Coxon v Kat - [2008] SADC 65

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
COXON v KAT
[2008] SADC 65
Judgment of His Honour Judge Tilmouth
22 May 2008
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - INCORPORATION OF OTHER STATUTORY PROVISIONS
The plaintiff was employed by the defendant under a contract of training within the meaning of the Vocation Education Employment and Training Act 1994 (SA). He later purportedly transferred the business to a company, without giving notice of transfer as required by s33(2) of the Act. The plaintiff suffered injury in the workplace in the period after the company took over the business, for which she was receiving compensation under the Workers Rehabilitation and Compensation Act 1986 (SA).
Held:
1. The defendant was not the employer as of the date of the workplace accident and the company was.
2. The failure to give notice of transfer of ownership of the business did not prevent an effective transfer between owners pursuant to s33(1) of the Act.
3. The "rights, obligations and liabilities" of the defendant as the former owner, became those of the new owner.
4. Those rights included the plea in bar under s54(1) of the Workers Rehabilitation and Compensation Act 1986 (SA), thus preventing the plaintiff from suing the defendant for occupier's liability.
Workers Rehabilitation and Compensation Act 1986 (SA) s54(1), 3; Vocational, Education, Employment and Training Act 1994 (SA) s3, 30(1), 30(5), 2(4); Training and Skills Development Act 2003 (SA) s2(6), s32, s33, s43, s44, s27, referred to.
Automatic Fire Sprinklers Pty Ltd v Watson (1996) 72 CLR 435; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 390-391; Crimmins v Stevedoring Industry Finance Committee (1999) 200 CLR 1, applied.
Pitcher v Langford (1991) 23 NSWLR 142 at 146 and 160B-G; Lenzoot Haulage Pty Ltd v Sinclair (1984) 42 SASR 506 at 513; Re C & T Grinter Transport Services Pty Ltd [2004] FCA 1148 at [20](3); Golden Plains Fodder Australia Pty Ltd v Millard [2007] SASC 391 at [69] 6; Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd. (2005) 222 CLR 1994 at [40-41]; Errington v Target Australia Pty Ltd (1995) 65 SASR 378; Wiltshire Police Authority v Wynn [1981] QB 95; Rowe & Cooney v Capital Territory Health Commission (1982) 39 ALR 39 at 56-57; Australian Railways Union v Public Transport Corporation (Vic) (1993) 47 IR 119; Junior Constable Case (1943) 17 SAIR 334 at 348; R v Commonwealth Court of Conciliation & Arbitration; Ex parte Whybrow & Co (Bootmakers case (No 2)) (1910) 11 CLR 1 at 32; John Heine & Son Ltd v Pickard (1921) 29 CLR 592; Fletcher v AH McDonald & Co Pty Ltd (1927) 39 CLR 174; Culbert v Clyde Engineering Co Ltd (1936) 54 CLR 544 at 551; Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 at 1026; Adamson v New South Wales Rugby League Ltd (1991) 31 FCR 242 at 267; News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 527; Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194 at [48]; Ford v Lismore City Council (1989) 28 IR 68; Burton v Litton Business Systems Pty Ltd (1977) 16 SASR 162 at 165-166; Twist v Randwick Municipal Council (1976) 136 CLR 106 at 109-110; Kioa v West (1985) 159 CLR 550 at 584-585; Annetts v McCann (1990) 170 CLR 596 at 598; Slivak v Lurgi (Australia) Pty Ltd (2001) 205 CLR 304; Czatyrko v Edith Cowan University (2005) 79 ALJR 839, [2005] HCA 14; Mc Cluskey v Karagiozis (2002) 120 IR 147 at [13]; Darling Island Stevedoring & Lighterage Co Ltd v Long (1957) 97 CLR 36; Colombin v TransAdelaide (2001) 21 NSWCCR 370; Re Investa Properties Ltd (2001) 187 ALR 462 at [11]; Syncap Management (Rural) Australia Ltd v Lyford (2004) 51 ACSR 223; (2004) 22 ACLC 1568 at [48], considered.

