ANZ v Mercer

[2001] HCATrans 17

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S143 of 2000

B e t w e e n -

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

Applicant

and

KAREN ELIZABETH MERCER

Respondent

Application for special leave to appeal

GAUDRON J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 16 FEBRUARY 2001, AT 9.53 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR P.L. PERRY, for the applicant.  (instructed by Hickson Wisewoulds)

MS A.J. KATZMAN, SC:   If the Court pleases, I appear with my learned friend, MR B.G. McMANAMEY, for the respondent.  (instructed by Stacks – The Law Firm)

MR JACKSON:   Your Honours, the issue sought to be agitated in this case is the meaning to be attributed to the term “substantial contributing factor” in section 9A(1) of the Workers Compensation Act 1987 (NS W). Your Honours, I use the expression “the meaning” of that term. What we mean by that is the operation to be attributed to that phrase in the context of the Act. Could I say what I propose to do in dealing with the ‑ ‑ ‑

GAUDRON J:   But this is purely a question of construction, is it, of a State statute of limited application?

MR JACKSON:   Your Honour, in the first place, true it is a question of construction, second the State statute and third, not of limited application, with respect.  It is a very broad application to many, many cases, indeed, and in relation to the question of construction, the approach taken by the Court of Appeal in this case seems to have been – and, your Honours, the reason why, at the start I made a qualification, I used the expression “meaning” – to give a fairly ordinary expression “a substantial contributing factor” a meaning that is different in some way from a pure evaluation of the facts in relation to that issue in circumstances where the result of the view taken by the Court of Appeal was that they said that the judge and, in our submission - and I will take your Honours to the passage in just a moment where the judge was saying that was entirely orthodox.  The Court of Appeal said that was wrong because of the evaluation he was engaged in of the facts but the Court of Appeal itself had no jurisdiction to deal with the pure question of fact.

What has been done, your Honours, is that the way in which the Court of Appeal has approached it is to take an analysis that fundamentally involves a question of weighing up facts as the expression “substantial contributing factor” would indicate and then say the judge is wrong for doing that in circumstances where the Court of Appeal’s jurisdiction is limited to an appeal on questions of law.

The way in which the Court of Appeal has gone about it, your Honours, is one that, in our submission, must have consequences in relation to many, many cases because it determines two things:  first of all, the approach to be taken in courts below it and secondly, the approach to be taken by the Court of Appeal itself.  So, your Honours, in one sense, what your Honour put to me is right.  It involves a question of interpretation of a State statute, nothing the worse for that, with respect.

GAUDRON J:   And a limited class of workers compensation cases.

MR JACKSON:   Your Honour, the main class of workers compensation cases, not the ones that involve the frills, as it were. This is the main class of cases. It applies to all the ordinary workers compensation cases. Your Honours, could I seek to make that out? I have mentioned the course I was proposing to take. That was to indicate how the issue arises, where there was an error in the Court of Appeal, why it matters and why the case is of sufficient importance. May I take your Honours to the first of those things? Section 9 of the Workers Compensation Act – that is in the bundle of legislation at page 2. 

McHUGH J:   But it is fundamental to your submission that “substantial” means more than “material”, is it not?

MR JACKSON:   Yes, your Honour.

McHUGH J:   But why?  Mr Jackson, you are familiar with the cases on the Trade Practices Act, Tillmanns Case and other cases, Laidley’s Case that deal with the meaning of “substantial”.  It is just used in opposition to tenuous or remote, is it not?  Why is not that the proper meaning of it?

MR JACKSON:   I do not think that we are disagreeing with your Honour.  It means something different, your Honour, from a contributing factor and one sees a reference by our learned friends to Favelle Mort Limited, but that is simply a case where what had been added was in the case of disease that had to be a contributing factor.  Now, the legislature has added the words “substantial contributing factor”.

McHUGH J:   Yes.

MR JACKSON:   Now, in dealing with that, that obviously involves a question of degree.  Your Honours, in some cases, and, your Honours, our written submissions accept this, the Court of Appeal was right in saying it does not mean that it has to be a dominating or the only cause or anything like that.  But the point we would seek to make is that when one goes to what the Court of Appeal ultimately said, the way in which the Court of Appeal dealt with it was, having discussed these matters in respects in which we would have no disagreement, it then says the judge was, in effect, doing the wrong thing when the judge was doing the very thing that the statute required.

Your Honours, perhaps I could go immediately to the Court of Appeal in that regard.  Your Honours will see that if one goes to page 24, paragraph 9, what the Court of Appeal did was to note that it was accepted that the injury was:

in the course of her employment and that the employment contributed to that injury –

but the question was whether the contribution was “substantial”.

