Danielsen v Onesteel Manufacturing Pty Ltd - [2009] SASC 56

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
DANIELSEN v ONESTEEL MANUFACTURING PTY LTD & ANOR
[2009] SASC 56
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)
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - PLEADINGS - GENERALLY
Appeal from decision of District Court Judge upholding order of Master striking out plaintiff and appellant’s claim - plaintiff’s claims could not be made out in amended statement of claim, deed of release and discharge precluded bringing of number of claims, no cause of action identified against the defendant and respondent - amended statement of claim grossly defective - appellant issued proceedings against 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) - defendant not relevant employer for the purposes of Workers Rehabilitation and Compensation Act 1986 (SA) and Occupational Health, Safety and Welfare Act 1986 (SA).
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 Limited - section 54 not inoperative by virtue of section 109 of the Constitution - no direct inconsistency arises between section 54 and the various provisions of the Corporations Act 2001 (Cth) and Trade Practices Act 1974 (Cth) - Safety Rehabilitation and Compensation Act 1988 (Cth) not applicable - direction that section 78B notices be served on several Attorneys unnecessary - failure to comply with duty to serve notice under section 78B does not invalidate the exercise of jurisdiction - duty to serve notice under section 78B enlivened where issue under Constitution or its interpretation is established rather than asserted - proposed amended statement of claim not compliant with rules of pleading - leave to amend statement of claim refused - section 72 of the Civil Liability Act 1936 (SA) did not justify claims in respect of perjury - deed of discharge not rendered ineffective by the provisions of the Corporations Act 2001 (Cth).
Workers Rehabilitation and Compensation Act 1986 (SA) s 54(1); Occupational Health, Safety and Welfare Act 1986 (SA) s 19 and s 56; Civil Liability Act 1936 (SA) s 72; Corporations Act 2001 (Cth) s 181, s 182, s 183, s 184, s 185, s 556, s 596AA-AI, s 601, s 601FA, s 601FB(4), 601FC, s 601, s 601FC, s 601 FD, s 601 MA and s 601EB; Commonwealth of Australia Constitution Act 1901 (Cth) s 109; Judiciary Act 1903 (Cth) s 78A and s 78B; Trade Practices Act 1974 (Cth) s 44ZZO, s 45DC, s 51AD, s 51AE, s 51ACA, s 75AZE, s 77A, s 82, s 87U and s 87Z; Safety Rehabilitation and Compensation Act 1988 (Cth) s 16, referred to.
Andrews v Ziersch (1994) 61 SASR 521; State Bank of NSW v Commonwealth Savings Bank of Australia (1986) 4 NSWLR 549; Re Finlayson; ex parte Finlayson (1997) 72 ALJR 73; Glennan v Commissioner of Taxation (2003) 77 ALJR 1195; James v South Australia (1927) 40 CLR 1; Hopper v Egg and Egg Pulp Marketing Board (1939) 61 CLR 665; ACCC v C G Berbatis Holdings (1999) 95 FCR 292; Green v Jones [1979] 2 NSWLR 812; Public Service Association of NSW, Re Application by; Re Industrial Union Employees (Commissioned Police Officers) Award (1947) 75 CLR 430; Nikolic v MGICA [1999] FCA 849; Errington v Target Australia Pty Ltd (1995) 65 SASR 378; Daniels v DCT [2007] SASC 431; Australian Securities and Investments Commission v White (Unreported, Federal Court, Drummond J, No QG 40 of 1998, 16 July 1998); Viskauskas v Niland (1983) 153 CLR 280; Ex parte McLean (1930) 43 CLR 472; R v Brisbane Licensing Court; ex parte Daniell (1920) 28 CLR 23; Colvin v Bradley Brothers Pty Ltd (1943) 68 CLR 151, considered.

DANIELSEN v ONESTEEL MANUFACTURING PTY LTD & ANOR
[2009] SASC 56
Full Court Gray, Sulan and David JJ
GRAY J.

This is an appeal from the decision of a District Court Judge.
This appeal was heard at the same time as the appeal in the matter of Danielsen v OneSteel Ltd. Judgment in that appeal, [2009] SASC 55, is to be delivered at the same time as this judgment.
