Victorian WorkCover Authority v BSA Limited
[2017] VSC 224
•4 May 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2016 02086
| VICTORIAN WORKCOVER AUTHORITY | Plaintiff |
| v | |
| BSA LIMITED and OTHERS (according to the Schedule) | Defendant |
---
JUDGE: | GARDE J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 6 April 2017 |
DATE OF JUDGMENT: | 4 May 2017 |
CASE MAY BE CITED AS: | Victorian WorkCover Authority v BSA Limited & Ors |
MEDIUM NEUTRAL CITATION: | [2017] VSC 224 |
---
WORKCOVER – Employer – Worker – Deemed Worker – Right of subrogation of employer’s rights by Victorian WorkCover Authority – Claimed error on the face of the record – Employer and worker – Relevant principles of construction – Workplace Injury Rehabilitation and Compensation Act2013 (Vic) s 3 definitions of ‘employer’ and ‘worker’, ss 10, 12, 39(1), 69, 71(1), 71(4), 73(1), Part 3 Div 4, s 435, Part 10, Sch 1 Pt 1 cl 9.
JUDICIAL REVIEW AND APPEALS – Jurisdiction of Magistrates’ Court – Preliminary question – Discretion – Fragmentation of hearing in an inferior court – Magistrates’ Court Act 1989 (Vic) s 109, Administrative Law Act1978 (Vic) s 10, Supreme Court (General Civil Procedure) Rules2015 (Vic); Magistrates’ Court General Civil Procedure Rules2010 (Vic) r 47.04–47.05.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr S A O’Meara QC with Mr S E Gladman of Counsel | Minter Ellison |
| For the First Defendant | Mr N T Robinson QC with Ms C M Harris of Counsel | Aitken Partners |
| For the Second Defendant | Mr A J Saunders of Counsel |
HIS HONOUR:
Introduction
The Victorian WorkCover Authority (‘the Authority’) seeks prerogative and declaratory relief relating to a ruling by a Magistrate to hear evidence as to whether the right of BSA Limited (‘BSA’) to defend a proceeding in the Magistrates’ Court of Victoria is subrogated to the Authority.
Background
Alen Nikolovski (‘the claimant’) claims compensation for a back injury said to be sustained when installing a Foxtel box at a residence in Brighton East on 27 October 2014 (‘the incident’).
Following the incident, the claimant made two claims for compensation for weekly payments, medical and other expenses. The first claim was made on 18 November 2014 against Alen Nikolovski Pty Ltd, a company registered by the claimant three months before the incident. This claim was rejected by QBE Workers Compensation (Vic) Ltd (‘QBE’), acting as agent for the Authority, on the ground that the claimant was not a worker under the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic)[1] (‘the Act’). According to QBE, the claimant was self-employed and undertook all of his work for BSA. His income was wholly derived from BSA.
[1]Reprint no 1, as at 1 July 2014
The second claim was made on 22 December 2014 against BSA. This claim was rejected by Allianz Australia Workers’ Compensation (Victoria) Ltd (‘Allianz’), acting as agent for the Authority. Allianz denied that the claimant’s employment had contributed to any injury sustained by him, but did not deny that the claimant was a worker of BSA.
Following an unsuccessful conciliation, the claimant brought a proceeding in the Magistrates’ Court against BSA to obtain compensation for the claimed injury (‘the proceeding’).
BSA contends that it was not the employer of the claimant at the time of the incident. It says that the Magistrate was correct when he decided to proceed to hear evidence as to whether the claimant was a worker of BSA.
The proceeding
The claimant’s statement of claim filed in the proceeding alleges that he was employed by BSA as an installer of Foxtel cable and units. The notice of defence filed by the solicitors for the Authority in the name of BSA admits that the claimant was ‘engaged’ by BSA as an installer of Foxtel cable and units on the date of the incident.
Both the statement of claim and the notice of defence suffer from deficiencies. The statement of claim does not make clear whether common law employment or deemed employment under sch 1 cl 9 of the Act is relied on and gives no particulars. The use of the word ‘engaged’ in the notice of defence is confusing, as the word is ambiguous and does not make it clear whether employment of the claimant by BSA was admitted.
