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VII. Bankm:ptcy or winding up of em- , workman may prove for the balance in ployer under contract with insurers the bankruptcy or liquidation. ($ 5).

(3) There shall be included among the a. Text of $ 5.

debts which, under ” 1 of the preferen

tial payments in bankruptcy act 1888, Section 5. (1) Where any employer and s 4 of the preferential payments in has entered into a contract with any in- bankruptcy (Ireland) act, 1889, are, in surers in respect of any liability under the distribution of the property of a this act to any workman, then, in the bankrupt and in the distribution of the event of the employer becoming bank- assets of a company being wound up, to rupt, or making a composition or ar- be paid in priority to all other debts, the rangement with his creditors, or, if the amount, not exceeding in any individual employer is a company, in the event of case £100, due in respect of any comthe company having commenced to be pensation the liability wherefor accrued wound up, the rights of the employer before the date of the receiving order against the insurers as respects that lia- or the date of the commencement of the bility shall, notwithstanding anything in winding up; and those acts and the prefthe enactments relating to bankruptcy erential payments in bankruptcy amendand the winding up of companies, be ment act, 1897 shall have effect accordtransferred to and vest in the worknian, ingly. Where the compensation is a and upon any such transfer the insurers weekly payment, the amount due in reshall have the same rights and remedies spect thereof shall, for the purposes of and be subject to the same liabilities as this provision, be taken to be the amount if they were the employer, so, however, of the lump sum for which the weekly that the insurers shall not be under any payment could, if redeemable, be regreater liability to the workman than deemed if the employer made an applithey would have been under to the em- cation for that purpose under the first ployer.

schedule to this act. (2) If the liability of the insurers to (4) In the case of the winding up of a the workman is less than the liability company within the meaning of the stanof the employer to the workman, the naries act 1887, such an amount as aforeinto a steam engine belonging to a cotton, of building contractors, who habitually factory, where such work is done under con made contracts for the demolition of old tract by a firm of engineers. Wrigley v. buildings on the site of which new ones Bagley (1901] 1 K. B. (Eng.) 780, 84 L. T. were to be constructed. Knight v. Cubitt N. S. 415, 70 L. J. K. B. N. S. 538, 65 J. P. [1902] 1 K. B. (Eng.) 31, 50 Week. Rep. 113, 372, 49 Week. Rep. 472, affirmed in [1902] | 18 Times L. R. 26, 71 L. J. K. B. N. S. 65, A. C. 299, 71 L. J. K. B. N. S. 600, 66 J. P. 66 J. P. 52, 85 L. T. N. S. 526. 420, 50 Week. Rep. 656, 86 L. T. N. S. 775, The erection of signals for a new railway 18 Times L. R. 559.

siding by a contractor. Burns v. North The fixing of an iron roof by a subcon British Ř. Co. (1900) 2 Sc. Sess. Cas. 5th tractor for a builder, the evidence showing series, 629, 37 Scot. L. R. 448, 7 Scot. L. T. that this was no part of the latter's busi- 408 (workman was run over).

Bush v. Hawes [1902] 1 K. B. (Eng.) Work done in the course of his employ216, 71 L. J. K. B. N. S. 68, 85 L. T. N. S. ment by a servant of a contractor for the 507, 66 J. P. 260, 50 Week. Rep. 311. collection and delivery of goods conveyed

The erection by a contractor of coal-haul- by a railway for a through rate. Greening machinery at the power station of an hill v. Caledonian R. Co. (1900) 2 Sc. Sess. electric railway company. Brennan v. Dub. Cas. 5th_series, 736, 37 Scot. L. R. 524, 7 lin United Tramways Co. [1900] 2 I. R. Scot. L. T. 458 (servant injured while trans(Ir.) 241.

ferring a barrel from a lorry to a goods The erection by a contractor of a retain train). ing wall to protect the track of a railway. Carting work done by the servant of a Dundee & A. Joint R. Co. v. Carlin (1901) firm of contractor, who were under con3 Sc. Sess. Cas. 5th series, 843, 38 Scot. tract to do all the carting work in conL. R. 635, 9 Scot. L. T. 55 (servant run nection with a factory. Bee v. Ovens (1900) over by train).

