Hewitt v Benale Pty Ltd
[2002] WASCA 163
•19 JUNE 2002
HEWITT -v- BENALE PTY LTD [2002] WASCA 163
| (2002) 27 WAR 91 | |||
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASCA 163 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:33/2002 | 21 MAY 2002 | |
| Coram: | SCOTT J HASLUCK J EM HEENAN J | 19/06/02 | |
| 46 | Judgment Part: | 1 of 1 | |
| Result: | FUL 33 of 2002 appeal dismissed, FUL 48 of 2002 appeal allowed | ||
| A | |||
| PDF Version |
| Parties: | JOHN FRANCIS HEWITT BENALE PTY LTD WMC RESOURCES LTD SLOBODAN KOLJIBABIC |
Catchwords: | Workers compensation Statutory interpretation Constraints on award of common law damages Whether leave required before commencing a claim for damages Breach of duty by deemed employer Scope of deemed employer provision in s 175 of the Act Provision held to apply to a party deemed the employer at time of the accident Leave to commence claim for damages required |
Legislation: | Interpretation Act 1984, s 8 Workers' Compensation and Rehabilitation Act 1981, Pt IV Div 1, Pt IV Div 2, Pt III, s 3, s 3(a), s 5, s 18, s 86, s 93B, s 93C, s 93D(4), s 160, s 175, s 175(1), s 175(2), s 175(3) |
Case References: | Austral Pacific Group Ltd (In Liq) v Air Services Australia (2000) 203 CLR 136 Bird v The Commonwealth (1988) 165 CLR 1 Bishop v Chung Bros (1907) 4 CLR 1262 Bull v Attorney-General (NSW) (1913) 17 CLR 370 Collector of Customs v Agfa Gevaert Ltd (1996) 186 CLR 389 Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 Federal Commissioner of Taxation v Comber (1986) 10 FCR 88 Hewitt v Benale Pty Ltd [2002] WADC 22 Hocking v Western Australian Bank (1909) 9 CLR 738 Hogan v Hogan (No 2) [1981] 2 NSWLR 768 Hollis v Vabu Pty Ltd (2001) 75 ALJR 1356 James Hardie & Coy v Seltsam Pty Ltd (1998) 196 CLR 53 James v Cowan (1930) 43 CLR 386 Kartinyeri v The Commonwealth (1998) 95 CLR 337 Khoury (M & S) v Government Insurance Office of NSW (1984) 54 ALR 639 Kingston v Keprose Pty Ltd (No 3) (1987) 11 NSWLR 404 Koljibabic v WMC Resources Ltd [2001] WADC 286 Midgley v Monger [2000] WASC 291 Moltoni Corporation Pty Ltd v QBE Insurance Ltd (2001) 185 ALR 213 Muller v Dalgety & Co Ltd (1909) 9 CLR 693 Municipal Officers Association of Australia v Lancaster (1981) 37 ALR 559 Newcombe v AME Properties Ltd (1995) 14 WAR 259 Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd (1963) 109 CLR 276 OP Industries Pty Ltd v MMI Workers' Compensation (NSW) Ltd (1998) 17 NSWCCR 193 Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 Re Monger; Ex Parte Rocket Engineering (Australia) Pty Ltd, unreported; FCt SCt of WA; Library No 980013; 22 January 1998 Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16 The Council of the Shire of Lake Macquarie v Abadair County Council (1969) 123 CLR 327 Thompson v Last Touch TV Services Pty Ltd (1978) 38 FLR 397 Torette House Pty Ltd v Berkman (1939) 39 SR (NSW) 156 Wacal Developments Pty Ltd v Realty Developments Pty Ltd (1978) 140 CLR 503 Adams v Chas S Watson Pty Ltd (1938) 60 CLR 545 Australian Turf Industries Pty Ltd v Dalet Pty Ltd, unreported; SCt of WA; Library No 980658; 12 November 1998 Bonser v Melnacis [2002] 1 Qd R 1 Bowes v Chaleyer (1923) 32 CLR 159 Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 Commonwealth of Australia v SCI Operations Pty Ltd (1998) 192 CLR 285 Cooper Brookes (Woolongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 Coulton v Holcombe (1986) 162 CLR 1 Employers' Mutual Indemnity Association Ltd v K B Hutcherson Pty Ltd [1976] 2 NSWLR 302 Harris v Wood [1949] VLR 43 IW v The City of Perth (1997) 146 ALR 696 Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (The New York Star) (1978) 139 CLR 231 Re Credit Tribunal; Ex parte General Motors Acceptance Corporation, Aust (1977) 14 ALR 257 The Crown v Kiffin Thomas (1904) 6 WALR 91 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : HEWITT -v- BENALE PTY LTD [2002] WASCA 163 CORAM : SCOTT J
- HASLUCK J
EM HEENAN J
- Appellant
AND
BENALE PTY LTD
Respondent
- Appellant
AND
SLOBODAN KOLJIBABIC
Respondent
(Page 2)
Catchwords:
Workers compensation - Statutory interpretation - Constraints on award of common law damages - Whether leave required before commencing a claim for damages - Breach of duty by deemed employer - Scope of deemed employer provision in s 175 of the Act - Provision held to apply to a party deemed the employer at time of the accident - Leave to commence claim for damages required
Legislation:
Interpretation Act 1984, s 8
Workers' Compensation and Rehabilitation Act 1981, Pt IV Div 1, Pt IV Div 2, Pt III, s 3, s 3(a), s 5, s 18, s 86, s 93B, s 93C, s 93D(4), s 160, s 175, s 175(1), s 175(2), s 175(3)
Result:
FUL 33 of 2002 appeal dismissed
FUL 48 of 2002 appeal allowed
Category: A
Representation:
FUL 33 of 2002
Counsel:
Appellant : Mr P J Marsh
Respondent : Mr P V Lansell
Solicitors:
Appellant : D G Price & Co
Respondent : Jackson McDonald
FUL 48 of 2002
Counsel:
Appellant : Mr M J McCusker QC & Mr D J Bishop
(Page 3)
- Respondent : Mr G R Hancy
Solicitors:
Appellant : Clayton Utz
Respondent : Slater & Gordon
(Page 4)
Case(s) referred to in judgment(s):
Austral Pacific Group Ltd (In Liq) v Air Services Australia (2000) 203 CLR 136
Bird v The Commonwealth (1988) 165 CLR 1
Bishop v Chung Bros (1907) 4 CLR 1262
Bull v Attorney-General (NSW) (1913) 17 CLR 370
Collector of Customs v Agfa Gevaert Ltd (1996) 186 CLR 389
Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285
Federal Commissioner of Taxation v Comber (1986) 10 FCR 88
Hewitt v Benale Pty Ltd [2002] WADC 22
Hocking v Western Australian Bank (1909) 9 CLR 738
Hogan v Hogan (No 2) [1981] 2 NSWLR 768
Hollis v Vabu Pty Ltd (2001) 75 ALJR 1356
James Hardie & Coy v Seltsam Pty Ltd (1998) 196 CLR 53
James v Cowan (1930) 43 CLR 386
Kartinyeri v The Commonwealth (1998) 95 CLR 337
Khoury (M & S) v Government Insurance Office of NSW (1984) 54 ALR 639
Kingston v Keprose Pty Ltd (No 3) (1987) 11 NSWLR 404
Koljibabic v WMC Resources Ltd [2001] WADC 286
Midgley v Monger [2000] WASC 291
Moltoni Corporation Pty Ltd v QBE Insurance Ltd (2001) 185 ALR 213
Muller v Dalgety & Co Ltd (1909) 9 CLR 693
Municipal Officers Association of Australia v Lancaster (1981) 37 ALR 559
Newcombe v AME Properties Ltd (1995) 14 WAR 259
Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313
Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd (1963) 109 CLR 276
OP Industries Pty Ltd v MMI Workers' Compensation (NSW) Ltd (1998) 17 NSWCCR 193
Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355
Re Monger; Ex Parte Rocket Engineering (Australia) Pty Ltd, unreported; FCt SCt of WA; Library No 980013; 22 January 1998
Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16
The Council of the Shire of Lake Macquarie v Abadair County Council (1969) 123 CLR 327
Thompson v Last Touch TV Services Pty Ltd (1978) 38 FLR 397
Torette House Pty Ltd v Berkman (1939) 39 SR (NSW) 156
Wacal Developments Pty Ltd v Realty Developments Pty Ltd (1978) 140 CLR 503
(Page 5)
Case(s) also cited:
Adams v Chas S Watson Pty Ltd (1938) 60 CLR 545
Australian Turf Industries Pty Ltd v Dalet Pty Ltd, unreported; SCt of WA; Library No 980658; 12 November 1998
Bonser v Melnacis [2002] 1 Qd R 1
Bowes v Chaleyer (1923) 32 CLR 159
Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249
Commonwealth of Australia v SCI Operations Pty Ltd (1998) 192 CLR 285
Cooper Brookes (Woolongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297
Coulton v Holcombe (1986) 162 CLR 1
Employers' Mutual Indemnity Association Ltd v K B Hutcherson Pty Ltd [1976] 2 NSWLR 302
Harris v Wood [1949] VLR 43
IW v The City of Perth (1997) 146 ALR 696
Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (The New York Star) (1978) 139 CLR 231
Re Credit Tribunal; Ex parte General Motors Acceptance Corporation, Aust (1977) 14 ALR 257
The Crown v Kiffin Thomas (1904) 6 WALR 91
(Page 6)
1 SCOTT J: These two appeals were heard together because, as will be revealed in these reasons, the issues arising in each appeal were identical.
2 The question that arises in each matter is the proper construction of s 175 of the Workers' Compensation and Rehabilitation Act 1981 ("the Workers' Compensation Act"). That section provides:
"175. Principal contractor and sub-contractor deemed employers
(1) Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor if he were the sole employer would be liable to pay under this Act.
(2) The principal is entitled to indemnity from the contractor for the principal's liability under this section.
(3) The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal.
(4) Where the principal and the contractor are jointly and severally liable under this section, a judgment obtained against one is not a bar to proceedings against the other except to the extent that the judgment has been satisfied.
(5) Where compensation is claimed from or proceedings are taken against the principal, in the application of this Act a reference to the employer shall be read as a reference to the principal except where, for the purpose of calculating the amount of compensation, a reference is made to the earnings of a worker, the reference shall be read as a reference to the earnings of the worker under the contractor.
