CSR Timber Products Pty Ltd v Weathertex Pty Ltd

[2013] HCATrans 211

[2013] HCATrans 211

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S71 of 2013

B e t w e e n -

CSR TIMBER PRODUCTS PTY LTD

Applicant

and

WEATHERTEX PTY LTD

Respondent

Application for special leave to appeal

BELL J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 SEPTEMBER 2013, AT 12.14 PM

Copyright in the High Court of Australia

MR M.J. NEIL QC:   May it please the Court, I appear with my learned friend, MR B.C.A. BRADLEY, for the applicant.  (instructed by Leigh Virtue & Associates)

MR L. KING SC:   May it please the Court, I appear with my learned friend, MR E.G. ROMANIUK, for the respondent.  (instructed by Edwards Michael Lawyers)

BELL J:   Yes, Mr Neil.

MR NEIL:   Your Honours, there are important issues, we would submit, raised by this case.  If I could just draw your Honours’ attention in the application book to section 151Z which is set out by his Honour Justice Meagher at page 37 and going over to page 38 and it is in our set of materials.  The competing interpretations of that section are directed principally to the chapeau which appears at about line 30:

If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages –

various provisions apply.  Principally, we are dealing with the indemnity whereby an employer who pays compensation under subparagraph (d) that employer is “entitled to be indemnified by” a tortfeasor, generally called a “stranger” as appears in the centre of page 37.  I appreciate that headings are not part of the Act but the concept I want to come back to, for example, where on a worksite a vehicle comes in and a contractor’s vehicle runs over a worker the employer has to pay the compensation to the worker but may seek an indemnity against the tortious contractor.  There are some variations in section 151Z(2) which I will not take your Honours to. 

The issue in this case is whether as per the Act, as per the extended definition which is in our materials and referred to in the judgment, where in the Act worker’s employer includes a number of groups, including a legal personal representative, a government employer, but specifically includes former employer, do you read the chapeau words “worker’s employer” as worker’s employer or former employer as the Act says or do you read them, as the Court of Appeal held at application book 45, paragraph 40:

A construction of “worker’s employer” as referring, with respect to an injury, to the employer liable to pay compensation for that injury under s 9(1) of the 1987 Act gives effect –

et cetera.  That is the Court of Appeal’s decision.  The court has read into section 151Z’s chapeau the words “worker’s employer” means, with respect to an injury, the employer liable to pay compensation for that injury under section 9(1) of the Act.

BELL J:   Has not the court considered that the definition which would include former employer is subject to a contrary indication in the text by reference to 151Z(2)(e)?

MR NEIL:   Your Honours, we would submit that 151Z(2)(e) is the only real textual matter that his Honour has referred to and in our submission if you simply put in that section the words “former employer” it would not make any difference.  It does not aid the context of reaching the decision about the chapeau.  Indeed, in our submission, when one goes to application book 45 his Honour does not, other than to say it gives effect to the object of 151Z - well we know the object is to provide an indemnity - his Honour says it does not lead to unreasonable results.  In our submission, it leads to very unreasonable results.  In our submission, it would not matter if 151Z(2)(e) contained the words “former employer” and in the last part of paragraph 40 his Honour says:

not inconsistent with the operation of ss 15(2), 16(2) and 17(1)(d) which provide the statutory right to contribution.

In our submission, it is completely inconsistent with them and undermines them and, indeed, it is an important question, your Honours, because not only does, as Justice Meagher points out at application book 34 in paragraph 12, at about line 22:

The question of construction raised by the second of the separate questions has not, as far as the researches of counsel reveal, been the subject of decision.  It is an important question of general application in relation to injuries consisting of diseases of gradual onset or the aggravation or acceleration of a disease or the loss of hearing caused by a gradual process.

Leave was granted for those reasons.  In our submission, it is not a matter of slight importance, it is a matter of substantial importance in New South Wales and as our documents show there is a similar provision, different wording but similar in South Australia and they have an extended definition.  I cannot say that about other States but I can say that in Queensland and Western Australia there is similar general provision but do not seem to have the extended definition.

Your Honours, to the extent that we can see that his Honour may have been raising other matters of context his Honour did refer to section 9(1) of the Act but that is irrelevant, we submit.  All that says is compensation is to be payable “in accordance with this Act.”  That is in our materials.  His Honour did go, as did the primary judge, to a small paragraph in the explanatory note and the primary judge referred to that at application book 10.  He actually did not refer to it but he referred to this view that his Honour thought, at about line 60, that the change of bringing in the extended definition in 1987 had something to do with the abolition of common law rights against a former employer.  At the top of application book 11 his Honour says:

Parliament plainly intended to close the remedy off against employers present and past.

