Gosbell v ADI Ltd

[2001] NSWSC 354

CITATION:	Gosbell v ADI Ltd & Anor [2001] NSWSC 354
CURRENT JURISDICTION:	Common Law Division
FILE NUMBER(S):	SC 20111 of 2001
HEARING DATE(S):	2 May 2001
JUDGMENT DATE:	25 May 2001
PARTIES :	Scott Raymond Gosbell (Plaintiff) v ADI Limited (First Defendant) Inter-Chillers Pty Ltd (Second Defendant)
JUDGMENT OF:	Master Malpass

COUNSEL :	Mr M Joseph SC (Plaintiff) Mr R S Sheldon (First Defendant) N/A (Second Defendant)
SOLICITORS:	TD Kelly & Co (Plaintiff) Sparke Helmore (First Defendant) PricewaterhouseCoopers Legal (Second Defendant)
CATCHWORDS:	Election to be made under s 45 - a sequential step to be taken prior to institution of action or proceeding - must be in writing - need to be express - not made in this case.
LEGISLATION CITED:	Safety, Rehabilitation And Compensation Act 1988, s 44, s 44 (1) s 45, s 45 (1), s 45 (2). Supreme Court Rules 1970, Pt 31.
CASES CITED:	Austral Pacific Group Ltd (in liq) v Air Services Australia 173 ALR 619. Commonwealth v Flaviano (1996) 40 NSWLR 199. Grogan v Commonwealth of Australia (1999) 1 QdR 30.
DECISION:	See Paragraph 25.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER MALPASS

FRIDAY 25 MAY 2001

20111 of 2001 SCOTT RAYMOND GOSBELL v ADI LIMITED & ANOR

JUDGMENT


1   The plaintiff suffered injury in a work incident. Proceedings for recovery of damages were brought on 16 February 2001.

2   The first defendant was his employer at the time of the incident and is also “the licensed corporation” for the purposes of the Safety, Rehabilitation And Compensation Act 1988 (the Act).

3 A defence has been filed by the first defendant. It puts in issue the question of whether or not there has been an election which satisfies the requirements of s 45 of the Act. It relies on s 44 as barring the right to commence and maintain the proceedings.

4   A Notice of Motion was filed by the first defendant on 12 April 2001. In effect, it sought summary relief. It came on for hearing on 2 May 2001.

5 Following the commencement of the hearing, a separate question was formulated by the parties. An order was made pursuant to Pt 31 of the Supreme Court Rules 1970. By consent, the court then proceeded to hear the separate question.

6   The formulation of the separate question may be found in Exhibit B. It is in the following terms:-
“Whether the Plaintiff elected in writing to institute an action or proceeding against the Commonwealth, the Commonwealth Authority or the licensed corporation under s 45 of the Safety, Rehabilitation & Compensation Act, 1988 prior to the commencement of these proceedings.”

7 It is common ground that an election satisfying the requirements of s 45 has to be made prior to the commencement of proceedings. The making of such an election has been regarded as being a condition precedent to the commencement of valid proceedings. Unless and until that happens, s 44 applies and no action lies.

8 Section 44 of the Act provides that an action or other proceeding for damages did not lie against the Commonwealth, a Commonwealth Authority, a licensed corporation or employee in certain cases. It is expressed to be subject to s 45.

9   Section 45 is in the following terms:-
“45. Actions for damages---election by employees
(1) Where:

(a) compensation is payable under section 24, 25 or 27 in respect of an injury to an employee; and
(b) the Commonwealth, a Commonwealth authority, a licensed corporation or another employee would, but for subsection 44(1), be liable for damages for any non-economic loss suffered by the employee as a result of the injury;


the employee may, at any time before an amount of compensation is paid to the employee under section 24, 25 or 27 in respect of that injury, elect in writing to institute an action or proceeding against the Commonwealth, the Commonwealth authority, the licensed corporation or other employee for damages for that non-economic loss.

(2) Where an employee makes an election:
(a) subsection 44(1) does not apply in relation to an action or other proceeding subsequently instituted by the employee against the Commonwealth, the Commonwealth authority, the licensed corporation or the other employee for damages for the non-economic loss to which the election relates; and
(b) compensation is not payable after the date of the election under section 24, 25 or 27 in respect of the injury.


(3) An election is irrevocable.

(4) In any action or proceeding instituted as a result of an election made by an employee, the court shall not award the employee damages of an amount exceeding $110,000 for any non-economic loss suffered by the employee.”


10   The plaintiff has tendered copy documentation which has been admitted as Exhibit A. This documentation is relied on by the plaintiff as satisfying the election requirements of s 45.

11   The documentation comprises a letter from T D Kelly & Co (the solicitors for the plaintiff) to the plaintiff himself which is dated 20 December 2000 together with certain writing thereon made by the plaintiff. The writing consists of the words “Scott Gosbell” (the name of and presumably also the signature of the plaintiff) and the date “9/1/2001”.