(Page 7)
- (6) For the purposes of this section, where sub-contracts are made ¾
(a) 'principal' includes the original principal for whom the work is being done and each contractor who constitutes himself a principal with respect to a sub-contractor by contracting with him for the execution by him of the whole or any part of the work;
(b) 'contractor' includes the original contractor and each sub-contractor; and
(c) a principal's right to indemnity is a right against each contractor standing between the principal and the worker.
(7) Where the disability does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply."
3 The central issue relates to the deeming provision under s 175(1) and that part of the section which deems a principal to be an employer for the purposes of the Act.
4 Each matter proceeded in the District Court on agreed statements of facts which are set out in other judgments.
5 There are two conflicting decisions from the District Court of Western Australia which fall for consideration in these appeals. In Koljibabic v WMC Resources Ltd [2001] WADC 286 O'Sullivan DCJ had occasion to consider the validity of a writ of summons against a deemed employer. The writ had been issued without the leave of the District Court as required by s 93D(4) of the Workers' Compensation Act as it then existed. At the time that provision required leave of the District Court before proceedings in which damages were sought could be commenced. It was not in issue that if that provision applied to these proceedings, then the writ issued by the worker in each case was a nullity.
6 O'Sullivan DCJ held that s 93D(4) of the Workers' Compensation Act had no application to the proceedings before him. In his reasons
(Page 8)
- his Honour referred to the definition of "employer" in s 5 of the Workers' Compensation Act which provides:
"'Employer' includes any body of persons, corporate or unincorporate, and the legal personal representative of a deceased employer, and, where the services of a worker are temporarily lent or let on hire to another person by the person with whom the worker has entered into a contract of employment the latter shall, for the purposes of this Act, be deemed to continue to be the employer of the worker whilst he is working for that other person."
"The definition of employer in section 5 does not include a principal as defined in section 175(1). In my view if the intention of the legislature was to treat all 'principals' as employers of injured workers so that the provisions of the act generally applied to them it would have been appropriate to have amended section 5. In my opinion this points to a narrower application of section 175 than that contended for by the appellant."
8 His Honour went on to consider the limitation on damages contained in the Workers' Compensation Act and said at [15] - [16]:
"It is one thing to limit common law actions against a person who bears an ultimate statutory liability to compensate an injured worker. It is another to limit it in favour of someone who will often bear no financial burden at all."
9 [16]:
"In my view the language of section 175 is apt to describe claims for compensation but not claims at common law. Thus the word 'damages' and 'action' are not to be found in the section [cf s 92 and s 93]. Moreover section 175(2) and 175 (3) contemplate that a principal should become liable 'under this section'. No liability at common law arises under the section at all. Section 175(1) provides that both the principal and the contractor 'are jointly and severally liable to pay any compensation which the contractor, if he were the sole employer would be liable to pay under the act'. In my view the
(Page 9)
- liability 'under the section' referred to in subsections (2) and (3) of section 175 is the liability created in subsection (1)."
10 O'Sullivan DCJ therefore concluded that s 175(1) deemed a principal to be an employer for the purposes of creating liability to pay compensation under the Workers' Compensation Act and no more.
11 The same issue arose for consideration before Hammond CJDC in a subsequent action of Hewitt v Benale Pty Ltd [2002] WADC 22. As the reasons in that case indicate, Hammond CJDC was aware of the earlier decision of O'Sullivan DCJ.
12 Hammond CJDC identified the issue before him at [10] as:
"The issue therefore crystallises to this question as to whether or not the restriction or limitation on the award of 'common law' damages clearly envisaged by Division 2 of the act is applicable in the case of an action brought against the defendant in this matter who is to be regarded as an employer of the plaintiff only by virtue of the deeming provisions of section 175 of the Act."
13 Hammond CJDC came to the opposite conclusions arrived at by O'Sullivan DCJ and said at [19]:
"By virtue of the enactment of the wide-ranging Act No. 48 of 1993, the principal act has changed its integral character. It is no longer an act dealing with the compensation of injured workers, it is an act that now (inter alia) clearly seeks to constrain the award of 'common law' damages to workers by limiting the right to claim damages for tort to those where higher levels of loss are established.
14 [20]:
"It therefore, in my view, serves no useful purpose to return to the provision of section 3 of the act and to seek therefrom a conclusion that would limit the application of Act No. 48 of 1993."
15 Hammond CJDC then dealt with authority and referred to the contrary views of O'Sullivan DCJ and said at [22 to 24]:
"With the greatest respect to the contrary views expressed by his Honour Judge O'Sullivan and Registrar Kingsley, I cannot find that there is any room for doubt as to the application of
(Page 10)
- Division 2 of the 1993 act. It clearly refers to the 'employer'. The act contained the section 175 provision at that point deeming two classes of persons to be the employer 'for the purposes of this act.'"
16 [23]:
"I am conscious of the dicta of Deane and Gaudron JJ in Bird v The Commonwealth (1988) 165 CLR 1 at 9 referred to by his Honour Judge O'Sullivan in Koljibabic v WMC Resources Ltd [2001] WADC 286 at 17 but at the end of the day it is my finding that the legislation I am considering no longer fills the definition of simply workers' compensation legislation, it has wider purposes."
17 [24]:
"With regret I must disagree with my colleagues. I must find that Part IV, division 2 of the act does apply to the plaintiff's claim in the factual circumstances set out in the statement of agreed facts."
18 Because counsel for the appellant in WMC Resources v Koljibabic, FUL 48 of 2002 was advancing the same contentions as counsel for the respondent in Hewitt v Benale Pty Ltd, FUL 33 of 2002, this Court determined that the appropriate course of proceedings was for counsel for the appellant in 48 of 2002 to make his submissions, followed by counsel for the respondent in FUL 33 of 2002, then we heard submissions from counsel for the appellant in FUL 33 of 2002 and the respondent in FUL 48 of 2002. That unusual course was adopted because the arguments advanced by the parties could be more uniformly and rationally dealt with in that way.
19 The grounds of appeal in each matter are:
20 FUL 33 of 2002:
1. The learned Chief Judge erred in law in finding that the constraints on awards of common law damages that apply to an action by a worker against his or her employer as set out in Part IV Division 2 of the Workers' Compensation & Rehabilitation Act 1981 applied to the Appellant's (Plaintiff's) action against the Respondent (Defendant) notwithstanding the absence of any contract of
(Page 11)
- employment between the Appellant (Plaintiff) and the Respondent (Defendant) who was only a deemed employer of Appellant (Plaintiff) pursuant to s 175 of the Workers' Compensation and Rehabilitation Act 1981.
- 2. Alternatively, the learned Chief Judge erred in law by finding that s 175 applied to the Appellant's claim against the Respondent.
21 And the grounds of appeal in FUL 48 of 2002 are:
1. The learned Judge erred in law in finding that the Appellant is not deemed pursuant to Section 175(1) of the Workers' Compensation Act ("the Act") to be the Respondent's employer for the purposes of Section 93D(4) of the Act, when he ought to have found that the Appellant is so deemed.
2. The learned Judge erred in failing to apply Section 175(5) of the Act when he ought to have applied the same and found that, by reason thereof, the Appellant is deemed to be the Respondent's employer for the purpose of Section 93D(4) of the Act.
3. The learned Judge erred in failing to find that:
(a) pursuant to Section 93D(4) of the Act, the Respondent was obliged to obtain the leave of the District Court to bring the Action; and
(b) by reason of the Respondent's failure to obtain such leave, the Writ therein is a nullity and liable to be set aside,
when he ought to have so found.
22 Senior counsel for the appellant in FUL 48 of 2002 submitted that the deemed employer under s 175 of the Act was a deemed employer for all purposes of the Act. In particular, counsel pointed to the provisions which provide that in the event of a worker recovering both common law damages and workers' compensation, the amount received by way of workers' compensation must be set off against the damages award. Counsel contended that these provisions are clearly referrable not only to the actual employer, but also the deemed employer under s 175 of the Act because otherwise, if the deemed employer could not offset the workers' compensation payments against the damages award, then the employee would receive not only workers' compensation but, in addition, damages arising from the same loss. That, counsel contended, was clearly not the
(Page 12)
- intention of the legislation and it followed that the reference in s 175 to the deemed employer was not simply for the purposes of workers' compensation payments but for all purposes of the Act.
23 Senior counsel further contended that the effect of subs (4) of s 175 was that both the principal and the contractor could be jointly and severally liable to a worker under the section, but so that the worker could only receive one compensation payment. That being the case, the Act contemplated that there could be more than one employer for the purposes of the Act, even although the fictional employer under s 175 would not at common law otherwise be an employer in the strict legal sense.
24 Senior counsel also pointed to the fact that the definition of "employer" in the Workers' Compensation Act is in its terms an inclusive definition and so does not purport to be either exclusive or exhaustive. "Employer" is defined in the Workers' Compensation Act:
"'employer' includes any body of persons, corporate or unincorporate, and the legal personal representative of a deceased employer, and, where the services of a worker are temporarily lent or let on hire to another person by the person with whom the worker has entered into a contract of employment the latter shall, for the purposes of this Act, be deemed to continue to be the employer of the worker whilst he is working for that other person;
the term 'employer' shall extend to any person for or by whom the worker, as defined in paragraph (a) or (b) of the definition of 'worker', works or is engaged; and
'employer' in relation to liability to pay compensation for or in respect of a disability to a worker, means the employer in the relevant employment."
25 Whilst it is correct to say that the definition of "employer" in that section contains no reference to the "deemed employer" in s 175, the definition is, nonetheless, an inclusive definition. The definition is not exhaustive and does not necessarily exclude a construction which would enable a deemed employer to come within its terms.
26 It should be added for the sake of completeness that after the issue of the writ in Koljibabic v WMC the requirement for leave to be obtained before an action for common law damages could be commenced was deleted from the Workers' Compensation Act.
(Page 13)
27 A further argument relied upon by O'Sullivan DCJ, and supporting his construction of the Act, arises from the provisions of s 3 of the Workers' Compensation Act which provides:
"3. Purposes
The purposes of this Act are -
(a) to make provision for the compensation of -
(i) workers who suffer a disability;and
(ii) certain dependants of those workers where the death of the worker results from such a disability;
(c) to promote safety measures in and in respect of employment aimed at preventing or minimizing occurrences of disabilities; and
(d) to make provision for the hearing and determination by the dispute resolution bodies of disputes between parties involved in workers' compensation matters in a manner that is fair, just, economical, informal and quick."
