Sandarousi v L & A Pressure Welding Pty Ltd

[2005] NSWWCCPD 59

WORKERS COMPENSATION COMMISSION

APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:Sandarousi v L & A Pressure Welding Pty Ltd [2005] NSW WCC PD 59

APPELLANT:  Keriakos Carlos Sandarousi

RESPONDENT:  L & A Pressure Welding Pty Ltd

INSURER:GIO Workers Compensation (NSW) Limited

FILE NUMBER:  WCC5006-04

DATE OF ARBITRATOR’S DECISION:          29 October 2004

DATE OF APPEAL DECISION:  1 July 2005

SUBJECT MATTER OF DECISION: Sections 151A(3)(a) and 151C of the Workers Compensation Act 1987; preclusion from commencing proceedings in the Workers Compensation Commission; election to commence proceedings in the District Court.

PRESIDENTIAL MEMBER:  Deputy President Gary Byron

HEARING:Determined on the papers

REPRESENTATION:  Appellant: Carroll & O’Dea Lawyers

Respondent: Rankin Nathan Lawyers

ORDERS MADE ON APPEAL:  The decision of the Arbitrator is confirmed.

No order is made as to costs.

BACKGROUND TO THE APPEAL

1. On 23 November 2004 Keriakos Carlos Sandarousi (‘the Appellant/Mr Sandarousi’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 29 October 2004.

1. The Respondent to the Appeal is L & A Pressure Welding Pty Ltd (‘the Respondent/Pressure Welding’).

1. The insurer is GIO Workers Compensation (NSW) Limited (‘the Insurer’).

1. Mr Sandarousi claims to have suffered an injury to his back, left arm and shoulder, on 16 August 2001, when he fell from a timber ladder at work, because the rung on which he was standing, broke.  He claims that permanent impairment compensation is payable as a result of his injury, as it arose out of and in the course of, his employment.

1. On 24 March 2004 he lodged an ‘Application to Resolve a Dispute’ in the Commission for “non-economic loss compensation and compensation for pain and suffering.” 

1. The Insurer denied liability for the claim on 27 May 2004 on the basis that Mr Sandarousi is prohibited from bringing his claim, given that he elected to bring common law proceedings in respect of his claim.

1. It is not in dispute that Mr Sandarousi commenced a claim in the District Court on 22 November 2001 for injuries sustained while in the employ of Pressure Welding. It is not disputed that on 8 August 2003 those proceedings were dismissed by consent, due to the failure of Mr Sandarousi to comply with the provisions of section 151C of the Workers Compensation Act 1988 (‘the 1987 Act’), as it then was.

1. Mr Sandarousi concedes that the Statement of Claim filed in the District Court alleges the same injury as relied upon in these proceedings before the Commission.

THE DECISION UNDER REVIEW

1. The Certificate of Determination, dated 29 October 2004 records the Arbitrator’s orders as follows:

“The determination of the Commission in this matter is as follows:

1.That the Respondent is not liable for the payment of compensation under section 66 and/or section 67 of the 1987 Act.

2.No order as to costs.”

ISSUES IN DISPUTE

1. The issue in dispute in the appeal is whether the Arbitrator erred in deciding that Pressure Welding is not liable for payment of compensation pursuant to section 66 and/or section 67 of the 1987 Act, by reason of Mr Sandarousi making an election pursuant to section 151A(3)(a) of the 1987 Act, to commence proceedings in the District Court.

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:

   “(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

2. Both parties have submitted that an oral hearing should take place.  However, neither party has advanced any reasons in support of this submission.  I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances. 

LEAVE

1. The threshold requirements of section 352(2)(a) and (b) of the 1998 Act are satisfied and the appeal was lodged within 28 days of the Arbitrator’s decision, in compliance with section 352(4) of the 1998 Act.

1. Leave to appeal is granted.

EVIDENCE AND SUBMISSIONS

1. In summary, Mr Sandarousi submits that the Arbitrator erred in arriving at his decision, and in particular, the finding that the Statement of Claim that was filed in the District Court constitutes proceedings commenced in a court within the meaning of section 151A of the 1987 Act.  It is submitted that the Arbitrator erred in his findings: that the Statement of Claim constitutes an election within the meaning of the section; the Statement of Claim was not null and void and of no legal effect, and that section 151A is not a condition precedent and is merely a procedural issue. 