Now, your Honours, could I just say a couple of things about the way in which the Court of Appeal then went about it.  The first thing was that it recognised that the term “employment” was a reference to what the worker actually was doing.  Your Honours will see that at page 25, paragraph 13.  The Court of Appeal dealt with that issue again, although it was common ground, at page 28, paragraphs 22 to 23, so there was no error by the primary judge.  The court also said in paragraph 17 – if I could just go back to page 26 – that it was:

the strength of the causal linkage that is in question –

Your Honours, various submissions of the present respondent were then dealt with but in the course of doing so, the court, at page 29 paragraph 27, said that it was:

the extent of the causal link which is at issue –

Now, your Honours, then one comes to the approach ultimately taken by the Court of Appeal.  It commences at page 31, paragraph 31, and your Honours will see that at about line 5 on the page, paragraph 31, their Honours said that the primary judge was correct in taking into account:

that the precise activity that led to the –

injury could have happened anywhere and, in particular, it could have happened at home or at work.  The operation of the provisions is then discussed at paragraphs 31 to 34, and then, your Honours, one comes to the conclusion of error and one sees that in paragraph 35 on page 33.

Now, your Honours will see that what is being discussed is the extract from the primary judge’s reasons which appears at page 23, paragraph 8, of the Court of Appeal.  I will not read it out, of course, but your Honours will see particularly paragraph 32 and the passage that concludes at the end of the paragraph:

In the relativities of things it was more a coincidence than a contribution.

McHUGH J:   My problem is that the judgment of the learned President is not expressed with his usual clarity.  I must say I have some difficulty in understanding exactly what test he was substituting or saying was ‑ ‑ ‑

MR JACKSON:   If I may say so, with respect, your Honour, to the President, that is exactly one of the grounds of complaint, in a sense, because it is impossible in an important case of this kind, in our submission, to work out precisely what was being done.  That appears from paragraph 35.  What was done was to do the very thing, in our submission, that the court did not have power to do because, as your Honours will see, at page 24, paragraph 9, lines 15 to 16, the appeal is “limited to a point of law”.

GAUDRON J:   Your complaint really is the way in which the Court of Appeal went about its appellate functions?

MR JACKSON:   Your Honour, yes, indeed.

GAUDRON J:   Rather than asserting any particular meaning to be attributed to the State?

McHUGH J:   The problem is that it is hard to know what is the law of the State on this particular point.

MR JACKSON:   That is it, your Honour.  Perhaps I can say two things.  The first is that if one looks at the reasons of the Court of Appeal it is very difficult to say what test the court was applying but if one looks at the way in which the court applied whatever the test it was adumbrating may have been, one sees that it then goes over the edge of the jurisdiction of the court because it is a pure re‑evaluation of the question of fact.

GAUDRON J:   What about paragraph 34 on page 33?

MR JACKSON:   Your Honour, it is, in our submission, irrelevant.  The disagreement with the Compensation Court judge is really irrelevant.  The disagreement is purely in relation to the potential application of the test in a particular case.

GAUDRON J:   Did Chief Judge Bishop reject that third proposition?

MR JACKSON:   Your Honour, he rejected the lightning example.  But when one looks to see what he did, it is perfectly apparent, in our submission, if one looks at the whole of that passage that is extracted in paragraph 8 of the Court of Appeal’s reasons, then what he was doing was really the very thing that the statute requires in terms of section 9A.

One does not treat the fact that it happened in the course of employment or as a result of employment as being the ultimately decisive question.  The statute says that specifically and so one has to look at, as he said at the end of paragraph 32 of his reasons quoted at page 23, one has to look at the relativities of things.  He did; arrived at a result and then, when one goes to see what the Court of Appeal did at page 33, your Honours will see that their Honours say this portrays legal error because the absence of employment characteristics was treated as determinative.

McHUGH J:   Mr Jackson, the learned Chairman in the Workers Compensation Commission obviously took the view that significant “contributing factor” is at least as strong as “arise out of”.  Now, that may well be wrong and the Court of Appeal may be right, in paragraph 34, to have rejected it in one sense but my problem is I am not sure what was substituted in place of it.  It may be that “substantial contributing factor” is not more stringent than “arise out of” but so what?  You still have to ask what is the substantial contributing factor in a particular case.

