Williams & Anor v Mistearl Pty Ltd

[2001] HCATrans 136

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B19 of 2000

B e t w e e n -

NICOLE WILLIAMS

First Applicant

FAI INSURANCE COMPANY LIMITED

Second Applicant

and

MISTEARL PTY LTD

First Respondent

JENNIFER KINGSLEY

Second Respondent

Application for special leave to appeal

KIRBY J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 4 MAY 2001, AT 12.08 PM

Copyright in the High Court of Australia

MR R.J. DOUGLAS, SC:   If it please the Court, I appear with MR K.F. HOLYOAK for the applicants.  (instructed by McInnes Wilson)

MR D.O.J. NORTH, SC:  If it please the Court, I appear with MR G.R. MULLINS for the respondents.  (instructed by Mullins & Mullins)

KIRBY J:   Yes, thank you.  I have a certificate from the Deputy Registrar of this Court certifying that he has been informed by the solicitors for the second respondent that the second respondent does not wish to take part in these proceedings and will abide by the decision of the Court.  Yes, Mr Douglas.

MR DOUGLAS:   Your Honours, this proposed appeal provides a vehicle for this Court, we would submit, to rule on whether a claim for contribution under a standard tortfeasors contribution statute can be defeated by modern statutes providing for mandatory pre‑litigation compromise procedures.  On the result in the case at hand, your Honours, loss allocation between tortfeasors can be distorted in circumstances where an injured person, importantly enjoying a title to enforce the liability by seeking or recovering damages, does not do so either by subsequently electing for a lump sum compensation offer under the relevant statute or compromise his/her damages claim.

Your Honours, we submit that the election under the Queensland statute, which their Honours in the appellate court considered in this instance, may be contrasted with the election under the Commonwealth statute construed by this Court in the Airservices decision.  Your Honours, in Airservices this Court concluded that the effect of the statutory election under section 44 of the Commonwealth statute was to clothe the claimant in that case with a right which he had not previously enjoyed because of the operation of section 44.

Here, in contrast, the election by the plaintiff, which was one to accept a lump sum offer of compensation, precluded the pursuit of what was his right of action, namely, to seek damages, which we would submit, as a matter of statutory construction, had already come into existence under section 253(1) of the Queensland statute and under section 259(1) by way of confirmation under that same statute, upon the circumstantial foundation of the plaintiff having received from WorkCover a notice of assessment.

Your Honours, those sections are conveniently found in the application book, if needs be, at pages 14 and 15 of the companion decision of Bonser v Melnacis, which was delivered on the same day by the appellate court, and from which there was no application for special leave.  We submit, in this respect, that the appellate court erred by failing to distinguish the Commonwealth legislation and its interpretation in this Court approving decisions previously of other appellate courts.

We would submit that the contention we put is right because it would be a curious result if the election makes such a difference, that is, the election to which we just referred.  The legislation in cognate provisions pertaining to persons with a serious injury, a claimant who suffered a serious injury, a person who is a claimant/dependant or, moreover, even under the same section, a person in respect of whom WorkCover has assessed a serious disability, I should say a zero disability, are all persons who, according to the statutory provision, is entitled in each case to seek damages.  We would submit the election in that respect makes no difference.

In this respect, also, we submit the appellate court here went further.  In the reasoning in the companion decision of Bonser, after referring to section 302, which we refer to in our amended summary, and which utilises the terminology starting “a proceeding in a court for damages”, the court, the appellate court in this instance, concluded that any right of action did not come into existence unless and until all the pre‑proceeding steps, including the compromised steps which were provided for under Chapter 5 of the Queensland Act, directed to compromising or settling the cause for common law damages were exhausted.

Now, whatever the correctness, we submit, of the conclusion on the facts of Bonser, which differed from the facts of the present case, because in that instance there was no notice of assessment which was issued by WorkCover to that claimant, it was erroneous for the court to dispose of this matter on the same basis because, on account of the notice of assessment having been received, there was an entitlement which had vested.  The terminology used in section 302 ‑ ‑ ‑

HAYNE J:   Sorry, entitlement that had vested in whom?