2 Sc. Sess. Cas. 5th series, 439, 37 Scot. The work of a man employed by a window L. R. 328, 7 Scot. L. T. 362 (factory owner cleaning company, who was injured while held liable). cleaning the windows of the defendant, a Work done by a carter in the employ firm of tailors. Dempster v. Hunter (1902) of a railway company, while he was en4 Sc. Sess. Cas. 5th series, 580, 39 Scot. gaged in transporting the goods of the L. R. 395, 9 Scot. L. T. 450.

defendants, a firm of sausage makers, to a The following operations have been held station on the railway. M'Govern v. Cooper not to be “merely ancillary" to the business (1902) 4 Sc. Sess. Cas. 5th series, 249, 39 of the defendant:

Scot. L. R. 102, 9 Scot L. T. 270. Work done by a subcontractor for a firm

ness.

said, if the compensation is payable to pensation has no right against the estate a miner or the dependents of a miner, of his bankrupt employer who has enshall have the like priority as is con- tered into a contract with an insurer as ferred on wages of miners by ý 9 of that to liability under the compensation act, act, and that section shall have effect and the fact that the insurance company accordingly.

is also insolvent does not alter the situa(5) The provisions of this section with tion.22 Upon an employer's becoming respect to preferences and priorities bankrupt, the right which he has or his shall not apply where the bankrupt or trustees in bankruptcy have against the the company being wound up has en insurance company are transferred to, tered into such a contract with insurers and vested in, the workman, and the emas aforesaid.

ployer has lost his right of indemnity (6) This section shall not apply where against the insurance company.

23 Where a company is wound up voluntarily mere- an injured employee of a colliery had ly for the purposes of reconstruction or been receiving compensation, and the of amalgamation with another company. assurance company in which the employ

[This section is merely an elaboration ers were insured consequently went into of 5 of the original act.]

liquidation, and shortly after the col

liery also went into liquidation, it was b. Proceedings under this section. held that the employee was entitled to a

In the case of the winding up or bank- sum equal to the annuity of his compenruptcy of an employer who is insured, cordance with the assurance company act

sation after deducting 25 per cent in ac5 of the act gives the workman only the 1909, 7, and the amount which the colsame right against the company that the liery had paid the workman before it employer had; 20 and if the rights of a went into liquidation was not to be demember of a mutual insurance company ducted.24 have been legally terminated, the work- Charges incurred in obtaining an man has no rights against the company.21 award are not preferential debts within An injured workman entitled to com- I the meaning of g 5, subsec. 3.25

20 In King v. Phænix Assur. Co. [1910] 2 Times L. R. 730, 57 Sol. Jo. 773, [1913] W. K. B. (Eng.) 666, 80 L. J. K. B. N. S. 44, 103 N. 256, 6 B. W. C. C. 799. L. T. N. S. 53, 3 B. W. C. C. 442, where the 22 Re Pethick [1915] Ch. (Eng.) 26, 84 policy of insurance contained a clause re- L. J. Ch. N. S. 285, 112 L. T. N. S. 212, quiring disputes between the insurers and [1915] W. C. & Ins. Rep. 5, (1915] H. B. R.. the employer to be submitted to arbitra- 59, [1914] W. N. 403, 59 Sol. Jo. 74. Neville; tion, and there was a genuine dispute, it J., took the position that the result of $ 5 was held that an injured employee could is to deprive a workman of his rights. not take proceedings in the county court against his employer's estate where the to have compensation awarded from the latter had been insured, since all of the company until the dispute had been sub- employer's rights against the insurer were mitted to arbitration and an award had transferred to the workman; and to hold been made.

