Royal v Alcoa of Australia Ltd

[2004] WASCA 269

ROYAL -v- ALCOA OF AUSTRALIA LTD [2004] WASCA 269

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2004] WASCA 269
Court:	THE FULL COURT (WA)
Case No:	CIV:1391/2004	Heard:	15 JUNE 2004
Coram:	MCLURE J LE MIERE J JENKINS J	Delivered:	23/11/04
No of pages:	34	Judgment Part:	1 of 1
Result:	Leave to appeal granted Appeal allowed
Category:	B
PDF Version

Parties:	DARREN ROYAL ALCOA OF AUSTRALIA LTD (ACN 004 879 298)
Catchwords:	Practice and procedure District Court appeal Amendment of defence to include a plea pursuant to the Workers Compensation & Rehabilitation Act 1981 (WA), s 175 Lack of clarity in proposed amendment Otherwise no injustice in allowing the proposed amendment
Legislation:	Motor Vehicles Ordinance 1949-1971 (NT) Rules of the Supreme Court 1971 (WA), O 20 r 8(1) Workers Compensation & Rehabilitation Act 1981(WA), s 5, s 84I(1), s 84I(2), Pt IV Div 2, s 93B(1), s 93B(1)(a), s 93C, s 93D(2), s 93E, s 93E(3)(b), s 175, s 175(1), s 175(3), s 175(7)
Case References:	Baume v The Commonwealth (1906) 4 CLR 97 Clough & Rogers v Frog (1974) 4 ALR 615 Cropper v Smith (1884) 26 Ch D 700 Cropper v Smith (1884) 51 LT 729 Gould v Mt Oxide Mines Ltd (In Liquidation) (1916) 22 CLR 490 Grljusich & Anor v Grljusich, unreported; SCt of WA (Seaman J); Library No 930253; 6 May 1993 Hewitt v Benale Pty Ltd (2002) 27 WAR 91 Kavanagh v The Commonwealth (1959) 103 CLR 547 State of Queensland v JL Holdings Pty Limited (1997) 189 CLR 146 Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323 Willis v Normandy Golden Grove Operations Pty Ltd [2003] WASCA 221 Wilson v Metaxas [1989] WAR 285 House v The King (1936) 55 CLR 499 Sunich v Fluor Australia Pty Ltd [2003] WADC 207

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : ROYAL -v- ALCOA OF AUSTRALIA LTD [2004] WASCA 269 CORAM : MCLURE J

LE MIERE J
JENKINS J

HEARD : 15 JUNE 2004 DELIVERED : 23 NOVEMBER 2004 FILE NO/S : CIV 1391 of 2004 BETWEEN : DARREN ROYAL

Applicant

AND

ALCOA OF AUSTRALIA LTD
(ACN 004 879 298)
Respondent

ON APPEAL FROM:

Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA

Coram : MULLER DCJ

Citation : ROYAL -v- ALCOA OF AUSTRALIA LIMITED [2004] WADC 31

File No : CIV 2514 of 2002

(Page 2)

Catchwords:

Practice and procedure - District Court appeal - Amendment of defence to include a plea pursuant to the Workers Compensation & Rehabilitation Act 1981 (WA), s 175 - Lack of clarity in proposed amendment - Otherwise no injustice in allowing the proposed amendment

Legislation:

Motor Vehicles Ordinance 1949-1971 (NT)

Rules of the Supreme Court 1971 (WA), O 20 r 8(1)
Workers Compensation & Rehabilitation Act 1981(WA), s 5, s 84I(1), s 84I(2), Pt IV Div 2, s 93B(1), s 93B(1)(a), s 93C, s 93D(2), s 93E, s 93E(3)(b), s 175, s 175(1), s 175(3), s 175(7)

Result:

Leave to appeal granted

Appeal allowed

Category: B

Representation:

Counsel:

Applicant : Mr B C Nugawela
Respondent : Mr P D Quinlan

Solicitors:

Applicant : Friedman Lurie Singh & D'Angelo
Respondent : Clayton Utz

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

Baume v The Commonwealth (1906) 4 CLR 97
Clough & Rogers v Frog (1974) 4 ALR 615
Cropper v Smith (1884) 51 LT 729
Gould v Mt Oxide Mines Ltd (In Liquidation) (1916) 22 CLR 490


(Page 3)

Grljusich & Anor v Grljusich, unreported; SCt of WA (Seaman J); Library No 930253; 6 May 1993
Hewitt v Benale Pty Ltd (2002) 27 WAR 91
Kavanagh v The Commonwealth (1959) 103 CLR 547
State of Queensland v JL Holdings Pty Limited (1997) 189 CLR 146
Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323
Willis v Normandy Golden Grove Operations Pty Ltd [2003] WASCA 221
Wilson v Metaxas [1989] WAR 285

Case(s) also cited:

House v The King (1936) 55 CLR 499
Sunich v Fluor Australia Pty Ltd [2003] WADC 207


(Page 4)

1 MCLURE J: I have had the advantage of reading in draft the reasons to be published by Jenkins J. I agree that leave to appeal should be granted and the appeal allowed. I agree generally with her Honour's reasons on proposed ground of appeal 2 relating to discretionary matters. However, I propose to state my own reasons on the question whether the defence pleads an arguable claim under s 175 of the Workers' Compensation and Rehabilitation Act 1981 ("the Act").

2 The background is as follows. The applicant (plaintiff) claimed damages from Alcoa of Australia Ltd (respondent/defendant) in relation to an injury sustained on 19 June 2001 at Alcoa's refinery in Kwinana. The injury was sustained in the course of the applicant's employment with G & F Beltline Services ("contractor"). The contractor had agreed to provide conveyor belt splicing, repair and inspection services to Alcoa at its refineries, including the Kwinana refinery ("premises"). The applicant received workers' compensation from the contractor for his injuries.

3 The applicant appeals from the decision of Muller DCJ, dismissing an appeal from the decision of a District Court Registrar granting the respondent leave to amend its defence to rely on s 175 of the Act. If that section applies, it is a bar to the applicant's claim for common law damages by virtue of Pt IV Div 2 of the Act: Hewitt v Benale Pty Ltd (2002) 27 WAR 91.

4 Section 175 of the Act materially provides:

"175. Principal contractor and sub-contractor deemed employers

(1) 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.

…

(Page 5)

(3) 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 a part or process in the trade or business of the principal.

…

(7) Where the disability does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply."

5 The respondent pleads (in par 3 of the defence) that on 19 June 2001 the contractor advised the respondent that belt repair work was required on the B4 North East conveyor ("B4NE") and a maintenance work order ("MWO") was raised by the respondent for work on B4NE. However, the applicant commenced work on B4 North West conveyor ("B4NW") contrary to the MWO. After emitting an audible warning alert sound, B4NW commenced operation. The applicant was injured as a result.