COXON v KAT
[2008] SADC 65
The issue?

A single question presently calls for resolution at this stage of these proceedings, namely whether the defendant Michael Kat was the employer of the plaintiff Dyani Coxon as of Friday 6 September 2002. If he was not, the plaintiff is entitled to maintain an action against him for occupier’s liability, pursuant to Part 4 of the Civil Liability Act 1936 (SA). If he was, that action is barred by s54 (1) of the Workers Rehabilitation and Compensation Act 1986 (SA). This question was reserved for preliminary decision by an order of a Master of this court made on 15 March 2005, pursuant to R75.02 of the District Court Rules 1987.
Factual background
The singular question calling for determination arises in this way. The defendant has run an hairdressing business for approximately ten years. He personally owns the shop premises situated in Aldgate in the Adelaide hills, out of which the business trades. For a number of years it was registered under the business name “MK Cutters” by Mr Kat.[1] Later, on 10 July 2000, “MK Cutters and Beauty” was registered as a business name pursuant to the Business Names Act 1996 (SA), in his name personally.
[1] Exhibit P1 p71.
Mr Kat was reliant on the financial side of things on his accountant, who advised the incorporation of a company to conduct the business. Hence Go Kat Pty Ltd was incorporated on 25 August 2000, although it did not commence trading until 1 July 2001. There were a number of other directors at various times, but it is accepted that Mr Kat effectively controls the company. It duly registered the business name “MK Cutters and Beauty” as of 20 October 2001.
At all material times the Australian Business Number of the defendant and the then Go Kat Pty Ltd were the same. Likewise the National Australian Bank account operated by the business remained the same. It appears arrangements were not made for taxation or bank records to be altered from one name to the other, precisely as of 1 July 2001. Those types of changes appear to have been made progressively, as and when attention was drawn to the need to do so. For example, the National Australia Bank sought a change in the accounts by its letter of 25 September 2002.[2]
[2] Exhibit P9.
All the same it was Go Kat that ran the business and paid the trading accounts, including wages as from 1 July 2001. Mr Kat made admissions to that effect during the course of his evidence.[3] The businesses continued to operate from the same premises employing the same staff and using the same equipment. That being so, there is really little difficulty in finding the probabilities are that as of 1 July 2001 the company owned and operated the hairdressing business. Not only is his admission sufficient proof of same: Pitcher v Langford,[4] that state of affairs is reinforced by the changes in business name, a superannuation report submitted by Go Kat Pty Ltd for November 2001,[5] and a PAYG payment summary submitted to the Australian Tax Office for the financial year to 30 June 2003.[6] Signed by Mr Kat on 14 July 2003, the latter records “Go Kat trading as MK Cutters” as the employer of Ms Coxon for that financial year, which of course encompasses 6 September 2002. Finally, the trading and profit and loss statement of Go Kat Pty Ltd as of 30 June 2003, shows it had paid significant wages in connection with the hairdressing business, for that financial year.[7] These are documents “entitled to be given … proper legal effect …”: Lenzoot Haulage Pty Ltd v Sinclair,[8] Re C & T Grinter Transport Services Pty Ltd[9] and Golden Plains Fodder Australia Pty Ltd v Millard.[10] It is clear, from these combined circumstances then, that Go Kat Pty Ltd was the successor to Mr Kat of the hairdressing business: Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd.[11]
[3] T28 L10-L15.
[4] (1991) 23 NSWLR 142 at 146 and 160B-G.
[5] Exhibit P5.
[6] Exhibit P1 p57.
[7] Exhibit P4.
[8] (1984) 42 SASR 506 at 513.
[9] [2004] FCA 1148 at [20](3).
[10] [2007] SASC 391 at [69] 6.
[11] (2005) 222 CLR 184 at [40-41].
