The Commonwealth of Australia v TransAdelaide

[2001] NSWCA 52

Reported Decision: (2001) 21 NSWCCR 483

New South Wales

Court of Appeal

CITATION:	THE COMMONWEALTH OF AUSTRALIA v TRANSADELAIDE & ANOR [2001] NSWCA 52
FILE NUMBER(S):	CA 40093/01
HEARING DATE(S):	7 March 2001
JUDGMENT DATE:	7 March 2001
PARTIES :	THE COMMONWEALTH OF AUSTRALIA v TRANSADELAIDE & ANOR
JUDGMENT OF:	Mason P at 1; Priestley JA at 21; Heydon JA at 22

LOWER COURT JURISDICTION :	Dust Diseases Tribunal
LOWER COURT FILE NUMBER(S) :	DDT 326/00
LOWER COURT JUDICIAL OFFICER :	Armitage J

COUNSEL:	Appellant: C Hoeben SC 1st Respondent: J D Hislop QC/A J Grant 2nd Respondent: M Joseph SC/W Walsh
SOLICITORS:	Appellant: Church & Grace 1st Respondent: Moray & Agnew 2nd Respondent: Alex Stuart & Associates
CATCHWORDS:	Dust Diseases Tribunal claim - Crimmins Case - transfer of South Australia's non-metropolitan railways to Commonwealth - inchoate tortious claims passed - mesothelioma later diagnosed (ND)
DECISION:	Leave to appeal granted. Appeal dismissed

CA 40093/00

MASON P

PRIESTLEY JA

HEYDON JA

Wednesday 7 March 2001

THE COMMONWEALTH OF AUSTRALIA v

TRANSADELAIDE & ANOR

JUDGMENT

1    MASON P: In my view this is a proper case for the grant of leave and I would grant leave.

2    The second respondent, whom I shall refer to as the plaintiff, commenced proceedings in the Dust Diseases Tribunal in 2000. He joined the first respondent as the first defendant, (hereafter TransAdelaide), and subsequently the appellant as the second defendant (hereafter the Commonwealth). The plaintiff seeks damages for mesothelioma diagnosed in 1998 which he claims resulted from the negligence of his employer the South Australian Commissioner for Railways.

3 It is pleaded that he was employed between 1956 and 1964 as a fitter at Peterborough in South Australia. TransAdelaide is the ultimate statutory successor to the South Australian Railways Commissioner, tracing through the State Transport Authority established in 1974 (see South Australian Railways Commissioner’s Amendment Act 1975 (SA) s6). TransAdelaide is the body corporate in which the State Transport Authority was continued in existence (see Passenger Transport Act 1994 (SA), Sch 2). The Commonwealth is the statutory successor to the liabilities of the Australian National Railways Commission (see Australian National Railways Commission Sale Act 1997 (Cth), Sch 3).

4    On 21 May 1975 the Commonwealth and the State of South Australia entered into an Agreement whereby the Commonwealth would acquire South Australia’s non-metropolitan railways. Peterborough is a non-metropolitan area. The Agreement was subject to legislative endorsement. The Commonwealth’s acquisition was to be by its Australian National Railways Commission (ANRC), a body corporate established under the Australian Railways Act 1975 (Cth). The Agreement provided for the vesting of items such as land and rolling stock used exclusively for the purposes of non-metropolitan railways in the ANRC on 1 July 1975 (cl 5). Also to be transferred to the ANRC were the “current assets” as apportioned to non-metropolitan railways and services. ANRC was also to accept responsibility for the “current liabilities” so apportioned (see cl 5(1)(c)). The Agreement also provided for the transfer of staff, such transfer to be effected on a date after 1 July 1975 called the “declared date” (see Pt 3).

5 The detailed financial arrangements included provision for the Commonwealth to pay $10,000,000 before 1 July 1975 and other financial adjustments including the Commonwealth taking over various debts and liabilities associated with non-metropolitan railways (see cl19). The Parliament of South Australia approved and gave effect to the Agreement by the Railways (Transfer Agreement) Act 1975 (SA). The Commonwealth did so by the Railways Agreement (South Australia) Act 1975 (Cth). By each enactment the Agreement was approved. The acquisition and vesting of property provided for in the Agreement was consented to and other aspects of the Agreement were addressed. Each enactment dealt with the transfer of liabilities in essentially identical terms. The South Australian enactment stated, in s 7:

On and from the declared date the State and each State Authority is, by force of this section, freed and discharged from all liabilities and obligations incurred by it, and not discharged before that date, in connection with the administration, maintenance and operation of the non-metropolitan railways and of any services that are principally or mainly incidental or supplementary to, or are principally or mainly operated in association with, those railways to the extent to which the Commission becomes subject to those liabilities and obligations on and from that date.

6 The Commonwealth enactment stated in s 8:

The Commission shall on and after the declared date be subject to all liabilities and obligations incurred by South Australia or a State Authority before that date in connection with the administration, maintenance and operation of the non-metropolitan railways and of any services (including passenger and freight road services) that are principally or mainly incidental or supplementary to, or principally or mainly operated in association with, those railways, to the extent to which those liabilities and obligations are not discharged before that date.

7    The material parts of the South Australian enactment commenced on 30 October 1975 and the material parts of the Commonwealth enactment commenced on 10 November 1975. The declared date was 1 March 1978.

8    In the Dust Diseases Tribunal, TransAdelaide moved to have the proceedings dismissed as against it. So too did the Commonwealth. Issue was effectively joined between TransAdelaide and the Commonwealth as to which body is the relevant successor to the South Australian Railways Commissioner. No party suggests that the plaintiff has no-one to sue for his late-diagnosed mesothelioma, putatively stemming from the negligence of the South Australian Railways Commissioner between 1956 and 1964.

