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The long and winding road: Interplay of MVAs and Workers’ Compensation in Tasmania - Cook v Buckingham [2012] TASSC 53


Facts

The plaintiff, Russel Cook, was injured as a result of a motor vehicle accident. The driver, Ronald Buckingham, negligently ran off the road when driving the plaintiff to work. Mr Cook sued for damages sustained as a result of the accident.

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Louis Cooper
Director - Insurance Litigation
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Proceedings

Two actions were taken and heard together with respect to liability arising out of the accident.

Firstly, Mr Cook sued for damages sustained as a result of the accident, and third party proceedings were taken by the driver against the Motor Accidents Insurance Board (MAIB), claiming an indemnity. The MAIB, which would ordinarily be liable to indemnify a driver, contended that in these circumstances it was not liable because the driver was acting in the course of his employment and therefore provisions of the Workers Rehabilitation and Compensation Act 1988 (Tas) (“WRC Act”) applied to the claim for damages.

Secondly, the employer sued the driver, Mr Buckingham, seeking reimbursement of workers compensation payments to Mr Cook. The driver again took third party proceedings seeking an indemnity from the MAIB.

The driver’s negligence

The driver conceded negligence but relied on a defence under s 138AB(1) of the WRC Act which, at the time, provided that a worker needed to lodge an election with the Workers’ Compensation Tribunal in order to seek common law damages, which could only occur if there was a whole person impairment of 30% or more. In considering whether this section was applicable as a defence, Blow J had regard to whether the driver was driving in the course of his employment (and thus, whether the employer was vicariously liable for the purposes of this section).

Blow J considered a range of English and Australian authority on the issue of vicarious liability. In reliance on English authority which suggested that there needed to be a contractual obligation to travel in a car on the way to work for it to be considered in the course of employment, Blow J held that the driver was not acting in the course of employment. This was despite the fact that the employees were paid for their travelling time. Important factors for the finding were that the employees were free to choose routes of travel, mode of transport, that they only received an allowance for travel rather than remuneration and that the ‘driver was employed to operate an excavator and not to be a chauffeur’. On this basis it was held that the provisions of s 138AB did not apply and provided no defence to the negligence of the driver. Mr Cook was therefore entitled to damages at common law.

MAIB’s liability

The MAIB is generally bound to indemnify the user of a motor vehicle pursuant to s 14 of the Motor Accidents (Liabilities and Compensation) Act 1973 (Tas) (“MALC Act”), but this does not apply to injuries where the WRC Act applies. MAIB submitted that as Mr Cook’s injuries arose out of his employment, it was not liable to indemnify in this case.

Having regard to s 25(6) of the WRC Act, which provides that an injury does not arise from a worker’s employment if it occurs when the worker is travelling to and from their place of employment, Blow J concluded that the injury did not arise from the driver’s employment. On this basis it was held that the WRC Act did not apply, and the driver was entitled to an indemnity pursuant to s 14 of the MALC Act.

Employer’s indemnity

The employer claimed an indemnity from the driver pursuant to s 134(1) of the WRC Act. Under s 81AB an employer who disputes liability for worker’s compensation must serve written notice to that effect within 84 days. It was argued that the employer’s failure to do so resulted in it being taken to accept liability’ and therefore brought the injury under the category of ‘an injury for which compensation is payable’. However, Blow J held that the failure of the employer to dispute did not make it liable to pay compensation because there may be many reasons why liability may not be disputed (e.g. mistake, an oversight, generosity or as a deliberate commercial decision). It was held that the existence of an indemnity in the circumstances would be unjust. The employer was not entitled to an indemnity as it was not ‘liable to pay compensation’. Section 134(1) is to be interpreted as conferring a right to indemnity only where compensation is payable to a worker under s 25(1) of the Act.

Comment

This case, specific to Tasmanian workers’ compensation and motor accidents legislation, demonstrates the complexities for travel claims in this jurisdiction. Workers’ compensation insurers should take note to be extremely careful when making payments in such circumstances – the road to recovery may turn out to be a dead end. However, the findings of Blow J have been appealed by the MAIB, so we shall see.

                   
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