Transcript p 40). The primary judge found that "the practice was for employees to go onto the deck of the trailer to remove loose parts" and that "Mr Izzard accepted this system of work, despite his evidence that Dunbier's employees should not get onto his trailers" (Judgment pp 5 - 6). There was also evidence from Mr Tucker and Mr Nair regarding an occasion on which the former had been struck by a falling frame (Transcript pp 65 and 193 - 4) and a separate occasion on which the latter had observed an upright frame topple over (Transcript p 16).

THE JUDGMENT AT FIRST INSTANCE

The compulsory third party insurer

70 The parties accepted at first instance and on appeal that TAC's liability depended upon whether Mr Buckley's injuries fell within the definition of "injury" in s 3 of the Motor Accidents Compensation Act 1999. The definition is couched in the following terms:

"injury:

(a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during:

(i) the driving of the vehicle, or

(ii) a collision, or action taken to avoid a collision, with the vehicle, or

(iii) the vehicle's running out of control, or

(iv) such use or operation by a defect in the vehicle

... "

71 The parties also accepted that only subparagraph (iv) of (a) of the definition could possibly be applicable in the present context.

72 The primary judge's reasoning in finding for TAC on this issue included the following:

"94. I am satisfied that the frame was a significantly integral part of the trailer to be treated as incorporated in the truck. The intended use of the frame encompassed the process of loading and unloading the trailer.

...

96. Even if it is accepted that the base plate was too small it by no means follows that the injury the plaintiff suffered was as a result of the size of the base plate and caused by that alleged defect as distinct from being a result of negligence on the part of Mr Izzard in failing to give proper instructions about the way the frame was to be moved and to warn that the frame might be unstable if pulled. The use of the frame, by moving it back to enable the unloading of the boat trailers was not dangerous per se. Mr Izzard did not manufacture the frame, it was manufactured for him at his request.

97. The plaintiff has the onus of proof as to the intended use of the frame. I accept that the intended use was to increase the capacity of the trailers to carry boat trailers from Victoria to Ingleburn. Its use as a handhold was not a use in the operation of the vehicle.

...

101. ... It may be assumed, without specifically knowing, that if a longer baseplate had been used then there might be greater stability, but that does not of itself mean that the stability of the base plate that was in place was a danger to users in all circumstances, or in circumstances where it was likely to be used in the course of the unloading or loading of the truck. It only became dangerous when somebody tried to pull it. But whether or not this would have been the same situation, had the baseplate been longer, was not known.

102. It was submitted there was no defect in the design of the upright. As I said, it might have been more stable if the base was longer, but there was no evidence other than that of Mr Wingrove, the engineer, given in chief to support this submission. As I said, there was no engineering assessment of the forces applied to the upright. The real issue, in my opinion, was whether or not in the circumstances the upright should have been locked after the vehicle came to a halt and the peripheral frame had been moved to allow the forklift to access the trailers.

103. Therefore, I conclude that the predominant, proximate or immediate cause of the injury (see Allianz) was the unsafe system of work created by Mr Izzard in not locking the frame after it had been moved to allow access to the forklift and not instructing Dunbier's employees about the correct way to move the perimeter frame. In my opinion, it was Mr Izzard's failure to instruct that caused the unsafe situation that led to the plaintiff's injury. The injury was not caused by any defect in the trailer" (Judgment pp 28 - 30).

Mr Izzard and Haulage's liability

73 In concluding that Mr Izzard and Haulage were in breach of their duty of care to Mr Buckley, the primary judge said:

"118. In my opinion, the risk was foreseeable that a person could pull the perimeter frame. If this occurred and it was not locked there was a probability that serious harm could occur because of the weight of the frame. As the unloading on at least a weekly basis required employees of Dunbier to be exposed to this risk the defendants had a duty to take steps to avoid the risk of injury. These steps including locking the frame when not being moved to allow access to a forklift, and instructing Dunbier, through the plaintiff or directly through correspondence of the risk, so that their employees could be properly instructed.

...

122. In my opinion, the plaintiff has established but for the failure of Mr Izzard to advise him of the specific risk posed by a person pulling rather than pushing the frame the accident would have been avoided. I also find that another cause of his injury was the failure of Mr Izzard to lock the frames in place after the boat trailers had been removed. I am satisfied that he did not lock the frames where they were no longer being moved to allow the boat trailers to be unloaded. I find that it was Mr Izzard's responsibility to lock and unlock the frames. Had he done so, a chance that the plaintiff would take hold of a frame that had not been locked would have been avoided" (Judgment pp 34 and 36).

74 The primary judge summarised his reasons for holding that Mr Buckley was guilty of contributory negligence as follows:

"127. I infer that the plaintiff may have been aware of a risk of alighting where he did on the trailer with no ladder. However, accepting Mr Izzard that he helped with the movement of a frame earlier, this did not in my opinion fix the plaintiff with knowledge that it could topple over. I find that the plaintiff taking hold of the frame was not a failure to take reasonable care. However, alighting from the trailer where he did, and where there was no ladder, was in my opinion contributory negligence. Compared with the failure of the defendants to warn the plaintiff of the condition of the frame his failure to take care for himself in alighting from the trailer was far less culpable. It must also be recalled that he alighted after Mr Izzard told him to get off the trailer. I assess the plaintiff's contributory negligence at 20%" (Judgment p 37).

Dunbier's liability as employer

75 The primary judge concluded as follows:

"130. In this case, Dunbier knew the system of loading and unloading and was involved in it day to day. However, it did not know of any specific risk involving the use of the perimeter frames, and without such knowledge could not have given appropriate instructions to employees. There was no evidence that getting on or off the deck of a trailer was dangerous, calling for any instructions or directions to staff. The defendant did not need to devise a system of work where no risk was identified" (Judgment p 38).