MR JACKSON:   Yes, your Honour, and if one looks at what was said by the Compensation Court judge, what one sees in relation to that is that he was discussing the provisions but when one comes to see the actual application of it he is purely doing exactly what the statute said.  Your Honour, what we would said then is if you go then to page 33, see the part that the Court of Appeal extracted where they say, “This is made clear by the concluding sentences”, that, with respect, cannot be right because the two sentences are first, “The mere fact” et cetera and, your Honours, that is simply to paraphrase the provision of the statute and the second sentence:

In the relativities of things it was more a coincidence than a contribution –

that is purely to arrive at a factual conclusion.  I said as to the first of those, your Honours, that that was just to paraphrase the statute and your Honours will see that that is so from section 9A(3), which says, specifically, that:

A worker’s employment is not to be regarded as a substantial contributing factor to a worker’s injury merely because of either or both of the following:

(a) the injury arose out of or in the course of, or arose both out of and in the course of, the worker’s employment –

and the second one ‑ ‑ ‑

McHUGH J:   Whatever else 9A has done, it seems to have overcome the cases where the worker is working away on the factory floor and his neighbour runs in and knocks him down.  That is no longer sufficient to cover compensation.

MR JACKSON:   Yes.  Your Honour, the occasion for it, of course, was the Court’s decision in Zickar where, to put it shortly, a condition that might have manifested itself before, within, in the course of or not in the course of employment happened at employment. 

Your Honours, the last thing I wanted to say was this in relation to the importance. Your Honours will see from the way in which section 9A is expressed that it applies – if I could just take your Honours to section 9A(1) – it operates as a qualification to the operation of 9, obviously enough. It says:

No compensation is payable under this Act in respect of an injury unless the employment concerned was a substantial contributing factor to the injury.

Then, your Honours, in subsection (4) it indicates the cases where it does not apply.  That is section 10 – “Journey claims” and section 11 ‑ ‑ ‑

McHUGH J:   “Recess claims” and death claims or claims by trade union employees.

MR JACKSON:   It is manifest, in our submission, that it applies to very many claims in a very large jurisdiction.

GAUDRON J:   Now, could I take you to your draft ground of appeal, which does not necessarily relate to what you have been saying today, Mr Jackson, page 38?

MR JACKSON:   Yes, your Honour.  No doubt it could be elaborated upon, point 2.

GAUDRON J:   Perhaps in fairness to Ms Katzman, who may have to answer your submissions, you should formulate it now.

MR JACKSON:   Your Honour, could I put it in substance rather than in precise language?

GAUDRON J:   Yes.

MR JACKSON:   We would say, first of all, ground 2 is right.  We would want to keep that because it is a possible way of looking at it.  The second is we would add a ground saying that the Court of Appeal decided the case on a basis not permitted by the terms of the Compensation Court Act in that it decided the case on the basis of a review of a question of fact, rather than a question of law.  Thirdly, your Honours, in doing so, it substituted a test which was not permitted by the terms of the Act, the terms of substantial contributing factor.  Your Honours, they are related, the two aspects.

GAUDRON J:   Thank you.  Yes, Ms Katzman.

MS KATZMAN:   The application for special leave is opposed on two grounds.  The first is that there is no basis for a grant of special leave because no question of general or special importance arises.  We would respectfully submit that your Honour Justice Gaudron was right when your Honour said that this really is a question of statutory construction in New South Wales and no more.

GAUDRON J:   You say it is, or is it really a question about the appellate function?

MS KATZMAN:   With respect we would say no for reasons which I will go into shortly.  The second basis upon which we would submit that the application should be refused is that the Court of Appeal was right and that the appeal should have been allowed.  The decision is not attended by sufficient doubt.

Can I turn to the question of special leave first?  There is no identical phrase in any of the statutes that are included in the booklet submitted by my learned friends.  The closest is the Victorian statute which refers to a “significant factor contributing to the injury” and has some elements of section 9A(2).  The Queensland statute speaks of “employment as the major significant factor”, the Veterans’ Entitlements Act to “the substantial cause”  In Tasmania there is a statutory definition of “substantial contribution as the major or most significant factor” and there is no such provision in the New South Wales Act.

But perhaps the most important difference between the statutes is that in New South Wales subsection (3) appears and that is the subsection upon which the applicant places considerable emphasis, namely that:

A worker’s employment is not to be regarded as a substantial contributing factor to a worker’s injury merely because of either or both of the following:

including that the –

injury arose out of or in the course of –

employment or both.  That subsection does not appear in other of the workers compensation statutes or any of the other statutes to which the applicant has made reference.  The approach which was taken by the Court of Appeal in this case is the same as the approach taken in the other States in any event and the Court of Appeal ‑ ‑ ‑

GAUDRON J:   What is that approach, Ms Katzman?