29 It is also to be noted that s 175 appears in Part X of the Workers' Compensation Act in a part headed "Insurance" which deals with the obligations of employers to take out insurance to protect workers in relation to compensation liability. Senior counsel for the appellant indicated that the policy of insurance taken out by WMC Resources Ltd, the appellant in appeal 48 of 2002, does not cover the appellant's liability as a deemed employer.
(Page 14)
30 The history of s 175 is set out in the reasons of O'Sullivan DJC in Koljibabic v WMC Resources Ltd [2001] WADC 286 at [7] and [8]:
"[7] There is no doubt that the appellant was a 'principal' within the meaning of that word in this provision. The question upon which this application turns is whether the section operates to define the appellant as an employer for the purposes of s 93B and Part IV Div 2.
[8] Section 175(1) first appeared in the Act when it was passed in 1912 and there has been very little alteration to it over the years (see No. 96 of 1912, s 9). At that time and until 1993 there was, of course, no provision to be found restricting the right of an injured worker to recover damages at common law."
31 Section 93D(4) of the Workers' Compensation Act which was the relevant provision applicable to the matter being dealt with by O'Sullivan DCJ at the time of the issue of the writ provided:
"Proceedings in which damages are sought are not to be commenced without the leave of the District Court".
32 That section was contained within Div 20 Part IV of the Act. Section 93B(1) which confines the ambit of the Division provides:
"93B Application of this Division
(1) This Division applies to the awarding of damages against a worker's employer independently of this Act in respect of a disability suffered by a worker if -
(a) the disability was caused by the negligence or other tort of the worker's employer; and
(b) compensation has been paid or is payable in respect of the disability under this Act, or would have been paid or be payable but for section 22."
(Page 15)
- for the purposes of a common law damages claim so that the provisions of s 93D(4) had no application to the subject matter of the writ of summons.
34 It is to be noted that while s 175(1) of the Workers' Compensation Act was contained within the Act in a slightly different form since the Act was first passed in 1912 there was of course no Div 2 of Part IV of the Act at that time. Those provisions were introduced in 1993. Once those provisions were introduced the question that then arose was whether the deemed employer in s 175(1) was to be given a meaning which would extend the limitation to the restraints on common law damages contained within Div 2 of Part IV to the deemed employer.
35 Section 8 of the Interpretation Act 1984 provides:
"8. Law Always Speaking
A written law shall be considered as always speaking and whenever a matter or thing is expressed in the present tense, it shall be applied to the circumstances as they arise, so that effect may be given to every part of the law according to its true spirit, intent, and meaning."
36 That approach to statutory construction was applied by the High Court of Australia (Barwick CJ, Menzies and Windeyer JJ in The Council of the Shire of Lake Macquarie v Abadair County Council (1969) 123 CLR 327 per Barwick CJ at 331.
37 It is apparent from these reasons that the relevant provisions of the Workers' Compensation Act have changed over the years. With the introduction of Div 2 of Part IV of that Act limitations were placed upon the right of an injured employee to claim damages. In my view, it is clear from those provisions that whatever the meaning of s 175(1) at the time of the passing of the Workers' Compensation Act the deemed employer was intended to come within the limitation of damages provisions contained in Div 2 Part IV for the purposes of the relevant provisions of s 93B.
38 Whilst the facts are not precisely the same in the second appeal of Hewitt v Benale in that when the writ was issued in that case, s 93B had by then been repealed, the same issue arose. The reason is that s 93C of the Act, which then applied, provided:
(Page 16)
"93C Limit on Powers of Courts
If this division applies a court is not to award damages to a person contrary to this division."
39 It follows that the same consideration arose namely, whether the deemed employer should be subject to the limitation provisions created in Div 2 Part IV of the Act.
40 The issue that falls for resolution in these appeals is, therefore, whether the deeming provision in s 175(1) deems the principal to be the employer only for the purposes of payment of workers' compensation or whether the deeming provision applies for other purposes under the Act, namely the institution of civil action for common law damages against the deemed employer.
41 If the view taken by O'Sullivan DCJ is correct, then the limitations on liability for common law damages contained in Div 2 of Part IV of the Workers' Compensation Act would apply to limit the liability of the actual employer, but would not apply so as to limit the liability of the deemed employer. In my view, that could not have been the intention of the legislature. There is no reason why the actual employer of an injured worker should have the advantage of a statutory limitation on liability whilst a deemed employer, occupying that position because of the fiction created in s 175(1) of the Workers' Compensation Act, would not.
42 It would also be anomalous for an employee to be able to obtain an unlimited award of damages against a deemed employer, but be subject to the limitation provisions if action was taken against the actual employer. In workplaces where an employee was employed by a contractor or subcontractor it would be in the employee's best interests to sue the principal and thereby avoid the statutory limitations.
43 I then turn to the legal principles dealing with the construction of the section.
44 In the fifth edition of Statutory Interpretation in Australia by Pearce and Geddes the authors says at page 116 [4.34] under the heading Device of "Deeming":
"This use of the expression 'deemed' was described by Griffith CJ in Muller v Dalgety and Co Ltd (1909) 9 CLR 693 at
(Page 17)
- 696 as a 'statutory fiction', a device for extending the meaning of a term to a subject matter which it properly does not designate. When 'deemed' is used in this way, Griffith CJ pointed out that it is important to consider the purpose for which the fiction has been introduced. Care must be taken to observe that the extended meaning of the word is applied but equally the reader must be aware that it is a fictitious use of the word and is only applicable in its particular context. 'Deeming provisions are required by their nature to be construed strictly and only for the purpose for which they are resorted to … . It is improper in my view to extend by implication the express application of such a statutory fiction."
45 It would appear that a similar provision exists in the corresponding legislation in New South Wales. In OP Industries Pty Ltd v MMI Workers' Compensation (NSW) Ltd (1998) 17 NSWCCR 193 Meagher, Beazley JJA and Fitzgerald AJA had occasion to consider the corresponding provisions in New South Wales and construed the phrase "for the purposes of the Act" in such a way as not to limit its operation to the recovery of statutory compensation. Beazley and Fitzgerald JJA took the view that to impose a restrictive or narrow construction of that term may well introduce or leave open complications the clause was intended to overcome. The same view was expressed by Meagher JA at 6.
46 It was submitted by counsel for the respondent in appeal 33 of 2002 that the literal meaning of the purposes in s 3 of the Workers' Compensation Act should be read into s 175 where that provision refers to "the purposes of this Act". It is said that there is no reference in those purposes to claims for common law damages. It is to be noted, however, that s 3 of the Act was in the Act before the introduction of the limitation provisions in Part IV, Div 2 were introduced into the legislation in 1993. No corresponding amendments were made to s 3 to reflect the change of purpose introduced into the legislation by those amendments. It follows that a literal interpretation of the statute based upon that approach is not called for in these cases: see Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 per McHugh, Gummow, Kirby and Hayne JJ at 384. It follows, in my opinion, that s 175 is not ambiguous in the sense that it requires a construction which would not interfere with the basic rights of workers.
47 It is further contended by counsel for the respondent in FUL 33 of 2002 that a construction which makes the deemed employer an employer for all purposes of the Workers' Compensation Act would in itself create
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anomalies. In particular, reference was made to the indemnity provisions which permit the employer to obtain an indemnity from a party liable for common law damages with respect to workers' compensation payments. I am not persuaded that this construction of the Act necessarily creates that consequence. In my view, the indemnity provision in s 92 of the Workers' Compensation Act is designed to ensure that where a worker recovers both common law damages and workers' compensation, the party paying the common law damages should indemnify the party by whom the workers' compensation payments were made to the extent of those payments. If the deemed employer has made the payments, then I can see no reason why the deemed employer should not be reimbursed. If the actual employer is the party by whom the payments were made, then I can see no reason why the actual employer should not seek reimbursement, nor can I can see any reason why reimbursement should be made or ordered in such circumstances. Section 92, in my view, is directed to ensuring that the party paying out the workers' compensation payments, whoever that might be, is indemnified.
48 In my view, it is unnecessary to determine whether the deemed employer under s 175(1) of the Workers' Compensation Act is a deemed employer for all purposes of the Act. It is sufficient to conclude that a deemed employer under s 175 is an employer for the purposes of Div 2 Part IV of the Workers' Compensation Act so that the provisions which limit the liability of an employer under that part of the Act would equally apply to the deemed employer.
49 In my opinion, therefore, appeal FUL 33 of 2002 should be dismissed and appeal FUL 48 of 2002 should be allowed.
50 I would hear from the parties as to any further orders that are required to resolve these two matters.
51 HASLUCK J: The question raised by these appeals is whether the constraints on the award of common law damages prescribed by Pt IV Div 2 of the Workers' Compensation and Rehabilitation Act 1981 are applicable to a claim brought against a party who is to be regarded as an employer of the claimant pursuant to the deeming provisions of s 175 of the Act.
52 The facts and matters giving rise to the appeals are set out in the judgment of Heenan J and I will not go over them at length. His Honour notes that a difference of opinion has emerged in the District Court concerning the deeming provision. The difference of opinion is
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manifested in the judgments of his Honour Judge O'Sullivan concerning FUL 48 of 2002 and his Honour Chief Judge Hammond concerning FUL 33 of 2002. For the reasons given by Heenan J, I find it convenient to begin by looking at the matters in issue in the former appeal, that is to say, WMC Resources Ltd v Koljibabic FUL 48 of 2002.
53 The respondent, Slobodan Koljibabic, was employed by a firm called Ralph M Lee. That firm was engaged by the appellant, WMC Resources Ltd, to perform work at the appellant's mine and nickel smelter located near Kalgoorlie. During the course of the work the respondent allegedly suffered injury from exposure to fumes. He commenced a common law action against WMC in which he sought damages for negligence and breach of statutory duty.