1. Pressure Welding submits that the issue turns upon two questions:

“(a)Should the condition (6 month delay) in s.151C be characterised as condition precedent such that failure to comply with ought render any proceedings a nullity, void ab initio and or not validly commenced?

(b)Even if it should be so characterised, does that mean that the worker has not ‘elected’ for the purposes of s.151A?”

1. Pressure Welding further submits that Mr Sandarousi exercised a choice and made an irrevocable claim that cannot now be ignored.  It submits that the judgment in State of New South Wales v Connor [2003] NSWCA 200 (‘Connor’), “leads one almost inevitably to the conclusion that even proceedings commenced not validly will constitute an election.”

.

1. Both parties rely upon a number of Court of Appeal decisions and previous decisions of Arbitrators of the Commission.  They also rely upon their arguments before the Arbitrator, as recorded in the transcript of the proceedings before him.  The submissions of the parties are summarised at paragraphs 16 – 22 of the Arbitrator’s ‘Statement of Reasons for Decision’, and do not need to be set out in detail, again.

1. The Arbitrator observed in summary that Mr Sandarousi relied upon various Court of Appeal decisions to submit that the Commission should find that the commencement of proceedings in the District Court was null and void and was not a proper commencement at all, with the result that no election was made.  Mr Sandarousi argues that, being a nullity, the proceedings were not proceedings in a court by which he made an election, and as a consequence, he is entitled to commence proceedings for permanent loss compensation in the Commission.

1. The Arbitrator states, in summary, at paragraph 11 of his Statement of Reasons for Decision that the argument before him was in fact limited to the issue of whether the action of Mr Sandarousi, in commencing proceedings in the District Court, amounted to an election to claim damages from Pressure Welding in respect of the injury sustained, so as to preclude his claim in the Commission for permanent loss compensation, by operation of section 151A of the 1987 Act.

DISCUSSION AND FINDINGS

1. It is not in dispute that Mr Sandarousi commenced proceedings in the District Court, within a period of just over three months of sustaining the injury, allegedly arising from and in the course of his employment with Pressure Welding. This was in contravention of section 151C(1) of the 1987 Act, which provides that a person is not entitled to commence such proceedings until six months have elapsed since giving of notice to the employer. It is not disputed that the proceedings in the District Court were struck out by consent on 8 August 2003.

Were the District Court proceedings a nullity?

1. At the relevant time, section 151C of the 1987 Act provided:

“(1)A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until 6 months have elapsed since notice of the injury was given to the employer.

(2)Despite subsection (1), the person is entitled to commence court proceedings against the employer if either of the following occurs:

(a)the employer denies all liability in respect of the injury,

(b)the employer admits partial liability in respect of the injury but the person is dissatisfied with the extent to which the liability is admitted.”

1. Section 151C(2) has no application on the facts in this matter.

1. In Gordon v Berowra Holdings Pty Ltd [2005] NSWCA 27 (‘Gordon’) the Court of Appeal held that section 151C of the 1987 Act is a condition precedent of a procedural nature that must be satisfied before the commencement of proceedings, but that proceedings commenced in contravention, “at least in an inferior court”, are not a nullity nor void. Mason P cited a number of cases at [36] in support of this finding, stating that they all recognized that the purpose of provisions such as section 151C of the 1987 Act, was to promote settlement before commencement of court proceedings. His Honour went on to state at [40]:

“It is, however, fallacious to conclude that proceedings in breach have failed to engage the jurisdiction of the court, or are a nullity.  The remarks of Glass JA in National Mutual Fire[National Mutual Fire Insurance Co Ltd v The Commonwealth of Australia (1981) 1 NSWLR 400], referred to by the primary judge and relied on in this Court by the defendant, recognise that an additional inquiry must always be made. This is whether one can discern from the legislative scheme an intention that invalidity or nullity will be the consequence of non-compliance with a prohibition, however clearly it is expressed.”

