Danielsen v OneSteel Manufacturing Pty LTD` - [2006] SADC 126

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
DANIELSEN v ONESTEEL MANUFACTURING PTY LTD`
[2006] SADC 126
Reasons of His Honour Judge Tilmouth
13 October 2006
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA
Appeal from a decision of a Master striking out an action, is an appeal by way of re-hearing.
District Court Rules 97.01; District Court Act s43 (1971) SA; Local and District Courts Act 1976 (SA) s58, referred to.
Licul v Corney (1976) 180 CLR 213, applied.

APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE
Application to amend to strike out statement of claim. District Court Rule 53.01. Whether the statement of claim discloses causes of action. Breach of statutory duty.
Thornton v Kirkless Borough Council [1979] QB 626; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Egan v Commonwealth Minister for Transport (1976) 14 SASR 445, applied.

NEGLIGENCE - ESSENTIALS OF ACTION FOR NEGLIGENCE - DUTY OF CARE - RELATIONSHIP OF PROXIMITY
Plaintiff suing under Workcover Corporations Act 1994 (SA), and Corporations Act (2001) (Cth). Held to confer no private rights of action.
Slivak v Lurgi (Australia) Pty Ltd (2001) 205 CLR 304; Czatyrko v Edith Cowan University (2005) 79 ALJR 839; [2005] HCA 14; Darling Island Stevedoring & Lighterage Co Ltd v Long (1957) 97 CLR 36, applied.

NEGLIGENCE - MISCELLANEOUS DEFENCES
Plaintiff suing with respect to workplace injuries, held to be barred by s54(1) of the Workers Rehabilitation and Compensation Act 1986 (SA) and deed of discharge.
Wade v Australian Railway Historical Society (South Australian Division) (t/as Steamranger) (2000) 77 SASR 221, applied.
Evans v TransAdelaide (2004) 238 LSJS 44, [2004] SADC 194, distinguished.

DANIELSEN v ONESTEEL MANUFACTURING PTY LTD`
[2006] SADC 126
The Proceedings

Timothy Michael Danielsen (hereinafter for convenience sake referred to as “the plaintiff”), has a long-standing grievance against a former employer relating to injuries suffered in the work place and for the consequential losses he claims to have suffered following the termination of his employment. It is the position of both parties that the employer at all relevant times was OneSteel Trading Pty Ltd trading as “OneSteel Metaland” in Mount Gambier.
The plaintiff issued proceedings out of this Court on 8 February 2005 against OneSteel Manufacturing Pty Ltd, as well as associated entities, OneSteel Metaland and OneSteel Trading Pty Ltd (the “defendants”), alleging inter related multiple causes of action against each.
It appears from the various papers before the court, that OneSteel Manufacturing Pty Ltd and OneSteel Metaland are both wholly owned subsidiaries of OneSteel Limited. OneSteel Manufacturing Pty Ltd managed worker’s compensation claims for OneSteel Metaland, the latter simply being “an expired business name” previously registered by OneSteel Trading Pty Ltd.
The matter proceeded before the Master on the accepted footing that OneSteel Trading Pty Ltd was the employer at relevant times, but as appears below, various proceedings in other forums were issued by the plaintiff against OneSteel Manufacturing Pty Ltd as his employer.
So far the defendants have filed no defence. They did however bring an application to strike out a Statement of Claim, filed pursuant to DCR 53.01. The application, made under DCR 3.01, was granted by a Master of this Court on 22 December 2005.[1] The matter comes before the Court by way of an appeal by the plaintiff against that order. DCR 3.01 enables the court to “dismiss proceedings which disclose no cause of action …”.
[1] Judgment No 88 of 2005 dated 22 December 2005, Master Norman.
The Nature of the Appeal
It was submitted for the defendants as respondents to the appeal, that when this Court exercises the power of review over orders of a Master, it is necessary to demonstrate error before the Court can interfere. According to Mr Wallwork, the Master in striking out the plaintiff’s statement of claim, effectively made a final order disposing of his rights, putting an end to the action: Licul v Corney[2]. He also cited DCR 97.01 as reinforcing the position, which provides that an appeal against “an interlocutory judgment of a Master shall be by way of rehearing” and the judge on appeal “in matters involving the exercise of a discretion … may exercise his own discretion without regard to the manner in which it was exercised in the decision … appealed against”. The inference in the submission was that it would be otherwise in cases of final orders.
