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Fatigue Case | Plaintiff recovers $1.25M in Queensland journey claim

Case note: Kerle v BM Alliance Coal Operations Pty Ltd [2016] QSC 304

In the case of Kerle v BM Alliance Coal Operations Pty Ltd, the Supreme Court of Queensland considered the issues of work related fatigue, the duty of a mine operator to a worker and the question of whether a labour hire worker could be a servant of its host employer pro hac vice (for one occasion only), allowing the labour hire employer to shift responsibility for a worker to their host employer.

The doctrine of pro hac vice has the effect of deeming that someone is an employee of a company using the services of the person ‘for the time being’ or ‘for the occasion’. In negligence and workers’ compensation cases, successfully arguing pro hac vice will see an employer transfer their responsibility for a worker to another party. However, as this case illustrates, there is a heavy burden upon an employer who attempts to shift responsibility for a worker.

The Facts

Kerle was an employee of Axial HR Pty Ltd (Axial), a labour hire firm.  He was as a dump truck operator at the Norwich Park Mine near Dysart in Central Queensland.  His host employer was HMP Constructions Pty Ltd (HMP). BM Alliance Coal Operations Pty Ltd (BMA) was the mine operator.

In October 2008, at the end of four overnight 12-hour shifts, Kerle began driving to his home in Monto (more than 400 km away from the mine) and apparently fell asleep at the wheel some 300 km into his journey.  At the time of the accident, Kerle had been awake for 17 to 19 hours. Kerle’s vehicle swerved onto the right-hand of the road, hit a rail and then a concrete wall, resulting in significant injuries to Kerle, including a brain injury.

Kerle brought claims in negligence against Axial, HMP and BMA; on the basis that each company owed him a duty of care that had been breached.

The Issues

At trial, the Court considered issues such as:

  • fatigue and the other factors which could possibly have led to the accident;
  • whether Kerle was contributorily negligent, by starting or continuing the journey without sufficient rest;
  • which of the Defendants owed a duty of care to Mr Kerle;
  • how damages should be apportioned between those Defendants.

The Judgment

Justice McMeekin recognised that Kerle was an honest witness but that there were significant evidentiary problems with Kerle’s evidence because of his fatigue at the time of the accident and the head injuries he suffered.  However, the Court ultimately decided in his favour and awarded damages against his employer as well as against HMP and BMA.

Kerle’s employer, Axial, argued that Kerle was under the ‘effective control and supervision’ of HMP, and that HMP was therefore the employer pro hac vice.  In rejecting this argument, Justice McMeekin referred to the English case of Mersey Docks Harbour Board v Coggins & Griffiths (Liverpool) Ltd noting that the burden of proving an entity is an employer pro hac vice is very difficult and ‘can only be discharged in exceptional circumstances’, where the ‘entire and absolute control’ over the employee had passed to the second employer.  Justice McMeekin found that, in Kerle’s case, entire and absolute control had not passed from Axial to HMP, and that HMP was therefore not the employer pro hac vice.  The facts relied upon by His Honour in arriving at this decision were that:

  • the Plaintiff’s employment required him to report to both a site supervisor of HMP and Axial, providing him with the contact details for both;
  • it was a condition of his employment that he contact an Axial supervisor if he was unable to work on a particular day or if he was injured;
  • the Plaintiff was required to comply with Axial’s code of conduct while on site or at accommodation provided by the client; and
  • it was the, ‘policy of Axial to monitor and control the fatigue levels of employees at work, particularly when working extended hours’.

The Court found that responsibility for Mr Kerle’s injuries should be apportioned between Axial, HMP and BMA, to the Defendants as follows:

  • 36% (to Axial – employer);
  • 54% (to HMP – host employer); and
  • 10% (to BMA – mine operator).

The Court awarded damages to Kerle in the sum of $1.25M.

BMA’s Duty of Care

One significant aspect of the judgment was the finding that BMA, the mine operator, owed a duty of care to the Plaintiff.

His Honour found that it was not appropriate to limit consideration of whether a duty of care was owed to the usual circumstances in which a duty might be owed by a principal to an independent contractor (as per Stevens v Brodribb Sawmilling Co Pty Ltd or Leighton Contractors Pty Ltd v Fox), because:

  • The risk of personal injury in Stevens arose from the organising of activities between different contractors and that was not the risk here;
  • The Plaintiff was not injured when carrying out a specialised task that fell within the expertise of HMP or Axial;
  • BMA had detailed knowledge of the safety issues surrounding managing workplace fatigue; and
  • The risk did ‘not arise from the physical exigencies of the workplace or directly from the manner in which the work was performed by either Axial’s employees or any other contractor’. BMA brought the risk into being by its insistence on the consecutive 12-hour night shifts. And otherwise, statements of principle by Justices Brennan and Mason in Stevens, supported the imposition of a duty where the principal created the risk.

Taking into account these matters, including the features of the relationship between the Plaintiff and BMA, the Court was satisfied that BMA owed the Plaintiff a duty of care.

Contributory Negligence

Justice McMeekin accepted that fatigue was the most likely cause of the accident and rejected the Defendants’ argument that Kerle was contributorily negligent.  In doing so, the judgment addressed the allegations of the Defendants on contributory negligence, finding most notably:

  • There was no specific instruction by the Defendants to Kerle not to operate a vehicle when fatigued;
  • Kerle was not aware that he could use the accommodation at the site to rest after he had completed his last shift;
  • Kerle’s decision to embark upon the drive knowing that he had not rested and after completing his fourth consecutive night shift, illustrated his lack of understanding about fatigue.