MR DOUGLAS:   An entitlement which had vested in the claimed worker to seek damages.  That is, at that point, upon a notice of assessment having been received, according to the legislation that person, that claimant worker, was vested with a right to seek damages, and, we submit, as we do in the amended outline, that, in fact, from that point up to the point when the lump sum offer was the subject of an election for acceptance, there was a period of time in which a liability existed in the employer such as to enliven or ground an entitlement for a claim of contribution under the tortfeasor contribution statute.

HAYNE J:   Forgive me, Mr Douglas, I find it hard to keep these provisions all at once.  You say the worker had a right to sue for damages before completion of some of the steps specified in section 302?

MR DOUGLAS:   Your Honour, in our submission, the worker had a right of action for damages.  The only statutory provision which precluded him from going further by way of commencing court proceedings was section 302.  In the meantime ‑ ‑ ‑

HAYNE J:   I am sorry, I need to take this a bit slower because I am not sure that I am on top of it by any means.  Do you say that despite 302 saying:

The claimant may start a proceeding in a court for damages on if –

(a) to (d), the claimant had a right to sue for damages which existed before taking steps (a) to (d)?  Do you see the tension that seems to me to arise?

MR DOUGLAS:   Yes.  In our submission, for the purpose of the contribution statute, he had a right of action.  That right of action had crystallised once he had passed the statutory point of the statute predicating that he could seek damages.  The tension arises in this instance, your Honours, because in the past 10 years, perhaps five to 10 years, in the various jurisdictions of Australia – and we have identified the legislation in our amended outline – there have been introduced, understandably, procedures designed to circumvent the need for proceedings to be commenced in order for damages claims to be prosecuted and hopefully compromised.

The legislature has sought fit in a number of jurisdictions to impose mandatory pre‑proceeding processes which are directed towards compromising those claims.  Our submission is that the contribution statute, as it has been construed in this Court over the last 50 years, has not had to confront a situation in which a claimant/plaintiff enjoyed a right of action but the only impediment to the prosecution of that right of action was a provision compelling that plaintiff to undertake pre‑proceeding processes directed solely at the compromise of that claim.

KIRBY J:   The Court has brought up in the cases of James Hardie v Seltsam and Airservices Cases involving this opaque phrase – it is not particularly congenial to bring it up for the third time in the space of two years, but what is the practical significance of this for other States and for numbers of cases given, as I take it, the commonality of these procedural interpositions that now exist in several jurisdictions?  Is that a correct inference or not?

MR DOUGLAS:   There are a number of propositions your Honour just put to me, but we would submit the importance of this particular issue is that, as the appellate court identified in its concluding reasons in Bonser, the present interpretation, or the interpretation which the court adopted, albeit reluctantly, of this provision was such as to allow loss allocation between tortfeasors to be distorted by reason of a plaintiff deciding which tortfeasor he/she intended to pursue.  That is, in the relevant instance here, even though the claimant had reached a position whereby he could under – he was entitled to seek damages, he elected to accept a lump sum offer.

In a like situation provided for by the statute, as we mentioned earlier, in a case where a person suffered a serious injury or even a zero disability or a dependency claim, that person could proceed to prosecute the claim in the sense of seeking damages by way of compromise from the insurer, WorkCover, but could not commence proceedings immediately until those processes had been complete.  Now, whether the claimant ‑ ‑ ‑

KIRBY J:   In your amended summary of argument you have named legislation in New South Wales, as well as Queensland, which provides for moratoriums on the commencement of proceedings.

MR DOUGLAS:   Yes, we have.

KIRBY J:   Is that the only legislation you have been able to find so far?

MR DOUGLAS:   No.  The closest legislation we can identify is the Victorian legislation, which is incorrectly identified as a 1995 statute rather than a 1985 statute.  That legislation was amended last year, your Honour, to provide for a regime very similar to that which is predicated in the WorkCover Queensland Act, that is, it predicates an entitlement provision which has its foundation in an assessment of injury, and then once that gateway, as it is described in the authorities, is passed through, it provides for pre‑proceeding processes by way of an exchange of offers in a conference to settle the proceedings.  So, to answer your Honour’s question, the Victorian legislation passed last year is the closest.

The other statutes we identified provide for, in each instance, a moratorium on the commencement of proceedings but without the imposition of an entitlement provision other than that which is pedestrian, namely, that a person be a worker or be involved in a motor vehicle accident or whatever the case may be.

KIRBY J:   Presumably you would say that this has the potential to affect a lot of cases?

MR DOUGLAS:   In our submission, it will.  Common law damages was reintroduced into Victoria last year, ergo the provisions to which we just referred.  That is a jurisdiction which, we would submit – it is obviously a larger State than Queensland with a larger work force – is likely to yield a plethora of cases.  But the same position obtains in Queensland.  There are circumstances in which – in any circumstance in which, we would submit, a plaintiff/claimant under the WorkCover Queensland statute either elects to accept lump sum compensation or compromises his or her claim at some point after qualifying by notice of assessment, that person can defeat a claim for contribution made by another tortfeasor who is sued by that plaintiff at a later point in time.  We would submit the issue will come up ‑ ‑ ‑

KIRBY J:   I assume that this would only be about a half a day of argument, would it?

MR DOUGLAS:   Mr Holyoak agrees that that would be the estimate.  I think that that would be correct, yes.

KIRBY J:   Yes.

MR DOUGLAS:   It is very much a legal issue.  The only relevant fact in this case is the question of the notice of assessment.  Your Honours, unless ‑ ‑ ‑

KIRBY J:   Yes, I think we will hear the respondent.  Thank you.

MR NORTH:   Your Honours, the matter that is sought to be agitated turns upon its peculiar facts and upon legislation that is unique to Queensland.

KIRBY J:   Well, they are peculiar facts, but they are facts that can have analogues in lots of other cases, and we are told that the legislation, though unique to Queensland, has analogies in other States, at least Victoria.

MR NORTH:   That is not correct.  We have looked at those legislation.  Can I take your Honours to section 252 of the Act?  Your Honours have a copy of the Act.  The Act is in two volumes.  Section 252 will be found towards the end of the first volume, your Honours, in the material that has been supplied.

KIRBY J:   Yes, we have that.

MR NORTH:   Your Honour, this is one of the crucial provisions that was identified by the Court of Appeal.  Can I direct your Honours to, firstly, subsection (2):

All the provisions of this chapter are provisions of substantive law.

And to subsection (1):

If a provision of an Act or a rule of law in inconsistent with this chapter, this chapter prevails.

Your Honours, there is no analogue for this section that we can find in any of the legislation in Australia identified by our learned friends.  So the bars against procedure, and also the provisions that abolish rights, are expressly deemed to be substantive not procedural, and any rule of law, which would include the traditional approaches to notices before action or steps before action are expressly overruled. 

Can we take your Honours to the next section, section 253, and particularly to subsection (3):

To remove any doubt, it is declared that subsection (1) abolishes any entitlement of a person not mentioned in the subsection to seek damages for an injury sustained by a worker.

KIRBY J:   But is that an apt description for a claim for indemnity in respect of an injury sustained by a worker, or claim for contribution?

MR NORTH:   Your Honour, this section is important because that in combination with other sections I will take your Honour to – to adopt the words of the majority judgment in Airservices or the judgment of the three Justices in Airservices at paragraph [32], they go:

to the validity of the title to enforce the liability.

That is the touchstone that has been identified by the Court in Airservices, and is not challenged, that determines whether there is any liability if sued or liability to suit, which is the test under the contribution legislation.  Your Honours would recall that in Airservices the conclusion of this Court was that the rights had been abolished, and here we have an abolition.

Now, we do not find an analogue of this provision in the statutes of the States that our learned friends have referred to.  We have looked for them.  The only analogue is the analogue in the Commonwealth legislations that have been determined by this Court, or considered by this Court, very recently.

Can I next take your Honours to section 259, which was another crucial provision and applied on the facts of this case:

The claimant may seek damages for injury only after the claimant has received a notice of assessment –

Now, our learned friends agitate that she received a notice of assessment, therefore, she has got through the abolition, but subsection (2) expressly provides that:

If, in the notice, the claimant is offered a payment of lump sum compensation for the injury –

which applied here –

the claimant is not entitled to both –

(a)  payment . . . ;and

(b)  damages for the injury.