[2] (1976) 180 CLR 213
An appeal lies from a judgment given by a Master of the Court to a Judge pursuant to s43 of the District Court Act 1991 (SA), which is otherwise silent on the nature or scope of such appeal. Formerly, appeals pursuant to s58 of the repealed Local and District Criminal Courts Act 1976 (SA) were held to be appeals stricto sensu, so that error had to be shown before the power to interfere arose: Millbank v Price[3], Cheeseman v Launer[4], Bagshaw v Taylor and Taylor[5] and Cross v Reilly[6].
[3] [1954] SASR 166, 173.
[4] (1972) 3 SASR 573, 576.
[5] (1978) 18 SASR 564
[6] (1979) 21 SASR 553.
It is difficult to appreciate why an aggrieved party in an interlocutory proceeding is entitled to a full rehearing on appeal from a decision of a Master, whereas a litigant put completely out of court by a final order, has lesser rights, so the point made on behalf of the defendants is not one to be lightly accepted. Although the nature of the application to strike out the action was interlocutory, the order doing so was for practical purposes, final. However, that order necessitated a discretionary exercise, one separately attracting the second limb to DCR 97.01, so that the court remains entitled to exercise its own discretion in the matter. As there appears to be no authority directly in point, the safer course, and one more favourable to the plaintiff, is to reconsider the matter afresh by way of rehearing, unencumbered by the reasons of the Master.
Procedural Matters
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.
Ultimately, Mr Danielsen stood or fell on his redrafted Statement of Claim filed 31 May 2006[7]. This distils into essentially three broad heads, crystallising in paragraphs 71, 72 and 73 respectively.
[7] FDN 29.
Historical events of significance
The plaintiff has completely exhausted his statutory remedies arising under the Workers Rehabilitation and Compensation Act 1986 (SA). Initially he sued Onesteel Manufacturing Pty Ltd for workers compensation arising from alleged injuries suffered whilst employed as a storeman in the Metaland hardware store at Mount Gambier. Following a judicial determination of his claim, a Deputy President of the Workers Compensation Tribunal (SA) concluded that the employer’s rejection of his claim on account of alleged disability was correct in relation to a right shoulder injury, but made a favourable determination that he was entitled to weekly payments of income maintenance with respect to events between 28 February 2002 and 19 September 2002, relating to a work related injury to the lower back and that he was further entitled to recover expenses incurred pursuant to s 32 of that Act.[8] His appeal from that determination was dismissed by a Full Bench of the Tribunal, on 5 March 2004.[9]
[8] Danielsen v OneSteel Manufacturing Pty Ltd [2003] SAWCT 116, [124]-[125].
[9] Danielsen v OneSteel Manufacturing Pty Ltd [2004] SAWCT 58.
As to those proceedings it should be noted, for reasons that will become only too apparent, that s54(1) of the Workers Rehabilitation and Compensation Act 1986 (SA) provides so far as is relevant:-
54-Limitation of employer's liability
(1) Subject to subsection (2), no liability attaches to an employer in respect of a liability arising from employment by that employer except-
(a) a liability under this Act; or
In Errington v Target Australia Pty Ltd (1995) 65 SASR 378 the Full Court held that a worker could not pursue an alternative claim against an employer on the basis of occupier’s liability because of s54(1), as it expressed a legislative policy to remove any right of action against the relevant employer arising from workplace injuries, except as provided for within the framework of the Act itself.[10]
[10] Judgment [46], [56] and [67].
The evident purpose of this section is that the scheme of statutory compensation created in 1986 “is more likely to promote the rehabilitation of injured employees than a scheme which involves an unlimited common law right of an action in damages for employment injury”: Georgiadis v Australian and Overseas Telecommunications Corporation[11], Sutherland v Federal Airports Corporations[12].
[11] (1994) 179 CLR 297 at 329 per McHugh J.
[12] (1998) 72 SASR 356.
In addition to the worker’s compensation proceedings, Mr Danielsen applied to the Industrial Relations Court for relief from unfair dismissal against OneSteel Manufacturing Pty Ltd, pursuant to the Industrial and Employee Relations Act 1994 (SA), an action settled by means of a discharge and release executed by him on 9 July 2002. This was addressed to OneSteel Trading Ltd, defined as his “employer” therein and made in the context of the proceedings then before that court in which it appears OneSteel Pty Ltd was respondent.[13]
[13] Exhibit TAK4 to the affidavit of Tracey Anne Kerrigan, 18 May 2005; FDN 6.