otherwise, and say that the liability of the An appeal lies to a divisional court from employer remains because it is not expressan order of a county judge giving a work- ly released under the section would enable: man a charge upon moneys due from an | the workman to proceed against the eminsurer to the employer. Kniveton v. ployer, having, by the transfer of the em Northern Employers' Mut. Indemnity Co. ployer's rights against the insurance com[1902] 1 K. B. (Eng.) 880, 18 Times L. R. pany to himself, deprived the employer of 504, 71 L. J. K. B. N. S. 588, 50 Week. the benefit of the contract that he has. Rep. 704, 86 L. T. N. S. 721; Morris v. entered into with the insurer. Northern Employers' Mut. Indemnity Co. 23 The trustees in bankruptcy of the em(1902) 2 K. B. (Eng.) 165, 71 L. J. K. B. ployer of an injured workman have no right N. S. 733, 66 J. P. 644, 50 Week. Rep. 545, to repayment from an insurance company 86 L. T. N. S. 748, 18 Times L. R. 635. In of sums paid to the workman as compensathose cases the applications were held not tion on account of his injury, since the to be maintainable; the reasons assigned rights of the employer have been transbeing that the workmen were merely sub- ferred to the workman, and whatever may rogated by the statute to the rights of the be the right of the workman, the employer employers, and that, having regard to the has no longer any right to indemnity.. circumstances involved and the terms of Craig v. Royal Ins. Co. (1915; Div. Ct.) 84 the contracts between the employers and L. J. K. B. N. S. (Eng.) 333, 112 L. T. N. S. the insurers, it was clear that, at the time 291, [1915] W. C. & Ins. Rep. 139, [1915]' when the applications were made, there H. B. R. 57, [1914] W. N. 442. was no fund in respect of which the insurers 24 Re Law Car & General Ins. Corp.. were liable to the employers.

(1913) 110 L. T. N. S. (Eng.) 27, 58 Sol.. 21 Daff v. Midland Colliery Owners' Mut. Jo. 251. Indemnity Co. (1913; H. L.) 82 L. J. K. B. 25 Re Jinks (1914; K. B. Div.) 137 L. T.. N. S. (Eng.) 1340, 109 L. T. N. S. 418, 29 | Jo. (Eng.) 320.

Appeals from orders of the county (1) The workman may take proceedcourt judge relative to payment to the ings both against that person to recover workmen by insurance companies in damages, and against any person liable which the bankrupt employer was in- to pay compensation under this act, for sured lie to the divisional court, and such compensation, but shall not be ennot to the court of appeal; 26 and an titled to recover both damages and comappeal from the decision of the county pensation; and court judge, awarding a lump sum to an (2) If the workman has recovered injured workman against the receiver or compensation under this act, the perliquidator of the employer, does not lie son by whom the compensation was paid, to the court of appeal.27

and any person who has been called on In the cases cited in the subjoined to pay an indemnity under the section note, all of which arose out of the same of this act relating to subcontracting, transaction, the court discusses a number shall be entitled to be indemnified by of questions involving ý 6 of the British the person so liable to pay damages as Columbia workmen's compensation act of aforesaid; and all questions as to the 1902, which is similar to ý 5 of the Eng- right to and amount of any such indemlish act of 1897, with the exception that nity shall, in default of agreement, be jurisdiction is given to a judge of the settled by action, or, by consent of the supreme court, instead of to the judge parties, by arbitration under this act. of the county court.28

Section 6 of the original act provided

as follows: VIII. Liability of third person whose [Section 6 of the original act provided negligence causes the injury (8 6). compensation is payable under this act a. Text of $ 6.

