Suleski v Pilbara Iron Company (Services) Pty Ltd - [2021] WADC 18

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   SULESKI -v- PILBARA IRON COMPANY (SERVICES) PTY LTD [2021] WADC 18
CORAM:   PRINCIPAL REGISTRAR MELVILLE
HEARD:   15 JANUARY & 16 FEBRUARY 2021
DELIVERED          :   4 MARCH 2021
FILE NO/S:   CIV 2526 of 2016
BETWEEN:   SPASE SULESKI
Plaintiff

AND

PILBARA IRON COMPANY (SERVICES) PTY LTD
Defendant

Catchwords:

Application for summary judgment and to strike out the writ - Definition of 'injury' in s 5 Workers' Compensation and Injury Management Act 1981 (WA) - Section 93B Workers' Compensation and Injury Management Act 1981 (WA) - Meaning of aggravated and punitive damages

Legislation:

Civil Liability Act 2002 (WA)
Interpretation Act 1984 (WA)
Rules of the Supreme Court 1971 (WA)
Workers' Compensation and Injury Management Act 1981 (WA)

Result:

Application dismissed

Representation:

Counsel:

Plaintiff	:	Mr J R Brooksby
Defendant	:	Ms E L Thuijs

Solicitors:

Plaintiff	:	Slater & Gordon - Perth
Defendant	:	Jackson McDonald

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

Apache Energy Ltd v Alcoa of Australia Ltd [No 2] [2013] WASCA 213
Armet v CFC Consolidated Pty Ltd [2019] WASCA 165
Austin v St John of God Health Care Inc [No 2] [2013] WADC 42
Carter v Walker [2010] VSCA 340
Coxon v Wilson [2016] WASCA 48
Heugh v Knight [2017] WADC 84
Kieronski v Woodside Energy Ltd [2017] WADC 151
McGrath v Geraldton Meat Exports Pty Ltd [No 2] [2005] WADC 43
Mickelberg v 6PR Southern Cross Radio Pty Ltd [2002] WASCA 270
Re Monger; Ex Parte Cross [2004] WASCA 176
Transfield Pty Ltd v Rawstron [2005] WASCA 78

PRINCIPAL REGISTRAR MELVILLE:

Background

The plaintiff issued a writ on the 14 July 2016. The general endorsement was to the effect that as from a period commencing on or about 30 July 2013 the plaintiff was exposed to numerous bullying and harassment incidents from a representative of the defendant until he became incapacitated and that this was due to the negligence of the defendant.
In his statement of claim filed 12 June 2018 the plaintiff particularizes at pars 21, 23 and 24 the conduct alleged to constitute the breach of duty of care. Most of the particulars relate to conduct that might be described as bullying and/or harassment. The breach of duty of care is alleged to have resulted in the plaintiff developing a psychiatric condition for which compensatory damages are claimed.[1]
[1] Statement of agreed facts at par 10(d).
From the statement of agreed facts it is apparent that the plaintiff had prior to commencing these proceedings lodged a claim for workers' compensation under the Workers' Compensation and Injury Management Act 1981 (WA) (the Act) on the basis that he had suffered an 'injury' as that term is defined in the Act, resulting in incapacity. The defendant had denied liability to pay compensation under the Act on the basis that the plaintiff's condition was not an 'injury' as that term is defined in the Act.
It is agreed there is a history of appeals from the initial Arbitrator's decision of the 19 August 2016 resulting in the matter ultimately being remitted back for arbitration of the question of whether the discipline was 'unreasonable and harsh'. That question was found for the plaintiff on 2 September 2020 and is the subject of a further appeal to this court by the defendant. The appeal has not yet been determined.
On 23 September 2020 the plaintiff amended his statement of claim to include a claim for aggravated and exemplary damages.
On 30 September 2020 the defendant applied for an order that the action be summarily dismissed or alternatively the writ be struck out.
The basis of the application for an order for dismissal or to strike out the action is that one way or another the plaintiff cannot be awarded damages. It is argued that either the plaintiff will prove an entitlement to compensation which means damages cannot be awarded by reason of s 93K found in pt IV Div 2 of the Act or that, alternatively, plaintiff will not be able to prove his claim at all.[2] For reasons that follow I do not consider the position is anywhere near as simple as that.
[2] Defendant's outline of submissions at pars 44 - 45.
Given the defendant's appeal against the finding the discipline was 'unreasonable and harsh', which is really an appeal against the finding the plaintiff suffered an 'injury', I considered staying this application until the outcome of the appeal. This was particularly so because of my initial view that it was difficult to see how the defendant can come to this court seeking an order that the plaintiff's action be dismissed on the basis he has suffered an 'injury' whilst at the same time arguing in the appeal that the plaintiff had not suffered an 'injury'. In my view such an inconsistent position is an affront to any sense of fairness and justice. The injustice lies in the potential for the action to be dismissed or struck out on the basis of the defendant's contention the plaintiff had suffered an 'injury' only for it to be subsequently held in the appeal, on the basis of the defendant’s contrary contention, that the plaintiff had not suffered an 'injury'. The position of the plaintiff may well be prejudiced beyond repair because any action he might subsequently commence will seemingly be faced with a limitation defence not currently available to the defendant.[3]
[3] Defendant's outline of submissions at par 42.
However I have come to the view that irrespective of the outcome of the appeal these applications must still be dealt with. If the appeal is dismissed and the finding that the plaintiff suffered an 'injury' is upheld it will still be necessary to determine whether the action can proceed in the face of s 93K of the Act and the fact the plaintiff now claims aggravated and exemplary damages. If the appeal is allowed it will still be necessary to deal with the defendant’s application for summary judgement in light of its argument that the plaintiff will not succeed in proving his claim for damages at all.

The Workers' Compensation and Injury Management Act

The Act in pt IV Div 2 places constraints on the awarding of common law damages against employers who are sued by their workers.
Section 93B provides that Div 2 applies to the awarding of damages in respect of an 'injury' suffered by a worker if:
(a)it was caused by the negligence or other tort of the worker's employer; and
(b)compensation has been paid or is payable in respect of it under the Act.
However, s 93B(3)(b) goes on to declare that the division does not apply to the awarding of 'exemplary or punitive damages'.
Section 93K(4) which is found in Div 2 provides that damages can only be awarded if;
(a)the worker elects, in the manner prescribed in the regulations, to retain the right to seek damages; and
(b)the Director registers the election in accordance with the regulations; and
(c)court proceedings seeking the damages are commenced after the Director gives the worker written notice that the Director has registered the election …
To this point and for the purposes of dealing with this application it can be seen that Division 2 only applies where compensation is paid or payable in respect of an 'injury' (as defined in the Act).
The Act provides several definitions of 'injury', the relevant one for the purposes of this application being:
a disease contracted by a worker in the course of his employment at or away from his place of employment and to which the employment was a contributing factor and contributed to a significant degree; or
…
but does not include a disease caused by stress if the stress wholly or predominantly arises from a matter mentioned in subsection (4) unless the matter is mentioned in paragraph (a) or (b) of that subsection and is unreasonable and harsh on the part of the employer …
The matters referred to in subsection (4) include 'discipline' and the expectation of discipline or a decision by the employer in relation to discipline.
It follows therefore that the plaintiff's psychiatric condition, even where contracted in the course of his employment and in circumstances in which the employment contributes and contributes to a significant degree to the contraction of that disease, will not meet the definition of 'injury' if it results from stress wholly or predominantly arising from discipline, unless that discipline is unreasonable and harsh.

