Where a Corporation, in trade or commerce, supplies goods that are manufactured by it and the goods has a defect that causes injury to an individual, that individual may recover compensation from the corporation for their injury. This principle is contained in section 75AD of the Trade Practices Act 1974 (NSW) and is often referred to as “manufacturer’s liability”.
Accordingly, if an individual suffers an injury as a result of a defect in a good manufactured and supplied by a corporation, that individual may commence a claim against the corporation. However, where an entitlement to workers compensation exists, this cause of action is not available.
This is so due to the operation of s.75AI of the Trade Practices Act. This section states as follows: Section 75AD, 75AE, 75AF or 75AG does not apply to a loss in respect of which an amount has been, or could be, recovered under a law of the Commonwealth, a State or a Territory that:
(a) relates to workers’ compensation; or
(b) gives effect to an international agreement. An example of the operation of section 75AI is as follows; An individual purchases new tyres from a tyre dealer and has them fitted to their vehicle; this dealer is a corporation that is both the manufacturer and supplier of the tyres. 4 weeks after purchasing the new tyres, the individual is travelling to work, when a tyre blows out causing them to lose control of the vehicle and subsequently crash into a tree. The individual suffers severe injuries as a result of the accident. As the individual was travelling to work they have entitlements under the Workers Compensation Act. If the individual had not been travelling to or from work (thus not been entitled to workers compensation), they may have brought a claim against the tyre manufacturer under s.75AD of the Trade Practices Act for supplying them with defective goods that caused injury. However, because of the operation of section 75AI, the existence of the workers compensation entitlements means that the individual is, unfortunately, unable to commence a claim against the manufacturer under section 75AD and is limited to receiving only statutory workers compensation benefits.
Alice Davis and Ana Grguric work with Emma Mead who is our Personal Injury Specialist. They can assist with your Personal Injury enquiries. They are based at the Newcastle office of Burke, Elphick and Mead Lawyers.