Runcan v Svedala Australia Ltd
[2007] WASCA 126
•12 JUNE 2007
RUNCAN -v- SVEDALA AUSTRALIA LTD [2007] WASCA 126
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASCA 126 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | CACV:102/2005 | 2 MARCH 2007 | |
| Coram: | STEYTLER P WHEELER JA McLURE JA PULLIN JA BUSS JA | 12/06/07 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Application for leave to appeal refused | ||
| B | |||
| PDF Version |
| Parties: | VIOREL RUNCAN SVEDALA AUSTRALIA LTD (ACN 000 197 428) |
Catchwords: | Workers compensation Persons liable to pay compensation Alternative rights against employer for damages at common law and statutory compensation Application of "deemed employer" provisions under Workers compensation and Injury Management Act 1981 (WA) |
Legislation: | Workers Compensation and Injury Management Act 1981 (WA), s 175(1) |
Case References: | Dalgety Australia Ltd v Rubin, unreported; FCt SCt of WA; Library No 5485; 24 August 1984 Foster v Chief Executive Officer of the Department of Agriculture (2006) 153 IR 168 Hewitt v Benale Pty Ltd (2002) 27 WAR 91 Jones v Wesfarmers Ltd [2003] WASCA 225 Klein v Minister for Education (2007) 81 ALJR 582 Koljibabic v WMC Resources Ltd [2003] HCATrans 427 Marsden v Unimin Australia Ltd [2004] WASCA 143 Marsden v Unimin Australia Ltd [2005] HCATrans 569 Minister for Education v Klein [2005] WASCA 185 Re Calder; Ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343 Royal v Alcoa of Australia Ltd [2004] WASCA 269 Talbot & Olivier (a firm) v Witcombe (2006) 32 WAR 179 Traegar v Pires de Albuquerque (1997) 18 WAR 432 Transfield Pty Ltd v Rawstron [2005] WASCA 78 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : RUNCAN -v- SVEDALA AUSTRALIA LTD [2007] WASCA 126 CORAM : STEYTLER P
- WHEELER JA
McLURE JA
PULLIN JA
BUSS JA
- Appellant
AND
SVEDALA AUSTRALIA LTD (ACN 000 197 428)
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram : McCANN DCJ
Citation : RUNCAN -v- SVEDALA AUSTRALIA LTD [2005] WADC 46
File No : CIV 3317 of 2001
(Page 2)
Catchwords:
Workers compensation - Persons liable to pay compensation - Alternative rights against employer for damages at common law and statutory compensation - Application of "deemed employer" provisions under Workers compensation and Injury Management Act 1981 (WA)
Legislation:
Workers Compensation and Injury Management Act 1981 (WA), s 175(1)
Result:
Application for leave to appeal refused
Category: B
Representation:
Counsel:
Appellant : Mr B L Nugawela
Respondent : Mr D R Clyne
Solicitors:
Appellant : Friedman Lurie Singh & D'Angelo
Respondent : Deacons
Case(s) referred to in judgment(s):
Dalgety Australia Ltd v Rubin, unreported; FCt SCt of WA; Library No 5485; 24 August 1984
Foster v Chief Executive Officer of the Department of Agriculture (2006) 153 IR 168
Hewitt v Benale Pty Ltd (2002) 27 WAR 91
Jones v Wesfarmers Ltd [2003] WASCA 225
Klein v Minister for Education (2007) 81 ALJR 582
Koljibabic v WMC Resources Ltd [2003] HCATrans 427
Marsden v Unimin Australia Ltd [2004] WASCA 143
Marsden v Unimin Australia Ltd [2005] HCATrans 569
(Page 3)
Minister for Education v Klein [2005] WASCA 185
Re Calder; Ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343
Royal v Alcoa of Australia Ltd [2004] WASCA 269
Talbot & Olivier (a firm) v Witcombe (2006) 32 WAR 179
Traegar v Pires de Albuquerque (1997) 18 WAR 432
Transfield Pty Ltd v Rawstron [2005] WASCA 78
(Page 4)
1 JUDGMENT OF THE COURT: This is an application for leave to appeal against an interlocutory decision. The respondent sought, and was given, leave to amend its defence to a claim for common law damages for negligence and breach of statutory duty arising out of personal injuries suffered by the appellant. The amendments raised as a defence the contention that the respondent was a "deemed employer" for the purposes of s 175 of the Workers Compensation and Injury Management Act 1981 (WA) ("the Act") and that it was consequently entitled to the protection afforded by Pt IV, Div 2 of the Act. In his proposed appeal, the appellant contends that the amendments are manifestly untenable and that the respondent should not have been given leave to make them. The court was told that the application for leave to appeal raised questions concerning the correctness of its previous decisions. A bench of five judges was consequently convened to hear the application. At the conclusion of argument we refused leave to appeal. These are our reasons for doing so.