Subsequently, the solicitors for BSA disputed the Authority’s right to act in the name of BSA. They said that BSA did not at any time employ the claimant, and that the claimant was not a deemed worker under sch 1 cl 9. They also said that the Authority had no subrogated right to conduct or defend the proceeding in the name of BSA. They filed a notice of change of solicitor and a summons seeking to have the Authority’s solicitors deliver up files and documents in the proceeding held by them for BSA. In turn, the Authority’s solicitors issued a summons in the proceeding seeking to have the notice of change of solicitor treated as ineffective.
The Magistrate heard the applications made by summons over three separate days. All parties appeared by counsel. The Authority submitted that it was entitled to defend the proceeding in the name of BSA under s 71(4) of the Act. BSA submitted that no right of subrogation arose under s 71(4) arose because the claimant was not a worker as defined in the Act.
The Magistrate’s ruling in the proceeding
The Magistrate ruled that he could only decide the subrogation issue if he could satisfy himself as to whether the claimant was a worker employed by BSA.[2] He rejected the Authority’s contention that the issue of subrogation involved only an analysis of the Act. He said it was necessary to hear evidence from the claimant and he adjourned the proceeding to permit this to be done.[3]
[2]Transcript of proceedings, Alen Nikolovski v BSA Limited (Magistrates’ Court of Victoria, Magistrate O’Brien, 14 April 2016) 61, 27–31 (‘Transcript’).
[3]Ibid 63, 17–26.
The Authority then issued an originating motion in this Court under O 56 of the Supreme Court (General Civil Procedure) Rules2015 (Vic) challenging the Magistrate’s ruling and claiming that there was error on the face of the record.
Relevant definitions
Section 3 is the definitions section of the Act, and defines the words ‘employer’ and ‘worker’:
employer includes—
(a) a person—
(i) for whom a worker works; or
(ii) with whom a worker agrees to perform work—
at the person’s direction, instruction or request, whether under a contract of employment (whether express, implied, oral or in writing) or otherwise; and
(b)a person who is deemed to be an employer under this Act; and
(c)if the services of a worker are temporarily lent or let on hire to another person by, or with the consent of, the person with whom the worker has entered into a contract of employment or apprenticeship or otherwise, the last mentioned person, while the worker is working for that other person; and
(d) the legal personal representative of an employer who is dead;
worker means an individual—
(a) who—
(i) performs work for an employer; or
(ii) agrees with an employer to perform work—
at the employer’s direction, instruction or request, whether under a contract of employment (whether express, implied, oral or in writing) or otherwise; or
(b) who is deemed to be a worker under this Act;
A person is ‘deemed’ to be a worker of an employer in the various circumstances set out in sch 1 pt 1 of the Act. Clause 9 provides:
(1) This clause applies if—
(a)an entity (the principal), in the course of, and for the purposes of, a trade or business carried on by the entity, enters into a contractual arrangement with another entity (the contractor) for the provision by the contractor of services (not being transport services within the meaning of clause 8) to the principal for reward in respect of a relevant period; and
(b)the provision of the services by the contractor under the contractual arrangement is not ancillary to the provision of materials or equipment by the contractor to the principal under the contractual arrangement; and
(c)at least 80 percent of those services are, or are to be, pursuant to the contractual arrangement, provided by the same individual (the individual) being—
(i)the contractor; or
(ii)if the contractor is a partnership, an individual member of the partnership; or
(iii)if the contractor is a body corporate— a member, director, shareholder or employee of the body corporate; or
(iv) if the contractor is the trustee of a trust— a person who may benefit under that trust or is an employee of the trustee; and
(d)the gross income of the contractor that is, or is to be, derived from the provision of the services pursuant to the contractual arrangement is, or is to be, at least 80 per cent of the total gross income of the contractor earned from services of the same class provided by or on behalf of the contractor in the relevant period.
(2)This clause does not apply in respect of a contractual arrangement if the Authority determines that, in providing services to the principal, the contractor is carrying on an independent trade or business.
…
(5)If subclause (1) applies—
(a)the individual is deemed to be a worker in respect of the relevant period; and
(b) the principal is deemed to be the employer of the individual in respect of the relevant period; and
(c)the total amount paid or payable by the principal to the contractor under the contractual arrangement, less—
(i)the applicable prescribed percentage (if any); or
(ii)if there is no applicable prescribed percentage, the part of that total amount not attributable to the provision of labour—
is deemed to be remuneration.