On 8 February 2005 Timothy Micheal Danielsen, the plaintiff and appellant, issued proceedings against OneSteel Manufacturing Pty Ltd claiming compensation for lost wages past and future, net expenses past and future, loss of superannuation past and future, reimbursement for other unspecified expenses and costs, and for such further orders as the Court deemed appropriate. It appears that a claim was being pursued for common law damages, although the initiating documents are imprecise.
Following amendments to the statement of claim, an application was heard and determined by a Master for an order that the summons and statement of claim be struck out. The Master described the plaintiff’s claim as follows:
The plaintiff’s claims appear to be two-fold: firstly, a claim arising out of injuries which the plaintiff allegedly sustained during the course of his employment with Onesteel Trading Pty Ltd (“Onesteel Trading”) and secondly, a claim for lost benefits for a share plan, lost superannuation and other unidentified expenses which it appears allegedly arise out of the termination of employment of the plaintiff by Onesteel Trading.
It appears that by this time, the plaintiff had added OneSteel Trading Pty Ltd as a further defendant. It was common ground that OneSteel Trading Pty Ltd was the plaintiff’s employer, that OneSteel Trading Pty Ltd was a wholly owned subsidiary of OneSteel Ltd, and that OneSteel Manufacturing Pty Ltd was a company delegated with the authority to manage workers’ compensation claims on behalf of OneSteel Trading Pty Ltd. OneSteel Manufacturing Pty Ltd was also a wholly owned subsidiary of OneSteel Ltd. At one time a business name, OneSteel Metaland, was included as a defendant. Again it is common ground that this was a business name owned ultimately by OneSteel Ltd.
The basis of the strike-out application was that the claim was barred by statute and that, in any event, there had been a deed of release and discharge entered into that precluded the plaintiff’s claim.
The Master concluded that the plaintiff’s claims as articulated in his amended statement of claim could not be made out on any view of the facts or the law, and proceeded to make an order striking out the claim. The Master reasoned that section 54(1) of the Workers Rehabilitation and Compensation Act 1986 (SA) precluded any claim. The Master further reasoned that the deed of release and discharge precluded the bringing of a number of the claims, and that no cause of action at all had been identified against OneSteel Manufacturing Pty Ltd. The Master also pointed out the grossly defective nature of much of the amended statement of claim.
The plaintiff appealed to a District Court Judge from the decision of the Master. The Judge dismissed the appeal. On the hearing of the appeal before the District Court Judge, the plaintiff sought to rely on a proposed further amended statement of claim, and the appeal proceeded to be argued on the basis that the proposed amendments were before the Court.
The proposed amended statement of claim does not follow the rules as to pleadings and is a difficult document to fully comprehend. However, it may be understood to allege that the defendants or one of them failed to maintain a safe workplace. The safe workplace was said to be one free of discrimination, harassment and bullying. It was then alleged that conduct of this nature was permitted to occur. It was further alleged that OneSteel Manufacturing Pty Ltd was vicariously liable for alleged perjury and false misleading evidence given by witnesses on its behalf in proceedings before the Workers’ Compensation Tribunal.
Later in the statement of claim allegations were made of a series of incidents in which it was said that the plaintiff sustained physical injury, and allegations were made that those matters arose as a result of a failure to maintain a safe working environment. Allegations were also made that the defendants engaged in conduct that amounted to an abuse of power.
It is apparent that the plaintiff has a deeply perceived grievance against his former employer and related entities in regard to alleged work injuries and related alleged misconduct. It would appear that much of the alleged misconduct has been advanced in an attempt to avoid the provisions of section 54(1) of the Workers Rehabilitation and Compensation Act.
Ultimately, having regard to the Judge’s conclusion that the appeal should be dismissed, leave to amend the statement of claim was refused. In this respect the Judge made the following observations:
As mentioned, the matter was considered below on the basis of an amended Statement of claim. The Master evidently struck out the claim after forming the view that no amount of amendment could cure the inherent defects identified in his reasons. After it was pointed out to the plaintiff early in this appeal, that his claims as pleaded in that document suffered from a number of defects other than those identified by the Master, he was granted permission to submit a further draft, effectively giving him the opportunity to re-plead to see if he could establish arguable causes of action. This indulgence occurred with the consent of the defendants, given somewhat reluctantly, but nevertheless for the very sensible reason that if the appeal was eventually dismissed on the basis of those defects, the defendants would inevitably face fresh proceedings in the amended terms.
