Berowra Holdings Pty Ltd v Gordon

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HIGH COURT OF AUSTRALIA

GLEESON CJ,
GUMMOW, KIRBY, HAYNE, HEYDON AND CRENNAN JJ

BEROWRA HOLDINGS PTY LTD   APPELLANT

AND

RODNEY JOHN GORDON  RESPONDENT

Berowra Holdings Pty Ltd v Gordon
[2006] HCA 32
15 June 2006
S473/2005

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of New South Wales

Representation:

B W Walker SC with P L Perry for the appellant (instructed by Lyons Barnett Kennedy)

J E Sexton SC with P A Regattieri for the respondent (instructed by Peacocke Dickens & Price)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

  1. GLEESON CJ, GUMMOW, HAYNE, HEYDON AND CRENNAN JJ. Part 5 (ss 149-151AC) of the Workers Compensation Act 1987 (NSW) ("the 1987 Act") is headed "Common law remedies". Section 151 provides that "except to the extent that this Act otherwise expressly provides", it "does not affect any liability in respect of an injury to a worker that exists independently of this Act". However, s 151C stipulates a six months delay before the commencement of court proceedings against an employer for damages.

  2. The grounds of appeal for this appeal from the New South Wales Court of Appeal[1] show that it turns upon an issue of construction of Pt 5 of the 1987 Act.  This may be shortly stated:  does the prohibition apparently imposed by s 151C deny legal effect both to proceedings for common law damages commenced in contravention of that prohibition and to all steps later taken by the parties under the relevant Rules of Court with respect to such proceedings?

    [1]Gordon v Berowra Holdings Pty Ltd (2005) 62 NSWLR 427; see also Gordon v Berowra Holdings Pty Ltd [No 2] [2005] NSWCA 123.

  3. The appellant ("the employer") submits that the Court of Appeal erred and that, on its proper construction, s 151C(1) does have this result. Therefore, it is said, an action commenced by the respondent ("the worker") in the District Court, together with the employer's own offer of compromise made under the District Court Rules ("the Rules"), were null and void.

  4. The question of the construction of s 151C falls to be resolved in the light of two significant facts about which there was no controversy. First, the worker did commence an action in the District Court without complying with s 151C. Secondly, the employer did not take any point (in pleadings or otherwise) regarding failure to comply until the day before the matter was listed for hearing in the District Court some 18 months later. That day fell at a time when the employer's offer of compromise pursuant to Pt 19A of the Rules remained open. The employer contends that the second fact is irrelevant and that the first fact constitutes a complete answer to the case.

  5. The submissions by the employer should not be accepted.  We turn to explain why this is so.

    Section 151C

  6. On 23 November 2001, when the worker filed his…

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Details
Case
[2006] HCA 32
Decision Date

CaseChat Overview and Summary

The appeal concerned a dispute between Berowra Holdings Pty Ltd (the defendant) and Rodney Gordon (the plaintiff) regarding workers' compensation. The plaintiff, having been injured in the course of his employment, commenced proceedings for damages in the District Court of New South Wales before the six-month period stipulated by section 151C of the *Workers Compensation Act 1987* (NSW) had elapsed since he provided notice of his injury. The defendant did not raise the non-compliance with section 151C in its defence, and the proceedings progressed, including an arbitration award in favour of the plaintiff and a subsequent application for a rehearing in the District Court.

The central legal issues before the High Court of Australia were whether the plaintiff's proceedings were invalid or a nullity due to non-compliance with section 151C, whether procedural steps taken under the District Court Rules were similarly invalid, and whether the defendant was entitled to withdraw its offer of compromise and have the proceedings summarily dismissed on the grounds of this non-compliance, considering the concept of waiver. The Court was required to construe section 151C of the Act, which imposed a restriction on the commencement of court proceedings but made no express provision for the consequences of non-compliance.

The High Court reasoned that section 151C should not be interpreted as a jurisdictional pre-condition for the court to hear claims for work injury damages. Instead, the provision was seen as postponing the remedy for a common law right, conferring a right upon the defendant employer to raise the issue of non-compliance in accordance with the relevant court's procedural rules. Proceedings commenced in contravention of section 151C were not a nullity but were vulnerable to an application for strike-out or summary dismissal, with the court's discretion to grant such an order depending on the defendant's actions within the context of the Rules of Court and the procedural history. The Court held that the defendant's conduct, including its failure to raise the point of non-compliance until after making an offer of compromise, meant that the procedural rules and the concept of waiver were relevant.

The appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

The appeal raises questions concerning the meaning and purpose of the provision of the Act; the effect of non-compliance with its terms; and whether Rules of Court, requiring leave and restricting withdrawal of an offer of compromise, can have effect in the face of the public policy evident in s 151C. The facts Mr Rodney Gordon ("the plaintiff") was injured in the course of his employment with Berowra Holdings Pty Ltd ("the defendant"). The injury occurred on 2 October 2001. On 12 October 2001, a claim form, containing written notice of the injury, was given to the defendant. The defendant admitted liability for workers' compensation payments. It commenced paying compensation immediately. On 23 November 2001 the plaintiff commenced proceedings for damages in the District Court of New South Wales. He did so by filing a statement of claim. The proceedings were thus commenced before six months had elapsed from the giving of the notice of injury to the employer. The exact reason for the prompt commencement of proceedings was not established. The possibility that it had happened in an attempt to avoid the application to the proceedings of further restrictive provisions, limiting access to common law damages[49], was postulated by the Court of Appeal[50]. However, as neither party at any stage gave evidence concerning their state of mind at the relevant times, this issue was left unresolved. Materially, a defence, filed by the defendant on 23 March 2002, raised no point as to the non-compliance of the plaintiff's proceedings with s 151C(1) of the Act. [49]The Workers Compensation Legislation Further Amendment Act 2001 (NSW) substituted s 151H of the Act. The section commenced operation on 27 November 2001.[50](2005) 62 NSWLR 427 at 430 [6]. To the contrary, the proceedings progressed in a way normal for a determination of such a claim brought within time. In February 2003, the proceedings went to arbitration in Dubbo. The arbitrator made an award in favour of the plaintiff[51]. The defendant sought a rehearing of the claim in the District Court. This was listed for trial before a judge of that Court in May 2003. A hearing date of 21 May 2003 was assigned[52]. [51](2005) 62 NSWLR 427 at 430 [8].[52](2005) 62 NSWLR 427 at 430 [8]. In April 2003, the plaintiff made an offer of compromise to the defendant[53]. This was not accepted[54]. Then, on 6 May 2003, the defendant made an offer of compromise to the plaintiff. It was signed on its behalf by its solicitor. It stated[55]:"The Defendant offers to compromise this claim on the following terms:(1)The Defendant to pay to the Plaintiff the sum of $50,000.00 plus costs as agreed or assessed;(2)This offer remains open for 28 days from the date of receipt;(3)This offer is made in accordance with Part 19A of the District Court Rules."[53]Pursuant to District Court Rules (NSW), Pt 19A ("the DCR").[54](2005) 62 NSWLR 427 at 430 [9].[55](2005) 62 NSWLR 427 at 430 [10]. At about 5.30 pm on 20 May 2003, the day before the hearing, counsel for the defendant telephoned the plaintiff's solicitor. He told him that he had instructions from the defendant to withdraw the offer of compromise; to apply to the court "in that regard"; and to seek an order that the proceedings "were a nullity ab initio and to seek summary dismissal"[56]. In terms, the defendant did not withdraw its offer. For the first time between the parties, reference was made to s 151C of the Act.[56](2005) 62 NSWLR 427 at 430 [11].

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

GLEESON CJ, GUMMOW, HAYNE, HEYDON AND CRENNAN JJ KIRBY J
It may not appear from originating process that six months have elapsed from receipt of notice by the employer of the injury. The employer's construction implicitly requires the court to undertake a jurisdictional inquiry in each case as to whether or not s 151C has been satisfied. That is not the usual function which a court (as distinct from an administrative body) performs when called upon to exercise judicial power in a matter which prima facie is within the jurisdiction of the court. That is the nature of this case, as explained above. Further, such an inquiry is likely to be complex, especially when regard is had to the terms of s 151C(2).Conclusion respecting s 151C Section 151C should not be read as if the entitlement of a plaintiff to commence court proceedings after the passage of six months from the giving to the employer of notice of the injury was a pre‑condition to the jurisdiction conferred upon the court to determine claims for work injury damages. The considerations adverted to earlier in these reasons all point against the employer's construction of s 151C. The better view is that the provision does not inevitably result in the invalidity of proceedings commenced in contravention of it, either for want of the court's jurisdiction or because the court has no jurisdiction except to accede to a defendant's application (whenever brought) to set aside the proceedings and to do so without regard to the procedural history and the relevant Rules of Court. The construction advanced by counsel for the worker should be accepted. Section 151C does not extinguish rights or create new rights. Rather, it postpones the remedy for the common law right to initiate proceedings in a court of competent jurisdiction. The "right" which s 151C does confer is conferred upon the defendant employer and must be raised in accordance with the procedural rules appurtenant to the particular court. Proceedings commenced by a worker in contravention of s 151C engage the jurisdiction and procedural rules of the court in question. Such proceedings are vulnerable to an application by the defendant to strike out the initiating process or to move for summary dismissal, but they are not a "nullity". Once a plaintiff has commenced proceedings, s 151C must be understood in connection with the procedural structure for the conduct of litigation in that court, not in isolation from it. This is not to subjugate the statute to the Rules, but to recognise that the subject-matter with which the statute deals is "rights" in the context of actual or apprehended litigation, and to understand the function of the Rules of Court and procedural law in facilitating adjudication of disputed claims. The upshot is that the effect of non‑compliance with s 151C will depend in each case upon the actions of the defendant in the context of the relevant Rules of Court. Where the defendant requires an order by the court for the defendant to give effect to a point as to s 151C, in exercising its discretion the court will take into account numerous factors. Not all of these (as Lord Griffiths recognised in Ketteman v Hansel Properties[27]) may be measured in economic terms.[27][1987] AC 189 at 220."Waiver"

Ratio Decidendi

Legal Principle Established

Established by: GLEESON CJ, GUMMOW, HAYNE, HEYDON AND CRENNAN JJ, KIRBY J

Full text does not contain this section.