was caused under circumstances creat

ing a legal liability in some person other Section 6. Where the injury for which than the employer, to pay damages in compensation is payable under this act respect thereof, the workman may, at was caused under circumstances creat- his option, proceed, either at law against ing a legal liability in some person other that person to recover damages, or than the employer to pay damages in against his employer for compensation respect thereof,

under this act, but not against both; and 26 Leech v. Life & Health Assur. Asso. , there was no privity of contract between [1901] 1 K. B. (Eng.) 707, 70 L. J. K. B. the workman and the insurer of the emN. S. 544, 84 L. T. N. S. 414, 17 Times L. R. ploying company, it was held, after the 354, 49 Week. Rep. 482, 3 W. C. C. 202; company had become insolvent, that he Kniveton v. Northern Employer's Mut. In- could not, by any proceedings taken in his demnity Co. (Div. Ct.) [1902] 1 K. B. own name, establish the liability of the (Eng.) 880, 71 L. J. K. B. N. S. 588, 86 L. insurer to the company, and that the liaT. N. S. 721, 50 Week. Rep. 704, 18 Times i bility must be ascertained by the liquidator L. R. 504, 4 W. C. C. 37; Morris v. Northern of the company. The decision of MacEmployer's Mut. Indemnity Co. [1902] 2 donald, C. J. A., proceeded upon the ground K. B. (Eng.) 165, 71 L. J. K. B. V. S. 733, that the liability of the insurer could not 86 L. T. N. S. 748, 66 J. P. 644, 50 Week. i be ascertained in such an action as he was Rep. 545, 18 Times L. R. 635, 4 W. C. C. maintaining. "The creation of the charges 38.

alone, without reference to that part of 27 Homer v. Gough [1912] 2 K. B. (Eng.) | the section which gives a remedy for en303, 81 L. J. K. B. N. S. 261, 105 L, T. N. S. forcing it, effects the subrogation men732, 5 B. W. C. C. 51.

tioned in the English cases.” The view 28 In Disourdi v. Sullivan Group Min. expressed by Irving, J. A., was that the Co. (1909) 14 B. C. 256, it is held that liability of the insurers could be deterthis provision of the act cannot be in- mined only in an action in which the voked, unless the insurer has admitted his liquidator of the insolvent company should liability, or has been found by a competent be plaintiff. Martin, J. A., was of opinion tribunal to be liable. In this case the in- i that an action in the supreme court could surer was proposing to contest his liability. not be deemed an application to a “jndge

In Disourdi v. Sullivan Group Min. Co. of the supreme court,” in the sense of the (1909) 14 B. C. 273, the application of statutory provision. the workman for an order that the em- In the same cases an action to obtain ployer and the insurers proceed to the a declaration that the workman was entrial of an issue with him was refused on titled to a first charge on the moneys to the ground that any right which he might which his employer was entitled, and for have against the insurers must be decided an order for payment, was held to have in an action commenced in the ordinary been rightly dismissed. The dismissal by way.

the trial judge was rested on the ground In Disourdi v. Sullivan Group Min. Co. that there was no privity of contract be(1910) 15 B. C. 305, on the ground that 'tween the workman and the insurers.

if compensation be paid under this act, whose negligence was alleged to have the employer shall be entitled to be in- caused the injury.31 Where a workman demnified by the said other person.] in a colliery also carried on a small

farm, and while occupied as a collier b. Joint liability of employer and third

was injured by the negligence of a third person.

person,

and recovered compensation As to liability of third person whose from his employer, he cannot thereafter negligence caused the injury under the bring an action for damages against the American statutes, see post, 225.

third party and recover damages for inThe effect of 6, subsec. 1 of the act, juries which he has suffered as a farmer, is that although an injured workman although such damages were not includmay proceed against either his employer ed in the compensation.32 or the person liable for damages, there The acceptance of payments by the cannot be a recovery both of compen- injured workman from a person other sation and of damages, and the recovery than the employer, who was alleged to of one terminates the right to proceed be liable for negligence, although no acfor the other.29 So a workman who has tion has been commenced and such liaobtained an award for the payment of bility is not admitted, precludes the compensation cannot subsequently main- workman, under ý 6, subsec. 1, from obtain an action against the third person taining compensation from the employwhose negligence caused the accident.30 er.33 And the fact that a workman And the father of a workman who for expressly reserves his right to compensathree years had received full compensa- tion does not affect the result.34 But a tion from his employers, and who sub- servant who, having received one paysequently died as the result of his in- ment under the act without qualification, juries, cannot thereafter bring an action which payment was offered voluntarily based on fault, against a third person by the employer, refused to sign any