Considerations

Principally, Kerle’s case is significant because it is one of a small number of Australian decisions which has considered workplace fatigue and related system failures in recent years. It will be of interest to employers and businesses operating in a number of industries (e.g. mining, oil & gas, transport) where workers travel for extended periods or, work long consecutive shifts on a FIFO basis. The case may also be of interest to compulsory third party insurers.

Secondly, it reinforces established law that employers, such as labour hire companies who provide labour to other companies, will not find it easy defend a claim on the basis that the employee was a servant pro hac vice of another entity.

And finally, it is of interest because the mine operator was found to have owed the Plaintiff a duty of care. This finding will be of particular interest to parties involved in multi-party disputes in mining, construction, oil & gas and infrastructure.

A full copy of the Court’s decision can be downloaded here.

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Pool tragedy caused by failure to warn of diving danger

Pool tragedy caused by failure to warn of diving danger

Case note: Lennon v Gympie Motel [2016] QSC 315

The Supreme Court of Queensland found the Gympie Motel 85% liable for injuries suffered by a girl who was rendered tetraplegic after diving into the Motel’s pool. The decision (delivered on 22 December 2016) is a timely reminder that businesses with pools and swimming facilities must take appropriate care for the safety of users. The judgment may also be used as a guide for businesses when considering the types of signage to display to adequately warn entrants of a risk of injury from diving.

The accident happened in 1998, when the girl was aged 12.

The Facts

On 21 February 1998, Karla Lennon, her mother and siblings stayed at the Motel. The family had not stayed there before.

The Motel had an in-ground pool. The pool was 10 metres by 5.2 metres, with an internal width of 4.5 metres. Its depth went from 0.9 metres to 1.74 metres. The pool was fenced.

There was a sign on the gate to the pool area which read:

‘Pool Rules

All children must be under adult supervision at all times, in pool area.’

On arriving at the Motel, Karla’s younger sister Letitia asked their mother if she could go swimming. The mother agreed and told Letitia that Karla would be in charge.

Letitia recalled that she and Karla were jumping in from different areas around the pool and gliding, to see how far they could each glide along. Letitia recalled other people present in the jacuzzi area of the pool and had a conversation with one of the people.

At one point a man said to Letitia, ‘…your sister is over there and she’s floating…’. Letitia told the man that Karla had done this before and that she was just playing a joke. The man left the pool area. Letitia realised that Karla was not responding. Emergency services attended. Karla suffered a ‘hypoxic brain injury secondary to immersion due to a cervical spine injury’.

Letitia (who was 7 years of age at the time) gave evidence about the circumstances leading up to the incident at the trial. There was no direct evidence at trial about the incident. Karla had no recollection of the event.

The Plaintiff’s Case

It was Karla’s case that:

(1) she knew not to dive into shallow water or pools in which she could not judge the depth;

(2) she intentionally dived into the pool, striking her head, and did not appreciate the depth of the pool;

(3) the Motel failed to warn her about the depth of the pool by having a ‘no diving’ sign or depth markers, or both;

(4) if the Motel had erected signage, warning users of the pool as to either its depth or that diving was prohibited, Karla would not have dived into the pool.

The Defendant’s Case

It was the Motel’s case that:

(1) there was insufficient evidence for the Court to conclude how Karla’s injuries occurred;

(2) the absence of depth markers or a no diving sign did not constitute a breach of duty because of the obviousness of the risk of diving into the pool;

(3) Karla was outgoing, oppositional and, even if a no diving sign or depth marker were present, she would have done exactly what she did;

(4) the foreseeability of any risks of injury were adequately addressed by the sign requiring adult supervision;

(5) Karla contributed to her own injuries.

The Judgment

Both parties led evidence about Karla’s character. The Court ultimately accepted submissions made on Karla’s behalf, that she was a responsible and mature child. In arriving at this conclusion, the Court took into account that:

(1) Karla had previously travelled by train, bus and water taxi to Stradbroke Island for 2 years prior to the incident, every weekend, during the school term and, without adult supervision;

(2) Karla worked in her mother’s second-hand store, serving customers, for up to three to four hours;

(3) Karla would travel with her father, who owned a trucking and logistics business, and she would take messages and write cheques; and

(4) Karla’s friend’s mother allowed Karla and her daughter to swim, unsupervised, at the beach.

The Court was satisfied, on the balance of probabilities, that Karla’s injuries were in fact caused by her diving into the pool and striking her head on the bottom of the pool. In arriving at this conclusion, the Court relied heavily upon the opinion of Dr Tuffley, who considered it was ‘highly probable, and certainly more probable than not’, that this was the cause of Karla’s injury.

The Court accepted that if the Motel had displayed a no diving sign, that Karla would have obeyed that warning. This was despite the fact that it was Karla’s evidence that she would have obeyed an instruction from her mother not to dive into the pool. Having regard to her character, the Court did not consider it was unreasonable for Karla not to be supervised by her mother in the pool.

The Court found that the duty of care owed by the Motel to Karla extended to take care for the safety of the persons using the pool and that the Motel breached its duty of care by failing to take the precautions (of displaying a no diving sign or a depth marker, or both) to warn guests who may misjudge the depth of the pool. Displaying the adult supervision sign did not discharge the Motel’s duty to the Plaintiff in this instance. The Court had regard to Australian Standards which state that, ‘[u]nless specifically designed for diving, private pools should not be used for that purpose’ and accepted the Plaintiff’s submission that there was no safe place to dive in the pool.

A deduction of 15% was allowed for the Plaintiff’s own negligence, having regard to the fact that while she was found to have dived in the deeper area of the pool and had been diving safely into the pool without incident for 10-15 minutes beforehand, she had a general awareness of the dangers associated with diving.

Considerations

This judgment will be of interest to pool owners and businesses with swimming facilities. The decision may be used as authority for the kinds of precautions that may be reasonably required of a commercial facility to address the risk of people diving into shallow water. However, it should not be taken as authority for the proposition that an absence of parental supervision will be superseded by an owner’s failure to warn of risks. The disposition of the Plaintiff was a key feature of the judgment in this case. There have been changes in the law since this incident occurred and similar circumstances, with a Plaintiff of a different maturity level, could produce a different result.

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Workers’ compensation changes to affect contribution claims

Workers’ compensation changes to affect contribution claims

Workers Compensation Qld – Workers Compensation Legislation Qld – Workers Compensation Lawyers Brisbane – Workers Compensation Law – Workers Compensation and Rehabilitation Act – Workers Compensation Insurance – Workers Compensation Scheme – Contractual Obligations – Contractual Indemnities – What is an indemnity clause? – Contractual Interpretation Australia – Contractual Indemnification – Contractual Disputes – Workers Compensation Regulator

On 14 June 2016, the Queensland Parliament introduced the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill 2016 (Qld) (Bill).

On 31 August, the Bill was passed (with amendments) that will constrain contractual indemnity clauses in workers’ compensation claims.

The Bill

The Bill is part of a broader social reform which includes the establishment of the National Injury Insurance Scheme for Queenslanders.

The Bill set out to restore the original policy intent of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCRA) and provide certainty to stakeholders after recent Court decisions interpreted certain provisions of the WCRA in ways that could adversely affect the operation of the scheme.

The Amendment

Clause 31: which will amend Chapter 5 of the WCRA states as follows:

‘236B Liability of contributors

(1) This section applies to an agreement between an employer and another person under which the employer indemnifies the other person for any legal liability of the person to pay damages for injury sustained by a worker.

(2) The agreement does not prevent the insurer from adding the other person as a contributor under section 278A in relation to the employer’s liability or the insurer’s liability for the worker’s injury. 

(3) The agreement is void to the extent it provides for the employer, or has the effect of requiring the employer, to indemnify the other person for any contribution claim made by the insurer against the other person.

(4) In this section-

damages includes damages under a legal liability existing independently of this Act, whether or not within the meaning of section 10.’

The Bill also proposed to amend the definition of damages under section 10 of the WCRA, however, a motion in the parliament to change the definition was defeated.

For Parties 

This amendment will mean that if:

  • a common law claim has been made against an employer; and,
  • the employer agreed to indemnify another party for that party’s legal liability; and,
  • WorkCover Queensland brings a contribution claim against that party,

the party joined to the claim will be unable to enforce their contractual indemnity clause to neutralise the contribution claim.

In many claims, the addition of section 236B(3) will allow contribution claims to be made by WorkCover, with third parties constrained in their ability to enforce indemnities against employers. However, the application of section 236B in a claim will depend upon:

  • who the parties to the relevant agreement are; and
  • the wording of the indemnity.

For instance, in an agreement where:

  • the parent company of an employer grants indemnity to a party; and
  • the agreement was not between the ’employer’ and the other party,

but the employer is referred to as part of a ‘contractor group’ or otherwise in the agreement, then section 236B may not apply to the agreement. In such a case, an entity related to the employer (such as a parent company) may remain liable for the indemnity granted to the other party.

Otherwise, the new Section 236B(3) may not operate to defeat actions in contract against employers by other parties (e.g. for breach of warranty or, for breach of an obligation to insure).

Once enacted, the amendment will apply to existing claims; if a settlement for damages has not been agreed or, a trial has not commenced.

To read the Bill in full, click here. To read the Queensland Parliament’s third reading speech, click here.

BOOK A FREE CONSULTATION for advice and information about your rights and obligations in a workers’ compensation matter, by calling (07) 3067 3025 or contact us online.

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Workers’ compensation changes to affect contractual indemnities

Workers’ compensation changes to affect contractual indemnities

Workers Compensation Qld – Workers Compensation Legislation Qld – Workers Compensation Lawyers Brisbane – Workers Compensation Law – Workers Compensation and Rehabilitation Act – Workers Compensation Insurance – Workers Compensation Scheme – Contractual Obligations – Contractual Indemnities – Contractual Interpretation Australia – Contractual Indemnification – Contractual Disputes – Workers Compensation Regulator

 

On 14 June 2016, the Queensland Parliament introduced the Workers’ Compensation and Rehabilitation (National Injury Insurance Scheme) Amendment Bill 2016 (Qld) (Bill).

The Bill

The Bill is part of a broader social reform which includes the establishment of the National Injury Insurance Scheme for Queenslanders, to commence from 1 July 2016.

The Bill proposes to restore the original policy intent of the Workers’ Compensation and Rehabilitation Act 2003 (Qld) (WCRA) and provide certainty to stakeholders after recent Court decisions have interpreted certain provisions of the WCRA in ways that could adversely affect the operation of the scheme.

If passed, the legislation will prevent employers from securing cover under their workers’ compensation insurance policies for contractual indemnities they have given to third parties for damages payable to workers. In the first reading speech for the Bill, the Minister for Employment and Industrial Relations said:

‘The Bill prevents the contractual transfer of liability for injury costs from principal contractors or host employers to employers with a workers’ compensation insurance policy such as subcontractors or labour hire employers and clarifies that an insurer will not be liable to indemnify an employer for a liability to pay damages incurred by a third party contractor under a contractual arrangement.’

The Amendments

The relevant sections of the Bill that will impact contractual liabilities are:

  • Clause 5: which proposes to amend the ‘Meaning of Damages’ in Section 10 of the WCRA to say:

‘(4) Further, a reference in subsection (1) to the liability of an employer does not include a liability to pay damages, for injury sustained by a worker, arising from an indemnity granted by the employer to another person for the other person’s legal liability to pay damages to the worker for the injury.’

  • And Clause 31: which will amend Chapter 5 of the WCRA as follows:

‘236B Liability of contributors

(1) This section applies to an agreement between an employer and another person under which the employer indemnifies the other person for any legal liability of the person to pay damages for injury sustained by a worker.

(2) The agreement does not prevent the insurer from adding the other person as a contributor under section 278A in relation to the employer’s liability or the insurer’s liability for the worker’s injury. 

(3) The agreement is void to the extent it provides for the employer, or has the effect of requiring the employer, to indemnify the other person for any contribution claim made by the insurer against the other person.

(4) In this section-

damages includes damages under a legal liability existing independently of this Act, whether or not within the meaning of section 10.’

For Employers

These amendments will mean that WorkCover Queensland will only be liable to indemnify an employer to the extent of the employer’s legal liability to the worker for damages under the WCRA. So, if an employer agrees to indemnify another party for damages beyond its legal liability under the WCRA, the workers’ compensation policy will not extend to cover those damages.

The changes may result in some employers exposed to liabilities for which they hold no insurance. However, in many claims, the addition of Section 236B(3) will allow contribution claims to be made by WorkCover, with third parties constrained in their ability to enforce indemnities against employers. What is unclear from the Bill and the WCRA, is whether an employer could secure cover for their liability to indemnify another party for ‘compensation’ under the WCRA (as opposed to ‘damages’). Also, the new Section 236B(3) may not operate to defeat actions in contract against employers by third parties (e.g. for breach of warranty or, for breach of an obligation to insure).

The industries that are most likely to be affected by the changes include: construction; mining; resources; and, transport. With these amendments, and the extension of the unfair contract terms regime to small businesses later this year, employers may wish to consider updating their service agreements to limit the risks to their business and follow current developments in the law.

The changes may see a rise in the number of employers requiring independent legal representation in common law claims. An employer who has agreed to indemnify another party may require independent legal advice about their contractual obligations, rights under the WCRA, the worker’s entitlements to damages under multiple regimes, apportionment and costs.

The Parliament has nominated the Finance and Administration Committee to consider the Bill.  To read the Bill in full, click here.  To read the Queensland Parliament’s first reading speech, click here.

BOOK A FREE CONSULTATION for advice and information about a workers’ compensation or contractual indemnity dispute, by calling (07) 3067 3025 or contact us online.

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Kate DenningWorkers’ compensation changes to affect contractual indemnities
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How to Detect Fraud in Personal Injury Claims

How to Detect Fraud in Personal Injury Claims

Fraud – Insurance Fraud – Fraud Qld – Detect Fraud – Fraudulent Misrepresentation – Insurance Fraud Investigation – Insurance Fraud Reporting – Insurance Fraud Cases – Insurance Fraud Penalties Qld – Insurance Fraud Definition – Dispute Insurance Claim

Insurance fraud has been estimated to account for about 10% of general insurance costs in Australia ($2B annually). This doesn’t take into account undetected fraud.

Some people may take the view that insurance fraud is a victim-less crime. But most would agree that money spent investigating, defending, paying or prosecuting fraudsters could be better used to reduce insurance premiums and pay genuine claims.

So what are some red flags that could suggest fraud in a personal injury claim? Here are some that we’ve identified:

Late claim

If a claim is started close to the expiration of a Plaintiff’s limitation period, then questions will arise about why the Plaintiff has taken so long to bring their claim. Check what treatment the Plaintiff has had since the event. Consider the Plaintiff’s current circumstances. Has the Plaintiff had a change in their employment status, medical advice, legal representation or personal circumstances? One or more of these things may explain why the claim has been brought late.

Delay in medical treatment

A delay in seeking medical treatment after an event is usually detected by treating health care providers and medico-legal experts. The longer that a Plaintiff delays treatment for an injury, the more difficult it may be to prove that the incident caused it. Of course, some medical conditions are characterised by a delayed onset of symptoms. So consider how similar injuries are diagnosed and treated.

Just started a job

A Plaintiff injured in a workplace just after they’ve commenced employment may come under more scrutiny than a longstanding employee. Consider the Plaintiff’s employment history. Did the Plaintiff start the job after a long period of unemployment? Were they adequately trained and supervised? Did the Plaintiff’s employment history suggest they were capable of performing the task?

Project coming to an end

If a claim is made by a Plaintiff working on a project that is approaching finalisation, the Defendant may be suspicious of the Plaintiff’s motivation for bringing their claim. Has the Plaintiff brought a claim in similar circumstances in the past? Was the Plaintiff facing other disciplinary action from the employer? If not, the Defendant’s suspicions may lead nowhere.

Retirement approaching

Claims by Plaintiffs close to retirement age will usually be managed with caution. If a Plaintiff goes from full-time to part-time employment after their injury, check if there were social security or superannuation incentives for doing so. Investigate the Plaintiff’s retirement plans and financial commitments. If a Plaintiff worked in a physical occupation, are there statistics available about the average retirement age of men/women doing that work.

Claims history

It goes without saying that a history of numerous claims will be of concern to a Defendant. Determine the seriousness of the injuries in those past claim/s and their relevance to the current one.

No witness

If there were no witnesses to an incident, then there is no one to verify a Plaintiff’s account. However, the lack of a witness will not necessarily prevent a Plaintiff from succeeding in their claim. Check whether documentary evidence could support the Plaintiff’s version. Did the Plaintiff immediately report the injury? Has the Plaintiff’s description of the incident stayed consistent over time?

No reporting

Defendants are right to be suspicious of claims for injuries that were not reported when they occurred, particularly where a workplace policy requires all incidents and injuries to be reported. Did the Plaintiff report their injury to health care providers and not the Defendant? If so, this may be adequate. Did the Plaintiff later describe the incident as involving a ‘sudden’ or ‘immediate’ onset of pain? If so, why didn’t they report their injury?

Limited treatment

How much treatment has the Plaintiff received for their injuries since the event? Check whether the Plaintiff’s records contain references to other conditions. Is there limited references to the injuries for which damages are claimed? If other conditions dominate the treating records or a Plaintiff has had little treatment, then Defendants may query the extent of the impact that the injury has had on the Plaintiff’s life.

Holidays

It’s a widely held belief in personal injury litigation that: a Plaintiff able to travel; is also able to work. Defendants will be suspicious of Plaintiffs that go on holidays after suffering an injury, which is apparently so serious, that they cannot work. If possible, find out when the Plaintiff made their travel arrangements. Was it before or after the event? What kind of holiday did the Plaintiff go on?

For Defendants

Defendants should use red flags like these to detect fraud and limit their exposure to damages, legal costs and rises in insurance premiums. The sooner that fraud is detected, the faster that parties can dispose of a claim.

However, these red flags do feature in lots of personal injuries claims. So, one of these in isolation doesn’t necessarily mean that a Plaintiff is bringing a fraudulent claim. It may simply be that the Plaintiff needs to offer a satisfactory explanation.

BOOK A FREE CONSULTATION for advice and information about fraud in a personal injury matter, by calling (07) 3067 3025 or contact us online.

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Dangerous Recreational Activities | Contract Claims & Intentional Torts

Dangerous Recreational Activities | Contract Claims & Intentional Torts

Dangerous Recreational Activities – Dangerous Recreational Activities Qld – Dangerous Recreational Activities Civil Liability Act – Dangerous Recreational Activities CLA – Dangerous Recreational Activities Cases – Dangerous Recreational Activities Examples – What is a dangerous recreational activity? – Duty of Care Legislation Qld

What is a dangerous recreational activity?

Section 18 of the Civil Liability Act 2003 (Qld) (CLA QLD) defines a dangerous recreational activity as:

‘an activity engaged in for enjoyment, relaxation or leisure that involves a significant degree of risk of physical harm to a person’.

Civil Liability Act 2003 (Qld)

The CLA QLD limits the ability of injured Plaintiffs to recover damages in negligence for personal injuries that arise out of dangerous recreational activities.

Under section 19 of the CLA QLD, a person is not liable in negligence for harm suffered by another person as a result of the materialisation of an obvious risk of a dangerous recreational activity engaged in by a person.

Section 17 of the CLA QLD states:

’17  Application of div

This division applies only in relation to liability in negligence for harm to a person resulting from a dangerous recreational activity engaged in by the plaintiff.’

But proving that a Plaintiff was engaged in a dangerous recreational activity under the CLA QLD isn’t always straightfoward. A decision of the Supreme Court of Queensland last year highlighted an issue for Defendants seeking to raise the defence.

Ireland v B & M Outboard Repairs

In Ireland v B& M Outboard Repairs [2015] QSC 084, the Defendants argued that the Plaintiff was engaged in a dangerous recreational activity.

The Court rejected the Defendant’s submission that section 19 of the CLA QLD applied; principally, because the activity did not involve an obvious risk. However, the Court made an additional comment that section 19 would not apply because section 17 refers to liability in negligence only and not, to an action for breach of contract.

Liability in Negligence

Unlike the Civil Liability Act NSW (2002) (CLA NSW), the CLA QLD does not define the word ‘negligence’.

Without a definition, one might assume the phrase ‘liability in negligence’ means an action in negligence and not, an action in contract or, an intentional tort. In the first reading speech for the Civil Liability Bill 2003 (Qld), Parliament said that the dangerous recreational activities provisions would change the ‘conventional law of negligence’ – as opposed to the law of contract or, the law of torts.

Considerations

Plaintiffs may frame their claims to avoid the dangerous recreational activity defence under the CLA QLD. However, the interpretation of section 17 is yet to be judicially determined. The comments in Ireland were in obiter. That said, if Ireland’s reasoning is applied, Defendants will not be assisted by section 19 of the CLA QLD against a claim in contract.

Parties to claims involving recreational activities which may be ‘dangerous’ may wish to consider the following:

  • the application of the obvious risk provisions under the CLA QLD
  • any contract between the parties
  • whether the contract between the parties was for the dangerous recreational activity itself (compared with transportation or equipment hire)
  • the application of Commonwealth legislation such as the Competition and Consumer Act 2010 (Cth) to the claim
  • any defects or flaws in equipment in use
  • signage, advertising and manufacturers specifications or notifications
  • facts suggesting an intentional tort
  • insurance coverage issues arising from an action in contract against the Defendant or an intentional tort

BOOK A FREE CONSULTATION for advice and information about a personal injury matter by calling (07) 3067 3025 or contact us online.

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Kate DenningDangerous Recreational Activities | Contract Claims & Intentional Torts
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Section 54 Insurance Contracts Act – what’s not an ‘act’?

Section 54 of the Insurance Contracts Act – what’s not an ‘act’?

Section 54 Insurance Contracts Act – Section 54 Insurance Contracts Act Summary – Section 54 ICA – Maxwell v Highway Hauliers Pty Ltd

Case note: Allianz Insurance Ltd v Inglis [2016] WASCA 25

This was an appeal by Allianz Insurance Ltd (Allianz) to the Court of Appeal (WA) (Court). The case concerned a preliminary question about the application of section 54 of the Insurance Contracts Act 1984 (Cth), based on an agreed set of facts.

The question to be decided was whether, on the proper construction of an Allianz Sure Cover Plus home insurance policy (Allianz Policy), Allianz was required to indemnify its Insureds for their liability to the Defendants.

The Insureds succeeded at District Court level. Our summary of that decision is here. Allianz sought leave to appeal that decision to the Court of Appeal (WA) (Court).

Section 54 Insurance Contracts Act

Section 54 of the Insurance Contracts Act 1984 (Cth) states:

‘(1)  Subject to this section, where the effect of a contract of insurance would, but for this section, be that the insurer may refuse to pay a claim, either in whole or in part, by reason of some act of the insured or of some other person, being an act that occurred after the contract was entered into but not being an act in respect of which subsection (2) applies, the insurer may not refuse to pay the claim by reason only of that act but the insurer’s liability in respect of the claim is reduced by the amount that fairly represents the extent to which the insurer’s interests were prejudiced as a result of that act.

(2)  Subject to the succeeding provisions of this section, where the act could reasonably be regarded as being capable of causing or contributing to a loss in respect of which insurance cover is provided by the contract, the insurer may refuse to pay the claim.’

The Facts

The Plaintiff, Ms Georgia Inglis (Georgia) (aged 10) alleges that she was run over by a ride-on lawnmower operated by the First Defendant, Mr Stephen Sweeney (Stephen) (aged 11).

Georgia is the daughter of Mr Stuart Inglis and Mrs Linda Inglis (Georgia’s parents).  Mr Stuart Inglis owned the ride-on lawnmower.  Georgia lived with her parents.  Georgia’s parents were named insureds under the Allianz Policy.

It is alleged that on 17 October 2004, Mr James Inglis (James) (aged 12), Georgia’s brother, rode the lawnmower from Georgia’s parents’ house, to the Second and Third Defendants’ house.  The Second and Third Defendants are the parents of Stephen.

Stephen ran over Georgia in a game that involved Georgia being towed behind Stephen on the ride-on lawnmower. Georgia brought claims against the Defendants. The Defendants brought claims against Mr Stuart Inglis and Georgia’s brother, James (the Insureds).  The Insureds brought claims against Allianz, for indemnity under the Allianz Policy.

The Allianz Policy

Insuring clause

The Allianz Policy contained the following clause relating to cover for injury to other people:

‘… We will cover your legal liability for payment of compensation in respect of:

  • death, bodily injury or illness…’

Exclusion clause

The Allianz Policy contained an exclusion clause which read:

‘What you are not covered for:

  1. We will not cover your legal liability for: …
  2. injury to any person who normally lives with you, or damage to their property;’

Allianz denied indemnity under the Allianz Policy.

The Submissions

Allianz submitted that the expression ‘a person who normally lives with you’ did not contain or constitute an ‘act’ under section 54(1) but instead, was a state of affairs or, the status or description of a person.

It was the submission of the Insureds that the act must have occurred or (if continuous) be occurring at the time of the accident. The Insureds argued that this was mandated by the word ‘lives’ in the expression, ‘a person who normally lives with you’. The Insureds did not suggest any other ‘act’ engaged section 54(1).

The Findings

In the judgment dated 3 February 2016, the Court allowed the appeal by Allianz, finding:

  1. ‘Act’ means something done or being done by a person. It is different from a state of affairs or the result of an act. Assistance in understanding the distinction between these things may be drawn from criminal law.
  2. The fact that a ‘person normally lives with’ an insured does not constitute an ‘act’ within the meaning of section 54(1).

The Court rejected the argument by Allianz that the Insureds’ claims were in respect of liability of a kind not dealt with by the Allianz Policy.

Considerations

It remains difficult for insurers to establish that a relevant liability falls outside of the scope of cover under a policy.

However, the argument put forward by Allianz that an ‘act’ under section 54 of the Insurance Contracts Act 1984 (Cth) is not:

  • a state of affairs;
  • the status of a person;
  • the description of a person,

could be used in support of an insurer’s decision to exclude cover in a variety of circumstances.

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Kate DenningSection 54 Insurance Contracts Act – what’s not an ‘act’?
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Contributory negligence finding of 50% against pipeline worker

Case note: Kennedy v Queensland Aluminia Limited [2015] QSC 317

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The Supreme Court of Queensland has made a finding of 50% for contributory negligence against a pipeline worker who suffered burns from caustic liquid after failing to follow the training and procedures of his employer.

The Facts

Mr Paul Kennedy (Plaintiff) brought a claim for damages against his employer, Queensland Aluminia Limited (Employer).

The Plaintiff was required to break open a vertical pipe and to replace a “blind” on a section of it. The pipe conveyed caustic solution. The Plaintiff was aware that if the pipe was not isolated effectively from the tank overhead, caustic could emerge from the pipe and it would cause severe burns if he came into contact with it.

The Plaintiff touched the pipe noting that it was hot and believed that it was “live” or “energised”. He closed the pump suction valve by turning a hex nut to what he thought was the closed position. He actually opened the valve. The hex nut was not marked to show when it was opened or closed.

The Plaintiff loosened three bolts on the flange at the base of the pipe where he intended to insert the blind. A “show of liquor” came from the open section of the flange at a steady pace and then the stream reduced to a dribble. He left the task for a break and returned to it half an hour later.

On return, no further caustic was coming from the pipe. He removed the rest of the bolts and while in a kneeling position the caustic shot out, striking him in the chest and face.

The Issue

The Court considered that there were two reasons why the incident occurred:

  1. The Plaintiff opened the pump suction valve instead of closing it.
  2. The Plaintiff did not prove isolation.

The Employer admitted liability for the claim but said that the Plaintiff was contributorily negligent for failing to prove isolation.

The Training

The Employer had a standard procedure for proving isolation. A witness for the Employer explained that in such a situation, a worker is expected to shut the suction valve and open the drain leg by removing the cap. The worker is to use a probe to probe the drain leg to get the flow. The worker is to then open the suction valve to witness the flow. When the flow has stopped, the worker has proved isolation.

The Plaintiff’s evidence at trial demonstrated an inconsistency between his understanding of how to prove isolation and the actual procedure the Employer required staff to follow. The Plaintiff simply turned off the suction valve and then proceeded to open the pipe. The Plaintiff believed that he should break into the pipe “to prove drainage”.

The Court was satisfied that the Plaintiff knew of the use that ought to have been made of the probe. It was set out in a documented tagging procedure. The Plaintiff had seen a power point slide relating to the procedure. A witness for the Employer said that the task the Plaintiff was undertaking was not complex and it was one that staff would be competent to perform after six months in the job. The Plaintiff had been working for the Employer for three years at the time of the incident. He had been promoted and had tag competencies.

The Judgment

In a judgment delivered on 18 November 2015 The Honourable Justice McMeekin found as follows:

  1. The Employer failed to ensure that there was an adequate system of marking the valves to ensure that an operator knew when they were opening or closing them.
  2. The Plaintiff had been adequately trained. He would not have been promoted and given tag competencies, if he was not completely familiar with the Employer’s procedures. He failed to follow instructions in proving the isolation of the system. He had no excuse for doing so. That involved a significant departure from safety procedures.
  3. The Plaintiff’s actions went well beyond “mere inadvertence, inattention or misjudgment”. The Employer’s system was intended to cater for a mistake. The possibility of a valve not being effective was at the heart of the Employer’s system. Had the Plaintiff done as he had been taught, the open valve would have been identified and the work not undertaken.
  4. Liability should be apportioned between the Employer and the Plaintiff 50/50.

His Honour also commented that it was “trite law” that the onus lies on an employer to establish contributory negligence.

Considerations

Here, the Employer established a significant reduction for contributory negligence despite:

  • pleading limited particulars of its case for contributory negligence; and
  • the fact that it could not call a witness who could claim to have directly taught the Plaintiff the procedures.

The case illustrates how important it is for employers and host employers to persist with allegations of contributory negligence where a worker has departed from the Employer’s documented safety procedures and training.

This case will be of particular interest to those working in industries involving isolation and tagging procedures – e.g. mining, gas, infrastructure.

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Kate DenningContributory negligence finding of 50% against pipeline worker
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No compensation for degenerative disc disease

Kirby v Blackwood (Workers’ Compensation Regulator) [2015] QIRC 184

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The Queensland Industrial Relations Commission (Commission) has refused the appeal of a worker seeking compensation for degenerative disc disease.

The Facts

Ms Kaye Kirby (Appellant) underwent a spinal fusion to her L1 – L3 discs in 1991.

In about 2001, she started working for InvoCare Australia Pty Ltd (InvoCare) as a Funeral Manager. She told InvoCare about her pre-employment spinal surgery.

In 2010, she started to suffer back pain and in 2011, sciatica. The Appellant brought a common law claim for a back injury (injury) and a secondary psychiatric injury arising out of her employment with the InvoCare. Before the Appellant could proceed with her common law claim, she had to establish that she had an entitlement to compensation under the Workers’ Compensation and Rehabilitation Act 2003 (Qld).

The Appellant alleged that her injury arose out of her work over the period 2011 to 2012.

The duties the Appellant claimed contributed to her injury included:

  • moving chairs
  • carrying Neverfail water bottles
  • vehicle maintenance
  • coffin deliveries
  • transfer of deceased persons
  • transfer of caskets/coffins and pallbearing at funerals
  • burials

The Appellant’s claim was rejected by the Workers’ Compensation Regulator (Regulator). She appealed the Regulator’s decision to the Commission.

The Issue

The issue for determination by the Commission in the Appeal was whether the Appellant’s injury arose in the course of her employment.

The Experts

The Appellant relied upon the evidence of Dr Gillett, Orthopaedic Surgeon, in support of her claim. Dr Gillett provided a report to the effect that work practices over a period of time in relation to manual lifting, particularly the lifting of coffins, would have placed stress and strain on the lower back and on the Appellant’s fusion. Dr Gillett said that even without the work of a funeral director, the Appellant would have had some increasing degeneration to her lumbar spine. However, he estimated her duties caused an acceleration in her degeneration of 5 years more than what would have occurred.

The Regulator relied upon the evidence of Associate Professor Peter Steadman, Orthopaedic Surgeon. Associate Professor Steadman was of the opinion that the Appellant was suffering from Adjacent Segment Disease (ASD) an almost inevitable consequence of her previous spinal fusion. Importantly, he was ‘unable to ascertain any specific work related event or contribution over a period of time that would indicate employment was the cause of her complaint in terms of the deterioration’. Although he accepted that if the Appellant was undertaking regular heavy lifting of the type described, this would have exacerbated her condition, as Dr Gillett opined.

Both experts agreed that ASD can be a consequence of a spinal fusion.

The Judgment

In a judgment delivered on 30 October 2015, Industrial Commissioner Fisher refused the appeal, finding:

  1. At times the Appellant was required to undertake lifting outside of safe manual handling limits, in lifting oversized coffins. However, the weight of loads borne by her was not satisfactorily established.
  2. The Appellant was symptom free until 2010. The development of her symptoms was not associated with any particular incident or work task.
  3. The onset of the Appellant’s symptoms was more consistent with the evidence of Dr Steadman.
  4. The Commission was unable to accept on the balance of probabilities that the Appellant’s employment was a significant contributing factor to her injury.

Considerations

This case will be helpful for employers and claim managers who are defending manual handling cases. For those with similar claims, what’s most interesting about this case is that the Appellant was unsuccessful despite:

  • the Commission accepting that she had undertaken lifting outside of safe manual handling limits.
  • the employer giving the Appellant manual tasks with knowledge of her pre-employment spinal fusion.

Manual handling cases can be the most difficult types of workers’ compensation claims to defend. However, this decision highlights that workers may fail where they are unable to identify the precise work duties alleged to have caused their injury.

BOOK A FREE CONSULTATION for advice and information about a personal injuries matter by calling (07) 3067 3025 or contact us online.

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Kate DenningNo compensation for degenerative disc disease
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Photographs of woman at work led to compensable injury

Photographs of woman at work led to compensable injury

by Kate Denning Google+

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Case note: Waugh v Simon Blackwood (Workers’ Compensation Regulator) & State of Queensland [2015] ICQ 028

The Facts

Ms Astrid Waugh (Appellant) brought a claim for workers’ compensation for psychiatric injuries arising in the course of her employment with the State Library of Queensland (SLQ).

The Appellant’s co-worker, Mr Bruce McGregor (McGregor), took covert photographs of the Appellant and a number of other people, using SLQ electronic devices.  The equipment was confiscated from McGregor and 2,500 images were found on the confiscated devices. A number of the images focused on the chest area of female employees of the SLQ.

The Appellant only became aware of the photographs in March 2013, after hearing rumours about McGregor’s actions. The Appellant approached a work colleague, who followed up with management about her concerns. The Appellant asked to see the images after a meeting with management on 2 May 2013. The Appellant said she was told that the images would be provided. A week later, the Appellant says that she was told, ‘Oh Astrid, your head is not even in most of them’.

The images were posted to the Appellant on 17 May 2013. This was after the SLQ undertook a consultation process, which included obtaining legal advice. The Appellant complained that management had ‘brushed her off’.

The Proceedings

The Appellant suffered a psychiatric injury. She made successful application to WorkCover Queensland for workers’ compensation benefits. The SLQ appealed the decision to accept the claim. The Workers’ Compensation Regulator upheld the SLQ’s appeal. The Appellant appealed to the Queensland Industrial Relations Commission (Commission). The Commission refused her appeal.

The Appellant appealed to the Industrial Court of Queensland (Court).

Her appeal challenged these findings of the Commission:

  1. That the injury did not arise out of, or in the course of, the Appellant’s employment as ‘the workplace was merely the background or setting in which the inappropriate behaviour took place’.
  2. The significant contributing factor to the injury was the taking of the photographs and not the Appellant’s employment.
  3. The manner in which the SLQ dealt with the issue was reasonable management action taken in a reasonable way.

The Judgment

In a judgment delivered on 8 October 2015, President Justice Martin allowed the appeal, finding:

  1. There was a delay in advising the Appellant of the existence of the photographs. That delay had some effect upon the Appellant.
  2. The fact that the photographs were taken in the workplace was integral to the development of the psychiatric injury. This was supported by unchallenged psychiatric evidence. This was a case in which the employment was more than just the setting in which the inappropriate behaviour took place. The effect of the behaviour and the intensity of the impact it had was magnified by the fact that it occurred in the workplace.
  3. The actions of the SLQ fell short of ‘reasonable management action’.

Considerations

The Court acknowledged that the circumstances of this case would test the best intentioned employer. However, it also highlighted some shortcomings of the SLQ, which the Court found were not dealt with by the Commission, including:

  1. The delay in advising the Appellant of the photographs and the nature of the photographs.
  2. The fact that the SLQ did not say anything to the Appellant until she approached another employee about the matter.
  3. The lack of any disciplinary action or sanction on McGregor.
  4. Allowing McGregor to resign.
  5. The tone of correspondence advising staff of McGregor’s resignation, which could be reasonably seen to be, if not supporting McGregor, a benign acceptance of his conduct.
  6. Failing to report the incident to a relevant authority.

It’s easy to imagine similar criticisms being made of an employer in say, a bullying case. This case will be of interest to those working in management, employment law or human resources. It highlights the fragility of these situations and the need for businesses to be aware of what could fall short of ‘reasonable management action’ in a workers’ compensation claim.

BOOK A FREE CONSULTATION for advice and information about a workers’ compensation matter, by calling (07) 3067 3025 or contact us online.

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Kate DenningPhotographs of woman at work led to compensable injury
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InDefence covers legal and technical issues in a general way. Changes in circumstances or the law may affect the completeness or accuracy of the information published. InDefence is not designed to express opinions on specific cases, to provide legal advice or to establish a relationship of client and lawyer between Denning Insurance Law and the reader, or any third party. No person should act or refrain from acting solely on the basis of this publication. You should seek legal advice particular to your circumstances before taking action on any issue dealt with in this blog.