Meyers v The Director of National Parks
[2006] NFSC 2
•20 FEBRUARY 2006
SUPREME COURT OF NORFOLK ISLAND
Meyers v The Director of National Parks [2006] NFSC 2
PRACTICE AND PROCEDURE – Strike out application – Action for damages by injured employee against an alleged tortfeasor who was not the plaintiff’s employer – Whether Court has jurisdiction having regard to Employment Act.
Employment Act 1988 (NI) s 43
THOMAS JOHN MEYERS v THE DIRECTOR OF NATIONAL PARKS
SC13 of 2005WILCOX J
20 FEBRUARY 2006
SYDNEY (HEARD IN NORFOLK ISLAND)
IN THE SUPREME COURT
OF NORFOLK ISLAND
SC13 of 2005
BETWEEN:
THOMAS JOHN MEYERS
PlaintiffAND:
THE DIRECTOR OF NATIONAL PARKS
Defendant
JUDGE:
WILCOX J
DATE OF ORDER:
20 FEBRUARY 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The orders proposed by paras 1, 2 and 3 of the defendant’s application of 22 August 2005 be refused.
2.The application in relation to para 4 be stood over generally with liberty to restore that application to the list by notice to the Court and the plaintiff.
3. The defendant pay the costs of the application incurred by the plaintiff to date.
IN THE SUPREME COURT
OF NORFOLK ISLAND
SC13 of 2005
BETWEEN:
THOMAS JOHN MEYERS
PlaintiffAND:
THE DIRECTOR OF NATIONAL PARKS
Defendant
JUDGE:
WILCOX J
DATE:
20 FEBRUARY 2006
PLACE:
SYDNEY
REASONS FOR JUDGMENT
WILCOX J:
On 26 August 2005, the defendant in this proceeding, the Director of National Parks, filed an application seeking the following relief:
(i)an order setting aside the Amended Originating Application; or alternatively,
(ii)an order requiring the plaintiff in the principal proceeding, Thomas John Meyers, to provide security for the defendant’s costs.
On 31 August 2005, I held a directions hearing during which it was agreed that argument about the alternative proposed order would be postponed and that a determination about the first proposed order would be made by reference to written submissions, without an oral hearing. Directions were made for the filing of evidence, on which any party wished to rely in connection with the interlocutory application, and written submissions.
The only evidence filed was an affidavit of Cameron Hutchins, a solicitor acting on behalf of the defendant. Mr Hutchins annexed to his affidavit certain documents, including a copy of the Employment Act 1988 (NI) (‘the Act’) and the explanatory memorandum to the Bill for that Act that was provided to members of the Norfolk Island Legislative Assembly.
The plaintiff’s case
The Statement of Claim filed by the plaintiff alleges that the defendant is a corporation sole and was responsible, inter alia, for the establishment and management of the Norfolk Island National Park. It is further alleged that the defendant entered into a contract with a New Zealand company, Roadstone Construction Limited (‘Roadstone’), for works associated with the upgrade of Mount Pitt Road, this road being apparently within or related to the national park.
The Statement of Claim alleges that Roadstone, ‘under the supervision and control of the Defendant undertook the contract works by employing a subcontractor, Island Industries Pty Ltd (‘Island Industries’)’. Paragraph 6 of the Statement of Claim then alleges: ‘At all material times Roadstone and Island Industries in carrying out their contracts were agents and/or servants of the Defendant’.
Paragraph 7 alleges that the plaintiff, at all material times, was an employee of Island Industries. Nonetheless, it is alleged (in para 8) that ‘the Defendant exercised authority and control over those works and the Plaintiff’ and (in para 9) that, at all material times, the defendant owed the plaintiff ‘a duty of care to ensure that proper measures were taken to protect the health and safety of persons such as the Plaintiff who were working on the site at Mount Pitt Road’.