The pleaded case
2 The appellant's case, as pleaded in his amended statement of claim, is as follows. The appellant was "a sub-contractor welder". On about 3 August 1999 he "had a contract for service with Extraman WA Pty Ltd ('Extraman') to complete contract work for … [the respondent]" at premises occupied and controlled by the respondent (par 4.1). The appellant attended the premises and was required, between about 3 August 1999 and about 7 September 1999, to weld horizontal plates to a metal structure. In the course of doing so he suffered an injury to his right shoulder and cervical spine on about 7 September 1999 (par 4.16). The injuries were caused by the negligence of, and/or breach of statutory duty by, the respondent, which had failed, amongst other things, to provide a safe system of work (par 5).
3 In its defence the respondent denied, amongst other things, that there had been any negligence or breach of duty on its part. The amendments which are contentious for the purpose of these proceedings appear in paragraphs 7 to 12 of the defence. The effect of these paragraphs is as follows. By an oral agreement made in or about July or August 1999 between the respondent and Extraman, Extraman agreed to provide employees for the purpose of performing welding work on a structure known as a "grizzly" at the respondent's premises. The effect of the agreement was that the respondent "contracted with … [Extraman] for the execution of work by or under … [Extraman] in that … [the appellant] was employed by … [Extraman] to work under the supervision, direction
(Page 5)
- and control of the … [respondent]" (par 7B). The appellant was "a worker as defined in Section 5 of the … Act, being a person engaged by … [Extraman] to provide labour for hire as part of … [Extraman's] business and was paid by … [Extraman] for that labour" (par 8A). The welding work on which the appellant was employed was "directly a part of the process in the business of the … [respondent] … within the meaning of section 175(3) of the … Act … " (par 10). The respondent was consequently the deemed employer of the appellant pursuant to s 175(1) of the Act. Because the appellant's injuries did not amount to a "disability" (as defined in s 5 of the Act) with a degree of 16 per cent or more, common law damages could not be awarded in his favour by virtue of the provisions of s 93D and s 93E of the Act.
The relevant provisions of the Act
4 Section 175 of the Act is found in Pt X which is entitled "Insurance". Variants on that section have appeared in Western Australian workers compensation legislation since 1912. So far as it is presently relevant, it reads as follows:
"(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.
(2) The principal is entitled to indemnity from the contractor for the principal's liability under this section.
… "
5 Part IV, Div 2 of the Act came into effect in 1993. Section 93C provides that if Div 2 applies, a court is not to award damages to a person contrary to its provisions. Section 93E(3) (forming part of Div 2) allows common law damages to be awarded against an employer, but only if the worker's degree of disability is between 16 per cent and 30 per cent (in which event the worker must "elect" to retain the right to seek damages: s 93E(3)(b)) or more than 30 per cent.
(Page 6)
6 In Hewitt v Benale Pty Ltd (2002) 27 WAR 91 the Full Court (Scott, Hasluck and EM Heenan JJ) held that the provisions of Div 2 of Pt IV of the Act apply to an action for common law damages against a person who is deemed to be an employer by s 175(1) of the Act. Since then, in 2004, the legislature enacted s 93B(5) of the Act, the effect of which is that, with prospective effect from November 2004, Div 2 of Pt IV does not apply to the awarding of common law damages against a person who was an employer only because that person was deemed to be so by s 175. Section 93B(5) has no application to these proceedings because the appellant's cause of action arose in 1999.
The decision of the primary Judge
7 The primary Judge (who dealt with the issue on an appeal from the decision of a deputy registrar of the District Court) relied, so far as is presently relevant, on the decisions of the Full Court in Hewitt and in Marsden v Unimin Australia Ltd [2004] WASCA 143.
8 In the second of those cases, the court (Miller and McKechnie JJ, Wallwork AJ) was called upon to answer the question whether, "when a worker of a labour hire company works for and under the supervision of another company, the second company is deemed to be the employer under s 175" (at [2] of the judgment). In that case the appellant had been employed by a labour hire company ("Integrated Workforce") which had made his services available to the respondent ("Unimin"). While working at Unimin's premises he had not seen, or taken any instructions from, anyone from Integrated Workforce. The majority (Miller and McKechnie JJ, Wallwork AJ dissenting) said (at [41] - [42]):
"The arrangement described in the evidence was a contract for the execution of work under a contract and falls within s 175 of the Act. The execution of the work was under the contractor. Integrated Workforce contracted with the respondent to execute work by its employees at the direction of the respondent. The appellant was employed by Integrated to do that work.
Although the appellant took day-to-day directions from Unimin [the respondent] he was carrying out the work on behalf of Integrated Workforce, his employer. The contract with Unimin was for the supply of labour. The work carried out under that contract was one and the same as the work carried out by the appellant under the contractor even though it would also be correct to describe the work as being carried out under the principal."
(Page 7)
- The majority consequently concluded (at [43]) that the trial Judge had been correct to find that Unimin was deemed by s 175 to be an employer of the appellant.
9 The Court in Marsden dealt simultaneously with a companion appeal, Price v Resolute Resources Ltd (bearing the same citation as Marsden). In that case the appellant was employed by Drake Personnel Ltd ("Drake"), also a labour hire company. Drake contracted with a company known as Resolute Resources Ltd ("Resolute") to make the appellant available to Resolute for the purpose of performing maintenance duties at a mine site controlled and operated by Resolute. By the same majority (Wallwork AJ again dissented), the court found (at [49]) that it had been open to the court below to conclude that s 175(1) of the Act applied to Resolute.
10 In the present case, the primary Judge plainly considered that the combined effect of Hewitt and Marsden (by which we refer also to Price) is that a defence of the kind pleaded by the respondent in its amendment is open.
Ground of appeal
11 There is only one ground of appeal. It is to the effect that the primary Judge erred in law in applying the ratio of Marsden and thereby giving the respondent leave to amend its defence so as to plead reliance upon s 175 of the Act. The ground has two limbs. These are set out in the particulars to it. The first is that "the decision in Hewitt … upon which Marsden was founded, was wrongly decided". The second is that "Marsden was wrongly decided as contracts for the supply of labour only were not intended to be caught by s 175 of the Act".
Hewitt
12 As to the first limb, we have mentioned that the effect of the relevant ratio in Hewitt has been done away with by the legislature through the enactment of s 93B(5) of the Act. However, Hewitt has repeatedly been applied in cases preceding, or not affected by, the enactment of that section. Apart from Marsden, it has been applied in Jones v Wesfarmers Ltd [2003] WASCA 225 at [22] per Malcolm CJ (Parker and McKechnie JJ agreeing); Royal v Alcoa of Australia Ltd [2004] WASCA 269 at [3] per McLure J; and Transfield Pty Ltd v Rawstron [2005] WASCA 78 at [27]. The assumption that Hewitt was correctly decided underpinned the decisions of this Court in Minister for Education v Klein [2005]
(Page 8)
- WASCA 185 and Foster v Chief Executive Officer of the Department of Agriculture (2006) 153 IR 168.
13 Hewitt has also been considered by the High Court. The judgment of the Full Court in an appeal decided together with Hewitt (and under the same citation), Koljibabic v WMC Resources Ltd, was made the subject of an application for special leave to appeal: Koljibabic v WMC Resources Ltd [2003] HCATrans 427. In the course of refusing special leave, McHugh JA (speaking also for Kirby and Heydon JJ) said:
"The language of section 175(1) of the Workers' Compensation and Rehabilitation Act 1981 is intractable. The duty of courts is to give effect to the purpose of Parliament derived from the language of the statute. It is true that the construction favoured in the Full Court can lead to potential injustice to a deemed employee in certain circumstances. However, the contrary construction urged by the applicant results in consequences that are also unlikely. In these circumstances, the purpose must be derived from the statutory text. The applicant's construction would, it seems to us, require major surgery on the legislative language.