The apprenticeship of the plaintiff
The plaintiff originally entered into a “contract of training” to become an apprentice hairdresser. As defined in s3 of the Vocational Education, Employment and Training Act 1994 (SA) (“the VEE&T Act”), “a contract of training means a contract under Part 4 in respect of training in a trade or other declared vocation”. Hairdressing is a gazetted trade thereunder.[12] Part 4 (s30-42 inclusive) regulates training by employers of persons in a trade. Section 30(1) makes it compulsory to undertake such training only under a contract of training. Pursuant to s30(5), the employer must within two weeks after employing a person under a contract of training, provide a copy thereof to the Accreditation and Registration Council (“ARC”) established under Part 2 for the purposes of administering the VEE&T Act. Criminal sanctions apply for breaches of both s30(1) and s30(5).
[12] SA Gazette 24 April 1996, p2045.
Such a contract of training was entered into by the plaintiff, initially with Miren Pty Ltd, hairdressers of Mount Barker on 23 August 2000.[13] This placement related to a quieter business than she was used to, so she approached Mr Kat and eventually secured a transfer of her contract to him. The changeover was duly notified and confirmed by ARC, as commencing on 24 July 2000 for a further term of two years and four months.[14] In a second letter of 10 May 2001, ARC noted the receipt of transfer notification of the trainee plaintiff from Miren Pty Ltd to the defendant, stating that it was “ binding on all parties … from 12 March 2001 for the remainder of the contract term”.[15] Wages were thereafter paid regularly into her bank account, transferred by electronic means.
[13] Exhibit P1, pp29-31
[14] Exhibit P1 p32.
[15] Exhibit P1 p33.
The worker’s compensation issue
On Friday evening 6 September 2002 the plaintiff was working in the hairdressing business at the Aldgate premises, under the transferred contract of training. When walking from a waiting room situated downstairs, to a beauty area upstairs, she slipped on a flight of wooden stairs, suffering what she alleges in her statement of claim to be serious injury. It is because of this incident that she instituted proceedings out of this court against Mr Kat personally on 4 November 2004, claiming damages for personal injury for breach of the duty of care, as occupier.
He pleads the claim is statute barred, because as of 6 September 2002, the contract of training remained intact between him personally and the plaintiff. He maintains no effective transfer of the contract or her apprenticeship to Go Kat Pty Ltd occurred and hence that he remained her employer as of that date.
Pursuant to s54 of the Workers Rehabilitation and Compensation Act (above), a liability for the payment of worker’s compensation arises against an employer, only as provided for under that Act. Section 54(1) provides:
Division 9 – Miscellaneous
Subdivision 1 – Limitations on liability
54 – Limitation of employer’s liability
(1) Subject to subsection (2), no liability attaches to an employer in respect of a compensable disability arising from employment by that employer except –
(a) a liability under this Act;
As a consequence, a worker cannot pursue an alternative claim against the same employer for occupier’s liability, as s54(1) expresses a distinct policy removing any such right of action against the employer arising from work place injury: Errington v Target Australia Pty Ltd.[16]
[16] (1995) 65 SASR 378.
There is no dispute that the subject accident occurred in the work place or that it otherwise gave rise to a “compensable disability arising from employment”. Indeed the plaintiff made a claim for compensation and she continues to receive certain benefits thereunder. The question remains whether there was a valid transfer of her contract from Mr Kat to Go Kat Pty Ltd?
For relevant purposes an employer is defined in s3 of the Workers Rehabilitation and Compensation Act (above) to mean “a person by whom the worker is employed under a contract of service, or for whom work is done under a contract of service”. Section 3 also defines a “contract of service” as including a “contract of apprenticeship”. This in turn links with s2(4) of Schedule 2 to the VEE&T Act (now s2(6) of Schedule 2 to the Training and Skills Development Act (below)) which provides a “reference in an Act … to an apprenticeship is to be read as a reference to a trainee under a contract of training …”.
The contract of training
At this point it is convenient to return to the terms of the contract of training.[17] This was in a form “required by ARC by notice in the Gazette”, in terms consistent with those gazetted on 17 December 1998[18], and “conditions required by ARC by notice in the Gazette”, although the precise gazettal was not proved: ss30(4)(a)&(b) respectively.