The summary judgment application

The application for summary judgement is brought pursuant to the Rules of the Supreme Court 1971 (WA) (the RSC) O 16 r 1. This provides that the court 'may' order judgement be entered for the defendant if satisfied the action is frivolous or vexatious, or the defendant has a good defence on the merits. The word 'may' imports a discretion.[4] The principles to be applied on a summary judgement application are not contentious. It has been said that an action should not be summarily dismissed unless it is so obviously untenable that it cannot possibly succeed, should be exercised with exceptional caution, and should never be exercised unless it is clear there is no real question to be tried.[5] Nor should an application for summary judgment be treated as though it were the preliminary trial of a question of law.[6]
[4] Interpretation Act 1984 (WA) s 56(1).
[5] Mazzuchelli v Mazzuchelli [2007] WASC 21 [20]; Fancourt v Mercantile Credits Ltd [1983] HCA 25.
[6] Apache Energy Ltd v Alcoa of Australia Ltd [No 2] [2013] WASCA 213 [89].

The application to strike out the action

Again the principles to be applied are not contentious. By RSC O 20 r 19 the Court 'may' strike out a pleading or an indorsement on a writ on the grounds it discloses no reasonable cause of action, is scandalous frivolous or vexatious, may prejudice embarrass or delay the fair trial of the action, or is otherwise an abuse of the process of the court. Again, the word 'may' imports a discretion. As for an application for summary judgement, a court should also be cautious not to risk stifling the development of the law by the summary rejection of a claim which might raise the possibility that, as the law develops, a cause of action will be found to lie: Mickelberg v 6PR Southern Cross Radio Pty Ltd [2002] WASCA 270 [29] (Steytler J, Malcolm CJ & Murray J agreeing); Coxon v Wilson [2016] WASCA 48 [13] (Buss JA).

