Brett Hocking v the Southern Greyhound Racing Club Incorporated, D.A. and C.M. Payne Kennels and Workers Rehabilitation and Compensation Corporation No. SCGRG 92/1000 Judgment No. 4226 Number of Pages 10 Workers'..

[1993] SASC 4226

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ(1), MILLHOUSE(2) AND DEBELLE(3) JJ

CWDS
Workers' compensation - statutory right of Workers Compensation and Rehabilitation Corporation to intervene in proceedings by worker against wrongdoer - whether proceedings affect interest of Corporation. Workers Rehabilitation and Compensation Act 1986 s.123a.

HRNG ADELAIDE, 8 October 1993 #DATE 10:12:1993
Counsel for appellant:     Mr K R McCarthy QC
Solicitors for appellant:    Phillips Fox
Counsel for respondent:     Mr C S E Swan
Solicitors for respondent: Elston Gilchrist

ORDER
Appeal allowed.

JUDGE1 KING CJ This is an appeal by Workers Rehabilitation and Compensation Corporation against a decision by a Master refusing to join the Corporation as an Intervener in an action. 2. The action was brought by the plaintiff against two defendants for damages for injury sustained in consequence of their negligence. The plaintiff discontinued the action against the first defendant and at the relevant time it remained on foot against the remaining defendant only. The plaintiff is the first respondent to this appeal but took no part in the hearing. The remaining defendant is the second respondent and it supported the decision appealed against. 3. The accident causing the first respondent's injuries occurred in the course of his employment. The Corporation as at the 5th January 1993 had made payments of workers' compensation to the first respondent to a total sum of $46,794.03. The Corporation estimates that an additional $40,540, which sum includes $12,416 payable pursuant to s.43(2) of the Workers Rehabilitation and Compensation Act, is payable to the first respondent in future. The Corporation has given notice to the second respondent of its entitlement to recover compensation and therefore has a charge, pursuant to s.54(7)(e) of the Act, to the extent of the entitlement on damages payable by the second respondent to the first respondent. 4. The Corporation claims a right to intervene in the first respondent's action against the second respondent by virtue of the provisions of s.123a of the Act which is as follows:
    "123a The Corporation has a right to intervene and be
    heard in -
    (a) immaterial or
    (b) any proceedings before a Court -
    (i) in which the interpretation or application of this Act is
    in issue; or
    (ii) in which the Corporation's interest may be directly or
indirectly affected." 5. The question which the learned Master had to determine was whether the first respondent's action amounted to proceedings in which the Corporation's interest might be directly or indirectly affected. He considered that the proceedings could not affect the interests of the Corporation. 6. The first argument put by Mr McCarthy QC, who appeared for the appellant, involved a far reaching conception of the scope of intervention. He contended that intervention by the Corporation would enable it to obtain a determination in the action of the amount payable to the first respondent and consequently of the amount recoverable by the Corporation from the second respondent pursuant to s.54(7). In that way the difficulties pointed out in Paglia v Trice (1991) 56 SASR 62 at p.70 might be overcome. This would occur because on intervention the Corporation would become a party to the proceedings with all the rights of a party, including the right to obtain such relief as it might be entitled to. Section 27 of the Supreme Court Act would enable the Court to make all necessary orders to dispose of issues not only between the original parties to the action but also between the Corporation and the second respondent. 7. There are, in my opinion, two answers to that contention. The first is that the statutory right to intervene is founded upon the existence of a potential in the proceedings to affect the interest of the Corporation. That potential must therefore exist in the proceedings as constituted before any intervention. The right to intervene cannot arise from an interest which is created by the intervention itself. The second is that intervention would not enable the Corporation to achieve the objects postulated by Mr McCarthy. The latter point requires some consideration of the nature and scope of the intervention which is authorised by the section. 8. The section does not define the rights which are conferred on the Corporation by the entitlement to intervene. The only clue to be found in the section is the expression "right to intervene and be heard in". I interpret that expression as limiting the right to a right to become an intervening party and to be heard in the proceedings. There remains the difficulty of what is comprehended by the expression "to be heard in". The lack of definition suggests that the legislature must have intended a concept of intervention already known to the law. The expression used differs from that used in connection with intervention by the Attorney-General in s.9 of the Crown Proceedings Act 1992 which is intervention "for the purpose of submitting argument on issues of public importance". It appears that the concept of intervention was not known to the common law or to equity. It was permitted in Admiralty and in Probate. It was provided for by statute in the Matrimonial Causes jurisdiction; Corporate Affairs Commission v Bradley 1974 1 NSWLR 391 per Hutley JA at pp.397-8. Hutley JA at p.396 says:
    "A person accepted as an intervener becomes a party to
    the proceedings with all the privileges of a party. Thus he
    can appeal, tender evidence and participate fully in all
    aspects of the argument. His position is quite different
    from that of an amicus curiae." 9. Intervention by leave is provided for in the present Rules of the Supreme Court. This is an innovation in the Rules except that Order 39 Rule 40 of the old Rules provided for intervention in Admiralty actions. Rule 33 does not define the rights of persons permitted to intervene but provides for a determination by the Court as to the extent to which intervention will be permitted and the giving of all necessary directions (Rule 33.04). Rule 33.01 is based upon Rule 24 of the United States Federal Rules of Civil Procedure. The scope of the concept of intervention as understood in the United States may be gathered from the treatment of Rule 24 in Corpus Juris Secundum Vol. 35A paras 128-155. For relevant purposes its scope is summarised in para 130:
    "... the range of activity of an intervener in the
    prosecution or defense of the interest he is permitted to assert
    must necessarily be as extensive as that allowed the original
    parties to the suit, and an intervener may litigate fully on the
    merits, but he may assert an interest no greater than that of
    the original parties. An intervener is limited to the field of
    litigation open to the original parties, and must join in the
    support of the claim made or in defense of the claim asserted in
    the litigation in the first instance. A person may not
    intervene in an action for the purpose of raising new issues and
    may not introduce issues which are outside the scope of the
    issues of the main suit; and an intervention seeking to
    introduce litigation which has no relation to that opened by the
original complaint generally will not be permitted." 10. This concept of intervention appears to accord with the concept as understood in the Probate and Admiralty jurisdictions. 11. Neither the general concept of intervention as understood in the jurisdictions in which it exists, nor the words of the section "right to intervene and be heard in", provide support for the argument that the Corporation may raise issues not raised between the original parties or may claim relief in the form of a determination of the amount recoverable from a defendant pursuant to s.54(7). Mr McCarthy relied upon s.27 of the Supreme Court Act but I do not think that that section assists his argument. 12. Mr McCarthy laid stress on the practical convenience of having an injured plaintiff's entitlement and the Corporation's entitlement determined in the same proceedings. There is much to be said at a pragmatic level for the adoption of that course. The practical convenience of providing a solution to the problems referred to in Paglia v Trice cannot justify the Court, however, in giving to the words of s.123a a meaning which they will not properly bear. The Corporation, when exercising its right pursuant to s.123a to intervene in the action of another, must be limited to the support of or opposition to the claims and issues raised by the existing parties to the action. In many cases, the result desired by the Corporation can be achieved by the institution of proceedings by the Corporation against the alleged wrongdoer in the same Court as that which is seized of the injured person's action. The jurisdiction conferred on the Industrial Court by s.54(7)(g) is not an exclusive jurisdiction. It would be proper in most cases to make procedural orders which would ensure that both actions were heard and determined together. In the Corporation's action, it would be open to the defendant to raise any defences which he might have against the Corporation. For example issues as to the time limit imposed by s.54(7)(ii) and as to the extension of such time limit pursuant to the Limitation of Actions Act might have to be explored. 