6 The respondent pleads and the evidence establishes that Alcoa and the contractor entered into a contract in writing dated 3 November 2000 ("the contract"). Under the contract, the contractor was to provide conveyor belt splicing, repair and inspection services to Alcoa in accordance with "all relevant documentation". Work was to be performed in accordance with specified documents incorporated into and forming part of the contract, which documents were not in evidence. Clause 7 of the contract deals with supplementary agreements. It provides:

"Supplementary Agreements will be raised under this Agreement from time to time. Each Supplementary Agreement awarded under this Agreement will reference this Agreement Number and by reference thereto will incorporate all provisions contained therein.

(a) Scopes of work will be communicated to the Supplier from time to time via the Contract Administration and Payment System (CAPS) Service Orders.

(b) The Supplier shall offer to complete the work within the time specified for a Lump Sum amount or on a Schedule or rates basis as stated.

(Page 6)

(c) Alcoa will advise the Supplier via CAPS service order if the work specified is authorised to proceed.

(d) Work may be authorised verbally under this agreement but this authorisation expires at 12: .. on the next normal working day. Should the Supplier not receive confirmation via CAPS service order within this time, then work under the verbal authorisation shall cease and Alcoa's purchasing custodian should be notified immediately."

7 The evidence relating to the contract is incomplete. It is unclear whether cl 7 applies. Further, not all contractual documents are exhibited and there is little evidence on the relationship between the contract and the purpose and effect of an MWO.

8 Paragraphs 1 and 7A(a)(i) - (iv) of the defence pleads the relevant parts of the respondent's s 175 defence. In par 1 the respondent pleads that the applicant was sent to the premises by the contractor to undertake "conveyor belt splicing and/or inspection and/or repairs" pursuant to the contract and then continues in par 7A as follows:

"(a) Pursuant to section 175 of the [Act] … the [respondent] and [the contractor] are each deemed to be the [applicant's] employers for the purposes of the Act as:

(i) The [respondent] had contracted with the contractor to undertake conveyor belt splicing, repair and maintenance ('contract');

(ii) The [contractor] employed the [applicant] to undertake the conveyor belt splicing, repair and maintenance pursuant to the contract;

(iii) On the day of the [applicant's] accident, the [applicant] had been instructed by the [contractor] to undertake conveyor belt splicing, repairs and maintenance on the respondent's B4NE conveyor, one of the [respondent's] bauxite ore conveyors at the respondent's Kwinana Alumina refinery ('the Works').

(Page 7)

(iv) The work to be performed under the contract was directly a part or process in the trade or business of the [respondent]."

9 The learned appeal Judge below said he understood the respondent's position to be that although work on B4NW was not specifically authorised by the MWO, it still fell within the scope of the contract. That is not expressly or impliedly pleaded. The respondent goes no further than pleading the scope of works the subject of the contract; that the applicant was sent to the premises for the purpose, and with instructions, to undertake works falling within the scope of the contract; and that the applicant was employed by the contractor to undertake works pursuant to the contract. The respondent does not plead that the work undertaken, even though contrary to the MWO, was within the scope of works of the contract.

10 If it is the respondent's case that the work undertaken by the applicant on B4NW was within the scope of the contractual works, it has failed to plead the material facts in support of such a plea, including the terms of the contract on which it relies. On the evidence before this Court, I am unable to conclude that such a plea would be unarguable.

11 It is also unclear from the pleading whether the respondent intends to plead a case that s 175 applies to render the respondent a deemed employer of the applicant even if the work performed by him on B4NW which caused the injury the subject of the claim was outside the contractual scope of works. As far as I was able to glean from the oral submissions put on behalf of the respondent at the hearing, it does intend to contend that s 175 applies even if the work undertaken by the applicant on B4NW was outside the scope of the contractual work. As I understand the submission, that result is said to flow from the fact that the applicant was on the premises for the purpose and with instructions to perform work within the contractual scope of works.

12 The applicant contends that s 175 of the Act requires that the injury the subject of the claim (in this case personal injury arising by accident) occur in the actual execution (performance) of the contract works. Accordingly, only if (which the applicant disputes) the work on B4NW was within the contractual scope of works would the requisite connection be established.

13 On a proper construction of s 175, in particular subs (1), (3) and (7), there must be a connection between the injury and the execution of the

(Page 8)

contractual works. As to the phrase "in the execution of the work, a worker is employed by the contractor" in subs (1) of s 175, execution means the carrying out or performance of the work; work means work pursuant to the contract between the principal and contractor; and worker is employed means the contractor employs (uses) his worker in carrying out the work under the contract.

14 Although there is no express requirement in subs (1) of s 175 for a connection between the execution of the contract work by the worker and the injury (or disease) the subject of the claim, that requirement emerges when subs (1) is read in the context of subs (3) and (7) of s 175. By subs (3) and (7), in order for the principal to be liable, the work on which the worker is employed at the time of the occurrence of the disability must be directly a part or process in the trade or business of the principal and occur in respect of premises on which the principal has undertaken to execute the work or which is otherwise under its control or management. The word "work" in subs (3) can only mean contractual work and, in context, the word "disability" is a reference to (at least) the time at which the injury occurred. Thus, the phrase "unless the work on which the worker is employed at the time of the occurrence of the disability" in subs (3) is a reference to the contractual work on which the worker is employed, which must coincide with the occurrence of the injury.

15 The nature and extent of the connection between the injury and the execution of the contractual work is a separate issue. It is apparent from the terms of subs (3) and (7) of s 175 that the nature and extent of the connection is not determined by the definition of "disability". The permitted connection between the injury (or disease) and employment in the definition of "disability" is significantly wider than the specific limitations imposed in subs (3) and (7) of s 175. It is arguable that the definition of "disability" applies except to the extent that it is inconsistent with the limitations in s 175.

16 It is inappropriate in an interlocutory application of this kind to go beyond the specific propositions advanced by the parties and attempt to provide an exhaustive statement of the scope of the section. For example, on the facts of this case it is unnecessary to decide whether s 175 applies to an injury which occurred in the course of a break in the work which was referrable and incidental to the actual performance of the contract works, such as a toilet or lunch break. However, it is arguable that a causal or temporal connection between the injury and the execution of the contract will suffice. It is also arguable that injuries suffered during breaks directly referable to the execution of the works may be sufficient.

(Page 9)

17 However, what is at issue in this case is whether it is arguable that the respondent is a deemed employer if the only material facts are that the worker was on the premises on instructions from his employer for the purpose of performing part of the contractual works but the injuries the subject of the claim are directly caused by the worker performing non-contractual works. In such circumstances, there is no arguable causal or temporal connection between the injury and the execution of the contractual works as the injuries arose out of, and in the course of, his execution of non-contractual works. On the facts, the worker's presence on the premises on instructions from his employer for the purpose of performing contractual works is not of itself sufficient to establish the necessary connection between the injury and the execution of contractual works.

18 The respondent's s 175 pleading in its current form fails to plead all the material facts giving rise to a statutory defence and is vague and embarrassing. However, I am unable to conclude that an arguable statutory defence is not available to the respondent. Accordingly, I would grant leave to appeal, allow the appeal and give the respondent leave to replead.