1. In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 the principles discussed by Glass JA were stated authoritatively by the High Court by McHugh, Gummow, Kirby and Hayne JJ who said at 390:

“The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds.  The classification is the end of the inquiry, not the beginning.  That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provisions is mandatory or directory and, if directory, whether there has been substantial compliance with the provision.  A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid.  This has been the preferred approach of courts in this country in recent years, particularly in New South Wales.  In determining the question of purpose, regard must be had to ‘the language of the relevant provision and the scope and object of the whole statute’.”

1. These principles were applied in Gordon where Mason P observed (Sheller and Beazley JJA agreeing) that section 151C(1), which applies to proceedings in the District Court, was not a provision that “spells incurable voidness upon non-compliant proceedings.” at [42]. He concluded at [49] that section 151C(1) “does not erect a jurisdictional preclusion.”

1. The Court in Gordon considered a number of the cases cited by each of the parties in the instant matter.  Many of these were considered by the Arbitrator in the instant matter along with a number of decisions of other Arbitrators of the Commission.  Other arbitral decisions have been cited by Mr Sandarousi.  Pressure Welding concedes that the unreported Court of Appeal case of Dandashli v Dandashli 16 December 1996 (‘Dandashli’) and “arguably other cases provide some support for the worker’s position on this point.”  However, it also cites other cases in which the opposite conclusion has been drawn.  Similarly, there is an obvious divergence of opinion evident in the relevant arbitral decisions of the Commission.    

1. Mr Sandarousi refers to the decision of Neilson J in Deng v GMS Fulfilment Services Ltd (2003) 25 NSWCCR 446 (‘Deng’), “for all practical purposes, an identical facts situation”, where His Honour found that the filing of the statement of claim in breach of section 151C of the 1987 Act was “merely irregular or barrable” and as such, was still an election under section 151A of that Act. Mr Sandarousi cites Handley JA in Dandashli, and submits that a distinction was drawn between a limitation section and a provision that imposes a condition precedent, in that the former is not a nullity but an irregularity that is capable of being cured, while the latter is a nullity and is of no legal effect.  On this basis, he submits that the decision in Deng is wrong.  Dandashl, he said, was concerned with various provisions of the Motor Accidents Act 1988, and in particular section 52(1A)(b), which “for all practical purposes…is identical to section 151C.” It must be said that neither party nor the Arbitrator in the instant case, had the benefit of Gordon, which was concerned specifically with section 151C of the 1987 Act and dealt with the very issue in dispute in this appeal. However, the Arbitrator took into account the decision in Connor, and in particular the views of Sheller JA, who said that once proceedings have been commenced the election that flows from that cannot be avoided.  The Arbitrator referred to Mario Cardona v Penrith City Council [2003] NSW WCC PD36 (‘Cardona’) in which the Deputy President of the Commission observed that notwithstanding that the proceedings commenced may have been incompetent, it does not mean that they were not commenced at all.  In any event, Cardona and the Arbitrator’s decision are consistent with the decision in Gordon, which has now clarified the status of proceedings commenced in the District Court in contravention of section 151C of the 1987 Act.  

1. While section 151C of the 1987 Act is a condition precedent of a procedural nature that must be satisfied it is clear, particularly in light of the Court of Appeal decision in Gordon, that the District Court proceedings commenced by Mr Sandarousi are not null and void and of no legal affect, as he has claimed.  Accordingly, I find no error on the part of the Arbitrator and this ground of appeal fails.

1. It follows that the election within the meaning of section 151A of the 1987 Act (as it was at 22 November 2001), was irrevocably made, as found by the Arbitrator.

1. The Arbitrator is not in error in finding that Mr Sandarousi is precluded by the operation of section 151A(3)(a) of the 1987 Act from commencing the proceedings that were before him. Accordingly, his decision that Pressure Welding is not liable for the payment of compensation under section 66 and/or section 67 of the 1987 Act should not be disturbed.

DECISION

1. The decision of the Arbitrator is confirmed.

COSTS

1. No order is made as to costs.

Gary Byron

Deputy President  

1 July 2005

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF GARY BYRON, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE