Ebb v Fast Fix Steel Fixing Pty Ltd

[2007] NSWCA 236

Appeal Outcome: Special leave application refused with costs by the High Court - 7 March 2008

New South Wales

Court of Appeal

CITATION:	EBB v FAST FIX STEEL FIXING PTY LTD [2007] NSWCA 236 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	10 August 2007
JUDGMENT DATE:	6 September 2007
JUDGMENT OF:	Santow JA at 1; Basten JA at 2; Hislop J at 60
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	APPEAL – leave required to reopen earlier decision of Court – factors relevant to grant of leave - WORKERS COMPENSATION – deemed worker – independent contractor – recovery of common law damages by deemed worker – application of restrictions on recovery of damages – Workers Compensation Act 1987 (NSW) Part 5 – Workplace Injury Management and Workers Compensation Act 1998 (NSW) Schedule 1 and Chapter 7 - Words and Phrases – “deemed worker” – “for the purposes of the Act”
LEGISLATION CITED:	Workers’ Compensation Act 1926 (NSW), ss 6, 63, 65, Part VIII Workers Compensation Act 1987 (NSW), ss 2A, 3, 4, 15, 16, 17, 149, 150, 151, 151A, 151B, 151C, 151D, 151E, 151F, Part 5; Schedule 1, cl 1, Schedule 6, Pt 14, cl 1 Workers’ Compensation and Injury Management Act 1981 (WA), s 175, Part X Workplace Injury Management and Workers Compensation Act 1998 (NSW), ss 4, 15, 16, 17, 250, 254, Schedule 1, cls 1A, 2, 3, 3(5), 4(3), 5(2), 8(2), 13(2), Chapter 7, Division 6
CASES CITED:	Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 Hewitt v Benale Pty Ltd; WMC Resources Ltd v Koljibabic (2002) 27 WAR 91 Hobbs v Costain Australia Ltd (1995) 11 NSWCCR 56 Klein v Minister for Education [2007] HCA 2; (2007) 81 ALJR 582 Kotevski v Esselte Australia Pty Ltd [2005] NSWCA 126 Minister for Education v Klein [2005] WASCA 185 National Transport Insurance Ltd v Chalker [2005] NSWCA 62 OP Industries Pty Ltd v MMI Workers Compensation (NSW) Ltd (1998) 17 NSWCCR 193 Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 Richardson v Mayer (No. 2) (1964) 64 SRNSW 502 Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125 The Sydney Turf Club v Crowley (1972) 126 CLR 420 University of New England v Larsen-Walsh [2000] NSWCA 363 Western Sydney Regional Organisation of Councils Group Apprentices v Statrona Pty Ltd; Commercial Union Workers’ Compensation NSW Ltd v Hannaford (unrep, NSWCA, Mahoney AP, Meagher and Sheller JJA, 29 August 1995)
PARTIES:	Martin Ebb – Appellant Fast Fix Steel Fixing Pty Ltd - Respondent
FILE NUMBER(S):	CA 40487/06
COUNSEL:	D.E. Baran – Appellant M.A. Elkaim SC/J.W. Catsanos - Respondent
SOLICITORS:	Stacks Goudkamp – Appellant Moray & Agnew - Respondent
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 1161/06
LOWER COURT JUDICIAL OFFICER:	Truss DCJ
LOWER COURT DATE OF DECISION:	20.07.06; 27.07.06

CA 40487/06
DC 1161/06

SANTOW JA
BASTEN JA
HISLOP J

6 September 2007

EBB v FAST FIX STEEL FIXING PTY LTD

A preliminary issue was whether leave should be granted to re-open the decision of the Court in OP Industries Pty Ltd v MMI Workers Compensation (NSW) Ltd (1998) 17 NSWCCR 193.

The substantive issue in the appeal was whether a person deemed to be a “worker” for the purposes of the workers compensation legislation, but who was an independent contractor under general law principles, was subject to the constraints on recovery of common law damages within that legislation.

The Court of Appeal held, dismissing the appeal:

(Per Basten JA, Santow JA and Hislop J agreeing)

1. Leave to re-open OP Industries Pty Ltd v MMI Workers Compensation (NSW) Ltd was granted on the basis that (at [5]):

(a) it was arguably inconsistent with the judgment of the High Court in The Sydney Turf Club v Crowley ;

The Sydney Turf Club v Crowley (1972) 126 CLR 420, considered.

(b) it has been doubted in later judgments of the Court;

Kotevski v Esselte Australia Pty Ltd [2005] NSWCA 126; National Transport Insurance Ltd v Chalker [2005] NSWCA 62, considered.

(c) it was arguably inconsistent with earlier decisions of the Court; and

Hobbs v Costain Australia Ltd (1995) 11 NSWCCR 56; Western Sydney Regional Organisation of Councils Group Apprentices v Statrona Pty Ltd; Commercial Union Workers’ Compensation NSW Ltd v Hannaford (unrep, NSWCA, Mahoney AP, Meagher and Sheller JJA, 29 August 1995); University of New England v Larsen-Walsh [2000] NSWCA 363, considered.

(d) there are few cases in which it has been expressly applied.

Kotevski v Esselte Australia Pty Ltd [2005] NSWCA 126; National Transport Insurance Ltd v Chalker [2005] NSWCA 62; Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125; Klein v Minister for Education [2007] HCA 2; (2007) 81 ALJR 582, considered.

2. The legislative history of the workers compensation provisions relating to common law remedies does not reveal an intention to preserve unqualified rights for deemed workers to make claims for general damages: [31]-[35].

3. The deeming provisions appear in general terms in both the Workers’ Compensation Act 1926 and the Workers Compensation Act 1987: [52]. When Part 5 of the Workers Compensation Act 1987 abolished common law remedies in respect of an injury compensable under the Act, that would have included injuries for which compensation was payable as a result of the deemed employment provisions: [53]. The new provisions introduced to Part 5 in 1989 continue to link claims for damages to injuries for which the employer was liable to pay compensation under the Act: [54].

