| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : RUNCAN -v- SVEDALA AUSTRALIA LTD [2005] WADC 46 CORAM : MCCANN DCJ HEARD : 31 JANUARY & 10 FEBRUARY 2005 DELIVERED : 15 MARCH 2005 FILE NO/S : CIV 3317 of 2001 BETWEEN : VIOREL RUNCAN Plaintiff
AND
SVEDALA AUSTRALIA LTD (ACN 000 197 428)
Defendant
EXTRAMAN WA PTY LTD
Third Party
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA Coram : DEPUTY REGISTRAR HEWITT File No : CIV 3317 of 2001 Result : Application dismissed
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Catchwords:
Practice and procedure - Application for extension of time to appeal from Deputy Registrar - Amendment of defence to include a plea pursuant to Workers' Compensation and Rehabilitation Act 1981 (WA) s 175 - Required elements of plea
Legislation: Occupiers Liability Act (WA) 1985, s 2
Rules of the District Court (WA) O 6 r 11(2)
Workers' Compensation and Rehabilitation Act 1981 (WA) s 5(1), s 93B, s 93C, s 93E, s 175
Result: Application for extension of time to appeal granted
Appeal adjourned with liberty to defendant to file further minute of proposed amended defence
Representation:
Counsel:
Plaintiff : Mr B Nugawela
Defendant : Mr A Stavrianou (31.1.05) & Ms K Newton (10.2.05)
Third Party : No appearance
Solicitors:
Plaintiff : Friedman Lurie Singh & D'Angelo
Defendant : Deacons
Third Party : Greenland Brooksby
Case(s) referred to in judgment(s):
Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Hewitt v Benale Pty Ltd (2002) 27 WAR 91
Hewitt v Benale Pty Ltd [2002] WADC 22
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Marsden v Unimin Australia Ltd; Price v Resolute Resources Ltd [2004] WASCA 143
Re Monger; ex parte Cross [2004] WASCA 176
Royal v Alcoa of Australia Ltd [2004] WASCA 269
State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146
Case(s) also cited:
Frauenfelder v Reid (1963) 109 CLR 42
Girando v Girando (1997) 18 WAR 450
Jones v Wesfarmers Ltd [2003] WASCA 225
Van Stillevoldt BV v El Carriers Inc [1983] 1 All ER 699
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Introduction 1 This is an application by the defendant for an extension of time within which to appeal from a decision of Deputy Registrar Hewitt made on 20 October 2003. The application was filed on 4 November 2003 which was outside the five day period provided by O 6 r 11(2) of the District Court Rules 1996 for the filing of an appeal from a decision made by a Registrar. On 27 November 2003 Deputy Registrar Hewitt ordered, inter alia, that the application be adjourned to special appointment before a Judge in chambers and that the application and the appeal be heard together. 2 On 20 October 2003 the learned Deputy Registrar dismissed the defendant's application for leave to amend its defence to plead that at all material times the defendant was a deemed employer of the plaintiff pursuant to s 175(1) of the Workers' Compensation and Rehabilitation Act 1981 (WA) ("the Act") and that, accordingly, damages cannot be awarded to the plaintiff by virtue of the provisions of Division 2 of Part IV of the Act ("the statutory constraints"). 3 The learned Deputy Registrar dismissed the defendant's application on, essentially, two grounds. First, he held that it was "improbable that s 175 of the Act applies to the facts as they exist in … [this] case". This ground predicated that the provisions of s 175 of the Act do not extend to what is known as "labour hire" contracts. It is common ground for the purposes of this application that the alleged contractual relationship between the defendant and the third party was a so-called labour hire contract. Second the learned Deputy Registrar held that the proposed amendment was "inadequately particularised". The first of these grounds cannot now be sustained in the light of the decision of the Full Court of the Supreme Court in Marsden v Unimin Australia Ltd; Price v Resolute Resources Ltd [2004] WASCA 143. In that matter the Full Court held that s 175 of the Act could apply to a labour hire contract. 4 The application came on for hearing before a Judge on 3 May 2004 but was adjourned because the appeal to the Full Court of the Supreme Court in Marsden v Unimin Australia Ltd; Price v Resolute Resources Ltd (supra) had been heard and judgment reserved. 5 In the course of argument counsel for the defendant informed me that the defendant intended to rely upon a minute of proposed amended defence dated 8 April 2004, save and except that par 12 thereof was to be
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replaced by par 10 of a minute dated 2 December 2002. I have subsequently been provided with a further minute of proposed amended defence dated 11 February 2005 which reflects this position. 6 I propose to deal firstly with the merits of the proposed appeal and then with the application for an extension of time.
