New South Wales v Bahmad

[2004] NSWCA 287

NEW SOUTH WALES COURT OF APPEAL

CITATION:      STATE OF NEW SOUTH WALES v. BAHMAD [2004]  NSWCA 287

FILE NUMBER(S):
40803/2003

HEARING DATE(S):               19 July 2004

JUDGMENT DATE: 27/08/2004

PARTIES:
STATE OF NEW SOUTH WALES (APPELLANT)
JAMES BAHMAD (RESPONDENT)

JUDGMENT OF:       Mason P Beazley JA McColl JA   

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S):          DC14013/01

LOWER COURT JUDICIAL OFFICER:     Graham DCJ

COUNSEL:
P. Sternberg (Appellant)
S.F. Campell SC/A. Porthouse (Respondent)

SOLICITORS:
I.V. Knight - Crown Solicitor (Appellant)
Kheir & Associates (Respondent)

CATCHWORDS:
STATUTORY CONSTRUCTION - Workers Compensation Act 1987 - Workers Compensation Legislation Further Amendment Act 2001 (No. 94) - Transitional Provisions.
STATUTORY CONSTRUCTION - Interpretation Act 1987, s.68 - Whether contrary intention.

LEGISLATION CITED:
Community Service Orders Act 1979
Crimes (Administration of Sentences) Act 1999
Interpretation Act 1987
Workers Compensation Act 1987
Workers Compensation Legislation Amendment Act 2001
Workers Compensation Legislation Further Amendment Act 2001
Workplace Injury Management and Workers Compensation Act 1998

DECISION:
1.Appeal allowed.

1. Set aside verdict and judgment for the plaintiff (respondent in this Court).

2. Verdict for the defendant/appellant, judgment accordingly.

3. Respondent to pay appellant's costs of the trial and of the appeal.

4. Respondent to have a certificate under the Suitor's Fund Act 1951 if qualified

JUDGMENT:

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40803/03

MASON P
BEAZLEY JA
McCOLL JA

27 August 2004

STATE OF NEW SOUTH WALES v. BAHMAD

HEADNOTE

Mr. Bahmad suffered injury whilst carrying out work pursuant to a Community Service Order. He brought proceedings against the State claiming common law damages under Part 5 of the Workers Compensation Act 1987 for the negligence of the party providing the community service work. The trial judge rejected the State’s construction of the relevant provisions of this Act and entered a verdict and judgment in favour of Mr. Bahmad.

The State appealed, arguing that on the proper construction of the 2001 amendments to the Workers Compensation Act, ss.151G and 151H in their amended form applied to the appellant’s claim. If that was the case, Mr. Bahmad would not be entitled to any damages as he was not able to satisfy the 15% threshold provision in s.151H.

HELD per Beazley JA (Mason P and McColl JA agreeing):

(i) The words of the transitional provisions to the Workers Compensation Legislation Further Amendment Act 2001 (cl 14) are unambiguous and should be applied according to their terms.

(ii) The transitional provisions (cl 14) to the Workers Compensation Legislation Further Amendment Act 2001 applied to the respondent’s claim brought under Crimes (Administration of Sentences) Act 1999 so that the amended provisions of ss.151G and 151H applied.

(iii) Mr. Bahmad was not entitled to damages under the amended provisions of ss.151G and 151H of the Workers Compensation Act 1987 as he had failed to satisfy the prescribed threshold provisions.

Orders

1.Appeal allowed.

2.Set aside verdict and judgment for the plaintiff (respondent in this Court).

3.Verdict for the defendant/appellant, judgment accordingly.

4.Respondent to pay appellant’s costs of the trial and of the appeal.