19 LE MIERE J: I have had the advantage of reading in draft the reasons to be published by McLure J and Jenkins J respectively. I agree that leave to appeal should be granted and the appeal allowed. I agree with their Honours that the proposed amended defence is deficient. I will briefly state my own reasons for that decision.

20 The circumstances of this application and the terms of the proposed amended defence and the relevant statutory provisions are set out in the judgment of Jenkins J. I will not repeat them.

21 The power of the court to allow amendments is discretionary. There is no requirement imposed on the court to allow an amendment; it is a question of what the court considers to be just in the circumstances. The court may allow whatever amendments are necessary in such a manner and on such terms as may be just: see Bowen LJ in Cropper v Smith (1884) 26 Ch D 700.

22 The respondent sought leave to amend its defence to plead that it is deemed by reason of s 175 of the Workers' Compensation and Rehabilitation Act 1981 ("the Act") to be an employer of the applicant. If the respondent is deemed to be an employer of the applicant then, in the

(Page 10)

circumstances of this case, the provisions of Pt IV Div 2 of the Act will bar the applicant's claim for damages.

23 Section 175 of the Act sets out the conditions which must be satisfied for a person (the principal) who contracts with another person (the contractor) for the execution of any work by or under the contractor to be deemed to be an employer of a worker employed by the contractor in the execution of the work.

24 The defence must contain a statement in summary form of the material facts on which the respondent relies for its defence: O 20 r 8 (1). The necessary material facts include all of the material facts necessary to establish that the respondent is a deemed employer of the applicant.

25 Counsel for the applicant submitted that the proposed amended defence is deficient in that there is no plea that the injury sustained by the applicant occurred in the execution of the work that G & F Beltline ("Beltline") had contracted with the respondent to execute ("the contractual works"). Counsel for the applicant submitted that if the applicant sustained the injury when he was off on his own frolic and not as part of the contractual works, then the requirements of s 175 of the Act are not met.

26 Counsel for the respondent submitted that it was implicit in the proposed pleading that the applicant was injured whilst carrying out work that fell within the execution of the contractual works. Counsel for the respondent submitted that if the applicant was at the site for the purpose of performing conveyor belt work and was injured in the course of conveyor belt work, then that is sufficient to invoke the application of s 175 of the Act. Counsel for the respondent submitted that:

"The injury occurred on the west conveyor but that presence on the west conveyor is nevertheless … part and parcel of the carrying out of that overall contractual relationship between [the respondent] and [Beltline] and it is that contract … that is relevant to s 175."

27 On the hearing of this appeal, neither party attempted to state with precision the nature and extent of the connection between the injury to the worker and the execution of the contractual work that is required to be established for the principal to be deemed to be an employer of the worker. However, some temporal or causal connection between the injury to the worker and the execution of the contractual work is required to be

(Page 11)

established for the principal to be deemed to be an employer of the worker.

28 The necessary material facts that must be pleaded by the respondent include facts sufficient to establish that Beltline employed the applicant in the execution of the contractual works. The contractual works must be identified with sufficient precision to reveal the connection between the injury to the applicant and execution of the contractual works. It is also essential that the respondent should plead in its defence material facts sufficient to establish the relevant connection between the injury sustained by the applicant and the execution of the contractual works.

29 The proposed defence does not plead those material facts adequately or at all.

30 Paragraph 1 of the proposed defence pleads that Beltline sent the applicant to the respondent’s premises to undertake conveyor belt splicing and/or inspection and/or repairs pursuant to a contract between Beltline and the respondent. The contract is described as a contract entered into on 1 September 2000 for the supply of labour and materials by Beltline to the respondent for the completion of conveyor belt splicing, repair and inspection at the premises.

31 Paragraph 3 of the proposed defence pleads that the respondent raised a maintenance work order ("MWO") for work on the B4NE conveyor, but goes on to plead that the applicant proceeded to commence work on the B4NW conveyor, contrary to the MWO.

32 Paragraph 7A of the proposed defence pleads that the respondent had contracted Beltline to undertake conveyor belt splicing repair and maintenance. That appears to be a reference to the contract pleaded in paragraph 1. Paragraph 7A further pleads that Beltline employed the applicant to undertake the conveyor belt splicing, repair and maintenance pursuant to the contract.

33 When the proposed defence is considered as a whole, it is not at all clear what the respondent claims to be the work that the respondent contracted with Beltline to execute. It is not sufficient to plead that Beltline contracted to execute "conveyor belt splicing, repair and maintenance". That is altogether too vague and fails to identify the contractual work with sufficient precision to enable a determination to be made as to whether there is the requisite connection between the contractual work and the injury sustained by the worker.

(Page 12)

34 Secondly, the amended defence does not plead sufficient facts to establish the required connection between the injury suffered by the applicant and the execution of the contractual works. The proposed defence does not establish a temporal or a causal connection between the injury suffered by the applicant and the execution of the contractual works. The only contractual work sufficiently identified by the proposed defence is repair work on conveyor B4NE. It is not pleaded that the applicant ever commenced that work. It is not pleaded that there was any relevant connection between the injury suffered by the applicant and the execution of work on conveyor B4NE.

35 The primary judge accepted that the respondent must establish the required connection between the injury suffered by the applicant and the contractual works. His Honour said:

"As I understand the position [the respondent] still maintains that the [applicant] was undertaking work contrary to the maintenance work order but that the work he did on B4 North West conveyor, though not specifically authorised by the maintenance work order, still fell within the scope of the contract between [the respondent] and [Beltline]…

The contract between [the respondent] and [Beltline] related to a number of different sites and clearly covered the repair and inspection of all conveyor belts on those sites. Paragraph 2 of the agreement between [the respondent] and [Beltline] specifies that the [respondent] could modify the contractual duties of [Beltline] by a direction in writing. The question whether the maintenance work order constituted such a modification as to take the work [the applicant] was doing outside the scope of the contract between [the respondent] and [Beltline] is a matter of evidence. As I see it the position is clear enough. The contract between [the respondent] and [Beltline] related to both conveyors at the refinery. The [applicant] was on the site to work on a conveyor as contemplated by the contract. That was clearly the intention of both [the applicant] and [the respondent]. Giving s 175 a broader interpretation than that suggested by counsel for [the applicant] I believe it is strongly arguable that [the applicant] was injured while executing work contemplated by that contract even if the work fell outside the scope of the maintenance work order."

(Page 13)

36 It seems to me that his Honour exercised his discretion to allow the amendment on the basis that the proposed defence pleaded a temporal connection between the injury suffered by the applicant and the execution of the contractual works and that the defence identified the contractual works to be the inspection and repair of all conveyors on the respondent’s premises including conveyor B4NW.

37 There is a difference between a contract to inspect and repair all the conveyors on the premises on the one hand and a contract "for the supply of labour and materials … for the completion of conveyor belt splicing, repair and inspection at the premises" (see par 1 of the proposed defence) or "to undertake conveyor belt splicing, repair and maintenance" (see par 7A of the proposed defence) on the other hand. The difference is important where, as here, the respondent has pleaded that the specific repair and inspection of a conveyor that the applicant was carrying out at the time of his accident was the inspection and repair of a different conveyor from that which the respondent instructed Beltline to carry out and from that which Beltline instructed the applicant to carry out.