13. Mr McCarthy's alternative argument was that the Corporation's interest might be affected by the award of an amount in the plaintiff's action which was inadequate and insufficient to meet the Corporation's claim. 14. It is clear that these proceedings between the first respondent and the second respondent cannot affect the Corporation's interest as regards its rights against the second respondent. The Corporation, if it did not become a party, would not be bound by the amount of any judgment in this action. Irrespective of the amount of any such judgment it would be entitled to sue the second respondent for the true amount of its liability to the first respondent, determined in an action to which the Corporation is a party, less any amounts paid to the first respondent; Jeisman and Kneebone v State of South Australia unreported delivered 1st September 1993, in which the Full Court held that the decision in Seatainer Terminals Ltd v Dunn (1981) 27 SASR
21 had no application to the present Act. The Corporation's statutory charge and right to recover against the alleged wrongdoer, however, is not its only right under s.54(7). It has the right also to recover the amounts paid or payable by it from the injured person. That right is limited to the amount of damages actually received by the injured person. As the amount received will be determined by the amount of the judgment in the action by the injured person against the alleged wrongdoer, the value of that right is affected by the amount of that judgment. In most cases there would be little practical effect, as the Corporation's rights against the wrongdoer would be sufficient to protect its interests. There are two distinct rights, however, and the Corporation has an interest in protecting both. The possibility of an effect on one of them is sufficient to make it necessary to hold that the proceedings may affect the Corporation's interest. 15. The learned Master attached importance to the fact that the statutory right of intervention was confined to the Corporation and did not extend to an exempt employer. He considered that if it had been intended to authorise participation in proceedings between an injured worker and an alleged wrongdoer, the right would have been extended to the payer of the compensation whether the Corporation or an employer. I do not find that reasoning to be convincing. The Corporation is a statutory corporation with responsibilities for the administration of the workers' compensation scheme. It is understandable that the legislature might have been prepared to rely upon such a corporation to exercise a right of intervention responsibly but might be unwilling to so rely upon an employer. It could well have preferred to leave an exempt employer to apply for leave to intervene pursuant to Supreme Court Rule 33 and its analogues in the other Courts. 16. In my opinion the proceedings may affect the interest of the appellant and it is therefore entitled to be joined as an intervener. I would allow the appeal and make an order joining the appellant as an intervener in the action.

JUDGE2 MILLHOUSE J I agree that the appeal be allowed and an order made joining the appellant as an intervener.

JUDGE3 DEBELLE J The appellant Workers Rehabilitation and Compensation Corporation ("the Corporation") sought to intervene in this action pursuant to s.123a of the Workers Rehabilitation and Compensation Act, 1986 ("the Act"). A Master has refused it leave to do so. The appellant appeals from that decision. 2. The respondent Hocking was injured in the course of his employment on 19 May 1989. At that time he was employed by D.A. and C.M. Payne Kennels and was working at a greyhound raceway owned and occupied by the respondent, the Southern Greyhound Racing Club Incorporated ("the Greyhound Racing Club"). While working at the Greyhound Racing Club, Hocking's leg was struck by a lure which travelled along the inside rail of the track. 3. The Corporation has made payments to Hocking of compensation pursuant to the provisions of the Act in respect of the injuries he has suffered and continues to do so. The compensation has included payments for medical expenses, hospital expenses, income maintenance and a lump sum benefit. It is not disputed that these payments have been made in respect of the injuries sustained by the plaintiff on 19 May 1989. 4. Hocking instituted this action against both D.A. and C.M. Payne Kennels and the Greyhound Racing Club seeking damages at common law for the injuries he has sustained. He has since discontinued the action against D.A. and C.M. Payne Kennels. 5. On 5 January 1993 the Corporation gave notice pursuant to s.54(7) of the Act to both Hocking and the Greyhound Racing Club of its entitlement to recover compensation paid or payable by it to Hocking under the Act. It is not disputed by any of the parties that the Corporation is entitled to recover the amount of compensation paid or payable by it. On 5 February 1993 the Corporation applied to intervene in this action pursuant to s.123a of the Act which provides:
    "The Corporation has a right to intervene and be heard in -
    (a) any proceedings under this Act before a Review Officer,
    or the Tribunal;
    or
    (b) any proceedings before a court -
    (i) in which the interpretation or application of this Act is
    in issue;
    or
    (ii) in which the Corporation's interest may be directly or
indirectly affected." 6. The present application is founded on the provisions of s.123a(b)(ii). Thus, provided the Corporation can demonstrate that its interests may be directly or indirectly affected, it has a right to intervene: there is no room for any exercise of a discretion as to whether it should have leave to intervene. 7. Section 123a was introduced into the Act by the Act No 4 of 1991, that is, some two years after the action giving rise to this action. The learned Master held that the provision operated in respect to proceedings and the course of proceedings, irrespective of when the injuries the subject of the proceedings were sustained. He further held that the provision was procedural in nature and, therefore, had a retrospective operation: Van Vliet v Griffiths (1979) 20 SASR 524. There is no appeal from the Master's decision that s.123a applies to this action. 8. The Corporation seeks to intervene so that it may participate and be heard in the action in order to protect its rights of recovery conferred by s.54 of the Act. It says that, in protecting its rights, it wishes to make sure that the amount, if any, recovered by Mr Hocking is sufficient to reimburse it in respect of its entitlement under s.54. It seeks to ensure that either Mr Hocking does not settle the case for too little or that, if the matters comes to trial, that Mr Hocking vigorously pursues his action in order to recover the maximum award. 9. There can be little doubt that the Corporation has at least an indirect, if not a direct, interest in this action. Pursuant to s.54(7) of the Act, the Corporation is entitled to recover from Hocking the amount of compensation paid or payable by it out of any damages received by him. Section 54(7)(e) provides that, on giving notice to a wrongdoer of its entitlement to recover compensation under s.54, the Corporation shall have a first charge on damages payable by the wrongdoer. The Corporation's entitlement to recover compensation was examined by this court in Paglia v Trice (1991) 56 SASR 62. Subject to compliance with the terms of s.54(7), the Corporation may recover from Hocking or the Greyhound Racing Club, if it is found to be liable to Hocking, the compensation it has paid or will have to pay. The Corporation, therefore, has an interest in the proceeds, if any, of this action. At the very least, its interest is to protect its rights to recover from Mr Hocking or the Greyhound Racing Club should the latter be held to be liable to Hocking. 10. The reference to "interests" in s.123a(b)(ii) is not qualified. It is being used in a broad sense and is not to be read down or restricted. The width of the term "interests" has been emphasised in a number of decisions of the Federal Court dealing with the expression "a person whose interests are adversely affected" or like expressions in ss.3 and 12 of the AdministrativeDecisions (Judicial Review) Act, 1977 (Cth): see, for example, Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 36 ALR 64; Re Control Investments Pty Ltd (1981) 39 ALR 281 at 285; US Tobacco Co v Minister for Consumer Affairs (1988) 83 ALR 79. The meaning of the expression "in which the Corporation's interest may be directly or indirectly affected" in s.123a is perhaps even wider than the provisions in the Judicial Review Act. The Corporation is entitled by s.123a to intervene whenever its interests are affected. The nature of the interest may vary according to the issues in any particular action. But so long as the Corporation can identify an interest, be it direct or indirect, it is entitled to intervene. The Corporation's financial interest in protecting its rights under s.54(7) is on any view the kind of interest to which s.123a(b)(ii) is addressed. The Corporation is, therefore, entitled to intervene in this action. 11. Mr Walsh QC contended that s.123a was introduced in order to overcome the decision of this Court in Francese v Corporation of the City of Adelaide