That is picked up by his Honour Justice Meagher at application book 44 at about line 20 where his Honour refers to the explanatory note and he says it does:

however record that Part 5 –

and, in fact, the note, as we read it, says Part 5 by reason of sections 150 and 151 –

“continues the substance (with necessary adjustments because of the operation of proposed section 149) of the provisions of sections 64, 64A and 65 of the former Act relating to remedies against an employer and a third person, where both are liable”.  It is likely, as the primary judge observed, that the definition was amended to make clear that s 149 (which abolished the right to damages at common law) was capable of applying to ormer employers, as well as to any current employer of the worker.

We simply submit, your Honours, that cannot be correct.  In our materials behind tab 1 at page 9 there is the actual transitional provision and it says that section 149 which abolished the common law rights, and 150 which was in effect section 151Z:

do not apply to a cause of action in respect of –

(a)      an injury received by a worker before the commencement of those sections: or

(b)      the death of a worker resulting from or caused by such an injury.

(2)      In the case of any such cause of action, the provision of sections 63, 64 and 64A of the former Act continue to apply.

So, in our submission, that supposed context is not supported.  Your Honours, his Honour to the extent that one might imply through the judgment has identified some sort of mischief, we would simply put this, in fact there is no mischief identified in pursuing the matter according to the extended definition.  If his Honour had meant in some way to be suggesting that there is a possible double dipping by the worker we have simply cited what would have imagined would be the well‑known position set out in the case of Adams v Ascot Iron Foundry Pty Ltd, at 182 in our book, a decision of the Court of Appeal in New South Wales that if a worker receives workers compensation payments they are taken into account in the common law case.  You cannot have them twice.

BELL J:   Mr Neil, can I just direct your attention to one thing the respondent puts.  This is at application book 67, paragraph 10.  The respondent suggests;

It would be anomalous to say the least if the s 151Z(1) regime did not apply merely because the tortfeasor liable at common law happened to meet the description of “former employer”.

Now, on the face of things, there is some force to that.

MR NEIL:   Your Honours, this might come back with this question of the scheme of the Act.  In our submission, what has happened is that there is a scheme that deals with hearing loss, exacerbations and, relevantly, onset.

BELL J:   I understand that.  I am not sure, Mr Neil, that that is the point that is being made by the respondent at paragraph 10 of their submissions.

MR NEIL:   Your Honour, it would not be anomalous to say the – if the:

regime did not apply merely because the tortfeasor liable at common law happened to meet the description of “former employer”.

Our point is it is far more likely that the definition was extended to confirm what we submit was the previous situation to make it clear that former employers were not to be the subject of common law actions by later employers.  In other words, it is kept within the scheme.  In this case, for example, Weathertex bought my client’s place.  The worker continued to work there.  It was the same business.  They are not, we would submit, a stranger.

When you look at the scheme which provides for a limited statutory contribution they fall outside it - that is obviously why they brought the indemnity case – but as the Grate Lace Case says Justice Kirby, in our submission, had it exactly right and I will take your Honours to that in a moment.  There is an element of real importance that the contribution scheme avoids causation arguments, it avoids proportions arguments, it avoids lengthy and costly litigation.  It provides for a time period and it provides for a formula.  His Honour described it as semi‑arbitrary.  

In our submission, the whole idea is to keep the train of employers within that scheme and not to enable the last employer to simply bypass that scheme and go to an indemnity against a former employer who is not really a stranger.  That, in our submission, is the worst problem arising out of this decision because, in our submission, it is inconsistent with the scheme.  If the scheme provides, as it does, that the last employer may as against certain employers who have employed the plaintiff for up to a year and there is a formula, if he can have that arrangement, how can he also have a complete indemnity against such a person who cannot really be described, we submit, as a stranger.

The whole purpose of this legislation, we submit, is to allow originally at least, a non‑negligent employer who happens to be under the scheme the last employer, the right of indemnity against a tortfeasor.  It was not to allow him to have a right of indemnity against a previous employer tortfeasor who is within the scheme because the scheme is self‑contained, perhaps in house one might put it, and it is reasonable because if you can obtain an indemnity against non‑scheme tortfeasors that provides money to make the scheme less costly but the idea of having that plus go to the scheme we submit is absolutely inconsistent.