38 In my view the primary judge was wrong in his description of the proposed defence. The proposed defence does not plead the matters the primary judge considered to be sufficient to raise an arguable defence. The primary judge erred in the exercise of his discretion.

39 The proposed defence is deficient. It fails to plead, or plead adequately, the contractual works and the material facts that establish the temporal, causal or other relevant connection between the injury suffered by the applicant and the execution of the contractual works. A substantial injustice would be done if the amended defence were allowed to stand. The applicant would be required to decide whether to continue his action to trial without knowing the substance of a proposed defence that, if made out, is a complete answer to the applicant’s claim; and if the applicant does proceed to trial he will not know the case he has to meet. For those reasons leave to appeal should be granted and the appeal allowed.

40 The applicant submitted, in effect, that the respondent is not able to plead an arguable defence based on s 175 of the Act because the facts pleaded in par 3 of the proposed defence are inconsistent with the establishment of a necessary connection between the execution of the contractual works and the injury suffered by the applicant.

41 I am unable to conclude that the respondent is not able to plead material facts that would arguably give rise to a defence based on s 175 of

(Page 14)

the Act. Whether the respondent is able to plead an arguable defence based on s 175 of the Act will depend upon what the respondent pleads is the contractual work and what are the facts that establish the necessary connection between the execution of the contractual works and the injury suffered by the applicant. I agree with McLure J that on the facts pleaded the worker's presence on the premises on instructions from his employer for the purpose of performing contractual works is not, of itself, sufficient to establish the necessary connection between the injury and the execution of the contractual works.

42 I agree with Jenkins J that ground 2 of the proposed appeal is not made out. The primary judge made no relevant error to justify this court setting aside the decision on the ground asserted in proposed appeal ground 2.

Conclusion

43 I would grant leave to appeal, uphold the appeal and set aside the order granting the respondent leave to amend the defence without prejudice to the right of the respondent to make a further application to amend the defence.

44 JENKINS J: The applicant, the plaintiff in the action, seeks leave to appeal from the decision of a District Court Judge delivered 5 March 2004 dismissing his appeal from the decision of a Registrar of that Court. The Registrar's decision allowed the respondent, the defendant in the action, to amend its defence. The proposed amendments plead that pursuant to the Workers Compensation and Rehabilitation Act 1981 (WA) ("the Act"), s 175, the respondent is a deemed employer of the applicant, and therefore by virtue of the operation of the Act, s 93E and Div 2 of Pt IV, the applicant cannot be awarded damages against the respondent. This is because these provisions of the Act provide that a worker can not be awarded common law damages against his or her employer unless the worker has agreed with the employer or had it determined that their level of disability is not less than thirty per cent or the worker has asserted that he or she has a significant disability and elected to retain the right to seek common law damages. It is common ground that the statutory time periods within which the applicant had to take these steps have expired.

45 Prior to dismissing the appeal the learned Judge permitted the respondent to amend the minute of proposed amendments. The document relied upon by the learned Judge is a further minute of proposed amended defence, dated 24 February 2004.

(Page 15)

46 This Court heard the application for leave to appeal on the basis that if leave to appeal was granted the Court would determine the appeal without further hearing.

Leave to Appeal

47 The applicant must show that the decision in respect to which leave is sought is wrong, or at least attended by sufficient doubt to justify the grant of leave and that substantial injustice would be done by leaving the decision unreversed: Wilson v Metaxas [1989] WAR 285 per Malcolm CJ at 294.

48 The applicant's proposed grounds of appeal are as follows:

"1. The learned Judge erred in law in failing to conclude that the Respondent's proposed pleading was inconsistent with the requirements of s175 of the Worker's Compensation and Rehabilitation Act 1981 ('the Act'), as well as other aspects of its existing pleading, in that it does not allege that:

1.1 the Appellant was executing work at the respondent's premises;

1.2 the work that the Appellant was executing was by or under the contract between the Respondent and G & F Beltline.


2. The learned Judge erred in law in failing to balance or adequately balance the discretionary considerations in the exercise of his Honour's discretion to grant leave to amend the defence."

49 At the hearing of the application for leave to appeal the applicant abandoned ground 1.1.

50 Thus the grounds of appeal raise two discrete issues. The first is whether the proposed amendments to the defence are inconsistent with the requirements of the Act, s 175 and other aspects of the defence. The second is whether the learned Judge erred in the exercise of his discretion. I will deal with each issue in turn.

(Page 16)

Ground 1.1.2 - Inconsistency of Proposed Pleading

The pleadings

51 The statement of claim dated 5 July 2002, relevantly, alleges that the respondent was the occupier of an alumina refinery (par 3). It alleges that the applicant was at all material times employed by G & F Beltline ("Beltline") and was sent to the respondent's refinery to repair conveyor belt B4NE. It alleges that on 19 June 2001 the applicant went to the refinery to repair conveyor belt B4NE but that the applicant was "introduced" to conveyor belt B4NW. Further, as the applicant was working on conveyor belt B4NW it started running, the applicant was thrown forward onto the belt, dragged into a magnet and sustained injury (par 6).

52 The defence dated 11 October 2002, relevantly, admits that the respondent was the occupier of the alumina refinery (par 2). It does not admit that the applicant was employed by Beltline (par 1). As to par 6 of the statement of claim, in par 3 of the defence, the respondent pleads that on 19 June 2001:

"(a) the [applicant's] employer, [Beltline] advised the [respondent] that belt repair work was required on the B4 North East conveyor ('B4NE');

(b) a maintenance work order ('MWO') was raised by the [respondent] for work on B4NE;

(c) the [respondent] isolated B4NE consistent with the MWO;

(d) the [applicant] proceeded to commence work on B4 North West conveyor ('B4NW'), contrary to the MWO;

(e) B4NW emitted an audible warning / alert sound signifying that it was to shortly commence operation;

(f) the [applicant] failed to alight from B4NW and it commenced operation."

53 The respondent does not otherwise admit the matters pleaded in par 6 of the statement of claim.
(Page 17)

The proposed amendment to the defence

54 By the further minute of proposed amended defence dated 24 February 2004, it is proposed to add the following pleading to par 1 of the defence:

"1. … By way of further response to paragraph 4 of the Statement of Claim, the [respondent] says that the [applicant] was sent to the premises by [Beltline], his employer, to undertake conveyor belt splicing and/or inspection and/or repairs pursuant to the terms of a contract dated 1 September 2000, between [Beltline] and the [respondent], such contract having been entered into for the supply of labour and materials by [Beltline] to the [respondent] for the completion of conveyor belt splicing, repair and inspection at the premises."

