Interstate obligation to insure and the “fortuitous, fleeting or sufficiently unusual” test

RHG Home Loans Pty Ltd v Employers Mutual New South Wales Limited & Ors [2011] QSC 28

Applegarth J

Introduction

[1] The third respondent, Mr Marshall, commenced employment with the applicant (RHG) on 8 January 2007. He went to Sydney for two days of induction on 10 and 11 January 2007. Thereafter, he was based in Brisbane, and worked at RHG’s Brisbane office in the position of “Sales Account Manager – Qld City & West”. Mr Marshall travelled to Sydney on 21 May 2007 to attend a conference conducted by his employer at the Powerhouse Museum. This Northern Region Conference included a “team building” session on 22 May 2007. Whilst undertaking the mountain bike section of that session at the Royal Botanical Gardens, Mr Marshall was injured.

The issue

[4] The issue is whether or not the claimed liability to pay damages to Mr Marshall is a liability against which RHG is required to obtain insurance cover pursuant to the NSW Act. This depends on whether or not there is a sufficient connection to engage the obligation to insure under s 155 of the NSW Act in respect of the claimed liability.

[5] Employers Mutual submits that RHG is not obliged to insure against a liability to pay damages to Mr Marshall. It relies on two decisions of the Court of Appeal of Queensland to submit that, leaving aside the effect of s 9AA of the NSW Act,

Mr Marshall’s presence in New South Wales was, to use the language of Fitzgerald P in Burrows v The Workers’ Compensation Board of Queensland, “fortuitous, fleeting or sufficiently unusual”, so that his employment lacked a sufficient connection with New South Wales to engage the NSW Act.[1] Employers Mutual places particular reliance upon the judgment of McMurdo J in Francis v Emijay Pty Ltd who illustrated the same point with the example of an employee who was sent to New South Wales for a day or so of training, and who would not be regarded as someone then employed in New South Wales.[2]

[6] Employers Mutual also relies upon the enactment of s 9AA of the NSW Act to submit that the obligation to insure in s 155 of that Act was subject to the requirement that Mr Marshall’s employment was connected with New South Wales, with the existence of such a connection being determined in accordance with s 9AA. According to this argument, since New South Wales is not the State in which Mr Marshall usually worked, s 9AA(3) dictates that his employment was not connected with New South Wales. Compensation under the NSW Act is only payable in respect of employment that is connected with that State. Employers Mutual submits that because Mr Marshall was not a worker to whom RHG was liable to pay compensation, there was no obligation to insure under s 155 of the NSW Act in respect of any injury to him.

[7] WorkCover submits that there are “sufficient relevant connectors with New South Wales for the application of s 155 to this case, regardless of connectors which also exist with Queensland.” It points to factors that are said to demonstrate that

Mr Marshall’s presence in New South Wales was neither fortuitous, fleeting nor unusual. Authoritative decisions of courts in New South Wales and Queensland are said to overwhelmingly point to these connectors being sufficient for s 155 of the NSW Act to be engaged. WorkCover submits that the operation of s 155 is not constrained by the limitations contained in s 9AA, and there is no warrant for reading down the words in s 155 as if those limitations applied to a claim for damages.

LEGISLATION: Workers Compensation Act 1987 (NSW) s 9AA, s 155 Workers Compensation and Rehabilitation Act 2003 (Qld)

s 10

 

[14] Prior to s 9AA coming into force, the operation of s 155 depended on the existence of a relevant connection with New South Wales. Expressed differently, s 155 could not be taken to have a valid operation in respect of an employer’s liability arising from employment that had no sufficient connection with New South Wales. This was because it could not be supposed as a matter of statutory construction that the section was intended to impose an obligation to insure, and create an offence for failing to insure, in a case in which the employer, workers employed by it, their employment activities and the injury had no connection with New South Wales. Some sufficient connection with New South Wales was required in order for the section to apply and the obligation to insure to arise.