…
Clause 11 provides for claims relating to deemed workers to be made against the principal:
If an individual referred to in clause 9(1)(c)(iii) or (iv)—
(a)is deemed under clause 9(5) to be a worker employed by the principal; and
(b)makes a claim for compensation under this Act in relation to an injury arising out of, or in the course, of being so employed—
the claim must be made against the principal within the meaning of clause 9.
Relevant sections of the Act
The objectives of the Act include:
…
(d)ensure appropriate compensation under this Act … is paid to insured workers in the most socially and economically appropriate manner, as expeditiously as possible; and
(e)ensure workers compensation costs are contained so as to minimise the burden on Victorian businesses; and
(f)establish incentives that are conducive to efficiency and discourage abuse; and
…
(h)maintain a fully-funded scheme; and
(i)in this context, to improve the health and safety of persons at work and reduce the social and economic costs to the Victorian community of accident compensation.[4]
[4]Act s 10.
Employers have rights and obligations under s 12 of the Act. Under s 12(a), the entitlements of an employer include the entitlement to have the liability to pay compensation in respect of any injury arising out of or in the course of any employment determined in accordance with the Act.
Section 39(1) provides workers with an entitlement to compensation for injury arising out of or in the course of any employment, in accordance with the Act.
Section 69 defines the expression ‘claimed employer’ for the purposes of pt 3 of the Act to mean an employer that:
(a) considers that section 79(1)(a) or (b) applies to the employer; and
(b) makes an objection under section 79;
Under s 71(1) of the Act, the Authority is obliged to indemnify an employer in respect of the employer’s liability as an employer of a worker to pay compensation and damages in accordance with the Act for injuries suffered by the worker arising out of, in the course of, or due to the nature of employment by the employer.
Subsection 71(4) of the Act provides that:
The Authority is subrogated to all rights of action or recovery that an employer has against a person in respect of—
(a)any claim for compensation;
(b)any claim for damages;
…
made by a worker employed by the employer, or the dependants of a worker, including the right—
(d) to undertake the settlement of a claim against the employer; and
(e)to take over during such period as it thinks fit the control of a claim on behalf of the employer in respect of proceedings brought against the employer; and
(f)to defend or conduct any such proceedings brought against the employer in the name of the employer; and
(g)to pursue such form of appellate relief in the name of the employer as the Authority thinks fit; and
(h)to make decisions about the conduct of an application made, or proceedings brought, by the worker against the employer, including decisions relating to determinations of whole person impairment or serious injury, or both, in respect of the worker.
Section 73(1) of the Act provides for employers to forward claims for compensation and relevant medical certificates to the Authority. Section 75 provides for the Authority or a self-insurer to accept or reject claims for compensation within defined time periods.
Part 3 div 4 of the Act contains an extensive scheme for the resolution of employer objections if the claimant was not a worker as defined by the Act or if the employer was not the correct employer. The scheme applies only where claims are accepted by the Authority.[5]
[5]Act s 79(1).
The scheme provides that reasons for decision must be given by the Authority for its decision to accept or reject a claim for compensation, if requested by the employer.[6] It also provides for objections to be made by employers to the acceptance of a claim for compensation by the Authority,[7] for the internal review by the Authority of decisions made by it,[8] and for appeals to the Supreme Court by employers if dissatisfied with the Authority’s decision on review.[9]
[6]Ibid s 78.
[7]Ibid ss 79–80.
[8]Ibid s 84.
[9]Ibid ss 85–87.
Section 435 of the Act provides for a statutory contract of insurance to arise between an employer and the Authority under which:
(a)the Authority is liable to indemnify the employer in accordance with section 71; and
(b)the employer is required to pay premiums in accordance with this Act and comply with the provisions of this Act.
Part 10 of the Act concerns the registration of employers and the determination of premiums. Employers must be registered,[10] and must give estimates of rateable remuneration in respect of premium periods when required by the Authority.[11] In turn, the Authority gives employers a notice of premium payable by the employer.[12] An employer may apply to the Authority for a review of a premium or other payment payable to the Authority.[13] It is then for the Authority to review the application and make a determination.[14] If an employer is dissatisfied with the determination, the employer may make an application to the Victorian Civil and Administrative Tribunal (‘VCAT’) for a review of the decision, or appeal to the Supreme Court.[15] The onus of proof of the employer’s case in such a review is on the employer.[16]
[10]Ibid s 434.
[11]Ibid s 439.
[12]Ibid s 449.