55 It is also proposed to add new paragraphs 7A and 7B as follows:

"7A. The [respondent] further says that:

(a) Pursuant to section 175 of [the Act] as amended and in force at the date of issue of the Writ in the action herein, the [respondent] and [Beltline] are each deemed to be the [applicant's] employers for the purposes of the Act as:

(i) The [respondent] had contracted [Beltline] to undertake conveyor belt splicing, repair and maintenance ('contract'):

(ii) [Beltline] employed the [applicant] to undertake the conveyor belt splicing, repair and maintenance pursuant to the contract:

(iii) On the day of the [applicant's] accident, the [applicant] had been instructed by [Beltline] to attend the [respondent's] premises to perform work pursuant to the contract:

(iv) The work to be performed under the contract was directly a part or process in

(Page 18)

the trade or business of the [respondent] as:

(a) The trade or business of the [respondent] is the mining of and then the refining of bauxite ore into Alumina: and

(b) bauxite ore conveyors required periodic repair and maintenance, otherwise the bauxite ore conveyors would eventually fail resulting in significant loss to the Kwinana Alumina refinery's bauxite ore storage and handling capacity

(b) Compensation has been paid by G&F to the [applicant] in relation to the injuries allegedly suffered by the [applicant]:

(c) In the action herein, the [applicant] claims damages in respect of the alleged injury, and that the alleged injury was caused by the [respondent's] negligence or breach of statutory duty:

(d) No agreement has been reached as to the degree of disability resulting from the alleged injury ('Degree of Disability') as determined in accordance with section 93D(2) of the Act:

(e) Neither the [applicant] nor the [respondent] have registered an agreement regarding the [applicant's] Degree of Disability in accordance with the workers Compensation and Rehabilitation Regulations 1982 (WA) ('the Regulations'):

(f) The [applicant's] Degree of Disability has not been determined and registered in accordance with the Regulations:

(Page 19)

(g) The [applicant] has not elected to retain the right to seek damages in the manner prescribed by the regulations and registered his election in accordance with the Regulations:

7B. By reason of the matters referred to at paragraph 7A above, pursuant to sections 93C and 93E(3) of the Act, the [applicant] is not entitled to be awarded any damages in the action herein."

Applicable statutory provisions and legal principles

56 There is no dispute between the parties that the purpose of the proposed amendment is to plead that the respondent is a deemed employer of the applicant pursuant to the Act, s 175 so that, because the applicant has not complied with various provisions of the Act, Pt IV Div 2, the trial court is not able to award him any damages in this action. The application of Pt IV Div 2 to deemed employers pursuant to the Act, s 175, was determined in Hewitt v Benale Pty Ltd (2002) 27 WAR 91.

57 The relevant provisions of the Act, s 175 are set out below:

"175. Principal contractor and sub-contractor deemed employers

(1) 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.

…

(3) 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

(Page 20)

directly a part or process in the trade or business of the principal.

…

(7) Where the disability does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply."

58 In order to prove that it is a deemed employer within the meaning of the Act, s 175, the respondent will have to prove the following matters:

(a) that it contracted with Beltline for the execution of work by or under Beltline; and

(b) in the execution of the work, the applicant was employed by Beltline; and

(c) the work on which the applicant was employed at the time of the occurrence of the applicant's disability was directly a part or process in the trade or business of the respondent; and

(d) the applicant's disability occurred in respect of premises on which the respondent had undertaken to execute the work or which were under its control or management.

59 If the above matters are proven the respondent is deemed to be an employer for the purposes of the Act and, pursuant to Hewitt v Benale Pty Ltd (supra), the applicant will not be able to recover common law damages from the respondent in respect to a disability unless he has complied with the provisions of the Act, Pt IV Div 2. It is common ground that he has not done so and cannot now do so because the relevant statutory time limits have expired.

60 Section 175(1) does not directly address the circumstances in which the accident occurred. However, the Act, s 93B(1) states that Pt IV Div 2 only applies to common law claims in respect of a "disability" suffered by a worker if:

"(a) the disability was caused by the negligence or other tort of the worker's employer; and

(Page 21)

(b) compensation has been paid or is payable in respect of the disability under this Act, or would have been paid or be payable but for section 22."

61 Subsections 175(3) and (7) also expressly refer to a "disability". Thus, in order to deprive the applicant of an award of common law damages the respondent will have to allege and prove, amongst other things, that, if it was otherwise liable in negligence for the injury suffered by the applicant, the injury is a "disability" as that term is defined by the Act. The Act, s 5 defines "disability" to mean, relevantly:

"A personal injury by accident arising out of or in the course of the employment or whilst the worker is acting under the employer's instructions."

62 In the context of a case such as this where the applicant alleges that his injuries were caused by the respondent's negligence and the respondent in turn seeks to plead that it is a principal, deemed to be an employer pursuant to the Act, s 175, "the employment" referred to in s 5 is the deemed employment. Consequently, in order for the respondent to succeed in invoking the Act, Pt IV Div 2, it must prove that the personal injury to the applicant arose out of or in the course of the execution of work by or under Beltline pursuant to the contract between the respondent and Beltline. Alternatively it could prove that the applicant's personal injury occurred whilst the applicant was acting under the respondent's instructions.

63 The Rules of the Supreme Court 1971 (WA), O 20 r 8(1) require every pleading to "contain only a statement in summary form of the material facts on which the party pleading relies for his claim or defence … but not the evidence by which those facts are to be proved, and the statement must be as brief as the nature of the case admits".

64 In Gould v Mt Oxide Mines Ltd (In Liquidation) (1916) 22 CLR 490 at 517 Isaacs and Rich JJ described the function of pleadings as follows:

"Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged from the cases presented with reasonable clearness. Any want of clearness can be cured by

(Page 22)

amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest."

The parties' submissions

65 The applicant's submissions address the substance of the minute of proposed amendments to the defence dated 9 September 2003, which was the minute considered by the Registrar. I do not intend to deal with that minute as I am satisfied that the appeal to the District Court was determined on the basis of the further minute dated 24 February 2004. It would be futile for this Court to determine this application on the basis of the superseded minute. The applicant is not prejudiced by this Court considering the minute of 24 February as he acknowledges that similar objections arise with respect to it as arose with respect to the earlier minute. He has now had the opportunity to be heard in relation to the 24 February 2004 minute.

66 The applicant submits that the proposed pleading is inconsistent with the current pleading in par 3 of the defence in that par 3 alleges that at the time the applicant says he was injured as a consequence of the respondent's negligence ("the accident") the applicant was performing work on conveyor belt B4NW contrary to the maintenance work order ("the MWO") that had been raised by the respondent for work to be done by Beltline on conveyor belt B4NE. The applicant says that, thus, par 3 pleads that at the time of the accident the applicant was not performing "work by or under the contract" between the respondent and Beltline. Therefore the applicant says it is not open for the respondent to plead a defence under the Act, s 175(1) which has as one of its elements that the applicant was injured "in the execution of the work". The applicant submits that the plea in par 3 is "self destructive" of the proposed plea in par 7A.