The Judge agreed with the Master that the claims against OneSteel Manufacturing Pty Ltd could not succeed. Insofar as allegations were advanced pursuant to section 19 of the Occupational Health, Safety and Welfare Act 1986 (SA), the Judge noted that as OneSteel Manufacturing Pty Ltd was not the employer, the claims had to fail. The Judge added that no facts had been alleged that would support any relevant duty of care.
Insofar as the plaintiff sought to pursue a claim for damages pursuant to section 72 of the Civil Liability Act 1936 (SA), essentially raising allegations of perjury, the Judge rejected the claim and reasoned:
So far as the allegations of producing or giving false evidence against him are concerned, the claim appears to be founded on s 72 of the Civil Liability Act (above), and as such suffers from at least two fatal defects. Firstly, that section vests an action against individual persons not corporations. Secondly, and more significantly no identifiable foundation is laid in the pleadings submitted by the plaintiff, supporting proof of the prerequisites called for by ss72(2)(a)(i)-(iii), namely that the relevant defendant was convicted of perjury, found guilty of contempt of court on the ground of having committed perjury, or was committed for trial on a charge of perjury but by reason of the fact that no indictment was preferred, or a nolle prosequi entered. This action would therefore inevitably fail as well. His remedy, if at all, on these grounds would be to apply to set aside the judgment of the Tribunal on the grounds of fraud: Wyatt v Palmer.
The Judge rejected the appeal with respect to the dismissal of the complaint against OneSteel Metaland. In that respect the Judge reasoned:
As already mentioned above, both parties agree the plaintiff was employed by OneSteel Trading Pty Ltd, trading under the business name “OneSteel Metaland”. Of course the Business Names Act 1996 (SA) confers no right to sue anyone carrying on business under a registered business name, as such. Nor does it confer any statutory cause of action. For relevant purposes his employer always was OneSteel Trading Pty Ltd, so that any proceedings against OneSteel Metaland alone, would be incompetent.
So far as s33 of the Civil Liability Act is sought to be engaged, it confers no right to sue; rather it has the effect of qualifying liability at common law for nervous shock, as defined by the High Court in the well known case of Jaensch v Coffey.
On the hearing of this appeal, these findings and conclusions were not challenged. The Judge also reasoned that section 54(1) of the Workers Rehabilitation and Compensation Act would in any event preclude a claim against OneSteel Metaland.
With respect to the claims against OneSteel Trading Pty Ltd, the Judge summarised those claims as follows:
The third group of claims are made against OneSteel Trading Pty Ltd, in negligence, alleged discrimination and harassment, perjury by employees in giving evidence before the Worker’s Compensation Tribunal and loss through the sale of One Steel Ltd shares bought under an employees’ share plan, coming together in paragraph 73 of the draft amendment. In this part of the claim the plaintiff relies upon the “Corporations Law s601” and once again on the Occupational Health Safety and Welfare Act, ss19 and 56(1)(c).
The Judge took the view that section 54(1) of the Workers Rehabilitation and Compensation Act precluded any claim for common law damages arising out of any compensable injury. It was also considered that any claim under sections 19 and 56 of the Occupational Health, Safety and Welfare Act was bound to fail. In that respect he reasoned:
As to the Occupational Health Safety and Welfare Act, s19 does not apply to OneSteel Trading Pty Ltd for the reasons articulated above. Any valid claim under s56 is precluded by the agreement of discharge and release, which constitutes an absolute defence at the instance of One Steel Trading, as an action under “any other State Act”. The issues of discrimination and harassment arise from the same work place incidents ventilated in the compensation proceedings and are therefore precluded by s54 for the same reasons and if not by the discharge agreement. Furthermore no facts are pleaded, separating acts of discrimination from other circumstances relating to progress of his compensation claims, sufficient to sustain any such separate cause of action. As well, the claim for losses arising from an employee’s share plan are clearly foreclosed by the discharge agreement.
