Charter Hall Real Estate Management Services (NSW) Pty Limited v State of New South Wales [2020] NSWCA 26 (25 February 2020)

Summary

An insurer’s claim for indemnity in respect of workers payments paid to an injured firefighter has been upheld on appeal.

Legislation

Section 151Z of the Workers Compensation Act 1987.

Section 151Z provides that an employer’s insurer can claim indemnity in respect of compensation paid to a worker in circumstances where a third party has been negligent.

An insurer can commence recovery proceedings against a third party claiming indemnity in respect of compensation paid under section 151Z(1)(d).

Background

On 22 January 2007, a firefighter responded to an alarm that had been triggered by an air conditioning unit on the roof of a shopping centre. Access to the roof was obtained through a door at the top of a ladder. The door had a metal locking bar in front of it which had to be raised to access the roof. When the firefighter descended the ladder, he knocked the metal bar with his elbow and was injured as a result of it falling.

The employer brought proceedings in the District Court against the occupier of the shopping centre, seeking indemnity for workers compensation payments made to the firefighter. The firefighter did not sue the occupier.

The primary judge found that the occupier had breached its duty of care to the firefighter, and would be liable to pay the firefighter damages had he sued the occupier. The employer was not found to be negligent, and a claim for contributory negligence was rejected.

The amount of damages that would have been payable by the occupier had it been sued by the firefighter was well in excess of the amount of workers compensation that had been paid. The primary judge therefore determined that the employer was entitled to be indemnified for the workers compensation payments that had been made.

The occupier appealed the primary judge’s decision.

Decision

The Court of Appeal agreed with the primary judge’s findings that the occupier breached its duty of care to the firefighter, stating:

• The occupier had actual knowledge of the risk of injury posed by the absence of any restraint to prevent the metal bar from falling onto a person. It was determined that an employee of the occupier was aware that the locking bar had fallen on a security guard on two occasions prior to the firefighter’s injury.
• The risk of harm was not insignificant. The risk involved a risk of death or serious injury.
• The occupier owed a duty to take reasonable care to avoid risk of injury to people entering the shopping centre. It was reasonably foreseeable that the locking bar could be disturbed by someone dislodging it from its resting place. Simple and inexpensive precautions were available to the occupier to avoid the risk of harm. A hook could have been affixed to the wall where the locking bar rested.

The Court of Appeal agreed that the employer had not breached its duty of care to the firefighter. There was no evidence that the employer knew the locking bar had fallen previously and represented a danger.

The Court of Appeal also agreed that the firefighter did not contribute to his injury. His accidentally knocking the locking bar was accidental inadvertence not amounting to contributory negligence.

The appeal was dismissed, with the occupier ordered to pay the employer’s costs of the appeal.

Conclusion

This case serves as a reminder for insurers to consider recoveries of workers compensation payments made when a worker’s injury was caused by the negligence of a third party. It is not necessary for the worker to sue the third party to pursue a recovery action.