Danielsen v OneSteel Ltd
[2009] SASC 55
•27 February 2009
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
DANIELSEN v ONESTEEL LTD
[2009] SASC 55
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Sulan and The Honourable Justice David)
27 February 2009
WORKERS' COMPENSATION - LIABILITY TO PAY COMPENSATION - LIABILITY OF EMPLOYER
WORKERS' COMPENSATION - ALTERNATIVE RIGHTS AGAINST EMPLOYER AND/OR THIRD PARTIES AND CONSEQUENCES THEREOF - ACTIONS FOR DAMAGES AGAINST EMPLOYER - STATUTORY CONSTRAINT ON ACTIONS FOR DAMAGES
CONSTITUTIONAL LAW - OPERATION AND EFFECT OF THE COMMONWEALTH CONSTITUTION - INCONSISTENCY OF LAWS (CONSTITUTION, S 109)
Appeal from decision of District Court Judge upholding order of a Master striking out plaintiff’s claim - plaintiff and appellant issued proceedings against defendant and respondent claiming lost wages past and future, lost benefits of share plan past and future, medical expenses past and future, lost superannuation past and future and for other unspecified expenses, costs and orders that Court deemed appropriate - plaintiff asserted he sustained work-related injuries while in the employ of wholly owned subsidiary of OneSteel Ltd in circumstances in which OneSteel Ltd had breached an alleged common law duty of care - District Court Judge concluded plaintiff’s claim bound to fail due to provisions of section 54 of the Workers Rehabilitation and Compensation Act 1986 (SA) - plaintiff asserted that OneSteel Ltd, as holding company of his employer, was not protected by section 54 - plaintiff further submitted that section 54 conflicted with the Corporations Act 2001 (Cth) and inoperative by reason of section 109 of the Constitution - plaintiff failed to serve section 78B notices as required by the Judiciary Act 1903 (Cth) - whether plaintiff an employer of the defendant - whether section 54 inoperative by virtue of section 109 of the Constitution.
Held: appeal dismissed - section 54 of the Workers Rehabilitation and Compensation Act 1986 (SA) provides that no common law liability arises on the part of OneSteel Ltd - section 54 not inoperative by virtue of section 109 of the Constitution - reasons for decision in judgment No. [2009] SASC 56.
Workers Rehabilitation and Compensation Act 1986 (SA) s 54(1); Occupational Health, Safety and Welfare Act 1986 (SA) s 19 and s 56; Corporations Act 2001 (Cth) s 180; Commonwealth of Australia Constitution Act 1901 (Cth) s 109; Judiciary Act 1903 (Cth) s 78B; WorkCover Corporation Act 1994 (SA), referred to.
TransAdelaide v Evans (2005) 95 SASR 394; Golden Plains Fodder v Millard (2007) 99 SASR 461, considered.
DANIELSEN v ONESTEEL LTD
[2009] SASC 55Full Court: Gray, Sulan and David JJ
GRAY J
This is an appeal from a decision of a District Court Judge upholding an order of a Master striking out the plaintiff’s claim.
This appeal was heard at the same time as the appeal in the matter of Danielsen v OneSteel Manufacturing Pty Ltd and OneSteel Trading Pty Ltd. Judgment in that appeal, [2009] SASC 56, has been delivered at the same time as this judgment. The observations in [2009] SASC 56 as to the proper construction of section 54(1) of the Workers Rehabilitation and Compensation Act 1986 (SA) are incorporated by way of reference in these reasons. The observations in [2009] SASC 56 with respect to the suggested constitutional issues are also incorporated by way of reference and form part of these reasons.
On 18 April 2007, Timothy Micheal Danielsen, the plaintiff and appellant, issued proceedings against OneSteel Ltd, the defendant and respondent, claiming compensation for lost wages past and future, lost benefits of a share plan past and future, medical expenses past and future, lost superannuation past and future, for other unspecified expenses and costs and for such other orders that the Court deemed appropriate.
In his statement of claim, the plaintiff asserted that he sustained, while in the employ of a wholly owned subsidiary of OneSteel Ltd, a number of work related injuries in circumstances in which OneSteel Ltd had breached an alleged common law duty of care. The statement of claim purported to rely on the Occupational Health, Safety and Welfare Act 1986 (SA), the Civil Liability Act 1936 (SA) and the Corporations Act 2001 (Cth) as supporting the plaintiff’s claims.
