Lamy v National Direct Imaging Pty Ltd

[2003] HCATrans 536

[2003] HCATrans 536

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S95 of 2003

B e t w e e n -

EDMUND LAMY

Applicant

and

NATIONAL DIRECT IMAGING PTY LIMITED

Respondent

Application for special leave to appeal

GUMMOW J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 DECEMBER 2003, AT 9.42 AM

Copyright in the High Court of Australia

MR D.E. BARAN:   May it please your Honours, I appear for the applicant.  (instructed by Keddies)

MR C.R.R. HOEBEN, SC:   May it please the Court, I appear for the respondent with my learned friend, MR S. FLANIGAN.  (instructed by P.W. Turk & Associates)

GUMMOW J:   Yes, Mr Baran. 

MR BARAN:   Your Honours, this is an application for special leave from the Court of Appeal. Your Honours will note there were two matters before the Court of Appeal on the same section, which is section 151C(2)(a) and (b) of the Workers Compensation Act.  Your Honours may recall that in 2000 the Workers Compensation Act was substantially amended to change the law ‑ ‑ ‑

GUMMOW J:   We do not ponder the New South Wales Compensation Act day to day.

MR BARAN:   Your Honours, the gravamen of our application is that the New South Wales Court of Appeal were incorrect in the way in which they construed section 151C(2)(b), which is set out in the application book at page 20 ‑ ‑ ‑

GUMMOW J:   What is wrong with the reasoning of Justice Giles at page 30?  That seems to encapsulate it all. 

MR BARAN:   The reasoning is wrong for this, your Honour, that his Honour Mr Justice Giles effectively said that the admission must be a common law admission, that is, an admission of breach of duty of care, subject to contributory negligence.  The problem with that interpretation, we say, is that it is also connected with his Honour’s interpretation that the section is designed to facilitate settlement negotiations – that is subsection (1), that is, a six month period in which to resolve the matter ‑ and they applied and relied upon cases under the Motor Accidents Act.

The real problem with his Honour’s determination is this, that section 151C is preceded by not one word in respect of settlement negotiations, negotiations, settlement discussions or anything of the like. The Motor Accidents Act, between sections 40 and 52, is littered with sections regarding settlement negotiations as being the gravamen of what must be done before a person has a right to commence proceedings.  Your Honour Mr Justice Kirby will recall in the Court of Appeal hearing these types of cases where those particular sections preceded ‑ ‑ ‑

KIRBY J:   I do not think they had come in.  I think this is all post my regime.

MR BARAN:   In another lifetime, I think.

KIRBY J:   The fact is that post my regime more and more of these limits, caps, restrictions, impositions and so on have come in, so there is nothing unusual about this one.

GUMMOW J:   It has been changed again, has it not?

MR BARAN:   Yes, but the fact is, your Honours, that at the end of the day there is not one mention, not one word, about settlement negotiations or settlement being the reason why there was a six month delay.  The reason why there was a six month delay is to be found in sections 36 and 37 of the Act, that is, a worker is injured, he is paid 26 weeks of workers compensation, there is a six month period in which he is paid such entitlements as to bring him to a point where either (a) he decides to litigate at common law or (b) accepts his section 66 impairment compensation entitlements and does not litigate at common law.  That is the reason why.  The problem with Mr Justice Giles’ comment, which, I think ‑ ‑ ‑

GUMMOW J:   Just explain how your construction works.  You have to have a look at the text at the bottom of page 57.  Now, the primary provision is subsection (1), is it not? 

MR BARAN:   That is right.

GUMMOW J:   Then how do you say it works?

MR BARAN:   It is based on two things.  Firstly, a denial of all liability being an exception ‑ ‑ ‑

GUMMOW J:   Now, wait a minute.

MR BARAN:   There is a six month prohibition to sue.  We accept that.  But if, within that six month period, the employer denies all liability – and we emphasise the word “all” – that is, nothing should be paid to the worker ‑ then the worker can sue, because the worker has no other choice.  Then there is an admission of partial liability ‑ ‑ ‑

GUMMOW J:   It is proceedings for damages.

MR BARAN:   Yes, it is proceedings for damages.  Where there has been a denial of all liability, including all compensation…..the worker has no choice.  Either he cannot claim workers compensation or he takes his chances and claims common law damages and sues – simply relies upon the common law.  But the second subsection, which is (b), is a partial admission of liability in respect of the injury and there must be dissatisfaction by the worker.  Now, if that was designed simply to be an admission of breach of duty of care, one has to wonder how on earth can a worker be satisfied with simply an admission of breach of duty of care?  It makes no sense, with respect.

What the section is contemplating is, if your Honours look back at the entire Act, liability is always referred to in the Act as meaning a liability to pay workers compensation.  From the definitions section, in injury, all the way through the Act, the liability is the liability to pay workers compensation.  So if the worker “is dissatisfied with the extent to which” that liability has been paid, then the worker can make his election.  Either he accepts his section 66 entitlements for permanent loss compensation and gives up common law or he sues at common law.  That is the way we say it ought to be construed and must be construed, without any application or any reference whatsoever to the Motor Accidents Act for the very ‑ ‑ ‑

KIRBY J:   Is there any similarity to this problem in any other State of the Commonwealth?