MS KATZMAN:   We say the approach that the court took was that it is important when you look at how you define whether an injury is compensable to look at the scheme of the legislation itself and my learned friend took your Honours to section 9 and section 9A. The starting point, in fact, is section 4 and it is clear that that is what his Honour the President was doing in the Court of Appeal when he referred to section 9A(3) in his reasons for judgment and let me go to section 4, which is reproduced in both the authorities. Section 4 is identical to what it always was. It was not amended when section 9A was inserted into the Act so “injury” is defined to include an injury which occurs:

in the course of employment –

or arises out of employment. The next qualifying provision is section 9, then section 9A.

What the applicant sought to do in this case is to impose a test which is not incorporated by the legislation, that is to require that a worker establish both that the injury occurred in the course of employment and arose out of employment and then had to prove that the employment was a substantial contributing factor to the injury.

GAUDRON J:   Where do you see that in the Chief Judge’s reasons?

MS KATZMAN:   The President deals with that ‑ ‑ ‑

GAUDRON J:   Chief Judge Bishop.

MS KATZMAN:   I beg your pardon.  I am sorry.  He is not a Chief Judge, that is where I ‑ ‑ ‑

GAUDRON J:   Is he not?  He is a Compensation Court judge.

MS KATZMAN:   Compensation Court judge.  The error in the judge at first instance’s reasons is apparent, we would submit, when you go to paragraph 32 at page 10 where he sets out his conclusions.

McHUGH J:   I can understand the argument that it is the sentence:

It was not an activity with any employment characteristics about it –

as constituting error, but that was not the way the Court of Appeal identified it.  They did not identify that sentence as the error but the sentence further along, “The mere fact”  ‑ ‑ ‑

MS KATZMAN:   With respect, no, your Honour.  If your Honour goes to paragraph 31 on page 31, what the President says is, he refers to that very passage to which your Honour refers:

the precise activity . . . could have occurred elsewhere . . . This type of information –

he says is relevant but nothing makes it “determinative” and where we say the error at first instance was is that the judge applied the wrong test for determining whether or not the employment was a substantial contributing factor.  He elevated it to the status ‑ ‑ ‑

McHUGH J:   What is wrong with the sentence of the judge at first instance, in isolation:

The mere fact that the applicant did what she did when she did it is not sufficient of itself to make the employment a substantial contributing factor to the injury.

Now, it is that sentence which seems to me to be perfectly okay which is the sentence that is picked out in paragraph 35 on page 33 as indicating the legal error.

MS KATZMAN:   We would submit that one cannot read either the President’s comment in isolation or that sentence in isolation in the original judgment.  One has to read paragraph 35 with the paragraphs that precede it because it is from page 31, paragraph 31, that the President sets out the reasons why the judge at first instance was in error.  The problem with Judge Bishop’s reasoning, we submit, is elucidated most particularly in paragraph 31 because it is clear, we would submit, that what he was doing was creating a test.  The test was that if an injury could have occurred outside the workplace, then the employment could not have been a substantial contributing factor.

GAUDRON J:   That is really to take what the judge said out of context, is it not?

MS KATZMAN:   We would respectfully submit not.

GAUDRON J:   He notes a number of matters.  It could have happened anywhere.  It did not have any particular employment - the substantial contributing factor was the “constitutional state of the patella” or:

was a substantial contributing factor requiring as it did very little provocation for the dislocation to occur.

The Chief Judge does not deal with it as a determinative factor.  He deals with it as a factor relevant to making what has ultimately to be a value judgment, I suppose, as to whether it is a substantial contributing factor.

MS KATZMAN:   We would submit that the way in which his reasoning is expressed, he regarded as determinative the very fact that this was the kind of activity that could have occurred outside the workplace.

McHUGH J:   If that is the proper construction of the judgment then it is plainly wrong, or at least so it seems to me at the moment, but that said, I am by no means certain that the Court of Appeal has identified the relevant error of the judge or that it, itself, has expressed a view as to the correct meaning of the section.

MS KATZMAN:   We would submit it has done both.  In paragraph 31 more clearly perhaps than anywhere else because in paragraph 31 his Honour the President identifies the error to which we have pointed, namely that the fact that the activity could have been carried out somewhere else does not disqualify a worker from compensation and that is the effect of the reasoning of the judge at first instance.  The reference to the old cases dealing with the need for a worker to prove that the employment created a special danger makes it apparent that that is what the Court of Appeal had in mind because it looks there at the question of peculiar employment characteristics, if you like, as being the dominant, if not the determinative consideration.

McHUGH J:   But this overlooks what the judge at first instance said at page 9 of the judgment, paragraph 29, line 16:

I consider that the meaning that should be adopted of the word ‘substantial’ is that it means that it means more than minimal, large or great.