67 The applicant also submits that if the respondent alleges that the work the applicant was engaged in at the time of the accident was both contrary to instructions and done in execution of work by or under Beltline pursuant to the contract between the respondent and Beltline then it should expressly plead this latter allegation, as well as the first, so that the applicant can understand how the respondent puts its case.

(Page 23)

68 The respondent submits that the proposed amended defence, read as a whole, pleads that the work the applicant was executing was by or under the contract with Beltline. The respondent says that the proposed par 7A, in subparagraph (a)(i) and (ii), expressly pleads that the work the applicant was doing was by or under a contract with Beltline. It says that, by implication, the proposed amendments also include an allegation that at the time of the accident the applicant was performing work done in execution of the work under the contract between the respondent and Beltline.

69 The respondent submits that there is no conflict between par 3 of the defence and the proposed par 7A because although the applicant's work on the B4NW conveyor belt was contrary to the MWO it was nonetheless work that was "part and parcel of the carrying out of [the] overall contractual relationship between [the respondent] and [Beltline]".

The District Court decision

70 The learned Judge understood that the respondent maintains that the applicant was undertaking work contrary to the MWO but that the work the applicant was doing when the accident occurred still fell within the scope of the contract between the respondent and Beltline.

71 His Honour went on to say that the applicant still criticised the proposed amendments because they did not expressly assert that the applicant was involved in the execution of work under the contract between the respondent and Beltline. The learned Judge found that this was an issue the resolution of which depended upon the evidence. He concluded:

"Giving s 175 a broader interpretation than that suggested by counsel for the [applicant] I believe it is strongly arguable that the [applicant] was injured while executing work contemplated by that contract even if the work fell outside the scope of the maintenance work order. I find that the pleading sought to be introduced by the [respondent's] proposed amendment is certainly an arguable proposition and, in my view, the [respondent] should not be shut out from litigating an issue which is fairly arguable."

Determination of ground 1.1.2

72 The applicant's submissions are based on a construction of the Act, s 175(1) being that it is a requirement of the subsection that a defendant

(Page 24)

prove that a plaintiff's injury occurred whilst the plaintiff was executing work done under the contract between the defendant and the plaintiff's true employer. The construction contended for by the applicant reads too much into words of the Act, s 175(1).

73 In order to prove that it is a deemed employer all the respondent need do is prove the four matters I have referred to previously. None of those four matters require proof that the accident occurred or that the applicant was injured "in execution of the work" or whilst he was performing work "by or under" Beltline.

74 However that is not to say that the Act does not require a connection between the applicant's injury and the work done under the contract between the respondent and Beltline before the respondent is potentially liable as a deemed employer to pay compensation under the Act and thus able to take advantage of the restrictions that the Act places on the award of common law damages against employers. As I have previously stated that connection is provided for in part by the Act, s 175(3) and (7) and in part by the Act, s 93B and relevant definitions in s 5. Where, as in this case, the respondent seeks to bring itself within the Act, Pt IV Div 2 the applicant's injuries for which he is seeking an award of common law damages must be a "disability". That is, a personal injury by accident arising out of or in the course of the deemed employment or whilst the worker is acting under the employer's instructions. The "employment" in this case is the employment of the applicant by Beltline in the execution of the work required by the contract between the respondent and Beltline. The "employer" referred to is the deemed employer, that is respondent.

75 In ground of appeal 1.1.2, the applicant contends that the proposed pleading is inconsistent with the Act, s 175, because it does not allege that the work that the applicant was executing at the time of the accident was by or under the contract between the respondent and Beltline. Whilst I agree that there is no such pleading I do not agree that the absence of the pleading is inconsistent with s 175. For the reasons given earlier no such pleading is required by s 175. However, what is required in addition to what is already proposed, is a pleading that the applicant's injuries arose out of or in the course of the execution of work by or under Beltline pursuant to the contract between Beltline and the respondent. Alternatively, a pleading that the applicant was injured whilst he was acting under the respondent's instructions.

76 The absence of one of these pleadings means that the applicant is unaware of the case put against him. For example, as has been explained

(Page 25)

in many cases, there is a significant difference between an injury arising out of employment and an injury arising in the course of employment. The former phrase requires a causal connexion between the employment and its incidents, whereas the latter phrase requires that the pursuit of the employment should be an accompanying condition: Kavanagh v The Commonwealth (1959) 103 CLR 547 at 556 per Dixon CJ. Patently there is also a marked difference between injury in either of those two contexts and the third alternative in s 5 which is that the injury occurs whilst acting under the employer's instructions. The applicant is entitled to know upon which of these three alternatives the respondent relies.

77 This is particularly so in light of the respondent's pleading in par 3 of the defence to the effect that the applicant was injured whilst he was working on a part of the respondent's plant contrary to the MWO raised by the respondent. The respondent needs to plead, with clarity, how it says that it should nonetheless be found that the applicant suffered a disability as that term is defined by the Act.

78 It is not surprising that the learned Judge arrived at his decision given the way the applicant put its case. However, my view is that the proposed pleading is deficient because it fails to include a pleading referable to the Act, s 93B(1)(a) as read with s 5. This deficiency is compounded by the presence of par 3 of the defence. Given that the respondent is seeking the indulgence of the Court to amend its pleading the Court should not grant the indulgence where, as in this case, there is potential prejudice to the applicant. This prejudice may be able to be overcome by a further amendment to the proposed pleading which expressly identifies which of the three alternatives in the Act, s 5 the respondent relies on. It will also need to plead the material facts, in summary form, on which the respondent relies to support its pleading in that respect. Special care is needed to ensure that those facts are consistent with the pleading in par 3. In this respect it is difficult to see how the respondent could plead that the applicant was injured whilst the applicant was acting under its instruction consistently with the pleading in par 3 of the defence. Further, it would not be sufficient for the pleading to be no more than an allegation that the applicant was performing work that was "part and parcel" of the carrying out of the overall contractual relationship between the respondent and Beltline. Unless the proposed pleading is in the alternative to the pleading in par 3, the applicant is entitled to know how the respondent says that he was acting contrary to the MWO which presumably identified the work that was to be done by or under Beltline pursuant to the contract between Beltline and the respondent and yet still sustained an injury which arose out of or in the course of that work.

(Page 26)

79 The applicant further contends that, having regard to my findings as to what the respondent needs to prove to deprive the applicant of damages, it is not just necessary for the respondent to clarify how it says that he suffered a "disability" in light of the pleading in par 3 that he was, at the time of his injury, acting contrary to the MWO. The applicant goes a step further and asserts that it is not possible for the respondent to plead both circumstances because they are mutually exclusive. In other words, the applicant says that it was not possible for him to be both injured whilst acting contrary to the MWO and for that injury to be a "disability" as defined by the Act.

80 I do not accept this submission. For example, it would be possible for a worker to be injured whilst performing work that was outside the scope of a written instruction but was still work that arose in the course of employment. However, each case would depend on the facts as found at trial as well as the matters pleaded. Thus, whilst the appeal should not be allowed on this second basis, it highlights the importance of clarity in the pleadings and is a reason to allow the appeal because of the lack of clarity in the proposed amendments particularly when read with par 3 of the defence.