The Statement of Claim goes on to allege that, on 29 January 2003, in the course of the plaintiff’s duties as an employee of Island Industries, a multi-tyred roller operated by him lost traction and rolled over, trapping him beneath. As a consequence, the plaintiff says, he suffered ‘massive injuries loss and damage’, including the loss of both legs above the knee and significant loss of eyesight.
The defendant’s argument
As counsel for the plaintiff have submitted, the first order sought by the defendant is, essentially, an order summarily dismissing the principal proceeding. The first order does not depend upon any alleged defect in the Amended Originating Application or the Statement of Claim. The essence of the defendant’s argument is that this Court has no jurisdiction to hear and determine the plaintiff’s claim. The lack of jurisdiction is said to arise out of the terms of s 43 of the Act. The Court will always be cautious in exercising its power to strike-out an action: see General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125. However, if it is correct to say that the Court lacks jurisdiction to hear the case, there is no point in allowing it to proceed. For the purposes of the first order sought by the defendant, the critical (and only) question is whether, on its true construction, s 43 of the Act bars hearing and determination of this action.
The terms of the Act
Sections 5 and 6 are contained in Part 1 of the Act. They are in the following terms:
‘Application
5. (1) Subject to this section, this Act applies where work is carried out by an employee in Norfolk Island, whether a contract was entered into or not, and whether the contract, if any, was entered into in Norfolk Island or elsewhere.
(2) Where an employer is not ordinarily resident in Norfolk Island, an agent, officer or employee ordinarily resident in Norfolk Island of that employer is deemed, for the purposes of this Act, to be the employer where the agent, officer or employee –
(a)is ordinarily in charge of the employer’s business in Norfolk Island; or
(b)has entered into a contract on behalf of the employer in Norfolk Island.
(3) This Act applies where a contract for work to be carried out elsewhere than in Norfolk Island –
(a)is made in Norfolk Island; and
(b)the employer and employee under the contract are ordinarily resident in Norfolk Island.
(4) Where a person is employed to carry out work in Norfolk Island under a contract made in a place elsewhere than Norfolk Island and the person performs no duties under the contract on land in Norfolk Island except duties that are incidental to the performance of the principal duties of the person under the contract, this Act does not apply.
Persons to whom Act applies
6. (1) For the purposes of this Act, an employer may be a natural person, a body politic, a body corporate or unincorporated, a firm, an association, a partnership or club, the personal representative of a deceased employer or a partnership between 2 or more of them.
(2) For the purposes of this Act, where a natural person enters into a contract of service as an employee with another person, whether or not a natural person, the other person is the employer of the first-mentioned person.
(3) For the purposes of this Act, where a natural person enters into a contract (other than a contract of service) with another person, whether or not a natural person, the first-mentioned person is deemed to be an employee of the other person and the other person is deemed to be the employer of the first-mentioned person where –
(a)the contract constitutes or includes an agreement to perform work or service or work and service for consideration in money;
(b)the first-mentioned person personally performs all or part of the work or service or work and service; and
(c)the work or service or work and service are not –
(i)incidental to a trade or business regularly carried on by the first-mentioned person before, or apart from, the making of the contract; or
(ii)the carrying on by the first-mentioned person of business under a business name within the meaning of the Business Names Act 1976.’
Part 2 of the Act relates to employment terms and conditions. It requires that employment contracts be in writing and specifies certain minimum and default conditions of employment.