(1989) 51 SASR 522 where the Court held that the Corporation did not have a right to intervene in relation to questions of law arising under the Act. To read s.123a in that way is to limit the plain words of the provision in an unauthorised way. Further, if the parliamentary intention had been limited in the way in which Mr Walsh suggests, a provision such as s.123a(b)(i) would have sufficed. 12. Mr Walsh QC also contended that the fact that exempt employers did not have a right of intervention was a further indication that Parliament did not intend that the Corporation should be able to intervene in the way proposed in this action. There might be sound reasons why, if the Corporation has the right to intervene in actions between an injured person to whom compensation has been paid and a wrongdoer so that it may protect its interests, a similar right should be given to exempt employers. However, the fact that exempt employers have not been given that right cannot be used as a means of reading down the plain meaning of s.123a. The Role of the Corporation as Intervener While the Corporation may have a right of intervention, it does not necessarily follow that it is entitled to take as complete a role in the action as was adumbrated in the course of the submissions by its counsel, Mr McCarthy QC. He submitted that, as an intervener, the Corporation had all the rights of a party including the right to plead issues in addition to those pleaded by the parties. In particular, he submitted that the Corporation was at liberty, if so advised, to plead issues as between it and the plaintiff and as between it and the defendant. While an intervener may be a party to the action and have many of the rights of a party, I do not understand that the rights of an intervener to participate in an action extend as far as Mr McCarthy contended. 13. Intervention in actions in order to protect an interest has long been permitted in at least the admiralty and the probate jurisdictions. Order 12 r.24 of the Admiralty Rules which, in an amended form, is now Order 75 r.17 of the Rules of the High Court of Justice in England provided for the circumstances in which a court might order intervention. The right of intervention (as expressed in the former Order 12 r.24) is as follows: "In an Admiralty action in rem any person not named in the writ may intervene and appear as heretofore, on filing an affidavit showing that he is interested in the res under arrest, or int he fund in the registry." 14. The object of the Rule was to enable a person who has a substantial interest in the res to intervene, if this interest may be injuriously affected by the action against the res and to protect his interests: The Dowthorpe

(1843) 2 W.Rob. 73, 77; 166 ER 682, 684. Examples of persons having an interest to justify intervention include mortgagees of the ship, trustees in bankruptcy, underwriters who have accepted abandonment, and charterers: see Halsbury's Laws of England (4th edition) Vol 1 para 375 and the cases there cited. Other examples are included in the same passage. But the rights of an intervener are limited to the protection of his interest in the res, and he has no locus standi to raise issues which are not material to his purpose: The Lord Strathcona (1925) P.143. An intervener cannot set up defences which are not open to the owners of the res: The Byzantion (1922) 127 LT 756; 16 Asp. 19. See generally Roscoe's Admiralty Practice (4th edition) 313-314; Williams and Bruce, Admiralty Practice, (3rd edition) 270-272 and the Supreme Court Practice (the White Book), 1993, Vol 1, para 75/17/1. 15. In the Prerogative Court of Canterbury and subsequently in the Court of Probate, when a suit was pending, a person whose interest might be affected by the suit was permitted to intervene. The practice is noted in Hamilton v Hamilton (1913) 30 WN(NSW) 46; see also Osborne v Smith (1960) 105 CLR 153 at 159. However, the intervener had to take the cause as he found it at the time of intervention: Clements v Rhodes (1825) 3 Add.37, 40; 162 ER 395. 16. Although a more liberal view might prevail in the United States of America as to the circumstances in which intervention might be permitted, Federal Courts at least take a restrictive view as to the extent to which an intervener can participate in the action. An intervener cannot change the issues as between the parties in the action. The practice is expressed in these terms in Corpus Juris Secundum, volume 35a, para 130:
    "A person intervening must accept the litigation as it
    is presented in the main proceeding, that is, he must take the
    litigation as he finds it at the time of the intervention and,
    similarly, he is bound by the litigation as he finds it at the
    time of the intervention, and he is bound by all prior orders and
    adjudications of fact and law as though he had been a party from
    the commencement of the suit. However, an intervener must take
    the litigation as he finds it only in the sense that he cannot
    change the issues framed between the original parties, and he
    must join subject to the proceedings that have occurred prior to
    his intervention, and an application for intervention does not
    relate back to the date of the commencement of the main action.