[16] In Burrows the respondent’s employer at the time he was injured was a company incorporated in Queensland, which was not registered elsewhere and which had its only premises in Queensland. Its business as a transport operator regularly involved it in business activities in New South Wales. The respondent, the driver of one of its vehicles, went to New South Wales on numerous occasions in the course of his employment and he was injured in New South Wales while he was working there in the course of his employment. Fitzgerald P, with whom Mackenzie and Helman JJ agreed, concluded that s 155(1) of the NSW Act was not inapplicable “merely because neither employer nor employee is resident or domiciled, based or located, whichever be thought most apposite, in New South Wales when an employee is injured”.[3] Section 155 of the NSW Act was found to apply to the respondent’s then employer in respect of the work-related injury that he suffered in New South Wales in the course of his employment. Fitzgerald P observed that the NSW Act, described in its long title as an Act “to provide for the compensation and rehabilitation of workers in respect of work related injuries”, was “plainly intended to have a wide and beneficial operation.”[4] There was no identified reason to read down s 155(1) so as to exclude from its ambit the kind of work-related injury which occurred in New South Wales in that case. Fitzgerald P expressed the following reservation:

“However, there might be other provisions in the New South Wales Act to which the attention of this Court has not been drawn which effect some limitations in some circumstances, and it is possible that, for example, subsection 155(1) of the New South Wales Act is inapplicable if an employee’s presence in New South Wales when he or she is injured in the course of his or her employment is fortuitous, fleeting or sufficiently unusual.”[5]

[17] Francis concerned the issue of whether an employer in New South Wales was bound to obtain the insurance policy provided for in s 155 of the NSW Act to cover a contractual liability which an employee asserted against his employer. The Court concluded that the employer was obliged by s 155(1) of the NSW Act to provide for its liability in damages to Mr Francis. The Court did not question the correctness of the decision in Burrows. Williams JA, who agreed with the separate reasons given by both Keane JA and McMurdo J, did not seek to define “the outer limits of the range of operation of s 155”. This is because it was “clear beyond doubt” that the section applied to the circumstances at hand which involved an injury sustained in New South Wales by a “worker” at a time when he was there in his capacity as a worker.[6] Williams JA referred to the decision in Burrows and stated that a review of the amendments to the NSW Act since Burrows did not call for a reconsideration of the conclusion reached in that case. Williams JA stated: “if anything, the subsequent amendments support the conclusion therein reached.”[7]

[18] Keane JA (as his Honour then was) noted the possible qualification raised by Fitzgerald P in Burrows, and did not suggest that such a qualification might not exist. Instead, Keane JA referred to the primary judge’s finding that Mr Francis’ presence in New South Wales was not “fortuitous, fleeting or sufficiently unusual”.[8]

[19] In this matter WorkCover points to the following observation of Keane JA:

“It is significant that, before this Court, QBE was unable to cite any authority which is contrary to the proposition that it is sufficient to engage the operation of s 155(1) of the NSW Act that the injury should have occurred in New South Wales, or which supports the proposition that s 155(1) is relevantly concerned only with liabilities in tort or liabilities arising from a breach of contract of which the law of New South Wales is proper law.”[9]

Viewed in isolation, the first part of this sentence might be interpreted as suggesting that it will always be sufficient to engage the operation of s 155(1) of the NSW Act that the injury should have occurred in New South Wales. I do not interpret it that way. If Keane JA had intended to disagree with the qualification raised by Fitzgerald P in Burrows then he would have said so. His Honour would have stated that it was sufficient to engage s 155 that the injury occurred in New South Wales, and that it had been unnecessary for the primary judge to consider whether

Mr Francis’ presence was “fortuitous, fleeting or sufficiently unusual”. Moreover, if the presence of the injured worker in New South Wales was in itself sufficient to engage the operation of s 155, then Keane JA would not have referred at [35] to the fact that Mr Francis was not “fortuitously” in New South Wales when he was injured, and was there “in accordance with the terms of his employment and his employer’s expectations”.[10] I interpret the observation of Keane JA at [33] as simply referring to the fact that there was no previous authority cited by QBE of a case in which the relevant injury occurred in New South Wales in which s 155 was not engaged.