The defendant's submissions

The defendant's submissions were directed primarily to the proposition that there is a finding of the Arbitrator that the plaintiff had suffered an injury as defined in the Act so enlivening pt IV Div 2. It is to be observed that the decision of an arbitrator is final until such time as it is either overturned on an appeal or reconsidered by the Arbitrator.[7] In those circumstances the parties are bound by the decision and it gives rise to an estoppel.[8] It follows that as things stand the plaintiff is bound by the determination that he has suffered an 'injury' as defined.
[7] Workers Compensation and Injury Management Act s 217B and s 217A.
[8] McNair v Press Offshore Ltd (1997) 17 WAR 191; Kuligowski v Metrobus [2004] HCA 34.
The defendant further relies on the decision of the Court of Appeal in Armet v CFC Consolidated Pty Ltd.[9] In that case the Court of Appeal upheld the decision of the primary court that the action should be struck out because the proceedings had been commenced before the Director had given the worker written notice of the registration of the election (the appellant not even having elected) with the result that damages could not be awarded. The Court of Appeal agreed that to pursue proceedings in those circumstances was an abuse of process. However, it is clear in Armet's case compensation was payable in respect of an 'injury' as defined. It was common ground Mr Armet had suffered a back injury for which he had claimed compensation under the Act.
[9] Armet v CFC Consolidated Pty Ltd [2019] WASCA 165.
In the absence of an appeal by the defendant against the Arbitrator's finding the plaintiff has suffered an 'injury' as defined and in the absence of a claim for exemplary damages by the plaintiff I would be of the view that having regard to what the Court of Appeal said in Armet the action should be dismissed.
However if the appeal is successful and it is found that the plaintiff has not suffered an 'injury' as defined, it seems to me the plaintiff's case cannot be said to be obviously untenable or that there is no real issue to be tried. In my view a weakness in the Defendant's argument is what I regard as a questionable if not erroneous assumption that, if it be the fact that the plaintiff has not suffered an 'injury' as defined in the Act, then he cannot be awarded damages. The weakness is that in the circumstances of this case the issue of whether the plaintiff has suffered an 'injury' turns on whether the discipline was 'unreasonable and harsh'. Both of those requirements must be satisfied before the plaintiff can be found to have suffered an injury for the purposes of the Act and for compensation to be payable.
If the discipline should be found to be 'harsh' but not 'unreasonable' the plaintiff will be found not to have suffered an injury for the purposes of the Act and will not be entitled to compensation under the Act.
Conversely, if the discipline is found to be 'unreasonable' but not 'harsh' the plaintiff will be found not to have suffered an injury for the purposes of the Act and will not be entitled to compensation under the Act.
In either of those two scenarios the prohibition on the awarding of damages found in the Act will not be enlivened. What would then call for resolution is the question of whether a Court might award damages in circumstances where the discipline was found to be 'unreasonable' but not 'harsh'. Save for considerations as to whether a duty of care arises having regard to s 5S of the Civil Liability Act 2002 (WA) the defendant might face considerable challenges in arguing there was no negligence in the face of a finding the discipline was unreasonable.
To put it another way, it seems arguable that in the event there is a finding that the discipline was not 'unreasonable and harsh', there will necessarily be a finding that the plaintiff has not suffered an 'injury' as defined in the Act and therefore no entitlement to compensation under the Act. Such a finding would not preclude him from then pursuing a common law action based on negligence. Hypothetically such an action might involve considerations as to whether the discipline was unreasonable but not harsh or might involve considerations of whether, although the stress arose predominantly from discipline that was not unreasonable and harsh, there were other stressors which were a material contributor to the stress to which the plaintiff was subject and, in turn, the contraction of the disease.
Hypothetically, whilst one might ask what damages or losses would flow from a disease caused by discipline which although found to be 'unreasonable' was found to be less than 'harsh', the binding nature of the Arbitrator's decision would seem to compel the court to find the plaintiff has contracted a psychiatric disease in the course of his employment and to which his employment contributed to a significant degree, the contribution being wholly or predominantly unreasonable discipline. What then is the likelihood of the Court not finding loss and damage as a consequence?
Insofar as the plaintiff claims aggravated and exemplary damages the defendant firstly submits that aggravated damages are a form of compensatory damages that fall within the class of damages referred to in s 93K and secondly that exemplary damages being parasitic on compensatory damages are not recoverable where there is no longer a claim for compensatory damages. The defendant submits that as the effect of s 93K is that there is no existing claim for compensatory damages it follows there is no claim for punitive damages. In this regard the defendant relies on the decision of McGrath v Geraldton Meat Exports Pty Ltd [No 2][10] as authority for that proposition.
[10] McGrath v Geraldton Meat Exports Pty Ltd[No 2] [2005] WADC 43.
In McGrath v Geraldton Meat Exports Pty Ltd[No 2] the court found that the plaintiff had in the course of agreeing to a lump sum settlement of her workers' compensation claim with the defendant also settled her common law claim and as such she no longer had any entitlement to compensatory damages at common law. Consequentially any claim for exemplary damages which were parasitic on a claim for compensatory damages fell away such that her action for those damages had to be dismissed.
The defendant refers to Carter v Walker[11] and Heugh v Knight[12] as authority for proposition that the plaintiff's claim for aggravated damages forms part of the claim for compensatory damages. With that I agree.
[11] Carter v Walker [2010] VSCA 340.
[12] Heugh v Knight [2017] WADC 84.
However whether or not the claim for exemplary damages falls away in circumstances where the plaintiff has not contracted away his common law claim seems to me to remain arguable. In McGrath v Geraldton Meat Exports Pty Ltd [No 2], Eaton J, having concluded that the plaintiff never had any common law right to compensatory damages because she had redeemed them, did not have to, and did not appear to, go on to consider what was the effect of the statutory provisions found in s 93B(3)(a), namely that the division does not apply to the awarding of exemplary or punitive damages.
In circumstances in which the plaintiff has not contracted away his or her right to compensatory damages then the unresolved issues appear to be:
(a)does the claim for compensatory damages still exist? Is it a case that s 93K does not extinguish the right to compensatory damages but simply procedurally bars the remedy in prescribed circumstances, being failure to register the election to retain the right to seek damages and limits the assessment of damages in circumstances in which the degree of impairment is more that 15%.[13]
(b)In the event s 93K abolishes the claim for compensatory damages, what purpose is served by s 93B(3) declaring that the division does not apply to the awarding of 'exemplary or punitive damages'. One argument is that if Parliament by enacting s 93K(3) intended to abolish the plaintiff's common law right to compensatory damages, Parliament by declaring the division does not apply to the awarding of exemplary or punitive damages intended that such an entitlement would be preserved, for otherwise the words would have no purpose and are redundant. Further, to say the division does not apply to punitive damages but to destroy any claim to them by taking away the right to compensatory damages in s 93K(3) is arguably inconsistent. Inconsistent results should be avoided where possible.
(c)Whether, as the defendant suggests, s 93B in declaring that Div 2 does not apply to punitive damages is stating that the limits on how compensatory damages were to be calculated by reference to the prescribed amounts found in s 93K(12) and the degree of impairment found in s 93K(5), would not apply to the calculation of any punitive damages that might be awarded. Whether such an approach to the interpretation of s 93B adds anything to the law or whether it is a better argument than the first argument is open to debate.
[13] See Re Monger; Ex Parte Cross [2004] WASCA 176 [70], [115], [163] - [164]; Transfield Pty Ltd v Rawstron [2005] WASCA 78; Austin v St John of God Health Care Inc [No 2] [2013] WADC 42 [62], [65].