MS KATZMAN:   The President accepted that interpretation, which is the interpretation for which the applicant contends so that the interpretation of the words “substantial contributing factor” is as it was at first instance.  That is set out in the judgment in the Court of Appeal at pages 29 to 30 in paragraph 27.

The Court of Appeal, according to the applicant, applied the correct meaning to “substantial”, namely held it meant large or weighty in paragraph 27 of the reasons.  So the interpretation of “substantial contributing factor” – and that is the legal question – is not in issue.  The applicant is aggrieved by the overturning of the decision but the interpretation of “substantial contributing factor” is the interpretation which it would wish put upon it.

We would submit that the effect of Judge Bishop’s approach to the construction of section 9A is to exclude a vast number of workers from the operation of the Act because, if it be the fact that merely because you are doing something at the workplace which you could have done away from the workplace would shut out numerous workers from an entitlement to compensation, such as, for example, the chef who burns her hand at work because of boiling fat, a cleaner who slips on a wet floor and injures her back ‑ ‑ ‑

McHUGH J:   What about a truck driver carrying boxes or something?

MS KATZMAN:   Absolutely, or a taxi driver who suffers a whiplash injury in the course of employment.  The emphasis that the trial judge put on the employment characteristics aspect betrays the essence of the legal error in his judgment, which the Court of Appeal recognised.  The fact that the precise activity that she was carrying out at the relevant time could have occurred elsewhere in a different context does not exclude her from an entitlement to compensation.  The notion that the activity must have some employment characteristics about it to render it a substantial contributing factor, in our submission, betrays the legal error and the Court of Appeal recognised that.  I have nothing further.

GAUDRON J:   Yes, thank you, Ms Katzman.  Yes, Mr Jackson.

MR JACKSON:   May I say two things?  First of all, the part that our learned friend suggests is the error of the Court of Appeal at page 31 is something in relation to which we would say two things.  First, the Court of Appeal did not think it was an error.  They did not think that part was an error at all.  The second thing is that all that the judge was doing was taking into account the matters that he was obliged to take into account by the terms of section 9A(2).

May I indicate what I mean by those two things?  The first is if one goes to page 31, paragraph 31, their Honours say:

As indicated above, it was relevant for his Honour to have recorded (par 8, above) –

and that is the passage in question –

that the precise activity that led to the appellant’s workplace injury was a type of activity that could have occurred elsewhere, for example at home.  This type of information is required to be taken into account by s9A(2)(d) –

and, your Honours, if one goes to 9A(2) that is exactly what it says.

GAUDRON J:   But does not this application turn upon the next sentence:

However, nothing in s9A makes this determinative.

MR JACKSON:   Indeed, your Honour.

GAUDRON J:   And that, in turn, takes you back to the question whether or not Compensation Court Judge Bishop thought it did so that at the end of the day are we not really only concerned about whether or not there was an ambiguity in his reasons or whether or not the Court of Appeal correctly analysed his reasons?

MR JACKSON:   Your Honour, that is the starting point but it is not, with respect, the end of the matter because what you then find is that the judge having applied, what, in our submission, is a test that the Court of Appeal did not dissent from and one that the Act required him to take into account - and I refer to 9A(2)(b) and (d), and he said the things that the Act required him to do - one then sees the Court of Appeal, in circumstances where its powers and jurisdiction are relevantly limited, going to say that he showed legal error in that respect.

Your Honours, I have been to paragraph 35 already of the court’s reasons and the very thing that the court was there doing was to say two sentences, one of which is no more than reflecting the Act and the other of which is an evaluation of facts was an error of law.  Now, your Honours, that is something which, in our submission, goes beyond what the Court of Appeal was empowered to do and itself misconstrues the Act.

Your Honours, as to the other aspect of the case, our learned friend relies on the fact that this applies directly to the laws of one State.  We would submit as, your Honours, I suspect I have done this once or twice

before, that section 73 makes the court the final Court of Appeal from the courts of the States and that is a function which is, in appropriate cases, to be exercised.

GAUDRON J:   Yes, thank you, Mr Jackson. 

We are not convinced the Court of Appeal correctly analysed the decision of Compensation Court Judge Bishop at first instance.  This, notwithstanding, we do not consider that this is an appropriate case for the grant of special leave.  It is not clear that the Court of Appeal has given any particular construction to the relevant legislative provisions.

In a case where some precise construction were given to those provisions, it might be appropriate for this Court to consider the meaning placed upon them.  Accordingly, in this case, special leave is refused.  There is no reason why it should not be refused with costs, is there?  Yes, thank you.

AT 10.29 AM THE MATTER WAS CONCLUDED