5.Respondent to have a certificate under the Suitor’s Fund Act 1951 if qualified.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40803/03

MASON P
BEAZLEY JA
McCOLL JA

27 August 2004

STATE OF NEW SOUTH WALES v. BAHMAD

Judgment

1. MASON P.           I agree with Beazley JA.

2. BEAZLEY JA:     On 17 April 1999 Mr. Bahmad injured his right shoulder. At the time, he was performing work pursuant to a Community Service Order. Mr. Bahmad commenced proceedings against the State claiming damages due to the negligence of the party providing the community service work. The State is liable for any civil claim that arises out of the performance of community service work: see the Community Service Orders Act 1979; s.26N and Crimes (Administration of Sentences) Act 1999; s.121.

1. The State admitted breach of a duty of care but denied that Mr. Bahmad was entitled to damages because of the operation of ss. 151G and 151H of the Workers Compensation Act 1987 (WCA). The trial judge rejected the State’s construction of those sections and entered a verdict and judgment in favour of Mr. Bahmad. The State appeals against his Honour’s order.

2. Mr Bahmad’s entitlement to damages is governed by the combined operation of the provisions of the Crimes (Administration of Sentences) Act 1999 (CASA) and the WCA. However, the outcome of the appeal depends solely upon the proper construction of the transitional provisions to the 2001 further amending legislation to the WCA.  Having said that, a short traverse of the minefield created by the interrelated operation of CASA and the Workers Compensation legislation will be necessary.

   Statutory provisions governing entitlement to claim damages

3. Although Mr Bahmad’s Community Service Order was imposed under the Community Service Orders Act 1979, it was common ground between the parties that his entitlement to damages for injuries sustained whilst performing community service arose under s.122 of CASA which came into effect on 3 April 2000: CASA Sch 5 Pt 2 Div 4 (Savings, Transitional and Other Provisions)

1. The effect of s.122 of CASA is to make the provisions of Pt 5 Divs 1 and 3 of the WCA apply to any award of damages in respect of injury sustained during the course of an offender’s performance of community service work. Subsection 122(3) provides that in the application of Pt 5 Div 3 of the WCA “a reference to a worker is taken to be a reference to an offender who performs community service work”.

1. Part 5 of the WCA governs the award of damages in respect of claims brought by employees against employers for breach of an employer’s duty of care. Part 5 introduced a modified regime for the award of common law damages against employers. Division 1 contains the definitions for Part 5. Division 3 contains the provisions governing the award of modified common law damages.

1. On 27 November 2001, further significant modifications were introduced by the Workers Compensation Legislation (Further Amendment) Act 2001 No. 94 which amended, relevantly, ss. 151G and 151H of the WCA. Under the amended provisions, there is no entitlement to damages for non-economic loss: s.151G; and the recovery of economic loss is further restricted so that a worker must establish a degree of permanent impairment of at least 15%: s.151H.

1. It is common ground that if the 2001 amendments applied to Mr. Bahmad’s claim he would not be entitled to any damages as he was not able to satisfy the 15% threshold provision in s.151H.

The transitional provisions to the Amending Act

1. Under the savings and transitional provisions contained in Schedule 4 to the Further Amendment Act, the operation of the new ss. 151G and 151H was, in part, made retrospective by the provisions of cl 14 (which became cl 9 of Pt 18C of Schedule 6 of the WCA). Clause 14 provided:

   “An amendment made by Schedule 1 of the Workers Compensation Legislation Further Amendment Act 2001 applies in respect of the recovery of damages after the commencement of the amendment (and so applies even if the injury concerned was received before the commencement of the amendment) but does not apply in respect of the recovery of damages if proceedings for their recovery were commenced in a court before the commencement of the amendment.”

   Proper construction of the transitional provision

2. Mr Bahmad sustained his injury before the introduction of the amendments but did not commence proceedings until 11 December 2001, some 14 days after the commencement of the Amendment Act. The State contends that upon a proper construction of cl 14, the amended ss.151G and 151H apply to Mr Bahmad’s claim so that he had no entitlement to non-economic loss and that his claim was confined to damages for past and future economic loss provided he could establish impairment of 15%.