The Judge then concluded:
On the above analysis, all heads of the purported claim cannot possibly be maintained. On that basis the appeal must be dismissed. Insofar as the plaintiff seeks leave to amend his claim according to the draft of 31 May 2006, such leave is therefore to be refused.
On the appeal to this Court, the plaintiff submitted that the Judge had erred in his interpretation of section 54(1), that the deed of discharge did not preclude the plaintiff’s claims, that sections 19 and 56 of the Occupational Health, Safety and Welfare Act provided the basis for the claim, that section 72 of the Civil Liability Act supported and justified the claims in respect of perjury, and that insofar as section 54(1) precluded any common law claim, it was inconsistent with the Corporations Act 2001 (Cth) and should be struck out having regard to section 109 of the Australian Constitution. Finally, it was submitted that the deed of discharge was ineffective as a result of the provisions of the Corporations Act.
Section 54 of the Workers Rehabilitation and Compensation Act 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.
…
or
(b)     a liability at common law for non-economic loss or solatium.
…
(4a)Where—
(a)     a worker suffers a compensable disability (not being a disability that arises out of the use of a motor vehicle and gives rise to a liability of a kind referred to in subsection (2)); and
(b)     the disability is attributable to the negligence of another worker—
(i)who was acting in the course of employment with the same employer; and
(ii)whose negligence did not arise from, or in the course of, serious and wilful misconduct,
the worker has no right of action against the other worker.
…
(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;
the law of compulsory third-party motor vehicle insurance means—
(a) Part 4 of the Motor Vehicles Act 1959 (including a policy of insurance under that Part); or
(b) the law of another State or a Territory of the Commonwealth that corresponds to Part 4 of the Motor Vehicles Act 1959 (including a policy of insurance under such a law).
On its face, the deed precludes the claims being advanced against OneSteel Trading Pty Ltd. However, as earlier discussed those claims were rejected for the different reasons of the District Court Judge as set out above.
The plaintiff gave notice pursuant to section 78B of the Judiciary Act 1903 (Cth) that the appeal raised an issue under the Constitution, or involving its interpretation. The suggested issue, briefly summarised, involved an alleged inconsistency, pursuant to section 109 of the Constitution, between section 54 of the Workers Rehabilitation and Compensation Act and several Commonwealth legislative provisions.[1] The Attorney-General for South Australia intervened pursuant to section 78A of the Judiciary Act.
[1] Sections 57, 180-185, 563(2b), 556(e)-(h), 596AA(c), 596AB(1)-(3), 596AC(1), 596AE, 596AF, 601, 601FA, 601FB(4), 601FC, 601FD, 601MA, 796B(1), (3), (5b), (9) of the Corporations Act 2001 (Cth); Sections 44ZZO, 45DC, 51ACA, 51AD, 51AE, 52, 75AZE, 77A, 82, 84, 87CE, 87U, 87Z of the Trade Practices Act 1974 (Cth); Section 16 of the Safety Rehabilitation and Compensation Act 1988 (Cth).
In Andrews v Ziersch[2] Perry J set out the scope and operation of these provisions. Relevantly, he said:
[2] Andrews v Ziersch (1994) 61 SASR 521 at 538 – 540.
Section 54(1) and (2) operate to confine any liability of an employer with respect to a compensable disability to the liability imposed by the Act, and a liability at common law for non-economic loss or solatium, except in cases where the liability arises out of the use of a motor vehicle, in which event the employer remains liable at common law for damages at large (although subject to the various provisions in the Wrongs Act 1936 which serve to curtail the extent of an award of damages at common law).
….
Section 54(4a) operates in the case of a worker who has suffered a compensable disability and who might have a right of action at common law against a co-worker. In such a case, the common law action is extinguished (except in motor vehicles cases). The rationale behind this subsection would, at least in part, seem to be clear: to allow an action against the co-worker in such circumstances could give rise to a vicarious liability on the employer which had the potential to exceed the ceiling imposed by s 54(4).
Section 54(4b) was inserted by way of amendment at the same time as subs (4a), both subsections having been inserted by Act No 39 of 1988. Both sections are designed, at least in part, to achieve the same objective, namely, to ensure that the operation of the ceiling imposed by subs (4) is not circumvented in the case of subs (4b) by a claim for contribution against the employer by a third party who is sued for damages at common law by the worker. Although subs (4b) uses the expression "Where an action is taken", it is hard to imagine circumstances in which such action could be brought other than by the worker.
….
It follows that if the employer is sued for common law damages, and if liability at common law is established, he or she will be liable to pay damages not exceeding 1.4 times "the prescribed sum" under s 54(4). If a person other than the employer is sued as a co-defendant, or if such a person is sued alone, and liability against that person is established, he or she will be liable for the whole of the damages at common law, subject, no doubt, to reduction by any amount recovered by the worker from the employer by way of common law damages, having regard to the principle against double recovery.
From what I have said so far, it is clear that in the case where a person other than the employer is sued by a worker for damages at common law, that person's right of contribution under the Wrongs Act against an employer who otherwise might properly be regarded as "liable in respect of the same damages" within the meaning of s 25(1) of the Wrongs Act, is extinguished by reason of the operation of the words "the other person has no right to recover contribution from the employer" in s 54(4b) of the Act. Any common law right of contribution (and I know of none) would likewise be extinguished.
It follows that in consequence, the negligent third party may become liable to pay a disproportionate amount of the total damages compared with what might have been the case if the apportionment provisions of the Wrongs Act had been of application. But that distortion is an inevitable result of the operation of s 54.[3]
[3] See also Errington v Target Australia Pty Ltd (1995) 65 SASR 378 at 379, 384.

Sub-section (1) excludes any claim against an employer in respect of a “compensable disability” except as provided for by the Workers Rehabilitation and Compensation Act. Sub-section (4a) similarly limits the right of an injured worker to make a claim in negligence against a fellow worker. Sub-section (8) provides definitions for the purposes of section 54.
Section 78B Notices – Were Notices Required?
Counsel for the Attorney-General, having been served with the section 78B Notice, submitted to the Court that this was a case where notwithstanding the assertion of the plaintiff, there was no need for notices to be given. It was said that the so-called constitutional issues raised by the plaintiff were illusory and should have been rejected out of hand. In the event the Court received assistance from the submissions of counsel for the Attorney-General, and, as later appears, I reject each of the plaintiff’s contentions. However, counsel invited the Court to express its views with respect to the approach to be taken in cases where it takes the view that the suggested constitutional issue is trivial or frivolous. In the reasons that follow, I have accepted the invitation of the Attorney-General and have reached the conclusion that in this case, there was no need for the direction that section 78B Notices be served on the several Attorneys. I now set out my reasons for this conclusion.
Section 78B of the Judiciary Act provides:
(1)Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the Attorneys-General of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the Attorneys-General, of the question of intervention in the proceedings or removal of the cause to the High Court.
(2)For the purposes of subsection (1), a court in which a cause referred to in that subsection is pending:
(a) may adjourn the proceedings in the cause for such time as it thinks necessary and may make such order as to costs in relation to such an adjournment as it thinks fit;
(b) may direct a party to give notice in accordance with that subsection; and
(c) may continue to hear evidence and argument concerning matters severable from any matter arising under the Constitution or involving its interpretation.
In State Bank of NSW v Commonwealth Savings Bank of Australia[4] Kirby P commented:
... although there is a limited power to continue the hearing in default of notice, s78B is expressed in terms which are unusually emphatic. It is ‘the duty of the court not to proceed’. Thus, it is not for the parties to determine the matter by their agreement. The court’s duty arises because of its obligation to protect the interests of the partners in the polity of the Commonwealth.
[4] State Bank of NSW v Commonwealth Savings Bank of Australia (1986) 4 NSWLR 549 at 558 – 559.