4. It would be an implausible construction to hold that the concept of “worker” differs between provisions with respect to compensation and damages claims: [55].

5. Whether the meaning of “worker” in a particular provision is restricted to an employee under the general law, or operates according to the extended meaning provided by the Act is a question of construction which, once resolved, provides the limits of the operation of s 151 of the Workers Compensation Act 1987: [56].

6. Where a deeming provision is found in a particular provision having a specific purpose, rather than a general provision of the kind now under consideration, different factors may arise: [57].

Hobbs v Costain Australia Ltd (1995) 11 NSWCCR 56; University of New England v Larsen-Walsh [2000] NSWCA 363; Kotevski v Esselte Australia Pty Ltd [2005] NSWCA 126, distinguished.

7. To the extent that the reasons of the majority in OP Industries suggest that the deemed employment provisions will affect general law principles as to the relationships between those causing and suffering injury in the course of work, that approach is not consistent with the statutory deeming applying only “for the purposes of the Act”: [58].

OP Industries Pty Ltd v MMI Workers Compensation (NSW) Ltd (1998) 17 NSWLR 193, considered.

8. There is no case which holds that the constraints on common law damages imposed by Part 5 of the Workers Compensation Act 1987 and Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998 do not apply where the injury is suffered in the course of a deemed employment relationship. On their proper construction, those provisions do apply to such circumstances: [59].

CA 40487/06
DC 1161/06

SANTOW JA
BASTEN JA
HISLOP J

6 September 2007

EBB v FAST FIX STEEL FIXING PTY LTD

Judgment

1 SANTOW JA: I agree with Basten JA.

2 BASTEN JA: The short issue raised by this appeal was whether a person deemed to be a “worker” for the purposes of the workers compensation legislation, but who was under general law principles an independent contractor, was subject to the constraints on recovery of common law damages imposed by that legislation. In the District Court, Truss DCJ held that damages were so constrained, applying the decision of this Court in OP Industries Pty Ltd v MMI Workers Compensation (NSW) Ltd (1998) 17 NSWCCR 193 (Beazley JA and Fitzgerald AJA; Meagher JA dissenting).

3 The Appellant contends that OP Industries did not govern the outcome in the present case, or that, if it did, it should not be followed. In my view the first contention is correct, but the decision below was nevertheless correct.

Leave to reopen earlier decision

4 It is an established practice of the Court that leave is required “before a clearly applicable binding rule of an earlier decision of its own may be reargued”: see Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 at 171, applying Richardson v Mayer (No. 2) (1964) 64 SRNSW 502 (Herron CJ, Richardson and Macfarlan JJ). The need for leave is a reflection of the principle that the Court should follow its earlier decisions unless satisfied that they are clearly wrong and to emphasise the need for counsel seeking to challenge an earlier decision to demonstrate why, in principle, the Court should now depart from it: see generally, Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 at 99-101 (Gleeson CJ, Samuels and Priestley JJA and Hope AJA agreeing).

5 There are four reasons which would justify a grant of leave in the present case. The first is that, in granting leave to appeal, on 12 December 2006, Handley JA drew attention to the fact that the reasoning in OP Industries might be inconsistent with the judgment of the High Court in The Sydney Turf Club v Crowley (1972) 126 CLR 420. Secondly, doubts have been raised as to the correctness of the decision in later judgments in this Court, and in particular by Tobias JA (Young CJ in Eq and Brownie AJA agreeing) in Kotevski v Esselte Australia Pty Ltd [2005] NSWCA 126 at [30]. Thirdly, and as noted in Kotevski, it may be argued that the decision in OP Industries was not consistent with an earlier decision of this Court, Hobbs v Costain Australia Ltd (1995) 11 NSWCCR 56, followed in University of New England v Larsen-Walsh [2000] NSWCA 363. Fourthly, there appear to have been few cases in which OP Industries has been expressly applied. This may be thought surprising, giving the potential importance of the issue, but reference will be made below to those cases in which it has been considered.

6 These considerations are sufficient to grant leave to reargue the correctness of the reasoning in OP Industries.

Statutory scheme

7 Before turning to the various authorities referred to above, it is necessary to set out relevant aspects of the statutory scheme of the present workers compensation legislation, together with brief reference to its historical development.

8 Workers compensation legislation has long extended the benefits of statutory rights to compensation to persons who would not, under the general law, be considered employees of the particular employer. To identify the scope of the beneficial regime, it is sufficient to refer to the terms of the Workers’ Compensation Act 1926 (NSW) (“the 1926 Act”) which, since its enactment, provided for those engaged in numerous occupations, including contractors, timber getters, salesmen, share farmers and jockeys to be treated as workers for the purpose of entitlement to statutory compensation: see s 6(3)-(14). The provisions varied somewhat but can be illustrated by the predecessor to the provision in the current legislation which potentially deemed the Appellant to be a worker under the Workers Compensation Act 1987 (NSW) (“the 1987 Act”). Thus in the 1926 Act as enacted, s 6(4) provided:

“(4) Where a contract to perform any work exceeding five pounds in value (not being work incidental to a trade or business regularly carried on by the contractor in his own name or under a firm name) is made with such contractor who –

(a) neither sublets the contract nor employs workers; or
(b) though employing workers actually performs any part of the work himself,
such contractor and all such workers so employed shall, for the purposes of this Act, be deemed to be workers employed by the person who made such contract with such contractor.”

9 The 1926 Act referred in Part VIII (ss 63-65) to “remedies at common law”. Section 63, as originally enacted provided:

“63 (1) Nothing in this Act shall affect any civil liability of the employer where the injury was caused by the personal negligence or wilful act of the employer or of some person for whose act or default the employer is responsible.
(2) In such case the worker may, at his option, proceed under this Act or independently of this Act, but he shall not be entitled to compensation under this Act, if he has obtained judgment against his employer independently of this Act.”

10 Issues of common employment were dealt with in the following terms in s 65:

“65 (1) Where any injury or damage is suffered by a worker by reason of the negligence of a fellow worker, the employer of those workers shall be liable in damages in respect to that injury or damage in the same manner and in the same cases as if those workers had not been engaged in a common employment.
…
(3) ‘Employer’ in this section … does not refer to any person who by any provision of section six is deemed to be an employer.”

11 There are two comments to be made in relation to these provisions. First, s 63 was reborn in 1989, in a somewhat different form and context, in s 151 of the 1987 Act. Secondly, s 65(3) suggests that, to the extent that the 1926 Act made reference to common law remedies and liabilities, the extended definitions of worker and employer were thought to apply and hence needed to be modified, where appropriate. Both in the definition of “employer” and in various aspects of the extended concept of deemed workers, provision was made identifying the employer of the deemed worker. There can be little doubt that the reference to the “worker” in provisions such as s 63(2) were to be understood as referring to any worker who was entitled to compensation under the 1926 Act, which included the various categories commonly referred to as “deemed employment”.

12 With the enactment of the 1987 Act, the various categories of workers identified in s 6 of the 1926 Act were transferred to Schedule 1 under the heading “Deemed employment of workers”. (The 1926 Act was repealed.) Generally, however, the scheme of Part VIII dealing with remedies at common law was repeated in Part 5 of the 1987 Act, under the heading “Common law remedies”. Part 5 (ss 149-151) continued the abolition of the doctrine of common employment (s 151), including the exclusion from the meaning of the term “employer” of “any person who by any provision of this Act is deemed to be an employer”: s 151(4). However, its main thrust was found in s 149 which replaced s 63 and, in its primary provision, read as follows:

“ Abolition of common law remedies against employer, fellow workers etc
149. (1) A worker is not entitled to recover damages, otherwise than under this Act -
(a) from the worker’s employer;
(b) from any person who is vicariously liable for the acts or omissions of that employer; or
(c) from any person for whose acts or omissions that employer is vicariously liable,
in respect of any injury to the worker for which compensation is payable under this Act by that employer.”

The provisions of s 150 dealt with the circumstances in which the worker had a remedy against both the employer and another person.

13 On its face, there was no reason to suppose that the term “worker” was intended in some more restricted sense in Part 5 than in other Parts of the 1987 Act. That was because the criterion of its operation was to be found in the reference to damages in respect of “any injury … for which compensation is payable under this Act”. The express exclusion of deemed employers in s 151(4), albeit limited to the operation of that section, tended to confirm that no restrictive construction of the Part was intended.

14 In 1989, Part 5 was repealed and replaced by a new set of provisions imposing constraints on claims for damages under the general law, which constraints have been amended from time to time in quite significant respects. However, it was not suggested that any different construction should be given to the terms of Part 5 as it applied in March 2006, when the present proceedings for damages were commenced in the District Court, than at any other relevant time since 1989. Accordingly, it is generally sufficient to advert to the relevant provisions in their present form, whilst noting specific changes which may be considered significant.

15 The current provision relevant to the Appellant is to be found in clause 2 of Schedule 1 which, pursuant to extensive amendments made in 1998, now appears in Schedule 1 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (“the 1998 Act”) and reads as follows:

“ 2 Other contractors
(1) Where a contract:
(a) to perform any work exceeding $10 in value (not being work incidental to a trade or business regularly carried on by the contractor in the contractor’s own name, or under a business or firm name), or
(b) (Repealed)
is made with the contractor, who neither sublets the contract nor employs any worker, the contractor is, for the purposes of this Act, taken to be a worker employed by the person who made the contract with the contractor.

(2) (Repealed)

(3) A person excluded from the definition of worker in section 4(1) because of paragraph (d) of that definition is not to be regarded as a worker under this clause.”

16 The repeals noted in this provision are of no consequence: they involve the extraction of the class known as “outworkers” from this clause and their placement into a new clause 1A. What is however of critical importance is the use in clause 2(1) of the phrase “for the purposes of this Act” as it is that upon which much of the argument in the present case turned.

17 It is also convenient to note sub-clause 3(2) which picks up an exclusion in the definition of “worker” in s 4(1) of the 1998 Act, although only to confirm the exclusion. Paragraph (d) of the definition of “worker” deals with registered participants of a sporting organisation. The precise nature of the interaction with Schedule 1, clause 2 need not be considered, but the exception contained in paragraph (d) is itself subject to an exception “as provided by Schedule 1”. It is the inter-relationship of these provisions which tends to cast doubt upon the proposition that the statute envisages some concept of a “worker” as only a person employed under a contract of service, a concept consonant with the general law concept of employment and identified separately from the extended definition provided, originally in the same section in the 1926 Act, but now in a Schedule.

18 Whilst considering the operation of the definitions in the 1998 Act, it is important to note the connection between those definitions and the 1987 Act, and in particular Part 5, dealing with common law remedies. The connection is found in ss 2A and 3 of the 1987 Act. First, the 1987 Act “is to be construed with, and as if it formed part of, the 1998 Act”: s 2A(2). In the case of any inconsistency, the 1998 Act is to prevail: s 2A(3). Further, s 3 provides:

“ 3 Definitions
(1AA) In this Act, words and expressions have the same meanings as they have in the 1998 Act, unless this Act provides otherwise.”

(It is not necessary for present purposes to consider the inter-relationship of sub-s 2A(3), providing that the 1998 Act prevails to the extent of inconsistency, and the last clause in sub-s 3(1AA).)

19 The next step in the analysis is to identify the manner in which the current workers compensation legislation affects claims for damages under the general law. First, there are the substantive limitations on claims for damages found in Part 5 of the 1987 Act, which still have the title “common law remedies”. The term “damages” is defined to include any form of monetary compensation other than certain identified categories, being primarily compensation under the 1987 Act itself. Thus there is a clear distinction maintained between statutory compensation and general law damages. The concept of “damages” is clearly not restricted to damages recoverable in an action between an employee and employer and, consistently with the form of the legislation over many years, includes a reference to damages which may be recovered from a third party as well as an employer, such as the driver of another motor vehicle.

20 Within Part 5, Division 1A deals with choice of law and nothing was said to turn on those provisions, which were introduced in 2002. Division 2 is headed “Common law and other remedies generally” and commences with a provision reflecting s 63 in the 1926 Act, in the following terms:

“ 151 Common law and other liability preserved
This Act does not affect any liability in respect of an injury to a worker that exists independently of this Act, except to the extent that this Act otherwise expressly provides.”

It will be necessary to return to the effect of this provision, on which some reliance was placed by the Appellant.

21 Division 2 used to contain (in the 1987 Act as enacted) requirements for election between proceedings for damages and proceedings for compensation for non-economic loss. Sections 151A and 151B have however been repealed and the former has been replaced.

22 Division 3 is headed “Modified common law damages” and its application is defined in ss 151E and 151F which read, relevantly for present purposes:

“ 151E Application – modified common law damages
(1) This Division applies to an award of damages in respect of:
(a) an injury to a worker, or
(b) the death of a worker resulting from or caused by an injury,
being an injury caused by the negligence or other tort of the worker’s employer.
…
(3) This Division applies to an award of damages in respect of an injury caused by the negligence or other tort of the worker’s employer even though the damages are recovered in an action for breach of contract or in any other action.
151F General regulation of court awards
A court may not award damages to a person contrary to this Division.”

23 There are various constraints imposed by Division 3 (ss 151E-151T) which need not be identified for present purposes. If the Appellant is successful in his argument, namely that he is not a “worker” for the purposes of Part 5 of the 1987 Act, those constraints will be avoided. There are in addition procedural constraints under Chapter 7 of the 1998 Act, which, if they are applicable, will prevent him pursuing a damages claim against the respondent. The relevant procedural steps which have not been taken are those set out in Part 6 of Chapter 7 and deal with proceedings for “work injury damages”. The term “damages” has the same meaning as in Part 5 of the 1987 Act: see s 250(1) of the 1998 Act. That section provides:

“ work injury damages means damages recoverable from a worker’s employer in respect of:
(a) an injury to the worker caused by the negligence or other tort of the employer, or
(b) the death of the worker resulting from or caused by an injury caused by the negligence or other tort of the employer
whether the damages are recoverable in an action for tort or breach of contract or in any other action, but does not include motor accident damages.”

Again, it may be seen that the application of these provisions to the Appellant depends upon whether he falls within the meaning of the term “worker” as defined in the 1998 Act.

24 The focus of the debate has tended to be upon the definition of the term “worker”, no doubt because the relevant deeming provisions were originally found immediately following the definition of “worker” in s 6 of the 1926 Act. It has been accepted that inherent in these deeming provisions must be correlative concepts with respect to “employer” and “employment”, these concepts being inherently interrelated. However, the provisions of the legislation have at all times involved a central concept of “injury”. Relevantly for present purposes, that word was defined in the 1926 Act, and is still defined, in s 4 of the 1987 Act, to mean “personal injury arising out of or in the course of employment”: see also s 4 of the 1998 Act. It follows that whenever the legislation refers to an entitlement to compensation in respect of an injury or to damages in respect of an injury, it will be necessary to consider the meaning to be given to “employment” in the particular context. That focus is reflected in the heading of Schedule 1 which has, since it was introduced in the 1987 Act, referred to “deemed employment of workers”. It is also reflected in the fact that Schedule 1, clause 1 was actually taken, not from the extended definition of a “worker” in s 6 of the 1926 Act, but from the definition of “employer” in that Act.

The question of statutory construction

25 Before turning to the arguments which were found persuasive in the authorities, it is permissible, once it is accepted that existing authority may be revisited, to address the question of statutory construction as a matter of principle.

26 The Appellant presented a number of arguments in favour of the proposition that the deeming provisions in Schedule 1 of the 1998 Act operate only for the purposes of determining awards of statutory compensation. The first argument relied upon the history of the legislation. Because, as noted above, these provisions were introduced into the legislation at a time when there was no statutory interference with a worker’s right to claim common law damages, their effects were entirely beneficial to the worker. In those circumstances, the use of the phrase “for the purposes of this Act” which occurred in s 6(3A) of the 1926 Act, at a time when s 63 expressed an intention not to affect any civil liability or right existing independently of the Act, was clearly limited to a beneficial extension of the scheme for compensation.

27 That, it was contended, remained the purpose and intent of the deeming provisions, even after restrictions were imposed on claims for common law damages. That conclusion should be inferred from the fact that no relevant changes were made to Schedule 1 of the 1987 Act when the amendments to Part 5 were introduced.

28 That argument was supported by reference to numerous provisions in the deeming provisions in Schedule 1 which referred to “compensation payable under this Act” and the total absence of provisions referring to general law damages: see in Schedule 1 to the 1998 Act, clauses 3(5), 4(3), 5(2), 8(2) and 13(2).

29 This construction was supported by the inclusion, in s 151, of a limitation on affectation of liability that exists independently of the 1987 Act, except to the extent that the Act “otherwise expressly provides”. There was, so it was contended, no express provision that any limit was to be placed on claims by independent contractors in relation to work-related injuries, merely because those contractors were deemed to be workers for the purposes of obtaining compensation. Even if an inference to that effect could be drawn, which was rejected, an inference would not survive the requirement of express provision in s 151. If that were correct, it would presumably flow as a matter of practical application of a coherent scheme, that the extended meaning of “worker” should not be adopted for the purposes of Chapter 7, Division 6, of the 1998 Act.

30 The alternative analysis must commence by conceding the historical operation of the extensions to the definition of “worker” in the 1926 Act and the 1987 Act. Nevertheless, Part VIII of the 1926 Act dealt with common law remedies and there was no reason to exclude from the operation of those provisions the extended meaning given to workers and employers by s 6. As already noted, the express terms of s 65(3) tended to contradict any such implied restriction.

31 If the contrary view is to gain any traction, it must operate from the commencement of the 1987 Act, when common law remedies against an employer were abolished. However, s 149(1), as originally enacted, abolished such rights to damages “in respect of an injury to the worker for which compensation is payable under this Act by that employer”. It is difficult to discern any basis for an inference that the abolition applied to some persons entitled to compensation under the Act but not to others. At that time, there was no equivalent of s 63 of the 1926 Act, disallowing an intention to interfere with general law rights. That omission was understandable. Nevertheless, s 151 maintained, in sub-s (4), an express exception in relation to persons deemed to be employers. There is no obvious basis to assert that, when enacted, the 1987 Act intended to preserve unqualified rights to make claims for damages under the general law to a particular category of workers who are entitled to compensation, namely those who were deemed to be workers by virtue of Schedule 1.

32 Once the last step is taken, it is difficult to understand on what basis the use of the term “worker” might obtain a more restrictive operation upon the restoration in part of common law damages, as expressly “modified” by the 1987 Act, from 1989. If deemed workers had been deprived of those rights in 1987, the new scheme must surely have applied to them from 1989.

33 The only other change of significance was the separation of the legislation into two parts by the enactment of the 1998 Act. However, it is clear from the express inter-relationship accorded to the two Acts, that no different operation can be accorded to the definitional provisions because they now appear in the 1998 Act.

34 The fact that Schedule 1 provisions relating to deemed employment are replete with references to the effects in relation to compensation is explained by the history. It is not inconsistent with the intention that changes in relation to common law rights were intended to operate with respect to all those entitled to compensation payable under the Act.

35 Finally, it is significant that the definition of deemed employment is now, and always has been, found in a definition section which operates with respect to the whole of the Act and not in relation to any particular Part or Parts. Accordingly, when new provisions were introduced using defined terminology, it must be assumed that the drafter understood and intended that those general definitions would apply, unless expressly varied, in circumstances where there was no clear contrary intention which would impliedly exclude their operation.

36 On that analysis of the legislation, the appeal must fail. However, it is necessary to see if any authority binding on this Court, or authority of this Court which cannot be said to be clearly wrong, would lead to a different conclusion.

Relevant caselaw

37 The argument on the appeal not only sought to reopen the decision in OP Industries, but also asserted that the conclusion reached in that case was not open because of the reasoning of the High Court in Crowley. Alternatively, the conclusion should not have been reached because of earlier authority in this Court. To address these contentions, it is convenient to deal with the authorities chronologically.

38 The Sydney Turf Club v Crowley (1972) 126 CLR 420 involved, indirectly, an injury to a stablehand employed by a horse trainer while “riding work” at Canterbury Racecourse. The racecourse was managed by the appellant Club. Although it was not the employer of the stablehand, the Club was liable to pay compensation pursuant to s 6(10) of the 1926 Act. It was also found liable in damages under the general law. The Club had two insurers, being the Government Insurance Office of New South Wales (“the GIO”) and the Australian Jockey Club (“the AJC”). The GIO had issued the Club a public liability insurance policy, which did not extend to claims in respect of injury to any person “arising out of or in the course of the employment of such person in the service of the insured”. The AJC policy covered both compensation and damages in respect of persons who were or were deemed by the 1926 Act to be workers of the Club. The GIO paid the claim and then sought, claiming a right by way of subrogation, to recover from the AJC. As noted by Barwick CJ, with whom Walsh J and Stephen J agreed, the case turned upon the construction of the policy issued by the GIO and in particular whether the exception covered deemed employment under the 1926 Act. His Honour continued (p 424-5):

“The extension of the definition of a worker to include a stablehand riding work on a racecourse operated by a racing club is made by the Workers’ Compensation Act ‘for the purposes of the Act’. Such a person is deemed for the purposes of the Act to be a worker employed by the racing club. But the stablehand is not required to be treated as a worker in the employ of the racing club for any other purpose. Thus s 6(10) of the Workers’ Compensation Act will not itself make the stablehand riding work for a horse trainer, a worker in the employ of the racing club within the meaning of the policy.”

39 The stablehand in Crowley did not sue the Club as its deemed employee, but as an invitee at the racecourse: p 423. There was no suggestion that his cause of action in damages was in any way affected by the 1926 Act. The case is authority for the proposition that the deeming provision in the 1926 Act did not affect the operation of the policy which was not a statutory policy under the 1926 Act, so that a reference in the exception to “the course of employment” did not necessarily include deemed employment. As the Chief Justice noted, the purposes of the Act did not include the meaning of the policy. The case has nothing to say on the issue of whether, in the current context, “the purposes of the Act” are limited to the scheme for payment of compensation and do not extend to restrictions on common law damages.