3. Mr Bahmad contends that the language of cl 14 is ambiguous.  As the amendments deprived workers of a significant common law right, namely general damages for non-economic loss and special damages for medical expenses, he submitted that the ambiguity should be resolved in favour of maintaining the position as it stood at the time of injury.  The trial judge accepted this argument, finding that there was a relevant ambiguity in the sense expressed in Booker v. State Rail Authority of New South Wales (No. 2) (1993) 31 NSWLR 402 at 410.

4. In Booker, the Court (Kirby P, Mahoney and Clarke JJA) stated at 410:

   “If there were any doubt or ambiguity in the language it would be appropriate to resolve that doubt in favour of preserving important common law rights.  The right of injured persons to compensatory damages is such a right.  Parliament may deprive people of those rights.  It may do so by imposing caps and limitations on the recovery of damages of particular kinds and in particular circumstances.  But unless parliament has done so clearly, a court will ordinarily construe legislation and regulations in such a way as to preserve basic rights and not to diminish them …”

5. Unfortunately the trial judge in this case did not identify the ambiguity or doubt in the language that led him to apply this principle of construction to the transitional provision.

1. Senior counsel for Mr Bahmad sought to identify that ambiguity for the Court.  The argument had as its commencement point the fact that cl 14 is a provision of Schedule 6 to the WCA. 

1. Section 2A of the WCA provides that that Act is to be construed with and as if it formed part of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIMA). The purpose of that Act is to “establish a workplace injury management and workers compensation system” with a number of stated objectives including to provide for the prompt treatment of injuries: s.3(b) and for the provision of income support to workers during periods of work related incapacity: s.3(c).   

2. There were also major amendments to WIMA in 2001 introduced by the Workers Compensation Legislation Amendment Act 2001 No. 61 Relevantly, the amendments, which commenced on 1 January 2002, introduced “Ch 7: New Claims Procedures”.  The new definitions, “work injury” and ”work injury damages” were also introduced: WIMA s.4.  Those definitions are in the following terms:

   “Work Injury means an injury in respect of which compensation is payable.

   Work Injury Damages has the same meaning as in Chapter 7 (New claims procedures).” 

3. In Ch 7 “Work Injury Damages” are defined to mean ”damages recoverable from a worker’s employer in respect of an injury to the worker caused by the negligence or other tort of the employer”:  s.250.

4. I pause to note that “injury” continues to be defined as “a personal injury arising out of or in the course of employment”: s.4.   It bears the same meaning in the WCA: s.4.  It also bears that meaning in CASA with the contextual difference of arising out of the performance of a Community Service Order: s.122.

1. The new claims procedures introduced by Ch 7 of WIMA provide for a detailed regime for the notification and making of claims for work damages and the assessment thereof.  The Act applies to claims made after the commencement of Ch 7.  However, Pt 18C.6.5 of the WCA, provides that existing claims are to be treated as new claims.  They thus fall to be governed by the relevant procedures of Ch 7 of WIMA except to the extent those procedures are stated not to apply.

1. Senior counsel for Mr. Bahmad submitted that because the WCA and WIMA were to be read together, cl 14 of the Further Amendment Act applied only to work injuries and did not incorporate an injury sustained by a person performing a Community Service Order.  It followed that the 2001 amendments had to be read as if the provisions of WIMA were also incorporated into them.   On this approach cl 14 had to be construed as if the phrase “work injury”, as defined in WIMA, was implied before the word “damages” and the word “work” before the word “injury”.   Thus, cl 14 should read:

   “An amendment made by Schedule 1 of the Workers Compensation Legislation Further Amendment Act 2001 applies in respect of the recovery of work injury damages after the commencement of the amendment (and so applies even if the work injury concerned was received before the commencement of the amendment) but does not apply in respect of the recovery of work injury damages if proceedings for their recovery were commenced in a court before the commencement of the amendment.” (the bolded words being implied by force of this construction)

   It was argued that so construed, Mr Bahmad’s claim did not come within the transitional provisions because it was not a “work injury” as defined. 