    Provided that at the time the motion to intervene was granted no
    limitation was imposed on the scope of the intervention, as
    discussed infra ss.142, the range of activity of an intervener in
    the prosecution or defense of the interest he is permitted to
    assert must necessarily be as extensive as that allowed the
    original parties to the suit, and an intervener may litigate
    fully on the merits, but he may assert an interest no greater
    than that of the original parties. An intervener is limited to
    the field of litigation open to the original parties, and must
    join in the support of the claim made or in defense of the claim
    asserted in the litigation in the first instance. A person may
    not intervene in an action for the purpose of raising new issues
    and may not introduce issues which are outside the scope of the
    issues of the main suit; and an intervention seeking to introduce
    litigation which has no relation to that opened by the original
    complaint generally will not be permitted." (The citations have
been omitted.) 17. The approach in the Federal Courts in the United States appears to be consistent with the restrictive view in the admiralty and probate jurisdictions. There are sound reasons of policy for restricting the extent to which an intervener can participate in an action instituted by others. Generally speaking, the initial protagonists know the ambit of their dispute and the issues they wish the Court to determine. Courts are concerned to limit participation by interveners lest that participation extend the issues beyond those which the initial parties have defined and so increase the time of the action and thereby increase the cost to be incurred by the parties. That concern was expressed by the Court of Appeal in New South Wales in Tindle v Ansett Transport Industries Limited (1990) 21 NSWLR 492 at 497:
    "It is most unusual to permit individuals or corporations
    who are not parties to participate in the resolution of the
    issues joined between parties to proceedings in a court. It is
    unusual precisely because the purpose of pleading and of modern
    court procedure is to ensure that issues are refined and defined
    so that they can be resolved with accuracy, fairness and
    efficiency. The participation of interveners tends to be
    discouraged because of the addition of time and cost which their
    intervention occasions and because the issues which they may wish
    to argue may not infrequently broaden the ambit of the court's
enquiry as the parties to the proceedings wish to confine it." 18. In Corporate Affairs Commission v Bradley (1974) 1 NSWLR 391 at 396, Hutley JA said:
    "A person accepted as an intervener becomes a party to the
    proceedings with all the privileges of a party. Thus he can
    appeal, tender evidence and participate fully in all aspects
    of the argument. His position is quite different from that
of amicus curiae." 19. No authority was cited for the proposition that an intervener has all the privileges of a party. One of the privileges of a party is the right to define the issues. For the reasons I have given, I do not think that an intervener has that right. Instead, he must take the issues as he finds them subject only to the right to protect his own interests. 20. As in the case of interveners in Admiralty jurisdiction, the Corporation's intervention is to protect its interests. It is, therefore, appropriate in the case of the Corporation's intervention to apply the principles limiting the extent to which an intervener can participate which have been developed in the admiralty and probate jurisdictions. In the case of the Corporation, its interest is to ensure that its entitlement to recover compensation pursuant to s.54(7) is not adversely affected. A requirement that the Corporation is not at liberty to alter the issues as defined by the plaintiff and defendant should not affect the Corporation's capacity to protect its interests. In protecting that interest, it may exercise a number of the rights of a party including the right to obtain orders for discovery or be given leave to interrogate. But the right to intervention does not entitle the Corporation to litigate issues it has with either or both of the plaintiff and defendant in addition to the issues as defined by plaintiff and defendant. 21. It is I think apposite to add a note on the question of costs. Whether an order as to the costs of the intervener should be made will of course be a matter for determination in the exercise of the Court's discretion in each case. But, as at present advised, I do not think that the Corporation as intervener should assume that in every case it will be entitled to an award as to costs. In the probate jurisdiction an intervener was not usually allowed his costs where his interests were common with a party to the action: Bagshaw v Pimm (1900) P.148, Twist v Tye (1902) P.92. There are sound reasons why a similar principle should apply in an action of this kind where the Corporation intervenes to protect its financial interests. In Hamilton v Hamilton (supra) the applicant was given leave to intervene but was at risk as to costs. There may be means of protecting the Corporation's interest short of full participation in the action, for example, by securing an appropriate undertaking from one of the parties as to repayment of the compensation. These and any other relevant factors should be examined before any order as to the costs of the intervener is made. 22. For these reasons, I would allow the appeal, set aside the order of the Master, and in lieu thereof substitute an order that the Corporation is entitled to intervene in this action.