Thiess Watkins White (Constructions) v Gratelace Pty Ltd

[1996] HCATrans 124

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S155 of 1995

B e t w e e n -

THIESS WATKINS WHITE (CONSTRUCTIONS) PTY LIMITED

Applicant

and

GRATELACE PTY LIMITED t/as GRATELACE BRICKLAYING COMPANY

First Respondent

WILLIAM CHRISTOPHER HOLLIER

Second Respondent

CLOVER BRICKLAYING PTY LIMITED

Third Respondent

Application for special leave to appeal

BRENNAN CJ
DAWSON J
TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON TUESDAY, 16 APRIL 1996, AT 11.56 AM

Copyright in the High Court of Australia

_________________________

MR D.J. HIGGS, SC:   May it please the Court, I appear with my learned friend, MR N. PERRAM, for the applicant.  (instructed by Hickson Lakeman & Holcombe)

MR P.M. HALL, QC:   May it please the Court, I appear with my learned friend, MR C.J. WYNYARD, for the first respondent.  (instructed by Gadens Rideway)

MR G.J. McCREADY:   May it please the Court, I appear for the second respondent.  (instructed by Taylor & Scott)

MR G.F. LITTLE:   May it please the Court, I appear for the third respondent.  (instructed by A.O. Ellison & Co)

BRENNAN CJ:   Yes, Mr Higgs.

MR HIGGS:   Your Honours, this is an application with respect to the interpretation of section 15 of the Workers Compensation Act to be found at page 41 of the application book.  My short point is this, that, in our submission, the interpretation to which the Court of Appeal came to flies in the face of the only authority beforehand that provided guidance to the insurance industry of over 60 years’ standing in the decision of Mr Justice Dixon, as he then was, in Smith v Mann.

In this case the worker contracted dermatitis.  It was a disease of gradual onset and therefore it fell within the ambit of section 15.  Whilst he was employed by the respondent, Gratelace, in 1985 the dermatitis manifested itself and he was paid compensation for a short period of time.  There are findings that I will take your Honours to later on that we submit were binding on the court and found by the court to determine that the worker was permanently incapacitated from working within the cement industry because of the allergy that he had, the allergy being to cement, that being the industry in which he was engaged.

He then later was employed by Thiess, some years later.  He worked for a period of time.  The dermatitis manifested itself again.  By reference to the findings of the court below, it was a temporary aggravation.  Thiess paid workers compensation for a period from November 1986 until about October 1987.  The findings of the court below were that the aggravation was temporary and had well and truly spent over that period from November 1986 to October 1987.  The purpose of section 15 and its predecessor, section 7(4), was to relieve the worker of the burden of having to prove causation in relation to a disease of gradual onset with a particular employment but, in the event of an incapacity occurring, the way in which the legislation came to the assistance of the worker was by reference to section 15(1)(a)(i) which was to deem that the injury or the disease occurred at the time of incapacity.  Section 15(1)(b) then proceeded to provide that the compensation in effect was to be paid by the then or last employer.

Our submission is that in determining who the last employer is or was, it is necessary to look at the deeming provision in section 15(1)(a)(i), that you look at the employer who is or was the last employer of the worker at the time of the deemed incapacity.  Indeed, with respect, we would submit that that was the effect of the decision Mr Justice Dixon, as he then was, in Smith v Mann ‑ ‑ ‑

TOOHEY J:   It is not the incapacity that is deemed, is it?  You must look to actual ‑ ‑ ‑

MR HIGGS:   No, that is quite true.

TOOHEY J:   It is the injury which is deemed.

MR HIGGS:   I do apologise, your Honour is quite correct.  The injury occurs at the time of the deemed - the injury is deemed to have occurred at the time of the incapacity.

TOOHEY J:   Time of the actual incapacity, yes.

MR HIGGS:   At page 46 of the application book there is the part of the judgment in Smith v Mann that we rely upon, starting at line 5.

TOOHEY J:   Is the section that was under consideration there materially different?

MR HIGGS:   No, and throughout the judgment of Mr Justice Sheller and as between the parties, it was always conceded that in effect the old section was in substance the same as the new section.  Indeed, the judge at first instance determined liability by reference to the old section, sections 7(4) and 7(5) of the 1926 Act.  Even though their Honours found that that was the incorrect section, the reference to the old section made no difference.  For that reason that did not determine the appeal in any way.

BRENNAN CJ:   What is the incapacity in this case?

MR HIGGS:   The incapacity in this case was the incapacity referred to, we say, by his Honour Mr Justice Sheller at page 42 at about line 14:

The Commissioner found that the worker suffered from a dermatological condition with which he had been afflicted since January 1985 as a result of lengthy exposure to an allergen known as Dycromate which is found in cement.  As a result he had effectively been forced to retire from his life time vocation of bricklaying.

DAWSON J:   But he did not retire; that is the point.  It becomes a question of fact.  He went back to work.

MR HIGGS:   He did go back to work.

DAWSON J:   And he performed the work.