40 The phrase “for the purposes of this Act” appears in a number of provisions outside Schedule 1 where it does not necessarily encompass all other provisions of the Act. Hobbs v Costain Australia Ltd (1995) 11 NSWCCR 56 (Cole JA, Kirby P and Handley JA agreeing) was a case dealing with industrial deafness, where the plaintiff was held to have suffered an injury for which he had a complete cause of action prior to the commencement of the 1987 Act. As enacted, s 149 abolished the worker’s right to sue his or her employer in respect of an injury to the worker for which compensation was payable, being “an injury received by a worker before the commencement of” that section: see the 1987 Act, Schedule 6, Part 14, clause 1. However, s 17(1) provided that in the case of gradual hearing loss, the injury was deemed to have happened at the time when notice was given, or if the worker was not still employed at that time, on the last day of such employment. Although that deeming provision was expressed to operate “for the purposes of this Act” the provision was found in Part 2 dealing with liability to pay compensation. To have applied it in relation to common law claims would not have achieved consistency of operation, but rather would have achieved an anomalous result, whereby one category of injured workers (those suffering industrial deafness) would retrospectively lose their common law damages claims on the commencement of the 1987 Act, whereas others who had received injuries prior to the commencement of the Act would not. Similarly, after the 1989 amendments, that category would have been restricted to modified common law damages for pre-1987 injuries, whereas others would not. For that reason, the Court accepted that the operation of s 17 was restricted to rights to compensation. Accepting that reasoning in relation to the operation of s 17, it nevertheless provides limited assistance in construing the phrase “for the purposes of this Act” where it appears in a general part of the Act and in circumstances where applying it generally would not create internally anomalous results.

41 Shortly thereafter, on 29 August 1995, this Court handed down judgment in two related cases, Western Sydney Regional Organisation of Councils Group Apprentices v Statrona Pty Ltd and Commercial Union Workers’ Compensation NSW Ltd v Hannaford (unrep, Mahoney AP, Meagher and Sheller JJA). Although Meagher JA was later to renege on his agreement with Sheller JA, in OP Industries, the majority judgment in Statrona was that of Sheller JA, Meagher JA agreeing. The worker involved in the proceedings, Mr Hannaford, was employed by the appellant, WSROC, as an indentured apprentice. He was placed by WSROC with Statrona, where he was working at the time of the accident. The trial judge found that Statrona had breached its duty to provide a safe working environment, but that WSROC was not negligent. By the time of the appeal, the contending parties were WSROC, Statrona and Statrona’s workers compensation insurer, Commercial Union, and an insurer from which it had a policy of general insurance, Mercantile Mutual. The injury occurred three months before the commencement of the 1987 Act and accordingly was subject to the provisions of the 1926 Act. Pursuant to s 6(1) of the 1926 Act, WSROC was deemed to continue to be the employer of a worker temporarily lent to another person whilst under contract of apprenticeship, and accepted liability to pay compensation to Mr Hannaford. The two questions which then arose were whether Statrona and Mr Hannaford had a contractual arrangement which would amount to employment under the general law and whether WSROC had agreed to take out insurance which would cover Mr Hannaford during his time with Statrona, not only in relation to compensation, but also in relation to damages. Mahoney AP took a different view from the majority as to whether there was a contract which extended to common law damages claims brought by apprentices, between WSROC and Statrona. However, neither this, nor the other questions in relation to the coverage of the various insurance policies depended upon any specific construction of the 1926 Act.

42 The next case was OP Industries Pty Ltd v MMI Workers Compensation (NSW) Ltd (1998) 17 NSWCCR 193, which was concerned with an accident suffered on 20 March 1990, after the commencement of the 1987 Act and the 1989 amendments with respect to common law damages.

43 The facts of OP Industries were not dissimilar to those of Statrona. Although he had been in the employ of OP Industries Ltd for a period, the injured worker, Mr Ward, undertook an apprenticeship with Central West Group Apprentices Ltd, an organisation similar to WSROC which arranged for him to complete a plumbing course and then placed him with OP Industries to continue his apprenticeship. Following an injury, whilst working with OP Industries, he sued both Central West and OP Industries for damages. The trial judge held that, applying the deeming provision in Schedule 1, clause 1 of the 1987 Act, Central West was the employer and OP Industries was not. The Court, for reasons given by Fitzgerald AJA (Beazley JA agreeing), dismissed the appeal. The reasoning of the majority appears to have turned on two propositions, the first of which was that Central West had “temporarily lent or let on hire” Mr Ward’s services to OP Industries, which would not terminate his employment with Central West: 17 NSWCCR 193 at [23]. The second limb was a rejection of the argument that the deemed employment in Schedule 1, clause 1, being “for the purposes of this Act”, related only to statutory compensation. Meagher JA, in dissent, accepted the appellant’s argument that the deeming provision was not determinative, and that it was “intended to assist an injured worker to know which of several potential ‘employers’ is liable to pay him compensation under the Act”: at [9]. That conclusion led his Honour to consider which company was the worker’s employer, in accordance with general law principles.

44 Perhaps because of the way the case was argued, the reasoning in both judgments is based on a dichotomy which is arguably false and in any event demonstrates the irrelevance of the case for present purposes. Thus, OP Industries sought to argue that it was the worker’s employer, contrary to the deeming provision, so as to obtain the benefit of the statutory constraints on common law damages. In the present case, the worker seeks to argue that the deemed employer is not the employer for the purposes of the statutory controls over damages. It is arguable that the majority approach was wrong in OP Industries, not because it held that deemed employment fell within the statutory constraints on damages but because it held that identification of the employer for the purposes of the general law was constrained by the deeming provision. It would have been sufficient to support the conclusion reached by Meagher JA to conclude that the deeming provision did not apply to the determination of which company was the employer for the purposes of general law damages, that not being a purpose of the Act. His Honour did not need to go further and state that the deeming provision only applied to the compensation scheme under the Act. Thus, the reasoning in OP Industries appears to be based on an assumption that if the deeming provisions apply to the constraints on common law damages, they must also apply to the cause of action for the purposes of common law damages claims. In my view, that assumption is false. The statutory limitations imposed on claims for damages do not depend on employment according to general law principles.