OneSteel Ltd applied to strike out the statement of claim and dismiss the action. The application was heard by a Master who upheld the submission that the claim was bound to fail and dismissed the action. The plaintiff appealed to a judge of the District Court. On 12 May 2008, the District Court Judge dismissed the plaintiff’s appeal. It is from this decision that the plaintiff now appeals.
The District Court Judge, having addressed preliminary issues of no present relevance, concluded that the plaintiff’s claim was bound to fail for the reasons advanced by the Master. The substantive ground for concluding that the claim was bound to fail turned on the provisions of section 54 of the Workers Rehabilitation and Compensation Act. That section relevantly provides:
(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.
…
(8)In this section—
damages includes any form of compensation payable apart from this Act in respect of a compensable disability;
employer includes—
(a) any person for whose torts an employer is vicariously liable;
(b) any person who is vicariously liable for the torts of an employer;
To understand the arguments on appeal, it is necessary to return to the plaintiff’s claim. The plaintiff asserted that his employer was OneSteel Trading Pty Ltd, that he had suffered injuries in the course of his employment in breach of a duty of care owed to him. He claimed that whatever protection OneSteel Trading Pty Ltd may have against a common law claim, a protection that he disputed, that protection did not extend to the holding company of the employer, OneSteel Ltd. His contention was that a proper construction of section 54 did not extend protection to the holding company.
The conclusion of the District Court Judge was as follows:
… the Master conducted a careful analysis and review of the plaintiff’s various actions. The submissions that the Master failed to consider the documents lodged by the plaintiff and the facts of the case and failed to give proper consideration to the relevant statements, is entirely unfounded. So is the submission that there was a denial of natural justice. He found that none of the plaintiff’s allegations relied upon to show that the defendant was liable for damages constituted an arguable claim. In my view the Master came to the correct conclusion. In doing so I bear in mind the cautious approach to be taken by a court when considering a defendant’s application to strike out a plaintiff’s claim on the basis that no cause of action, or no arguable claim, is made out.
To fully understand the reasons of the Master it is necessary to record some earlier observations of the Judge:
On the hearing of the appeal before me the appellant sought to rely on the decision of the Full Court in Golden Plains Fodder Australia Pty Ltd v Millard. That case involved an appeal from a decision of a Judge of this court who was called upon to determine, as a preliminary point, which of two entities was in fact the employer of the plaintiff.
In the present case there is no doubt as to the identity of the plaintiff’s employer, nor any doubt that the employer was a wholly owned subsidiary of the current defendant. Mr Wallwork, for the defendant, urged upon me that that decision was distinguishable. I agree.
The plaintiff’s approach in the present action reveals a degree of misguided ingenuity. As the Master observed:
When Mr Danielson [sic] was confronted with the realisation that s54(8) WRCA worked against him he argued that the actions of the defendant’s employees give rise to a different cause of action, which is not work related and therefore bound by s54.
The argument was that, if the defendant’s direct employees, by giving directions which were inconsistent with its duty of care, then the plaintiff’s injuries could be pursued as a common law claim even though he suffered an injury at work on premises controlled by the employer and not the defendant. This required him to assert contrary to the previous action and the previous pleadings in this case that the employees who gave these directions were employed by the defendant and not by Onesteel Trading Pty Ltd.
In going about the process of pleading the claim the plaintiff has simply altered the factual contentions in the hope that that will be sufficient. For example, initially he asserted that various persons were employed by Onesteel Trading Pty Ltd and now, without any particulars, asserts that the defendant was responsible for the actions of employees of subsidiaries of the defendant. This would make a mockery of s54 WRCA.
Mr Danielson [sic] argues this without recourse to ss(8), namely, that the employer includes anyone who might be vicariously liable for the acts of the employer. Further, as he appreciated, the original statement of claim contained a number of factual flaws. He went on to assert that the various named individuals were not in fact employed by Onesteel Trading but employed by the defendant. This is simply and demonstrably not true.
This was in complete contradiction of the earlier pleading and assertions made in the other action and the other proceedings. He does this to get around the inability to particularise the relationship that might give rise to potential claims. I refer to the affidavit evidence of Ms Kerrigan which shows that the plaintiff’s assertions are false.
As a result and for reasons which were expressed by Master Norman in the previous action and Judge Tilmouth on appeal in that action, this new claim against a different but related company to the employer cannot be enjoined in the action for damages arising out of the injuries allegedly suffered by Mr Danielson [sic] in the course of his employment with Onesteel Trading Pty Ltd.
