Telstra Corporation Limited v Schlenert

[1994] HCATrans 70

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
              Sydney        No S52 of 1994

B e t w e e n -

TELSTRA CORPORATION LIMITED

Applicant

and

JOHN ERNEST SCHLENERT

Respondent

Application for special leave
  to appeal

MASON CJ
DEANE J
TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 OCTOBER 1994, AT 10.01 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR G.M. WATSON, for the applicant.  (instructed by Sparke Helmore)

MR D.M.J. BENNETT, QC:   If the Court pleases, I appear with my learned friend, MS A.J. KATZMAN, for the respondent.  (instructed by McClellands)

MASON CJ:   Yes, Mr Jackson.

MR JACKSON:   Your Honours, may I move immediately to the question whether the decision of the Full Court of the Federal Court is sufficiently attended by doubt.

The issue arises because the Safety Rehabilitation and Compensation Act, 1988, gives an entitlement to payment of compensation a lump sum for what is described as “non-economical loss”, and the equivalent enactment in force at the time of the injury suffered by the respondent made no such provision. 

The ultimate question, if I can take Your Honours to that immediately, is then the meaning of a phrase which appears in section 124 of the later Act, subsections (1A) and (2)(c), the phrase being:

that injury, loss or damage -

where it there appears.  Your Honours will see that section 124(1A) says that:

a person is entitled to compensation under this Act in respect of an injury, loss or damage suffered before the commencing day if compensation was, or would have been, payable to the person in respect of that injury, loss or damage under the 1912 Act, the 1930 Act or the 1971 Act.

Then, it is put, really, in another way in subsection (2), but Your Honours will seen the same phrase repeated.

The loss which is germane for present purposes is non-economic loss.  That is a term which is defined by the 1988 Act in section 4(1) and Your Honours will see it is expressed to be:

in relation to an employee who has suffered an injury resulting in a permanent impairment, means loss or damage of a non-economic kind suffered by the employee -

et cetera.

TOOHEY J:   Is that loss compensible only by a lump sum?

MR JACKSON:   Yes, Your Honour.  Your Honours will note in passing, if I could invite Your Honours to stay with the definition for just a moment, that the usage in the definition of the term, “means loss or damage”, is inconsistent, in our submission, with the submission advanced in our learned friend’s written submissions in paragraphs 3.1 and following, to the effect that the term, “loss”, as used in the Act means loss of property, the contention by the respondent in that regard being founded on the non-exhaustive definition of “loss” in section 4(1).

Three other terms may conveniently be referred to while looking at the definition section.  They are the terms, “injury” and “impairment”, immediately above it, and also, the term, “permanent”.  There is nothing startling about the definitions, but Your Honours will see that “injury” is widely defined.

From there, one goes to section 27, and section 27 is the provision which, by subsection (1), provides for there to be an entitlement to a lump sum by way of additional compensation in respect of the injury for non‑economic loss.  Your Honours will see the term, “non‑economic loss” is, of course, the provision to which I referred earlier.  Could I just say one other thing about section 27(1), and it is this:  as its opening words make clear, for there to be an entitlement under section 27 there must be compensation  payable for permanent impairment under section 24.  So, to put it shortly, if nothing is payable under section 24, nothing is payable under section 27.

Section 24, if I could take Your Honours to that now, provides that:

Where an injury to an employee results in a permanent impairment, Comcare is liable to pay compensation to the employee in respect of the injury.

Those are the central provisions.  Could I return to section 124.  It is clear, Your Honours, from the terms of subsection (1) that upon the coming into force of the 1988 Act, it, and not the 1971 Act, applied in respect of an injury suffered before the 1988 Act came into force.  The opening words of section 124(1) however, make it apparent that the operation of that provision is subject to this part.  In that regard, subsections (1A) and, relevantly, 124(2)(c) state, in our submission, the broad proposition that compensation is not payable in respect of particular loss or damage unless it would have been payable in respect of that loss or damage under the Act in force at the relevant time.  Your Honours will see the reference to the words, that “injury, loss or damage”, for example, in (1A), and also the fact that in the definition to which I referred earlier, “non-economic loss” is described as a species of loss or damage.  That that is the better interpretation of the provisions, is supported, in our submission, by the approach taken in the succeeding provisions of section 124. 