MR BARAN:   I do not believe so.

KIRBY J:   What is the amendment of the Act that has supervened?

MR BARAN:   Effectively, 151C is still in the Act but there have been some changes to the wording.  I think there are now the words “wholly denies liability”, but besides that it remains the same.  The amendment to the Act is now that no damages can be claimed for employer‑based injuries save and except for economic loss and only if a person achieves a whole bodily impairment of 15 per cent according to the American Medical Association Guidelines, 5^th edition.  That is the position now.

As I stand before your Honours this morning, the situation is this, that in this intervening period, the six months between accidents occurring and the passing of the new Act, basically, thousands of statements of claim were filed.  Their Honours recognised that if there was a rush of statements of claim to file at the District Court of New South Wales and the Supreme Court, what has now happened is that those workers that were caught in this six month period, but where there has been no breach of duty of care type admission conveyed, have been the subject of summary dismissal applications.

Those matters this morning are all waiting, effectively, your Honours’ decision today, because if your Honours refuse special leave a substantial amount of people have their rights to damages lost forever and the only claim they may have – and I stress “may”, because 15 per cent is a very high threshold – is effectively economic loss.  So damages for pain and suffering, Griffiths v Kerkemeyer, all that goes.  All of it.

GUMMOW J:   This seems to be a concerted policy in New South Wales at the legislative level.

MR BARAN:   That may well be, your Honour.  In fact, there are no savings in respect of the six month people, if I can use that word.

KIRBY J:   We might have our views on such measures, but we cannot affect the fact that Parliament has enacted measures of this kind and that the highest court of the State ‑ ‑ ‑

MR BARAN:   Absolutely, your Honour.

KIRBY J:    ‑ ‑ ‑ has given the interpretation which is before us.

MR BARAN:   Absolutely, your Honour, but it is a question of ‑ ‑ ‑

KIRBY J:   It is not a matter that has general relevance.  It is a statute that one would normally leave to the highest court of the State, or, in the federal sphere, the Full Court of the Federal Court.  We just cannot deal with every contested matter of statutory construction because, as Justice McHugh pointed out, by the time any of them get to us there are arguments both ways.

MR BARAN:   Absolutely, your Honours, but at times the High Court has intervened in respect of workers compensation matters, such matters as Correia, a matter of Gifford that I was in last year ‑ ‑ ‑

KIRBY J:   Well, we had a case recently concerning the limitations in this area.  It was, I think, a motor vehicle case, and it was a rather unpleasant experience to have to go through all these provisions.

MR BARAN:   Your Honours, it is also, we say, unpleasant that people lose their rights to damages for it.  That is a very significant matter.

KIRBY J:   Of course it is, but that, as Justice Gummow has said, seems to be the mood of the time.

MR BARAN:   But if workers, we say, with respect, were entitled to receive damages because the admissions by the insurers to date had

basically been to a point where the worker was dissatisfied to the extent to which liability in respect of the injury – not the claim, the injury – was conveyed and the workers were entitled to commence proceedings, under the Motor Accidents Act it is liability in respect of the “claim” which is in the language.  A claim is defined as a claim for damages for negligence arising out of a motor vehicle accident.  In the Workers Compensation Act, it is liability in respect of the injury, not in respect of the proposed claim.

Mr Justice Stein and Mr Justice Giles both speak of a “proposed claim”.  It does not exist in the statute.  It does exist in the Motor Accidents Act.  Mr Justice Giles also says that if a person is a person to whom compensation is payable, then you cannot have this type of construction that we propose, because it means that as soon as you get workers compensation that would be a partial admission of liability in respect of the injury.  But his Honour does not go on to say that what is critical to the question is the dissatisfaction of the worker. 

That is what triggers the right to commence the proceedings we would seek to urge if your Honours were to grant special leave.  It makes sense; it is part of the legislative history, its scope and its objective.  It makes perfect sense that that should be the construction to be adopted, your Honours, and it is for those very important reasons that we ask your Honours to grant special leave.

GUMMOW J:   We do not need to call on you, Mr Hoeben.

This application concerns the interpretation of section 151C of the Workers Compensation Act 1987 (NSW). The New South Wales Court of Appeal unanimously adopted a construction of the section which the applicant contests. The clue to the way in which the section is to be interpreted lies in its history. That is found in Part 5 of the Act. Part 5 was enacted in 1989 to restore the right of a worker to sue an employer at common law, but subject to restrictions imposed in Part 5 including section 151C. This is a reason sustaining the interpretation of that section adopted by the Court of Appeal. That interpretation reflects the legislative context and gives effect to the legislative text. No error is demonstrated on the part of the Court of Appeal. Accordingly, special leave to appeal is refused and refused with costs.

We will adjourn to reconstitute.

AT 9.53 AM THE MATTER WAS CONCLUDED