54 The effect of s 93D(4) of the Act was that leave had to be obtained before a claim for damages could be commenced against an employer. WMC contended that the effect of s 175(1) of the Act was to require that WMC be regarded as an employer of the respondent. O'Sullivan DCJ of the District Court ruled against WMC in regard to that issue. He held that the respondent was not employed by WMC and was therefore at liberty to commence a common law action without the leave of the District Court. WMC has now brought an appeal to the Full Court.
55 The Act provides in Pt III for a scheme by which employers are liable to pay compensation to workers who suffer disability by (among other things) personal injury by accident arising out of, or in the course of, employment. An important provision in that regard is s 18 of the Act which provides that if a disability of a worker occurs, the employer shall, subject to this Act, be liable to pay compensation in accordance with Sch 1. By s 5 of the Act the term "disability" is defined so as to cover disabilities arising in various circumstances including a personal injury by accident arising out of or in the course of the employment, or whilst the worker is acting under the employer's instruction.
56 The term "employer" is defined broadly. Where the services of a worker are temporarily lent or let on hire to another person by the person with whom the worker has entered into a contract of employment, the latter shall "for the purposes of this Act" be deemed to continue to be the employer of the worker whilst he is working for that other person. It is further provided that the term "employer" shall extend to any person for whom any worker works or is engaged.
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57 Subject to some qualifications that need not be noticed, s 160 of the Act obliges every employer to obtain from an approved insurance office a policy of insurance for the full amount of his liability to pay compensation under the Act to any worker employed by him.
58 Unlike workers' compensation legislationin some other jurisdictions, which requires insurance against all forms of an employer's liability for personal injury to a worker, the Act does not require an employer to insure against liability at common law. Moltoni Corporation Pty Ltd v QBE Insurance Ltd (2001) 185 ALR 213 at par 25.
59 Section 3 of the Act is in these terms:
"The purposes of this Act are -
(a) to make provision for the compensation of -
(i) workers who suffer a disability; and
(ii) certain dependants of those workers where the death of the worker results from such a disability;
(b) to promote the rehabilitation of those workers with a view to restoring them to the fullest capacity for gainful employment of which they are capable;
(c) to promote safety measures in and in respect of employment aimed at preventing or minimizing occurrences of disabilities; and
(d) to make provision for the hearing and determination by the dispute resolution bodies of disputes between parties involved in workers' compensation matters in a manner that is fair, just, economical, informal and quick."
60 The requirement in s 160 that employers be insured against liability to pay compensation is clearly a central feature of the legislation, but this is not included in the purposes listed in s 3 of the Act. This suggests to me that s 3 is intended to reflect the general policy of the Act, but the manner in which the Act makes provision for the compensation of workers who suffer a disability is to be determined by a close reading of the various checks and balances comprising the scheme of the Act. James v Cowan (1930) 43 CLR 386 at 410.
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61 Part IV of the Act deals with civil proceedings in addition to or independent of the Act. It is common knowledge that in 1993 various amendments were effected which were aimed at imposing constraints on awards of common law damages. Two divisions were created within Pt IV of the Act at that time. Division 1 contains a number of general provisions bearing upon a worker's entitlement to recover damages at common law. For example, s 86 of the Act lies within Div 1. It reads as follows:
"Except as expressly provided by this Act, nothing in this Act affects any liability that exists independently of this Act."
62 A newly created Div 2 deals with constraints on awards of common law damages. Section 93B provides that this Division applies to the awarding of damages against a worker's employer independently of the Act in respect of a disability suffered by a worker if the disability was caused by the negligence or other tort of the worker's employer and compensation has been paid or is payable in respect of the disability under this Act. By s 93C, if this Division applies, a Court is not to award damages to a person contrary to this Division. Various other provisions have the effect of confining claims for damages arising out of or in the course of employment to cases in which substantial amounts are claimed. A claimant who obtains damages at common law is obliged to give credit for workers' compensation payments. At the time the proceedings were commenced in the present case, s 93D(4) provided that claims for damages at common law were not to be commenced without the leave of the District Court.
63 It emerges, then, to this point, that the crucial question in the present case was whether the proceedings commenced by the respondent against WMC were to be characterised as proceedings against the worker's employer. The respondent's actual employer was Ralph M Lee but he was performing work under the control and upon the premises of WMC.
64 This brings me to s 175 of the Act. WMC contended that it was to be regarded as the respondent's employer as a consequence of this provision not only in regard to any liability for compensation under the Act but also in regard to the provisions concerning constraints on awards of common law damages.
65 Section 175 of the Act reads in part as follows:
"(1) Where a person (in this section referred to as the principal) contracts with another person (in this section
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- referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor if he were the sole employer would be liable to pay under this Act.
- (2) The principal is entitled to indemnity from the contractor for the principal's liability under this section.
(3) The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal."
66 It was not in issue in the present case that WMC was "the principal" as defined by s 175(1) of the Act. The bone of contention between the parties was whether WMC was deemed to be the respondent's employer only in respect of a liability to pay compensation under the Act or whether it was a deemed employer in respect of all matters of liability affected by the Act.
67 Counsel for the respondent submitted that the function of the deeming provision was limited to ensuring that an injured employee was entitled to recover workers' compensation from both the principal and the employer. A party such as WMC was deemed to be an employer of the worker "for the purposes of this Act" and this should be regarded as a reference to the purposes specifically listed in s 3 of the Act. In the absence of any express reference in the list of purposes to an intention upon the part of the legislature to impose limitations upon the recovery of damages at common law, s 175(1) should be interpreted so as to confine the operation of the deeming provision to claims for compensation under the Act. That would leave an employee such as the respondent at liberty to pursue a claim for damages at common law independently of the Act in the manner expressly allowed for by s 86 of the Act.
68 Counsel for the respondent submitted further that workers' compensation legislation is to be given a construction that is beneficial to a worker, and a construction which is favourable to the worker should be preferred. Bird v The Commonwealth (1988) 165 CLR 1 at 9; Re Monger; Ex Parte Rocket Engineering (Australia) Pty Ltd, unreported;
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- FCt SCt of WA; Library No 980013; 22 January 1998; Midgley v Monger [2000] WASC 291. This meant that in the absence of any provision expressly removing or qualifying his entitlement to claim damages at common law he should be at liberty to pursue such a claim.
69 I note in passing that the respondent's stance before the Full Court reflected the ruling of O'Sullivan DCJ in the Court below. In his Honour's view, the language of s 175 of the Act was apt to describe claims for compensation but not claims at common law. The provision did not refer expressly to liability at common law. In his view the liability "under this Section" referred to in s 175(2) and s 175(3) was the liability created in s 175(1), that is to say, a liability to pay any compensation which the contractor, if he were the sole employer, would be liable to pay "under this Act". He concluded that s 175(1) deems a principal to be an employer for the purpose of creating a liability to pay compensation under the Act and no more. This meant that the respondent in the present case was not required to obtain leave before commencing proceedings.
70 Counsel for WMC submitted that the interpretation adopted by O'Sullivan DCJ (and contended for by the respondent on appeal) would have anomalous consequences. If two workers were both injured in the course of working in the business of the owner of certain premises, and both were injured as a result of a defective mode of work, then if the first worker was directly employed by the owner of the premises, the first worker's claim would be subject to the constraints upon recovery of damages at common law imposed by Div 2 of Pt IV of the Act. On the other hand, if the circumstances were that the second worker was employed by an outside contractor, so that the owner of the premises was his deemed employer, the second worker would not be subject to such constraints. Actual and deemed employers each would both be liable to pay statutory compensation to workers, but the deemed employer would also be fully liable at common law, whilst the actual employer, with the non-delegable duty of care to the worker, would not be liable to that extent.
71 In Kingston v Keprose Pty Ltd (No 3) (1987) 11 NSWLR 404 McHugh J observed at 423 that a search for the grammatical meaning of a statutory provision still constitutes the starting point in regard to statutory construction. But if the grammatical meaning of a provision does not give effect to the purpose of the legislation, the grammatical meaning cannot prevail. It must give way to the construction which will promote the purpose or object of the Act. His Honour was of the view that a purposive
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- and not a literal approach is the method of statutory construction which now prevails.
72 One must also take account of the basic rule of statutory interpretation that the words of a statute must be interpreted having regard to the statute as a whole. In many cases, an Act does not contain provisions setting out in express words the policy and purpose of the legislation, but this does not prevent the Court from determining the policy or purpose of the legislation by a consideration of the various provisions of the legislation. Municipal Officers Association of Australia v Lancaster (1981) 37 ALR 559 at 579.
73 Reasoning of this kind is reflected in s 18 of the Interpretation Act 1984 which provides that in the interpretation of a provision of a written law, a construction that would promote the purpose or object underlying the written law (whether that purpose or object is expressly stated in the written law or not) shall be preferred to a construction that would not promote that purpose or object.
74 Section 175(1) of the Act provides that both the principal and the contractor are "for the purposes of this Act" deemed to be employers of the worker. The purposes of the Act are set out in s 3 of the Act. It is true that there is no express reference in the purposes listed in that provision to any limitation of liability in respect of common law claims. However, the purposes of the Act include, pursuant to s 3(a), the making of provision for the compensation of workers who suffer a disability. To my mind, this must be taken to mean the provision of compensation in the manner provided for by the Act.
75 I have already noted that a central feature of the scheme is that employers, by s 160, are required to obtain insurance cover in respect of liability for compensation under the Act, although this requirement does not appear as one of the listed purposes of the Act. To my mind, this suggests that when one seeks to understand what is meant by the purpose of making 'provision for the compensation of workers' (being one of the purposes mentioned in s 3 of the Act), it is permissible to look at the various constituents of the scheme reflected in the Act with a view to ascertaining what falls within the purpose. Those constituents, as the Act stood when the present proceedings were commenced, included certain constraints upon the award of damages at common law. It therefore seems to me that upon its proper interpretation, the deeming provision reflected in s 175(1) is applicable for all purposes of the Act. This means that Div 2 of Pt IV, and s 93D(4) in particular, applies to the respondent's
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- claim. The respondent was obliged to obtain leave pursuant to s 93D(4) before commencing proceedings for damages. If s 175(1) is interpreted in that manner, then the anomaly described in earlier discussion falls away.