29 Where a workman made no claim and . 33 A workman is precluded from obtaintook no proceedings under the act, but | ing compensation from his employer under merely reported the accident in the ordi- the act, when he has made a claim for dary way, and was informed that he was compensation against a person other than entitled to compensation, and afterwards his employer, alleged to be liable for neglireceived the maximum amount payable gence, and has received various payments under the act, he will be deemed to have i in satisfaction of his claim, although he “recovered” compensation, and will be has not resorted to legal proceedings and barred from proceeding against the person no legal liability is admitted. Page v. Burtliable in damages for his injury. Mahomed well (1908] 2 K. B. (Eng.) 758, 77 L. J. v. Maunsell (1907; C. C.) 124 L. T. Jo. K. B. N. S. 1061, 99 L. T. N. S. 542. (Eng.) 153, 1 B. W. C. C. 269.

34 Where an injured workman has made 30 Tong v. Great Northern R. Co. (1902; a claim for damages at common law against Div. Ct.) 86 L. T. N. S. (Eng.) 802, 66 J. a person other than his employers, and, P. 667, 18 Times L. R. 566.

without having taken legal proceedings, has 31 Gray v. North Britain R. Co. (1914) received a payment in settlement of his 52 Scot. L. R. 144, 8 B. W. C. C. 373. claim, he is barred from claiming compen

32 Woodcock v. London & X. W. R. Co. sation against his employers; and this re[1913] 3 K. B. (Eng.) 139, 82 L. J. K. B. sult is not prevented by a clause in the N. S. 921, 109 L. T. N. S. 253, 29 Times receipt given by him, reserving a right to L. R. 566, [1913] W. N. 179, [1913] W. C. claim compensation from his employers. & Ins. Rep. 563, 6 B. W. C. C. 471. This Mulligan v. Dick (1903) 6 Sc. Sess. Cas. action was brought in the divisional court. | 5th series, 126, 41 Scot. L. R. 77, 11 Scot. Rowlatt, J., said: “The right to recover I. T. 433. damages in respect of a personal injury A workman in the employment of cartis one indivisible right, and when the stat. ing contractors, who was injured while emute says the workman is not entitled to ployed under a contract between the con

damages,-unless it divides the tractors and a railway company, and who, right to recover damages,-it must mean under reservation of all claims he might that he is barred of his remedy for any have for compensation against other parcommon-law damages which flow from the ties, asked for and accepted from the coninjury which he has traced to the negli tractors a payment in full of all claims gence of the defendants. I do not think against them, under any statute or that the statute allows any other than common law, in respect of the injury, is that interpretation. The present case in barred by the terms of $ 6 from thereafter volves a curious position. It is not with claiming compensation under the act from out its hardship to the plaintiff, but I am the undertakers. Murray v. North British bound to sav that I do not see any ground R. Co. (1904) 6 Sc. Sess. Cas. 5th series, for doubting that in law he must fail in 540, 41 Scot. L. R. 383, 11 Scot. L. T. 746. the claim which he makes against the rail. road company."

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other receipt except subject to the reser c. Employer's right to indemnity from vation "without prejudice," subject to

third person. which other payments were received, has not exercised the option referred to in

The employer is entitled to indemnity 6 so as to preclude him from proceed- against any third person whose negliing against the other person liable for gence causes injury to his workman, for the injury.35 And a workman injured which injury the employer is obliged to by the neglect of a third person, who pay compensation,37 including fellow received compensation from the employ- workmen of the injured employee. 38 er, expressly reserving his right against But he cannot maintain an action for the third person, and agreeing that if indemnity against third persons whose he recovers damages he will reimburse negligence combined with that of his the employer for the amount of compen- own servants to produce the injury.39 sation received from him, has not "re- And no indemnity is recoverable from a covered compensation" so as to preclude third person, where such person is in him from proceeding against the third no wise liable to the workman.40 person in damages.36

The phrase "creating a legal liabili35 Oliver v. Nautilus Steam Shipping Co. nently reasonable from the point of view [1903] 2 K. B. (Eng.) 639, 72 L. J. K. B. of both workman and employer and in the N. S. 857, 89 L. T. N. S. 318, 19 Times interests of both." L. R. 697, 52 Week. Rep. 200, 9 Asp. Mar. 37 Dickson v. Scott [1914] W. C. & Ins. L. Cas. 436.

