| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : WORKERS' COMPENSATION AND REHABILITATION COMMISSION -v- MUIA HOLDINGS PTY LTD T/AS MUIA CONSTRUCTIONS & ANOR [2005] WADC 139 CORAM : COMMISSIONER POWER HEARD : 11 FEBRUARY 2005 DELIVERED : 22 JULY 2005 FILE NO/S : CIV 1309 of 2003 BETWEEN : WORKERS' COMPENSATION AND REHABILITATION COMMISSION Appellant (Plaintiff)
AND
MUIA HOLDINGS PTY LTD T/AS MUIA CONSTRUCTIONS
First Respondent (First Defendant)
MICHAEL COONEY
Second Respondent (Second Defendant)
Catchwords: Workers' compensation - Appeal - Application for leave to apply for summary judgment and application for summary judgment - Section 174 and s 175 of the Workers' Compensation and Rehabilitation Act 1981 - Issue estoppel - Statutory interpretation - Appeal dismissed
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Legislation:
Insurance Commission of Western Australia Act 1986
Interpretation Act 1984
Supreme Court Act 1935
Workers' Compensation and Rehabilitation Act 1981
District Court Rules 1996
Rules of theSupreme Court 1971
Result: Appeal dismissed Representation:
Counsel:
Appellant (Plaintiff) : Mr B P King
First Respondent (First Defendant) : Mr I R Freeman
Second Respondent (Second Defendant) : No appearance
Solicitors:
Appellant (Plaintiff) : State Solicitor
First Respondent (First Defendant) : Phillips Fox
Second Respondent (Second Defendant) : Not applicable
Case(s) referred to in judgment(s):
Ah Toy v Registrar of Companies for the Northern Territory (1985) 61 ALR 583
Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485
Blair v Curran (1939) 62 CLR 464
Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18
Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391
Deputy Commissioner of Taxation v Heaton (1997) 35 ATR 450
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Hewitt v Benale Pty Ltd; WMC Resources Ltd v Koljibabic (2002) 27 WAR 91
Hospitals Contribution Fund of Australia v Hunt (1983) 44 ALR 365
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Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki Smith & Co Pty Ltd, unreported, SCt of WA, Library No 920512; 12 October 1992
Jones v Wesfarmers Ltd [2003] WASCA 225
Kuligowski v Metrobus (2004) 208 ALR 1
Smith v Town & Country Bank, unreported, FCt of SCt of WA; Library No 970716; 18 December 1997
United States Tobacco Co v Minister for Consumer Affairs (1988) 83 ALR 79
White v Johnston (1886) 8 ALT 53
Case(s) also cited:
Nil
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1 COMMISSIONER POWER: This is an appeal against the orders made by Deputy Registrar Harman on 25 October 2004, by which he ordered, among other things, that the plaintiff's application for leave to apply for summary judgment and for summary judgment be dismissed.
