Loreto v SPRINGER Australia Pty Ltd t/a SPRINGER FOODS - [2007] WADC 65

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: LORETO -v- SPRINGER AUSTRALIA PTY LTD t/a SPRINGER FOODS [2007] WADC 65

CORAM: YEATS DCJ

HEARD: 27 APRIL 2007

DELIVERED : 4 MAY 2007

FILE NO/S: CIV 1980 of 2005

BETWEEN: JOSE ALBERTO LORETO
Plaintiff
AND
SPRINGER AUSTRALIA PTY LTD t/a SPRINGER FOODS (008 739 008)
Defendant

Catchwords:

Appeal from Deputy Registrar's decision - Plaintiff worker's degree of disability not yet determined under Part IV Division 2 of Workers Compensation and Injury Management Act 1981 - Plaintiff worker's common law action in negligence stayed

Legislation:

Workers Compensation and Injury Management Act 1981 s 93B, s 93C, s 93D,
s 93E

Result:

Appeal allowed
Plaintiff's application to lift the stay be dismissed

Representation:

Counsel:

Plaintiff: Ms F J Dempster
Defendant: Mr K H M Wong

Solicitors:

Plaintiff: Jackson McDonald
Defendant: Friedman Lurie Singh & D'Angelo

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

Commonwealth v Verwayen (1990) 170 CLR 394
Dossett v TKJ Nominees Pty Ltd [2003] HCA 69
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Mokta v Metro Meat International Ltd [2005] WASCA 143
MR & RC Smith Pty Ltd t/a Ultratune Osborne Park v Wyatt; Commissioner Nisbet; Dispute Resolution Directorate; No C13-2007; 28 February 2007
Re Monger; Ex parte Cross [2004] WASCA 176
Re Monger; Ex parte TNT Australia Pty Ltd [2002] WASCA 223
Re Monger; Ex parte Velsberry Pty Ltd [2003] WASCA 9

YEATS DCJ: This is the defendant's appeal against the decision of Deputy Registrar Hewitt made on 10 August 2006 when he ordered that a stay of the action made by consent on 13 October 2005 be lifted. The defendant seeks an order that the plaintiff's application to lift the stay, dated 1 May 2006, be dismissed.
The jurisdiction exercise by the Registrar of the District Court in relation to interlocutory matters is a delegated jurisdiction. A condition of the delegation of this jurisdiction is the provision for a complete review de novo before a Judge of the District Court (Hazart Pty Ltd v Rademaker (1993) 11 WAR 26).