2. I agree that Mr. Bahmad’s claim is not a claim for “work injury damages” as defined in WIMA.  Mr. Bahmad’s injury was not caused during the course of any employment.  Community Service is a court ordered penal activity.  It is not employment.  That however, begs the question. The issue is whether Mr. Bahmad’s construction of the transitional provision is correct. That in turn invokes the question of principle: what is the ambiguity in the words of the section that permits words not used in the provision to be inserted or implied?

3. At an almost trite level, Mr. Bahmad’s construction requires the Court to assume that Parliament made an inadvertent error of omission when in the portion in parenthesis, the terminology used was “injury” and not “work injury”.  There is nothing in the express words of the transitional provision or the amending Act that indicates that such an omission was made.  Nor is there anything in the purpose of the amendment to require those words to be implied.  The transitional provision operates in a coherent and purposeful way without the words being implied.  When the WCA in its amended form is then considered in conjunction with the provisions of WIMA, it also operates in a comprehensible and effective way. 

1. Senior counsel attempted to gain support for his proposed construction by looking at the overall operation of Ch 7 of WIMA so as to demonstrate that it could not apply to Mr. Bahmad’s claim.  In particular, he referred to s.262 of WIMA which provides:

   “Court proceedings for the recovery of work injury damages cannot be commenced until a claim for the damages has been made.”  (emphasis added)

   It was contended that Mr. Bahmad could not make “a claim” before commencing proceedings because he had already commenced proceedings. 

2. WIMA makes a distinction between the making of a claim for work injury damages and the commencement of proceedings to recover work injury damages. The making of a claim under WIMA is a non-curial procedure.  Section 262 is contained within Ch 7 Pt 2 Div 2 which deals with the making of a claim for work injury damages.  The section requires that a claim first be made in accordance with the non-curial procedures specified in Ch 7 before proceedings for recovery of damages are commenced. For example, a person making a claim must give notice of the relevant injury to the employer as soon as possible after the injury happened or enter the particulars of the injury in a register of injuries: s.254, s.256 and must make the claim in accordance with the applicable requirements of the WorkCover Guidelines: s.260.

3. Unfortunately, Mr Bahmad’s submission overlooked s.259 of WIMA which provides that s.262 (and other provisions for the making of a claim) have no application to a claim for work injury damages if proceedings were commenced before the commencement of s. 259, that is, before 1 January 2002.  Mr. Bahmad had already commenced his proceedings by then.

4. Senior counsel for Mr. Bahmad next relied upon s.280A to make the same point.  Section 280A provides:

   “Claim for lump sum compensation a pre-condition to damages claim

   A claim for work injury damages in respect of an injury cannot be made unless a claim for lump sum compensation in respect of the injury is made before or at the same time as the claim for work injury damages.”

5. The submission was to the effect that because Mr. Bahmad could not comply with this section, as he did not have a claim for lump sum compensation, it followed that the amended provisions of Pt 5 could not apply to him. Accordingly his claim for damages must be governed by the provisions of ss.151G and 151H as they stood before the 2001 amendments.

6. This submission suffers from a similar but not as obvious a flaw as did the submission relating to s.262.  There is no section that expressly makes s.280A inapplicable to proceedings that have already been commenced.  However, as I have just pointed out, because by the operation of s.259, s.262 does not apply to a person who has commenced proceedings, such a person does not have to first make a claim for work injury damages in accordance with the non-curial procedures specified in Ch 7.  Section 280A only applies to a person who makes a claim for work injury damages.  It follows that s. 280A can have no operation in relation to proceedings that have already been commenced because a person who has commenced such proceedings is not required by Ch 7 to first make a non-curial claim.

1. Mr. Bahmad next advanced a number of propositions to contend with the operation of s.68 of the Interpretation Act 1987 upon s.122 of CASA. I will deal with these submissions as best I can, as senior counsel himself struggled with them as he attempted to advance his client’s case.