DUNBIER'S LIABILITY AS EMPLOYER

Relevant principles

76 In Czatyrko v Edith Cowan University [2005] HCA 14; 79 ALJR 839, the appellant was injured whilst loading boxes onto a truck in the course of his employment. Without his knowledge, the hydraulic lifting platform by which he had ascended to the tray of the truck was lowered by another employee. The appellant was injured when he stepped back onto what he wrongly assumed was the lifting tray behind him. His employer was found to be in breach of its duty of care.

77 The Court stated the applicable general principles as follows:

"[12] ... An employer owes a non-delegable duty of care to its employees to take reasonable care to avoid exposing them to unnecessary risks of injury. If there is a real risk of an injury to an employee in the performance of a task in a workplace, the employer must take reasonable care to avoid the risk by devising a method of operation for the performance of the task that eliminates the risk, or by the provision of adequate safeguards. The employer must take into account the possibility of thoughtlessness, or inadvertence, or carelessness, particularly in a case of repetitive work" (References omitted).

78 The Court found that "the risk that a person required to step backwards and forwards on and from a moveable platform might do so without first looking behind him" was "plainly foreseeable" given that "the task was a repetitive one to be performed in a diminishing space" (at [13] - [15]). Yet there was no system in place to guard against this risk. The risk could have been "readily obviated by the respondent by the taking of simple measures" such as the fitting of a warning beeper to give notice that the lifting platform was being lowered, however none of these relatively simple measures was taken. The employer was accordingly found liable.

79 These principles had been earlier applied by the High Court in Kondis v State Transport Authority [1984] HCA 61; 154 CLR 672 in relation to equipment owned and operated by an independent contractor of the employer. In that case the respondent's contractor dropped part of a crane that he was driving onto the respondent's employee after failing to check whether anyone was standing below the part. Mason J (with whose judgment Deane J agreed, and whose approach was consistent with that of the other members of the Court) reached the following conclusions in relation to the employer's liability:

"In the result the respondent's duty to provide a safe system of work was non-delegable and the respondent was liable for any negligence on the part of its independent contractor in failing to adopt a safe system of work. The risk of injury from a falling rod or pin to an employee positioned under the crane during the extension procedure was slight, but nevertheless obvious. Avoidance of the risk called for the adoption of a procedure, even an instruction forbidding any employee assisting Clissold [an employee of the independent contractor] from taking up a position under the jib of the crane during the extension operation ... It was not a case in which the employer had placed his employee under the control of a third party in circumstances in which the employer ceased to have any power or opportunity to give directions as to the manner in which the work in question was to be undertaken.

The employer's duty at common law to take reasonable care for the safety of his employee extends to giving him directions in the performance of his work where directions might reasonably be thought to be required to secure him from danger of injury" (reference omitted) (at 688 - 9).

80 In Andar Transport Pty Ltd v Brambles Ltd [2004] HCA 28; 217 CLR 424 there was an issue as to whether an employer had breached its duty to an employee who was injured whilst unloading linen trolleys from a truck that he was driving in the course of his employment. The following was said in the plurality judgment in that case:

"[54] ... [I]t has been said that "[a] system of working normally implies that the work consists of a series of similar or somewhat similar operations". The loading and unloading of linen trolleys from a delivery truck, pursuant to a contractual arrangement requiring regular repetition of that activity, clearly falls within these descriptions. As a result, Andar was obliged to take reasonable steps to ensure that the loading and unloading was carried out in a safe manner. That obligation in turn required Andar to develop, and maintain, a methodology or system which would achieve that result. As a sub-set of the general common law duty of care outlined earlier in these reasons, the obligation is non-delegable. This court's decision in Nicol demonstrates that an employer may be liable for breach of the duty notwithstanding that the system of work was devised, in part, by an employee who was subsequently injured as a result of carrying out the system.

...

[57] ... To rely, as Andar does, on the circumstance that the trolleys had been in use by Brambles for many years previously is to ignore Andar's independent obligation to satisfy itself of the safety of the system. In any event, that a system has been in place for a significant period of time does not mean that an employer's obligations in respect of that system have been therefore complied with" (references omitted).

81 Although an employer's duty to its employee differs from some other duties of care in that it is non-delegable and the standard of care for an employee's safety that is required to be achieved has been described as "not a low one" (Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; 160 CLR 301 at 308), it nevertheless reflects the fundamental principles concerning duties of care stated in Wyong Shire Council v Shirt [1980] HCA 12; 146 CLR 40 at 47 - 48 and restated in s 5B of the Civil Liability Act 2002.

The existence of a foreseeable risk

82 The first requirement (see s 5B(1)(a) Civil Liability Act) is the existence of a foreseeable risk of which the defendant knew or ought to have known.

83 The primary judge's conclusion that Dunbier did not breach its duty of care was founded upon the view that Dunbier neither knew nor ought to have known of any relevant risk to Mr Buckley's safety (see Judgment [130] quoted in [75] above).

84 Whether or not Dunbier was aware of it (a question to which I will come), there clearly was in fact a risk of injury posed by the frames to those involved in the unloading of Haulage's vehicles. The primary judge acknowledged this risk when dealing with the issue of Haulage's liability (see Judgment [118] quoted in [73] above; see also Judgment [110]).

85 The frames were heavy and rested upon narrow bases. If pulled, pushed or knocked when unsecured they could easily topple onto someone causing the type of serious injury suffered by Mr Buckley (Transcript p 212).

86 The risk of this occurring was not insignificant (see s 5B(1)(b) of the Civil Liability Act) as the frames were necessarily put in an unsecured state during unloading operations.