History of the matter

By writ of summons, dated 5 September 2005, the defendant commenced an action for damages with statement of claim attached. The plaintiff alleges that in the course of his employment with the defendant he was required to carry out duties on a daily basis repeatedly and as a result of performing the duties through gradual onset he sustained injury caused by the negligence of the defendant. The injuries were particularised as including trauma to the cervical, thoracic and lumbar spine, aggravating and accelerating degenerative changes in the spine; disc desiccation in the lower thoracic intervertebral discs; facet hypertrophy within the lumbar spine at L3/4 and L4/5 levels; trauma to the hip, right leg, and left leg aggravating and accelerating degenerative changes in the hip, knee, and ankle joints; headaches, and depression. The plaintiff also alleged that as a result of his injuries and residual disabilities he had sustained and will sustain a loss of earning capacity and reduced parameters of employment and has suffered loss and damage and incurred expenses.
On 21 September 2005 the defendant's solicitors invited the plaintiff to agree to a stay of the action on the basis that the defendant had not accepted liability or been ordered to pay compensation to the plaintiff under the Workers Compensation and Injury Management Act ("the Act") and that therefore the plaintiff was unable to obtain a determination of his relevant level of disability under Part IV Division 2 of the Act. In response to that invitation the plaintiff consented to the action being stayed and an order was made on 13 October 2005 staying the action pending the determination of the plaintiff's relevant level of disability or until otherwise ordered by the Court.
On 14 October 2005 the plaintiff filed a Form 22 application pursuant to s 93D of the Act seeking a determination that his relevant level of disability is not less than 30 per cent. The defendant objected to the claimed relevant level of disability and the question of degree of disability was referred to an Arbitrator under s 93D(10) of the Act for determination.
On 8 December 2005 the defendant's solicitors wrote to the Arbitrator notifying him that the defendant did not consider he or the Directorate had jurisdiction to deal with the Form 22 application because there had been no acceptance or determination of liability under the Act and that therefore s 93B(1)(b) of the Act had not been complied with and until there was compliance there would be no jurisdiction for the Directorate to deal with the worker's Form 22 application.
On 13 December 2005 the solicitor for the plaintiff wrote to the Arbitrator in these terms:
"We note that it is the employer's contention that by virtue of s 93B(1)(b) of the Workers Compensation and Injury Management Act 1981 as amended, the Dispute Resolution Directorate has no jurisdiction to deal with the Form 22 Application.
The worker consents to an order that by virtue of s 93B(1)(b) of the Act, Division 2 of Part IV of the Workers Compensation and Injury Management Act 1981 does not apply and for the application to be dismissed on this basis."
On the following day the Arbitrator made an order as follows:
Agreed position: worker consents to following order;
Orders: that the application of the worker contained in his Form 22 Referral filed on 14 October 2005 be and is hereby dismissed.
Subsequently the plaintiff's solicitors on 23 December 2005 requested the defendant to file its defence in the District Court action but the defendant resisted filing on the basis that it considered the stay was not lifted by operation of the Arbitrator's order and the defendant intended to apply to strike-out the plaintiff's action on the basis that the plaintiff had not complied with Part IV Division 2 of the Act. The defendant filed a defence on 7 February 2006 to prevent the plaintiff entering judgment in default and at the same time the defendant applied for a stay of the action.
On 24 April 2006 Deputy Registrar Harman determined that the stay ordered by consent on 13 October 2005 was not lifted as a result of the Arbitrator's order as the plaintiff's relevant level of disability had not been determined. But the stay was lifted by order of Deputy Registrar Hewitt on 10 August 2006 and it is from that order that the defendant appeals.
The defendant maintains that the action ought to remain in abeyance until the plaintiff has obtained a determination of his relevant level of disability under Part IV Division 2 of the Act. For that reason the defendant seeks an order that the plaintiff's application to lift the stay be dismissed.

