- The Queensland Supreme Court considered the correct interpretation of the indemnity clause found in section 207B(8) of the Workers Compensation and Rehabilitation Act 2003 (Qld) (WCRA).
WorkCover Queensland, the plaintiff in these proceedings, sought indemnity for compensation paid to an injured worker. The alleged right to indemnification arose by virtue of section 207B(8) of the WCRA. This provision confers a right to indemnity where the injured worker has received compensation but has not recovered, or taken proceedings to recover, damages for the injury from another person, other than their employer. This often arises where a manufacturer is involved in the proceedings. The defendants applied to strike out WorkCover’s statement of claim, or sought in the alternative, a summary judgment.
The injured worker contracted malignant mesothelioma, allegedly in consequence of the inhalation of asbestos dust and fibres emanating from products manufactured by one or more of the defendants. The worker made an application under the WCRA for payment of compensation from WorkCover Queensland and also commenced separate proceedings in the District Court with respect to his injuries. However, the District Court proceedings were never served on the defendants and were not renewed, rendering the proceedings ‘stale’ under the Uniform Civil Procedure Rules 1999 (Qld).
Notwithstanding the filed District Court proceedings, WorkCover Queensland claimed to be entitled to indemnity from the defendants for the compensation it had paid to the injured worker. Adopting a literal interpretation of section 207B(8) of the WCRA, the defendants contended that WorkCover Queensland could never plead, let alone prove, that the worker had not taken proceedings to recover damages for his mesothelioma in circumstances where he had commenced (but not pursued) the District Court proceedings.
In response, WorkCover Queensland argued that the defendant’s literal interpretation of section 207B(8) of the WCRA was not correct because it would mean that the mere commencement of proceedings (without pursuing them) would defeat WorkCover Queensland’s right of indemnity which was counter to the legislative purpose of the provision.
The decision at trial
The Court rejected the defendants’ literal interpretation of section 207B(8) of the WCRA. Specifically, the Court concluded that if a person has merely filed a proceeding in court (which has then been allowed to lapse), they ought not be regarded as having “taken proceedings” for the purposes of section 207B(8).
Implications for you
The proper consideration of whether proceedings have been “taken” for the purposes of section 207B(8) of the WCRA, involves an objective assessment of the status of any recovery proceedings. The mere filing of proceedings (without pursuing those proceedings) will not constitute a person having “taken proceedings” and therefore, in such situations, WorkCover Queensland will retain its right of indemnity under section 207B(8) of the WCRA.
Updated 26 October 2022: An appeal on behalf the employers against the finding in favour of WorkCover was dismissed by the Queensland Court of Appeal on 21 October 2022.