Coles Myer Limited v Victorian WorkCover Authority and Frew [2002] VSCA 144

5. It would appear that the respondent first made a claim for compensation in September 1995 claiming to have been injured at "Myers, Keys Road Moorabbin" but stating that she had not reported the injury because "Drakes employ us, not Myer, and I did not know who to see". In any event, it would seem that her claim was accepted by the Victorian WorkCover Authority (VWA) or its agent - as insurer for Drakes - and compensation was paid pursuant to Division 2 of Part 4 of the Act, including s.98 and s.98A lump sum benefits. We were informed that such compensation was paid by VWA because it accepted that, at the relevant time, the respondent was employed by Drakes, even though the Act contemplates that Coles might also have been a deemed employer by virtue of its extension provisions.

8. In 1999 - and in purported compliance with the provisions of sub-ss.(2B) and (3) of s.135A the respondent made an application to have determined her "degree of impairment" as a prelude, if necessary, to bringing proceedings for common law damages as prescribed by the section. After the WorkCover amendments made to the Act in December of 1992, the section, relevantly, permits the bringing of such proceedings only if the injury arose out of, or in the course of, or due to the nature of employment and "if employment of that nature was a significant contributing factor, and the injury is a serious injury and arose on or after 1 December 1992". (Section 135A(2)(a).).

11. The respondent claims that her injury was and is such a compensable injury. Nevertheless, before she can commence common law proceedings against the person or persons responsible for her injuries, she has to be able to establish, in accordance with what are referred to as "gateway provisions" in s.135A, that her injury is "a serious injury" as defined. In the first place, she cannot bring proceedings unless a determination of her "degree of impairment" has been made in accordance with the section (sub-s.(2A)). Application for such a determination is to be made to the VWA or a "self-insurer" within a limited time period (sub-s.(2B)). If the VWA or self-insurer determines the degree of impairment in accordance with s.91 of the Act to be 30 per cent or more, then the injury is deemed to be a "serious injury" so as to permit proceedings for damages to be brought. If the Authority or self-insurer assess the degree of impairment as less than 30 per cent, then the person injured cannot bring the proceedings contemplated by s.135A unless the Authority or self-insurer is satisfied that the injury is "serious" and issues a certificate in writing consenting to the bringing of the proceedings (sub-s.(4)(a)) or a court, which is usually the County Court, upon the application of the person injured, gives leave to bring such proceedings (sub-s.(4)(b)). The Court may only give such leave if it is satisfied that the injury is a "serious injury".

14. In this case, the respondent, on 15 February 1999, applied to VWA to determine her "degree of impairment" in accordance with the provisions of the section. Her solicitor's letter recorded that it was the respondent's intention to bring common law proceedings against the employer ("Drakes") in respect of the injury suffered on 8 September 1995. The letter informed the Authority that in the event that the degree of impairment was assessed at less than 30 per cent, it was the respondent's intention to seek the Court's leave to bring the common law proceedings and to do so pursuant to sub-s.(4)(b) and (6) of the section.

17. On 4 March 1999, the Authority, through its agent, responded to the solicitor's letter, informing them that the letter of 15 February did not constitute a formal application under sub-s.(2B). The respondent's solicitor, on 17 December 1999, accordingly wrote a further letter, enclosing a prescribed s.135A "form of application" seeking a determination of the degree of impairment of the respondent and again informing the Authority of the respondent's intention - should the application prove unsuccessful - to make an application to the Court pursuant to sub-s.(4)(b) for leave to bring the proceedings. In response to this letter, the Authority's solicitors, Messrs Dunhill Madden Butler, wrote on 8 February 2000 acknowledging receipt of the respondent's claim and noting that the "expiry date" for making the degree of impairment determination was 18 April 2000. They sought the respondent's confirmation of that date, which was duly forthcoming. Not surprisingly, the respondent's solicitors were concerned at the time which was elapsing, bearing in mind that the injury was alleged to have occurred in September of 1995 and that the relevant limitation period would expire in September 2001. They had sought, unsuccessfully, to get the Authority to waive its right to rely upon the limitation period, in the event that the respondent would be unable to have her relevant rights determined before the expiry of the limitation period.

20. In any event, and notwithstanding these concerns, the Authority's solicitors wrote to the respondent's solicitors upon the very last day for delivery of the Authority's impairment assessment. They informed the respondent's solicitors that the Authority had assessed the impairment at less than 30 per cent and had rejected the application for a "serious injury certificate". Accordingly, and as previously forecast, the respondent filed her originating motion in the County Court on 4 May 2000 seeking the court's leave to bring the proceedings contemplated. The originating motion named the respondent as plaintiff and Coles Myer Limited and the VWA as defendants. In response to the originating motion the appellant, on 16 November 2000, issued a summons seeking an order that, as against it, the claim made by the originating motion be struck out.

23. The summons to "strike out" the claim made in the originating motion as against the appellant came before a judge of the County Court on or about 20 December 2000, at the same time as the respondent's originating motion was returned. Because of the time of year, it seems to have been agreed that the appellant's interlocutory application should be determined initially, with a view to fixing thereafter a time for the hearing of the originating motion. In the events which happened, the respondent's originating motion, which seeks leave to commence proceedings under s.135A, still remains to be heard. Nevertheless, the appellant's "strike out" application proceeded. In the course of his reasons dismissing the application on 21 February 2001, his Honour described the basis of the application as follows:

"The primary point made by Mr Curtain" (who appeared for the appellant below, but not on this appeal) "was that the scheme of s.135A permits the making of an application for a declaration that the plaintiff has sustained a serious injury only after certain steps had been taken. Although it is conceded that the plaintiff purported to take those steps, Mr Curtain's contention is that she did not do so correctly, in that the preliminary application was not made to his client, but to another entity. Thus, it is claimed that the first time the [appellant] became aware of the [respondent's] proposal to seek to institute common law proceedings was when it was served with a copy of this notice of motion. The submission is that this application (i.e. the 'serious injury' application) cannot be made other than in respect of an employer to whom a preliminary application for a determination of the degree of impairment pursuant to sub-s.(3) of s.135A has been made."

27. His Honour dismissed the "strike out" application on the basis that sub-s.(3) provided that it was the "Authority or self-insurer" which was to determine the degree of impairment of the worker. He also noted that sub-s.(5) of s.135A provided that the application made to the Court under sub-s.(4)(b) "must be served on the Authority or self-insurer and on each person against whom the applicant claims to have a cause of action". This led his Honour to observe that:

"It is envisaged by sub-s.(5) that the cause of action may proceed against a party who has not previously had the opportunity of assessing impairment or considering the separate application for a serious injury certificate."

31. Finally, his Honour, who is an experienced judge in this jurisdiction, stated that he was not aware of "this problem" having arisen in any other case, but that "one can understand how a degree of confusion had crept in" when the solicitors for the appellant had only learned of the existence of a notice of motion nominating their client as an employer when they had not been aware of the earlier "impairment degree" application

34. Although his Honour's orders made on the application did not finally dispose of the rights of the parties in any litigation between them, and were therefore interlocutory in nature, this Court (comprising Charles, J.A. and myself) granted leave to the appellant to appeal against that order on 16 March 2001. Because, by the time that application was heard, it was apparent that the respondent's capacity to commence any common law proceedings which she might thereafter be given leave to bring would be prejudiced by the passage of time beyond the relevant limitation period, leave was granted only upon an undertaking given by the appellant, through its counsel, that it would consent to an extension of, or not take any point in respect of, times of limitation which might hereafter prejudice the respondent in such proceedings as she might be given leave to bring.

37. Upon the hearing of this appeal the appellant was represented by Mr David Beach and Mr McDonald; the respondent by Mr Fox and Mr Nettlefold; and the VWA by Mr Coish. In the events which transpired on the appeal, it appeared that the issues were much narrower than I, and I speak entirely for myself, had anticipated them to be. Mr Beach did not contend that the VWA was not the authority properly in control of the respondent's compensation claim as the relevant insurer of Drake Personnel, or that Drake Personnel was not the or, at least, one of the employers of the respondent; nor was it contended that the VWA was not entitled to determine the degree of impairment of the respondent as the insurer of Drake Personnel. His contention was, as I understood it, that the only person who could be named as a respondent to the "serious injury" application was the VWA because it was the person who had made the determination of the respondent's "degree of impairment" and was thus the only person whom the Act contemplated as a defendant to the sub-s.(4)(b) application; and that that was so because it was the person - and the only person, who - by its conduct - was in dispute with the respondent, in the sense that it was the person who had denied to the respondent the remedy which she sought. Coles Myer, as self-insurer and alleged employer, had not made any such determination and, accordingly, it should not have been named as a party to the originating motion. Sub-s.(5) of s.135A does not give the right, so it was submitted, to name an independent third-party wrongdoer as a party to the originating motion. All that the sub-section does is to give to the respondent the right - indeed the obligation - to serve a copy of the sub-s.(4)(b) application upon a person against whom she claims to have a cause of action. It was contended that, to make a person like Coles Myer - which is a self- insurer - a party to such an application will expose it - notwithstanding that it has had no notice of the applicant's claim against it as wrongdoer - to procedural prejudice by virtue of provisions such as those contained in sub-ss.(2DD) and (2DE). Mr Beach pointed out that the written submissions filed on behalf of the respondent to this appeal virtually conceded the point which the appellant was making because those submissions agreed in paragraph 9 that:

"The appellant was not the respondent's employer, but a negligent third party who assumed the responsibility of an employer in the circumstances";

"As a negligent third party, the appellant is not entitled to any role whatsoever in the s.135A process..."

43. I am prepared to assume that, on a technical understanding of what he calls the "scheme of the Act", Mr Beach is right, and that the only person who should be named as a respondent to a sub-s.(4)(b) application is the Authority or insurer who, on behalf of the employer, made the determination of the degree of impairment, and not a person who is alleged by the applicant to be a negligent third party. On this narrow aspect of the Act's interpretation, he has the support of Mr Coish, who appeared on behalf of the VWA. He, too, maintained that the respondent's claim to VWA was properly made, and that Drakes were her employers. He was not prepared, however, to agree that Drakes are absolved from a duty of care to the respondent; nor can it be inferred, he says, that they will not be sued. All counsel, I think, agreed that the point being made about what persons should or should not be named as parties to the sub-s.(4)(b) application is a novel point which, in the past, has been honoured as much in the breach as in the observance. However, the issue of whether the appellant has been properly joined as a party to the originating motion is not one which, in my view, is necessary to be determined for the proper disposition of this appeal. This Court, and counsel in this case, are aware of many originating motions making applications under sub-s.(4)(b) which have named as parties to them persons other than those who have made the determination of the degree of impairment, and have named as parties those against whom the applicant claims to have a cause of action. That no doubt has been influenced by the provisions of sub-s.(5) because, as a matter of fairness, such persons should be notified that if the application succeeds they will be parties to the ensuing proceedings. Although it is unnecessary to decide the point here, it might be thought that the legislature has required that those persons be given notice of the sub-s.(4)(b) application because they should at least have the opportunity to make submissions in defence of their interests. Perhaps an intended defendant who is a self- insurer stands in a different position but, as presently advised, I cannot agree that the prejudice which is here alleged does in fact flow from procedural provisions such as sub-ss.(2DD) or (2DE), in the event that such a person is made a party in the circumstances which obtained here. Furthermore, counsel for the appellant in this court has undertaken not to take any such point should proceedings ultimately eventuate.

46. Having regard to the narrowness of the issues which have been debated on this appeal, it seems to me that it is the respondent who has suffered the prejudice as a consequence of the inevitable delay which the course of proceedings has taken. As I have said, it is my recall that those issues are more confined than those which were put to us on the application for leave over a year ago. I am indebted to Charles, J.A. for the concise notes of the arguments addressed to us when leave was sought. Those notes, although by no means intending to be complete, confirm my own recollection that the application was made at least partly on the basis that the VWA should not have made the determination of the degree of impairment; but that it should have been the self-insurer because it was alleged to be the employer. It was contended that the respondent had no right to make the application under sub-s.(4)(b) because there had been a non-compliance with the "gateway provisions" of the Act. I am of course mindful of the fact that there is a "Delphic quality" about the issues in dispute between the parties which could easily give rise to a misconception of what has been said more than a year ago; and I would not wish it to be thought that I am being critical of counsel in any way at all.

49. But whether I am right or wrong about what I have said, the fact is that this Court is being asked to review an interlocutory decision in a matter of practice and procedure, the effect of which, if allowed to stand - and for the reasons stated - will not work a substantial injustice to the appellant. The judge's order might be relevant to a preferred view of the scheme of operation of an Act which is frequently employed in this State and, in respect of which, it is no doubt desirable to have settled and uniform practices. But it is not a decision which determines the substantive rights of the parties in this litigation. For my own part, I regard the judge's order as one of the kind to which the oft-repeated words of Jordan, C.J. in In re Will of Gilbert (decd)[1] can aptly be applied. His Honour said.

"There is a material difference between an exercise of discretion on a point of practice and procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of the judge at first instance, the result would be disastrous to the proper administration of justice."

53. For the reasons stated, it is my view that this appeal should be dismissed.

58. I agree that the appeal should be dismissed for the reasons given by the President.

63. Save that I was not a member of the Court which heard the application for leave to appeal and cannot comment on what transpired on that occasion, I concur with the reasons and proposed orders of the learned President .

69. The formal order of the Court is that the appeal be dismissed with costs including costs reserved.

[1] (1946) 46 S.R. (N.S.W.) 318 at 323.