By that agreement the plaintiff covenanted to settle “in full satisfaction and discharge of all claims and complaints whatever…against the Employer or the employer’s servants or agents in any way relating to or arising out of my employment with the employer or its termination”. It went on to provide the discharge “may be pleaded by the employer as an absolute defence to any claims” and to record an undertaking that he would discontinue that claim, in addition to other claims commenced under the Employee Relations Act 1994 (SA), the Workplace Relations Act 1999 (Cth), ‘or (without limitation) any other State or Federal Act (“Acts”). Finally he agreed in clause 8.2 that he would not:-
“…commence or prosecute any proceedings of any nature whatever pursuant to the Acts or at common law in respect of any claims.”
This clause read in context of the entire agreement, prevents him from bringing any further proceedings against OneSteel Trading Pty Ltd as the employer defined therein, under any State or Federal legislation, or at common law.
An industrial Magistrate, in an ex tempore judgment of 1 April 2004, dismissed the plaintiff’s application pursuant to s 14 of the Industrial and Employee Relations Act (above) to set aside this agreement. An appeal from that decision was dismissed by a Judge of the Industrial Relations Court on 22 June 2006.[14]
[14] Danielsen v OneSteel Manufacturing Pty Ltd [2004] SAIRC 79.
The claim against One Steel Manufacturing Pty Ltd
The first defendant is sought to be sued in negligence and breaches of statutory duty by improperly invoking ss30B and 58C of the “Workcover Corporation Act 1994 (SA)”, by allowing employees to give misleading or false evidence in the Workers Compensation Tribunal, under sections 19 and 56(1)(c) of the Occupational Health Safety and Welfare Act 1986 (SA) and to quote the pleadings “the Corporations Act s232” (para. 71).
It is tolerably clear in these respects that the gist of his complaints reside in allegations that video evidence exhibited during the Tribunal hearing in his worker’s compensation claim was incorrectly dated and therefore misleading (para 46), and that various witnesses called before the Tribunal gave false evidence against him (para 47-51).
The sections in the Workcover Corporation Act mentioned above, could only have been intended to relate to the equivalent sections in the Workers Rehabilitation and Compensation Act, as no such provisions exist in the former. These deal with the effect of misconduct by a worker on his or her claim for compensation under the latter Act in the case of s30B, and with respect to certain restrictions on giving notice of termination of employment to a worker suffering compensable disability, in the case of s58C. The former is purely evidential and the latter prescriptive, but neither on any rendering could possibly vest a private right of action. Therefore the plaintiff could not succeed in bringing an action against OneSteel Manufacturing Pty Ltd, or anyone else for that matter, on account of either section.
When it comes to a consideration of the Occupational Health Safety and Welfare Act, s19 erects a statutory duty to provide and maintain safe systems of work, whereas s56 creates a criminal offence against employers discriminating against employees on account of health and safety issues. As such the former creates a private statutory cause of action against an employer in proceedings for breach of statutory duty: Slivak v Lurgi (Australia) Pty Ltd,[15] Czatyrko v Edith Cowan University[16], whereas the later provision, being purely penal, does not: Darling Island Stevedoring & Lighterage Co Ltd v Long.[17] In Slivak v Luigi there was no such employment relationship but there was in Czatyrko v Edith however, no equivalent of s54(1) was raised or considered.
[15] (2001) 205 CLR 304.
[16] (2005) 79 ALJR 839; [2005] HCA 14.
[17] (1957) 97 CLR 36.
It follows that only s19 is potentially available to him. However such an action is bound to fail as there was never any relevant employment or other sufficient relationship of proximity, vulnerability or reliance in existence as between him and OneSteel Manufacturing Pty Ltd, that could possibly give rise to such a duty. No facts potentially giving rise to such relationship are pleaded in the re-draft.
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[18].
[18] [1899] 2QB 106.