[20] If Keane JA had intended to state the unqualified proposition that it is sufficient to engage the operation of s 155(1) of the NSW Act that the injury occur in

New South Wales, then his Honour would not have acknowledged the degree of uncertainty that s 155 was said to create “as to the precise moment when the obligation in s 155(1) operates to require an out-of-State employer to insure in respect of its workers.”[11] Finally, Keane JA did not express any disagreement with the reasons of McMurdo J. In short, the reasons of Keane JA do not disapprove of the possible qualification discussed by the Court of Appeal in Burrows and do not state the unqualified proposition that it is sufficient to engage the operation of

s 155(1) that the injury occur in New South Wales.

[21] McMurdo J did not accept the submission of the respondent that s 155 was engaged whenever an employee was working in New South Wales, however temporarily, in the course of their employment. The question of whether s 155 was engaged was “a factual one, requiring a consideration of the circumstances of a particular case”.[12] The question was not answered simply by asking whether the worker was injured whilst working in New South Wales.

[22] After referring to the qualification expressed by Fitzgerald P in Burrows,

McMurdo J observed that the decision left open the possibility that in some circumstances, the presence of an employee in New South Wales in the course of his employment might not be sufficient.[13] His Honour referred to the two types of liability in respect of which s 155 required insurance and observed that the evident intent was that “the same worker or workers would be the subject of insurance against each kind of liability.” Accordingly, it was “relevant to consider the circumstances in which an employer was liable under the Act for workers compensation”.[14] Reference was made to amendments to the NSW legislation, including the enactment of s 9AA, which “clearly expressed” the particular factors that provide the required connection with New South Wales. Although those amendments did not affect the legislation that applied in the case under appeal, they were said to illustrate the relationship which exists between the operation of the workers’ compensation scheme and the employer’s obligation to insure under

s 155.[15]

[23] The judgment of McMurdo J, with which Williams JA agreed, developed the following propositions:

  • it is unlikely that the legislature “intended that an employer, when engaging a worker to work in another State but in circumstances where there was some prospect that the worker would be sent to New South Wales from time to time, should have to insure against that prospect”;
  • it is unlikely that the section was intended to oblige an employer to insure at the point when its employee enters New South Wales in the course of his employment for however short a time;
  • the terms of the statute in their application to employment of a worker in New South Wales require “some presence and performance of services within New South Wales, to an extent that it could be said, in ordinary speech, that New South Wales was a place where the employee sometimes worked.”
  • for example, “an employee who was sent to New South Wales for a day or so of training would not be regarded as someone then employed in New South Wales”;
  • it would be insufficient if the employee’s presence in New South Wales was “fortuitous, fleeting or sufficiently unusual”.[16]

 

 

[34] This is not a case in which an injury occurred in New South Wales in the course of the performance by an employee of his normal employment duties. Still, the fact that the injury occurred in the course of a conference that was intended to promote training and team building, rather than on an occasion when Mr Marshall was performing his usual work, does not alter the fact that the injury occurred in the course of his employment at an event that his employer encouraged him to attend and paid for. His presence in Sydney was not fortuitous. However, the event was sufficiently unusual to call into question whether a sufficient connection with New South Wales is established.

[35] The fact that the injury occurred in New South Wales has an obvious significance. However, upon the approach adopted in Francis, which I follow, the mere fact that the injury occurred in New South Wales may not be sufficient in all of the circumstances to establish the necessary connection with that State. It seems unlikely that an obligation to insure, and the consequences of failing to insure, should be visited upon an employer simply because an employee is injured in New South Wales. If that was the case, an employer from outside that State would be burdened with the obligation to insure, and the consequences of failing to do so, if an employee, based in another State, was injured whilst attending an unexpected and hastily-convened business meeting in Sydney from which she was scheduled to return the same day. It is hard to see in such a case why the fact that the injury occurred in that State should establish the necessary connection.