There is no reasonable prospect that an appeal would succeed."
14 An application for special leave was also refused by the High Court in Marsden: Marsden v Unimin Australia Ltd [2005] HCATrans 569. In the course of refusing leave, Hayne J (speaking also for Callinan J) said that the construction of the Act adopted in the Courts below was open. His Honour added that, "given that the legislation has since been amended it would not be in the interests of justice, in either the particular cases or more generally, to grant special leave to agitate … [the] questions of construction".
15 Hewitt was recently discussed by the High Court in Klein v Minister for Education (2007) 81 ALJR 582. The issue in dispute in that case arose only if Hewitt was correctly decided. The correctness of that decision had not been challenged. During the course of the hearing, the appellant applied for leave to amend his grounds so as to put in issue the correctness of Hewitt. He was denied leave to do so. The Court then revoked the grant of special leave. In his judgment, Gleeson CJ said (at [2]) that he felt no difficulty about deciding the question of construction that arose in Klein upon the assumption that Hewitt was correctly decided. He went on to say (at [2]):
(Page 9)
- "The Justices who refused special leave to appeal in that case regarded the statutory language, upon which the decision was based, as intractable. At the least, the construction adopted in Hewitt was fairly open, the decision has been followed in later cases, and its correctness has been assumed and acted upon by the Parliament of Western Australia. There is no occasion to re-open the issue it decided."
- In the same case Gummow, Hayne and Heydon JJ said (at [15]) that the Western Australian legislature's evident reliance on the correctness of the decision in Hewitt, coupled with the closing of the class of cases in which issues of the kind that arose in that case might arise, made it inappropriate for the High Court to consider whether to disturb the state of the law as stated in Hewitt. Kirby J (at [49] and following) considered that the decision in Hewitt was "apparently correct".
16 Against this background, it was, to say the least, optimistic to anticipate that this Court might now be persuaded to depart from Hewitt. The arguments that were brought on behalf of the appellant in support of the proposition that Hewitt was wrongly decided are largely the same as those that were agitated in the case itself. Counsel for the appellant told us that the only new contention is that the construction of the Act preferred in Hewitt creates results that are absurd and inconvenient and which could not have been intended by the legislature. He said that, on ordinary canons of statutory interpretation, that construction should have given way to one that does not have these consequences. It is unnecessary to go into the detail of that contention. That is because, as Kirby J said in Klein (at [52]):
"All of these [canons of interpretation], and other principles of construction, were carefully considered in the courts below before the favoured interpretation was adopted. In the end, however, as E M Heenan J pointed out in Hewitt … the duty of a court is to uphold the purpose of Parliament as expressed in the language of the legislation. The pull of particular canons of construction 'must ... be restrained within the confines of "the actual language employed" and what is "fairly open" on the words used' (Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638; 58 ALJR 502. See also Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518; 61 ALJR 190.)."
- These comments were, of course, made against the background mentioned above, being that the judges hearing the special leave application in
(Page 10)
- Koljibabic, while acknowledging that the construction favoured in the Full Court could lead to potential injustice in certain circumstances, considered the language of s 175(1) to be intractable.
17 In these circumstances, and having regard for the enactment of s 93B(5) of the Act, no basis has been shown for this court now to depart from the decision in Hewitt: see also, in this respect, Traegar v Pires de Albuquerque (1997) 18 WAR 432 at 446 - 447 and Re Calder; Ex parte Cable Sands(WA) Pty Ltd (1998) 20 WAR 343 at 354. In any event, as we shall explain when dealing with the second limb of the ground of appeal, it remains to be seen whether s 175 has any application in this case. Consequently, even if it was still open to challenge the construction put upon that section in Hewitt, it would be premature to reach any decision in that regard at this stage.
Marsden
18 The appellant's contention that Marsden was wrongly decided relies substantially upon what has since been said in this court in Foster. Counsel for the appellant suggests that there is an inconsistency between the reasoning of the court in Foster and that of the court in Marsden, and that the reasoning in Foster is to be preferred.