The plaintiff’s claim is for damages for work related injuries. He has no claim against his employer or other related companies of the parent corporation to sue for damages at common law pursuant to s54 of the Workers Rehabilitation & Compensation Act.
I have looked at this matter from various agency related perspectives to ascertain if some claim is arguable. I have come to the conclusion that there is none. I am mindful of the court’s approach to dismissing proceedings prior to trial – see General Steel Industries Inc. v Commissioner for Railways (New South Wales) (1964) 112 CLR 125.
On the hearing of the appeal, the plaintiff repeated his submissions as put to the Master and the District Court Judge, with little or no amplification.
The plaintiff further contended that insofar as section 54 sought to relieve a corporation from common law liability, it was in conflict with the Corporations Act and was rendered inoperative by reason of section 109 of the Australian Constitution.
The plaintiff had not served section 78B notices, as required by the Judiciary Act 1903 (Cth), and in the circumstances the Court proceeded to hear argument, to allow the parties to make written submissions in regard to the suggested constitutional issues, and to reserve the matter to consider the course to be followed in light of those submissions.
The WorkCover Corporation Act 1994 (SA) and the Workers Rehabilitation and Compensation Act establish a scheme of compulsory insurance. With some exceptions, not relevant in the present case, all employers must register with the WorkCover Corporation. Upon registration, an employer is given a registration number. Thereafter employers pay premiums to WorkCover which in turn assumes the responsibility of paying to injured workers compensation assessed by reference to the terms of the scheme. The scheme limits an employer’s liability and bars a worker from any right to claim common law damages from an employer.
The stated purpose of the Workers Rehabilitation and Compensation Act is to “provide for the rehabilitation and compensation of workers in respect of disabilities arising in their employment and for other purposes”. An important part of the scheme enacted by the Act was the abolition of a common law right to damages on the part of the employee against an employer. It was in this context that section 54 was enacted. As earlier observed, section 54(1) limits the liability that attaches to an employer. “Employer” is defined to include any person who is vicariously liable for the torts of an employer.
In the present proceedings, the plaintiff, by his pleading, and through his submission, acknowledged that his employer was OneSteel Trading Pty Ltd. His submission was that the holding company did not have the protection of section 54(1). The statement of claim asserted a common law duty of care owed by OneSteel Ltd, and separately asserted that OneSteel Ltd was liable for the negligence of its agents or servants, and for breaches of occupational health and safety requirements. The statement of claim necessarily implied an assertion of vicarious liability. Having regard to the extended definition of “employer”, by its express terms section 54(1) provides that no liability arises on the part of OneSteel Ltd.
The plaintiff referred to section 180 of the Corporations Act. That section addresses the civil obligation of directors and officers of the company; it does not direct itself to the liability of a corporation. In any event, in the present case there is no allegation that the holding company was a director or officer of the subsidiary. Section 180 does not assist the plaintiff.
The plaintiff also referred to sections 19 and 56 of the Occupational Health, Safety and Welfare Act. Those sections address the obligations of an employer and not the holding company of an employer. Section 19 imposes obligations on an employer to maintain a safe workplace and systems, and provides:
19—Duties of employers
(1)An employer must, in respect of each employee employed or engaged by the employer, ensure so far as is reasonably practicable that the employee is, while at work, safe from injury and risks to health and, in particular—
(a) must provide and maintain so far as is reasonably practicable—
(i) a safe working environment;
(ii) safe systems of work;
(iii) plant and substances in a safe condition; and
(b) must provide adequate facilities of a prescribed kind for the welfare of employees at any workplace that is under the control and management of the employer; and
(c) must provide such information, instruction, training and supervision as are reasonably necessary to ensure that each employee is safe from injury and risks to health.
Maximum penalty: Division 5 fine.
(a) for a first offence—Division 2 fine;
(b) for a subsequent offence—Division 1 fine.
(3)Without derogating from the operation of subsection (1), an employer must so far as is reasonably practicable—
(a) monitor the health and welfare of the employer's employees in their employment with the employer, insofar as that monitoring is relevant to the prevention of work-related injuries; and
(b) keep information and records relating to work-related injuries suffered by employees in their employment with the employer and retain that information and those records for such period as may be prescribed; and
Section 56 of the Act prohibits discrimination against employees in relation to matters concerning occupational health, safety and welfare, and provides:
56 - Discrimination against workers
(1)An employer must not dismiss an employee, injure an employee in employment or threaten, intimidate or coerce an employee by reason of the fact that the employee—
(a) is a health and safety representative or a member of a health and safety committee or has performed the functions of a health and safety representative or of a member of a health and safety committee; or
(b) has assisted or given information to an inspector, health and safety representative or health and safety committee; or
(c) has made a complaint in relation to a matter affecting health, safety or welfare.