However, the failure to comply with the duty contained in section 78B does not invalidate the exercise of jurisdiction. The duty is one of imperfect obligation.[5] The question arises as to how rigid is the duty contained in section 78B. In Re Finlayson; ex parte Finlayson[6] Toohey J remarked:[7]
In terms of s78B, a cause does not “involve” a matter arising under the Constitution or involving its interpretation merely because someone asserts that it does. That is not to say that the strength or weakness of the proposition is critical. But it must be established that the matter does involve a matter arising under the Constitution. (footnotes omitted)
[5]    Glennan v Commissioner of Taxation (2003) 77 ALJR 1195 at [13].
[6]    Re Finlayson; ex parte Finlayson (1997) 72 ALJR 73 at 74.
[7]    See also Glennan v Commissioner of Taxation (2003) 77 ALJR 1195 at [14]; As to what amounts to a matter arising under the Constitution or involving its interpretation, see James v South Australia (1927) 40 CLR 1.
In Hopper v Egg and Egg Pulp Marketing Board[8] in the context of determining whether or not the original jurisdiction of the High Court was enlivened under section 30 of the Judiciary Act by a matter purporting to arise under the Constitution or involving its interpretation, Latham CJ commented:
I entirely agree with my brother Starke that it is the duty of this court to be satisfied that it has jurisdiction before it deals with a case. The court cannot assume jurisdiction merely because the parties raise no question as to jurisdiction. But in this case I am of the opinion that there is jurisdiction because this action is a matter involving the interpretation of the Constitution (Judiciary Act, 1903-1907, sec 30(a)). The fact that the constitutional objection has failed does not deprive the court of jurisdiction if “the facts relied on were bona fide raised, and were such as to raise” the question.
Evatt J indicated:[9]
The original jurisdiction is attracted by reason of the constitutional question, but it is not limited to the determination of such question. The legal validity or strength of the plaintiff’s constitutional point is quite immaterial so long as it is genuinely raised.
[8] Hopper v Egg and Egg Pulp Marketing Board (1939) 61 CLR 665 per Latham CJ at 673.
[9] Hopper v Egg and Egg Pulp Marketing Board (1939) 61 CLR 665 per Evatt J at 681. See also Starke J at 677.
A similar approach applies where application is made under section 40 of the Judiciary Act for a matter to be removed into the High Court. In such circumstances a matter should “really and substantially arise under the Constitution”.[10]
[10] Public Service Association of NSW, Re Application by; Re Industrial Union Employees (Commissioned Police Officers) Award (1947) 75 CLR 430 per Williams J at 433.
The duty borne by this Court under section 78B of the Judiciary Act where a party purports to raise a question arising under the Constitution or involving its interpretation should be construed in a manner consistent with the interpretation and application of sections 30 and 40 of the Judiciary Act by the High Court. Accordingly, the duty under section 78B is enlivened where it is established as opposed to asserted, that there is a matter arising under the Constitution or involving its interpretation, and the facts relied upon are bona fide raised and are such as to raise the constitutional question, or the cause really and substantially involves the interpretation of the Constitution. The validity or strength of the constitutional point is immaterial so long as it is genuinely raised.[11] The following remarks of French J in ACCC v C.G.Berbatis Holdings[12] should be understood against the background of the above observations:
Section 78B does not impose on the Court a duty not to proceed pending the issue of a notice no matter how trivial, unarguable or concluded the constitutional point may be. If the asserted constitutional point is frivolous or vexatious or raised as an abuse of process, it will not attach to the matter in which it is raised the character of a matter arising under the Constitution or involving its interpretation - Nikolic v MGIC;[13] cf Australian Securities and Investments Commission v White.[14]
The circumstances contemplated by French J - where the constitutional point is trivial, unarguable or concluded, or frivolous, vexatious or an abuse of process - are examples of circumstances where the necessary requirements are not met.
[11] Green v Jones [1979] 2 NSWLR 812 per Hunt J at 817 - 818.
[12] ACCC v C.G.Berbatis Holdings (1999) 95 FCR 292 at 297. See also Daniels v DCT [2007] SASC 431; Commonwealth v Davis Samuel Pty Ltd [No 4] [2008] ACTSC 112.
[13] Nikolic v MGICA [1999] FCA 849.