Ground 2 – The Exercise of the Discretion to Grant Leave to Amend the Defence

81 The applicant submits that whether or not the proposed pleading is consistent with the Act, s 175 and other aspects of the defence, the respondent should not be given leave to amend its defence to include a plea pursuant to s 175 because:

a) the respondent has not advanced reasons for its delay in seeking to amend the defence;

b) the applicant is prejudiced by the late application to amend the defence. This is said to be because he has lost his opportunity to comply with the Act, Pt IV Div 2 as the respondent failed to give him a notice pursuant to Workers Compensation and Rehabilitation Regulations 1982 (WA); reg 19 ("a reg 19P notice") which would have put him on notice that the respondent claimed to be a deemed employer; and

c) the applicant's personal circumstances are such that it would be an injustice to allow the amendment.

(Page 27)

Legal principles

82 The grant or refusal of leave to amend a pleading is a matter of discretion: Baume v The Commonwealth (1906) 4 CLR 97.

83 In State of Queensland v JL Holdings Pty Limited(1997) 189 CLR 146 at 155 per Dawson, Gaudron and McHugh JJ their Honours said:

"Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties."

84 In the course of their judgment their Honours said that the principles established in Cropper v Smith (1884) 51 LT 729 and accepted by the High Court in Clough & Rogers v Frog (1974) 4 ALR 615 were still good law. In Cropper v Smith (supra), Bowen LJ said:

"Now, I think it is a well-established principle that the object of courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights … I know of no kind of error or mistake which if not fraudulent or intended to overreach the court ought not to correct if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy; and I do not regard such amendment of a matter of favour or of grace."

85 The case of Clough & Rogers v Frog (supra) has factual relevance to this case. The case involved two related actions instituted by the one plaintiff. Two days before both actions were listed for hearing the defendants applied for leave to amend their defences by pleading a defence based on statute to the effect that the actions were statute barred because the plaintiff had failed to commence the proceedings within three years of the date he first received workers' compensation payments. The Supreme Court of the Northern Territory refused leave to amend on the

(Page 28)

basis that the plaintiff would suffer prejudice if the applications were granted. The possibility of prejudice was said to arise because there had existed the chance that the plaintiff had a cause of action against the nominal defendant pursuant to the Motor Vehicles Ordinance1949-1971 (NT) for injuries caused by or arising out of the use of an uninsured motor vehicle. He had not instituted such an action because of his claims against the defendants. Any cause of action against the nominal defendant had become statute barred by the time the defendants applied to amend their defences.

86 In allowing the defendants' appeals and granting leave to amend the High Court said:

"As the defence, if established, would be a complete answer in either action, the amendments sought should have been allowed unless it appeared that injustice would thereby have been occasioned to the respondent, there being nothing to suggest fraud or improper concealment of the defence on the part of the appellants. With the exception of the suggestion of prejudice arising in respect of the loss of the possible claim against the nominal defendant, the matters relied upon by the respondent in opposition to the amendment sought go at the most to delay and irregularity only, matters which are relevant to costs but do not constitute injustice to the respondent in the sense in which that expression is used."

87 The High Court found that the question before them turned on the claim that there was a possibility of prejudice or injustice in respect to the loss of the action against the nominal defendant. Assuming the most favourable view of the Motor Vehicles Ordinance the court found that any cause of action against the nominal defendant was lost two years before the second action commenced. Consequently the grant of leave to amend in that action would work no injustice in the manner suggested. In respect to the first action, the possible cause of action against the nominal defendant was extant when it commenced. However, by the time the plaintiff obtained an order giving him leave to amend his statement of claim the cause of action was lost and it was as a consequence of that order that the defendants were permitted to generally plead to the amended statement of claim. The court said that in the exercise of that right the defendants could have pleaded the statutory defence. By allowing them to plead it at a later date, no injustice was thereby occasioned to the plaintiff.
(Page 29)

88 The leading Western Australian case with regard to the principles applicable to an application to amend a pleading is Tony Sadler Pty Ltd v McLeod Nominees Pty Ltd (1994) 13 WAR 323. In that case Seaman J (with whom Anderson J concurred) at 331-335 reviewed the authorities relevant to the granting of leave to amend particularly in light of the modern approach to case flow management. His Honour repeated and applied what he had said in Grljusich & Anor v Grljusich, unreported; SCt of WA (Seaman J); Library No 930253; 6 May 1993 wherein he said, inter alia:

"In my opinion the Court in considering whether it is just to grant belated amendments will consider not only prejudice to the applicant but prejudice to the public interest and prejudice to the opponent on the basis that it is entitled to weigh in the balance the strain the litigation imposes on the opponent, his anxieties in facing new issues, the raising of false hope and his legitimate expectation that the trial will determine the issues one way or the other …

If a court list is disrupted because a party has failed to prepare in time for the hearing other litigants waiting for a hearing have been needlessly prejudice and the court is concerned to balance the prejudice to the parties which arise from an adjournment in the public interest in the proper use of the resources provided for the administration of justice …

In Commonwealth v Verwayen (1990) 170 CLR 394 at 416, 464 it was said that it should no longer by likely assumed that an award of costs would cure the prejudice caused by a late amendment. It is my opinion that the new rules further diminish the significance of costs as a cure of prejudice and in view of their terms there is no longer any place for a general presumption that an award of costs will cure prejudice. Furthermore it is my view that consideration may be given by the court to allowing the consequences of the negligent or dilatory conduct of litigation to lie with those responsible for that state of affairs."

89 Seaman J's comments must be read in light of what the High Court said in State of Queensland v J L Holdings Pty Limited (supra). This is particularly so as the High Court restated and applied what had been said in Cropper v Smith (supra), a case which Seaman J said could no longer be relied upon.
(Page 30)

90 In Willis v Normandy Golden Grove Operations Pty Ltd [2003] WASCA 221, McKechnie J (Malcolm CJ agreeing) found that something less than knowing concealment of a defence by a defendant seeking to amend its defence to plead the Act, s 175, was sufficient to weight the scales in favour of disallowing a similar amendment to that the respondent seeks to make in this case. His Honour found that the defendant's failure to discover the contract between it and the plaintiff's true employer caused the plaintiff to lose a real chance to reconsider his position in the light of the contractual arrangement between his true employer and the defendant and to consider the possible effect of the Act, s 175. It seems that his Honour was of the view that this was improper concealment of a matter relevant to the proposed defence or that it worked an injustice to the plaintiff in that if this concealment had not occurred the plaintiff may have been able to take steps to protect himself from the provisions of the Act, Pt IV Div 2 and the relevant limitation period for suing his true employer. In that case the plaintiff had applied for, but not proceeded with the application for, a determination of his level of disability pursuant to the Act, Pt IV Div 2. However, prior to the discovery of the contract the general limitation period for suing his true employer expired.