The plaintiff's submissions

Conversely, the plaintiff who brought proceedings in the Workers' Compensation Arbitration Service on the basis he suffered an 'injury' as that term is defined in the Act and who has a final determination that he suffered an 'injury', now seeks to argue for the purposes of proceeding with this common-law action that the question of whether he has suffered an 'injury' as that term is defined in the Act remains in issue.[14]
[14] Plaintiff's submissions par 27.

The plaintiff submits that the decision of Deputy Registrar Harman in Kieronski v Woodside Energy Ltd[15] supports his argument. With respect, I am unable to see such support in the decision. The learned Deputy Registrar observed that it was common cause that compensation had not been paid by the defendant and that the parties were presently awaiting the determination as to whether the plaintiff had any entitlement to compensation. It is not apparent from the Deputy Registrar's reasons for decision whether the question before him was whether there was an unresolved issue as to whether the plaintiff had suffered an 'injury' as defined in the Act, or whether the unresolved issue was whether incapacity had resulted from, or statutory allowances had been incurred as a result of, the 'injury'. However it appears from what the Court of Appeal said in Armet that the issue before the learned Deputy Registrar was whether compensation was payable.
[15] Kieronski v Woodside Energy Ltd [2017] WADC 151.
In any event it seems to me the Court of Appeal in Armet dealt with the position taken by the learned Deputy Registrar in Kieronski on the basis that once the plaintiff pleads facts in his common law action which if proven constitute an 'injury' as that term is defined in the Act and pleads facts that demonstrate compensation is payable under the Act as a result of that 'injury' it is irrelevant that there has not been a determination of 'injury' and irrelevant that there has not been a determination that compensation is payable.[16] In other words on the facts as pleaded, if there is an injury and compensation is payable under the Act for that injury, then s 93K is immediately enlivened.
[16] Armet v CFC Consolidated Pty Ltd [2019] WASCA 165 [127] - [131].

Conclusion

In view of the defendant's inconsistent contentions in the appeal that the plaintiff has not suffered an injury as defined in the Act I consider it would be inappropriate to exercise my discretion to summarily dismiss the action. Further, in my view the claim for exemplary damages is not obviously untenable and in those circumstances it follows that I am not satisfied the action is frivolous or vexatious or that the defendant has a good defence on the merits to that aspect of the claim.
In respect of the application for an order the writ be struck out pursuant to RSC O 20 r 19, quite apart from the fact that rule does not empower the striking out of the writ but is limited to the striking out of the indorsement on a writ or a pleading, for the same reasons given for declining to dismiss the action I would not exercise my discretion to strike out the indorsement or statement of claim.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
MEB
Associate
4 MARCH 2021