Part 3 of the Act contains s 43. The Part is headed ‘Compensation for Work-Related Accidents, etc’. It commences with some interpretation sections (ss 26-28) and follows with sections providing compensation in relation to death (s 29), incapacity (s 30), permanent loss or impairment of function (ss 31-32), industrial deafness (s 33), hernia (s 34), occupational disease (s 35), heart attack or stroke (s 36) and medical treatment (s 37). This is followed by provisions concerning rehabilitation services (s 38) and compulsory insurance in respect of ‘the full amount of the employer’s liability to pay compensation under this Part to all employees employed by the employer’ (s 39). Section 40 deals with the situation that arises where an employer who is ‘liable to pay compensation to an employee under this Part’ is uninsured. Section 41 covers the situation where a liable employer ceases to exist. Section 42 provides for variation of rates of compensation. Then comes s 43. It is headed ‘Compensation in substitution for other claims’ and reads as follows:
‘43.(1) Subject to subsection 43(3), where an employee –
(a)suffers incapacity;
(b)would have suffered incapacity but for the fact that the employee did not suffer a loss or diminution of the employee’s capacity to earn; or
(c)dies as a result of an occurrence or condition specified in subsection 29(1),
no proceedings for damages or compensation arising directly or indirectly out of –
(d)an injury or condition out of which the incapacity arose;
(e)an injury or condition out of which incapacity would have arisen had the employee suffered a loss or diminution of the employee’s capacity to earn; or
(f)a death as a result of an occurrence or condition specified in subsection 29(1),
shall be heard or determined except in accordance with this Act, whether instituted by the employee or another person, and whether under a rule of law, enactment or law in force in Norfolk Island.
(2)Without limiting the generality of subsection 43(1) -
(a)the action for loss of services (known as the action per quod servitium amisit); and
(b)the action for loss of consortium (known as the action per quod consortium amisit), in relation to an employee,
are hereby abolished.
(3) Subsections 43(1) and 43(2) do not apply in respect of a cause of action that arose during a period not exceeding 6 years before the commencement of this Act.
(4) It is the intention of he Legislative Assembly that compensation payable under this Act in respect of incapacity or death arising out of, or in the course of, employment is to be in substitution for damages recoverable or payable in respect of the incapacity or death whatever the cause of action or basis of liability and whether the cause of action is actionable at the suit of, or the liability is enforceable by, a person suffering incapacity or some other person.
(5) Nothing in this section affects an action for breach of a contract of insurance.
(6) In this section, a reference to damages includes a reference to aggravated, exemplary or punitive damages.’
The remainder of Part 3 deals with a miscellany of subjects: a prohibition on contracting out of Part 3 (s 44), misconduct by the employee (s 45), recovery of overpayments (s 46) and provision of information as to compensation (s 47).
Part 4 of the Act concerns safe working practices. Part 5 provides for conciliation, adjudication and review and Part 6 contains certain miscellaneous provisions. No party contends that any of those Parts casts light on the proper interpretation of s 43 of the Act.
The defendant’s solicitor draws attention to the absence from the Act of definitions of either ‘compensation’ or ‘damages’, such as appear in the workers compensation legislation of most Australian States. The solicitor also points out that the Act does not contain provisions allowing for recovery of compensation payments made pursuant to the Act against negligent third parties, such as are contained in the legislation of many other jurisdictions.
The defendant’s argument
In his primary written submissions, the solicitor for the defendant said:
‘The intention of the legislature with respect to section 43 of the Act is made clear by the title of the section – “Compensation in substitution for other claims”. The section could have been entitled “Compensation in substitution for other claims against employers”, which, as explained below, appears to be the basis of the Plaintiff’s argument, however section 43 does not have that title.
The Defendant submits that it was the intention of the legislature for compensation under the Act to be in substitution for all other claims, not merely claims against employers. This is supported by the following:
(a)under the Act there is no civil liability for occupiers or manufacturers for breaches of duties relating to the provision and maintenance of safe working environments;
(b)unlike the workers’ compensation statues [sic] of the Commonwealth and the Australian states and territories, the Act does not clearly state that employees retain the right to bring claims for damages against negligent third parties; and
(c)the Act does not include any provisions by which rights and obligations of employees, insurers and third parties are adjusted so as to ensure that “double compensation” does not occur.’
The solicitor argued that, in order for the plaintiff to be entitled to succeed, the words ‘against an employer’ would need to be read into that portion of s 43(1)(a) that lies between paras (c) and (d), so as to make it read ‘no proceedings for damages or compensation against an employer, arising directly or indirectly out of’. The solicitor points to sub-s (4) of s 43, in particular the words ‘whatever the cause of action or basis of liability’. It is said these words demonstrate:
‘a clear intention by the legislature that compensation payable under the Act is to be in substitution of all claims for damages and causes of action, whether the work-related injuries or incapacity arose due to an act or omission of the employee, the employer or a third party such as an occupier or a manufacturer. To read down those words to the effect that the substitution applied only to causes of action against employers would defeat the intention that compensation is to be paid under the Act regardless of liability.’
The defendant’s solicitor put an alternative argument as follows:
‘Whilst the Plaintiff may assert that the Defendant has been sued as a third party and not as an employer, an analysis of the Statement of Claim reveals that the Defendant has been sued as if it were the Plaintiff’s employer. The allegations of negligence contained in the Statement of Claim relate to breaches of duties owed by employers, occupiers and/or manufacturers.’
The solicitor went on to discuss the particulars of negligence given by the plaintiff and to refer to various provisions of the Act concerning safe working conditions.
It is convenient to say at once that I would not be prepared to base the first order sought by the defendant upon the alternative argument set out in para 17. The Statement of Claim makes it clear that the plaintiff does not assert the defendant was his employer at any relevant time; he expressly states he was employed by Island Industries. The plaintiff claims that, nonetheless, the defendant owed to him a duty of care. Whether or not that claim can be made good cannot be determined until the Court has before it all of the relevant evidence. The claim cannot be presumed to be bad, as it would be necessary for it to be regarded as providing a basis for summary dismissal of the proceeding or an order to similar effect.
The plaintiff’s argument
Counsel for the plaintiff submitted that the purpose of s 43 of the Act:
‘is to replace (or restrict/abolish) an employee’s common law cause of action for negligence against his/her employer with a statutory scheme of no fault compensation. It does not extend to causes of action against other defendants.’
Counsel went on:
‘The words used by parliament in s.43 do not evidence an intention to extinguish an individual’s cause of action against persons other than an employer. Such an abolition of all other causes of action would require clear and unambiguous language expressly specifying that such property rights were being removed by statute: see Baker v Campbell (1983) 153 CLR 52 at 96-7, 116-7, 123; Sorby v Commonwealth (1983) 152 CLR 281 at 289, 309-310, 316; Sargood Bros v Commonwealth (1910) 11 CLR 258 at 279.’
Counsel for the plaintiff argued that the defendant misconceived the position in pointing to an absence in the Act of a provision that employees retain their right to bring claims for damages against negligent third parties; they said ‘it is the absence of an extinguishment of rights which is significant’. Counsel pointed out that nowhere in the Act ‘is there to be found the type of express provision identified in other workers compensation schemes where third party rights are modified’, as in s 50 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) and various State statutes. In any event, said counsel, the explanatory memorandum ‘makes clear that the “substitution” of rights relates only to claims against an employer’.
The explanatory memorandum deals with cl 43 of the Bill for the Act in the following way:
‘Compensation in substitution for common law claims
The intention of the Legislative Assembly expressed in the legislation is that compensation payable under the legislation for incapacity or death arising out of, or in the course of, employment is to be in substitution for damages for such incapacity or death. This is to apply irrespective of the cause of action or basis of liability, and whether the cause of action is actionable at the suit of (or the liability is enforceable by) an incapacitated person or some other person.This intention is given effect to by provisions abolishing common law employers’ liability. No proceedings are to be heard or determined except under the legislation for damages (including aggravated, exemplary or punitive damages) or compensation arising directly or indirectly out of (1) an injury or condition arising from an employee’s incapacity, (2) an injury or condition out of which incapacity would have arisen if the relevant employee had suffered a loss or diminution of earning capacity (eg for a minor injury not leading to loss of earning capacity) or (3) death that falls within the causes of death for which compensation is payable to dependants. The prohibition on hearing or determining such proceedings applies irrespective of whether they are brought under a rule of law, enactment or other law in force in Norfolk Island. Without limiting the generality of that prohibition, the action for loss of services (the action per quod servitium amisit), is expressly abolished, as is also the action for loss of consortium (the action per quod consortium amisit) in relation to an employee.
