Grogan v WBK and C of A

[1998] HCATrans 104

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B48 of 1997

B e t w e e n -

GLORIA CHARLOTTE GROGAN

Applicant

and

W.B.K. PTY LTD

First Respondent

COMMONWEALTH OF AUSTRALIA

Second Respondent

Office of the Registry
  Brisbane  No B49 of 1997

B e t w e e n -

GLORIA CHARLOTTE GROGAN

Applicant

and

COMMONWEALTH OF AUSTRALIA

First Respondent

W.B.K. PTY LTD

Second Respondent

Applications for special leave to appeal

McHUGH J
KIRBY J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON FRIDAY, 17 APRIL 1998, AT 2.45 PM

Copyright in the High Court of Australia

________________________

McHUGH J:   I have a note addressed to The Deputy Registrar from Messrs. Quinlan Miller & Treston, Solicitors for WBK Pty Ltd, saying they “do not intend to file any material on the Application in addition to that which has been filed by the Commonwealth of Australia”.

MR DOUGLAS:   Yes, we understand that.

McHUGH J:   Yes.

MR DOUGLAS:   The point is the same in both matters.

McHUGH J:   I can appreciate that, yes.

MR R.R. DOUGLAS QC:   May it please the Court, I appear with my learned friend, MR K.B. VARLEY, for the applicant in both cases. (instructed by Barwicks Wisewoulds)

MR R. W. GOTTERSON, QC:   May it please the Court, in B48 of 1997 I appear with my learned friend, MR J.A. LOGAN, for WBK Pty Ltd, the first respondent, (instructed by Quinlan Miller & Treston) and with my learned friend, MR P.G. BICKFORD, for the Commonwealth, the second respondent. (instructed by Australian Government Solicitor)

McHUGH J:   Yes.  You just rely on the matter in the Commonwealth’s application - you appear for WBK?

MR GOTTTERSON:   For the Commonwealth and for WBK.

McHUGH J:   And for WBK?

MR GOTTERSON:   Yes.

McHUGH J:   But you have got no additional material?

MR GOTTERSON:   No.

McHUGH J:   Yes, thank you.  Mr Douglas.

MR DOUGLAS:   The short point in this case involves the proper construction of section 45 of the Comcare Act or the Safety Rehabilitation and Compensation Act 1988  and whether the plaintiff, in this case, election before she commences proceedings at common law must be first communicated to the Commonwealth.  The case is of some importance because material before the Court of Appeal and before her Honour Judge McMurdo revealed there were about eight cases at that time in Queensland where the point arises, and numerous in other States. 

The appellant’s contention at the appeal, if special leave is granted, would be that the election, necessarily made under section 45, need not be communicated to the Commonwealth and was properly made by the applicant’s solicitor signing the plaint before it was filed in the District Court in Brisbane.

The applicant will rely upon the reasoning of her Honour Judge McMurdo, and in particular that of his Honour Mr Justice Fryberg in the record pages 29 and 30, where his Honour relied upon passages in Sargent v A.S.L.  Developments Pty Ltd (1974) 131 CLR 634, draws:

the distinction which exists between elections involving a choice between contractually conferred rights and other instances of election.

This is page 29 about point 3 of the page.  We submit that his Honour’s reasoning is correct.  We submit that a proper construction of section 45, particularly when compared with section 47, indicates that there was no need to communicate the election in writing to the Commonwealth.  We draw the distinction and the legislation, your Honours, is conveniently set out in Judge McMurdo’s judgment at pages 3 and 4 of the record.  The election which must be made under section 45 is, an election in circumstances:

Where:

(a)  compensation is payable under section 24, 25 or 27 in respect of any injury to an employee;

and that is the case here.  It goes on to read, skipping (b):

the employee may, at any time before an amount of compensation is paid -

which is the case here -

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 -

bearing in mind, the Commonwealth, not Comcare, which is the paying authority -

the Commonwealth authority, the licensed corporation or other employee for damages for that non-economic loss.