[36] Although Mr Marshall’s trip to Sydney for the conference in May 2007 was not a fleeting visit, it was unusual. It did not involve the performance of his usual duties. It was not a regular event, such as a monthly sales meeting. It was the kind of occasion to which McMurdo J alluded in Francis at which it could not be said, in ordinary speech, that the worker was at a place where he sometimes worked. The example given by McMurdo J of an employee who was sent to New South Wales for a day or two of training and who would not be regarded as someone then employed in New South Wales is apposite.

[37] It might be said that the presence of Mr Marshall and other workers at the conference and team building session in Sydney was expected, and therefore it was reasonable for his employer to insure under the NSW Act against a liability of the kind claimed. However, RHG’s knowledge that Mr Marshall was expected to travel to Sydney, and the opportunity that it had to effect insurance, do not determine the present issue. It often might be said that an employer can reasonably contemplate that a worker may be required in the course of their employment to be temporarily present in New South Wales. The question is not whether RHG expected Mr Marshall to be temporarily in Sydney for an activity associated with his work. The issue is whether it was obliged to insure against a liability arising from his temporary presence in New South Wales in all of the circumstances.

[38] At the time of the accident, Mr Marshall was not employed in New South Wales in the sense of being there in order to perform his normal duties. He was expected to be in Sydney for less than 48 hours. The type of conference and team building session that he attended was not a regular part of his employment. His attendance at the conference and team building session was unusual. Overall, the nature, duration and purpose of his presence in New South Wales on 21 and 22 May 2007 was “sufficiently unusual” to mean that his employment was not sufficiently connected with New South Wales. Consequently the injury received by him is not one in respect of which RHG was obliged to insure pursuant to s 155.

[39] Even if I was to leave aside s 9AA, I would conclude that the circumstances did not engage s 155 of the NSW Act. However, for the reasons that follow, I consider that s 9AA applies.

[40] I accept the submission of WorkCover that s 9AA relates to liability for compensation, as distinct from liability for damages, and that s 9AA has no equivalent in relation to damages. However, this does not dispose of the issue of whether the obligation to insure under s 155 in respect of liability for damages extends to workers whose employment is not connected with New South Wales in accordance with the test for connection set out in s 9AA. That issue turns on the interpretation of s 155.

[46] By force of s 9AA(3)(a) a worker’s employment is connected with the State in which the worker usually works in that employment. In this case Mr Marshall’s employment was connected with Queensland, which was the State in which he usually worked in his position as Sales Account Manager. Because his employment was not connected with New South Wales for the purpose of s 9AA, compensation under the NSW Act was not payable in respect of his employment. At the relevant time he was not a worker in respect of whom RHG had a liability to pay compensation under the NSW Act and, accordingly, RHG was not obliged to maintain insurance pursuant to s 155 in respect of its liability independently of the NSW Act for an injury to him.

Conclusion

[47] The liability in damages claimed by Mr Marshall is not a liability against which his then-employer was required to provide under the NSW Act. RHG’s insurer under its New South Wales compulsory insurance policy is not obliged to indemnify it in respect of Mr Marshall’s claim.

[48] Because the claimed liability is not a liability against which RHG was required to provide under the NSW Act, s 10(2)(b) of the Queensland Act is not triggered. As a result, Mr Marshall’s claim is a claim for damages within the meaning of s 10 of the Queensland Act. There is no doubt that RHG was Mr Marshall’s “employer” and that he was a “worker” within the meaning of the Queensland Act. RHG’s insurer under its Queensland compulsory insurance policy, WorkCover, is obliged to indemnify it against any liability established against it by Mr Marshall arising out of the relevant claim.

Brisbane Barrister – David Cormack 

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