Victorian Workcover Authority v Virgin Australia Airlines Pty Ltd & Anor [2013] VSC 720

Pursuant to section 85(6) of the Accident Compensation Act 1985 (Vic) (AC Act), if a person receives worker’s compensation under the AC Act and subsequently obtains damages in respect of the injury under the law of any place outside Victoria (whether within or outside Australia), the Workcover Authority is entitled to recover from that person the amount of the compensation paid under the AC Act or an amount equal to the damages obtained, whichever is the lesser amount.

Mr Tzovlas was a passenger on a Virgin Airlines flight from Sydney to Melbourne when, in the airspace above Tullamarine, he suffered a serious injury when a flight attendant dropped a portable Eftpos machine on his head. The impact caused him to twist sharply, badly injuring his back.

As Tzovlas was travelling for the purpose of his employment, he claimed worker’s compensation under the AC Act. Tzovlas also commenced proceedings against Virgin for damages under the Civil Aviation Carrier’s Liability Act 1959 (Cth) (CACL Act). At the material time, the carrier’s liability was capped at $500,000.

A dispute arose about whether any damages awarded under the CACL Act would constitute damages in respect of injury ‘under the law of any place outside Victoria (whether within or outside Australia)’. Tzovlas felt he would be greatly disadvantaged if the Workcover Authority could recover the $500,000 because, without the application of the CACL Act, his damages would substantially exceed the capped limit of $500,000.

The Supreme Court found the AC Act is remedial legislation in that it provides an entitlement to compensation which is not fault-based. The entitlement is not unlimited however; there must be a connection between the worker and Victoria and there is a principle against double-payment of compensation which allows recovery from the worker if other damages are awarded.3

Remedial legislation must be interpreted to give the fullest relief which the fair meaning of its language will allow. This rule however, must be tempered by the actual language used. Where, as in this case, remedial legislation includes a provision like section 85(6) which is not remedial, the court must exercise caution when construing it.

The Supreme Court rejected arguments by Tzovlas that section 85(6) only applied where the other damages were awarded on the basis of the negligence of a third party whereas in this case the damages under the CACL Act are based on strict (no-fault) liability, or where the other damages were adequate to compensate the injured worker whereas in this case the CACL Act imposed a statutory cap.

Tzovlas also contended that the CACL Act was a Commonwealth Act and as Victoria was part of (or inside) the Commonwealth, the claim under the CACL Act was not a claim under the law of any place outside Victoria.
The Supreme Court rejected a construction of the word ‘place’ as something exclusively physical and considered the reference to ‘under the law of any place outside Victoria’ was apt to describe non-Victorian sources of laws, including legislation of the Commonwealth. Accordingly, the ‘intention of the legislature appears to be that compensation is not payable, and may be recovered, where the worker has been paid damages in respect of the same injury under a law of another jurisdiction’.

As a result, the Victorian Workcover Authority was able to bring recovery proceedings in respect of the CACL Act damages under section 85(6).