76 I consider that the view I have just expressed gives effect to the purpose of the Act. It is quite clear from a consideration of the Act as a whole that the legislation is not designed to provide compensation to an injured worker without any limitation. It emerges from the scheme of the Act that a worker is only entitled to recover compensation in respect of injuries incurred in the course of his employment or in similar circumstances. There are various other checks and balances which reveal that the amounts recoverable as compensation will have to conform to certain prescribed limits. The Act guards against double recovery of both compensation and damages. It is consistent with the scheme of the Act that there should be certain constraints upon the recovery of damages at common law, although, no doubt, there will be adjustments to what is thought to be the appropriate balance from time to time.
77 I also find some support for the view I have expressed in s 175(3) of the Act. The effect of that provision is that the principal is not liable under the deeming provision unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal. This suggests that the deeming provision is only to apply in circumstances where the work being performed approximates to the worker's usual course of employment. It seems to me that this restriction removes any element of unfairness that might arise if the party contracting out its labour were to be unexpectedly exposed to a liability for damages at common law which arose from work not usually being performed by the actual employer. To my mind, this provision is consistent with the notion that the deemed employer mechanism is applicable for all purposes of the Act including the constraints on award of damages at common law.
78 It follows from these reasons that I would allow the appeal and hold that the respondent was obliged to obtain leave pursuant to s 93D(4) of the Act before commencing proceedings.
79 I apply the same reasoning to the appeal from his Honour Chief Judge Hammond in Hewitt v Benale Pty Ltd FUL 33 of 2002.
80 In essence, as appears from a schedule of agreed facts settled for use in the trial of a preliminary issue in this matter, the appellant, John Francis Hewitt, was employed by Skill Hire Pty Ltd as a meat process worker and
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was hired out to the respondent, Benale Pty Ltd, to work at that company's abattoir.
81 It was agreed for the purpose of s 175 of the Act that Benale was a deemed employer of the plaintiff. The question for determination in the District Court was whether the constraints on the award of damages at common law provided for by Div 2 of Pt IV applied to the appellant's claim for damages.
82 Hammond CJDC held that Div 2 of Pt IV of the Act applies to the appellant's claim in the factual circumstances set out in the statement of agreed facts. The appellant was therefore obliged to apply for and obtain leave from the District Court before commencing proceedings for damages. It was against this background that the appellant brought an appeal against the ruling.
83 It follows from my reasoning in respect of the WMC appeal that I would dismiss the appeal in this appeal FUL 33 of 2002 and hold that the appellant was obliged to obtain leave before commencing proceedings.
84 EM HEENAN J: These two appeals, which the Court has heard together, raise the same important point: namely, whether s 93B and Pt IV Div 2 of the Workers' Compensation and Rehabilitation Act 1981 apply to an action for damages at common law by a plaintiff suffering personal injury as a result of an alleged breach of contract, breach of statutory duty, negligence or other breach of duty by a defendant who, while not the plaintiff's employer, is a deemed employer by virtue of s 175 of that Act.
85 This difficult question has resulted in two conflicting answers being given in the two judgments of the District Court of Western Australia which are under appeal. In the proceedings which are the subject of appeal, FUL 48 of 2002, his Honour Judge O'Sullivan QC has held that the deemed employer provisions of s 175 of the Act are limited in their application and purposes and do not apply to the provisions in Pt IV Div 2 and, in particular, to s 93B of the Act. On the other hand, his Honour Chief Judge Hammond held, in the proceedings giving rise to appeal FUL 33 of 2002, that the provisions of s 175 in deeming certain persons to be an employer for the "purposes of the act" extend to all provisions of the Act including Div 2 of Pt IV. On this second view s 93B and the other provisions of that division apply to any plaintiff who wishes to commence a common law action for damages for personal injuries against a defendant who is such a deemed employer. The resolution of these conflicting views will resolve not only the litigation between the parties to
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these two appeals, but no doubt will have application to many other similar cases. Therefore, the issue, which although one essentially of statutory interpretation, is of major practical significance.
86 Before directly addressing the issues posed by the appeals, it is necessary to relate the facts which have led to the two sets of proceedings in the District Court and to describe how each case was dealt with in that court. It is convenient first to address Appeal FUL 48 of 2002 because, although commenced after Appeal FUL 33 of 2002, the events in issue occurred earlier in time.
Appeal Ful 48 of 2002 – WMC Resources Ltd v Slobodan Koljibabic
87 Koljibabic issued a generally endorsed writ of summons against WMC Resources Ltd on 19 March 1998 claiming damages for injuries suffered in an accident at the Western Mining Kalgoorlie nickel smelter on 29 July 1996 alleged to be due to the negligence, breach of contract or breach of statutory duty of the defendant. The provisions of the Workers' Compensation and Rehabilitation Act 1981 as they stood at the date of the commencement of this action required that leave of the District Court to commence the proceedings was necessary if the defendant was the employer of the plaintiff. It has been held by this Court that the commencement of such proceedings without leave, where leave was required, constitutes a nullity and that consequently such proceedings can be summarily dismissed or struck out – Newcombe v AME Properties Ltd (1995) 14 WAR 259.
88 In the action, a statement of claim was delivered and amended. By this pleading, the plaintiff (respondent) alleged that the defendant (appellant) conducted mining operations at the Western Mining mine and/or nickel smelter near Kalgoorlie. He further alleged that in the course of those operations, the appellant/defendant engaged contractors, including the plaintiff's employer Ralph M Lee, and co-ordinated their activities. The plaintiff, as an employee of Ralph M Lee, was lawfully working on the defendant's site as a full-time electrician. It was further alleged that the work which Ralph M Lee had contracted to perform for the defendant related to matters over which WMC Resources Ltd had control or, but for an agreement between it and Ralph M Lee, would have had control. It was then alleged that the plaintiff sustained personal injury arising from exposure to smells, gases, fumes, steam containing noxious chemicals and airborne sediment which were dangers due to the state of the premises and to actions or omissions of the appellant/defendant. The pleading then set out a series of alleged acts of negligence or breach of
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- statutory duty followed by particulars of injuries, medical treatment, disabilities and a plea of loss and damage. A defence was filed by the defendant/respondent by which the appellant, WMC Resources Ltd; alleged that Ralph M Lee (WA) Pty Ltd was engaged as an independent contractor; asserted that the working premises were at the material times controlled by Ralph M Lee; denied negligence or other breach of duty; put in issue all allegations of damages; and advanced, in the alternative, a plea of contributory negligence. Specifically, the appellant/defendant pleaded: that prior leave was necessary for the commencement of the action pursuant to s 93D(4) of the Workers' Compensation and Rehabilitation Act; that leave had not been obtained; and that, by virtue of s 93C, the plaintiff was not entitled to any damages in the action.
89 Later, by chamber summons issued 25 May 2001, the appellant/defendant applied for orders setting aside the writ for want of jurisdiction or, alternatively, sought leave to apply for summary judgment and for the dismissal of the plaintiff's claim pursuant to Rules of the Supreme Court O 16 r 1. That application came before Registrar Kingsley in chambers who, by order of 26 July, dismissed the appellant's/defendant's application with costs. The reason for the learned Registrar's decision appears clearly from the last paragraph of his written reasons:
"I am of the opinion that s 175 does not deem an employer for every purposes under the Act. One cannot ignore the historical context of s 175 and the legal context. The historical context is that s 175 has been part of the Workers Compensation Act when there has never been any limitation on awards of damages. The deeming could only have referred to liability to pay compensation. The legal context is that s 175 is within the Workers Compensation Act, an Act for the purposes of compensation. Nothing in s 175 reveals a wider purpose, unlike s 93. For these reasons the application to dismiss the action for lack of jurisdiction is denied."
90 The present appellant, WMC Resources Ltd, appealed from the Registrar's decision to a Judge of the Court. That appeal, which required the matter to be determined afresh, District Court Rules (1996), O 11 r 11, was heard before his Honour Judge O'Sullivan QC on 21 November 2001. By order of 20 December 2001 his Honour dismissed the appeal leaving the plaintiff/respondent at liberty to continue the prosecution of his action. It is from that order dismissing the appeal that the appeal to this Court
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- comes after leave granted by order of this Court (Anderson, Wheeler and Miller JJ) on 20 March 2002.
91 In his reasons for dismissing the appeal from the decision of the Registrar, his Honour Judge O'Sullivan QC outlined the course of the litigation; described the history of s 175 of the Act; and pointed out that the purposes of the Act were expressly identified by s 3 which did not contain any reference to the exclusion or limitation of claims for damages at common law. The basis for his Honour's conclusion that Div 2 of Pt IV of the Act was not brought into application by s 175 appears from the following passages in his Honour's reasons:
"11. The definition of employer in s 5 does not include a principal as defined in s 175(1). In my view if the intention of the legislature was to treat all principals as employers of injured workers so that the provisions of the Act generally applied to them it would have been appropriate to have amended s 5. In my opinion this points to a narrower application of s 175 than that contended for by the appellant.
…
It is to be noted that the exclusion or limitation of common law claims is not expressed to be a purpose in this section 3 [sic 3] and that when s 93D was introduced into the Act the opportunity was not taken to amend it. In Midgley v Monger, The Director Conciliation and Review Directorate [2000] WASC 291, Miller J made the same point at [23]."
92 His Honour then cited a passage from the judgment of Deane and Gaudron JJ in Bird v The Commonwealth (1988) 165 CLR 1 at 9 to the effect that the Workers' Compensation Act is remedial in its character; should be construed beneficially; and that where two interpretations of such an Act are possible, that which is more favourable to the worker should be preferred. Undoubtedly, that is the proper approach to take in cases of ambiguity or uncertainty if the scope of the remedy provided is in question, but, before that approach to interpretation can be brought to bear, it is necessary to determine whether there is any real uncertainty or ambiguity about the provisions of the statute under consideration. The first and primary rule of interpretation is that if there is a clear meaning of the provisions which can be derived from the statute as a whole, that should be given effect.
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93 The grounds of this appeal are that there were errors of law by the learned Judge:
(i) in finding that the appellant is not deemed pursuant to s 175(1) of the Act to be the respondent's employer for the purposes of s 93D(4) of the Act when it should have been found that the appellant was deemed to be the employer;
(ii) in failing to apply s 175(5) of the Act when this should have been applied so as to deem the appellant to be the respondent's employer for the purpose of s 93D(4);
(iii) in failing to find that the respondent was obliged to obtain leave of the District Court before commencing proceedings pursuant to s 93D(4) and that because of the absence of such leave the writ was a nullity and should have been set aside.
