Harris v The Commonwealth of Australia - [2003] WADC 79

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: HARRIS -v- THE COMMONWEALTH OF AUSTRALIA [2003] WADC 79

CORAM: GROVES DCJ

HEARD: 12 MARCH 2003

DELIVERED : 4 APRIL 2003

FILE NO/S: CIV 2253 of 2001

BETWEEN: JEREMY MICHAEL HARRIS
Plaintiff
AND
THE COMMONWEALTH OF AUSTRALIA
Defendant

Catchwords:

Torts - Commonwealth employee - Election by injured employee to sue or accept compensation - Whether election in writing made by employee

Legislation:

Safety, Rehabilitation and Compensation Act 1988 s 44, s 45

Result:

Appeal allowed

Action dismissed

Representation:

Counsel:

Plaintiff: Mr R A Harrison
Defendant: Mr EM Corboy SC

Solicitors:

Plaintiff: Dwyer Durack
Defendant: Australian Government Solicitor

Case(s) referred to in judgment(s):

Austral Pacific Group Ltd (In liq) v Airservices Australia (2000) 203 CLR 136
Commonwealth of Australia v Flaviano & Anor (1996) 40 NSWLR 199
Commonwealth v Verwayen (1990) 170 CLR 394
Grogan v Commonwealth of Australia [1999] 1 Qd R 30
Sargent v A.S.L. Developments Ltd (1974) 131 CLR 634

Case(s) also cited:

Crowe v Comcare Australia (No 2) [2002] FMCA 147
Gosbell v ADI Ltd & Anor [2001] NSWSC 354
Janssen v Commonwealth of Australia [1994] 2 Qd R 596
Krygger v Commonwealth of Australia, unreported; DCt of WA; Library No 3366; 2 April 1992
Walsh v Commonwealth of Australia (1998) 155 ALR 182
William Van Oostveen v Commonwealth of Australia [1998] FCA 1751