45 The next case referred to was University of New England v Larsen-Walsh [2000] NSWCA 363. That case stood for all relevant purposes, on the same basis as Hobbs. It was concerned with a progressive injury (chemical sensitivity, not loss of hearing) in relation to which s 16 of the 1987 Act identified the date on which the injury was deemed to have happened, which was after the commencement of the 1987 Act. The construction adopted in Hobbs was applied on the basis that ss 16 and 17 were not distinguishable from each other: see Handley JA (Spigelman CJ and Sully J agreeing) at [11] and [12].

46 National Transport Insurance Ltd v Chalker [2005] NSWCA 62 involved injury to a driver using heavy moving equipment, caused by the negligence of another driver. Both worked for a company, Rex J Andrews Pty Ltd, but were independent contractors and not employees, according to general law principles. The appellant, which was the insurer of the negligent driver, sought to demonstrate an employment relationship by reliance upon the deeming provisions in Schedule 1, clause 2(1) of the 1998 Act, being the same deeming provision as that engaged in the present case. Reliance was placed by the appellant on OP Industries. Because the appellant was entitled to succeed on a different issue, Mason P (with whom Tobias JA and Grove J agreed), did not determine that claim, noting that it involved “difficult issues” and also noting that he had “reservations about the correctness of OP Industries”: at [75].

47 A month later, Tobias JA delivered an ex tempore judgment in Kotevski v Esselte Australia Pty Ltd [2005] NSWCA 126 (Young CJ in Eq and Brownie AJA agreeing). The case was similar to Hobbs and University of New England, in that it involved a condition having a gradual on-set. Proceedings were commenced on 22 November 2001 and, applying the statutory limitation contained in s 151D of the 1987 Act, the trial judge considered whether any part of the injury had been suffered within a three year period, namely after 22 November 1998. His Honour held that it had not. In this case, it was the claimant who sought to engage the provisions of s 15, in Part 2 of the 1987 Act, because his incapacity arose on 13 August 1999 (within the three year period) and s 15(1)(a) deemed the injury to have happened at the time of the worker’s incapacity. If successful, the claimant would have obtained modified common law damages; if unsuccessful, he received no damages. In reliance upon Hobbs and University of New England, the Court rejected the argument that the deeming provision in s 15, stated to be “for the purposes of this Act”, extended to provisions modifying common law remedies in Part 5 of the 1987 Act, and accepted that the deeming provision was relevant only to a claim for compensation under Part 2. To the extent that the claimant sought to invoke the decision in OP Industries, his Honour held that the context in which s 15 was found was “entirely different” and the case was thus distinguishable: at [30]. His Honour also noted a submission that OP Industries was wrongly decided and stated:

“In my opinion there would also be substance in that submission. Consideration of the various provisions of Schedule 1 to the Act which relate to ‘deemed employment of workers’ reveal that their context is the deeming of an employer in circumstances where compensation is payable under the Act: see clauses 3(5), 4(3), 5(2), 8(2) and 13(2).”

His Honour noted the reservation expressed by Mason P in Chalker but also found it unnecessary to reach any final view on the issue: at [30].

48 The final authority to which reference should be made is the recent decision of this Court in Shaw v Bindaree Beef Pty Ltd [2007] NSWCA 125, in which the facts were close to those in OP Industries and the relevant deeming provision was to be found in Schedule 1. The injured worker, Mr Shaw, commenced employment with the respondent, Bindaree Beef, but was then engaged as a trainee pursuant to an agreement apparently with a different entity, Yolarno Pty Ltd. In that capacity, he was directed to work at the meat processing plant operated by Bindaree Beef. Bindaree Beef and Yolarno were associated companies. If OP Industries were to be applied, and on the assumption that the training contract was entered into with Yolarno, then it would have been sufficient to look to the terms of Schedule 1 of the 1998 Act, which would have identified Yolarno as the party which continued to be the employer of the worker who was “temporarily lent or let on hire to” Bindaree Beef: Schedule 1, clause 1. The majority (Giles JA, Spigelman CJ agreeing) did not need to address this question because they held that the training contract was with Bindaree Beef. All members of the Court addressed the question as to the parties to the training contract without reference to the 1987 Act or the 1998 Act. Once that question was determined, if Yolarno had been the employer under the training contract, Schedule 1, clause 1 would have deemed Yolarno to be the employer of the worker “for the purposes of the Act”. On the assumption that there was only one employer, there was nothing in the 1987 Act or in the 1998 Act which rendered Bindaree Beef the employer, so as to enjoy the constraints on damages found in Part 5 of the 1987 Act. As the only member of the Court to hold that the contract was with Yolarno, I saw no reason to depart from the approach of the majority in OP Industries, though for reasons set out above, I do not think that OP Industries was determinative of that question.

49 Before leaving the authorities, reference should be made to the decision of the High Court in Klein v Minister for Education [2007] HCA 2; (2007) 81 ALJR 582. That case involved an appeal from a decision of the Western Australian Court of Appeal dealing with a deemed employment provision in the Workers’ Compensation and Injury Management Act 1981 (WA), s 175. Although the terms of the provision were to be found in Part X of the Act, dealing with insurance, and referred to liability to pay compensation, the provisions had, in a series of cases, been held to apply so as to deem each of the principal and the contractor to be an employer for the purposes of restraints on common law damages: see Hewitt v Benale Pty Ltd; WMC Resources Ltd v Koljibabic (2002) 27 WAR 91 and Minister for Education v Klein [2005] WASCA 185. However, because an amendment had reversed that approach, from the date on which the amending legislation commenced, a majority in the High Court concluded that special leave to appeal should be revoked: at [16] (Gummow, Hayne and Heydon JJ). Gleeson CJ and Kirby J, in separate judgments, would have dismissed the appeal. Kirby J, in concluding that the approach adopted by the Court of Appeal had been correct, noted that this Court “construing corresponding provisions in the New South Wales legislation in OP Industries Pty Ltd v MMI Workers’ Compensation (NSW) Ltd, came to a like conclusion about the meaning of the phrase ‘for the purposes of the Act’”: at [45]. In doing so, his Honour referred to the judgment of Scott J in the WA Court of Appeal, 27 WAR 91 at [45]. However, it may be doubted whether Schedule 1 in the workers compensation legislation in this State includes “corresponding provisions” to those under consideration in the WA Act. Further, Scott J expressed the view that Meagher JA had taken a similar approach to the majority in OP Industries “at 6”. It is true that at [5] Meagher JA held that the legislation must affect common law litigation, but, contrary to the majority, he did not accept that the deemed employment provisions had that effect. It is doubtful whether these authorities give any material support to the reasoning in OP Industries.

