Article 151Z – come one, come all – it is not only available to the person who actually paid the indemnity – Employment and HR

Thorn versus Monteleone; Thorn vs. Kelly [2021] NSWCA 319

On December 16, 2021, the NSW Court of Appeal confirmed that the sentence “the person who paid the compensation” in Section 151Z refers to:

1. the Nominal Insurer;




2. the Insurer who pays the indemnity; and




3. the employer.

The literal interpretation proposed by the appellant, and his civil liability insurer, according to which only the person who actually made the payment of the indemnity could avail himself of article 151Z to recover it; was wrong.

Facts

Monteleone was employed by the Kellys as an agricultural contractor.

He was injured in 2013 while on the job helping the Thorns unload sheep from a truck.

The Kellys were not insured for workers’ compensation purposes.

The nominal insurer intervened and paid Monteleone $212,599.71 in workers’ compensation under the Workers Compensation Act 1987 (NSW) (‘the law’).

The Kellys only repaid part workers’ compensation benefits paid ($72,410.06), to the nominal insurer.

Monteleone sued the Thorns for negligence.

The Kellys sued the Thorns under 151Z(1)(d) to recover all workers’ compensation benefits paid to Monteleone.

On February 19, 2021, Judge Cavanagh determined that the Thorns were liable to Monteleone and assessed damages at approx. $1.4 million. He also determined that the Kellys were entitled to recover all workers’ compensation payments made.

The Thorns appealed.

Tenuous

Judge Cavanagh’s interpretation of Section 151Z was correct because “the person who paid the compensation” shall be interpreted as referring to the person who paid or on whose behalf the payment was made.

The intent and effect of the law is that compensation for injury occurring in the course of employment is payable to a worker by the employer, regardless of the insurance position of the employer: section 9 .

The intent of Section 151Z(1)(d) is to permit the burden of workers’ compensation payments to be shifted to the third party tortfeasor who is liable to pay damages of the injury.

Bring back home

Beware of third-party insurers who advise you on how to interpret the law you deal with every day. If the Kellys had listened to them, they might have missed out on recouping another $140,000.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.