Could I go, in that regard, to section 124(3).  The succeeding provisions deal with numbers of dollars, and, perhaps, whilst in our submission they support what we are saying, I will not trouble Your Honours with the detail of them.  But subsection (3), Your Honours will see, provides that:

A person is not entitled to compensation under section 24 -

and Your Honours will recall, if there is no entitlement under 24, there is no entitlement to the lump sum under 27 -

in respect of a permanent impairment.....being an impairment.....that occurred before the commencing date, if -

then one of two sets of circumstances apply.  The first set is that in paragraph (a), namely that a lump sum had been paid under the 1971 Act.  The second circumstance is that dealt with in (b) and, relevantly, (b)(iii), namely, if a lump sum was not payable under the earlier Act.  So that there is no entitlement under 24 and thus under 27 if one had already received the lump sum under the earlier Act or was not entitled to it under the earlier Act.

If I could pause at the point, Your Honours will see at page 57 of the record at about point 6 that one of the majority, Mr Justice Einfeld, said:

it would be anomalous and unjust in the extreme if the equally new “additional compensation” for non‑economic loss -

that is the new section 27 compensation -

were to be withheld from earlier injured employees.

But, Your Honours, that is exactly what the Act does do by section 124(3)(a).  And, in respect of “earlier injured employees”, if I could use His Honour’s phrase, who suffered an injury which did attract lump sum compensation under the 1971 Act but had been paid that lump sum before the 1988 Act came into force, section 124(3)(a) has the effect they are not entitled to compensation under section 24 ergo, there is no entitlement under section 27. 

There are two other significant, relevant classes in relation to whom an exactly similar situation arises.  Firstly, there are those who suffered total and permanent impairment before the 1988 Act came into force.  They were not entitled to a lump sum under the 1971 Act because of a particular provision of that Act, section 39(14).  Instead, their entitlement was to periodical payments.  Section 39(14), Your Honours will see at page 35 of at least the pamphlet copy I have of the 1971 Act.

In relation to that class of persons, if it were not for section 124(3)(b)(iii) of the 1988 Act, they would be entitled, under section 24 - Your Honours, I am sorry, may I say that again - under section 39(14) of the 1971 Act, they did not have an entitlement to a lump sum because they got periodical payments.  If it were not for that, they would have been entitled to a lump sum but is that they do obtain anything pursuant to section 24 of the 1988 Act.  Because there is no entitlement under section 24 of the 1988 Act there is no entitlement under section 27.  So that is the next class of persons who were entitled to compensation under the prior Act, but who do not get a lump sum.

The next and final category is that covered by section 124(3)(b)(iii) again, and that is in respect of persons who had a permanent impairment under the prior Act, but not a total and permanent impairment but, an impairment of such a kind that it would not give rise to an entitlement to a lump sum under the 1971 Act.

If I could pause to deal with that for just a moment:  under the 1988 Act, a person is entitled to compensation under section 24 if the injury results in a permanent impairment.  Your Honours, I have been to the ambit of the definitions before.  What one would be entitled to get compensation for under the 1988 Act would include such common injuries in the work environment as injuries to the neck, injuries to the brain or, for example, injuries to other internal organs. 

The 1971 Act had adopted a rather different approach.  In sections 39(3) and 39(4) it had provided for a table of losses of particular parts of the body - fingers, hands, limbs and so on - or for loss of efficient use of those parts of the body.  That is in section 39(12).  It gave lump sums in respect of those injuries, that was dealt with by 39(3), and also sections 40, 41 and 42.  But in respect of injuries such as those I have indicated before - to the brain, to internal organs and so on, or to the back - it did not give lump sums in respect to them.  Because a pre‑condition of the operation of section 27 of the 1988 Act is that the case is one where compensation is payable under section 24 and because the terms of section 124(3) make it clear that compensation is not payable under 24 in respect of an injury which would not have resulted in lump sum compensation under the 1971 Act, no compensation is payable in such cases under section 27. 

What I wanted to say in relation to that is that it is just not correct to say, as our learned friend’s submissions do in paragraph 3.7, that if our argument was correct, section 124(3)(b) would not have been necessary.  Section 124(3)(b), for example, performs a quite distinct function. 

TOOHEY J:   Is it a section, Mr Jackson, or a subsection that is essential to your argument?

MR JACKSON:   No, Your Honour, no, it is not.

TOOHEY J:   Is section 124(1A) essential to your argument?

MR JACKSON:   Could I just say this:  Your Honour is right but it perhaps does not matter whether it is (1A) or (2).

TOOHEY J:   I asked a question, not made a statement.