[17] Exhibit P1, pp29-31.
[18] Pp 1954-1965.
Clause 1(d) of the contract requires the employer to notify ARC within seven days of the transfer or assignment. This marries with the duty contained in s33(2). This was not done here. That it was not, does not appear to have been deliberate, for Mr Kat simply did not turn his mind to compliance with this and any other consequences of the change in ownership. Although he received professional advice to incorporate the business, it does not appear if that advice covered other consequent obligations, such as to notify ARC, the Australian Tax Office, or even his bankers for that matter. Clause 3(c) requires the approval of ARC “in advance of any proposed changes to this contract including any intention to vary, suspend or cancel this contract”. This reflects the obligation erected by s32(1). Clause 3(e) provides the contract is to remain subject to, and requires the parties to comply with, the VEE&T Act.
The statutory context
The VEE&T Act, since repealed by the Training and Skills Development Act 2003 (SA) on 12 June 2003, provides a code for contracts of training, or apprenticeships as they were once called. Of particular relevance to the present question are sections 32 and 33:
Termination or suspension of contract of training
32.     (1)     Subject to this Act, a contract of training may not be terminated or suspended        without the approval of ARC.
(2)     A party to a contract of training may terminate the contract by notice in writing to    the other party or parties to the contract within the period after the commencement of the        term of the contract that is specified by ARC by notice in the Gazette for the trade or        other declared vocation to which the contract relates.
(3)     Where a contract of training is terminated under subsection (2), the employer must within seven days of the termination, notify ARC, in writing, of the termination.
Penalty: Division 7 fine.
Transfer of contract to new employer
33.     (1)     A change in the ownership of a business does not result in the termination of a       contract of training entered into by the former owner, but, where a change of ownership     occurs, the rights, obligations and liabilities of the former owner under the contract are transferred to the new owner.
(2)     Where a contract of training is transferred or assigned from one employer to another (whether by subsection (1) or otherwise), the employer to whom the contract is     transferred or assigned must, within seven days of the transfer or assignment, notify     ARC, in writing, of the transfer or assignment.
Penalty:     Division 7 fine.
Practically identical provisions are reproduced in the Training and Skills Development Act (s43 and 44).
Obviously a purported dismissal or termination without obtaining the requisite approval of ARC pursuant to s32(1), or on account of the failure to furnish the requisite notice under s32(3), would be ineffective in law: Automatic Fire Sprinklers Pty Ltd v Watson.[19] Yet it does not follow the same conclusion applies in the case of the failure to notify ARC of transfer as required by s33(2). It is, in each case, a matter of discerning the legislative intent. As explained in Project Blue Sky Inc v Australian Broadcasting Authority:[20]
… determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to the language of the relevant provision and the scope and object of the whole statute.
[19] (1996) 72 CLR 435.
[20] (1998) 194 CLR 355 at 390-391 [footnotes omitted].
It is not difficult at all to appreciate why breaches of s32 produce invalid termination and suspension. That consequence protects the trainee and serves to preserve rights under the existing contractual arrangements. In contrast, the same does not normally apply in the case of breaches of s33(2), for an ineffective transfer to a new employer, is to the disadvantage of the trainee. There is no evident purpose in construing s33(2) as meaning breach produces invalidity of the transfer of a contract of training to a new employer. On the contrary, that outcome would have the effect of frustrating the purpose of s33(1) in protecting trainee’s rights when transfer occurs, by keeping their contract of training on foot.
Those objectives, the VEE&T Act taken as a whole, and Part 4 in particular, serve to prevent employers from “contracting-out” (s30), to preserve and regulate the terms of contracts of training (ss34-38 inclusive), to prevent arbitrary or unilateral (but not voluntary) termination or suspension (s32), to provide for “seamless” transfer of contracts of training arising thereunder (s33), and to guarantee perpetuation of training upon change of employer for the duration of training: ss30(1) and 36(2). Accordingly, on its proper construction, s33 does not require, as a precondition to valid transfer, the giving of the notice required by s33(2).
