Robe River Mining Co Pty Ltd & Anor v Morseu

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: ROBE RIVER MINING CO PTY LTD & ANOR -v- MORSEU [2004] WADC 142

CORAM: DEANE DCJ

HEARD: 31 MAY 2004

DELIVERED : 21 JULY 2004

FILE NO/S: CIV 3197 of 2002

BETWEEN: ROBE RIVER MINING CO PTY LTD
YALLEEN PASTORAL CO PTY LTD
Appellants
AND
ROY MORSEU
Respondent

Catchwords:

Appeal from decision of Deputy Registrar - Whether there should be a stay of proceedings pending degree of disability determination or agreement as to such - Section 175 of the Workers' Compensation and Rehabilitation Act 1981

Legislation:

Wokers Compensation and Rehabilitation Act 1981

Motor Vehicle (Third Party Insurance) Act 1943

Result:

Appeal allowed

Representation:

Counsel:

Appellants: Mr M L Williams
Respondent: Mr S Melville

Solicitors:

Appellants: Phillips Fox
Respondent: Chapmans

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

Bandwill Pty Ltd v Spencer Laitt (2000) 23 WAR 390
Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) 18 WAR 345
Hastie v Iluka Midwest Ltd (2003) 32 SR (WA) 190
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Hewitt v Benale Pty Ltd (2002) 27 WAR 91
Jones v SNF (Australia) Pty Ltd (2002) 29 SR (WA) 164
Jones v Wesfarmers Ltd [2003] WASCA 225
Wentworth v A‑G (NSW) (1984) 154 CLR 518
Western Metal Zinc NL v Wesfarmers Transport Ltd & Anor [2003] WASCA 152

Case(s) also cited:

De San Miguel v Ryanex Pty Ltd [2003] WADC 263
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Price v Resolute Resources Ltd [2002] WADC 235
Speno Rail Maintenance Australia Pty Ltd v Hamersley Iron Pty Ltd [2000] WASCA 408