Even then the witnesses named in the draft pleading, would probably be entitled to claim witness immunity - that might be a matter for a substantive defence rather than and absolute impediment. Apart from s72(2) (above) the position here is as stated by Gleeson CJ, Gummow, Hayne and Heydon JJ in D'Orta-Ekenaike v Victoria Legal Aid[19]:-
[39] From as early as the 16th century, a disappointed litigant could not sue those who had given evidence in the case. That is, the disappointed litigant could not seek to demonstrate that witnesses had given, or parties had suborned, perjured evidence or that witnesses or parties had conspired together to injure that litigant. Nor could the disappointed litigant seek to demonstrate that what was said by the witnesses had defamed that litigant.. All such actions were precluded or answered by an absolute privilege. It mattered not how the action was framed. And it mattered not whether the disappointed litigant alleged that the witness had acted deliberately or maliciously. No action lay, or now lies, against a witness for what is said or done in court. It does not matter whether what is done is alleged to have been done negligently or even done deliberately and maliciously with the intention that it harm the person who would complain of it. The witness is immune from suit and the immunity extends to preparatory steps. That the immunity must be pleaded as a defence makes it nonetheless an immunity from suit.
[19] (2005) 223 CLR 1, 79 ALJR 755; (2005) 214 ALR 92 at [39])
Finally, in relation to OneSteel Manufacturing, proposed causes of action under the “Corporations Act s232” are framed in the 31 May redraft. Section 232 of the Corporations Act 2001 (Cth) enables a “Court” as defined in s58AA (which does not include this court) to may make an order under s233, when a corporation is found to have acted contrary to the interests of or against the members of that Corporation. The nature of those orders relate to the administration, structure and organisation of the Corporation and have no relevance to the facts pleaded by Mr Danielsen. This avenue of redress simply does not arise. Quite apart from this consideration and the lack of jurisdiction, there remains no basis in any of the pleadings laying a foundation enabling him to claim standing to bring suit as a member of the Corporation.
The claim against One Steel Metaland
The second generic claim against OneSteel Metaland, is framed in negligence and breach of statutory duty. It relates to workplace incidents and injuries, unsafe work practices, inadequate training, workplace discrimination and harassment. In his plea Mr Danielson relies on s33 of the Civil Liability Act 1936 (SA) and ss19 and 56(1)(c) of the Occupational Health Safety and Welfare Act 1986 (SA) (para. 72).
The underlying facts on which this part of the proposed claim hinges, are based on incidents in the work place in mid-January 2000 (para 10), November 2001 (para 20), January 2002 (para 24), February 2002 (para 26), April 2002 (paras 32, 38 and 41), for which he sought workers compensation. That claim was rejected on 28 May 2002 by OneSteel Manufacturing Pty Ltd, and subsequently litigated in the Tribunal as outlined above.
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.[20]
[20] (1984) 155 CLR 549.

According to s54(1) of the Workers Rehabilitation and Compensation Act quoted above, not only are proceedings of this nature prohibited against the employer, liability for the events and incidents relied upon against OneSteel Metaland can only attach to the employer OneSteel Trading Pty Ltd in any event. Since Mr Danielsen was not employed in the legal sense by OneSteel Metaland at all, there is no claim available to him for injury at work against it. And although the discharge contains no direct express bar against OneSteel Metaland, it operates as such insofar as it was the agent of OneSteel Trading Pty Ltd “in any way relating to or arising out of my employment with the Employer….” [clause 5].
In addition the plaintiff contends OneSteel Metaland as an indemnity insurer, was in breach of WorkCover rules by reason of misconduct in attempting to defeat his original compensation claim. He relied on Wade v Australian Railway Historical Society (South Australian Division) (t/as Steamranger),[21] however it has no relevance to the current situation. That case involved a claim against defendants, neither of whom were employers, so that the action did not impinge in any respect upon s54(1) of the Workers Rehabilitation and Compensation Act (above).
[21] (2000) 77 SASR 221, special leave refused by the High Court (2001) 22 (12) Leg Rep S25.
Mr Danielsen also took some refuge in Evans v TransAdelaide[22] a case involving injury in the employ by the South Australia Police. Evans wished to pursue an action at common law against TransAdelaide rather than the Police. A Judge of this Court concluded the action was not barred by s54(1). The situation confronted in this case is somewhat different. Here claims unquestionably arsing from workplace injury, are sought to be maintained against the employer. In that case TransAdelaide was not the employer at all.
[22] (2004) 238 LSJS 44; [2004] SADC 194.