The position at common law
The submission of Dr Salu for the defendant was alternatively that the contract of employment or service did not transfer as between old and new owners, whereas the contract of training did. This submission was based on common law notions of contracts of service and the consequences under the common law, of the transfer of employment without the consent of the employee.
Before returning to this issue, it serves to place the statutory regime into the preceding common law context. There is a distinction between a contract of service and a contract of apprenticeship, crucial for some special limited purposes, as in Wiltshire Police Authority v Wynn,[21] but not so far as the existence of a contract of apprenticeship prevented the apprentice from being an employee: Rowe & Cooney v Capital Territory Health Commission,[22] Australian Railways Union v Public Transport Corporation (Vic).[23]
[21] [1981] QB 95.
[22] (1982) 39 ALR 39 at 56-57.
[23] (1993) 47 IR 119.
It has long since been held that apprenticeships constituted contracts of service: Junior Constable Case,[24] an approach entirely consistent with the decisions of the High Court of Australia in R v Commonwealth Court of Conciliation & Arbitration; Ex parte Whybrow & Co (Bootmakers case (No 2))[25], John Heine & Son Ltd v Pickard,[26] Fletcher v AH McDonald & Co Pty Ltd[27] and Culbert v Clyde Engineering Co Ltd.[28] Each one involved claims of one kind or another by apprentices and in none of them was it suggested they were not employees. Apprenticeships are now practically universally regulated by award, or by legislation, as in this case.
[24] (1943) 17 SAIR 334 at 348.
[25] (1910) 11 CLR 1 at 32.
[26] (1921) 29 CLR 592.
[27] (1927) 39 CLR 174.
[28] (1936) 54 CLR 544 at 551.

In either situation, there was no power for an employer to unintentionally transfer the employment, as Lord Atkin forcefully observed in Nokes v Doncaster Amalgamated Collieries Ltd:[29]
My Lords, I confess it appears to me astonishing that apart from overriding questions of public welfare powers should be given to a court or anyone else to transfer a man without his knowledge and possibly against his will from the service of one person to the service of another. I had fancied that ingrained in the personal status of a citizen under our laws was the right to choose for himself whom he would serve: and that this right of choice constituted the main difference between a servant and a serf. But if Parliament has so enacted the result must be accepted.
Viscount Simon LC stated it was a fundamental principle of the common law that:[30]
… the principle, namely, that a free citizen, in the exercise of his freedom, is entitled to choose the employer whom he promises to serve, so that the right to his services cannot be transferred from one employer to another without his assent.
[29] [1940] AC 1014 at 1026.
[30] At 1020.
In accordance with this principle, it has been held the benefit of contracts of service cannot be assigned by an employer without the consent of the employee: Adamson v New South Wales Rugby League Ltd[31] and News Ltd v Australian Rugby Football League Ltd[32]. To express the principles another way, employees cannot go from one employer to another without their consent, for “no employee is an asset in the employer’s balance sheet to be bought and sold”: Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd.[33] Hence when an employer purports to transfer a contract of service to another employer, without the consent of the employee, “… their employment with their pre-restructure employer did not cease and their employment with their post-restructure employer did not commence”: McCluskey v Karagiozis.[34]
[31] (1991) 31 FCR 242 at 267.
[32] (1996) 64 FCR 410 at 527.
[33] (2005) 222 CLR 194 at [48] citing Nokes v Doncaster Amalgamated Collieries Ltd above.
[34] (2002) 120 IR 147 at [13].
The difficulties these apparently quite straightforward principles can cause in practice, is well illustrated by reference to Ford v Lismore City Council.[35] In that case, the plaintiff was “transferred” from one Council to another, during the course of an amalgamation achieved by way of proclamation under the Local Government Act 1919 (NSW). The plaintiff sought a declaration that she was wrongly dismissed by the former Council. Allen J considered three possibilities as to the legal effect of the “transfer”.[36]
The first is that notwithstanding her "transfer" she remained a servant of Byron Council and did not become a servant of Lismore council. The second is that she did become a servant of Lismore Council but her contract of service with Byron Council remained in existence. The third is that she ceased to be a servant of Byron Council and became a servant of Lismore Council. Which was it?