19 The issue that arose in Foster was whether an employee of the University of Western Australia who had been deployed to work for what was described as a "joint venture" in the field of legume research was deemed by s 175 of the Act to be employed by the chief executive officer of the Department of Agriculture, who was one of the "joint venturers". Wheeler JA (with whom Steytler P and Pullin JA agreed) said (at [11] - [12]):
"While … the Agreement [between the joint venturers] obviously contemplates that work will be done, it would not, in my view, be correct to characterise it as an agreement 'for the execution of work' by each of the joint venturers … It seems to me that there is a distinction to be drawn between a contract for the execution of work, which one would generally understand to be the execution of some particular task, even if broadly defined, and one for the temporary provision of workers for the purpose of assisting the principal to complete whatever tasks the principal has set itself. So far as the Act is concerned, the distinction appears to me to emerge when one compares the extended definition of 'employer' in s 5 with the terms of s 175. The definition of 'employer' is relevantly as follows:
- "'employer" … and, where the services of a worker are temporarily lent or let on hire to another person by the person with whom the worker has entered into a contract of employment the latter shall ... be deemed to continue to be the employer of the worker … '
- The focus of that definition is on the provision of the services of a worker. The focus of s 175 is on the contract for the execution of work. It is, of course, possible to contemplate agreements which are agreements both for the provision of workers and for the execution of work; for example, where there is a contract for particular identified work and there is further an identification of the manner in which particular workers are to be made available to perform that task. However, the two concepts are distinct and very often an agreement will be able to be characterised as simply one or the other. "
20 Wheeler JA went on to say (at [13]) that the distinction discussed by her might appear to be inconsistent with the decision in Marsden. Then, after suggesting that that decision may have rested upon the misidentification of the party to be considered as the contractor, she said (at [16]):
"In any event, if it be accepted that Marsden is correct, it may be that it is explained on the basis that the contract in that case was one of the 'dual' types of contract which I have described, in which there was both a contract for identified work and for the provision of workers to perform that work. There is some support for that conclusion in [39] of the reasons of the majority."
21 Her Honour went on to say (obiter, at [18]) that it seemed to her, in any event, that the words "by or under" required "some degree of control or supervision greater than that implicit in merely providing an employee for a task". She said that, if that were not the case, it is difficult to see what the words "by or under" the contractor would add to the further requirement contained in s 175(1) that, in the execution of the work, the worker be employed by the contractor.
22 In the present case, counsel for the appellant urges this court to follow Foster in holding that work is not executed "by or under" a contractor unless the contractor maintains at least some control or
(Page 12)
- supervision over the employee. He submits that, if Foster is correct in that respect, the defence raised by the amended pleading cannot succeed because the respondent pleads (par 7B) that the appellant was employed by Extraman to "work under the supervision, direction and control" of the respondent. He argues that it necessarily follows from this that no scope was left for control or supervision of the appellant by Extraman who, he contends, was the "contractor" for the purposes of s 175(1).
23 Accepting that there is room for debate concerning the correctness of what was said in Foster at [11] - [12] and also at [18], we are not at all persuaded that this is the appropriate time to have that debate. As we have said, the issue is raised in the context of a pleading point in respect, essentially, of one paragraph of the defence, which is less than precise in its ambit. Paragraph 7B merely recites that the appellant was employed by Extraman to work under the supervision, direction and control of the respondent. It does not say whether or not that supervision, direction and control was exclusive of any exercised by Extraman. At this stage, little is known concerning the detail of the contractual arrangements between Extraman and the respondent. The same is true of the contractual arrangements between Extraman and the appellant. These arrangements might prove to be material to the nature of the work required to be performed by the appellant under the contract between Extraman and the respondent and to the question whether Extraman exercised any supervision, direction and control over the appellant in respect of the performance of that work. Counsel for the respondent told us that the respondent was not willing to participate in any endeavour to reach agreement as regards the material facts in this respect. In these circumstances nothing useful would be achieved by deciding, at this stage, legal questions that may not arise on the evidence, or the answer to which may be influenced by evidence the ambit of which is as yet uncertain: see Dalgety Australia Ltd v Rubin, unreported; FCt SCt of WA; Library No 5485; 24 August 1984; Talbot & Olivier (a firm) v Witcombe (2006) 32 WAR 179 at [22]. The points can be aired, if they arise, after the trial.
Conclusion
24 It follows that no basis has been shown for the grant of leave to appeal on either limb of the single ground. It was for these reasons that we refused the application for leave.
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