(3)  If, in the notice, a claimant is required to make an election to seek damages for the injury, the claimant cannot change the claimant’s election –

Your Honours, there is also a related provision – I will not take your Honours directly to it, but remind your Honours of it, section 207, which the Court of Appeal referred to, which refers to this circumstance, and it describes the election as irrevocable, which is the term used in the Commonwealth legislation considered by this Court.

KIRBY J:   But that is irrevocable on the part of the plaintiff.

MR NORTH:   Yes, the plaintiff.  Then there are further provisions, which are all part of Chapter 5, which are deemed to be substantive and to prevail notwithstanding any other rule of law.  Can I take your Honours to section 301?  That provides that:

This division states the conditions that must be satisfied before a claimant can start a court proceeding.

Then in section 302, which was identified by the Court of Appeal:

The claimant may start a proceeding in a court for damages only if the claimant has complied with –

and there are four stages that are specified cumulatively.  Now, the injured person, Ms Kingsley, when she was injured, the Act substantively affected her rights in that her entitlement to seek damages was abolished at the time of the accident.  She could not start proceedings for damages until she complied with the assessment, the election, given a mandatory notice, complied with mandatory disclosure and medical reports, and complied with a mandatory pre-court negotiations and offers, and complied with section 303, a further provision, all of which are substantive and not procedural.

Your Honours, it is submitted, that being substantive and not procedural, the combined effect of the sections we referred to go to the validity of the title to enforce any liability of which is the touchstone as identified by this Court in Airservices.

Your Honours, we have already identified that this claimant, or Ms Kingsley, made her irrevocable election to accept compensation and not to seek damages, which means give a notice making a claim and asking for it.  At no time was her employer, my client, liable to suit by Ms Kingsley.  At no time has she and at no time will it be.  The Act abolished her entitlement to seek damages.  The abolition could only be removed by her making an irrevocable election to seek damages.  Ms Kingsley elected to accept compensation and not damages.  She did not take the steps required by her of 302 to enable her to commence or maintain proceedings, all of which, your Honours, the Act deems to be substantive, and, therefore, legislative provisions of the kind considered by this Court in Harding v Lithgow Corporation, which was referred to in the Airservices decision, are distinguishable.

Your Honours, it is submitted that the essential features of the WorkCover Act are comparable to the provisions that were of the Commonwealth legislation considered in Airservices because of the features of annihilation, features of election, and features of prohibition against any suit unless several stages antecedent to annihilation are complied with.

Your Honours, there are other factors that point against a grant in this case.  This matter, we remind the Court, concerns legislative provisions peculiar to Queensland, particularly ‑ ‑ ‑

KIRBY J:   I am not sure that that is necessarily fatal to an application.  After all, as Justice Callinan reminds us from time to time, we are the supreme court in respect of Queensland, that is to say the supreme Federal Court.

MR NORTH:   I accept that, your Honour.

KIRBY J:   All right.  You have dropped that point, then,  Move to your next point.

MR NORTH:   No, your Honour, I do not withdraw it.  It is a fact that it is irrelevant but it is not always decisive.

KIRBY J:   Your point is still good in so far as you say there are peculiarities of the Queensland legislation that limit its utility to present an issue of general significance to the law.

MR NORTH:   That is so, your Honour.  We do not say it is necessarily of its own decisive.  It goes in combination.  The other features, particularly sections 252 and 253, find no analogue anywhere else.

KIRBY J:   Yes.  Well, you have made that point.  We will want to hear what Mr Douglas says about that.

MR NORTH:   Finally, your Honour, or in combination, we submit that there are peculiar facts to this case, being the election she has made, the fact that section 259 has been triggered.  In the amended outline our learned friends do not challenge the companion decision of the Court of Appeal in the Bonser Case.  What they really agitate is that on the facts of this case a different result should flow.

Your Honours, therefore, in summary, the reasons against the ground are the decision is plainly correct; it does not raise any new or novel point; it turns upon Queensland, and peculiarly Queensland legislation, and on its own facts.

KIRBY J:   Yes, thank you.  What do you say about those two sections of the WorkCover Queensland Act, Mr Douglas, 252 and 253?