And subsection (3) makes:

an election is irrevocable.

The distinction to be drawn is that in section 47 which requires an employee, who institutes proceedings against the Commonwealth, to:

as soon as practicable but in any event not later than 7 days after the day on which he or she first became aware that those proceedings had been instituted, notify Comcare in writing of those proceedings.

That section is set out on page 4 of the application book.

Now, his Honour Justice Fryberg takes that up at the bottom of page 29 over to 30 of the record, and we adopt his reasoning, if he Court pleases, where he says:

Under s. 45(2), where an employee makes an election, compensation is not payable after the date of the election under s. 24, 25 or 27 in respect of the relevant injury.  For that reason, Comcare has a clear interest in knowing of the election.  But Comcare is a distinct legal personality from the Commonwealth.  Unless and until it is sued, the Commonwealth has no interest in whether there has been an election under s. 45.  Until that happens, the Commonwealth is not a “party” to anything, except possible the contract of employment, which is unaffected by s.  44 and 45 of the Act.

Your Honours, we submit that the proper construction of this Act is an important matter to be considered by this Court.  We submit that it is of general application throughout the Commonwealth and there appears to be some divergence of judicial opinion as to how the section should be interpreted.

KIRBY J:   What do you say about that phrase “subsequently instituted” in subsection (2)(a)?

MR DOUGLAS:   Yes, your Honour, that is the phrase ‑ ‑ ‑

KIRBY J:   We have to try and look at the whole scheme of this and how it is to work.  I think you would agree that it would be expected normally you would make your election otherwise than by commencing proceedings, but do you say you can do it by ‑ ‑ ‑

MR DOUGLAS:   Yes, we say you can do it.

KIRBY J:   That does not seem to be comfortable with that scheme in (2)(a).

MR DOUGLAS:   Well, your Honour, the answer to that is, we submit that where the legislation required notice to be communicated, it said so, and we have given examples of that in our outline of submissions in the application and in particular section 47.  It is notable, we submit, that that requirement was not included in section 45 of the legislation.

KIRBY J:   If the decision of the Court of Appeal is maintained and not disturbed by this Court, then the message will go out to those who represent employees that they just have to elect in a clear, emphatic and separate way from legal proceedings, and does that not mean that they will be focussing their attention on the election instead of just jumping in and taking the ‑ ‑ ‑

MR DOUGLAS:   Well, assuming that is a correct interpretation, that message will go out ‑ ‑ ‑

KIRBY J:   Assuming it is an arguable interpretation that has been upheld by the Court of Appeal.

MR DOUGLAS:   We simply submit that ‑ ‑ ‑

KIRBY J:   We cannot take on every case where there is an arguable point of federal legislation.

MR DOUGLAS:   No, I appreciate that, but this is a case, we submit, of general application, where there are many cases ‑ ‑ ‑

KIRBY J:   Is that your best point?

MR DOUGLAS:   It is.

KIRBY J:   But come back to the scheme, that phrase “subsequently instituted” in (a) is really troubling me.

MR DOUGLAS:   Yes, it troubled the majority of the Full Court as well, against us, but it did not trouble his Honour Justice Fryberg in the same way.

McHUGH J:   Well, did his Honour mention it?

MR DOUGLAS:   It depends what he means by the first phrase in his judgment, your Honour.  He said that he agreed with the judgment of Davies JA except for one crucial aspect.

KIRBY J:   We are not here to analyse the psychology of the judges of the Court of Appeal; we are here to convince ourselves one way or the other.  The fact that it did not convince Justice Fryberg does not make the point; you have got to convince us.

MR DOUGLAS:   We submit that the best way to seek to construe that provision is to look at other provisions of the Act which do require communication of an election and ‑ ‑ ‑

McHUGH J:   Let us get clear from you what you regard as the special leave point.  Is it whether section 45 requires that an election under that section be communicated to the Commonwealth before commencing proceedings?

