The Plaintiff in a personal injury claim, Mr Stankovic, sustained a right shoulder injury on 3 April 2013 as a result of heavy lifting while working as a tiler for a company called Trendbuild.
On 9 July 2013, Mr Stankovic lodged a compensation claim with WorkCover Queensland. Mr Stankovic identified Trendbuild as his employer, however the true position was that Mr Stankovic performed work under a contract of service with a trust, and Mr Stankovic himself was a trustee. This meant Mr Stankovic was not properly a “worker” under the Workers’ Compensation & Rehabilitation Act 2003 (WCRA).
The “trust” issue had not been disclosed to WorkCover by Mr Stankovic, and was not known to WorkCover when, on 22 July 2013, it accepted the application for compensation on the basis that Mr Stankovic was a “worker”.
Almost two years later, WorkCover issued a Notice of Assessment in respect of the right shoulder injury. The Claimant did not accept the lump sum offer accompanying the Notice of Assessment and soon after launched a common law damages claim.
On 23 October 2015, WorkCover’s newly appointed solicitors rejected the damages claim because they said Mr Stankovic was not in fact a “worker”. The upshot of WorkCover’s decision was that Trendbuild was not indemnified by WorkCover in respect of the WCRA claim. Trendbuild believed WorkCover should indemnify it under the WCRA, and brought an application before the Queensland Court of Appeal to force WorkCover to do so.
The question the Court had to decide was: if WorkCover determines that a person is a “worker” in respect of a compensation claim, is it precluded from changing its mind and saying a person is not a “worker” in the subsequent common law claim for damages?
To answer this question, the Court had to look closely at the language used in the WCRA. In particular it compared Chapters 3 and 4 of the WCRA which regulates statutory claims and compensation, and Chapter 5 which regulates common law claims for damages.
The Court pointed out that not only are “compensation” and “damages” regulated by different chapters of the WCRA, they are also different heads of liability and Parliament identified different objects for each. The main object of compensation is to provide benefits for workers who sustain injury in their employment. By contrast, Chapter 5 relating to damages does not create any entitlement for workers but rather extensively limits the common law right to seek damages. The objects of Chapter 5 include the “protection of employers’ interests in relation to claims for damages” and that “compulsory insurance against injury in employment should not impose too heavy a burden on employers and the community”.
The Court found that the construction of the WCRA contended for by Trendbuild was not reconcilable with the clear demarcation between “compensation” and “damages”, did not find support in other provisions of the WCRA, and was not compatible with the various objects laid down in the WCRA.
A decision in a compensation claim that a person was a “worker” may have been made very early in the claim in the absence of relevant information, or may simply have been decided incorrectly. This decision by the Court of Appeal means that insurers will not be bound by that earlier determination in a subsequent damages claim, and they will be free to examine this question anew with the benefit of more complete information and legal advice.
This article was written by Daniel Sullivan, Associate, and Cameron Seymour, Partner
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