MR HIGGS:    But he performed it in circumstances where he was always - it comes down to a question of degree as to whether or not he was sensitised to an extent as to effectively force him to retire from the industry.  The fact that he goes back and tries to work, in the event of the sensitisation being to such a degree that the manifestation of the dermatitis is inevitable, we would submit is an ongoing incapacity.

BRENNAN CJ:   But it is not a case of attempting to work.  He worked.

MR HIGGS:   Well, he did work but he worked and ‑ ‑ ‑

BRENNAN CJ:   Then, if he worked, he was not then incapacitated.

MR HIGGS:   But he was partially incapacitated at the time.

BRENNAN CJ:   True, but then he becomes totally incapacitated.

MR HIGGS:   Yes.  Your Honour, we do not cavil with the proposition that we were liable for the extra incapacity that occurred to the worker whilst he was in our employ.

BRENNAN CJ:   Why do you say “extra” having regard to the section?

MR HIGGS:   For the reason that, when you go to the section and the judgment of his Honour Mr Justice Dixon, in fixing - if I could just take your Honours quickly to page 46.  The specific passage that we rely on starts at line 5:

The expression in the first paragraph ‘in whose employment the worker is or who last employed the worker’ implies a reference to a point of time or event, and it is apparent that the occurrence of incapacity is the event or time intended.  The employer at the time of, or last before, the incapacity is made primarily liable.”

DAWSON J:   That is incontrovertible, but the question arises:  when is the time of the incapacity?

MR HIGGS:   Your Honour, just answering that in two steps, it was not incontrovertible, according to Mr Justice Sheller because what plainly follows from that, we would submit, is that, in order to identify the last employer, you have to have regard to a temporal connection, the temporal connection being the time of the incapacity referred to in section 15(1)(a)(i), and that you just cannot disregard that.  It is not a deeming provision which obscures the meaning of the description of who is the last employer.  But that is exactly what Mr Justice Sheller did.

DAWSON J:   What he says is there was a sequence of incapacities, if I may put it that way.  That appears from page 48.  In that situation it is the last incapacity, the one that finally incapacitates the person, that is the relevant one.  But one can approach it that way or approach it another way saying, “Look, it wasn’t really an incapacity until such stage as it was accepted by everyone that the man couldn’t go back to work”.

MR HIGGS:   Your Honour, firstly at the bottom of page 47 of the application book his Honour held that in order to determine who the last employer was, you have no regard to the deeming provision.  I appreciate that that is not a direct answer to your Honour but it is the first in two steps, if I might do it that way.  Just picking up the fourth‑last line:

As Dixon J pointed out -

referring to Smith v Mann -

that implies a reference to a point of time or event and the occurrence of incapacity is the event or time intended.  It is unnecessary to turn to the deeming provision which in this case obscures rather than enlightens.

In answer to your Honour Justice Dawson’s point, at page 48 his Honour determines the question as to who is the last employer regardless as to whether or not the aggravation or new disease or injury that occurred during the course of the employment with Thiess, regardless as to whether or not it was temporary or permanent.  His Honour says at the top of the page at line 13:

That incapacity could have been permanent.  The worker could have called in aid s47 of the 1987 Act, which provides that a worker who, as the result of injury, is unable without substantial risk of further injury to engage in employment of a certain kind because of the nature of that employment shall be deemed to be incapacitated -

He refers to whether or not that was made out.  He refers to the cases of Green v Wilmers and the like and then goes on:

But however that may be -

and this is the crux of our complaint, with respect.  His Honour then proceeded to say regardless as to whether the injury during the course of Thiess’s employment was permanent or not, we have no regard to the deeming provision in order to identify who the last employer is and, even if it is a temporary aggravation or a disease of temporary duration, because we do not have any regard to the deeming provision, we simply fix primary liability for workers compensation upon the last employer.

DAWSON J:   All his Honour is saying is that there are a series of incapacities.  It is the final incapacity which you take into account for the application of the section because, ex hypothesi, the earlier incapacities were only temporary.

MR HIGGS:   Your Honour, there are two answers to that.  The judgment of Mr Justice Manser at page 23 of the application book at line 9 was to this effect:

It is clear that the employer Thiess is liable to the worker for compensation on the basis of the worker’s total incapacity for some period after the worker ceased his employment with them in November 1986 and it would seem, on the evidence, that compensation has been paid for the appropriate period of that total incapacity.

That finding was never challenged.

BRENNAN CJ:   If it was not ever challenged, let us see how it fits in with section 15.  It must be because Thiess is then to be regarded as the last employer for the purposes of section 15(1)(b), is that right?

MR HIGGS:   That is so, your Honour.

BRENNAN CJ:   So, if we have Thiess as the last employer for the purposes of that section, it must be that at the time when the worker was employed by Thiess, the injury was deemed to have happened.

MR HIGGS:   But, your Honour, that requires an identification of the injury that occurred during the course of Thiess’s employment.