[13]Ibid s 461.
[14]Ibid s 468.
[15]Ibid s 478(2).
[16]Ibid s 483.
On review or appeal VCAT and the Supreme Court have the power to confirm, adjust or vary the amount payable by the employer, or to make other orders.[17]
[17]Ibid ss 484, 485; Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss 51, 130.
Authority’s submissions
The Authority submits that s 71(4) of the Act means that the Authority is subrogated to defend any proceeding in which a person claims for compensation as a worker who suffered an injury arising out of, or in the course of, employment with an employer.
The main submissions of the Authority are:
(a)The use of the expression ‘is subrogated’ suggests that s 71(4) is a statutory obligation imposed on the Authority. The word ‘subrogated’ is used in its ordinary sense.
(b)The terms ‘employer’ and ‘worker’ are not used consistently throughout the Act. In s 71(4), these terms are used in conjunction with the word ‘claim’. The terms ‘employer’ and ‘worker’ must therefore be understood to mean alleged employer and alleged worker.
(c) The Authority’s functions include defending or conducting proceedings before a court and defending actions against employers brought under the Act and at common law.[18]
(d)There is no provision in the Act that permits an alleged employer to determine a claim for compensation or conduct a proceeding in respect of such a claim.[19]
(e) The Authority’s construction of s 71(4) promotes the two relevant purposes of the Act evident in the text of s 71(4) when read in the context of the scheme. The first relevant purpose is to ensure that claims made by workers under the Act are managed in a consistent, fair, expeditious and economical manner by taking them out of the hands of individual employers and placing them under the control of the Authority. The second relevant purpose is to ensure that the Authority conducts the defence of any claim in respect of which the Authority would be liable under ss 70(1) and 71(1) of the Act.[20]
(f) If the Magistrate’s construction is correct, there would be irrational consequences. The Authority would not be subrogated to conduct the defence of any claim in which the claimant’s employment is disputed.
(g) Where there is a dispute about the claimant’s employment, that dispute would need to be resolved at a preliminary trial. This would bifurcate the proceeding and result in complexity, uncertainty, additional costs and delay.[21]
(h)The Act does not contain any procedure for the determination of preliminary questions about the claimant’s employment. If the Parliament had intended this consequence, one would have expected this intention to be clearly stated.
[18]Citing Act s 493(1)(l), (m).
[19]Act s 364.
[20]Relying also on the Interpretation of Legislation Act 1984 (Vic) s 35(a).
[21]Citing R (Burkett) v Hammersmith and Fulham London Borough Council [2002] 1 WLR 1593, 1608 [46].
In its reply submission, the Authority contends:
(a) The strength of the presumption that a statute is not intended to interfere with common law rights varies depending on the context and the nature of the right in question. It should be approached cautiously.[22]
[22]Citing Gifford v Strang Patrick Stevedoring Pty Ltd (2003) 214 CLR 269, 285 [36].
(b) The relevant contextual features in this case include that s 71(4) is part of an accident compensation scheme in which the Authority is liable under ss 70(1) and 71(1) if a worker establishes his or her employer is liable to pay compensation or damages in respect of an injury arising out of, in the course of, or due to the nature of employment. In addition, there is nothing unusual about ‘on risk’ indemnity insurers being subrogated to conduct the defence of proceedings brought against insureds, including on the basis that the claimant was not a worker or that the alleged employer was not the correct employer.
(c) If the alleged employer has a common law right to conduct its own defence of the claim using its own legal representatives, that right should be classified as a ‘lesser’ rather than a ‘fundamental’ right. If the right does arise, it is displaced by s 71(4).
(d) The omission of any procedure in the Act by which the alleged employer can challenge a determination that the claimant was a worker employed by the alleged employer should be regarded as deliberate and supports the Authority’s construction.
(e) The definitions in the Act must be read subject to the implied qualification ‘unless the contrary appears’.[23] The terms ‘employer’ and ‘worker’ are not used consistently throughout the Act, and their meaning depends on the context. The court can depart from a statutory definition if the procedure established by the Act would not work, or if the provisions affected by the definition operated in a way which clearly the legislature did not intend.[24]
[23]Citing Kelly v The Queen (2004) 218 CLR 216, 253 [103]; Transport Accident Commission v Treloar [1992] 1 VR 447, 449.
[24]Citing Federal Deputy Commissioner of Taxation v Mutton (1988) 12 NSWLR 104, 108.