Now, your Honours, Justice Kirby – we have put his references in the Grate Lace Case in our submissions and also in our materials.  His Honour says – if I can take your Honours to tab 17.  His Honour agreed with the orders of Justice Sheller and the Chief Justice agreed with the orders.  The decision was unanimous.  There is nothing inconsistent in the other judgments with what Justice Kirby went out of his way to say.  He says at line 45 on page 174:

The issue of causation in the law is itself so controversial that Parliament stepped in to provide a semi‑arbitrary formula in s15 of the Workers Compensation Act 1987, substantially re‑enacting s7(4) of the Workers’ Compensation Act 1926.

It has been there a long time, your Honours:

The object of the section is such that it should be capable of being applied simply by employers, workers and insurance clerks, to the saving of inconvenience to the worker denied the payment of weekly compensation and other benefits and to the saving of the expense of litigation as between the employers, to determine the employer (and insurer) primarily liable to pay compensation to the worker.

This is further amplified on page 175.  His Honour points out the basic mistake of the trial judge and at about line 33:

With respect, that approach overlooked the semi‑arbitrary but very practical purposes of s15 of the 1987 Act.

At line 45:

If this result occasions an apparent injustice to Theiss in this case (as Manser CCJ by inference must have thought), the answer which the Act gives is clear. In other like cases Theiss’ insurer will probably escape liability where true notions of causation would have attached it. Looking at compensation cases overall, substantial justice will be done. Uncertainty of workers’ entitlements will be reduced. The costs of litigation will be contained. It is the duty of this Court to give effect to these sensible statutory objectives and not to frustrate the instructions of Parliament in s15(1)(b) –

and 16 and 17 reply to the other types.  Now, this very litigation, your Honours, illustrates what should not have happened, in our submission.  If “former employer”, as per the statutory definition, is put into section 151Z and the respondent’s argument and the Court of Appeal judgment only exempts “former employer” in 151Z.  They say that it applies to the rest of the Act but for some reason it does not apply to the chapeau.  You put in the section 9 person.  We would not have this litigation if it were not for this argument so at least, we would submit, it is a matter for special leave because right now the problem that Justice Kirby envisaged of costs, expense, litigation is before your Honours.

We would submit that the resolution in our way, in our favour, would send everyone back to the scheme and real strangers would be dealt with by the chapeau properly interpreted in subsection (d) and the section 151Z(2) argument really pales into insignificance, if there ever was anything in it, we would submit, your Honours.  There is no legislative purpose shown by Justice Meagher.  He does not refer to one as to why you get rid of the extended definition and import his words and there is no specified clear‑cut mischief that the case of Alcan said is terribly important.

So, in our respectful submission, it runs in the teeth of this Court’s decisions.  There is not a text‑based context here, we would submit.  If anything, it is convenient.  That is all that his Honour in the long run, we would submit - his Honour perceives it to be convenient at paragraph 40 on application book 45 to bring in, with respect, his preferred construction. 

We submit it is wrong, it produces unreasonable results.  It is highly inconsistent with the scheme, produces litigation costs and expense and there is no other decision on it and that South Australia could be involved.  In our respectful submission, the implications in New South Wales alone are significant and ought to result in special leave.  If it please the Court.

BELL J:   Yes, thank you, Mr King.

MR KING:   Your Honour, to deal first with my learned friend’s point in the transitional provisions on page 9 of the applicant’s materials, with all respect to my learned friend, he misconceives the situation there and I forgive him for it because, unlike me, he has not had to live with this legislation for most of his professional life.  But that transitional provision preserved injuries prior to 30 June 1987 as being a subject of common law proceedings for ordinary damages.  It only works from then on.  Modified damages were re‑introduced in 1989 as a result of a lot of political agitation.  But, with respect, what Judge Kearns said and what Justice Meagher, with the concurrence of the others, said is perfectly correct that any time from 30 June 1987 onwards, you could have somebody with an employer, or a former employer, in respect of that period and it squarely covers that situation.

Your Honours, my learned friend’s other point about everything is catered for by the contribution provisions in sections 15, 16 and 17 of the Act again involves a very significant misconception which is dealt with in paragraph 11 of our summary of argument on page 67 of the book, immediately following the paragraph 10 to which Justice Bell drew attention. The two things – my learned friends – apples and oranges. Those provisions are for a strictly limited right of relief only in respect of statutory compensation, not statutory compensation within a lump sum of damages.