87 Counsel for Dunbier contended on appeal that Haulage had in place a system that adequately dealt with this risk. He relied particularly upon the following evidence given by Mr Izzard:

"Q. ... [A]s well as taking the trailers off the back of the truck, it was necessary to take the loose items off the back too?

A. That's correct, yes.

Q. And it was not uncommon to, certainly for you, to give a hand in getting the loose items off the truck?

A. No, well that was my job, that was a part of the job, yeah, I had to be up there and one of the boys had to take them away from me, you know, like I'd hand them to them and they'd put them on a pallet or if they needed them on whatever, you know.

Q. And on occasion, one of the boys would get on the back of the truck and give you hand?

A. On occasion.

...

Q. Did you want to say something else Mr Izzard?

A. Well, it was under duress let's say, they'd hop on and give you a hand because it just wasn't, it wasn't something I was comfortable with.

Q. The reason you weren't comfortable with it was because you knew that these racks in the unlocked position were unstable?

A. Well that's not exactly right, because of the fact, when we were down to picking the stuff up, in a normal situation those racks would be locked. It was just the fact is you still need somebody on the ground. If two was up there, there's only usually two of us in the yard, there wasn't much point, that being two was on the top and then you can't throw a tyre off, a boat tyre off onto the ground (Transcript p 216).

88 Even if the "normal situation" to which Mr Izzard referred could be characterised as a system, it was far from adequate, not least because there remained a period during the loading operations when the frames were unsecured. This occurred because it was not possible for someone on the trailer to secure the frames. It was necessary for that to be done by a person standing on the ground (Transcript p 38).

89 It appears that as a matter of practice it was Mr Izzard who undertook the task of re-securing the frames (Judgment p 36 at [122]). In his evidence Mr Izzard appeared to suggest that normally the frames would be re-secured after they had been moved to facilitate unloading but before the actual unloading commenced (see his words "when we were down to picking the stuff up" quoted in [87] above). However, as this would have involved Mr Izzard alighting from the vehicle after moving the frames, securing the frames whilst standing on the ground and finally remounting the trailer to commence the unloading, there was a risk that it would not occur on every occasion and that unloading would proceed before the frames were re-secured. Indeed, Mr Tucker gave evidence that although there was "nothing stopping [the frames] from being locked off ... it just wasn't practised" (Transcript p 68). As evident from Mr Buckley's injury, a failure to lock the frames placed Dunbier employees at the risk of significant harm. It appears from Mr Izzard's evidence quoted in [66] above (particularly the words "well the last part has got taken off") that the frames had not been re-secured before the unloading that preceded Mr Buckley's injury occurred.

90 Dunbier was aware that its employees helped Mr Izzard to unload Haulage's vehicles. The unloading occurred not at a remote location, but at Dunbier's own premises, of which Mr Buckley was the manager. As in Kondis (see [79] above), this "was not a case in which the employer had placed his employee under the control of a third party ... [and] ceased to have any power or opportunity to give directions as to the manner in which the work in question was to be undertaken". To the contrary, while the unloading was occurring on its premises, Dunbier was perfectly capable of "taking reasonable steps to protect [Mr Buckley] from injury and to that end of prescribing and insisting on a safe system of work" (Kondis at 689).

91 Even if Mr Buckley had not been familiar with what was involved (and it appears that he in fact was), Dunbier, through Mr Buckley, had an obligation to obtain that knowledge from employees who possessed it, notably Mr Tucker and Mr Nair. The slightest consideration on Dunbier's part would have revealed that the unloading operations required the heavy metal frames to be unlocked and left, at least for a short period of time, in a state in which a mere push, pull or knock would topple them over, quite possibly onto a Dunbier employee. It should also have revealed that there had been at least two earlier incidents when frames had toppled over (see [69] above).

92 The primary judge said that Dunbier "did not know of any specific risk involving the use of the perimeter frames" (Judgment [130] quoted in [75] above) but the knowledge of the risk that I have just described was sufficient to require a response from Dunbier. The weight and instability of the perimeter frames would have been capable of observation by Dunbier staff given the frequency with which unloading occurred on Dunbier's premises ("at least twice a week, once a week" (Transcript p 78)) and its continuation for "two and a half or three years before the accident" (Judgment at [52]).

93 The primary judge also said that there was "no evidence that getting on or off the deck of a trailer was dangerous" but the real question was whether the presence of heavy, unsecured frames posed a risk of injury to Dunbier employees involved in the unloading operations. These operations involved employees mounting and dismounting from the deck of the trailer. Using a frame as a hand-hold to dismount was one of the many ways in which a limited amount of force applied to a frame in the course of unloading might cause it to topple over. There was no need for Dunbier to have had foresight of the specific way in which the accident occurred, provided that it had, or should have had, foresight of the fact that there were numerous means by which a frame of such height and weight might be caused to fall on one of its employees during the unloading process (see Transcript p 180).

94 Moreover, an employer discharging its duty to take reasonable care to avoid exposing its employee to an unnecessary risk of injury "is bound to have regard to a risk that injury may occur because of some inattention or misjudgment by the employee in performing his allotted task" (Ferraloro v Preston Timber Pty Ltd (1982) 56 ALJR 872 at 873). Accordingly, the fact that Mr Buckley's injuries were suffered whilst he was using a perimeter frame for a purpose for which it was not intended (to support his dismount from the trailer) does not mean that they were not caused by Dunbier's breach of its duty to provide a safe system of work in which the risk of such misjudgment is adequately accounted for. In other words, Mr Buckley's actions were "more apposite to the issue of contributory negligence than to the issue of negligence itself" (ibid at 873).