The pleadings 7 By his amended statement of claim filed on 12 February 2002 the plaintiff pleads that: (a) He was born on 11 May 1954 and is and was at all material times a sub-contract welder (par 1). (b) At all material times the defendant occupied and controlled premises situated at 6-12 Uppsala Place, Canning Vale, Western Australia ("the premises") and was thus an "occupier of the premises" within the meaning of s 2 of the Occupiers Liability Act 1985 (par 3). (c) On or about 3 August 1999 the plaintiff had a contract for service with the third party to complete contract work for the defendant at the premises. (d) Over a period in August and on or about 7 September 1999 the plaintiff attended the premises and carried out welding work to a 2.5 m metal structure which was required for a crusher machine known as a "grizzly". Whilst doing so the plaintiff suffered a gradual onset of right-sided thoracic facet joint dysfunction and inflammation involving his right shoulder and cervical spine as a result of repetitive twisting and bending involved in the performance of the welding work. The plaintiff alleges that the contract work included "welding work on the table, infrastructure and the grizzly structure and that the plaintiff was required to complete the contract work for the defendant until all the work had been completed as required by the defendant." (Paragraphs 4.1 to 4.16 and further and better particulars filed on 22 April 2002.) These circumstances are defined in par 4 as 'the accident'.
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(e) The accident was caused solely by the negligence and/or breach of statutory duty of the defendant, its servants or agents, that is to say negligence at common law and/or breach of s 5 of the Occupiers Liability Act (pars 5 and 6). (f) As a result of the accident he has suffered injury resulting in pain, discomfort, stress, shock, permanent disability, loss and damage, particulars of which are set out (par 7). 8 By its defence filed on 19 March 2002 the defendant: (a) traversed all of the allegations pleaded in pars 1, 3, 4, 5, 6 and 7 of the statement of claim. (b) further pleaded various facts as to the plant and equipment that was said to have been available for the plaintiff's use and the fact that the plaintiff did not require an assistant nor request one, and that the plaintiff had undertaken an induction with the defendant prior to commencing work at the premises. (c) pleaded, further or in the alternative to the balance of the defence, that if (which was denied) the plaintiff had suffered injury, such was caused solely or partly by the plaintiff's contributory negligence.
The proposed amended defence 9 By the proposed amended defence the defendant seeks to amend par 3 so as to admit that it occupied the premises and this amendment is not opposed by the plaintiff. 10 By proposed new pars 7, 8, 9, 10, 11 and 12 the defendant seeks to invoke s 175(1) of the Act and the statutory constraints on the award of damages. Those paragraphs read as follows: "7. By an oral agreement made in or about July or August 1999 between the defendant and the third party, the third party agreed to provide employees for the purpose of execution of welding work on a structure known as a grizzly at the premises.
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PARTICULARS OF AGREEMENT The agreement was oral and made by Geoff Schnaars alternatively Brian Sizer on behalf of the defendant and an employee or officer of the third party on behalf of the third party whose identity is unknown to the defendant. 8. The plaintiff was employed to work at the premises by the third party. 9. Further, at all material times the defendant was carrying on the business of providing engineering facilities for various commercial enterprises (particularly those involved in the mining industry) including all tasks necessarily involved therein including but not limited to welding work on a grizzly. 10. The defendant pleads that the welding work on which the plaintiff was employed is directly a part of the process in the business referred to in par 9 of this amended defence within the meaning of section 175(3) of [the Act]. 11. Pursuant to the matters pleaded in pars 7-10 of this amended defence the defendant pleads that it was the deemed employer of the plaintiff pursuant to section 175(1) of the Act. 12. The defendant says the plaintiff's disability (as defined in section 5 of the Act) did not result in: and the defendant accordingly denies that the plaintiff is entitled to an award of damages and says that the plaintiff is precluded from such an award by reason that the plaintiff has failed to satisfy the provisions of section (sic: sections) 93D and 93E of the Act." 11 The plaintiff opposes these amendments.
