Craig v Qantas Airways Ltd & Anor [2001] QSC 394

SUPREME COURT OF QUEENSLAND CITATION: Craig v Qantas Airways Ltd & Anor [2001] QSC 394 PARTIES: MAXWELL CRAIG (plaintiff) v QANTAS AIRWAYS LTD (ACN 009 661 901) (defendant) and WORKCOVER QUEENSLAND (third party) FILE NO: No 5462 of 1997 DIVISION: Trial Division DELIVERED ON: 23 October 2001 DELIVERED AT: Brisbane HEARING DATES: 13, 14, 16, 17, and 20 August 2001, and 12 October 2001 JUDGE: Helman J. CATCHWORDS: PROCEDURE - COSTS COUNSEL: P.A. Kronberg for the plaintiff D.O.J. North S.C. and R.C. Morton for the defendant J.S. Miles for the third party SOLICITORS: Watts & Company for the plaintiff Moray & Agnew for the defendant Bradley & Co. for the third party [1] HELMAN J: I published reasons for my decision on the plaintiff’s claim in this proceeding on 12 October 2001. Following the publication of the reasons, I heard further argument on the question what orders as to costs should be made. [2] The plaintiff claimed as a worker employed by the defendant, and relied on the defendant’s legal liability existing independently of the Workers’Compensation Act 1990 to pay damages in respect of the injury alleged. The defendant, as an employer, was required to insure, and to remain insured, with the Workers’ Compensation Board of Queensland under a policy in respect of its legal liability existing independently of the Act to pay damages in respect of a worker employed by it, being a liability within the cover of accident insurance as defined in s. 5 of the -- 1 of 4 -- 2 Act: s. 44(2). The expression ‘accident insurance’ was defined in s. 5(1), and, so far as the definition is relevant, it was as follows: “accident insurance” means insurance by which an employer is indemnified against all sums for which the employer may become legally liable, in respect of injury to a worker employed by the employer, in respect of- . . . (b) damages arising under circumstances creating also, independently of this Act, a legal liability in the employer to pay such damages, other than a liability against which the employer is required to provide under some other Act of Queensland or a law of another State or a Territory, or of the Commonwealth or of another country. The term ‘injury’was defined in s. 6. So far as s. 6 is relevant, it was as follows: 6.(1) In this Act- “injury” means personal injury arising out of, or in the course of, employment if the employment was a significant contributing factor to the injury. (2) “Injury” includes- (a) a disease contracted in the course of employment, whether at or away from the place of employment, if the employment was a significant contributing factor to the contracting of the disease; and (b) an aggravation or acceleration of a disease if the employment was a significant contributing factor to the aggravation or acceleration; . . . (3) “Injury” does not include a personal injury, disease, or aggravation or acceleration of a disease, suffered by a worker because of - (a) reasonable disciplinary action taken against the worker in connection with the worker’s employment; [3] The defendant held a policy of insurance under s. 44 with the Board from and including 1 August 1995. The plaintiff’s claim, as pleaded, was for damages for an injury suffered after 1 August 1995: initially, in his statement of claim delivered in June 1998, on or about 4 January 1996; and later, following amendment to his statement of claim, in or about September or October 1995. I have set out in my reasons published on 12 October 2001 the details of the plaintiff’s claim as it was pleaded. It suffices to say that his claim was for damages for an injury which was a -- 2 of 4 -- 3 mental disorder arising from breaches of duty, and that the exception provided for in s. 6(3)(a) did not apply. Although the plaintiff complained of disciplinary action taken by the defendant in his particular 11(A)(vi), it was of course a complaint of disciplinary action which was not reasonable. [4] It follows from what I have said that if the plaintiff were to have proved his pleaded case the defendant would have been entitled to be indemnified by the Board as the insurer under the policy in respect of any sum the defendant might have been ordered to pay to the plaintiff by way of damages. The third party, despite a demand that it acknowledge its obligation to indemnify the defendant should the plaintiff’s claim as pleaded succeed, refused to do so: see paragraph 7 of the defendant’s statement of claim against the third party and paragraph 1 of the third party’s defence to that statement of claim. [5] In those circumstances the third party was not justified in resisting the defendant’s claim to indemnity and the defendant was justified in joining the third party as it did. The third party would not of course have been liable to indemnify the defendant in respect of any damages awarded to the plaintiff for an injury suffered before 1 August 1995, but the plaintiff’s claim was not pleaded in that way: it was confined to injury suffered after 1 August 1995. Accordingly, the question whether any injury suffered by the plaintiff may have occurred before 1 August 1995 is irrelevant to a determination of the question whether the defendant was justified in joining the third party. Its justification rests on the only relevant circumstance: the way in which the plaintiff had pleaded his claim. It is not relevant that some of the actions of the defendant relied on by the plaintiff occurred before August 1995, because the case as it was pleaded was that the cumulative effect of actions before and after the commencement of the cover provided by the policy resulted in injury after 1 August 1995. While the plaintiff’s claim was pleaded as it was the defendant was at risk of suffering a judgment for damages assessed on the basis of the facts as pleaded. It was that risk that was covered by the defendant’s policy with the Board. The defendant was not required, and the third party was not entitled, to proceed on the assumption that the facts might be found to be other than as pleaded. [6] On behalf of the third party, Mr Miles submitted that the defendant’s claim against the third party should have been for damages for breach of contract rather than for the declaration sought. I see no merit in that argument. It appears to me that the defendant’s claim as pleaded was, if anything, the preferable way in which to frame it. [7] In resisting an order for costs against the third party in favour of the defendant Mr Miles sought to rely on the facts of the case as I found them to be. Those findings are, in my view, irrelevant to the issue of what orders for costs should be made. The only relevant questions in relation to costs are whether the third party was justified in resisting the defendant’s claim to indemnity and the related question whether the defendant was justified in joining the third party. As the third party was not justified in doing what it did, and the defendant was justified in doing what it did, I conclude that the defendant should have its costs. To put the defendant in the position it should have been in had the third party admitted its liability to indemnify the defendant in respect of the plaintiff’s pleaded claim, the defendant should have an order against the third party for the costs of its defence to the -- 3 of 4 -- 4 plaintiff’s claim and for the costs of bringing and prosecuting the third party proceeding, each to be assessed on the indemnity basis. [8] It is not necessary for me to consider any complications which might flow from the issue raised in paragraph 5 of the defendant’s defence to which I referred in paragraph 34 of my reasons published on 12 October 2001. That issue concerned the effect of s. 182D of the Act, which commenced on 1 January 1996. But even if that section had had the effect that the plaintiff was not entitled to begin his proceeding, the defendant would not have been prevented by that circumstance from claiming indemnity from the third party in respect of the plaintiff’s claim. [9] The defendant would be entitled to an order against the plaintiff in respect of its costs of resisting the plaintiff’s claim assessed on the standard basis, but, taking into account the order to be made in favour of the defendant against the third party, I conclude that it would be appropriate to order that the costs that the defendant would otherwise have recovered against the plaintiff be paid by the plaintiff to the third party. I shall therefore order that the plaintiff pay to the third party the defendant’s costs, assessed on the standard basis, incurred in resisting the plaintiff’s claim, such costs not to include any costs incurred by the defendant in bringing and prosecuting the third party proceeding. -- 4 of 4 --