GROVES DCJ: This is an appeal against a decision of a Registrar made on 12 December 2002 on the defendant's (the Commonwealth) application to strike out the action. That part of the action relating to economic loss was struck out however the claim for non‑economic loss was allowed to stand. The appeal is against the Registrar's refusal to also strike out the claim for non‑economic loss.
By Writ of Summons dated 30 August 2001 the plaintiff commenced action against the Commonwealth claiming damages for personal injuries sustained in the course of his employment. The statement of claim which followed particularised claims for both economic and non‑economic loss.
At all material times the plaintiff was in the employment of the Australian Army. The Commonwealth was his employer at the time of the alleged incidents for the purposes of the Safety, Rehabilitation and Compensation Act 1988 ("the Act").
The issue for determination on this appeal may be simply stated in the following terms:
"Whether the plaintiff elected in writing to institute an action or proceeding against the Commonwealth under s 45 of the Act prior to the commencement of these proceedings."
By s 14 of the Act Comcare is liable to pay compensation in respect of injuries suffered by Commonwealth employees. The injury must be an injury arising out of or in the course of the employee's employment (s 4 and s 5 of the Act).
Pursuant to s 24, s 25 and s 27 of the Act Comcare is liable to pay compensation to an employee where the injury results in permanent impairment.
Section 44 of the Act provides that an action or other proceeding for damages for work related personal injuries does not lie against the Commonwealth. It is expressed to be subject to s 45.
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 mount exceeding $110,000 for any non‑economic loss suffered by the employee."
If the plaintiff so elects a number of consequences flow:
(a)Compensation under sections 24, 25 and 27 is not payable (section 45(2)(b)).
(b)The election is irrevocable (section 45(3)).
(c)The award of damages in the proceedings is limited to $110,000 (section 45(4))."
The prohibition on making a claim at common law in the absence of an election under s 45 has been held to be a substantive provision and not merely a procedural one: see Austral Pacific Group Ltd (In liq) v Airservices Australia (2000) 203 CLR 136 at 148. The requirement of s 45 is not a precondition merely to the commencement of proceedings but rather it is a precondition to the existence of the cause of action. Section 44 and s 45 are substantive in the sense that without an election having been made under s 45 there is no cause of action. This requirement might be contrasted, for example, with s 47A of the Limitation Act where notice is required to be given before proceedings may be commenced but where there is a discretion in the Court to waive compliance with the requirement to give notice.
The provisions of s 45(2) make it clear that there must be a two stage process, firstly, the election and secondly the institution of proceedings. The election must be made prior to the commencement of proceedings so that the proceedings have been commenced as a result of the election. The issuing of a writ of itself is not an election in writing within s 45(1): Grogan v Commonwealth of Australia [1999] 1 Qd R 30.and Commonwealth of Australia v Flaviano & Anor (1996) 40 NSWLR 199.
The only communication which the plaintiff can point to as satisfying the election requirements of s 45 is a letter dated 10 August 2001 from the plaintiff's solicitors to the Defence Legal Service, Department of Defence. The letter commences "…We now propose to commence proceedings against the Commonwealth of Australia" and concludes with a request that the Department of Defence provide an address for service of the proceedings.
The Commonwealth contends that those words do not amount to an election in the sense required by the Act.
The plaintiff bears the onus of demonstrating that an election has been validly made under s 45: see Austral Pacific (supra) at 149.
In Commonwealth of Australia v Flaviano (supra) Sheller JA at 203 observed:
"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, 3^rd 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."
Thus, the election must be express so that there can be no doubt about the matter and it could not be met by conduct from which an election could be implied. This was the approach taken to that decision in Grogan v Commonwealth of Australia (supra) at p 34. Further, it has been said that an election is by its very nature an informed choice between two inconsistent rights: Sargent v A.S.L. Developments Ltd (1974) 131 CLR 634 and Commonwealth v Verwayen (1990) 170 CLR 394 at 421.
In that sense, the making of an informed choice between two inconsistent rights requires the plaintiff to consciously make an election in terms of the section so that the conduct constituting the election must demonstrate that the employee is making a deliberate choice between:
(a)Obtaining compensation for permanent impairment and non‑economic loss pursuant to sections 24, 25 or 27 by application under the Act; or
(b)Obtaining damages for non‑economic loss, subject to the limitations imposed by section 45, by way of judgment in proceedings commenced pursuant to section 45.
As to what constitutes an election it was said in Sargent (supra) at 646:
"The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other."
The Act does not prescribe any particular form of words to be used in order to express an election made one way or the other. Nor does it require that there must be, concurrent with the election, an express abandonment of other rights under the Act. Nevertheless, what must be demonstrated in making an election is that in fact an election is made and that it is unequivocal in that it is an informed choice (my emphasis). The election must be express and "the requirements of the subsection are not met by conduct from which an election could be implied…". (Flaviano (supra).
In my view the words used in the letter of 10 August 2001 do no more than to communicate to the Commonwealth that the plaintiff had made a decision "…to commence proceedings…" As much as those words convey is that the plaintiff had in contemplation or was minded or inclined towards pursuing a common law claim for damages.
There is no mention of making or having made an election. The words of themselves do not convey any indication of an election having been made. Nor is there any indication that the effect or requirements of s 44 and s 45 had been considered or addressed.
Furthermore, the communication of the decision to commence proceedings can stand on no different footing and be no better than the actual commencement of proceedings. If commencing proceedings is not conduct which is capable of amounting to an election under s 45 because it is not an express statement of election then the writing of a letter simply advising of a decision to commence proceedings clearly could not be conduct which would constitute an election either. In my view it requires something more to be said. As it is, as the plaintiff must necessarily contend, it would require one reading the words to draw the conclusion that there has been an election by implication made by the plaintiff. Such is not permissible.
In my view the decision to commence proceedings is not sufficient to constitute an election. Therefore I find that the plaintiff has not made the election required by s 45. In the absence of an election the plaintiff has no cause of action against the Commonwealth.
If any support is required for that conclusion the Commonwealth also points to the position taken by the plaintiff as expressed in subsequent correspondence and in the statement of claim preceding and following amendment after the Registrar's order. That the letter of 10 August 2001 was never intended to constitute an election for the purposes of s 45 of the Act is, it was submitted, evident from:
(a)the plaintiff's insistence that he could not make an election and denial that the Act applied to his claim. That insistence and denial were made in correspondence from the plaintiff's solicitors to the Australian Government's solicitors dated 29 July 2002 wherein it is stated:
"Accordingly at the time the proceedings were commenced it would not have been possible for our client to apply for a determination and make an election pursuant to section 45 of the…Act. In any event, we do not concede that the…Act applies to a claim for damages for assault and detention. …"
(b)The plaintiff's insistence that he did not need to make an election as was expressed in his solicitor's letter to the Australian Government Solicitor dated 29 August 2002 wherein it was said:
"Accordingly we do not believe the position is clear in terms of a requirement for election. …"
(c)The plaintiff's attempt to claim economic loss in addition to non‑economic loss in contradiction to s 44 and s 45 of the Act.
The statement of claim, until amendment pursuant to the Registrar's order now appealed from, was inconsistent with the notion of there having been an election made under s 45 to pursue a claim for non‑economic loss. Until the most recent amendment the pleading as it stood was clearly inconsistent with there having been an election made under s 45 in that it did not reflect in any way the limitations contained within that section.
The plaintiff's assertion as to those matters is in conflict with an irrevocable election having been made (s 45(3)). In effect, the plaintiff was purporting to maintain a position whereby all his options remained open. That position is incompatible with and is in contradiction to, the assertion made on behalf of the plaintiff that an irrevocable election had been made.
Accordingly, for those reasons also I find support in concluding that the plaintiff had not made the election required by s 45.
The appeal will be allowed. The decision of the Registrar, insofar as he refused to strike out the claim for non‑economic loss, will be set aside.
The action will be dismissed.