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Relevant statutory provisions and legal principles
12 Section 175 of the Act provides as follows: "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 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." 13 Pursuant to s 5(1) of the Act the term "worker" means "any person who has entered into or works under a contract of service … with an employer, whether by way of manual labour, clerical work, or otherwise and whether the contract is expressed or implied, is oral or in writing … [and] includes –
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(b) any person engaged by another person to work for the purpose of the other person's trade or business under a contract with him for service, the remuneration by whatever means of the person so working being in substance for his personal manual labour or services … . 14 The first of these definitions invokes the common law concept of a contract of service whereas the definition in par (b) (sometimes known as the "extended definition") applies to a person who under common law principles would be regarded as an independent contractor of the employer but who is brought within the purview of the Act because he or she is in substance providing his or her personal manual labour or services to the employer. 15 The statutory constraints on awards of common law damages provide, inter alia, as follows: "93B Application of this Division (1) This Division applies to the awarding of damages against a worker's employer independently of this Act in respect of a disability suffered by a worker if – 93C Limit on powers of courts If this Division applies a court is not to award damages to a person contrary to this Division. 93D Assessment of degree of disability ... 93E Restrictions on awarding of damages and payment of compensation (3) Damages can only be awarded if - (a) it is agreed or determined [pursuant to s 93D] that the degree of disability is not less than 30 per cent
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and that agreement or determination is recorded in accordance with the regulations; or (b) the worker has a significant disability and elects, in the prescribed manner, to retain the right to seek damages and the election is registered in accordance with the regulations. (4) For the purposes of subsection (3)(b) the worker has a significant disability if it is agreed or determined that the degree of disability [determined pursuant to s 93D] is not less than 16 per cent and that agreement or determination is recorded in accordance with the regulations." 16 The application of the statutory constraints to principals who are deemed to be employers of workers pursuant to s 175 of the Act was determined by the Full Court of the Supreme Court of Western Australia in Hewitt v Benale Pty Ltd (2002) 27 WAR 91. As I have said, in Marsden v Unimin Australia Ltd; Price v Resolute Resources Ltd (supra) the Full Court further held that when a worker of a labour hire company works for and under the supervision of a client of the labour hire company, the second company may be deemed to be the employer of the worker under s 175. 17 In Royal v Alcoa of Australia Ltd [2004] WASCA 269 the Full Court held that all of the material facts necessary to establish the deemed employment relationship must be pleaded. Thus a defendant is required to plead the following matters: (a) that the defendant contracted with a contractor for the execution of work by or under the contractor; (b) in the execution of the contractual work, the plaintiff was employed by the contractor and sustained the relevant disability; (c) the plaintiff was a "worker" within the meaning of that term in the Act; (d) the contractual work on which the plaintiff was employed at the time of the occurrence of the disability was directly a part or process in the trade or business of the defendant; and
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(e) the plaintiff's disability occurred in respect of premises on which the defendant had undertaken to execute the work or which were under its control or management.
The submissions 18 Counsel for the plaintiff submitted that the proposed amended defence set up inconsistent pleas, insofar as pars 1 and 3 thereof traversed pars 1 and 4 of the statement of claim, whereas the proposed plea of deemed employment in pars 7 to 11 of the amended defence predicates that the allegations in pars 1 and 4 of the statement of claim are true. In effect, the plaintiff's submission is that the proposed pleading is embarrassing. I accept that submission, but in my view the defect is not insuperable because the defendant is entitled to traverse the plaintiff's statement of claim (ie put the plaintiff to proof) and, in the alternative, plead any arguable defence which arises if the plaintiff proves his case. In effect, such a defence is an alternative plea of confession and avoidance, but it is necessary for the defendant to make clear that the pleas are in the alternative to each other. In my view, the proposed amended defence is not properly pleaded in this respect and the alternative nature of the defences needs to be clearly pleaded if the defendant wishes to maintain its general traverse of the statement of claim. 19 The plaintiff next submitted that leave to amend in terms of the minute should be refused on the grounds that the material facts underlying the allegation of deemed employment pursuant to s 175 of the Act had not been properly pleaded. In particular, it was submitted that: 1. The proposed par 8 fell short of adequately pleading, or particularising, that the plaintiff was a "worker" within the meaning of that term in the Act. 2. The pleading did not plead that the work performed by the plaintiff was "by or under" the third party. 3. There was no plea that workers' compensation had been paid to the plaintiff, or was payable pursuant to the Act. 20 I accept the first and second of those submissions. 21 As regards the first submission, in my view it is not sufficient for par 8 of the defence to simply plead that "the plaintiff was employed to work at the premises by the third party". In my view it is necessary for the defendant to plead the material facts necessary to establish that the
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plaintiff was a "worker" within the meaning of that term in the Act. In the course of submissions counsel for the defendant stated that the defendant intends to rely on both of the definitions referred to in s 5(1) of the Act, that is, the plaintiff was "a worker" because he entered into a contract of service with the third party (a common law employment relationship) or because the plaintiff fell within the extended definition of "worker". Neither of these contentions is adequately pleaded in the proposed defence. I note that the plaintiff has only pleaded (and the defendant has denied) that he was a subcontract worker and entered into a contract for services with the third party. Even if the defendant admitted that plea it would not be sufficient to bring the plaintiff within the extended definition of "worker" in the Act. In order to do so the defendant must also plead that the plaintiff was remunerated for working for the third party in substance for his personal manual labour or services. 22 Next, in my view the proposed defence fails to plead (as it should) that at the time of the occurrence of the alleged disability pleaded in the statement of claim the plaintiff was employed on the contractual works pleaded in par 7 of the defence. It is not sufficient to simply plead that the plaintiff was employed to work at the principal's premises by the third party and that the work was directly a part or process in the business of the principal, which is the effect of the proposed pars 8, 9 and 10. 23 The plaintiff further submitted that the proposed amended defence was defective in that it lacked a plea that workers' compensation had been paid to the plaintiff, or was payable, that is to say, it was submitted that the defendant is required to expressly plead facts bringing the plaintiff's claim within s 93B(1)(b) of the Act. In my view, a finding that workers' compensation was "payable" to the plaintiff under the Act is a finding of law which is capable of being decided on the material facts establishing the deemed employment pursuant to s 175 of the Act. Accordingly, it is not necessary for that conclusion to be pleaded (see Seaman, Civil Procedure in Western Australia, par [20.8.4]). But, I do accept the plaintiff's submission if the defendant relies on the fact of the plaintiff having been paid compensation under the Act. In effect, that is an optional matter for the defendant to plead. 24 Next, the plaintiff repeated a submission made to the learned Deputy Registrar to the effect that there was a lack of affidavit evidence supporting the amendment. I accept that in some cases it is necessary for some evidence to be placed before the Court to establish the arguable merit of a proposed amendment to a pleading. That is particularly the case when an amendment is proposed at a very late stage, or turns on the
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construction of a document. In my view, this is not such a case for the following reasons. First, in relation to the timing of the application for leave to amend, I am not satisfied that the amendments are being made so late in the day as to require some substantiation of the proposed new pleading (see par 25 below). Second, in my view there are sufficient material facts pleaded in pars 1, 2, 3 and 4 (including the further and better particulars thereof) of the statement of claim to disclose that an arguable case could be pleaded under s 175 of the Act, albeit there are certain additional material facts which must be pleaded to make out the defence. 25 Counsel for the plaintiff next submitted that the defendant was barred by the doctrine of waiver from pleading the statutory constraints by way of defence. In support of this submission counsel cited the decision of the High Court of Australia in the Commonwealth of Australia v Verwayen (1990) 170 CLR 394, and referred to obiter dicta of the Full Court of the Supreme Court of Western Australia in Re Monger; ex parte Cross [2004] WASCA 176 (especially per Malcolm CJ at [22 to 64 and 70] and E M Heenan J at [175 to 212]) to support the contention that the doctrine of waiver is available to bar reliance by an employer on the statutory constraints. As I understand it, the plaintiff's contention relies upon the effluxion of time between the delivery of the first instance decision of this Court in Hewitt v Benale Pty Ltd [2002] WADC 22 on 28 February 2002, the delivery of the Full Court's judgment in the same matter on 19 June 2002 and the first intimation by the defendant's solicitors to the plaintiff's solicitors in or about early September 2002 of the defendant's intention to rely upon the statutory constraints. Counsel for the defendant submitted that the reasons for the delay are adequately explained in the affidavit of Mr Andrew Gabrielson sworn on 26 August 2003 and that, further, waiver should be pleaded by way of reply to the amended defence and dealt with at trial. I accept the defendant's submissions in this respect. In my view, it is only in the very clearest case that an interlocutory finding can be made on the merits of a proposed pleading (including a reply). In my opinion, the present case is not such a case.
Discretionary factors 26 The power of the Court to allow amendments to the pleadings is discretionary. The Court's discretion must be exercised bearing in mind that the ultimate aim of the Court is the attainment of justice and no principle of case flow management can prevent a party from litigating an issue which is fairly arguable, provided that any prejudice to other parties can be remedied. (See State of Queensland v J L Holdings Pty Ltd
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(1997) 189 CLR 146 at 154.) In the present application I have reached the view that a defence pleading the statutory constraints is not unarguable and the plaintiff has not identified any specific prejudice which would flow if the defendant is given leave to amend.
The application for an extension of time in which to appeal 27 The defendant's application for an extension of time in which to file a notice of appeal was supported by an affidavit of Elizabeth Rodd sworn on 8 February 2005. Counsel for the plaintiff did not object to the late filing of the affidavit. Ms Rodd deposes to the fact that the solicitor who had the conduct of this matter on behalf of the defendant in October 2003 wrongly believed that an appeal could be filed within 21 days of the date of the Deputy Registrar's decision, instead of the five days allowed by the Rules. 28 The factors to which the Court must have regard when considering an extension of time to appeal are: (a) the length of the delay; (b) the reasons for the delay; (c) whether there is an arguable case; and (d) the extent of any prejudice suffered by the respondent. (See Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196.) Counsel for the plaintiff opposed the grant of an extension of time on only one ground, that is to say that the proposed appeal is not arguable. In any event, I am satisfied that by reason of the relatively short delay, the reasons for the delay set out in Ms Rodd's affidavit and the absence of any prejudice suffered by the plaintiff that the other three criteria are satisfied. 29 For the reasons outlined above, I am of the view that a defence based upon the statutory constraints is not unarguable and the defendant ought to be given the opportunity to plead the same. Thus, if a suitably pleaded minute of proposed amended defence is filed leave to amend ought to be granted and, therefore, the appeal allowed. Accordingly, the defendant is entitled to an extension of time up to and including 4 November 2003 within which to lodge the notice of appeal.
Conclusion 30 I am satisfied that a defence pleading the statutory constraints would not be unarguable in this case and the defendant should be given an
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opportunity to plead that defence. For the reasons I have outlined, in my view the minute presently before the Court (ie that dated 11 February 2005) does not adequately plead the elements of the defence which must be established by the defendant. 31 The appeal is a hearing de novo of the amendment application (see Hazart Pty Ltd v Rademaker (1993) 11 WAR 26 per Malcolm CJ at 28) and it is preferable in terms of case flow management that the question is resolved before me. 32 Accordingly, I am prepared to grant the defendant an extension of time to file its appeal, but otherwise adjourn the appeal with a direction that the defendant have liberty to file a further minute of proposed amended defence within 14 days. Orders in relation to the disposition of any dispute that may remain in relation to that minute and hence the disposition of the appeal itself, can be made later.
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