DEANE DCJ: This is an appeal from a decision of a Deputy Registrar on 5 April 2004 dismissing an application by the defendants for a stay of proceedings. As such it is a hearing de novo; Hazart Pty Ltd v Rademaker (1993) 11 WAR 26. The appellants seek an order that this Court stay the action pending either a degree of disability determination being obtained by the respondent or facts arising whereby the Court can conclude that the respondent can never obtain such a determination. Counsel for the appellants however, emphasize that they are not seeking an order by way of this appeal that the respondent's action be dismissed and for that reason take issue with the respondent's argument that the application for the stay is a mere disguise for a summary judgment application.
The respondent filed a statement of claim against the appellants for damages claiming negligence with respect to personal injuries allegedly suffered by him at the appellants' premises on 18 January 2000. At that time the respondent was employed by Barclay Mowlem Construction Ltd as a loader operator pursuant to an employment contract. This is pleaded in par 2 of the Statement of Claim.
According to an affidavit sworn by Shane Ambrose Orians on 19 April 2004, Robe River Mining Company Ltd, one of the appellants, owned and operated a mining operation near Pannawonica and as part of that operation it railed iron ore from its mining operation to its processing plant and shipping facility at Cape Lambert. For this purpose a railway line existed between the mining operations and processing and shipping facilities adjacent to which, and running parallel to it, was a vehicle rail access road. Both the railway and rail access road were located on land leased by Robe River Mining Co Pty Ltd from the Crown. It contracted with Barclay Mowlem Construction Ltd (the third party) to carry out rail centre welding and associated track repair work for Robe River Mining Co Pty Ltd during a period in October 1999.
The appellants assert that the work the third party agreed to perform under the contract was directly part of Robe River Mining Co Pty Ltd's mining business and necessary for that business to be conducted.
On the day of the alleged accident, the respondent was driving along the rail access road in a registered motor vehicle owned by the third party, to destination at 149 KP Peg. Annexed to Mr Orians' affidavit as 'SA051' is an investigation report relevant to the accident prepared by Mr Kevin Piefke which indicates that the vehicle in question struck a bull on the rail access road, and further confirms that the vehicle in question was registered to the third party. According to the affidavit of Catherine Anne Elphick sworn 5 April 2004 and filed on behalf of the appellants, the respondent claimed and was paid workers compensation from his employer in relation to injuries allegedly received in the accident. Those payments have been ongoing since approximately 21 February 2000 and there has been no redemption by the respondent of his claim, nor according to that same affidavit has the respondent agreed to his degree of disability being determined with either Robe River Mining Co Pty Ltd or the third party. The respondent has not applied to have his degree of disability determined by Work Cover.
The appellants submit that Robe River Mining Co Pty Ltd is the respondent's deemed employer for the purposes of the Workers Compensation Rehabilitation Act 1981 ("the Act") by virtue of the extended definition of principal in s 175(6) of the Act: Jones v Wesfarmers Ltd [2003] WASCA 225, Jones v SNF (Australia) Pty Ltd (2002) 29 SR (WA) 164. Whilst this has been raised in relation to Robe River Mining Co Pty Ltd, counsel for the respondent submits it has not been raised in relation to Yalleen Pastoral Co Pty Ltd. In my view that does not advance the matter particularly, and in reality the issues relevant to both those entities are very similar if not largely the same, and indeed, the respondent alleges that the appellants were joint tortfeasors, and there was a concurrence in the act or acts causing his damage, and so for the purposes of this argument, I do not intend to make any particular distinction with respect to the position of either of those entities.
Section 175(1) of the Act states:
"Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor if he were the sole employer would be liable to pay under this Act."
That section therefore deems certain persons to be employers for the purposes of the Act and this in turn relates to Pt IV Div 2 of the Act which imposes certain constraints on awards of common law damages. The appellants therefore argue that the respondent's claim is subject to such constraints or restrictions; Hewitt v Benale Pty Ltd (2002) 27 WAR 91. A determination as to Robe River Mining Co Pty Ltd is the respondent's deemed employer is a critical or threshold question for the purposes of this appeal because if that is not the case the appellants' argument falls away and the appeal must fail. Counsel for the respondent submits that there is an implied joinder of issue on this matter which should be resolved at trial.
Constraints of awards on common law damages mean in part that if a worker under the Act is determined to have a degree of disability between 16 per cent and 29 per cent, capped damages may be awarded, and where the degree of disability is determined to be 30 per cent or more, there is no restriction on the amount of damages which may be awarded. A worker wishing to pursue a claim for damages at common law must either agree his degree of disability with the relevant party or parties, or obtain an assessment of that degree of disability before a court can award damages. In the absence of either of these requirements being met, persons falling within the definition of "worker" are not entitled to be awarded damages against an employer as defined or deemed under the Act.
Section 175(3) of the Act states ;
"The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the disability is directly part or process in the trade or business of the principal."
Section 175 of the Act deems principals, where they contract with employers, to be employers themselves in certain circumstances, and in this matter Robe River Mining Co Pty Ltd, asserts that it is a deemed employer pursuant to the operation of the legislation. It argues that at the relevant time the respondent was employed by Barclay Mowlem Construction Ltd which in turn had a contract of service with the appellants. In seeking to rely on the deeming provision, the appellants must establish that there was a contract between Robe River Mining Co Pty Ltd and the actual employer, being Barclay Mowlem Construction Ltd for the execution of any work under or pursuant to the contract, that is work to be carried out by the contractor directly, or pursuant to a sub contract arrangement. In this case it is said that the respondent was employed by Barclay Mowlem Construction Ltd for the execution of work under a contract which it had with Robe River Mining Co Pty Ltd. The question then becomes whether, in this case, the work on which the respondent was employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal.