2 The appeal is a complete review de novo pursuant to O 6 r 11 of the District Court Rules 1996 and is to be dealt with by way of an actual re-hearing of the application which led to the orders under appeal (Hazart Pty Ltd v Rademaker (1993) 11 WAR 26). 3 The plaintiff contends that it should be given leave to apply for summary judgment and that summary judgment should be entered against the first defendant in the sum of $38,363.50, with interest pursuant to s 32 of the Supreme Court Act 1935. The first defendant did not contest the amount of the sum claimed, but it does dispute that summary judgment should be entered against it. 4 The principles which govern the exercise of my discretion in this appeal are well established. 5 It is for the plaintiff to show that the delay in bringing its application for summary judgment is justifiable in all the circumstances (Jacka Nominees Pty Ltd (in liq) v Edwards Karwacki Smith & Co Pty Ltd, unreported, SCt of WA, Library No 920512; 12 October 1992 at 8 - 9 and Smith v Town & Country Bank, unreported, FCt of SCt of WA; Library No 970716; 18 December 1997). Any particular prejudice caused by the plaintiff's delay will be a relevant factor in determining whether leave should be granted (Deputy Commissioner of Taxation v Heaton (1997) 35 ATR 450 at 453). 6 The plaintiff bears the legal onus of satisfying this Court that summary judgment should be entered against the first defendant (Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18 at 19, 23 and 34). 7 The power to order summary judgment should be exercised with great care and never unless it is clear that there is no real question to be tried (White v Johnston (1886) 8 ALT 53). As the High Court said in Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99: "The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried…although the appellants have not succeeded in
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8 A similar view was earlier expressed by Dixon J in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91: "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury…once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process." 9 Furthermore, the Court should be careful not to risk stifling the development of the law by summarily disposing of this action if there is a reasonable possibility that it will be found in the development of the law that a defence exists. As Master Allen put it, in the context of an application against a plaintiff, in Hospitals Contribution Fund of Australia v Hunt (1983) 44 ALR 365 at 373 - 374: " …a court at first instance should be particularly astute not to risk stifling the development of the law by summarily throwing out of court actions in respect of which there is a reasonable possibility that it will be found, in the development of the law, still embryonic, that a cause of action does lie. The risk of injustice to the plaintiff, which summary termination of his claim would entail, is real. One cannot predict, with firm assurance, what the future holds as the final formulation of the new development." 10 In this appeal, the plaintiff quite appropriately advanced a number of comprehensive arguments to demonstrate that there is no real question to be tried (see Dey v Victorian Railways Commissioners (supra) at 91 and Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332 at 334) and that summary judgment should be entered against the first defendant. The first defendant put similarly comprehensive arguments in response.
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11 In arriving at my decision, I have fully considered all of the arguments put to me by the parties, both orally and in writing, as well as all of the evidence put before the Court and relied on by the parties.
12 Before considering the arguments, it is helpful to overview the background to this matter and put the arguments in their proper context. 13 On 12 January 2001, Ian Gerard Larkin ("the Worker") suffered a disability within the meaning of s 5 of the Workers' Compensation and Rehabilitation Act 1981 ("the Act"). The Worker made an application to the Directorate of Conciliation and Review on 5 April 2001 seeking compensation. The application was the subject of a conciliation conference on 15 May 2001. The conciliation was successful and the second defendant was ordered to pay the Worker weekly payments of compensation for a 10 week period and medical expenses to a maximum of $2,442.78. 14 On 17 August 2002, the application came before Review Officer Spivey ("the Review Officer") for determination. He made an award comprising the following orders: 15 The second defendant did not make any payment pursuant to the Award within 30 days of its making and, as far as I am aware, still has not done so. 16 The Review Officer provided reasons for decision for the Award on the same date ("the Reasons for Decision"). The Reasons for Decision, which are annexure B to the affidavit of Mario D'Ovidio sworn 21 May 2004, relevantly contained the following findings: (a) the Worker suffered a disability within the meaning of the Act on 12 January 2001; (b) the Worker was, on the day on which he suffered the disability, an employee engaged under a contract of service by the second defendant; (c) the Worker was not directly employed by the first defendant;
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(d) neither the first defendant nor the second defendant were relevantly insured under the Act at the material time; (e) the work being undertaken by the Worker at the time of the disability was directly a part or process in the trade or business of the first defendant; (f) there was a relationship of principal and contractor between the first and second defendants, respectively; and (g) the provisions of s 175 of the Act operated. 17 The plaintiff is a body corporate which has the control and administration of the Workers' Compensation & Rehabilitation General Fund ("the General Fund") pursuant to s 100 of the Act. As a result of the second defendant's failure to make any payments pursuant to the Award within the prescribed time, the plaintiff, by its agent, the Insurance Commission of Western Australia ("ICWA") made payments from the General Fund pursuant to s 174(1) of the Act to the Worker to satisfy the Award. No point is taken about the payments being made by ICWA. The payments totalling $38,363.50, comprised weekly payments of compensation in respect of wages of $35,550.00 and statutory allowances of $2,813.50. 18 The Award was not appealed under the Act. 19 It appears from par 39 on p 22 of the Reasons for Decision that the reason for ordering the second defendant, rather than the first defendant or both, to pay the Worker weekly payments of compensation and statutory allowances was that, as both defendants were uninsured, it was considered appropriate by the Review Officer that the first respondent, as the "…actual employer…" of the Worker, should be held liable for and ordered to make payment. 20 The first issue requiring consideration is whether the plaintiff's delay in bringing the application for summary judgment is justifiable in all the circumstances and whether, as a consequence of that delay, some particular prejudice has been suffered by the first defendant. 21 The writ of summons in this action was issued on 16 June 2003. The first defendant entered an appearance on 4 July 2003. The second defendant has, as far as I am aware, not yet been located or served with the writ, with the consequence that the writ against the second defendant has expired.
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22 After obtaining an extension of time, with the consent of the plaintiff, the first defendant served its defence on 29 July 2003.
23 On 5 September 2003 the plaintiff attempted to apply to the Review Officer for him to reconsider his decision pursuant to s 84ZF(3) of the Act on the basis of new information. The new information was that the second defendant was no longer resident in Australia and could not be made to fulfil the requirements of the Award. 24 There was then some correspondence between the Review Officer and the solicitor for the plaintiff concerning that application and whether the matter should be re-listed before him (which is adequately described in pars 7 and 8 of the affidavit of Catherine Anne Ide affirmed on 13 August 2004) so the Award could be amended. 25 The upshot of the correspondence was that the Review Officer indicated, by letter dated 22 October 2003, that he considered the plaintiff did not have the required standing to apply to have the matter re-listed before him. Accordingly, he determined that he would not re-list the matter. 26 At that point, the plaintiff decided that it would not pursue an amendment to the Award and has not done so. 27 On 10 December 2003 a minute of consent orders, enclosing a minute of proposed amended statement of claim, was sent to the first defendant. A signed minute of consent orders was received from the first defendant on 17 March and filed on 23 March 2004. The statement of claim was, accordingly, amended. An amended defence was filed on 6 April 2004 and a reply to it was filed on 21 April 2004. 28 The statement of claim was subsequently further amended to rectify an error in the calculation of the amount claimed. The further amended statement of claim was filed on 2 June 2004. It did not require any further amendment to the defence or reply. 29 By letter dated 14 July 2004, the first defendant advised the plaintiff that it was attempting to obtain an indemnity from its insurer in relation to the present claim. It requested at least four weeks in which to confer with its insurer. The plaintiff postponed the making of its summary judgment application for four weeks. On 10 August 2004, the first defendant advised the plaintiff that its insurer had declined to indemnify it.
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30 This limited chronology of events is extracted from the aforementioned affidavit of Ms Ide, which describes the relevant sequence of events in more detail. The first defendant did not challenge the accuracy of the chronology.
31 In that affidavit, Ms Ide simply deposes that the first defendant will not suffer any prejudice from the grant of leave to apply for summary judgment. Furthermore, she deposes that the first defendant had not to that date communicated any objection to the delays in the action and that some of the delay could be attributed to the time taken by the first defendant to (presumably) respond to the plaintiff's requests or was as a result of the request by the first defendant to postpone the summary judgment application. 32 In the course of argument before me, no particular prejudice was identified by counsel for the first defendant. 33 On the basis of the arguments put by the plaintiff in this appeal, it is at least arguable that an application for summary judgment could have been brought within 21 days of the first defendant's appearance on 4 July 2003. 34 Admittedly, the plaintiff's attempts to apply to the Review Officer to amend the Award, if successful, would have narrowed the issues. However, and as already noted, that attempt was not made until about two months after the first defendant had entered its appearance in the action and just over one month after the first defendant had filed its defence. There was then a delay of about six weeks between what appears to be the date of the plaintiff's decision not to pursue an amendment to the Award and its decision to amend its statement of claim, a minute of the proposed amended statement of claim being sent to the first defendant with the minute of consent orders on 10 December 2003. 35 As also noted, a further amended statement of claim was filed on 2 June 2004, about some six weeks after the reply was filed on 21 April 2004. 36 The plaintiff's application for leave to apply for summary judgment and for summary judgment was filed on 13 August 2004. 37 In the circumstances, it does appear as though some of the delay in bringing the application for leave to apply for summary judgment and summary judgment is properly attributable to the conduct of the plaintiff. I am not entirely satisfied that the application for leave to apply for
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summary judgment was brought as soon as practicable. Nonetheless, no particular prejudice to the defendant has been identified in the course of argument before me, nor relied on by the first defendant. It would appear to be the case that the first defendant may have been generally prejudiced by the additional expense which has been incurred as a result of the application not having been brought by the plaintiff at an earlier stage of the proceedings. 38 Notwithstanding my concerns about the plaintiff's explanations for some of the delay in bringing the application, I am nonetheless satisfied that it has, on the whole, justified that delay in all the circumstances and that there is no particular prejudice to the first defendant such as to warrant the exercise of my discretion against the plaintiff on its application for leave to apply for summary judgment against the first defendant. Consequently, I would not on the basis of delay alone dismiss this appeal. 39 I now turn to consider whether summary judgment should be entered for the plaintiff against the first defendant. 40 As I have already observed, the power to enter summary judgment is one which should be exercised with great care and it should never be exercised unless it is clear that there is no real question to be tried. 41 In essence, the plaintiff contends that there is no real question to be tried for two reasons. 42 First, it argued that the Reasons for Decision determined three relevant issues, in the following ways: (a) a relationship of principal and contractor existed between the first and second defendants; (b) s 175(1) of the Act applies, with the consequence that the first defendant is deemed an employer of the Worker and is jointly and severally liable to pay the compensation due to the Worker under the Act; and (c) the first and second defendants were relevantly uninsured in respect of their liability to pay that compensation. 43 The plaintiff argues that the effect of these findings is that the issues determined by them cannot be re-litigated in this action. In short, the first defendant is issue estopped, with the consequence that it has no defence to this action. In the course of oral argument, counsel for the plaintiff drew a distinction between an order and a decision. The point being its
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contention that, in this case, the findings were a legally indispensable part of the decision (if not also the Award). 44 Secondly and in the alternative, the plaintiff contends that, irrespective of any issue estoppel, the first defendant is liable as a deemed employer under s 175 of the Act to pay the compensation and the plaintiff can exercise its right under s 174(1) to sue and recover against the first defendant, by virtue of the operation of s 174(2) of the Act. 45 The first defendant contends that it has not paid the compensation within 30 days of the Award, because no award, requiring it to make that payment, was made against it (Cairns, "Australian Civil Procedure", 6th ed, Law Book Co, 2005 at 553 – 554 and the cases referred to therein). Any failure to satisfy the Award was said to be that of the second defendant. 46 Furthermore, the first defendant contends that the findings relied on by the plaintiff are not legally indispensable to the conclusion which underpins the Award and are, consequently, subsidiary or collateral to it. It argues that, as the findings relied on by the plaintiff are not legally indispensable, they cannot be a basis for any issue estoppel. 47 Moreover, the first defendant argues that s 174(2) of the Act cannot independently render it liable, in the absence of an award against the first defendant. 48 The first defendant also contends that the application for summary judgment is an attempt to circumvent the Award. 49 The starting point for a closer analysis of these arguments is an examination of the provisions of s 174 and s 175 of the Act. 50 Section 174 provided: "174. Payment to worker from General Fund (1) Where – (a) compensation in accordance with this Act is due by an employer to a worker (other than a worker in respect of whom refusal of insurance is permitted pursuant to this Act);
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51 Section 175 provided:
"Division 2 – Insurance by principals, contractors, and sub-contractors
175. Principal contractor and sub-contractor deemed employers (1) Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor if he were the sole employer would be liable to pay under this Act. (2) The principal is entitled to indemnity from the contractor for the principal's liability under this section. (3) The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal. (4) Where the principal and the contractor are jointly and severally liable under this section, a judgment obtained against one is not a bar to proceedings against the other except to the extent that the judgment has been satisfied. (5) Where compensation is claimed from or proceedings are taken against the principal, in the application of this Act a reference to the employer shall be read as a reference to the principal except where, for the purpose of calculating the amount of compensation, a reference is made to the earnings of a worker, the reference shall be read
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as a reference to the earnings of the worker under the contractor. (6) For the reasons of this section, where sub-contracts are made – (7) Where the disability does not occur in respect of premises on which the principal has undertaken to execute the work or which are otherwise under his control or management, subsections (1) to (6) inclusive do not apply." 52 It appears from the Review Officer's Reasons for Decision, that the first defendant has been found to be a deemed employer of the Worker and is, as a consequence, by the operation of s 175(1) of the Act, jointly and severally liable to pay any compensation which the contractor (the second defendant in this case) if he were the sole employer would be liable to pay under the Act. 53 It also appears from the language of s 174(1) that the obligation on the plaintiff to pay the Worker the amount required to satisfy the Award, namely, $38,363.50, from monies standing to the credit of the General Fund and any award for costs, arises when each of the three requirements in s 174(1)(a) to s 174(1)(c) have been met. 54 Arguably, any liability which the first defendant has under s 175(1) to pay the compensation satisfies the requirement in s 174(1)(a) that compensation in accordance with the Act is due by an employer to a worker. By s 18 of the Act, an employer shall, subject to the Act, be
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liable to pay compensation in accordance with Schedule 1 if a disability of a worker occurs. Section 21 of the Act renders an employer liable to pay compensation under the Act from the date of incapacity resulting from the disability. The distinction which might be drawn is that the compensation the subject of these proceedings becomes due only when an award is made against the first defendant. On the other hand, it might be contended that the compensation is due, because if the first defendant were the sole employer an award of the kind made would make that compensation due and payable (see s 175(1)). 55 It would appear that the relevant requirement in s 174(1)(b) has been met. The first defendant, like the second defendant, was not relevantly insured against its liability to pay compensation to the Worker under the Act. 56 Section 174(1)(c) is the final requirement. It is that the employer does not pay the compensation due within 30 days of the obtaining of an award by the Worker or his representative. As previously noted, the second defendant did not pay the compensation due within the time prescribed. 57 In addition to creating the obligation to pay the amount required to satisfy the Award (and any attendant award for costs), s 174(1) also enables the plaintiff to sue for and recover that amount from the employer (and to exercise any rights of the employer under the Act in relation to the payment of that Award until that amount is so recovered). 58 It may be argued that the ability to sue and recover is dependent on a valid payment by the plaintiff under s 174(1). Suffice to say, that argument was not explored in this appeal. 59 Reading the last requirement creating the obligation to pay the amount required to satisfy the Award (s 174(1)(c)) in conjunction with the power to sue for and recover that amount from the employer, lends some support to the argument that the obligation to pay and the right to sue and recover are concerned with and confined to the same thing – the non-payment of compensation by an employer against whom an award has been made and the recovery of that compensation from the same employer. It is not altogether clear from reading s 174(1) alone that the right of recovery extends beyond the employer against whom an award has been made. 60 However, s 174(2) of the Act assists in understanding the nature and extent of the right to sue and recover prescribed by s 174(1).
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61 First, s 174(2) provides that the reference to the employer in s 174(1) shall be read as a reference to each person liable, by reason of s 175, as an employer to pay compensation under the Act to a worker. It also provides that the rights of the plaintiff against the employer under that subsection, which appears to be a reference to s 174(1), are exercisable against those persons jointly and severally (and a judgment against one is not a bar to proceedings against the other, except to the extent that any such judgment has been satisfied).
62 Under s 174(1), the right against an employer is the right to sue for and recover the amount required to satisfy any award (and any attendant award for costs) from the employer (and, until it so recovers that amount, includes the exercise of any rights of the employer under the Act in relation to the payment of that award). 63 The obligation to pay the worker is expressed as an obligation to pay, from the General Fund, the amount required to satisfy the award (and any award for costs in respect thereof). The power to sue for and recover that amount from the employer, which by s 174(2) would appear to include the first defendant, is a power to sue for and recover the amount required to satisfy the award. The ability to sue for and recover that amount does not appear to be dependent on the worker obtaining an award of compensation against the first defendant and the first defendant not paying that compensation within 30 days of the award. In short, the ability to sue for and recover the amount paid from an employer is arguably not expressed in a way which would indicate a legislative intent that it be confined to the circumstance where the employer sued and from whom recovery is sought must be an employer against whom an award has been made. Such an interpretation would be consistent with the legislative scheme, which appears designed to ensure that any payments made from the General Fund (in respect of an uninsured liability) are recoverable from another source where they cannot be recovered from the so called direct employer (s 18 Interpretation Act 1984). Arguably, it is also consistent with the extension of liability for an employee's disability to a principal who would not otherwise be regarded as an employer (Jones v Wesfarmers Ltd [2003] WASCA 225 at [70]) and the inclusive definition of "employer" in s 5 (Hewitt v Benale Pty Ltd; WMC Resources Ltd v Koljibabic (2002) 27 WAR 91 at [25]). 64 Against this construction of these provisions is the presently less convincing argument that there is some ambiguity in s 174(2), where it relevantly provides:
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"(2) Where by reason of section 175 more than one person is liable as an employer to pay compensation under this Act to a worker, the reference in subsection (1) to the employer shall be read as a reference toeach person so liable,… ." [My emphasis] 65 Arguably, a question which might be asked is what is meant by the words "…each person so liable...". Are they intended to be a reference to each person liable to pay compensation under the Act pursuant to s 175? Alternatively, are they intended to be a reference to a person liable to pay compensation due pursuant to an award made against that person? Section 174(1) is concerned with the latter. If the words " …each person so liable…" are intended to mean only the latter, then the rights of the plaintiff are exercisable only against the second defendant and not the first defendant, the first defendant not being a person liable to pay compensation pursuant to the Award. The first defendant relevantly contends that where s 18 provides that it is "…subject to this Act…", it should be interpreted to mean that it is subject to what the first defendant maintains is the proper interpretation of s 174. For the reasons which I have already outlined, I would not regard such a narrow, and possibly absurd, interpretation likely. The more generous and purposive construction is more likely. 66 The different potential constructions of s 174(1) and s 174(2) and their effects lead me to conclude that the plaintiff has not discharged its onus in demonstrating that there is no real question to be tried. 67 Nonetheless, it is appropriate that I give some consideration to the arguments on issue estoppel. 68 As already noted, the primary submission in opposition to the argument that there is an issue estoppel is that the deemed relationship between the Worker and the first defendant is legally dispensable to the conclusions which underpin the Award against the second defendant and, therefore, cannot ground any estoppel. The first defendant contends that this is made obvious by the inability of the first defendant to appeal any factual findings made by the Review Officer, there being no award made against the first defendant (Ah Toy v Registrar of Companies for the Northern Territory (1985) 61 ALR 583). 69 The plaintiff was an intervenor in the proceedings which resulted in the Award and maintains, as a result, that it is entitled to rely on any relevant issue estoppel (Australian Securities Commission
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v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 505; Corporate Affairs Commission v Bradley [1974] 1 NSWLR 391 at 396 and United States Tobacco Co v Minister for Consumer Affairs (1988) 83 ALR 79 at 94). The first defendant did not appear to take much issue with this proposition, preferring to concentrate instead on whether there was any basis for such an estoppel. 70 The principles governing issue estoppel are well described in the judgment of Dixon J in Blair v Curran (1939) 62 CLR 464 at 531 - 533: "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order. Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J. in R. v. Inhabitants of the Township of Hartington Middle Quarter (1), the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision
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itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous. In the phraseology of Lord Shaw, 'a fact fundamental to the decision arrived at' in the former proceedings and 'the legal quality of the fact' must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation (2)). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation. The difficulty in the actual application of these conceptions is to distinguish the matters fundamental or cardinal to the prior decision or judgment, decree or order or necessarily involved in it as its legal justification or foundation from matters which even though actually raised and decided as being in the circumstances of the case the determining considerations, yet are not in point of law the essential foundation or groundwork of the judgment, decree or order." (See also Kuligowski v Metrobus (2004) 208 ALR 1 at 9 - 18). 71 The first defendant contends that it is not estopped from contesting the issue that it was not at the material time an employer of the Worker, because that finding, if made, was not legally indispensable. It was not legally indispensable, according to the first defendant, because it was not a necessary finding for the Award (against the second defendant). In other words, it argues it was not a matter necessarily established as the legal foundation or justification for the conclusion, namely, the Award. 72 On one view, the first defendant's contention is not without some merit. It was not necessary to find that the first defendant was an employer of the Worker to make the Award against the second defendant. 73 On the other hand, the Award against the second defendant appears to have been made on the basis that, as both defendants were uninsured and as the second defendant was the "…actual employer…" of the
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Worker, it was considered appropriate that it be held liable for the payment of workers' compensation. Presumably, an award could just as easily have been made against the first defendant, or both defendants, but it was not. No contrary proposition was advanced by the first defendant. 74 If there is no issue estoppel, then it is arguably open to the first defendant to contest the plaintiff's claim against it on the basis that it was not relevantly an employer (which could be held liable) under the Act. 75 Again, it should be apparent from what is outlined above that it cannot be said, in respect of the arguments about issue estoppel, that there is no real question to be tried. The first defendant's contention that the finding that it was an employer may not be legally indispensable to the Award, if that Award is the relevant "conclusion". The resolution of this issue is more properly a matter for trial, not a summary judgment application. 76 The first defendant also contends that the Award was a final decision incapable of being challenged other than through the appeal process in the Act. It argues that the effect of s 84B was to confer exclusive jurisdiction and limit any rights of appeal against the decision of the Review Officer to a compensation magistrate (s 87ZN of the Act). In short, the dispute about who was liable to pay compensation was to be dealt with exclusively under Part IIIA of the Act. It argues that the failure to appeal the Award had the effect of foreclosing the plaintiff's attempt in these proceedings to, as it described it, circumvent the Award by a collateral attack on it. 77 I should make two observations about this argument. First, in the course of oral argument, it appeared to assume less significance than the other two arguments between the parties. Secondly, whether the current proceedings are a collateral attack intended to circumvent the consequences of the Award might ultimately depend on what is the proper construction and the effect of s 174(2). Moreover, the existence of this argument and the potential for its development again highlight the need to proceed with caution when exercising my discretion in this appeal. Consequently, I am not satisfied, in this respect, that the plaintiff has discharged its onus. 78 Having expressed my conclusions in respect of each of the principal arguments put by the parties, it would be evident that I am not satisfied that the plaintiff has discharged its onus. Although it might be said that there should be some concerns about whether the first defendant has
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positively established a defence, it is clear to me, on the basis of the comprehensive arguments put by the parties, that some of these arguments are capable of further development. The timeless caution that the power to order summary judgment is one which should be exercised with great care, is one which is, to my mind, entirely appropriate to this case. The first defendant should have the opportunity to develop its arguments at trial. The plaintiff has not established that there is no real question to be tried. 79 For all of the reasons I have mentioned and applying the principles governing the exercise of my discretion, as I am required to, I do not consider this to be a proper case in which to allow the appeal and enter summary judgment for the plaintiff against the first defendant. Consequently, I would not do so. 80 Accordingly, I would dismiss the appeal against the orders of Deputy Registrar Harman made on 25 October 2004. I will hear the parties on costs.
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