Appeal Number FUL 33 of 2002 – John Francis Hewitt v Benale Pty Ltd
94 In this case, the appellant, Hewitt, issued a writ in the District Court of Western Australia on 29 May 2000. By his statement of claim, the appellant/plaintiff alleged that at all material times he had been employed by Skill Hire Pty Ltd as a meat process worker. He alleged that, on 3 August 1998, Skill Hire Pty Ltd directed him to work at the respondent's abattoir at the direct supervision of the respondent's staff and that, in doing so, he received all instructions with respect to his work from the respondent's staff. He further alleged that during the period from 3 August to 4 September and again on 28 October 1998, he was directed by the respondent to operate a loading machine in such a way that he suffered injury. This, it was further alleged, was due to the respondent's negligent failure to provide a safe system of work. A claim for damages relying solely on a cause of action in negligence was then advanced.
95 The respondent/defendant filed a defence, putting in issue many of the allegations of fact and advancing an alternative version of the incidents. Negligence was denied. Then the respondent specifically pleaded that: by virtue of s 175 of the Act, the respondent was deemed to be the employer of the appellant; that the provisions of Div 2 of Pt IV of the Act applied to the claim; and that the appellant was not entitled to damages because the alleged disability did not result in a degree of disability of 30 per cent as required by s 93E(3)(a), (9) or (12) or a degree of disability of 16 per cent as required by s 93E(4). It is to be noted that, because the injuries sustained by this appellant/plaintiff caused a disabling
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- injury from work in October 1999, the amendments to the Act effected by No 34 of 1999 applied so that leave to commence the action, if the respondent was an employer, was not necessary. However, no damages could be awarded unless the disability was of a degree greater than that contemplated by s 93E.
96 By some process which is not apparent from the materials before this Court, an order was made for the determination of a preliminary issue in the action. The reasons for decision of his Honour Chief Judge Hammond for dismissing the appellant's claim identify that issue. It was: Does Pt IV Div 2 of the Act apply to the appellant's/defendant's claim in the circumstances set out in the agreed statement of facts then before the court?
97 The facts which were agreed for the purposes of the trial of the preliminary issue were:
1. The respondent operates an abattoir.
2. The appellant was employed by the third party [sic Skill Hire Pty Ltd] as a meat process worker.
3. The third party agreed to hire labour to the respondent to work at the respondent's abattoir.
4. Pursuant to the agreement the appellant's services were hired out to the respondent to work at the respondent's abattoir.
5. On 3 August 1998 and between 28 October 1998 and 18 October 1999 the appellant was performing work at the abattoir which was directly a part or process and the trade or business of the respondent.
6. For the purpose of s 175 of the Workers' Compensation and Rehabilitation Act 1981, the respondent is a deemed employer of the appellant.
98 In view of the order made in the District Court after the determination of the trial of the preliminary issue, to dismiss the appellant's action against the respondent, it must also be assumed that there was an agreement or concession that the appellant's/plaintiff's degree of disability suffered as a consequence of the alleged negligence was less than 16 per cent in accordance with s 93D of the Act.
99 This preliminary issue was tried before the learned Chief Judge who, by a judgment of 13 February 2002, determined that Pt IV Div 2 of the
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- Act did apply to the appellant's/plaintiff's claim and ordered that the appellant's action be dismissed with costs. It is that judgment which is the subject of this second appeal.
100 At the trial of the preliminary issue his Honour was referred to the decision of Registrar Kingsley in Koljibabic v WMC Resources Ltd [2001] WADC 202. Later the decision of his Honour Judge O'Sullivan QC on the first appeal in the Koljibabic case was delivered and was considered by the learned Chief Judge in his reasons for decision. His Honour took note of the view attributed by his Honour Judge O'Sullivan QC to the significance of the purposes of the Act as declared by s 3 in the earlier case but correctly recognised that he was free to reach a different decision if so satisfied about the proper meaning of the Act. His Honour's reasons for preferring a different conclusion were stated as follows:
"19. By virtue of the enactment of the wide ranging Act No 48 of 1993, the principal Act has changed its integral character. It is no longer an Act dealing with the compensation of injured workers. It is an Act that now (inter alia) clearly seeks to constrain the award of 'common law' damages to workers by limiting the right to claim damages for tort to those where higher levels of loss are established.
20 It therefore, in my view, serves no useful purpose to return to the provision of s 3 of the Act and to seek therefrom a conclusion that would limit the application of Act No 48 of 1993.
…
22 With the greatest respect to the contrary views expressed by his Honour Judge O'Sullivan and Registrar Kingsley, I cannot find that there is any room for doubt as to the application of Division 2 of the 1993 Act. It clearly refers to the 'employer'. The Act contained the s 175 provision at that point deeming two classes of persons to be the employer 'for the purposes of this Act'."
101 His Honour acknowledged the principle of beneficial interpretation of workers' compensation legislation referred to in Bird v The Commonwealth (supra) which has already been mentioned but concluded that it did not apply because the interpretation of the statute which he
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- favoured was clear and unmistakable. His Honour concluded by finding "that the legislation I am considering no longer fills the definition of simply workers' compensation legislation, it has wider purposes."
102 The grounds of appeal in this case, as amended by leave during the hearing to add the second ground, are:
1. The learned Judge erred in law in finding that the constraints on awards of common law damages that apply to an action by a worker against his or her employer as set out in Pt IV Div 2 of the Workers' Compensation and Rehabilitation Act 1981 applied to the appellant's (plaintiff's) action against the respondent (defendant) notwithstanding the absence of any contract of employment between the appellant (plaintiff) and respondent (defendant) who was only a deemed employer of the appellant (plaintiff) pursuant to s 175 of the Act.
2. Alternatively, the learned Judge erred in law by finding that s 175 of the Act applied to the appellant's claim against the respondent.
The Issues in the Two Appeals
103 These competing interpretations given to the effect of s 175 on the application of Div 2 Pt IV to "deemed employers" present this Court with a stark choice. In order to reach a decision it is necessary that some examination of the subject matter of the legislation should be undertaken.
104 The Act establishes a regime for any "worker" who suffers a "disability" - s 18 - to receive compensation in defined or ascertainable amounts. A disability includes a personal injury by accident arising out of or in the course of the employment or whilst the worker is acting under the employer's instructions (s 5) and includes other conditions not material in these two cases. Importantly, insurance by employers against the liability imposed by the Act is compulsory. S 160(1) imposes an obligation on every employer to obtain and keep current a policy of insurance for the full amount of his liability to pay compensation under the Act. There is provision, in s 169, for the Governor, on the recommendation of the Commission, to determine the form in which any policy of insurance made obligatory under the Act is to be effected. However, the Court was informed that no particular form of policy at present has been "approved". As was noticed in Moltoni Corporation Pty Ltd v QBE Insurance Ltd (2001) 76 ALJR 337 at 342, unlike the
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- worker's compensation legislation in some other jurisdictions (notably New South Wales, Victoria, Queensland, Tasmania, the Northern Territory and the ACT), the Workers' Compensation and Rehabilitation Act 1981 (WA) does not require an employer to insure against liability at common law. Nevertheless, it is a commonplace, if not invariable, practice that the compulsory worker's compensation liability policies required by s 160 of the Act include extensions for an employer's common law liability.
105 Before the 1993 amendments to the Workers' Compensation and Rehabilitation Act, introduced by Act No 48 of 1993, which imposed for the first time procedural restrictions and other limitations on the commencement of an action for common law damages by any employee against his or her employer, Pt IV of the Act, ss 85 to 93 or other provisions to substantially the same effect, had existed in the legislation for a very long time. Shortly stated, the effect of those provisions has been to deal with the entitlement to worker's compensation in cases when damages at common law have been awarded or agreed, so as to ensure that a plaintiff who succeeds in obtaining damages at common law is not twice compensated. This is done by obliging credit to be given for worker's compensation payments which have been made if and when damages are recovered. Essentially, the effect of those provisions is to ensure that any worker's compensation paid is credited against damages recoverable from an employer, or where the damages are recovered from another tortfeasor, that an amount of the damages equal to the compensation recovered is paid to the employer by way of an indemnity for worker's compensation payments which the employer made. Provisions exist for appropriate adjustments for reduction of the credit, in the case of a judgment against the employer, or for the amount of the indemnity in the case of a judgment against another tortfeasor, by apportionment where there has been a finding of contributory negligence and a reduction of the damages in the common law action for that reason. By these mechanisms, a successful plaintiff in a common law action who has already had the benefit of worker's compensation payments before the date of judgment, will receive the proceeds of the judgment less the amount of compensation previously received, or an appropriate apportionment of that compensation where his damages have been reduced by apportionment. Until the 1993 amendments it was only to this extent that the Act dealt at all with claims for damages at common law, but, these provisions form an important and significant part of the legislation both before and after the 1993 amendments.
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106 It has, for a very long time, been a feature of the labour market, particularly the industrial labour market, for workers to be let on hire by their main employer to another employer for special or limited purposes sometimes, but not always, for short periods. This has long been recognised by the common law where there is a doctrine to deal with questions about which employer should be vicariously liable for the acts of the hired employee. This is described by Fleming: "The Law of Torts" 9th edition (1998) at page 419 as follows:
"An employer frequently agrees to make the services of his employee available to a third party. If in the course of performing the stipulated work, the employee injures someone, the general employer retains responsibility, unless he can establish that the effect of the transfer was to constitute his employee pro hac vice the servant of the hirer. In the course of the last 50 years, this burden has become increasingly heavy so that it can be discharged only in quite exceptional circumstances – Mersey Docks & Harbour Board v Coggins and Griffiths (Liverpool) Ltd [1947] AC 1 at 10. The principal reason for this bias may well be that the general employer, unlike the hirer, has selected the servant for the task and thereby makes himself responsible for the manner in which the work is carried out - Mersey Docks (supra). Besides, in the typical case of the general employer being in the business of lending out operating equipment and personnel, the cost of accidents can be quite economically absorbed in his own charges and rather more conveniently insured against because of his broader accident experience with this particular kind of risk.