9    On 16 February 2001 Judge Armitage acceded to TransAdelaide’s motion, and he dismissed the Commonwealth’s motion. He referred to most of the legislative provisions that I have mentioned and he applied the reasoning in Crimmins v Stevedoring IndustryFinance Committee (1999) 200 CLR 1. His Honour rejected the Commonwealth’s submission that there was a material distinction between the present legislative scheme and the transfer provision addressed in Crimmins, which transferred to the Stevedoring Industry Finance Committee the obligation to:

discharge all the liabilities and obligations of the [Australian Stevedoring Industry Authority] that existed immediately before

a particular date. (The words quoted are from s 14(b) of the Stevedoring Industry Acts (Termination) Act 1977 (Cth) .)

10    I agree with his Honour’s conclusion and I agree generally with reasoning of Judge Armitage. I would add the following remarks.

11 Section 8 of the Railways Agreement South Australia Act 1975 (Cth) must be read in context. It is one of a bundle of sections designed to give effect to the Agreement. So read, it should be seen as part of a legislative scheme designed to ensure a complete, effective and final transfer of assets, liabilities and employees from the South Australian body to the Commonwealth body, as regards non-metropolitan railways. With employees it would have been inevitable that some might have been carrying the seeds of illnesses that would later manifest themselves in circumstances giving rise to claims of legal liability.

12 It is not suggested that s8 is confined to financial liabilities. The words “all liabilities and obligations” are in my view too broad to exclude tort. On this basis, accrued tortious claims would be transferred. Having regard to the purpose of the Agreement and the legislation giving effect to it, it seems consonant with that purpose that inchoate tortious liabilities stemming from acts occurring prior to the transfer should go also. Some of the reasoning in Crimmins supports such a textual and contextual construction of the provision (see in particular per Kirby J at [191] and per Callinan J [365]).

13 In the statutory context in which I have sought to place it, s8 has as its key provision of present relevance the subjection of the ANRC to:

… all liabilities and obligations incurred by South Australia or a State Authority...in connection with the administration, maintenance and operation of the non-metropolitan railways...to the extent to which those liabilities and obligations are not discharged before [the declared date].

14    With respect to one of the arguments of the Commonwealth today, I would indicate that I see the concluding portion of the words quoted as emphasising the breadth of the scope of liabilities transferred, and therefore tending to support the conclusions of the learned trial judge.

15    In his challenge to the reasoning of the trial judge, Senior Counsel for the Commonwealth placed particular reliance upon a distinguishing feature between the legislative scheme discussed in Crimmins and that confronting this Court. In Crimmins the Court was concerned with transitional federal enactments that addressed the issues involved in the dissolution of one body and the acquisition of its assets and employees by another. Some of the reasoning of the Justices of the High Court which saw them taking a broad interpretation of the words “liabilities and obligations” is based upon the injustice that would flow if a person against whom some tortious act had been committed were left without any remedy because the body whose employees committed that act had ceased to exist, with no successor body to take over the liabilities coming to fruition, or crystallising thereafter.

16 The way the argument in this Court was developed was to look at the South Australian legislation and the fact that the South Australian statutory corporation in existence at the declared date, namely the State Transport Authority, remained in existence after that date; and at a later date was continued in existence but with the new title TransAdelaide. This of course is to look at the South Australian side of the equation. It is also to ignore the inferences that perhaps one would draw from the fact that the Railways Transfer Agreement Act 1975 (SA) provided in s7, which I have already set out above, for in effect a statutory abrogation by the State and each state authority of undischarged liabilities and obligations. Section 7 is obviously to be read as part of the South Australian side of the transfer and as the legislation passed in contemplation of s 8 of the Railways Agreement South Australia Act 1975 (Cth).

17    I think another difficulty with this part of the Commonwealth’s argument is that, as far as the federal legislation is concerned, there was no enactment that would ensure that some South Australian body would remain in existence as regards non-metropolitan railways. Indeed, the whole thrust of the scheme embodied in the Agreement and the two lots of complementary legislation was that South Australia would exit the scene as regards non-metropolitan railways.

18    The second argument advanced particularly in this Court by way of an attempt to distinguish the broad thrust of the reasoning in Crimmins, was to draw attention to the fact that the Crimmins legislation used the words “liabilities and obligations...that existed” whereas the legislation with which these proceedings are concerned speaks of “liabilities and obligations incurred”. Some reference was made to a discussion of the word “incurred” in a taxation context in Australia and New Zealand BankingGroup Limited v Federal Commissioner of Taxation (1994) 119 ALR 727 at 739-40. Senior Counsel readily accepted that the context was different, but he maintained his submission that there is some essential difference between “existed” and “incurred” in the two legislative contexts. I cannot see it. I think that the reasoning in Crimmins remains persuasive and applicable by analogy to the nearly identical context of the railways legislation we are concerned with and the Stevedoring Industry legislation with which Crimmins was concerned.

19    The third particular point argued was that the commercial context between the Crimmins situation and the present situation was different. In a sense it was. But it is very hard to see in what way that argument advances the appellant’s case in the present situation. If anything, I see the commercial aspect of the present legislative scheme as one where the financial line was ruled off, money was paid, the staff went over; and it seems to me more consonant with that approach that the type of tortious liabilities with which this case is concerned should pass to the purchaser rather than remain with the vendor.

20    For those reasons I propose that leave be granted, that the appeal be dismissed and that the appellant pay the costs of the respondents.

21    PRIESTLEY JA: I agree.

22    HEYDON JA: I agree.

23    MASON P: That is the Order of the Court.

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