Maximum penalty: Division 5 fine.
(2)An employer or prospective employer must not refuse or deliberately omit to offer employment to a prospective employee or treat a prospective employee less favourably than another prospective employee would be treated in relation to the terms on which employment is offered by reason of the fact that the prospective employee—
(a) has been a health and safety representative or a member of a health and safety committee or has performed the functions of a health and safety representative or of a member of a health and safety committee; or
(b) has assisted or given information to an inspector, health and safety representative or health and safety committee; or
(c) has made a complaint in relation to a matter affecting health, safety or welfare.
Maximum penalty: Division 5 fine.
(d) ensure that any employee who is to undertake work of a hazardous nature not previously performed by the employee receives proper information, instruction and training before he or she commences that work; and
(da) keep information and records relating to occupational health, safety or welfare training undertaken by any of the employer's employees during their employment with the employer; and
(e) ensure that any employee who is inexperienced in the performance of any work of a hazardous nature receives such supervision as is reasonably necessary to ensure his or her health and safety; and
(f) ensure that any employee who could be put at risk by a change in the workplace, in any work or work practice, in any activity or process, or in any plant—
(i)is given proper information, instruction and training before the change occurs; and
(ii)receives such supervision as is reasonably necessary to ensure his or her health and safety; and
(g) ensure that any manager or supervisor is provided with such information, instruction and training as are necessary to ensure that each employee under his or her management or supervision is, while at work, so far as is reasonably practicable, safe from injury and risks to health; and
(h) monitor working conditions at any workplace that is under the management and control of the employer; and
(i)ensure that any accommodation, or eating, recreational or other facility, provided for the benefit of the employer's employees while they are at work, or in connection with the performance of their work, and under the management or control of the employer (either wholly or substantially), is maintained in a safe and healthy condition.
…
The plaintiff’s pleading does not identify any basis on which the holding company OneSteel Ltd came under a section 19 or 56 obligation. In the circumstances sections 19 and 56 do not assist the plaintiff.
In developing his submissions the plaintiff referred to two authorities said to support his case. In TransAdelaide v Evans,[1] Doyle CJ was concerned with a claim for damages as a result of what was said to be the negligence of an occupier of premises. The issue arose as to whether the occupier of premises was an employer and whether the protection of section 54(1) was available. Doyle CJ concluded that section 54(1) did not apply to TransAdelaide, as it was a statutory corporation separate and distinct from the Crown. This decision provides no assistance to the plaintiff. It did not address the question of holding companies and subsidiaries, and no attention was necessary to the definition of “employer” within section 54.
[1] TransAdelaide v Evans (2005) 95 SASR 394.
The other authority referred to was a decision of this Court in Golden Plains Fodder v Millard.[2] That case also concerned the question of a claim alleging negligence on the part of an occupier of premises. The issue that arose was whether the defendant was in fact the employer of the plaintiff, and as such enjoyed the protection of section 54(1). The conclusion was reached as a matter of fact that the defendant was not the employer. The question of holding companies and subsidiaries did not arise. The definition of “employer” within section 54 did not arise for consideration. Again, this authority is of no assistance to the plaintiff.
[2] Golden Plains Fodder v Millard (2007) 99 SASR 461.
Returning to the plaintiff’s primary argument, no basis has been identified to suggest that OneSteel Ltd owed the plaintiff any common law duty of care, but in any event OneSteel Ltd had the protection of section 54 as an entity which was said to be vicariously liable for the torts of an employer.
Finally, the plaintiff claimed that section 54 of the Workers Rehabilitation and Compensation Act was inoperative by reason of section 109 of the Constitution. For the reasons provided in the judgment [2009] SASC 56, which are as earlier incorporated by way of reference in these reasons, this submission should be rejected.
This appeal should be dismissed.
SULAN J: I agree with the reasons of Gray J. I agree with the orders he proposes.
DAVID J. I agree the appeal should be dismissed for the reasons given by Gray J. I agree with the orders he proposes.
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