The Authority’s submissions in the Court and the relief claimed were adopted by the claimant.
BSA’s submissions
BSA submitted that the Magistrate regarded the issue of subrogation as a matter on which he was entitled to hear evidence including evidence of the claimant. It was not a pure question of law that could be decided in the absence of evidence. There was no error in the Magistrate’s ruling.
The main submissions of BSA are:
(a) In addition to the usual principles of statutory construction, there is also the principle that legislation is presumed not to alter common law doctrines unless this is clearly expressed in the legislation.[25]
[25]Citing Potter v Minahan (1908) 7 CLR 277, 303; Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403, 433; Orellana – Fuentes v Standard Knitting Mills Pty Ltd (2003) 57 NSWLR 282, [98]; Bell v Australian Securities Commission (1991) 31 FCR 184, 189.
(b) While the displacement of the usual situation at law that a person is able to defend a proceeding by his, her or its own legal representatives is clearly intended in the case of actual employees, the Act does not express this intention for a person who is not an employer.
(c) Part 3 div 4 of the Act contains the process for an employer to object in any case where the Authority has accepted a claim for compensation in respect of a worker. There is no procedure set out in the Act by which a person may object where the Authority has taken over the defence of a proceeding for a person and proposes, over that person’s objection, to accept that the person is an employer.
(d) The expression ‘claimed employer’ is found in s 69 which is in pt 3 of the Act, but does not apply to the Authority’s right of subrogation in s 71(4).
(e) It would be a surprising outcome that the employer would be bound by a fiction without any ability of a court to decide the truth of the matter on the facts.
(f) Section 71(4) applies only in relation to rights of action or recovery that an employer has against a person in relation to claims for compensation made by a worker employed by the employer. Under s 71(4)(c) the right extends to the control of a claim on behalf of an employer in respect of proceedings brought against the employer. These terms should all be understood in accordance with the definition of ‘employer’ and ‘worker’ in the Act. These definitions encompass employers and workers in the established factual sense, and deemed employers and workers. They do not encompass a worker or employee who does not factually have that status nor has been deemed under the Act to have that status.
(g) Nothing can be drawn from the fact that the Authority’s functions under s 493(1)(l) and (m) of the Act include conducting or defending actions in relation to actual or deemed employers within the scope of the definition of ‘employer’.
(h) It would be an irrational consequence if the Court and any person alleged to be an employer are held to an outcome known to be factually incorrect. It is unreasonable to impute to the legislature an intention to permit a situation which may lead to fixing liability for injuries or death of workers on persons who are not employers or deemed to be employers.
For reasons which I will shortly come to, I have concluded that the construction of s 71(4) of the Act advanced by BSA and adopted by the Magistrate is correct. This construction is more consistent with fair and just decision-making and outcomes.
Principles of statutory construction
There was no dispute between the parties about the need to apply accepted principles of statutory construction to the interpretation of s 71(4) of the Act.
In Project Blue Sky Inc v Australian Broadcasting Authority,[26] the plurality of the High Court said:
[T]he duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.[27]
[26](1998) 194 CLR 355.
[27]Ibid 384 [78] (citations omitted). See also Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 519 [39].
In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory),[28] the plurality of the High Court said:
This Court has stated on many occasions that the task of statutory interpretation must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.[29]
[28](2009) 239 CLR 27.
[29]Ibid 46–47 [47] (citations omitted). See also Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 519 [39]; Baini v The Queen (2012) 246 CLR 469, 476 [14]; SM v The Queen [2013] VSCA 342, [50]–[51]; Commissioner of State Revenue v EHL Burgess Properties Pty Ltd [2015] VSCA 269, [56].
Another consideration is the principle of legality. This requires that statutes be construed where constructional choices are open to avoid or minimise their encroachment upon rights and freedoms at common law.[30]
[30]Momcilovic v The Queen (2011) 245 CLR 1, 46 [43]; R v Secretary of State for the Home Department, Ex parte Simms [2000] 2 AC 115, 131; Al-Kateb v Godwin (2004) 219 CLR 562, 577 [19].