95 As stated by Mason, Wilson, Brennan and Dawson JJ in McLean v Tedman & Brambles Holdings Ltd [1984] HCA 60; 155 CLR 306 at 311 - 12, "It is not an acceptable answer to assert that an employer has no control over an employee's negligence or inadvertence. The standard of care expected of the reasonable man requires him to take account of the possibility of inadvertent and negligent conduct on the part of others ... The possibility that the employee will act inadvertently or without taking reasonable care may give rise to a foreseeable risk of injury".

A reasonable person's response to the risk

96 To comply with s 5B(1)(c) of the Civil Liability Act, it is necessary to consider whether a reasonable person in Dunbier's position would have taken precautions against the risk of harm to its employees that I have identified. It is necessary to consider in this context "the probability that the harm would occur if care were not taken", "the likely seriousness of the harm", "the burden of taking precautions to avoid the risk of harm" and "the social utility of the activity creates the risk of harm" (ibid s 5B(2)). The prospect of harm occurring was significant, for the reasons given above. The weight and composition of the frames gave rise to a real risk that grave harm might be suffered, as was the case for Mr Buckley.

97 Whilst s 5C(c) of the Civil Liability Act states that steps taken subsequently to obviate or reduce a risk of harm do not of themselves constitute an admission of liability regarding the risk, such steps are often nevertheless significant in identifying the measures that might have been taken before the accident to manage the relevant risk. In this case, simple steps were taken after Mr Buckley's accident to improve significantly the stability of the unsecured frames (Transcript pp 202 - 204). There was nothing to indicate that these measures imposed any significant burden (financial or otherwise) upon Haulage or that there was a reasonable excuse for not introducing them prior to Mr Buckley's accident.

98 At the hearing of the appeal, counsel for Dunbier emphasised that these steps were taken by Haulage and not by Dunbier, which did not have any power to direct Haulage to modify its vehicles. However this submission does not reflect the reality of the situation. Haulage had had its vehicles configured specifically for its work for Dunbier (Transcript p 210 - 211), which was a significant client. It is unrealistic to suppose that if Dunbier had voiced concerns regarding the safety of its employees and had requested that Haulage make the modest modifications that were so readily implemented after Mr Buckley's accident, that Haulage would have refused, particularly if Dunbier had offered to pay for the modifications.

99 The evidence to which I have referred above (see [63] and [64]) indicates that if the subsequent modifications to the frames had been made prior to Mr Buckley's accident, they would almost certainly have prevented the accident from occurring. The force that Mr Buckley applied to the frame whilst using it as a hand-hold fell far short of the magnitude of force that could be expected if a forklift hit a frame, this being something that Mr Izzard envisaged as capable of knocking over even a modified frame (see [64] above).

100 In light of these conclusions it is unnecessary for me to consider whether the issue of appropriate warnings and instructions to Dunbier employees concerning the frames would have sufficiently addressed the relevant risk, and whether the absence of such warnings and instructions was causative of Mr Buckley's injury (see Kondis at 689).

Whether casual act of negligence of independent contractor

101 Dunbier further contended on the appeal that at most there had been a casual act of negligence by an independent contractor and that Dunbier was not liable to its employee for the consequences of such an act. Whilst it may be accepted that an employer is not liable in respect of such an act (see for example Kondis at 678 - 9), the employer will nevertheless be liable where, as here, one of its employees is injured by such an act if the injury also results from the failure of the employer to provide a safe system of work for its employee (ibid at 688).

APPORTIONMENT OF RESPONSIBILITY FOR MR BUCKLEY'S INJURIES

102 Both Mr Izzard and Haulage's defences to Mr Buckley's claim and their cross-claim against Dunbier require consideration of how responsibility for Mr Buckley's injuries should be apportioned between Mr Izzard and Haulage on the one hand and Dunbier on the other.

103 Section 5 of the Law Reform (Miscellaneous Provisions) Act 1946, which is concerned with contribution between joint and several tortfeasors, stipulates that "the contribution recoverable from [a joint tortfeasor] shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage" (see subsection (2)).

104 The principles enunciated by the High Court in Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; 59 ALJR 492 in the context of contributory negligence are a guide to the appropriate approach in the present context. Under these principles the making of a relevant apportionment:

" ... involves a comparison both of culpability, i.e. of the degree of departure from the standard of care of the reasonable man ... and of the relative importance of the acts of the parties in causing the damage ... It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination" (at 494).

105 As the primary judge did not find Dunbier negligent, there was no occasion for him to apportion responsibility for Mr Buckley's injuries. On appeal the parties concerned with the issue agreed that it was appropriate that this Court proceed to apportion responsibility if it concluded that Dunbier was negligent as well as Mr Izzard and Haulage.

106 On the primary judge's unchallenged findings, there was a substantial degree of departure by Mr Izzard (and, vicariously, Haulage) from the standard that would be expected of a reasonable person in his position. This is demonstrated by the findings of the primary judge quoted in [73] above and by the following additional observations made by his Honour after referring to the earlier incident involving Mr Tucker:

"116. It appears that, notwithstanding this event and the slight injury caused to Mr Tucker, Mr Izzard took no steps to avoid the risk of injury that existed where an employee might pull instead of pushing the frame. He did not issue any warnings to Dunbier employees or discuss the matter with the plaintiff who was the manager of Dunbier's yard. He allowed them to work on the truck in ignorance of the risk of injury of which he was well aware. He should have had the foresight, as stated in Mr Wingrove's report, to lock the frames when not in use. He should have told the plaintiff the employees should be aware that the frames could topple if pulled so that the plaintiff could have told his employees to be careful. Mr Izzard's warning to Mr Nair was not adequate to discharge his duty to warn Dunbier's employees or indeed Mr Nair himself of the risk posed to them by pulling the frames instead of pushing them".

107 Furthermore the causative potency of Mr Izzard's negligence was great. He was the person in charge of the vehicle and its unloading. If he had acted earlier to modify the frames to reduce or eliminate the risk that they presented when they were unsecured, Mr Buckley's accident would not have occurred.