Application of the law to the facts

(a) Lack of reasons for delay

91 In respect to this issue the learned Judge said:

"The other ground upon which the application is opposed by the plaintiff is based upon an inadequate explanation by the defendant for the delay in making this application. The reasons for this delay are explained in the affidavit of Jerome Patrick Allan, a solicitor employed by the firm representing the defendant, sworn on 9 September 2003. It is clear from this affidavit that the initial failure to plead a defence under s 175 of the Workers' Compensation and Rehabilitation Act 1981 was simply due to the solicitor's unfamiliarity at the time with this legislative provision and its possible application to the facts in this case. It is only when the defendant's solicitor undertook a review of the discovery and pleadings in the action in the middle of June 2003 that the oversight was discovered and the necessary steps taken to correct the situation."

92 The alleged accident occurred on 19 June 2001. The applicant's writ was issued on 5 July 2002 and the statement of claim filed on 10 September 2002. The defence was filed on 11 October 2002 and the

(Page 31)

matter entered for trial on 22 April 2003. The application to amend the defence was made on 25 June 2003. As at that date, the action had not been given trial dates.

93 Understandably, the applicant questions how the solicitor in charge of the action for the respondent failed to appreciate the relevance to the respondent's case of this Court's decision in Hewitt v Benale (supra) delivered 14 June 2002 until June 2003. The solicitor has filed an affidavit stating that he was out of Australia for four years until September 2002 and was unaware of the decision in Hewitt v Benale (supra). However, he does not explain when he became aware of the decision in Hewitt v Benale (supra) and the reason for any delay after that date.

94 I conclude that the reason for the delay was the oversight by the respondent's solicitors. To this extent the delay is explained but not justified. As was said in Queensland v J L Holdings Pty Limited (supra) at 155, an application to amend is not the occasion for punishment of a party for its mistake or its delay in making the application. Thus, the delay in this case is not a sufficient reason to refuse the application for leave to amend the defence.

(b) Failure of respondent to comply with reg 19P

95 It was made clear in Clough & Rogers v Frog(supra) that the fact that a proposed late amendment to a defence will be a complete defence to an action is not a result which justifies refusing leave to amend unless there is some "fraud or improper concealment of the defence" on behalf of the defendant or some other injustice. The applicant says that it would be unjust to allow the amendments to the defence because the respondent failed to issue him with a reg 19P notice. Regulation 19P states:

"(1) The employer of a worker who has an unfinalized claim for compensation under the Act is to give the worker written notice, in a form approved by the Executive Director, of –

(a) the requirement under section 93E(3)(b) of the Act for the worker to elect to retain the right to seek damages; and

(b) the date by which the election is to be made.

(Page 32)

(2) The employer is to give the notice mentioned in subregulation (1) –

(a) if a dispute resolution body orders that weekly payments of compensation are to commence, within 7 days of the day of the order; or

(b) in any other case, 3 and 5 months from the day on which weekly payments commenced.


(3) An employer's obligation under this regulation to give a worker notice is fulfilled if the notice is given, within the time required, by an insurer with which the employer has a policy indemnifying the employer against liability to pay the compensation claimed."

96 The applicant submits that if the respondent had advised him that it regarded itself as a deemed employer by issuing him with a reg 19P notice then this would have put him on notice of the need to elect the right to seek damages and to otherwise comply with the Act, Pt IV Div 2 if he wished to pursue a claim for common law damages against the respondent. He contends that if the respondent wishes to avail itself of the benefits granted to employers under the Act then it must also bear the statutory burdens on employers, especially where the discharge of the burden would have alerted him to the fact that the respondent regards itself as his deemed employer.

97 The applicant made this submission for the first time at the hearing of the application for leave to appeal. Although reg 19P was mentioned in his written submission it was not mentioned to this effect. Thus the respondent did not have the opportunity to give proper consideration to this submission. Further, because it was not raised at first instance the respondent submits that it can not affect the correctness of the learned Judge's decision.

98 However, in reply to the merits of the applicant's submission at the hearing of the application, the respondent submitted that the last date on which the applicant could elect to retain the right to seek common law damages from a deemed employer, being the date six months after the day on which weekly worker's compensation payments had commenced, had passed prior to the issue of the applicant's writ. Thus, the respondent submitted that there was no injustice to the applicant in allowing the amendments. Further, the respondent said that the Act and Regulations made under the Act, do not require a principal, such as it, which has not

(Page 33)

had a claim for compensation under the Act served on it to issue a reg 19P notice to workers who are injured on its site.

99 The Act, s 84I(1) requires a worker to make a claim for compensation. Section 84I(2) says that the claim, if there is more than one employer, needs only to be served upon one of such employers. The Regulations prescribe a form for the claim for compensation. Interestingly, it does not require the worker to identify his or her employer or employers but it does contain a section for the employer's details. The instructions that are included in the form are that this section is to be completed by the employer "after receipt from the worker".

100 There is no evidence before the court that the applicant served a claim for compensation on the respondent or that it had knowledge, prior to the passing of the termination date, that the applicant had an unfinalised claim for compensation which may render it liable to issue a reg 19P notice. There is evidence in the form of an accident report prepared by the respondent to show that the respondent had notice of this accident. However, this does not indicate that the respondent was aware that the applicant had an unfinalised claim for compensation. Consequently assuming, without deciding, that reg 19P applies to deemed employers and that the applicant is entitled to raise this issue for the first time on appeal, I do not accept that the omission of the respondent to issue a reg 19P notice to the applicant amounts to improper concealment of its defence or otherwise makes it unjust to now allow the respondent to amend its defence.

101 By the time the applicant issued his writ he had already lost the opportunity, by the effluxion of time, to comply with the Act, Pt IV, Div 2. Nothing the respondent did or did not do after the issue of the writ has affected the applicant's position in that respect. Consequently the respondent should not be deprived on the opportunity to make the proposed amendments so as to raise an arguable defence.

(c) Applicant's personal circumstances

102 In his affidavit sworn 2 July 2003 the applicant deposes that he received significant injuries from the accident, including depression, that he sought legal advice in July/August 2001 and was told that he had a claim against the respondent. Consequently he did not make an election prior to the termination date to retain the right to seek common law damages. Instead he instructed his solicitors to institute the subject action against the respondent. Since then he has believed that the respondent does not have a meritorious defence to his claim, that his action would be

(Page 34)

successful and that his future would be secure. Not surprisingly he is distraught at the recent application by the respondent to amend its defence as proposed so as to plead what may be a complete defence to his claim.

103 The above summary shows that the applicant has at all times acted responsibly and has followed the legal advice he received. However I regard the law as being clear that the prejudice caused to an otherwise reasonable plaintiff by the fact that a proposed defence may be a complete bar to a plaintiff's claim is no reason to deny a defendant leave to amend its defence, particularly when trial dates have not been set. There must be some other factor to justify a refusal of leave. The only other factor I can identify in this case is one that goes to the clarity of the proposed amendments. Whilst this defect in the proposed pleading warrants this Court granting leave to appeal and allowing the appeal, it is also a defect which may be curable by further timely refinement of the proposed pleading in conformity with these reasons.