Jurisdiction of the Magistrates’ Court
The first step is to consider the jurisdiction given by the Act to the Magistrates’ Court to decide claims. Section 266(1) of the Act gives the Magistrates’ Court a like jurisdiction to the County Court in matters arising under the Act. Under s 264(1) the County Court has exclusive jurisdiction to ‘inquire into, hear and determine any question or matter arising under [the] Act or the Accident Compensation Act 1985 (Vic)’ out of any decision of the Authority or an employer. The conferrals give wide jurisdiction to each court to decide workplace injury claims.
The jurisdiction given to the Magistrates’ Court includes the hearing and determination of ‘any question or matter’ arising under the Act out of any decision of the Authority or an employer, and extends to the resolution of all issues in the proceeding. No party contended otherwise before the Magistrate or in this Court.
The conferral of exclusive jurisdiction by Parliament to a court to decide the issues in dispute between the Authority and BSA strongly suggests that this is how Parliament intended the issues in the present dispute to be resolved. The Authority’s interpretation would mean that it is the effective decision maker as to whether the relationship of employment or deemed employment exists, and would limit or restrict the jurisdiction of the County Court and the Magistrates’ Court to determine the employer’s objection to subrogation of its rights to the Authority. Disputes as to whether a person was a worker or a deemed worker of an employer would be decided in a significant class of cases by the Authority without any opportunity for the employer to be heard or to contest the Authority’s decision. This would be inconsistent with the wide conferral of exclusive jurisdiction on the Court which gives cogent support to the view that Parliament did not intend that the Authority have power to decide this issue without any ability for an employer to contest the issue in a court.[31]
[31]See Knight v FP Special Assets (1992) 174 CLR 178, 205; David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, 275–276; Oshlack v Richmond River Council (1998) 193 CLR 72, 81 [21]; see also the cases cited in BSA Ltd v Victorian WorkCover Authority [2016] VSC 435, n 33.
The construction of s 71(4)
The next step is to consider the construction of s 71(4).
As submitted by the Authority, it is true that s 71(4) imposes a statutory obligation on the Authority to stand in the shoes of the employer in the circumstances described in the provision. In these circumstances, claims made by workers under the Act are taken out of the hands of individual employers and put under the control of the Authority. It is for the Authority to defend such claims under ss 70(1) and 71(1). Where s 71(4) applies, the Authority’s functions include defending and conducting proceedings before a court and defending actions against employers brought under the Act and common law.
In my view, the correct approach to the interpretation of s 71(4) is to apply the definitions of ‘employer’ and ‘worker’ as found in s 3 of the Act to the language of that provision. This is the plain consequence of the statutory text and of an ordinary and grammatical reading of s 71(4) and the applicable definitions. It is not a case where the words actually used give rise to any real doubt or difficulty.
As submitted by BSA, the application of s 71(4) is dependent on whether the claimant is a worker, and BSA an employer within the meaning of the Act. In the present case, this entails consideration of the application of sch 1 cl 9 and in particular whether, in providing services to BSA, the claimant and his company are carrying on an independent trade or business.[32]
[32]Act sch 1 cl 9 (2).
As a result, it is essential for the Magistrate to hear evidence to determine whether the claimant and BSA meet the definitions of ‘employer’ and ‘worker’ in s 3 of the Act.
The construction of s 71(4) contended for by the Authority enlarges the language of s 71(4) so that the words ‘employer’ and ‘worker’ assume the expanded meaning of ‘alleged employer’ and ‘alleged worker’. There is no warrant for this interpretation of s 71(4). The definitions of ‘employer’ and ‘worker’ in s 3 are pivotal to the construction of the Act. There is no ambiguity concerning their application to s 71(4). While s 71(4) refers to claims for compensation, damages or contribution made by a worker, or the dependents of a worker against the employer, there is in my view no problem or uncertainty relating to the application of the definitions of ‘employer’ and ‘worker’ contained in s 3.
While I accept that the Court may be at liberty to depart from the text of a definition contained in a statute in limited circumstances, there is no need or warrant here to depart from the statutory definitions of ‘employer’ and ‘worker’. The application of the statutory definitions to s 71(4) produces a sensible and harmonious result. There is no contrary indication in the statutory context of s 71(4) or in s 71(4) itself. In my view, the reverse is true.
Section 71(4) is found in pt 3 of the Act which deals with compensation and claims. The term ‘claimed employer’ is defined in s 69 and applies to the same Part. However, the term ‘claimed employer’ is not used in s 71(4). It is clear that the draftsperson of pt 3 was alive to the difference in meaning between the expressions ‘claimed employer’ and ‘employer’, but did not draw s 71(4) so that it extended to claimed employers or workers. That consideration confirms that it is the statutory definitions of ‘employer’ and ‘worker’ that should be applied to s 71(4).