MR DOUGLAS:   Yes, that is it.

KIRBY J:   And your best argument, you say, is that section 47 specifically provides for communication and, of course, we do not have section 47 - it is the usual thing, we have the most irrelevant material here.

MR DOUGLAS:   I am sorry; it is in her Honour’s judgment at page 4 of the record.

KIRBY J:   I was just looking at the actual Act; you said you look at the whole scheme of the Act.  Which page is it?

MR DOUGLAS:   Section 47 is set out at page 4 of the record, your Honour, in her Honour’s judgment in the District Court.

KIRBY J:   How do you say that that fits in with the election before action or the election to take action, which is a separate issue?

MR DOUGLAS:   We say that that is an instance where communication of the written document, if you like, the written election, is required, in terms, and there are other instances in the Act, which we refer to in our outline at page 44 of the book, paragraph No 6.  We say that if you draw the distinction between section 45 and those sections which require communication of a written document, you can draw the analogy that such communication was not required before commencement of proceedings under section 45.

McHUGH J:   Yes, but it really throws little light on what section 45 requires, does it; it is dealing with a different situation.

MR DOUGLAS:   The effect of this, your Honour, is that if this lady ‑ ‑ ‑

McHUGH J:   The most you can get out of it is that it is a specific section ‑ that the Act itself does expressly deal with notice in at least one situation.

MR DOUGLAS:   At least one, yes.  The applicant here of course will be shut out of any remedy against the Commonwealth, being the view that she has made an election which is irrevocable, but it was an invalid election, in the sense that she did not communicate it in writing before issuing proceedings and, with respect, that is not really the purpose of the Act.  The purpose of the legislation is to compel an injured worker to decide one way or the other, whether to sue in the ordinary way or to accept the compensation under the scheme.  We just briefly refer to the court’s decision in Janssen’s Case before the Court of Appeal in Queensland, (1994) 2 Qd R 596, and the passage we wish to refer to is set out at page 6 of the record in her Honour’s judgment, where their Honours of the Court of

Appeal took the view that had been taken by the House of Lords in Debenhams Case, that:

‘In resolving a statutory ambiguity that meaning which produces an unreasonable result is to be rejected in favour of that which does not, it being presumed that Parliament did not intend to produce such a result.’

Your Honours, they are our submissions.

KIRBY J:   There was one point where you said that there would be an anomalous result and I just cannot bring it to my mind.

MR DOUGLAS:   The anomalous result is that it is contended now that the applicant will, if she fails here, have no remedy against the Commonwealth of Australia.

KIRBY J:   But there was another point in your written submissions that if the interpretation which is argued for by the Commonwealth has generally an anomalous result; could you remind me of what that was, I ‑ ‑ ‑

MR DOUGLAS:   Page 44 it is, your Honour, where we point to an absurdity in the result in paragraph 5.

McHUGH J:   You give various illustrations.

MR DOUGLAS:   We do.  They are our submissions.

McHUGH J:   Yes, Mr Gotterson.

MR GOTTERSON:   If the Court pleases, our learned friends accept that there must be a written election which precedes the institution of the proceedings and that the institutions themselves, of course, cannot amount to the election.  All the judges in the Court of Appeal so held, and it was held unanimously in the Court of Appeal in New South Wales in the case of Flaviano, to which we refer, to the same effect, where their Honours - or at least Justice Sheller, I think, at pages 203 to 204, dealt with specifically the judgment of Judge McMurdo and disagreed with it on that point.  So at a factual level that all the applicant‑ ‑ ‑

McHUGH J:   Is that reported, Flaviano?