[14] Australian Securities and Investments Commission v White (Unreported, Federal Court, Drummond J, No QG 40 of 1998, 16 July 1998).
In this case, the constitutional point is unarguable. Put another way, there is no matter arising under the Constitution in the sense that it cannot be established that there is a matter that really and substantially or genuinely arises under the Constitution as opposed to it merely being asserted. Further, the facts relied upon - those supposedly illustrating inconsistency - do not do so. It cannot be said that this case really and substantially involves a matter arising under the Constitution or the interpretation of the Constitution. Counsel was correct to submit that the plaintiff’s assertion enlivened the operation of section 78B.
Inconsistency
Section 109 of the Constitution provides that:
When a law of a State is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.
Generally, a State law will be held to be inconsistent with a Commonwealth law for the purposes of section 109 of the Constitution on one of three bases – that the Commonwealth law evinces an intention to “cover the field” on a particular topic to the exclusion of any State legislation,[15] or that there is some direct inconsistency between the relevant provisions in the sense that it is impossible to obey both laws,[16] or that a State law prohibits something which is expressly or impliedly permitted by a federal law.[17]
[15]Viskauskas v Niland (1983) 153 CLR 280; Ex parte McLean (1930) 43 CLR 472.
[16]R v Brisbane Licensing Court; ex parte Daniell (1920) 28 CLR 23.
[17] Colvin v Bradley Brothers Pty Ltd (1943) 68 CLR 151.
The subject matter of section 54 of the Workers Rehabilitation and Compensation Act is the compensation of workers for disability. Subsections (1) and (4a) both purport to remove or limit a right to seek compensation which may have existed but for those provisions. It is therefore possible that the rights which section 54 purports to affect might be otherwise dealt with in Commonwealth legislation in a way that gives rise to section 109 inconsistency. Subsection (8) however, provides definitions for the purpose of section 54.
Before considering whether there is any direct inconsistency between the particular provisions of the Corporations Act identified by the plaintiff and section 54 of the Workers Rehabilitation and Compensation Act, it is convenient to consider whether the Corporations Act is intended to “cover the field” intruded upon by the State provision. At a general level the State and federal laws are directed at distinct topics, that is, the compensation of injured workers on the one hand, and the regulation of corporations on the other. Section 5E(1) of the Corporations Act also provides:
The Corporations legislation is not intended to exclude or limit the concurrent operation of any law of a State or Territory.
Section 54, in limiting the rights of workers to make claims against employers and fellow employees in respect of injuries, does not intrude into a field which the Federal Parliament, by enactment of the Corporations Act has expressed an intention exclusively to regulate.
The same can be said of the Trade Practices Act 1974 (Cth). That Act is the product of an exercise of the trade and commerce power. It creates laws protecting consumers, providing for competition and ensuring fairness in trade. Section 54, in limiting the rights of workers to make claims against employers and fellow employees in respect of injuries, does not intrude into a field which the Federal Parliament, by enactment of the Trade Practices Act has expressed an intention exclusively to regulate.
Section 16 of the Safety Rehabilitation and Compensation Act 1988 (Cth) concerns Comcare’s liability to pay certain costs and expenses incurred by Commonwealth employees or employees of licensed corporations being Commonwealth authorities or eligible corporations within the meaning of the Act that sustain injury at work. The Safety Rehabilitation and Compensation Act does not apply to persons who are not Commonwealth employees or who are not employees of licensed corporations. Further, it does not seek to cover the field, that is, workplace injuries across the length and breadth of the Commonwealth. No inconsistency arises between section 16 and section 54 of the Workers Rehabilitation and Compensation Act.
It remains to consider whether any direct inconsistency arises between the various provisions of the Corporations and Trade Practices Acts as identified by the plaintiff and section 54 of the Workers Rehabilitation and Compensation Act. The plaintiff also referred to a number of non-existent statutory provisions. Statutory provisions that exist, and have been identified by the plaintiff are addressed hereunder.
Section 57 of the Corporations Act deals with classes of shares. It may be that the plaintiff intended to refer instead to section 57A which provides a definition of a “corporation” for the purposes of the Corporations Act. Neither section 57 nor section 57A is in any way inconsistent with section 54 of the Workers Rehabilitation and Compensation Act.