The objectives of the Act are consistent with this interpretation of s 71(4). Section 10(d) speaks in terms of the payment of appropriate compensation to ‘insured workers’ while s 10(e) provides for the containment of ‘workers compensation costs’ so as to minimise the burden on Victorian businesses. Most of the other objectives are general in their terms. It is consistent with the objectives and purposes of the Act that liability for claims by workers (including deemed workers) is imposed on employers whose rights are then subrogated to the Authority. Subrogation does not extend to claims which do not arise between workers and their employers.
The need to determine a preliminary question
As the Authority contended, it is true that there is a need in the proceeding for the Magistrate to determine as a threshold or preliminary question whether BSA was on the date of the incident the employer, and the claimant a worker employed by BSA. This involves considerations of fact and law. It involves hearing relevant evidence that the parties may wish to present. Disputes similar to those which arise in the present case have arisen in the past[33] and are likely to occur in the future.
[33]See Kovacic v Henley Arch Pty Ltd (2009) 22 VR 21; Elazac Pty Ltd v Shirreff [2011] VSCA 405.
While it is true, as contended by the Authority, that there is no provision in the Act for the determination of a preliminary question by the Magistrates’ Court, no provision is necessary. The determination by decision-makers of jurisdictional facts or preliminary issues is commonplace in many jurisdictions and circumstances. In Plaintiff M70/2011 v Minister for Immigration and Citizenship,[34] French CJ said:
The term “jurisdictional fact” applied to the exercise of a statutory power is often used to designate a factual criterion, satisfaction of which is necessary to enliven the power of a decision-maker to exercise a discretion. The criterion may be “a complex of elements”. When a criterion conditioning the exercise of statutory power involves assessment and value judgments on the part of the decision-maker, it is difficult to characterise the criterion as a jurisdictional fact, the existence or non-existence of which may be reviewed by a court. The decision-maker’s assessment or evaluation may be an element of the criterion or it may be the criterion itself. Where a power is expressly conditioned upon the formation of a state of mind by the decision-maker, be it an opinion, belief, state of satisfaction or suspicion, the existence of the state of mind itself will constitute a jurisdictional fact. If by necessary implication the power is conditioned upon the formation of an opinion or belief on the part of the decision-maker then the existence of that opinion or belief can also be viewed as a jurisdictional fact.[35]
[34](2011) 244 CLR 144.
[35]Ibid 179 [57] (citations omitted).
The hearing of a preliminary issue is a familiar process in all courts and in the Magistrates’ Court. Rule 47.04 of the Magistrates’ Court General Civil Procedure Rules 2010 (Vic) gives that court a discretionary power to order that any question in a proceeding be heard before, or after the hearing of the proceeding. Rule 47.05 empowers the Magistrates’ Court to dismiss a proceeding or make such other order as it thinks fit if the determination of a separate question in a proceeding substantially disposes of a proceeding or renders the hearing of the proceeding unnecessary.[36]
[36]See also Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 47.04, 47.05.
I therefore conclude that the need to decide a threshold or preliminary question is not a good reason to deprive BSA of the opportunity of reviewing a decision by the Authority that the claimant was a worker or deemed worker of BSA at the time of the incident.
The employer’s right to object to the level of premium
As the Authority contended, it is true that an employer has the right to seek review of premiums determined by the Authority under pt 10 of the Act. However this is no substitute for a right to be heard by a court afforded at the time when a disputed claim of employment is made against the employer. An alleged employer may, and often will, have knowledge or information relevant to the proper administration of justice, and is entitled to be heard particularly in circumstances where the Authority proposes to concede that the worker was employed by the employer. A failure to recognise the employer’s interest when a claim against the employer is heard and determined in circumstances such as the present may well lead to a denial of procedural fairness.
The resolution of a premium dispute occurs later in time and involves many issues relating to past history, the likelihood of future claims and the application of the provisions of the relevant premium order. It would be a very inconvenient means of revisiting a successful claim brought by a worker against an employer represented by the Authority which had resulted in a court order.
BSA’s submission as to discretion
BSA advanced a number of submissions as to the bringing of the proceeding in this court under O 56 and as to remedy, including a submission that relief should be refused on discretionary grounds.