MR DOUGLAS:   Yes, thank you.  I am happy to address both those points and there is a further point I wish to make briefly by way of reply.  The first point is this, that I do beg to differ with my friend in relation to the existence of the analogues interstate.  Section 93(20) of the Transport Act 1986, Victoria, which was referred to in the appellate decision here, and was the subject of consideration by the Court of Appeal in Swannell, which the appellate court relied upon, does contain precisely the same provision, namely, that the provisions of that section of the Victorian Act are provisions of substantive law.

As to the other Victorian statute to which I referred, your Honours, the Accident Compensation Act 1985, which was amended last year, in 2000, it also contains such a provision. As to that latter Act, section 138A, amended commencing 20 October 1999, provided:

For the avoidance of doubt, it is hereby declared that all the provisions of Division 8A, Division 9 and this Division contain matters that are substantive law and are not procedural in nature.

Divisions 8A and 9 are those to which we referred your Honours in relation to the analogous Victorian provisions.

KIRBY J:   Are there provisions equivalent to 253(3), that is to say declared abolishing:

any entitlement of a person . . . to seek damages for an injury sustained by a worker.

MR DOUGLAS:   Your Honour, there is not.  We cannot see any analogy to that.  But as to that point we say this, that there is nothing about that provision which in any way precludes a claim on the facts of this case.  Your Honour took us to section 253(3).  It:

abolishes any entitlement of a person not mentioned in the subsection to seek damages for an injury sustained by a worker.

If one goes to section 253(1)(a)(ii), the applicant here – I should say the plaintiff/claimant worker here, fell within that provision.  She was a person – I will recite the subparagraph:

(a)  the worker, if the worker has received a notice of assessment from WorkCover stating that –

. . . 

(ii)  the worker has sustained a non-certificate injury;

Importantly, that entitlement provision, impeded as it is, or related as it is to subsection (3) to which your Honour referred me, does not say “and who has elected or not elected to accept the lump sum offer”.  That requirement, stipulation, condition is not stated as a disentitling factor under section 253(1) or (3). 

HAYNE J:   But the point made against you seems to be that reading all of these provisions together, you can see that the taking of the various steps goes to the validity of the title to enforce liability.  That is the nub of the case against you.  What do you say about it?

MR DOUGLAS:   We say that that argument collects all the provisions and does not distinguish between, importantly and critically, the entitlement provisions which are contained in section 253 and following, and relevantly

section 259 in this case, which speak linguistically of a right to seek damages, and, in contrast or in juxtaposition, the provisions of the later divisions, which, once you pass through that initial gateway, speak only of a precluded entitlement to commence proceedings until what we identify are compromise‑inducing procedures are accorded with.  The argument, your Honour, fails to address that dichotomy

KIRBY J:   Yes.  Is there anything else?

MR DOUGLAS:   Just finally – and I can say it in two sentences – the argument by our friends, with respect, fails to identify the relevant point.  We are not speaking here, per se, of a claim by the claimant worker, but rather of a claim for contribution.  As long as the applicants can identify a point in time, a point in time according to the authorities, that liability for relevant purposes as we construe the statute exists, then that suffices.  The fact that that may be extinguished or curtailed or terminated at some later point in time does not.  Those are our submissions.

KIRBY J:   Yes, thank you, Mr Douglas.

The interpretation of the phrase “would, if sued, have been liable” has given rise to much litigation, including recently in this Court:  see James Hardie & Co Pty Ltd v Seltsam Pty Ltd (1998) 73 ALJR 238 and Airservices Australia v Austral Pacific Group (1998) 157 ALR 125.

Although the point which the applicant seeks to bring to this Court, like many others that have gone before, is arguable, we are not convinced that error has been shown in the construction adopted by the Court of Appeal of Queensland or that the application, if granted, would enjoy a reasonable prospect of success.  The Queensland legislation, viewed in its entirety, has its own peculiarities, in particular the provisions of the WorkCover (Queensland) Act 1996 sections 252 and 253.  These peculiarities provide additional reasons for refusing special leave.

Special leave is, therefore, refused.  The applicant must pay the respondent’s costs.

AT 12.40 PM THE MATTER WAS CONCLUDED