The first of these possibilities must be rejected. It is clear that, whatever else happened, the plaintiff became a servant of Lismore Council. That council paid her. She believed that she was employed by it. It believed it employed her. Both she and the council so acted. There is no suggestion that it was in any way unlawful for the Council to employ her or that it lacked the power to do so. The question then becomes whether her contract of service with Byron Council survived notwithstanding that she had become a servant of Lismore Council.
Later His Honour concluded:[37]
I find that the plaintiff's contract of service with Byron Council was terminated upon her entering the service of Lismore Council on 1 July 1982 in accordance with the instructions which had been given to her by Byron Council. She thereby "accepted", as Byron Council knew, that Byron Council no longer was her employer. It is of no comfort to Byron Council that in the litigation one of her claims was based, at one stage, on the premise that the contract of employment with Byron Council was still in existence. Once that contract had ceased to exist, by the plaintiff's acceptance of the repudiation of it by Byron Council, it could not be revived by the conduct of the plaintiff. At most the parties to the former contract could have entered into a new contract incorporating the terms of the earlier contract.
But clearly there was no new contract in the present case. There is no doubt that the dismissal was wrongful so as to entitle the plaintiff to recover damages from Byron Council.
[35] (1989) 28 IR 68.
[36] At 74-75.
[37] At 79-80.
Analysis of statutory structure and purpose
At first sight, the plain words of s33(1), to the effect that a change of ownership of a business “does not result in the termination of a contract of training”, seem straightforward enough. However the submission for the defendant was that a dichotomy between contracts of training and contracts of employment was retained, as s33(1) does not purport to transfer the contract of employment, only the “rights, obligations and liabilities” under the contract of training. It was submitted this view was strengthened by reference to s37:-
Contract of training to provide for employment
37. (1) A contract of training must provide for the employment of the trainee who is to be trained under the contract.
(2) ARC may, on the application of all parties to a contract of training, alter the contract so that it provides for part-time training instead of full-time training, or full-time training instead of part-time training.
The submission here was that a contract providing for the employment of a trainee, co-existed with a contract of training under the VEE&T Act; they were two different concepts and two distinctly different legal relationships inherited from the common law. As properly construed, so the argument went, s33 effects the transfer of training but not the contract of employment. Thus, as Ms Kat personally remained bound to the plaintiff under a contract of employment, he remained her employer as at 6 September 2002, within the meaning of s54 of the Workers Rehabilitation and Compensation Act.
Section 37 certainly refers to the notion of “employment”, but it is not alone in Part 4, in that respect.[38] Moreover it does so in a confined context. Part 4 is replete with the language of the contract of employment, or service. The entire Part consistently merges the concepts of training and employment as one. Such a dichotomy is inconsistent with s33(2), which casts the obligation to notify of transfer in all circumstances “whether by subsection or otherwise”. It is equally inconsistent with s32(1) which renders circumstances of termination or suspension “subject to this Act”, so that s33 in relation to transfer overrides s32. It is altogether too awkward and too impractical, as it is out-moded, to suppose Parliament intended to separate contracts of employment and contracts of training and then to permit them to subsist side by side. That view is supported by the objects the VEE&T Act seeks to achieve, as identified above.
[38] See ss34(1)(a) and ss36(2)(c).
Those various objectives would be defeated if an employer were permitted to avoid effective transfer by the mere device of deliberately omitting to inform a trainee of changes in ownership. The modes of expression then, together with the structure of Part 4, do not support the construction urged by the defendant.
It follows logically from this analysis, that the legislation covers the field and therefore overrides the common law position that the failure to obtain the assent of an employee, upon change of ownership, means the contract of training remains with the first employer, or otherwise constituted an act of dismissal as it would have under the common law: Burton v Litton Business Systems Pty Ltd.[39] Those preconditions are no longer directly relevant under this statutory regime. Now the obligation at every stage is to notify ARC: ss30(5), 32(1)(3), 33(2), s34(3) & (4). There is no direct obligation, as such, to notify the employee/trainee.