This submission raises a significant issue which it is not necessary to finally determine given the result in this proceeding.
Order 56 applications
The record for the purposes of this application consists of the complaint, the respective summonses, the pleadings and the reasons for the ruling of the Magistrate. Written and oral reasons form part of the record by virtue of s 10 of the Administrative Law Act 1974 (Vic).[37]
[37]See: Kuek v Victoria Legal Aid [2001] VSCA 80, [15]; InsuranceManufacturers of Australia Pty Ltd v King [2006] VSC 261, [21]–[22].
At the time when the Authority issued the originating motion in this matter, the Magistrate had commenced hearing the two interlocutory applications in the proceeding. He was yet to hear any evidence, make any decision or make orders in the interlocutory applications let alone in the proceeding. The absence of any completed hearing, determination or orders by the Magistrate in the interlocutory applications may be a reason why the Court should be disinclined to exercise its discretion to grant relief.
Section 109 of the Magistrates’ Court Act 1989 (Vic) requires that final orders be made by the Magistrate before relief can be granted by the Supreme Court under that Act. In Kuek v Victoria Legal Aid[38] (‘Kuek’), the Court of Appeal held that in the absence of exceptional circumstances, or as a matter of discretion, a litigant may not raise for determination under O 56 a matter or thing which is proper for determination on an appeal where the litigant has a right of appeal under s 109. If the proper course is an appeal under s 109, the litigant cannot choose at his or her option to turn to O 56 as an alternative.[39]
[38][2001] VSCA 80.
[39]Ibid [16]; see also Perkins v State of Victoria Bar Inc (2007) 26 VAR 180, 185–186 [17]–[18]; Wilson v Building Commission of Victoria [2015] VSC 629, [14]–[16]; Victorian WorkCover Authority v Judge Punshon [2005] VSC 361, [35]–[37]; Todarello Consolidated Investments Pty Ltd v Ian Finch [2007] VSC 492, [24]–[32]; Hickman v Smith [2003] VSC 126, [20]; Insurance Manufacturers of Australia Pty Ltd v King [2008] VSC 261, [19].
In Dean’s Pty Ltd v Laratae,[40] Zammit J was satisfied that judicial review of a Magistrate’s interlocutory decision should be granted where the decision would have a significant impact on the future conduct of the proceeding, and that it was an appropriate exercise of discretion to decide the issue raised on the application.[41]
[40][2015] VSC 341.
[41]Ibid [26].
The effect of the Authority’s action in issuing an O 56 proceeding following the ruling by the Magistrate to hear evidence is to fragment the hearing of the interlocutory applications before the Magistrate, and to deprive the Magistrate of the opportunity to give his reasons and make orders. The Authority might have won before the Magistrate had the Magistrate been permitted to hear evidence and conclude his hearing of the applications. The issues now raised by the Authority would have been just as strong as grounds in a judicial review proceeding at the conclusion of the applications after reasons had been given and orders made by the Magistrate.
The Authority’s decision to seek relief under O 56 at the time that it did also had the unfortunate effect of delaying the determination of the applications by over a year. It was preferable for the interlocutory applications to have been determined by the Magistrate and orders made before resort to judicial review. In the event, it will be necessary for the Magistrate to resume the hearing of the applications where he left off.
As stated in Kuek,[42] O 56 proceedings should not be conducted so as to fragment proceedings in inferior courts such as the Magistrates’ Court without good reason.[43] It is hard to see any justification for the very early intervention of the Supreme Court sought by the Authority, or any reason why the Magistrate should not have been permitted to hear evidence, complete the hearing, publish his reasons and make orders in the applications. However, in view of the fact that the Authority has failed in the points that it has raised, it is unnecessary to consider further whether relief should be refused.
[42][2001] VSCA 80.
[43]Ibid [16].
Conclusion
For the reasons that I have given, the course adopted by the Magistrate of proceeding to hear evidence as to the applicability of s 71(4) of the Act is correct. There is no error of law shown by the Authority on the face of the record.
The proceeding must be dismissed.
SCHEDULE OF PARTIES
Between VICTORIAN WORKCOVER AUTHORITY Plaintiff and BSA LIMITED First Defendant ALEN NIKOLOVSKI Second Defendant THE MAGISTRATES’ COURT OF VICTORIA Third Defendant
0
18
0