The claim against OneSteel Trading Pty Ltd
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).
At this point, it becomes important to clarify one factual matter. Even though on all accounts the relevant employer of the plaintiff was OneSteel Trading Pty Ltd, it was not immediately apparent why OneSteel Manufacturing Pty Ltd became respondent to the abovementioned Workers Compensation Tribunal hearings. As it transpires Mr Danielsen submitted two claims for workers compensation for work related injuries in January and February 2002 respectively. These were administered by OneSteel Manufacturing Pty Ltd an “exempt employer”. It appears from material filed in this court, once this anomaly became apparent, that “at all times it was agreed between the parties and not asserted otherwise that OneSteel Metaland was … the employer”. This position is accepted by Mr Danielsen. Indeed his then solicitors signed notices of dispute against OneSteel Metaland, so that in the result there can be no doubt, despite the record, that OneSteel Trading Pty Ltd trading as OneSteel Metaland, was the relevant employer at all material times.
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.
That leaves the s601 of Corporations Act, to consider. This appears to attract the provisions under Chapters 5A–5C relating to administrative deregistration, the management of investment schemes and the like, as to which - as in the case of other pleadings earlier mentioned seeking to attract the operation of that Act - no factual foundation is laid in the draft pleading, and as to which the Court is simply vested with no jurisdiction. Such a claim is also precluded by the discharge agreement as a proceeding “pursuant to a Federal Act”.
Other issues
During the course of his oral submissions Mr Danielsen sought to attribute error to the reasons of the Master, firstly on the basis that he decided the matter on the first statement of claim, rather than on the later amended Statement of Claim.[23] This is not supported by the reasons for decision of the Master. It is quite clear that the he had regard to both documents.[24] The generic nature of the order “I strike out the claim” confirms that view. The references in the judgment to paragraphs 17 and 18, although being to the first version of the Statement of Claim, are responsive to the reasoning process the Master was then undertaking with reference to an affidavit filed on behalf of the defence, which referred to the first version.
[23] Filed without leave under DCR 53.01.
[24] Reasons [4] and Order 1.
This Court has considered both documents carefully, as well as the redrafted version produced to the Court. Essentially they plead the same background facts and the same causes of action. Having reviewed them, the Court is of the view that the later version does not add in substance to the matters considered by the Master. The fact remains that they fail, as they did when the Master considered the matter, to explain how the facts alleged in the preliminary portions of the proposed Statement of Claim, give rise to the causes of action pleaded in the latter parts.
The Master also concluded that the plaintiff was in fact endeavouring to re-litigate matters already determined in other courts and tribunals and accordingly were an abuse of process.[25] This conclusion seems to be firmly based, judged from the fate of the other proceedings in other forums, summarised above.
[25] Reasons [70].
Should the proceedings be struck out?
The conclusions reached above, spring from the court’s review of the merits based on the expanded draft statement of claim produced by the plaintiff, without regard to the decision of the Master in any respect.
It is beyond argument that in proceedings of this kind a court is always hesitant to strike out any claim, and can only do so if the pleaded cause is bound to fail, assuming the truth of the allegations as pleaded: Thornton v Kirkless Borough Council.[26]A claim should therefore “only be struck out in a plain and obvious case”.[27] Put another way, it must be shown the case for the plaintiff is so clearly untenable or unarguable, that he cannot possibly succeed: General Steel Industries Inc v Commissioner for Railways (NSW);[28] Egan v Commonwealth Minister for Transport.[29] Even after applying these principles, the court is driven to the conclusion that the proposed proceedings against all three defendants must be struck out as each is bound to fail for the reasons given.
[26] [1979] QB 626.
[27] Lonrho v Tebbit [1991] 4 ALER 973, 979.
[28] (1964) 112 CLR 125.
[29] (1976) 14 SASR 445.
The above conclusions broadly accord with those drawn by the Master. In his reasons the Master, with some care, analysed the respective positions of the parties and the applicable principles. It is sufficient for the purposes of this judgment to indicate there is no identifiable error in his reasoning; nor has the plaintiff been able to point to any possible source of error in any relevant respect. If principle dictates, as argued by the respondents that appealable error must be demonstrated, it necessarily follows that the appeal had to be dismissed in any event.
Final Orders
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.
There will be a further order that the plaintiff pay to the respondents 60% of their costs to be agreed or taxed.