50 As noted by the joint judgment in Klein in the High Court, in relation to the Western Australian legislation at [7]:

“As originally enacted the Act was remedial and beneficial to workers. As amended, the Act has those beneficial purposes, but also had purposes of constraining recovery of damages in actions brought against employers independently of the Act.”

51 As the joint judgment further noted, in order to construe the deemed employer provision, s 175, “it would be necessary to examine the place that the provision occupied in the Act as a whole, both when the Act was first enacted, and as it has been amended from time to time”: at [13]. In undertaking that exercise in relation to the New South Wales legislation, a number of considerations may be identified.

52 First, the deeming provisions have always appeared in general terms, either in the definition section (as in the 1926 Act) or in a Schedule given effect by Part 1, entitled Preliminary, in which the definitions are generally found, as in the 1987 Act. Although the deeming provisions were originally introduced into the 1926 Act when no constraints were imposed on common law damages claims, any implication that they are now restricted to the beneficial scheme for payment of compensation is diminished by their re-enactment in substantially similar terms, including the phrase “the purposes of the Act”, in a new Act (the 1987 Act) containing purposes other than the beneficial purposes.

53 Secondly, when common law remedies were abolished by Part 5 of the 1987 Act, in its original form, the abolition was effected “in respect of an injury to the worker for which compensation is payable under this Act by that employer”: s 149(1) and (2). Further, the reference in the section to “compensation payable under this Act” was stated to include a reference to compensation “that would be payable under this Act if a claim for that compensation is duly made”: sub-s (3). Thus, the abrogation of common law rights in 1987 was identified by reference to an injury compensable under the Act, which would have included injuries for which compensation was payable as a result of the deemed employment provisions.

54 Thirdly, there are a number of provisions in the new Part 5, introduced in 1989, which continued to link claims for damages to injuries for which the employer was liable to pay compensation under the Act: see, eg, s 151A(2) (election), s 151B (effect of recovery of damages). Of particular importance were ss 151C and 151D, the former imposing a six month delay on the period within which a person was entitled to commence court proceedings for damages and the latter imposing a three year limitation period on the commencement of court proceedings. In each section the plaintiff was identified as a “person to whom compensation is payable under this Act” and the defendant as “the employer liable to pay that compensation”. Thus, when s 151 eschewed any implied affectation of common law rights, it did so by reference to liability “in respect of an injury” that existed independently of the Act. The express affectation effected by Part 5 is identified by reference to an injury for which compensation is payable. The linkage with a compensable injury is express and consistent.

55 Fourthly, the deemed employment provisions were continued in operation with the enactment of the 1998 Act and were transferred from Schedule 1 of the 1987 Act to Schedule 1 of the 1998 Act, with various amendments, but with no amendment to the expression “for the purposes of this Act”, in the relevant clauses and subclauses of the Schedule. Chapter 7 of the 1998 Act, which established new claims procedures covered both claims for compensation and for work injury damages. If the concept of a “worker” differed as between a compensation claim and a damages claim, provisions such as s 254 of the 1998 Act, requiring the giving of notice in both cases, must be read as operating differentially according to differing meanings of the word “worker”. This would be, at best, an implausible construction.

56 Fifthly, although s 151 of the 1987 Act states that the Act does not affect any liability in respect of an injury to a worker that exists independently of that Act, except to the extent that the Act otherwise expressly provides, it does not affect this issue of construction. Whether the meaning of “worker” in a particular provision is restricted to an employee under the general law, or operates according to the extended meaning provided by the Act, is a question of construction which must be resolved before applying s 151. Once the scope of a section is identified, that scope provides the limits of its operation.

57 Where a deeming provision is found in a particular provision having a specific purpose, rather than a general provision of the kind now under consideration, different factors may arise. Thus, a conclusion that the constraints on common law damages contained in Part 5 of the 1987 Act and Chapter 7 of the 1998 Act apply in relation to injuries occurring in the course of deemed employment, will cast no doubt on the different approach adopted in relation to ss 15, 16 and 17 of the 1987 Act, in cases such as Hobbs, University of New England and Kotevski.

58 To the extent that the reasons of the majority in OP Industries suggest that the deemed employment provisions, now found in Schedule 1 to the 1998 Act, will affect general law principles as to the relationship between those causing and suffering injury in the course of work, that approach is not consistent with the statutory deeming applying only “for the purposes of the Act”. To allow such provisions to have, by implication, some greater effect would be to contravene the express terms of s 151 of the 1987 Act.

59 There is no case which holds that the constraints on common law damages imposed by both Part 5 of the 1987 Act and Chapter 7 of the 1998 Act do not apply where the injury is suffered in the course of a deemed employment relationship, as identified in Schedule 1, clause 2 of the 1998 Act. On their proper construction, those provisions do apply in such circumstances. For this reason, the appeal must be dismissed. There being no submission to the contrary, costs should follow the event.

60 HISLOP J: I agree with Basten JA.

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11/09/2007	-	Correcting error in headnote - Paragraph(s) Headnote, par 8
28/04/2008	-	Correcting typographical errors - Paragraph(s) pars [39] and [59]