MR GOTTERSON:   Yes. (1996) 40 NSWLR 199 at pages 203, about G and a little over the page, and his Honour there said that:

Subsection (2) provides that when an election is made, subsection (1) does not apply in relation to an action or other proceedings subsequently -

and he emphasises “subsequently” -

instituted by the employee against the Commonwealth.  Subsection (4) speaks of any action or proceedings instituted as a result of an election.  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 section 45(1) by instituting the action or proceeding.

So there really does not seem to be any scope for argument that the institution of the proceedings itself by Mrs Grogan amounted to an election.  So, faced with that, what the applicant here says is that the act of election‑ ‑ ‑

McHUGH J:   Not that it did not amount to an election, but it does not amount to an election that is communicated.  Is there a distinction between the two points?

MR GOTTERSON:   Well, faced with that they seem to say, at a factual level - and indeed, all they can point to as something in writing is the signed plaint in the solicitor’s office, presumably before it is taken to the‑ ‑ ‑

KIRBY J:   The debate was commencing proceedings and filing the plaint, was that the distinction?

MR GOTTERSON:   Well, perhaps it has not been elevated quite to that level of distinction and perhaps it had to be service of the plaint as well, but all of those, service naturally and filing itself, which constituted the commencement of the action, could not be the election in writing, leaving aside the question of communication.  So, at a factual level, they have to proceed back in time to something antecedent to the filing of the plaint and all they have is the plaint document and the subscription, either by‑ ‑ ‑

McHUGH J:   Perhaps I should have asked Mr Douglas this, perhaps I might ask him now so we can be quite plain.  Mr Douglas, is the point that you make is that it is the signing, together with the subsequent filing of the complaint, that constitutes the election?

MR DOUGLAS:   We say one of two things in answer to that:  we say the signing of the plaint is the election; that is, the giving of instructions to sign an issue of plaint on her behalf, and the actual signing of it is the election in writing, we submit.

McHUGH J:   Yes, irrespective of whether it is filed?

MR DOUGLAS:   The filing of it is only, if you like, putting an imprimatur upon that election.

KIRBY J:   It would be inherent in the election that is required that it be notified to the Commonwealth, would it not?

MR DOUGLAS:   Yes.

KIRBY J:   So whether it is by a separate document or by the filing of a process.

MR DOUGLAS:   By the filing and serving of the process, in the ordinary course of the rules, but our submission below, and before the Court of Appeal, was that the election was made by the signing of the plaint before its issuance.

KIRBY J:   That is awkward as a part of the scheme of the Act, the purpose of the election being to notify the Commonwealth which path the employee is taking.

MR DOUGLAS:   Well, you see, there is no requirement for notice in that section.

KIRBY J:   There is no express requirement, but the scheme seems to envisage that there be, so that the Commonwealth can know whether this is a compo case or a damages case.

MR DOUGLAS:   As Justice Fryberg pointed out, the Commonwealth has no interest in knowing that, Comcare has, and section‑ ‑ ‑

McHUGH J:   Yes, I know, but that is what troubles me about your argument.  Sorry, we are not cutting into your time, Mr Gotterson; you will be given credit for this.  On that view it could not be the signing of the plaint that would constitute the election, could it?  Or would you say that it is just irrelevant when notification is given to Comcare?

MR DOUGLAS:   No, to Comcare, you are bound by the Act to do it within seven days effectively, after certain events, but section 45, that section speaks of an election to go one way or the other, that is, either at common law - I call it common law - or under the statutory scheme.

McHUGH J:   Well, I appreciate that, but how does Comcare fit into this?  You sign a plaint in the solicitor’s office, has Comcare ever got to be notified?

MR DOUGLAS:   No.  The scheme of the Act is that a claim for workers compensation is made on Comcare, and if you are entitled to payment under section 24, 25 or 27, you may either elect to take that compensation, or to sue pursuant to division of section 45, section 44 having abolished the old common law right to sue.  The defendant in such an action would be presumably the Commonwealth, it being the tortfeasor.

McHUGH J:    But how would Comcare know whether there was any obligation to pay under sections 24, 25 and 27?