According to received doctrine, responsibility is here also identified with control. Since in most cases control is divided between lender and borrower, the most obvious conclusion would perhaps have been to impose joint responsibility. Instead, the assumption prevails that control and liability must, as a rule, be allocated exclusively to one or the other. The test, we are told, is to ask 'Who exercised control not only over the task to be performed but also over the method of performing it?' The ultimate question is not what specific orders, or whether any specific orders, were given but who is entitled to give the orders as to how the work should be done – McDonald v Commonwealth (1945) 46 SR (NSW) 129 at 132."
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107 Since Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16, it has been recognised that an employer's duty to provide a safe system of work is not always restricted to his employees alone. Depending on the circumstances, it may sometimes extend to independent contractors whom the employer may engage to do work for him where there is a risk of injury arising from the nature of the work and where there is a need to give directions as to when and where the work is to be done and to co-ordinate the various activities. However, with regard to the issue of vicarious liability, the established distinction between employee and independent contractor is still, applied. Except in cases coming within the Stevens v Brodribb (supra) rule it is usually determinative – see Hollis v Vabu Pty Ltd (2001) 75 ALJR 1356. There have been some indications from the High Court that in a suitable case in the future, the general rule that a principal is not liable for the tortious acts of an independent contractor may need to be re-examined – Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 per McHugh J at 366 – 367 and per Kirby J at 392 – see also Hollis v Vabu Pty Ltd (supra) at par [32]. But the present situation is that the authority of Stevens v Brodribbb remains binding. That decision specifically approved the principle stated by Jordan CJ in Torette House Pty Ltd v Berkman (1939) 39 SR (NSW) 156 at 170.
108 However, these authorities disclose that in modern industrial conditions the "control test" is now only but one of the criteria for determining whether or not a person is an employee or an independent contractor. It can often be difficult to apply and is sometimes vague in operation. Now the emphasis is on the totality of the relationship between the parties (see Hollis v Vabu at [43 – 45]). These principles have developed in relation to controversies over whether or not the employer or principal should be liable for the tortious acts of an employee or independent contractor rather than in relation to questions about the existence and scope of any duty of care to the independent contractor. The latter is now governed by the principles which deal with the existence of a general duty of care.
109 It is against this background that the worker's compensation legislation was originally framed at a time when the distinction between employee and independent contractor was both sharp and fundamental. The liability which the Act imposes is the liability of an "employer" to a "worker" – s 18. However, both those terms have had their traditional meanings enlarged by the special definitions given to them by s 5 of the Act. So, the statutory definition of employer within this legislation is:
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- "5 - 'employer' includes any body of persons, corporate or unincorporated, and the legal personal representative of a deceased employer and, where the services of a worker are temporarily lent or let on hire to another person by the person with whom the worker has entered into a contract of employment the latter shall, for the purposes of this Act, be deemed to continue to be the employer of the worker whilst he is working for that other person;
The term 'employer' shall extend to any person for or by whom any worker, as defined in par (a) or (b) of the definition of 'worker' works or is engaged; and
'Employer' in relation to liability to pay compensation for or in respect of a disability to a worker, means the employer in the relevant employer."
110 This definition continues the approach of the common law to the employment of workers who are lent or let on hire by their ordinary employers to another. As in the common law, the original primary employer continues as the employer liable under the Act.
111 However, s 175 has the effect of making the person who takes the worker on loan or hire an employer and so liable under the Act for compensation concurrently with the principal employer. This result is achieved by deeming the person who takes the employee on loan or hire to be an employer "for the purposes of the Act". This "deemed employment" is additional to, and not in substitution for or exclusive of, the contractual employment by the original employer. The section is as follows:
"175. Principal contractor and sub-contractor deemed employers
(1) Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor if he were the sole employer would be liable to pay under this Act.
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- (2) The principal is entitled to indemnity from the contractor for the principal’s liability under this section.
(3) The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal.
(4) Where the principal and the contractor are jointly and severally liable under this section, a judgment obtained against one is not a bar to proceedings against the other except to the extent that the judgment has been satisfied.
(5) Where compensation is claimed from or proceedings are taken against the principal, in the application of this Act a reference to the employer shall be read as a reference to the principal except where, for the purpose of calculating the amount of compensation, a reference is made to the earnings of a worker, the reference shall be read as a reference to the earnings of the worker under the contractor.
(6) For the purposes of this section, where sub-contracts are made —
(a) 'principal' includes the original principal for whom the work is being done and each contractor who constitutes himself a principal with respect to a sub-contractor by contracting with him for the execution by him of the whole or any part of the work;
(b) 'contractor' includes the original contractor and each sub-contractor; and
(c) a principal's right to indemnity is a right against each contractor standing between the principal and the worker.
(7) Where the disability does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply."
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112 It was acknowledged at first instance that the appellant, WMC Resources Ltd, in Appeal 48 of 2002 is the deemed employer of the respondent Koljibabic within the meaning of s 175 and, in Appeal No 33 of 2002, that the respondent, Benale Pty Ltd, is the deemed employer of the appellant Hewitt within the meaning of the section. The critical issue is whether the character of deemed employer imposed by this section "for the purposes of this Act" satisfies the description of employer within Pt IV Div 2, especially s 93B, s 93C and s 93E.
113 The arguments which were addressed to the Court concerning the relationship, if any, of s 175 to Pt IV Div 2 fall conveniently into four main types; namely:
1. Submissions to the effect that the purposes of the Act are exhaustively defined by s 3 so that the absence of any express mention of a purpose to restrict or limit common law damages in that section, together with the knowledge that provisions to this effect were first introduced by amendments in 1993 mean that Div 2 of Pt IV deals with special legislative purposes which can, and should, be differentiated from the older purposes of the Act. These submissions contend that those original purposes are the only purposes contemplated by that phrase in s 175.
2. Submissions that a variety of anomalous situations, which it should be assumed that parliament did not intend, would occur if one, rather than the other, interpretation of the relationship between s 175 and Pt IV Div 2 were to be adopted.
3. The submission that a provision such as s 175 which creates a person as a "deemed employer" is by its very nature a fiction, so when interpreting the Act as a whole a court should lean to an interpretation which confines the fiction narrowly and avoids an interpretation which would allow the fiction to have application beyond the scope needed to achieve the effect intended.
4. Submissions that, if faced with uncertainty and ambiguity about the scope of s 175, a court should favour an interpretation which restricts any extension to the modification of long-established common law rights, unless there is the clearest expression of parliamentary intention to do so – Bishop v Chung Bros (1907) 4 CLR 1262 at 1275, Hocking v Western Australian Bank (1909)
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- 9 CLR 738 at 746, Thompson v Last Touch TV Services Pty Ltd (1978) 38 FLR 397 per Deane J at 408.
The Purposes of the Act
114 It is clear, as recognised by both Judges at first instance in these two cases that s 3 of the Workers' Compensation and Rehabilitation Act 1981 (WA) identifies the purposes of the Act without making any mention of restriction or modification of a worker's entitlement to damages at common law. However, I do not consider that it follows from this that one can conclude that Pt IV Div 2 is dealing with some discrete legislative purpose which should be distinguished from the other purposes of the Act and then be disregarded.
115 While it may be possible to find examples of a single word or phrase when used in a statute carrying differing meanings in different parts of the statute, that will generally be rare because of the established convention that the same expression should have a consistent meaning whenever appearing in a statute or instrument - see Piesse "The Elements of Drafting" 4th edition at 73; "Rules of Drafting" (1948) Can Bar Rev 1231 at 1234; and Robinson "Drafting" (1973) at 71. Furthermore, it is accepted that where, by amendment, a new provision is inserted into a principal Act and that provision speaks of "this Act", it speaks of the whole Act of which, from the time of the amendment, it forms part and of the Act in the form which it may from time to time thereafter assume – Ocean Road Motel Pty Ltd v Pacific Acceptance Corporation Ltd (1963) 109 CLR 276 per Taylor J at 280. So it has been held that where the ambit or character of an Act is significantly affected or reduced, by an amending statute, it is impossible to attribute a character to the Act as though it stood in isolation from the amendment which has reduced or modified its ambit – Kartinyeri v The Commonwealth (1998) 95 CLR 337 per Brennan CJ and McHugh J at 353 – 354.
116 It became established during argument that there are significant legislative purposes in this Act, which existed well before the 1993 and subsequent amendments, which do not receive express recognition by s 3. The obligation for compulsory insurance by all employers against the risk of liability under the Act is perhaps the most notable. The creation of a statutory guarantee fund is another, although perhaps subsidiary, such purpose. In my opinion, the meaning of words in the Act such as are contained in s 175, and the ascertainment of the purposes of the Act, are to be derived from reading the Act as a whole giving due attention and significance to provisions such as s 3 which identify specific purposes.
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- The prime obligation on the court is to apply a meaning to statutes which reflects the intention of the parliament displayed by the Act as a whole. It is necessary to be wary of propounding rigid rules. It has been said that "even the use of general rules carries dangers in this area because of the tendency for such rules to be given an inflexible application" – Collector of Customs v Agfa Gevaert Ltd (1996) 186 CLR 389 at 401.
117 In accepting that the amendments to the Workers' Compensation and Rehabilitation Act effected in 1993, and again in 1999, made far-reaching changes, including the introduction of provisions of a new character affecting workers' entitlements to avail of common law rights of action for damages for personal injuries, I am satisfied that those amendments enlarged the purposes which were being addressed by the legislation and confirmed, as was already the case, that the list of purposes expressly addressed by s 3 was not comprehensive or exhaustive. This is consistent with the interpretation of the phrase "objects of this Act" in different legislation which was undertaken by the Full Court of the Federal Court in Municipal Officers Association of Australia v Lancaster (1981) 37 ALR 559 at 579.
Alleged Anomalous Results
118 During the course of argument the Court was taken a number of supposed results which it was submitted could not have been in the contemplation of, or consistent with, the intention of parliament which would follow if one or other of the competing interpretations of s 175 of the Act were to be adopted. However, in my view, arguments of this nature are of secondary importance because, if the intention of parliament can be derived from the language used in the statute in the context of the Act as a whole, the consequences which follow must be taken to have been within the contemplation of the parliament. Especially is this likely to be so with legislation such as that which was the subject of the 1993 and 1999 amendments. These introduced a policy which might have been regarded by some as controversial in its abrogation or dilution of common law rights. Inevitably the consequences will disturb those who disagree with the policy so adopted. A court should not be disposed to avoid an interpretation of legislation because it removes or qualifies important pre-existing rights if the legislation is clear in its intention to effect such a purpose. Pointing out the consequences if legislation is to be interpreted in a manner which achieves that purpose does not serve to promote an alternative interpretation.