[39] (1977) 16 SASR 162 at 165-166.
That does not mean the failure to engage an employee in the process of termination, suspension or transfer of employer, are without their consequences. In the first place ARC’s failure to notify or consult the trainee in those situations, would almost certainly constitute a breach of the principles of natural justice: Twist v Randwick Municipal Council,[40] Kioa v West,[41] Annetts v McCann,[42] thus rendering decisions, consents or approvals of ARC liable to be set aside on administrative review to this court pursuant to s33 of the VEE&T Act (now s27 of the Training Skills Development Act (above)). Otherwise such decisions are amenable to Judicial Review for the same reasons, pursuant to Rule 98 of the Supreme Court Rules (1987) (now Rule 199 of the Supreme Court Civil Rules 2006).
[40] (1976) 136 CLR 106 at 109-110,
[41] (1985) 159 CLR 550 at 584-585.
[42] (1990) 170 CLR 596 at 598.
More than that, it is quite noticeable that most provisions within Part 4 of the VEE&T Act, including ss32(3) and 33(2), are enforceable under criminal sanction, whereas ss32(1) and 33(1) are not. This consideration is strongly suggestive of an intention to confer on trainees private statutory causes of action for enforcement against the employer or even ARC, in the case of non-compliance with either, in proceedings for breach of statutory duty: Slivak v Lurgi (Australia) Pty Ltd,[43] Czatyrko v Edith Cowan University[44], whereas provisions of a purely penal nature, do not confer such rights: Darling Island Stevedoring & Lighterage Co Ltd v Long.[45]
[43] (2001) 205 CLR 304.
[44] (2005) 79 ALJR 839; [2005] HCA 14.
[45] (1957) 97 CLR 36.
Rights, obligations and liabilities
It follows from the above analysis that the construction placed on the section by the defendant should be rejected. However that is not the end of the matter, since the effect of the phrase “rights, obligations and liabilities of the former owner under the contract are transferred to the new owner” contained in s33(1), remains to be considered. Both parties did not initially direct attention to this part of the provision, but they did so later by way of written submissions.
As the evident purpose of the legislation is to provide for seamless transfer of contracts of training from one employer to the next, s33(1) is to be read consistently with that policy when it comes to the transfer of the kinds of “rights, obligations and liabilities” to which it refers. It is clear that it was intended the trainee was to be put in an identical position – or at least no worse position - under the new employer, as under the old. That situation serves to preserve intact “the conditions of the employment for the apprentice/trainee, including wages and other entitlements” referred to in clause 3(a) of the contract of training itself.
Those rights, obligations and liabilities alluded to in s33(1) reside with the respective owners. They are not those belonging to the trainee. Although they may arise specifically ‘under the contract’ of training under Part 4, they are not limited to those rights, obligations and liabilities arising solely under the contract or the VEE&T Act. As revealed earlier, the Workers Rehabilitation and Compensation Act incorporates as employees thereunder, those employed under a “contract of apprenticeship”, an expression recognised by s2(4) of Schedule 2 to the VEE&T Act as a contract of training. As such, the right of employees to workers compensation under the former Act are conferred upon trainees under the combined effect of both Acts.
Accordingly, the new owner’s “rights, obligations and liabilities” to Dyani Coxon, include those incurred by the former owner up to the point of transfer, derived from the Workers Rehabilitation and Compensation Act (above). That bundle of rights necessarily incorporate the right to invoke s54(1) of the Worker’s Rehabilitation and Compensation Act (above), as a statutory bar to an occupiers’ liability claim arising from “a compensable disability” incurred by the former owner, even though the principal incidence of liability to make workers compensation payments lies with the Work Cover Corporation of South Australia under s46(1). That is to say Go Kat Pty Ltd stands in the shoes of the defendant so far as rights, obligations and liabilities to the plaintiff for workers compensation are concerned.