Sections 180-184 of the Corporations Act address the obligations of directors and other officers of companies such as the obligation to act in good faith and with care and diligence. Sections 180-183 are civil penalty provisions, and section 184 provides for criminal offences. Section 185 deals with the interaction of sections 180-184 with other laws and relevantly provides:
(a)have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office or employment in relation to a corporation; and
(b)do not prevent the commencement of civil proceedings for a breach of a duty or in respect of a liability referred to in paragraph (a).
This section does not apply to subsections 180(2) and (3) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of subsection 180(1).
Section 185 does not in any way preserve the sorts of causes of action which are excluded by section 54(1) and (4a) of the Workers Rehabilitation and Compensation Act, and sections 180 - 184 deal with entirely different types of duties than those dealt with by the Workers Rehabilitation and Compensation Act. Consequently there is no inconsistency between sections 180 – 185 of the Corporations Act and section 54 of the Workers Rehabilitation and Compensation Act.
Section 556 provides for priority in payment of certain debts owed by a corporation that is in the process of being wound up. It is not inconsistent with section 54 of the Workers Rehabilitation and Compensation Act.
Sections 596AA - 596AI of the Corporations Act protect the entitlements of employees of a corporation from diminution by agreements entered into or transactions undertaken by an insolvent corporation or the officers, representatives or agents thereof that are intended to defeat the recovery of those entitlements. No inconsistency between these sections and section 54 of the Workers Rehabilitation and Compensation Act arises.
Sections 601, 601FA, 601FB(4), 601FC, 601FD and 601MA of the Corporations Act deal with the creation and operation of registered schemes, being managed investment schemes registered under section 601EB of the Corporations Act by responsible entities. No inconsistency between these sections and section 54 of the Workers Rehabilitation and Compensation Act arises.
Section 44ZZO of the Trade Practices Act deals with the issue of conduct that may be imputed to a corporate body for the purposes of the Trade Practices Act. Section 45DC deals with conduct that may be imputed to an employee organization. Section 51AD prohibits breach of an industry code in the course of trade and commerce. Section 51AE permits regulations to identify relevant industry codes or parts of industry codes for the purposes of section 51AD. Section 51ACA defines “applicable industry code”. Section 52 prohibits a corporation from engaging in misleading or deceptive conduct in the course of trade and commerce. Section 75AZE prohibits a corporation from engaging in conduct that is liable to mislead persons seeking employment regarding the availability, nature, terms and conditions, or any matter relating to the employment. Section 77A prohibits a corporation from indemnifying a person against civil liability or legal costs incurred in relation to such proceedings where those proceedings arise out of the conduct of the person as an officer of the body corporate. Section 82 concerns actions for damages for breach of certain sections of the Trade Practices Act. Section 87CE concerns an obligation placed upon a defendant in proceedings involving an apportionable claim to identify a concurrent wrongdoer where there are reasonable grounds to believe that such wrongdoer exists. Section 87U concerns the calculation of damages for personal injury in relation to proceedings brought under Part VIA of the Trade Practices Act. Section 87Z prohibits a court in proceedings instituted under Part VIA of the Trade Practices Act from awarding damages for loss of superannuation contributions. No inconsistency between any of these provisions and section 54 of the Workers Rehabilitation and Compensation Act arises.
Insofar as the plaintiff asserts that section 54 of the Workers Rehabilitation and Compensation Act is invalid by reason of inconsistency with the identified provisions of the Corporations Act, the Trade Practices Act and the Safety Rehabilitation and Compensation Act it should be dismissed.
A Further Complaint
The plaintiff sought to argue that a deed of release was ineffective. On its face, the deed precludes the claims being advanced against OneSteel Trading Pty Ltd. However, as earlier discussed, those claims were rejected for the different reasons identified by the District Court Judge.
Conclusion
I would dismiss this appeal.
SULAN J: I agree that the Constitutional point is unarguable. I agree with the reasons of Gray J.
DAVID J. I agree the appeal should be dismissed for the reasons given by Gray J. I agree with the orders he proposes.