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119 However, it was submitted on behalf of the appellant in Appeal 48 of 2002 that the narrower interpretation of s 175, favoured by his Honour Judge O'Sullivan QC in the litigation giving rise to that appeal, would have an anomalous consequence in that the deemed employer may be unable to claim contribution, or indemnity, from a common law employer regardless of the merits of such a claim – Austral Pacific Group Ltd (In Liq) v Air Services Australia (2000) 203 CLR 136. While that decision indeed suggests that the deemed employer would not be entitled to obtain contribution or indemnity under the Law Reform (Contributory Negligence and Tortfeasors' Contributions) Act 1947 s 5(1), this is because the common law employer, on that hypothesis, would not be a person who if sued would be liable concurrently with the deemed employer – see also James Hardie & Coy v Seltsam Pty Ltd (1998) 196 CLR 53 - rather than because of any special meaning being given to the term "employer" within s 175. In other words, that consequence would be one which would flow directly from the narrower construction which counsel for the workers involved in these two appeals, urged should be adopted. It does not seem to me to be a factor which should affect the interpretation of the section. Such a result would not seem to modify, in any way, the ability of the common law employer to recover an indemnity from the deemed employer for his liability to pay worker's compensation benefits under the Act within s 175(2) and would not detract from the meaning of the section, except in relation to the crucial question of whether a deemed employer is also an employer within the meaning of Pt IV Div 2.
Restrictions on the Application of a "Deemed" Meaning
120 It was submitted by counsel for the respondent worker in Appeal 48 of 2002, that when the legislative device of "deeming" is used, it constitutes a statutory fiction – per Griffith CJ in Muller v Dalgety & Co Ltd (1909) 9 CLR 693 at 696 - and so it becomes important to consider the purpose for which the fiction has been introduced. As the submission went on, it was contended that a fictitious use of a word or phrase is only applicable in its particular context and should be confined to achieving the purpose for which parliament has enacted it – Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 at 323. To these citations may be added the observations of Fisher J in Federal Commissioner of Taxation v Comber (1986) 10 FCR 88 at 458 to the effect that deeming provisions are required by their nature to be construed strictly and only for the purpose for which they are resorted to, and that it is improper to extend by implication the express application of such a statutory fiction.
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121 This submission is but another way of raising the issue of whether or not the term "employer" including "deemed employer" within s 175 carries the same meaning in s 93D and other provisions of Pt IV Div 2 of the Act or whether there is reason to confine the extended meaning of the term "employer" within s 175 to those parts of the Act other than Pt IV Div 2 because of some differentiating factor. The examination already conducted of the reasons for favouring a consistent use of the term "employer" throughout the Act as a whole, and the absence of any clearly differentiating factors between s 175 and Pt IV largely disposes of this issue. However, there does seem to me to be at least one definite indication that the extended meaning of the term "employer" established by s 175 was intended to be applied in Pt IV both before and after the 1993 and 1999 amendments.
122 Examination has already been undertaken of the role of ss 92 and 93, both before and after 1993, in establishing a regime in which a worker who succeeds in a claim for damages at common law will be obliged to give credit for worker's compensation benefits received under the Act in order to avoid a situation of partial double compensation. This is achieved, in the case of an action against the worker's employer, by subsections 92(b), (c) and (e) and, where the worker's claim is against a stranger, by subsections 93(1)(b) and (4) and (5). As a deemed employer, under s 175, will be concurrently liable with the common law employer to pay worker's compensation benefits under the Act, there will be many instances in which the worker may bring an action against that deemed employer and succeed in recovering a judgment for common law damages. In every such situation, the principle enshrined in s 92 of avoiding double recovery of both damages and compensation, will apply. Section 92 will require the successful plaintiff worker to give credit for worker's compensation benefits which may previously have been paid by the deemed employer defendant. That is expressly what ss 175(5) achieves. I can see no escape from this conclusion, consistent with the manifest policy of the Act, because of the object of avoiding double recovery. In the event of a successful common law action, the avoidance of double recovery cannot be supposed to depend on whether the defendant is the common law employer or a deemed employer.
123 The conclusion means that the extended definition of employer within s 175 of the Act applies, and was always intended to apply, to s 92. The question then becomes, whether there is anything to differentiate Div 2 of Pt IV from all other provisions in the Act including Div 1. I can see no basis for making any such distinction. Indeed, I am of the view that Div 2 is an enlargement of the general subject matter addressed by
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- Div 1 of Pt IV, namely, the consequences for a worker, who is entitled to worker's compensation benefits under the legislation, also being eligible, in certain circumstances, to damages at common law. Once that continuity of purpose in the whole of Pt IV is recognized, the conclusion naturally follows that ss 93B, 93C and 93E use the term "employer" in a manner which includes the extended definition given to it by s 175.
Beneficial Interpretations
124 The final ground upon which it was submitted that a "deemed employer" within s 175 should not be regarded as an employer for the purposes of Pt IV Div 2 was that the Act should be given a beneficial interpretation which would preserve pre-existing rights of workers or, alternatively, confine restrictions upon them strictly in any case of uncertainty or ambiguity. As recognized by both Judges who dealt with the cases under appeal at first instance, workers' compensation legislation has long been recognized as remedial in character and like all such legislation should be construed beneficially – Bird v The Commonwealth (1988) 165 CLR 1 at 9. As was said by Isaacs J in Bull v Attorney-General (NSW) (1913) 17 CLR 370 at 384:
"In the first place, this is a remedial Act, and therefore, if any ambiguity existed like all such Acts should be construed beneficially … This means, of course, not that the true signification of the provision should be strained or exceeded, but that it should be construed so as to give the fullest relief which the fair meaning of its language will allow."
125 However, it has been said that this approach to interpretation "must be restrained within the confines of the actual language employed and what is fairly open on the words used" – Khoury (M & S) v Government Insurance Office of NSW (1984) 54 ALR 639 at 650. The approach to be taken with such statutes is that any ambiguity should be resolved by advancing the remedy which the statute appears intended to be resolved – Wacal Developments Pty Ltd v Realty Developments Pty Ltd (1978) 140 CLR 503 at 510 but the manifest intention of parliament must still be accepted Hogan v Hogan (No 2) [1981] 2 NSWLR 768 at 774.
126 It will be noticed that nothing in Pt IV Div 2 or s 175 appears to detract from the entitlement of a worker to compensation and other benefits created by this legislation. Accordingly, the present controversy is not one which raises issues about the existence or scope of the remedies which the Workers' Compensation and Rehabilitation Act 1981 (WA)
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- creates. This being the case, I consider that it is very doubtful whether this is an occasion for the application of the doctrine of beneficial interpretation for remedial statutes. Rather, the present appeals concern the interpretation of statutory provisions which remove or restrict access to established common law actions for damages. The need for the effect of such legislation to be expressed clearly and unambiguously has already been discussed and these principles of interpretation are not in doubt. However, once it has become clear, as I consider it has in the present case, that the intended effect of Pt IV Div 2 of this Act is to remove or restrict access to common law remedies in the situations specified, that effect will not be avoided by resort to the principle of beneficial construction of the statute as a whole. The basic principle is that the parliamentary intention should be identified and effected, care being taken that, in the process, there occurs no more far-reaching effect on established rights than parliament intends and is necessary to implement a clear parliamentary policy. For reasons already given, I consider that the extended definition of "employer", established by s 175, applies throughout the entire Act including in Pt IV Div 2.
Resolution of the Two Appeals
127 This means that both worker plaintiffs in the cases under appeal, the respondent in Appeal 48 of 2002, and the appellant in Appeal 33 of 2002 are bound by the provisions of Pt IV Div 2, especially s 93B and s 93C. They are unable to pursue claims for damages at common law without complying with the restrictions imposed by Pt IV which applied at the different times when the two actions were commenced. In Appeal 48 of 2002, the plaintiff/respondent, Koljibabic, commenced his action for damages at common law without first obtaining leave to do so as was then essential under s 93D(4) as it then existed. In the case of the appellant Hewitt in Appeal 33 of 2002, it has been acknowledged that his disability was not more than the minimum prescribed by s 93E(3) for eligibility to maintain an action for damages at common law. Consequently, neither worker plaintiff is entitled to pursue his desired action for damages.
128 There is a remaining ground which is particular to one appeal. Reference has already been made to the introduction of a second ground of appeal by amendment in Appeal 33 of 2002. As noted, this contended that the finding that s 175 applied to make the defendant/respondent, Benale Pty Ltd, an employer was erroneous. In support of that contention it was submitted that the point had been expressly agreed to the contrary at the trial and that it had not been open to the learned Judge at first
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instance to reach any contrary finding. Further detail in support was provided by the submission that, on the agreed facts, there was no contract between Skill Hire Pty Ltd and the respondent for "the execution of any work by or under the contractor" as is required by s 175. In my view, this contention can readily be refuted by an examination of the statement of claim filed by the appellant/plaintiff in the original proceedings. This expressly stated that Skill Hire Pty Ltd directed Hewitt to work at the defendant's/respondent's abattoir under the direct supervision of the defendant's/respondent's staff and that the appellant/plaintiff was working under the direction of the defendant/respondent in this manner during the period when it is alleged that he suffered injury by the defendant's/respondent's negligence. The agreed facts which were before the learned Judge at first instance set out this position in a summary way which, in my view, amply justified the conclusion that the respondent/defendant was a "principal" within the meaning of s 175(1) and, accordingly, also a deemed employer.
129 For these reasons I consider that the disposition of these two appeals should be as follows:
Appeal FUL 48 of 2002
This appeal should be allowed. The order of the District Court of 20 December 2001 dismissing the appellant's appeal from the decision of the Registrar of that Court should be set aside. In lieu, it should be ordered that the appeal from the Registrar should be allowed and that the respondent's (plaintiff's) action in the District Court should be dismissed.
Appeal FUL 33 of 2002
I consider that the decision of the learned Chief Judge of the District Court in this case was correct and that, therefore, this appeal should be dismissed.
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