This result finds parallels in other comparable legislation. For example, in Colombin v TransAdelaide,[46] the construction of s8 of the Railways Agreement (South Australia) Act 1975 (Cth) fell for consideration. This subjected the Australian National Railways Commission to the “liabilities and obligations incurred by South Australia...” of which the State had been freed. The respective liabilities and obligations of ANR became those of the Commonwealth by virtue of Schedule 3 to the Australian National Railways Commission Sale Act 1997 (Cth). Armitage J construed this provision as meaning the Commonwealth “stands for all purposes in the statutory shoes of the South Australian Commissioner for Railways”.[47] That conclusion was upheld in Commonwealth v Transadelaide.[48]
[46] (2001) 21 NSWCCR 370.
[47] At [47].
[48] [2001] NSWCA 52 (Mason P, Priestley, Heydon JJA), at [10].
Another example can be seen in Crimmins v Stevedoring Industry Finance Committee.[49] There the Australian Stevedoring Industry Authority was abolished by the Stevedoring Industry Acts (Termination) Act 1977 (Cth). Section 14 vested in a new body, all the rights and property vested in the Authority, and provided the new body was liable to perform all the duties and to discharge “all the liabilities and obligations of the Authority that existed immediately” beforehand. Crimmins was diagnosed with mesothelioma caused during his employment with the Authority. It was held that s14 vested in the successor, the liability of the former Authority for a breach of a duty of care which resulted in injury after the date of the assumption of liability under that Act.
[49] (1999) 200 CLR 1.
During the course of his reasons in Crimmins v Stevedoring Industry Finance Committee Kirby J said this:
[192] The combination in s 14(b) of the words "liabilities" and "obligations" suggests that each word had work to perform. This, in turn, indicates that the "obligations" of the Authority referred to were such "liabilities" as had already been conclusively and authoritatively determined to be owed in law. In the context of the use of the two nouns, the word "liabilities" indicates a responsibility of the Authority (to use a neutral word) which has not yet been conclusively determined to be a legal "obligation". In short, in the context, the use of the two words lends weight to the argument for the appellant that "liabilities" means, or at least includes, contingent and inchoate liabilities. Such "liabilities" might not be "obligations" because awaiting future events. But they are "liabilities" just the same.
That is precisely the situation here. In fact, the present case is stronger because of the inclusion in s33(1) of the additional word “rights”, an expression even more apt to pick up the rights conferred by s54(1).
Another analogy is to be found in the Corporations Act 2001 s601FS, which is:
Rights, obligations and liabilities of former responsible entity
(1) If the responsible entity of a registered scheme changes, the rights, obligations and liabilities of the former responsible entity in relation to the scheme become rights, obligations and liabilities of the new responsible entity.
This provision was construed in Re Investa Properties Ltd[50] as ‘intended to cause an incoming responsible entity to step into the shoes of its predecessor’ and in Syncap Management (Rural) Australia Ltd v Lyford[51] as having the consequence that the rights, obligations and liabilities of the former entity, became rights, obligations and liabilities of the new responsible entity.
[50] (2001) 187 ALR 462 at [11].
[51] (2004) 51 ACSR 223; (2004) 22 ACLC 1568 at [48].
Conclusion and orders
For the above reasons, the question posed for preliminary determination of the court, must be answered to the effect that the defendant was not as of 6 September 2002, the employer of the plaintiff. All the same, the defendant is entitled to set up the plea in bar, conferred by s54(1) Workers Rehabilitation and Compensation Act of proceedings by the plaintiff for occupiers liability, because the “rights” transferred to him incorporated that right. The plea in paragraph 1 of the amended defence filed 4 November 2004, “the within proceedings is a breach of s54(1) of the Workers Rehabilitation and Compensation Act 1986 (as amended) and the worker is thereby barred from maintaining those proceedings” is therefore upheld. The parties should be heard as to any consequential issues arising from these reasons, and as to costs.