Issue estoppel, estoppel and waiver

The case is somewhat complicated because in its defence filed on 7 February 2006 the defendant pleaded in par 11:
"Further or in the alternative if the plaintiff suffered injury, loss or damage as alleged (which is not admitted) and the defendant was negligent or in breach of statutory duty or in breach of contract as alleged (all of which are denied) the defendant says that the plaintiff is not entitled to receive damages by reason of his failure to comply with the provisions of Part IV Division 2 of the Workers Compensation and Injury Management Act 1981."
In its reply the plaintiff pleaded that the dismissal of the Form 22 application on 14 December 2005 was a final order for the purposes of the doctrine of issue estoppel and as a result the defendant is estopped from asserting that Part IV Division 2 of the Act applies as pleaded in par 11 of its defence. Alternatively the plaintiff asserts that the dismissal of the Form 22 application on 14 December 2005 was by consent of all parties and that therefore the plaintiff is estopped from asserting that Part IV Division 2 of the Act applies or the defendant is taken in law to have waived any right to plead reliance upon Part IV Division 2 of the Act.
In its rejoinder filed on 27 September 2006 the defendant admitted that the Form 22 application was dismissed, asserted that it was dismissed at the request of the plaintiff only, that the defendant was not heard and was not given the opportunity to be heard in respect of the plaintiff's request that the Form 22 application be dismissed and that the basis on which the plaintiff alleged the relevant dismissal was made did not form part of and was not necessarily decided by the dismissal. Further, the defendant admitted that the relevant dismissal was proclaimed in respect of the same parties as in this action but does not admit that the dismissal was a final order and denies that the doctrine of issue estoppel applies, denies that the dismissal created an issue estoppel and pleads that the Form 22 application was dismissed at the request of the plaintiff only without the consent of the parties and as the defendant was not heard, no estoppel was created and waiver could not operate.
The issue estoppel/waiver issues are in some ways secondary and peripheral to the main issue before me which is whether the District Court action should remain stayed given the plaintiff's failure to comply with provisions of Part IV Division 2 of the Act. I say that because the plaintiff's action in the District Court is one which in my view, were he to succeed, would fall within the provisions of s 93B of the Act so that Part IV Division 2 would apply and the Court's power to award damages would be limited. That is because s 93C of the Act, headed "Limit on powers of the courts", says:
"If this division applies, a court is not to award damages to a person contrary to this Division."
At the time the plaintiff made his Form 22 application to the Arbitrator, I accept the plaintiff's submission that Part IV Division 2 did not apply. That is because of the provisions of s 93B, titled "Application of this Division", which is in these terms:
(1) This division applies to the awarding of damages against a worker's employer independently of this Act in respect of an injury suffered by a worker, or a noise‑induced hearing loss suffered by a worker that is not an injury, if –
(a)it 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 it under this Act, or would have been paid or be payable but for section 22.
At the time the Form 22 application was made compensation had not been paid by the defendant, nor had any determination been made that compensation was payable in respect of the injury under this Act. Therefore at that time the division had no application to the plaintiff's case.
The relevant time for considering the application of the division is the time when damages are to be awarded at common law (Re Monger; Ex parte Velsberry Pty Ltd [2003] WASCA 9 per Murray J at [27]). But the situation will change markedly if the plaintiff is successful in his action in the District Court and establishes that he has suffered an injury caused by the negligence of his employer. In those circumstances the combined effects of s 18 and s 21 of the Act will be that the defendant employer comes under a liability to pay compensation from the date of incapacity resulting in that injury. Once such incapacity is suffered, compensation is payable instanter (Mokta v Metro Meat International Ltd [2005] WASCA 143 per Pullin JA at [44]). The Judge hearing the case will then have very limited powers because of s 93C of the Act and the effect of s 93E will mean that the Judge will be unable to award any damages. That is because s 93E imposes restrictions on the awarding of damages and provides in subsection (3):
Damages can only be awarded if –
(a)it is agreed or determined that the degree of disability is not less than 30% and that agreement or determination is recorded in accordance with the regulations; or
(b)the worker has a significant injury and elects, in the prescribed manner, to retain the right to seek damages and the election is registered in accordance with the regulations.
If the plaintiff were to establish his case at trial, the Court of Appeal in Mokta's case said that proceedings would then have to be adjourned to allow the plaintiff to seek a determination as to the degree of disability. Such a determination cannot be made by the District Court because the word "determined" means determined or decided on a reference under s 93D(10) or (11). That determination must be made by the Dispute Resolution Directorate established under the Act. (Mokta at [52]).
It is for that reason that the defendant maintains that this action should be stayed in the District Court so that the plaintiff can seek a determination of the degree of disability pursuant to a Form 22 application and, if the degree of disability is sufficient for damages to be awarded, the stay in the District Court action would be lifted.
The plaintiff asks that the stay be lifted now so that the District Court matter can proceed. If the action reaches the stage where Part IV Division 2 comes to apply, the Judge can determine whether issue estoppel, estoppel or waiver operate to prevent Part IV Division 2 from applying. The plaintiff's case is that those issues are best determined by a Judge at trial. The plaintiff submits that the issues are fully pleaded and at trial further evidence can be led. In the event that the plaintiff is successful on the issue estoppel waiver argument, then the Judge would be able to award common law damages without any of the restrictions under Part IV Division 2 of the Act. If that argument failed at that point, then the Court would adjourn while the Directorate dealt with the Form 22 application.
The plaintiff asserts that there is doubt whether a further Form 22 application can be brought. They rely on a recent decision of Nisbet DCJ in the Dispute Resolution Directorate (MR & RC Smith Pty Ltd t/a Ultratune Osborne Park v Wyatt; Commissioner Nisbet; Dispute Resolution Directorate; No C13-2007; 28 February 2007). That was a case where the plaintiff brought two separate Form 22 applications in the Directorate and the issue arose whether a decision of an Arbitrator was a final determination or whether a further determination could be made on a second Form 22 application. In Wyatt's case Nisbet DCJ found that precisely the same issue was sought to be litigated by the respondent in his second Form 22 application as he litigated and lost in his first Form 22 application. Therefore he held at [19]:
"It would hardly befit the objects of the Act to decide other than that the first determination was final and binding on the Arbitrator in the second Form 22 application in the circumstances which I have outlined above."
The plaintiff submitted that the effect of Wyatt's case is that the plaintiff in this case could never make another Form 22 application because his application has been dismissed in this case and that dismissal finally disposed of the application. I do not accept that to be true. The dismissal of the Form 22 application decision on the merits was done with the consent of the plaintiff. It was not a reasoned decision. The Arbitrator gave no reasons. He simply dismissed the application in circumstances where the defendant had indicated he had no jurisdiction and where the plaintiff had consented to the application being dismissed. The Arbitrator did not consider any issues related to the degree of the plaintiff's disability and if an application were now made for that to be determined, there is no part of the dismissal by consent that would be binding on the Arbitrator. I do not accept the plaintiff's submission that in the circumstances of this case the plaintiff could not make a Form 22 application.

The law in a state of some flux

Both counsel submitted to me that on the issue of whether issue estoppel, estoppel or waiver could apply in an action between worker and employer so as to prevent the employer from relying on Part IV Division 2 of the Act is a question that has been left in some uncertainty by the decision in Re Monger; Ex parte Cross [2004] WASCA 176. That was a decision of a bench of five in the Full Court on an application for a writ of certiorari and a writ of mandamus against Mr Monger. The issue was whether the Director of Conciliation and Review was obliged to register or at least to consider registering the applicant's election to pursue a claim for damages at common law pursuant to s 93E(3)(b) and (6) of the Act. In Cross's case the worker had lodged his election within the 14 day time limit, and his degree of disability had been determined as not less than 16 per cent but the worker had filed his Form 22 two days after the latest day allowable under the Act. Despite the late lodgement the Director proceeded to determine the degree of disability (which was disputed by the employer) and no‑one took the point concerning the late lodgement. But when the worker subsequently made his election and lodged it the Director, of his own motion, refused to register it. The issue before the Court was whether the Director and the employer were now estopped from relying on the late lodgement.
In Cross two of the Justices gave powerful reasons for determining that the entire Part IV Division 2 of the Act is procedural only and therefore amenable to issue estoppel, estoppel or waiver as between the parties. Malcolm CJ identified the question in the case at [22] as:
"Whether the time limit for filing a Form 22 can be overcome by resort to one or other of the doctrines of waiver or estoppel in a situation where the effect of the relevant statute is to provide that the Court has no jurisdiction to award damages contrary to the provisions of Division 2 of Part IV of the Act as provided in s 93C of the Act."
As to s 93C Malcolm CJ noted at [66] it is headed "Limit on powers of Courts":
"This implies that the limitation is one upon power which is suggestive of a limit upon the jurisdiction to award damages otherwise than in accordance with the statute. The limitation is in the nature of a limitation on the amount and scope of the award of damages at common law where there is liability established for negligence."
Malcolm CJ then agreed with Heenan J at [70]:
"With respect, I agree with the analysis by Heenan J of the decision of the High Court in Verwayen which has led his Honour to conclude that the character of the statutory defence in Part IV Division 2 and, in particular, s 93C of the Act are provisions which are procedural in character, having the effect of barring the remedy rather than the right or, as it has been put, 'non-jurisdictional' and, consequently, capable of being met by the doctrines of waiver or estoppel. The effect of the relevant provisions is not to deprive the Court of jurisdiction to award damages in the circumstances of this case, but to place limitations upon the remedy of damages at common law."
Malcolm CJ and Heenan J both referred to the decision of the High Court in Dossett v TKJ Nominees Pty Ltd [2003] HCA 69 where at [59] Kirby J discussed Western Australia's legislation and said:
"Nothing in the Workers Compensation Act either before or after the 1999 Act abolished the appellant's common law rights. All that happened was that the enforcement of those rights was made the subject of procedural conditions both before and after the 1999 Act. Section 93C provided that if Division 2 applied, a Court was not to award damages to a person contrary to the Division."
Wheeler J agreed with Malcolm CJ and Heenan J and noted at [115]:
"There is a larger issue which arises from the reasons of the Chief Justice and of EM Heenan J. Each of their Honours has held that s 93C of the Act is procedural, or 'non‑jurisdictional' (per Chief Justice, [70] p 28). That view casts doubt upon a number of earlier decisions of this Court which were not the subject of direct challenge in the present case … in my respectful view each of those decisions is wrong and each should be reconsidered not only because of the conclusions reached by Malcom CJ and EM Heenan J in the present case but for other reasons which I briefly outlined below."

Heenan J in his reasons relied on the reasoning of a number of the Justices of the High Court in Commonwealth v Verwayen (1990) 170 CLR 394 and in particular the reasoning of Gaudron J at p 486 when she said:
"The general principle is that 'an individual cannot waive a matter in which the public have an interest': … conversely a person may waive a right that is for his or her own benefit: … where a right is conferred by a statute a question may arise whether the statute confers a personal or a public right: … a statutory right to plead that an action is statute barred such as that conferred by s 5 of the Limitation of Actions Act (Victoria), which bars the remedy rather than the right to invoke a court's jurisdiction is a personal right."
Heenan J then found at [182]:
"An application of the tests accepted by Gaudron J in this passage would lead to a characterisation of the statutory defences available under s 93C and elsewhere in Part IV Division 2 of this Act as being procedural or non‑jurisdictional in character."
Heenan J went on to say at [184]:
"On all the tests referred to in the authorities, the character of a statutory defence in this legislation must be classified as procedural; as a bar to the remedy rather than of the right; or, 'non‑jurisdictional': leading to the conclusion that it may be waived. In this regard it is also to be recognised that, as I have already concluded from earlier analysis, the right to raise such a statutory defence is conferred upon employers as a private right rather than as a public right."
The difficulty I face as a District Court Judge is that the judgments of Malcolm CJ, Heenan J and Wheeler J in the Cross case directly conflict, it would appear to me, with the decision of the Full Court in Re Monger; Ex parte TNT Australia Pty Ltd [2002] WASCA 223 a decision which the parties in Cross did not ask the Full Bench to over-rule. Templeman J in his reasons in Cross's case referred to this at [97]:
"Standing in the way of that contention is the decision of this Court in Re Monger; Ex parte TNT Australia Pty Ltd [2002] WASCA 223. There in circumstances not relevantly distinguishable from the present case Anderson J, with whom Wallwork and Steytler JJ agreed, said at par 21:
'The scheme of Division 2 of Part IV is generally to prohibit courts from awarding damages in work accident cases and then to precisely define the circumstances under which the right to seek damages may be retained. There must be a certain level of disability (specified by reference to exact percentage points), there must be a positive election to retain the right, the election must be made in a prescribed manner and form and it must be made within a specified period of time, the expiration of which is expressed so as to be precisely ascertainable. In other words, … the legislation locks the gate to this field of common law damages and then fashions the key which alone is capable of turning the lock'."
Templeman J went on to note that in the TNT case the Full Court had not examined the issues raised in Verwayen's case in considering whether Part IV Division 2 was procedural or jurisdictional but he went on to say at [100]:
"In my view, it is not necessary to consider the ambit of the constraint imposed by s 93C. It is, I think, sufficient to say that in the present case, the Division does apply and that the applicant did not act within the relevant limitation period. It follows that the Court has no jurisdiction to award damages. I respectfully agree with Anderson J that 'neither the consent of the parties nor unauthorised administrative act of the director can overcome that provision'."
Pullin J, the fifth Judge in Cross's case, decided at [145] that no issue of waiver or estoppel arose in that case because mere participation in proceedings before the review officer did not mean the respondent waived any right to argue that the election was invalid. Pullin J found as a matter of fact that the employer had done nothing which could amount to estoppel or which would constitute a waiver of any kind.
Given this unsettled state of the law I find, with considerable respect, that the judgment of Heenan J in Cross is highly persuasive. The majority in TNT did not consider the issues identified by the High Court in Verwayen that need to be considered on the question of whether provisions are procedural or jurisdictional and whether issue estoppel and waiver can operate. I rely on the judgments of Malcolm CJ, Wheeler and Heenan JJ in Cross and accept that the provisions of Part IV Division 2 are procedural, that they are enacted for the benefit of the employer and that an employer can waive those provisions or be estopped from asserting them.

Factual findings

The main issue in this case is whether I should determine this issue or allow the matter to be determined on the pleadings at trial. But if I were to do that the trial could be futile in the sense that it could be an action for damages in the District Court where ultimately a Judge would not be able to award any damages because of Part IV Division 2. I note that in Mokta's case, which has not been challenged, Pullin JA said at [52] that normally a determination under the Act as to the degree of disability should take place earlier and that a Court should not end up in the position of having to adjourn to allow an appellant to seek a determination from the Directorate, I believe that proposition is important to the interests of justice and to the proper administration of justice in the District Court. To suggest that there is a loophole in the Act that would allow a plaintiff to put an employer to the cost and expense of a District Court trial for common law damages and only then to require an adjournment so that a determination could be made as to the degree of disability with the potential of depriving the Judge of the ability to award damages would be a result that would conflict with any reasonable expectation of the legislature in enacting these provisions. While I accept that the doctrines of issue estoppel, estoppel and waiver can apply, it seems to me that that issue should be determined now prior to any trial so that the Court's time is not wasted. If the plaintiff fails on that issue, then the proceedings in the District Court should be stayed while the plaintiff proceeds with a Form 22 application. Depending on the outcome of that application, the stay then could be lifted. Therefore I propose on the papers before me to determine the question of whether on the facts of this case the defendant is barred from relying on Part IV Division 2 because of issue estoppel, estoppel or waiver.

Issue estoppel, estoppel and waiver

The defendant alleges that issue estoppel arises from the order of the Arbitrator that the application of the worker contained in his Form 22 referral filed on 14 October 2005 be and is hereby dismissed. In order for the plaintiff's issue estoppel argument to succeed the plaintiff must demonstrate that the Arbitrator has already determined the question of whether the plaintiff must comply with the provisions of s 93E(3) of the Act before he is entitled to receive an award of damages. As a matter of fact on the evidence before me I do not accept that the Arbitrator's decision determined anything other than that the plaintiff had consented to dismissal of his Form 22 application. There was no evidence that the defendant ever asserted that Part IV Division 2 did not apply. There were certainly no assertion or concession or agreement that the plaintiff could simply proceed in the District Court unconstrained by Part IV Division 2. There was no issue estoppel as against the defendant arising from the letter written on 8 December 2005. I am satisfied from that letter that the defendant was saying no more than that at that time the Directorate had no jurisdiction and that was true.
I do not consider the facsimile sent by the plaintiff's solicitor as indicating any issue wherein there is agreement by the defendant. The defendant did not agree that Part IV Division 2 did not apply. The defendant agreed only that s 93B(1)(b) had not been complied with. That is not an appropriate characterisation of that provision. It is not a question of the plaintiff complying with s 93B; it is a question of whether compensation had been paid or was payable in respect of that injury under the Act. That clearly had not occurred as at the date of the Form 22 application.
I do not consider that the order made by the Arbitrator was in any way a finding or decision that arose from the facsimile from the defendant. In particular I do not accept the basis on which the plaintiff consented to that order, namely that Part IV Division 2 does not apply. I do not accept that there is any basis for the plaintiff's claim that the order was made dismissing the Form 22 application on the basis that s 93B did not apply.
Likewise, I find that there is no conduct by the defendant that could give rise to any waiver in this case. All the defendant has done is to refuse to pay compensation and to then challenge the actions taken by the plaintiff in proceeding with a Form 22 application without having had his alleged disability determined. That is a condition precedent to the bringing of the Form 22 application. The defendant has now agreed that it will not raise that objection if the plaintiff brings another Form 22 application. I consider that the proper way for this case to proceed is for the plaintiff to make that application to the Arbitrator. Nothing in Wyatt's case would preclude the Arbitrator from determining that application on its merits. The previous dismissal never considered the merits of the first Form 22 application and nothing in it could bind the Arbitrator on a second application.
For these reasons the appeal from the decision of the learned Registrar is allowed. I order that the plaintiff's application to lift the stay be dismissed.