In considering the arguments of counsel and the contents of Mr Orians' affidavit, I am of the view that the work that Barclay Mowlem Construction Ltd was performing pursuant to the contract with Robe River Mining Co Pty Ltd was directly a part or process in the trade or business that was being conducted and necessary for its operation. Clearly the business was that of mining in a general sense, but this involves a number of directly related essential activities, including the transportation of ore by some means from the mine site to a processing plant before the material can be shipped or transported onwards. A necessary part of the process obviously includes maintaining equipment such as rail tracks and associated mechanisms so that the work can be carried out efficiently and safely.
Whilst a number of issues have been raised on behalf of the respondent such as whether the work he was doing at the time of sustaining the disability is required to be the same work he had been contracted to carry out, there is nothing in the material before the court, which includes the statement of claim, that suggests to the contrary. Counsel for the respondent submits that even if this question was answered in the affirmative, then the question arises as to whether the work the respondent was doing at the relevant time was directly a part or process in the trade or business of the principal. In my view adopting a similar reasoning process as that applied by the court in Jones v Wesfarmers Ltd (supra) there is little doubt that this issue also can be answered in the affirmative. It should be noted that there is no evidence, including from the respondent himself who is in the best position to know, that he was doing anything other than something connected with his employment in the sense of work being carried out pursuant to a contract which his employer, Barclay Mowlem Construction Ltd had with Robe River Mining Co Pty Ltd. In my view the concept of "directly" should be construed in a common sense manner so that an obvious causal link can be demonstrated. It is a more confined concept than that of an activity arising out of a part or process of the trade or business of the principal.
Section 93B(3) of the Act states that Pt IV Div 2 does not apply to the awarding of damages to which the Motor Vehicle (Third Party Insurance) Act 1943 applies. As has been previously noted, the third party owned the vehicle that the respondent was driving at the time of the alleged accident as is further evidenced by annexure 'SA05' to Mr Orians' affidavit. Ownership of the vehicle is material because the appellants' need to confirm or establish they were not the owners of the relevant motor vehicle; Western Metal Zinc NL v Wesfarmers Transport Ltd & Anor [2003] WASCA 152.
Whilst as counsel for the respondent argues, where a stay of proceedings is sought on the basis that to continue them would be an abuse of process, the applicant, in this case the appellants, must demonstrate circumstances which so clearly give rise to an abuse as to make the contrary argument inarguable; Bandwill Pty Ltd v Spencer Laitt (2000) 23 WAR 390 at 397, 400, 413. On the other hand it is an abuse of process to wait for a trial to confirm matters that render the proceedings a nullity; Hastie v Iluka Midwest Ltd (2003) 32 SR (WA) 190. Further, the Court has an inherent power to prevent its processes from being abused and has the jurisdiction to order a perpetual stay of proceedings; Wentworth v A‑G (NSW) (1984) 154 CLR 518.
On the material presently available, and taking into account matters put forward by counsel, the indications are that this action will involve a comparatively lengthy trial with four parties and potentially a multiplicity of issues being raised. From a practical perspective this will clearly involve significant costs by way of gathering and presenting evidence, and perhaps further matters arising for determination in interlocutory proceedings. Clearly public resources must be applied in the most efficient and productive manner possible; Christmas Island Resort Pty Ltd v Geraldton Building Co Pty Ltd (No 5) 18 WAR 345. If the matter were to proceed to trial, and evidence of the nature reflected in the affidavits filed on behalf of the appellants to which reference has been made in these reasons, and the claim against Robe River Mining Co Pty Ltd were to fail on the basis that the relevant degree of disability had not been determined, then clearly very significant costs would have been incurred. It may well be that it could have been prevented when there is an opportunity for that to occur at this point in time. In appropriate circumstances, an application for a stay of proceedings may well avoid fruitless and expensive litigation, which clearly is in the interests of all parties to an action.
I consider that the appellants have satisfied the necessary criteria to invoke the restrictions insofar as s 175 of the Act and Pt IV Div 2 of the Act are concerned. Further, it is evident that the respondent has not agreed his degree of disability with any relevant party, nor has he had that degree of disability determined in the appropriate manner. I do not consider that a stay of proceedings will prejudice the respondent in pursuit of his claim in any meaningful way as he can no doubt obtain a degree of disability determination with some degree of expedition in which case the stay would be lifted and the matter can proceed in the usual way.
I do not regard this application in all of the circumstances outlined to be a disguised application for summary judgment. Were it to be the case that it was demonstrated that the respondent would never be able to obtain such an assessment, one would have to query the point in the action continuing. In either event, there would in all likelihood be a significant saving of costs. If it were to be the case that the respondent did not have his degree of disability determined to the requisite level, and there remained the issue of whether s 175 of the Act and Pt IV Div 2 of the Act apply, that is a discrete and relatively confined point which would not appear to require lengthy or extensive litigation. It is possible that such matters could be dealt with by way of a preliminary point at hearing, were that to be the desire of the parties.
There will be orders that the appeal be allowed and the orders of the Deputy Registrar of 5 April 2004 be set aside and the action be stayed on the basis contemplated in par 1.11 of the Notice of Appeal. Further that there be liberty to apply. I will hear counsel on the question of costs.

[2004] WADC 142

21 July 2004