MR DOUGLAS:   They would determine whether compensation was payable or not, in other words did the injury occur at work.

McHUGH J:   Yes, well, perhaps I have not understood the scheme of this, although we went over this in Georgiadis.  There is a workplace injury.  Now the notification under section 45 must be made before any amount is paid under‑ ‑ ‑

MR DOUGLAS:   Yes, once it is paid‑ ‑ ‑

McHUGH J:   That is the end of it.

MR DOUGLAS:   That is the end of that.

McHUGH J:   Yes, I follow, thank you.  Yes, Mr Gotterson.

MR GOTTERSON:   If the Court pleases.  The point that the respondents make to the application is this, that the election that is required under section 45(1) is one that must be, in order to perfect it, communicated to the Commonwealth, the Commonwealth authority or the licensed corporation concerned, and the indicia within section 45, which makes that clear enough, are these:  firstly, the provision in subsection (3) that an election is irrevocable.  In terms, the Act states an election is irrevocable.  To be revocable or irrevocable, to be in that state of being able to be revoked, surely, in the first instance, an election must be communicated.  So that is one point, and perhaps as importantly, for the matters that are referred to in 6(b) of our submissions, that important consequences follow from an election, notably, the Commonwealth or the Commonwealth authority or a licensed corporation who could otherwise be sued, cannot be sued.  And that deals with those entities. 

Then so far as Comcare is concerned, its obligation to pay compensation under the sections 24, 25 or 27 ceases after the election.  So it really does not assist the applicant’s case to point to section 47, which has to do with notification to Comcare, because other Commonwealth parties are interested, whether it be the Commonwealth itself to be sued or the Commonwealth authority or a licensed corporation.  They themselves, one would expect, entitled to know if an election to proceed is to be made.  For those reasons‑ ‑ ‑

McHUGH J:   Yes, we do not need to hear you further.  Anything in reply, Mr Douglas?

MR DOUGLAS:   No, your Honour.

McHUGH J:   The application for special leave must be refused in this case.  The principal issue in the application is whether s 45 of the Safety Rehabilitation and Compensation Act 1988 (Cth) requires that an election under that section be communicated to the Commonwealth before commencing proceedings.  The Queensland Court of Appeal held that it must.  The applicant contends that the signing of a plaint commencing proceedings constitutes an election whether or not it is communicated to the Commonwealth.  We see no reason to doubt the correctness of the conclusion of the Court of Appeal.  The words “subsequently instituted by the employee against the Commonwealth” in s 45(2) indicate that the election must be made prior to commencing the action or proceeding.  It is a short step to conclude that the election so made must be communicated.

The construction placed on the section by the Court of Appeal in this case also receives support from a decision of the New South Wales Court of Appeal in Commonwealth of Australia v Flaviano and Anor (1996) 40 NSWLR 199.

The applicant points out that, in contrast to s 45, s 47 of the Act expressly requires notice in a case where that section applies.  However, that fact throws little light on whether, in the different setting of s 45, the election must be communicated. 

In our view there is no reason to doubt the correctness of the decision of the Court of Appeal.  Special leave should be refused.

MR GOTTERSON:   I ask for costs, if the Court pleases.

McHUGH J:   One set?

MR GOTTERSON:   We minimised as far as could be by ‑ ‑ ‑

KIRBY J:   It would not be right for the present applicant to have to pay two sets of costs, given especially that one of your clients wrote and said we do not have anything else to say.  Why could they not have formed common cause?

MR GOTTERSON:   As the Court pleases.

KIRBY J:   You have had the great benefit of a final and conclusive determination of a statute that you wanted.

MR GOTTERSON:   As the Court pleases.

McHUGH J:   Have you anything to say, Mr Douglas?

MR DOUGLAS:   No, your Honour.

McHUGH J:   The application is refused with one set of costs only.

AT 3.15 PM THE MATTER WAS CONCLUDED