MR JACKSON:   I am sorry, Your Honour, I appreciate that.  I was endeavouring to answer it by saying this:  what Your Honour put to me, if I can put it that way, in relation to (1A), may well be correct but all I was going to say was this, that whilst (1A) and (2) are differently framed, they really seem to be something of a belt and braces for the Act, because they seem to do much the same thing, and it is difficult to see, relevantly, any difference between the operation of the two provisions.  The critical words in both are the words which are “that injury, loss or damage.”

TOOHEY J:   Why are the words, “loss or damage” used?  I mean, they are not used in section 24 which speaks only of an injury.  I understand that that is a liability imposing provision, but would it make any difference to the argument either way if section 124 spoke only of injury and entitlement to compensation in respect of an injury?

MR JACKSON:   It would, Your Honour, yes.  In this regard:  that if one did not have the words, “that injury, loss or damage”, it would be much easier to adopt the construction that was adopted by Mr Justice Sheppard against us in the Full Court of the Federal Court.  By that I mean what one would do would be to say, under section 24 there is a liability to pay compensation in respect of the injury.  From there, one would go to section 27 and say where an injury results in a permanent impairment and compensation is payable in respect of the injury, the commission is liable to pay additional compensation for non-economic loss.  Non‑economic loss, as I said before, is a defined term which indicates its loss and damage. 

From there, one goes to see the operation of section 124.  Section 124(1) would really just treat a pre-1988 injury as it had happened after 1988, to put it shortly and, perhaps, inexactly.  But, subsection (1A) and (2) are the provisions that draw the distinction between injury simpliciter and the consequences of the injury in relation to compensation.

Could I also say just this, that it is not correct, in our submission, to say that the Act makes section 27 compensation applicable in order to compensate, as it were, for the supposed effect of sections 44 and 45 in relation to the abolition of common law damages.  That section, 44, not having survived the Court’s decision in Georgiadis.  The provisions of section 124(3) make it clear that there are cases in which there would not be recovery under section 27 in any event.

Could I just say, finally, in relation to the ambit of the effect of the case.  It affects potentially all cases where there was an entitlement to a lump sum under the 1971 Act but where that lump sum had not been paid, perhaps even quantified, at the time when the 1988 Act came into force.  Your Honours, as I suppose a subset of that, it gives rise to the possibility that there may be very significant claims by persons who have not in the past attempted to make a claim in respect of the much lesser sum they would have obtained under the earlier Act.

MASON CJ:   Mr Jackson, we have frequently, if not regularly, refused applications for special leave to appeal in relation to questions of construction of provisions in Workers’ Compensation statutes and, indeed, as recently as Wednesday of this week we refused an application in Canberra that related to the construction of subsection (3) of this very section on the ground that it is a mere matter of statutory construction not involving any question of general principle.

MR JACKSON:   Your Honour, could I say in relation to that, I am conscious of what the Court did in that

case.  The particular point does not seem especially related to the issue raised in the present case, but may I say - - -

MASON CJ:   No, it was more of a transitional type provision.

MR JACKSON:   Yes.  Could I say in relation to that,  there will always be cases and perhaps the majority of cases in which the Court is dealing with questions of statutory construction but, inevitably, there will be, in our submission, cases that are out of the ordinary.  This case is out of the ordinary, in our submission, for a number of reasons.  One is the general application of it.  Another is the fact that the reasons of the majority in the Full Court are reasons which, in our submission, give two quite separate approaches and do not provide, if I may say so with respect, a great deal of guidance for the courts below in dealing with the application of the matter.

Your Honours, the last thing is that it is a case where one does not really know how many claims there are likely to be and, Your Honours, whilst I am conscious of the fact the Court does not take into account the money involved, at the same time, many cases are likely to be involved which could be disposed of relatively quickly.  Your Honours, those are our submissions.

MASON CJ:   Thank you, Mr Jackson.  The Court need not trouble you, Mr Bennett.

The issue sought to be raised in the proposed appeal relates to the interpretation of the words “that injury, loss or damage” in section 124 of the Safety Rehabilitation and Compensation Act 1988 of the Commonwealth.  That question is one of statutory construction turning on the meaning of the particular words and their context in a complex statute.  The answer to the question involves no matter of general principle.  As such, the case is not appropriate for the grant of special leave to appeal.  The application is therefore refused.

MR BENNETT:   I ask for costs, if Your Honour pleases.

MASON CJ:   You do not oppose that, Mr Jackson?

MR JACKSON:   There is nothing I can say about that, Your Honour.

MASON CJ:   The application is refused with costs.

AT 10.24 AM THE MATTER WAS ADJOURNED SINE DIE