108 Dunbier's departure from the requisite standard of care was also significant. Through the involvement of its employees over a period of years in the unloading operations, it was, or should have been, cognisant of the dangerous situation that existed when the frames were unsecured. Yet it took no steps to ensure the safety of its employees. Dunbier, along with Mr Izzard and Haulage, was well able to take steps to prevent an accident such as that which occurred to Mr Buckley.

109 As noted earlier, Mr Buckley's accident did not occur at a location removed from his employer's business premises, as often occurs in relation to labour hire companies. The activities that led to the accident were occurring "at least twice a week" at those business premises themselves (Transcript p 78).

110 I do not consider that there is a great deal of difference between the responsibilities for Mr Buckley's injuries of Mr Izzard and Haulage on the one hand and Dunbier on the other. However, as the dangerous frames formed part of Haulage's vehicle and Mr Izzard had control of the use of those frames, I would apportion 60 per cent responsibility to Mr Izzard and Haulage and 40 per cent to Dunbier.

THE APPLICATION OF SECTION 151Z

111 Section 151Z(1)(a) of the Workers Compensation Act 1987 permits a worker both to take proceedings against a third party for damages and to claim compensation from his or her employer under the Act (although the worker is not entitled to retain both).

112 Section 151Z(2) provides that if, in respect of an injury for which compensation is payable under the Act, a worker takes proceedings against a third party for damages and also "takes or is entitled to take" proceedings independently of the Act to recover damages from the employer, the following provisions apply:

"(2)

(c) the damages that may be recovered from the person by the worker in proceedings referred to in paragraph (a) [being proceedings against a third party for damages] 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 the 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,

... ".

113 As Mr Buckley's injuries were ones for which compensation was payable under the Workers Compensation Act and third parties (Mr Izzard and Haulage), whom he has sued for damages, raised a defence under s 151Z(2)(c), the following steps need to be taken:

(a) The contribution which Mr Izzard and Haulage would (but for Part 5 of the Act) have been entitled to recover from Dunbier as joint tortfeasor needs to be determined. This is the amount obtained when the percentage responsibility of Dunbier for Mr Buckley's injuries (which I have determined to be 40 per cent) is applied to the amount (not in issue on appeal) necessary to compensate Mr Buckley for his injuries.

(b) It is then necessary to determine the amount that Mr Buckley would have been entitled to recover from Dunbier under Part 5 of the Act. One barrier to his recovery may have been s 151H which falls in Division 3 of Part 5 of the Act. Dunbier contended that this section would have precluded Mr Buckley from obtaining damages from Dunbier in respect of the injuries in question in these proceedings.

(c) It is then necessary to apply the percentage representing Dunbier's responsibility (40 per cent) to the amount determined in accordance with (b).

(d) The damages recoverable by Mr Buckley from Mr Izzard and Haulage are then reduced by the excess of the amount calculated in accordance with (a) over that calculated in accordance with (c).

114 Section 151H contains the following limitation on the recovery of damages:

"(1) No damages may be awarded unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15%.

Note. Section 322 of the 1998 Act provides that the assessment of the degree of permanent impairment is to be made in accordance with WorkCover Guidelines. That section also provides that impairments that result from the same injury are to be assessed together.

...

(4) The degree of permanent impairment that results from an injury is to be assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.

... ".

115 As Mr Buckley did not sue his employer, no medical assessment of his injuries in accordance with the Workplace Injury Management and Compensation Act 1998 ("WIM Act") has been made. Dunbier contended that in these circumstances Mr Izzard and Haulage did not, and could not, establish that Mr Buckley was entitled to recover damages from Dunbier. It thus submitted that the hurdle imposed by s 151H on the recovery of damages from Dunbier (that the degree of permanent impairment be at least 15 per cent) was applicable.

116 Although I accept, on the authority of Maricic v Dalma Formwork (Australia) Pty Ltd [2006] NSWCA 174 at [71], that the onus of proof of Mr Buckley's entitlement rested upon Mr Izzard and Haulage, I otherwise reject Dunbier's submission. The presently relevant question posed by s 151Z(2) is: what damages would Mr Buckley have been entitled to recover from Dunbier? As Mr Buckley has not sued Dunbier for damages, the question is a hypothetical one. It is to be answered by reference to the circumstances existing at the time of the accident and not to some later time, such as when the worker brought proceedings against a third party (see Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; 67 NSWLR 516 at [42]).

117 This hypothetical question is analogous to that which frequently arises in the assessment of damages for professional negligence. Where negligence has caused a client to lose the opportunity to bring court proceedings, an assessment must be undertaken of what would have been likely to occur at a notional trial of the proceedings (Johnson v Perez [1988] HCA 64; 166 CLR 351 at 366 - 7; Firth v Sutton [2010] NSWCA 90 at [141] - [156]). As was pointed out in Johnson, the assessment may well require "a broad brush approach" (at 367) as assumptions need to be made about such matters as the likely trial date and the evidence that would or should have been available at the notional trial.

118 Likewise in the present context an assessment needed to be made as to what would have occurred if Mr Buckley had sued his employer. As in the professional negligence context, consideration needed to be given to the evidence that Mr Buckley would have had available for tender. In my view that required the Court in the present proceedings to make a finding on the balance of probabilities as to whether Mr Buckley would have been able to prove that a medical assessment of his injuries would have revealed a degree of permanent impairment of at least 15 per cent. Except in an obvious case of catastrophic injuries, the making of such a finding would require the Court to consider relevant medical evidence and the WorkCover Guidelines pursuant to which medical assessments are made in accordance with the WIM Act.

119 This view accords with that arrived at by this Court in Fuller. In that case an employer sought from a third party, whose negligent driving had caused injury to an employee, indemnity for the worker's compensation that the employer had paid to the employee. To succeed in its recovery action under s 151Z(1) the employer needed to prove that the third party was liable to the employee for damages for non-economic loss. As the injuries arose out of a motor vehicle accident, ss 131 - 2 of the Motor Accidents Compensation Act 1999 were applicable. These sections prohibit an award of damages for non-economic loss unless, in the case of a dispute, a medical assessment conducted in accordance with that Act demonstrates that the injured person suffered a degree of permanent impairment exceeding 10 per cent.

120 The third party in Fuller submitted that the employer could not demonstrate that the third party was liable to the employee for damages for non-economic loss when the employee had not undertaken a medical assessment in accordance with the Act. In rejecting this submission, Bryson JA (with the concurrence of Handley and Ipp JJA) said:

"[46] It was necessary for K & J Trucks [the employer] to establish the amount in respect of which there was a liability of Mr Fuller [the third party] to pay damages in respect of Mr Kearney's [the employee] injury, but the statutory machinery regulating the determination of the amount of Mr Kearney's [the employee] damages has no application because it applies only to a claim for damages by Mr Kearney [the employee] and the award of damages to him. If it is to be established in proceedings under s 151Z(1)(d) what damages Mr Kearney [the employee] suffered the amount of those damages can be determined by the Court, in much the same way as the Court can determine other complex questions; the unavailability of the machinery by which the amount of Mr Kearney's [the employee] claim would have been decided if he made a claim is not a difficulty for making this determination. If the actual facts are proved it is reasonable to decide that as a matter of probability, the process through which Mr Kearney [the employee] would have had to pass if he had made a claim would have produced a result which accorded with the actual facts; that is a reasonable way of assessing the probabilities, and much more likely to be correct than to suppose or to act on the supposition that the machinery would have produced a decision that Mr Kearney [the employee] was not entitled to anything for non-economic loss. The question is not how much damages should be awarded to Mr Kearney [the employee], but how much are the damages which the circumstances in which Mr Kearney's [the employee] injury was caused created a liability in Mr Fuller [the third party] to pay in respect of the injury: the provisions of s.151Z(1) show that the amount of those damages may fall to be decided in circumstances in which an injured worker does take proceedings and recover damages, but also in circumstances in which he does not. The machinery provisions with which Mr Kearney [the employee] and others concerned in his claim would have had to comply if he made one cannot be complied with; but the provisions which require compliance with them have no application to K & J Trucks' [the employer] claim under s 151Z(1)(d)."

121 Although in my view it was therefore unnecessary for Mr Izzard and Haulage to demonstrate that Mr Buckley had undertaken a medical assessment and that his degree of permanent impairment was at least 15 per cent, it was nevertheless necessary for them to satisfy the Court on the balance of probabilities that, at the hypothetical trial of an action by Mr Buckley against Dunbier, Mr Buckley would have been able to prove that he had undergone a medical assessment which revealed the requisite degree of impairment. On appeal, Mr Izzard and Haulage submitted that there was evidence before the primary judge from which that conclusion could be reached. Dunbier submitted the converse.

122 As resolution of this issue would require consideration of material (including medical reports) which was not put before this Court and was not the subject of detailed argument, the issue should be remitted to the primary judge for determination.

123 The parties did not identify any other issues between them concerning the quantification of the damages which Mr Buckley would have been entitled to recover from Dunbier. Accordingly, once the issue as to the degree of impairment has been resolved, the parties should be able to agree upon any necessary quantification of those damages and to apply the primary judge's finding as to contributory negligence and this Court's finding as to the apportionment of responsibility between the tortfeasors.

124 If the Court below concludes that Mr Buckley would not have been able to demonstrate a permanent impairment of at least 15 per cent, the damages to which he is entitled from Dunbier are zero. In those circumstances the effect of s 151Z(2)(c) is to reduce the damages recoverable by Mr Buckley from Mr Izzard and Haulage by the 40 per cent of Mr Buckley's damages that Haulage would (but for Part 5 of the Act) have been able to recover from Dunbier as contribution but which is not in fact recoverable (due to s 151H in Division 3 of Part 5 of the Act).

THE COMPULSORY THIRD PARTY MOTOR VEHICLE INSURER'S LIABILITY

125 As noted earlier, TAC, as the relevant compulsory third party motor vehicle insurer, is liable in relation to Mr Buckley's injuries only if those injuries were caused by and during the use or operation of Haulage's vehicle (which the parties accepted included the trailer upon which Mr Buckley's accident occurred) "by a defect in the vehicle" (see [70] - [71] above).

126 In Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193 an employee suffered a serious injury to his back whilst lifting a heavy ramp that formed part of a trailer attached to a truck owned by the respondent employer. The Court held that the absence on the trailer of any form of hydraulic or mechanical assistance for lifting the ramp was a "defect" for the purposes of the Motor Accidents Compensation Act and that this defect caused the employee's injuries (at [69]). Spigelman CJ (with whom Handley and Powell JJA agreed) concluded as follows:

"[68] The defect must be 'in' the vehicle. A vehicle is not 'defective' only because its operation in a particular manner may lead to injury. However, the manner in which it is intended to operate may determine whether there is a 'defect' 'in' the vehicle.

[69] In the present case, the respondent submitted that the absence of any form of hydraulic or mechanical assistant for lifting was a 'defect' for purposes of the Act. The appellant emphasised the possibility of a team lift as a safe system of work for the trailer in its extant condition. In the circumstances of the present case, the appellant's characterisation should be rejected.

[70] I have concluded above that the design of the trailer was such that it was intended to be used in circumstances where a single worker lifted each ramp. When this happened it was, in my opinion, the use or operation of a vehicle in which there was a 'defect' for its intended use. It was not negligent use of a vehicle otherwise fit for the purpose or use to which it was intended to be put."

127 In Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568 an employee was injured when he sought to convey airline containers manually to the rear of the truck upon which they were loaded. The truck had a mechanical unloading system that would ordinarily have performed this task but it was inoperative at the time of the accident. The Court held that the employee's injury was not an "injury" within the definition of that word in s 3(1) of the Motor Accidents Act 1988 which was relevantly in the same terms as the definition under present consideration.

128 The Court held that the operative cause of the employee's injury was not the defect in the vehicle but a negligent direction given by the employer to unload the vehicle manually. In so holding, Gummow, Hayne and Heydon JJ said:

"[102] The use in the definition of the emphatic and intensive phrase 'if, and only if' directs attention to notions of predominance and immediacy rather than to more removed circumstances. The definition of 'injury' looks, for the CTP insurance system, to notions of proximate cause found in insurance law. That construction is consistent with the subject, scope and purpose of the 1995 Act.

[103] It was the system of work adopted by GSF to deal with the problem of unloading presented by the failure in operation of the motorised T-bar and, in particular, the direction to use the crowbar to lever the containers which had a predominant quality for, and an immediacy to, Mr Oliver's [the employee] injury. The defect in the T-bar was not a defect by which the accident was caused in the necessary statutory sense" (Reference omitted).

129 Their Honours noted (at [89]) that the parties to the appeal did not challenge the decision of this Court in Zurich v CSR.

130 I consider that in light of the matters to which I have referred in [85] - [89] above, the perimeter frames in the present case were defective, rendering Haulage's vehicle itself defective. In my view the unstable nature of the frames when they were unsecured constituted a defect in Haulage's vehicle because the frames needed to be unsecured and moved to fulfil their intended purpose. As it was Mr Izzard's job, first, to unlock the frames (necessarily whilst he was on the ground), secondly, with the assistance of a Dunbier employee, to move the frames whilst he was on the tray of the trailer and thirdly, (whilst on the ground again) to re-secure the frames, there was necessarily a period of time in which the frames were unsecured when people were likely to be moving near them. They were heavy metal structures of some height, liable to topple over due to their small bases if care were not taken in applying force to them. The frames could not perform their intended role in the transit of the vehicle without imperilling the safety of those engaged in the unloading operations: if (as was intended to be the case) they were placed in such a way as to secure the cargo and to facilitate stacking of it, they had to be unsecured and moved in the course of the unloading operations. There was not only necessarily a short period of time during which they were unsecured but there was also a significant risk that they would remain so for the duration of the unloading operations (see [89] above).

131 Furthermore the defective nature of the frames "resulted in and caused" Mr Buckley's injuries within the meaning of those expressions in the definition of "injury" in the Motor Accidents Compensation Act. The pressure that Mr Buckley applied to the relevant frame caused it to topple onto him. This would not have occurred if the post-accident modifications designed to stabilise the frames had been made prior to the accident. To use the language of the plurality in Allianz v GSF, the defect in the frames "had a predominant quality for, and an immediacy to [Mr Buckley's] injury" (at [103]).

132 In Allianz v GSF the defective T-bar was not in use. In one sense its defective character caused the accident because its unavailability forced the employee to adopt an alternative, and dangerous, means of carrying out the same work. However this only made it a cause in an attenuated sense, not in the immediate sense required by the High Court. In the present case the defective item was not out of use. Rather, it fell on Mr Buckley while it was in use, and as a result of its defective character. The present case more closely resembles Zurich Australian v CSR where the defective ramp was being used for the purpose for which it was intended but its defective character resulted directly in injury to the employee.

133 TAC submitted on appeal that the frame was not defective in the relevant sense because, when used by Mr Buckley as a hand-hold, it was not being used in the manner for which it was intended. In my view this submission too narrowly describes the function of the frames. The frames were designed to facilitate the carriage of boat trailers and associated equipment on the vehicle. It was essential to this use that on arrival they be moved to a different part of the trailer to permit unloading of the boat trailers and equipment. The relevant frame was positioned where it was at the time of the accident, and in an unsecured state, because of the unloading operations. At the time of the accident Mr Izzard and Mr Buckley were dismounting from the trailer, presumably with the intent on the part of Mr Izzard of securing the frames when he was on the ground. Even though all of the cargo may by then have been lifted off the vehicle, the unloading operations could not have been regarded as complete until those engaged in it had dismounted from the vehicle and the frames had been re-secured. The precise reason for pressure being applied to the relevant frame is not presently significant as the frames were performing their intended function in relation to Haulage's carriage of Dunbier's goods when the accident occurred.

134 This approach is consistent with that of this Court in AMP General Insurance v Brett [1998] 27 MVR 492 in which a question arose as to whether a milk delivery boy who was struck by a passing vehicle whilst alighting from his truck to deliver milk had thereby been involved in an act independent of "the use or operation of the vehicle". The Court held that he had not because "[i]t is an integral part of the use of a milk delivery truck that somebody delivers milk from it" (at 495) (see also NRMA Insurance Ltd v NSW Grain Corporation (1995) 22 MVR 317 at pp 321 - 2). In the same way, the dismounting of Mr Izzard and Mr Buckley from the vehicle trailer was a part of, or at least a necessary concomitant of, the unloading operation. Mr Buckley could hardly be expected to remain on top of the vehicle indefinitely, or to leave the frames unsecured.

135 It follows from the above that I do not agree with the primary judge's conclusion that Mr Buckley's accident "did not occur in the use or operation of the vehicle and the injury was not caused by the use of the vehicle" (Judgment at [92]). His Honour found that the intended use of the frames was to "increase the capacity of the trailers to carry boat trailers from Victoria to Ingleburn" but that their "use as a hand hold was not a use in the operation of the vehicle" (Judgment at [97] quoted in [72] above). However he had earlier expressed the view that the "intended use of the frame encompassed the process of loading and unloading the trailer" (Judgment at [94]). For reasons that I have given earlier, I consider that Mr Buckley's accident occurred in the course of this process.

136 Whilst the accident would likely have been avoided if Mr Izzard had locked the frames earlier or given appropriate instructions to Mr Buckley, those possibilities were not, in my view, "the predominant, proximate or immediate cause of the injury" (compare Judgment at [103]). Rather, as I have said, the cause in that sense was the defective frame. It is unnecessary to consider whether those possibilities to which the primary judge referred were joint causes of Mr Buckley's injury (see Allianz Australian v GSF at [59] per McHugh J).

ORDERS

137 I agree with what Basten JA says concerning costs and with the orders that his Honour proposes should be made to dispose of the appeal.

138 BARRETT JA: I agree with Macfarlan JA.

139 I wish to add some observations about the process of calculation directed by s 151Z(2)(d) of the Workers Compensation Act 1987 where, as here, both the employer and a non-employer are liable in damages for injury sustained by a worker, the worker sues the non-employer (but not the employer) and that non-employer claims contribution from the employer.

140 In the discussion that follows, references to "Division 3" are references to Division 3 of Part 5 of the Workers Compensation Act; and references to "Part 7" are references to Part 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998.

141 As both Basten JA and Macfarlan JA point out, the question of the amount of damages that the worker would have been entitled to recover from the employer is a hypothetical question. This is because the employer has not been sued. In Goodman Fielder Ltd v Hickson [2008] NSWCA 69 at [24], Giles JA noted that "s 151Z(2) requires a trial within a trial of the damages which the worker could have recovered from the employer". It is this "trial within a trial" that proceeds on the hypothetical basis.

142 The hypothetical nature of the inquiry was referred to by Campbell JA in J Blackwood & Son Ltd v Skilled Engineering Ltd [2008] NSWCA 142 at [40]:

"While s 151Z(2)(d) requires the contribution that it talks about to be calculated 'as if the whole of the damages were assessed in accordance with the provisions of Division 3', it does not require that any of the damages involved in the calculation actually be assessed in accordance with the provisions of Division 3."

143 The hypothesis directed by s 151Z(2)(d) is not that the worker is suing his employer for damages or that the employer is liable in damages. For the limited and specific purpose of calculating the contribution recoverable by the non-employer from the employer, it is to be assumed that damages are being assessed "in accordance with provisions of Division 3 as to the award of damages". A necessary part of that assumption is that all things have happened necessary to permit the making of an assessment of damages in accordance with Division 3.

144 The first provision within Division 3 is s 151E. It causes Division 3 to have direct application to an award of damages in respect of an injury to a worker caused by the negligence or other tort of the worker's employer. Had there been contested proceedings in which the worker sued the employer for damages, s 151H(4) (which is also within Division 3) would have required that the degree of permanent impairment (a matter made relevant by s 151H(1)) be "assessed as provided by this section and Part 7 (Medical assessment) of Chapter 7 of the 1998 Act". A medical assessment under Part 7 would accordingly have been necessary for the purposes of such contested proceedings; and provisions in Part 7 about submitting to medical examination would have been relevant.

145 When the contribution to which the non-employer is entitled from the employer under s 151Z(2)(d) is being calculated, no such medical assessment can in fact be undertaken under Part 7. Essential pre-conditions to the operation of the provisions in Part 7 are not satisfied and cannot be satisfied. There is no "claim" as defined by s 4(1) because the worker is not, as a matter of fact, claiming workers compensation or "work injury damages" as defined by s 250(1) (that is, damages "recoverable from" the employer for certain matters); and, because there is no "claim", there is no "claimant" as defined by s 4(1). There is no "medical dispute", as defined by s 319, because there is no "dispute between a claimant and the person on whom a claim is made".

146 It follows that when, in the course of the "trial within a trial" required by s 151Z((2)(d), the court considers the 15% impairment threshold with which s 151H is concerned and, in doing so, gives effect to the several directions in s 151H itself, it must proceed without a Part 7 medical assessment and therefore without the assistance of the conclusive presumptions that such an assessment creates through s 326 of the 1998 Act.

147 But it does not follow that the court will ignore Part 7. On the contrary, it will pay close attention to Part 7 and, in obedience to s 151H(4), give effect to the Part 7 principles concerning quantification, even though the Part 7 quantification mechanisms are not available. The court must thus, for example, pay attention to the Part 7 provision (s 322(1)) that requires assessment of the degree of permanent impairment to be made in accordance with the WorkCover Guidelines. It will have regard to those guidelines in deciding whether, in the "trial within a trial" of hypothetical proceedings between worker and employer in which there was a Part 7 medical assessment, the necessary minimum 15% impairment would have been proved on the balance of probabilities.

148 The s 151Z(2)(d) task is of the kind referred to by Bryson JA in Fuller v K & J Trucks Coffs Harbour Pty Ltd [2006] NSWCA 88; (2006) 67 NSWLR 517 in the passage quoted by Macfarlan JA at [120]. Although the court must calculate, for an alternative purpose, an amount the method of calculating which for a primary purpose is stated in the statute, the court is not given for the alternative purpose machinery that it is required to use when making a calculation for the primary purpose. But unavailability, for the alternative purpose, of the machinery that it would be necessary to use in making a calculation for the primary purpose does not mean that the court is unable to make a calculation for the alternative purpose. It means that the court must do the best it can without the assistance of the particular machinery.

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Decision last updated: 10 May 2012