Rep. (Eng.) 67, 30 Times L. R. 256, 7 B. 36 Wright v. Lindsay [1912] S. C. 189, W. C. C. 1007. 49 Scot. L. R. 210, 5 B. W. C. C. 531. The In Daily News v. MeNamara (1913) 7 lord justice clerk said: “Now, the ques. B. W. C. c. (Eng.) 11, an employer retion in the circumstances of this case is, covered a judgment in a divisional court whether the pursuer has ‘recovered for the full amount of compensation which compensation that he is barred from pro- he was obliged to pay to the widow of a ceeding in his action. Looking to the deceased workman, from a third person arrangement made it appears to me that whose negligence caused the death of the what the pursuer has received is not com workman. pensation recovered under the act. It is 38 Fellow workmen through whose negliof the nature of a sum advanced by the gence another workman is injured are inemployers under conditions which exclude cluded in the words "some person other the idea of its being a final acceptance of than the employer,” and are liable for the compensation under the act. The arrange- indemnity provided for in $ 6.

Lees v. ment is in every sense reasonable and Dunkerley Bros. (1910) 103 L. T. N. S. humane. The employer knows that if his (Eng.) 467, 55 Sol. Jo. 44. And see Bate servant cannot get damages from the al v. Worsey (1912] W. C. Rep. (Eng.) 194, leged wrongdoer, he must provide compen- 5 B. W. C. C. 276. sation. But, as the litigation for damages 39 Cory v. France [1911] 1 K. B. (Eng.) is a long and protracted proceeding, he 114, 80 L. J. K. B. N. S. 341, 103 L. T. N. arranges with the workman, ‘I will give you S. 649, 27 Times L. R. 18, 55 Sol. Jo. 10, now what corresponds to what would be my 11 Asp. Mar. L. Cas. 499. liability, so that you may be supported, 40 A firm of stevedores is not entitled but you must engage to me to return me to be indemnified by a colliery company what I advance if you are successful in for the compensation which they are comgetting the fuller compensation from the pelled to pay to one of their workmen on wrongdoer.' I am of opinion that payments account of injuries received by him, caused nade under such an arrangement are no by the brakes on one of the company's bar to action at law." Lord Salvesen said: | wagons being insufficient to control the “Where a payment is made by an employer wagon as it was returned down a gradient to his workman on the footing that he shall up which it had been drawn in order to be be entitled to recwer damages at common emptied in the vessel, the company not law against third parties, and that the being responsible for the unusual strain sums which the employer has disbursed to which the brakes were put in descending are to be repaid out of any damages which the gradient, which was greater than the he may 80 recover, I think the case is wagons were subjected to while employed entirely different. The compensation so on the company's own business. Kemp v. paid is in the nature of an advance by Darngavil Coal Co. (1909) S. C. 1314, 46 the employer for the maintenance of the Scot. L. R. 939; Caledonian R. Co. v. Warpursuer pending proceedings to make good wick (1897) 25 R. (H. L.) 1, 35 Scot. L. R. his claim, and is only accepted as in full 54, followed. Elliott v. Hall (1885) L. R. of the workman's right under the act 15 Q. B. Div. (Eng.) 315, 54 L. J. Q. B. N. against his employer in the event of his S. 518, 34 Week. Rep. 16, distinguished. claim against the third party being unsuc. Lord Pearson observed: "The accident hapcessful. I cannot think that it was ever pened during the time when the haulage intended that the act should make inef-contract was suspended, and during the ful. fectual an arrangement of this kind, emi- | filment of the contract of loading, to which

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