12   Largely, the letter may be described as a letter furnishing advice to the client. It contains inter alia the following:-
“If you were able to prove that your injuries have been caused by the negligence of your employer then you may be entitled to general damages under the Common Law. A claim for Common Law damages is not in addition to your entitlement to lump sums under the Safety & Rehabilitation Act but rather instead of those lump sums.
If you commence Common Law proceedings for damages you irrevocably elect out of your entitlement to lump sum compensation under the Compensation Act.
……
Based upon your instructions and the investigative reports provided to us, we feel confident that you would be able to prove that ADI were negligent.
We note that all of the above was discussed with Mr Weaver at our most recent conference and that you have instructed us to issue common law proceedings out of the District Court of NSW.
In the event that you understand all of the above and wish to proceed on the above basis, would you kindly sign this letter below in order to confirm your understanding and your instructions and return same at your earliest convenience.”
13   The court has been taken to what was said by Sheller JA in Commonwealth v Flaviano (1996) 40 NSWLR 199 at 203 - 204. His Honour observed as follows:-
“An election is a choice of alternative rights or claims. It may be made expressly or implied from conduct: see R P Meagher, W M C Gummow and J R F Lehane, Equity Doctrines and Remedies , 3rd ed (1992) at par 3915. While in some circumstances the institution of proceedings may be treated as an act of election, strictly speaking it is conduct from which an election may be inferred. Section 45 speaks of the employee electing in writing. I would infer that the employee is required so to express his or her election so that there can be no doubt about the matter. The requirements of the subsection are not met by conduct from which an election could be implied, such as the institution of proceedings to recover damages. That this is so finds support in the language of s 45. Subsection (2) provides that when an election is made, subs(1) does not apply in relation to an action or other proceedings subsequently instituted by the employee against the Commonwealth (my emphasis). Subsection (4) speaks of any action or proceeding instituted as a result of an election (my emphasis). With the greatest respect to the opinion of her Honour Judge McMurdo in Grogan v The Commonwealth , I do not think Mr Flaviano made an election in writing to institute an action or proceeding within the meaning of s 45(1) by instituting the action or proceeding.”

14   The court was also taken to what was said by the High Court in Austral Pacific Group Ltd (in liq) v Airservices Australia 173 ALR 619 and what was said by the Queensland Court of Appeal in Grogan v Commonwealth of Australia (1999) 1 QdR 30.

15   The first defendant contends that Exhibit A is not an election in the sense required by the Act. It is said that it is not an express election. Further it is said that it is of the character of being no more than a confirmation of understanding and instructions.

16   The statutory scheme looks to the making of a choice by the employee between statutory entitlements (compensation under ss 24, 25 or 27 in respect of an injury) and common law damages (damages for any non-economic loss suffered by the employee as a result of the injury). The election itself is described in s 45 (1) as an election “in writing to institute an action or proceeding against the Commonwealth, the Commonwealth authority, the licensed corporation or other employee for damages for that non-economic loss”.

17 The statute itself makes it clear that the events of election and of institution of action or proceeding are regarded as separate and distinct. Section 45 (2) provides that where an employee makes an election, s 44 (1) does not apply in relation to an action or other proceeding subsequently instituted by the employee. The statute requires the taking of sequential steps. As a temporal matter, the institution of the action or proceeding must take place subsequent to the election. This view is supported by authority ( Austral and Grogan ).

18   The plaintiff’s signature was placed on the letter dated 20 December 2000 to confirm both his understanding of advice received in a conference with Mr Weaver and in the letter itself and also to confirm the instructions given in the conference to issue common law proceedings out of the District Court of New South Wales.

19   If the court had been uninstructed by authority a different view may have been thought to be open, but there is binding authority which appears to have decided that s 45 requires the election to be express so that there can be no doubt about the matter and that it could not be met by conduct from which an election could be implied ( Flaviano at pp 203 - 204). This was the approach taken to that decision in Grogan (at p 34). It certainly has to be in writing. In Austral at (34) it was said that if an issue was raised as to whether an election had been made, the primary evidence on that issue would be the written election.

20   In the present case, the letter may be read as giving express instructions to institute certain proceedings. What is missing in Exhibit A is any express content dealing with an election then being made to institute proceedings for damages for non-economic loss. Indeed, an assertion to that effect is inconsistent with the meaning thrown up by the writing itself.

21   The contents of Exhibit A are lacking material addressing the question of an election then being made, which was irrevocable, as a sequential step preceding the institution of an action or proceedings. The letter does in effect point out that the common law general damages and the statutory entitlements are alternatives. Also, it advises that the commencement of common law proceedings for damages constitutes an irrevocable election out of statutory entitlements. It is in the course of the giving of this misleading advice that the only mention of the making of an election appears in the letter. There is no mention of the need to make an election prior to the institution of action or proceedings.

22   It is common ground that the plaintiff bears the onus in relation to the question that the court is asked to separately determine (see Austral at (34) ). In my view, the plaintiff’s case falls short of even demonstrating that an implication of an election could arise from the writing which comprises Exhibit A.

23   The understanding confirmed by the plaintiff putting his signature to the letter was that an election would be effected upon the commencement of proceedings (not by placing his confirmatory signature on the letter). Both the solicitors and the client were under the misapprehension that any election would be made upon the commencement of the contemplated proceedings. In my view, it cannot be implied from Exhibit A that by signing it on 9.1.2001 he was thereby making an irrevocable election. The plaintiff would have been entitled to entertain the belief that, had he wished to do so, it remained open to him to change his mind and revoke the instructions to commence proceedings. He was not confirming any understanding that by signing the letter he had then lost statutory entitlements to compensation in respect of his injury.

24   Accordingly, I take the view that the plaintiff has not discharged the onus borne by him. Therefore, I have reached the decision that the plaintiff has not made the election referred to in Exhibit B.

25   In the circumstances, the language of the question would seem to require an answer of no. The first defendant is to have the costs of the special question, otherwise I reserve the question of costs. The Exhibits may be returned.
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Last Modified: 05/28/2001