If you are caught as a deemed employer and there is somebody else who has employed the worker in the same sort of employment capable of causing the problem within 12 months, you can seek limited proportionate contribution and it is based on the period.  Say, for example, I am working for Mr Romaniuk in conditions capable of causing some disease and a deemed date of injury arises, I have worked for Mr Stapleton for one week in the year before, Mr Romaniuk would get an absolute pittance by way of contribution.  If I have worked for Mr Stapleton 53 weeks before, Mr Romaniuk could get no contribution and it has got nothing to do with faults with the injury being caused in circumstances creating a legal liability in somebody.

When you move to 151Z – as is said in the argument and as the Court of Appeal noted in its reasons – the two things are completely

different.  Those, with respect, are the linchpins of my learned friend’s argument and they are just not relevant to the operation of section 151Z.

GAGELER J:   Well, to be fair to him, he does acknowledge the limited operation of sections 15 to 17.  He says that the statutory scheme is as between employers, that is all there is. 

MR KING:   But the indemnity in 151Z is for the whole of the compensation, not for some proportion of it and it is a fault‑based indemnity, not a no‑fault – 15, 16 and 17 are statutory compensation, no fault.  Section 151Z is a discrete provision in the fault‑based aspect of the Act dealing with damages and compensation and how the adjustment falls out. 

I am sorry, Justice Gageler, I am not endeavouring to put the boot into my learned friend, but it is really a false comparison.  It does not aid 151Z’s interpretation.  If you look at the context provided by 151Z itself, if somebody has to pay compensation by reason of somebody else’s negligence, the indemnity operates in favour of the person who is fixed with the liability to pay compensation.

BELL J:   Your point in paragraph 10 is if the employer pays compensation in relation to an injury occasioned by someone being run over by a truck that just happens to be owned by a person who some years earlier was an employer, it would be odd if liability were excluded.

MR KING:   It would completely emasculate the – Judge Kearns on, I think, it is page 14 of the book, your Honours – it is really necessary to start at page 13, paragraph 39.  His Honour goes on to give a couple of examples by way of illustration but those examples can be multiplied.  My learned friend referred to a building site – a truck coming on to a building site.  Your Honours, we all know, with respect, I am not giving evidence from the lectern, that on large building sites people can change from one employer to another.  A labourer can go from – and the show goes on and he could be injured by the employer he was working for a week earlier and the new employer has to pay the compensation and the negligence of the former employer is available to trigger the indemnity.

Your Honours, with respect, I do not think I can assist any more.  It has been well put in Mr Darke’s and Mr Romaniuk’s argument, if I may say so, in writing.

MR NEIL:   Your Honours, could I deal with the three of my friend’s misconceptions.  One, the transitional provisions – I still maintain my submission but I add that as between deciding that the intention was to make an amendment to include former employer because it had something

to do with section 149 or as to keeping it within the scheme, we would submit overwhelmingly, the latter ought to be the preferred view.

Secondly, as my learned friend says I have got a misconception about how these two schemes would work, not so.  The indemnity applies to the statutory compensation.  The scheme applies to the statutory compensation.  The difference is that the indemnity may be obtained against a person who is a stranger who is not an employer.  But the statutory scheme of compensation applies to allow you to get the compensation in part back from the former employer.  To marry them is an error, we submit.  That is what Justice Meagher tried to do and made a mistake in doing so, such that they are inconsistent. 

As to my learned friend’s examples which the trial judge set out at AB14, could I just say this.  They are homely examples, originally attractive, but they fail for two reasons.  One, the workers in those situations would not be persons under a contract of service.  A person who just happened to be a former employer who came on to the site and assaulted someone, there is no contract of service, and he is acting not as an employer, nor is a person example one. 

Just because a person is a former employer it would be, in our respectful submission, drawing the longest possible bow to say that simply because of that he had come within the section.  Any reasonable interpretation restricts employer or former employer to a person acting in such a capacity – not acting in a private capacity or as a criminal.  If it please the Court.

BELL J:   There are insufficient prospects that were special leave granted the appeal would succeed.  Special leave is refused with costs.

The Court will adjourn to 9.30 am on Wednesday, 11 September in Perth.

AT 12.41 PM THE MATTER WAS CONCLUDED