A transitional provision preserves common law proceedings where the cause of action arose not more than 6 years before the commencement of the legislation. Nothing in the above prohibitions affects an action for breach of an insurance contract.’
It will be observed that, for the most part, this paragraph merely paraphrases the clause. However, the paragraph includes a sentence stating that the legislature’s intention ‘is given effect to by provisions abolishing common law employer’s liability’.
Counsel for the plaintiffs also argued that ‘abolition of causes of action against a non-employer tortfeasor, without a corresponding substitution of rights for statutory compensation’ would be contrary to the legislative power of the Norfolk Island parliament, which is not authorised to make laws for:
‘the acquisition of property otherwise than on just terms’ similar to s.51 (XXXI) of the Commonwealth of Australia Constitution. In this context it has repeatedly been recognised that “property” extends to a right to bring action to recover damages for injury caused by negligence: Georgiadis –v- Australian and Overseas Telecommunications Corp. (1994) 179 CLR 297; Commonwealth –v- Muwett (1997) 191 CLR 471; Smith v ANL Ltd (2000) 204 CLR 493.’
Finally, counsel for the plaintiffs argued that:
‘… one consequence of the Defendant’s argument is that even if the Norfolk Island Supreme Court does not have jurisdiction, that conclusion would not restrict the jurisdiction of the Federal Court of Australia to hear the claim if new proceedings were commenced. The Defendant does not apparently submit that s.43 extinguishes the plaintiff’s cause of action, it merely says the Norfolk Island Supreme Court does not have jurisdiction to hear the same. The Federal Court of Australia would however retain jurisdiction to hear a claim against an officer of the Commonwealth pursuant to s.75(iii) of the Constitution and ss.39 and 39B of the Judiciary Act 1901 (Cth).’
Conclusion
I do not find it necessary to reach a final conclusion about the arguments noted in paras 25 and 26. It is not clear to me that s 51(xxxi) of the Commonwealth Constitution has any application to this case. As the solicitor for the defendant pointed out in reply, in each of the three cases mentioned by the plaintiff’s counsel, when the relevant legislation came into force, the plaintiff already had a vested cause of action. That is not true in the present case.
In relation to proceedings in another court, it is correct that s 43 fails to extinguish the cause of action. Although s 43 is couched in language wide enough to forbid the hearing and determination in any court of a proceeding falling within para (d), (e) or (f) of subs (1), the Norfolk Island legislature would not have power to exclude any jurisdiction of a non-Norfolk Island court. Whether the Federal Court of Australia has jurisdiction on the basis suggested by counsel for the plaintiffs is doubtful; but, if it does, that jurisdiction would be available even if the defendant’s present application were successful.
Read literally, s 43 has the effect of precluding this Court from hearing and determining the present proceeding. This is a proceeding ‘for damages … arising … out of an injury or condition out of which the (plaintiff’s) incapacity arose’. If this action were brought by the plaintiff against Island Industries, his employer at the time that he suffered the incapacity, s 43 would undoubtedly bar the proceeding, at least in this Court. However, I do not think s 43 should be read literally. Despite the width of the words used in s 43, I believe it was not the intention of the legislature to preclude actions against non-employer tortfeasors.
Modern explanatory memoranda rarely advance understanding of a problematic statutory provision. The memorandum usually uses the same language as that which, in the statute, creates the problem. However, in this case, the explanatory memorandum departs from the statutory language to describe the provisions included in cl 43 of the then Bill – now s 43 of the Act – as being ‘provisions abolishing common law employer’s liability’. The memorandum makes no reference to abolition of the common law liability of any other person.
Although the explanatory memorandum was annexed to Mr Hutchins’ affidavit, the solicitor for the defendant put no argument concerning its terms, even after counsel for the plaintiff drew attention to the particular paragraph.
The explanatory memorandum sets out the basis upon which the Bill was put before the Legislative Assembly. In the absence of any material indicating to the contrary, it must be presumed this was the basis upon which s 43 was enacted.
The view that the legislature intended to confine the operation of s 43 to claims against employers is supported by the structure of the Act. As its name suggests, the subject of the Act is the relationship between employers and employees. Part 3 of the Act, in which s 43 appears, is designed to establish a workers’ compensation scheme, of a kind familiar in all Australian jurisdictions. The Part is clearly designed to impose burdens on employers, and to give benefits to employees, in relation to death and various types of incapacity arising out of the employment relationship. It is understandable that the legislature might have thought it reasonable to take away an employee’s right to sue his or her employer in respect of a work-related incapacity, for which the employer was required to provide compensation. But it is not readily understandable why the legislature would also have wished to take away the employee’s right to sue a non-employer tortfeasor. Reading the section in the way urged by the defendant would yield strange results. Consider the hypothetical case of a motor accident in which two people are injured, as a result of the negligence of another person. One of the injured persons is not acting in the course of his or her employment and is free to sue for damages. The other person is engaged in conduct that makes the accident one arising out of, or in the course of, the employee’s employment; so the accident, for that person, is a ‘work-related accident’ (see s 26(1) of the Act) entitling him or her to compensation (s 28) but – on the defendant’s argument – barring him or her from recovering damages against the tortfeasor. On the defendant’s argument, the tortfeasor obtains immunity from a damages claim as a side wind of legislation concerned with the rights inter se of employers and employees.
I agree with counsel for the plaintiff that the Court should not construe a statute as abolishing a cause of action unless it is clearly satisfied that this was the legislature’s intention. In the context of a statute that, otherwise, deals entirely with the employer-employee relationship, a provision that, read literally, has the effect of precluding an action for damages against a non-employer comes as such a surprise that the reader is forced to wonder whether this really was intended. When elucidation is sought from the explanatory memorandum, the answer is clearly in the negative.
I should mention that I have given careful consideration to points (a), (b) and (c) made by the defendant’s solicitor, as set out in para 15 above. There is no substance in point (a). It would not be expected that a statute concerned with the employment relationship would contain provisions relating to the civil liability of occupiers or manufacturers; one would expect such rules to be governed by a different statute, if they were not to be left to common law. Point (b) is correct in point of fact, but the question is not whether the Act specifically retains the right of action against negligent third parties but whether it abolishes the right of action that already exists. Point (c) is also factually correct. I agree that such provisions would be desirable and might have been expected. However, statutory anomalies and omissions are not uncommon. Although any court will hesitate to interpret legislation in such a way as to cause an anomalous result, the circumstance that there will be such a result may not be decisive. In the present case, this factor is outweighed by the other matters I have mentioned.
Disposition
The defendant prefers to postpone that aspect of its application that relates to security for costs. The plaintiff’s counsel have advanced cogent arguments against an order for security for costs but, in deference to the defendant’s request, I will not now deal with that aspect of the application filed on 26 August 2005.
I will refuse the orders proposed by paras 1, 2 and 3 of that application. I will stand over para 4 generally, with liberty to the defendant to restore to the list that part of the application. The defendant must pay the costs of the application incurred by the plaintiff to date.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox. Associate:
Dated: 20 February 2006
Counsel for the Plaintiff: M B Williams SC and E G H Cox Solicitor for the Plaintiff: McCourts Solicitors Solicitor for the Defendant: Australian Government Solicitor Determination made by reference to written submissions.