BRENNAN CJ:   Not at all.  It follows ineluctably from the proposition that you were the last employer.  You were the last employer at the time when the events deemed to have occurred under (a) occurred, otherwise (b) would have no application.

MR HIGGS:   No, your Honour, with respect.  We answer that in two ways.  In our submission, the identification of the last employer is by importing or having regard to the deeming provision in section 15(1)(a)(i).  In addition to that, we submit that the compensation that we are required to pay is only in relation to the injury which occurred during the course of our employment.  We are not liable to pay compensation for an injury which has occurred beforehand or a disease or an incapacity that has occurred beforehand.

BRENNAN CJ:   But the injury is deemed to have happened at the time of the incapacity.  That incapacity occurred during employment with Thiess.

MR HIGGS:   But, your Honour, in the event of there being an incapacity which even, according to Mr Justice Sheller’s judgment, was continuing, that is whilst employed with Gratelace.  Say, for example ‑ ‑ ‑

BRENNAN CJ:   If that were so, then Thiess would not be the last employer.

MR HIGGS:   And that is our point, your Honour.

DAWSON J:   But it paid compensation on the basis it was the last.

MR HIGGS:   But only in relation to the extent to which the incapacity, over and above that which existed immediately before the worker’s employment with us ‑ ‑ ‑

DAWSON J:   But you are creating the very difficulties that the section was designed to eliminate.  In other words, the injury will occur at various stages along the progressive employment of the worker.  You could pick any one of those.....but what the legislation does is to pick the last point, the last employer, and say you pay, and you claim contribution from the others.

MR HIGGS:   But, your Honour, say, for example, the situation arose that the worker is employed by A.  He manifests the signs of dermatitis for the first time and, as his Honour Mr Justice Sheller found, he was effectively forced to retire from the industry.  Five years later he goes to employer B, he works there for two days, the inevitable occurs - that which in reality forced him from the industry - that is, the inevitable consequences of the dermatitis manifesting itself flares up again and he leaves the employment.  Prior to the employment with B there is two years arrears of workers compensation.  There can only be one last employer and, as we perceive the judgment of the Court of Appeal, last employer changes as time goes by without reference to the deeming provision in section 15(1)(a)(i).

If there are arrears of workers compensation, the worker is deprived of the opportunity of claiming those arrears of workers compensation because the goalpost has shifted, there is a new last employer.  The original employer is no longer the last employer.  Yet, by reference to section 15(1)(b), we cannot be held liable for the arrears in workers compensation.

DAWSON J:   Simply because he was not regarded as being incapacitated until he ceased to pursue that avenue of employment and did so because he could not do it because of his dermatitis.

MR HIGGS:   Your Honour, in our submission, the findings of his Honour Mr Justice Sheller, as supported by the findings of the commissioner at page 5 of the application book, were that from the time this condition manifested itself, he was effectively forced to retire and, once that occurred ‑ ‑ ‑

DAWSON J:   But he was not effectively forced to retire.  Effectively he went on.

MR HIGGS:   But, your Honour, he did not effectively do it because he ‑ ‑ ‑

DAWSON J:   No, but he did for a certain length of time.  It was on the basis that he did that that your client paid compensation to him.  There must come a point of time, I suppose, where one decides that it is impossible to go on in these circumstances, and that is when the incapacity occurs.  That happened after he had been employed by your client.

MR HIGGS:   But it was no different - when the condition had settled - the short point is - I do not want to labour it but ‑ ‑ ‑

DAWSON J:   He had dermatitis and it was a very disabling condition.  The disablement, the final disablement, came when he was with your client.

MR HIGGS:   But, your Honour, the final disablement was no different, apart from the temporary flare‑up, whilst he was in our employment.  Your Honour might not agree with the point, but that is the point.  I see the light, I will sit down.

BRENNAN CJ:   Thank you, Mr Higgs.  The Court need not trouble other counsel.

The decision of the Court of Appeal is not attended with sufficient doubt to justify a grant of special leave.  Accordingly, special leave will be refused.

MR HALL:   I ask for an order for costs.

MR McCREADY:   Likewise, if it please the Court.

MR LITTLE:   As do I, your Honour.

BRENNAN CJ:   Do you have anything to say, Mr Higgs?

MR HIGGS:   I have no submission to make in relation to the application pressed by Gratelace.  In relation to the other two parties, the submissions that we made did not affect their entitlement at all in relation to the worker.  We were not arguing that he was not entitled to workers compensation.  It was simply an argument in effect between Gratelace and Thiess.

BRENNAN CJ:   Is it right to say that the other parties were joined as respondents to the application?

MR HIGGS:   They were ‑ ‑ ‑

BRENNAN CJ:   By your client.

MR HIGGS:   Yes, because they are parties, but it did not affect their rights; it just simply affected whether or not they were going to - and in those circumstances ‑ ‑ ‑

BRENNAN CJ:   I think once the parties have been joined, the order for costs necessarily follows.  Accordingly, special leave will be refused with costs in favour of each of the respondents.

AT 12.17 PM THE MATTER WAS CONCLUDED