2. Section 68 of the Interpretation Act provides that a reference in an Act (in this case, in CASA) to another Act (the WCA) is a reference to that Act “as in force for the time being.” He conceded that if s.68 applies to s.122 then, ss.151G and 151H in their amended form would have to apply. However, s.68 (and the other provisions of the Interpretation Act) only apply “except insofar as the contrary intention appears” in the Act in question: Interpretation Act: s.5(2). He said the existence of a contrary intention is itself a question of construction: Durham Holdings v. NSW (1999) 47 NSWLR 340 at 351.

3. The subtext of this submission, I think, was a restatement of the construction for which Mr. Bahmad contends combined with the proposition that that construction indicated a contrary intention so that s.68 had no application. That is, as s.68 had no application the new provisions do not apply. The mere statement of the submission demonstrates its circularity. But in any event, as I have rejected the construction for which Mr Bahmad contends, it follows that I must reject the notion that there is any contrary intention shown in the amending legislation.

4. The next argument is more complex. The submission in terms was that s.68 does not expressly deal with a provision that is repealed and remade. The changes introduced by the 2001 Further Amendment Act were so radical that they amounted, not to an amendment or modification of the existing legislation, but to a repeal and a remaking of the same provisions.

5. The argument then moved to the provisions of CASA. It was said that Pt 5 Div 2 of CASA in which s.121 appeared did not merely modify rights. Rather, it created rights. For example, it created an indemnity for the entity providing the community service work. This was important because under s.30(1) of the Interpretation Act, “The amendment or repeal of an Act … does not: (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under the Act …” In any event there is a presumption against the abrogation of common law rights:  see Dossett v. TKJ Nominees Pty. Limited (2003) 78 ALJR 161; Coco v. R. (1994) 179 CLR 427; Booker v. State Rail Authority of New South Wales (No. 2) (1993) 31 NSWLR 402.

1. It followed, as I understand the argument, that the application of these principles meant that the rights of Mr. Bahmad to claim damages for his injury could not be affected by the introduction of the new ss.151G and 151H because that would involve an abrogation of his rights.

2. This submission is based on at least one flawed premise and potentially a second. First, provisions of s.68(1) expressly extend to an Act as amended: see s.68(2); as well as an Act that has been repealed and re-enacted, with or without modification: see s.68(3)(a). Subsection 3 further provides: “and a reference to a provision of the repealed Act … extends to the corresponding provision of the re-enacted Act …”. 

3. The second potential flaw relates to the submission that s.121 created rights. One right allegedly so created was a partial immunity to the provider of the community service (in this case that was likely to have been a local council). Another was creating vicarious liability in the Crown for the negligence of a provider of community service work. However, this was a continuation of the statutory regime under the Community Service Orders Act and therefore, arguably did not create rights.

4. More fundamentally, however, I have difficulty understanding the connection sought to be made between s.68 and the provisions of s.121. The rights and/or liabilities under that section are either not affected by the changes to ss.151G and 151H or are enhanced. It is Mr Bahmad’s right that has been limited by bringing an injury sustained in the course of a Community Service Order under the umbrella of the WCA. That Act has, in turn, limited rights of workers in respect of common law damages.

5. In any event, on the State’s construction of cl 14, neither s.5(2) or s.68 of the Interpretation Act have any work to do, because, by its express terms cl 14 provides for the retrospective application of the new provisions and to Mr Bahmad’s claim.

6. The other arguments advanced, namely the presumption against retrospectivity and the unreasonableness of the result should the State’s construction be correct, do not assist if the express terms of the transitional provisions have that very effect.  As I have determined that question in favour of the State it follows that the appeal should be allowed with costs. 

7. The formal orders I propose are -

   1.Appeal allowed.

   2.Set aside verdict and judgment for the plaintiff (respondent in this Court).

   3.Verdict for the defendant/appellant, judgment accordingly.

   4.Respondent to pay appellant’s costs of the trial and of the appeal.

   5.Respondent to have a certificate under the Suitor’s Fund Act 1951 if qualified.

8. McCOLL JA:      I agree with Beazley JA.

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LAST UPDATED:               30/08/2004