(2) Is s 48 of the SRC Act limited in its application to claims for damages of the type that are abrogated by s 44?
66 There are several provisions of the SRC Act which refer to actions, proceedings, or claims for damages -
(a) s 4(1), which defines "damages" as including "any amount paid under a compromise or settlement of a claim for damages";
(b) s 44, which provides that "an action or other proceeding for damages" does not lie against the Commonwealth, a Commonwealth authority, a licensed corporation, or an employee in respect of a compensable injury;
(c) s 45, which provides that an employee may elect in writing to institute "an action or proceeding" against the Commonwealth, a Commonwealth authority, a licensed corporation, or other employee for damages for non-economic loss;
(d) s 46, which requires an employee or dependant to notify Comcare of a "claim" made against a third party for the recovery of damages in respect of a compensable injury to, or death of, the employee;
(e) s 47, which requires an employee or dependant to notify Comcare of a "claim for damages" made against the Commonwealth, a Commonwealth authority, a licensed corporation, or another employee in respect of a compensable injury or death;
(f) s 48, which is the focus of this appeal, which is engaged where an employee "recovers damages in respect of" a compensable injury, or where "damages are recovered by" a dependant in respect of a death where compensation was payable in respect of the injury that resulted in the death;
(g) the subrogation provision in s 50 headed "Common law claims against third parties", which provides that Comcare "may make a claim" for damages in the name of an employee or dependant against a person where the injury or death occurred in circumstances that appear to create a legal liability in that person to pay damages;
(h) the form of statutory garnishee in s 51, which is engaged where a person "appears to be liable" to pay damages, and where Comcare may require the person to pay the damages to Comcare if the person "agrees to pay damages" to the employee or dependant, or if damages are awarded to the employee or dependant "in proceedings arising out of" a claim made in respect of the injury or death; and
(i) s 52A, which applies where "an employee takes action for non-economic loss", and under which Comcare may "take over the conduct of that action" on behalf of the party against whom the claim is made.
67 As I indicated earlier, one question that arose in the Full Court's decision in Romero was whether s 54 of the Seafarers Act precluded an employee bringing a complaint for sex discrimination. Subsection 54(1) of the Seafarers Act corresponds to s 44(1) of the SRC Act, although there are slight but immaterial differences of expression -
54 Employee not to have right to bring action for damages against employer etc. in certain cases
(1) Subject to section 55, a person does not have a right to bring an action or other proceedings against his or her employer, or an employee of the employer in respect of:
(a) an injury sustained by an employee in the course of his or her employment, being an injury in respect of which the employer would, apart from this subsection, be liable (whether vicariously or otherwise) for damages; or
(b) the loss of, or damage to, property used by an employee resulting from such an injury.
...
68 Other provisions of Part 4 of the Seafarers Act generally correspond to Part IV of the SRC Act, although there are other differences of expression. For instance, the headings to ss 56, 57, and 59 of the Seafarers Act refer to "proceedings" rather than "common law claims", and the text of those provisions refers to the institution of proceedings rather than the making of claims. Section 58 of the Seafarers Act corresponds to s 48 of the SRC Act, and provides for an employee or dependant to account to the employer for any damages recovered, and for the termination of compensation under the Act after the date on which damages are recovered.
69 In Romero at first instance, Ms Romero claimed that she had been the subject of bullying and vilification by the captain of a ship. She claimed that the captain and her employer had engaged in wrongful conduct in breach of s 14(2) of the Sex Discrimination Act, and that the employer had breached her contract of employment, and in particular a workplace discrimination and harassment policy that she alleged was incorporated into the contract of employment.
70 At a factual level, the claims of discrimination by Ms Romero were not accepted by the trial judge, Marshall J: Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCA 439 at [17]-[22]. Further, Marshall J did not accept that, even if the workplace harassment policy was incorporated into the contract of employment, that the employer had breached the policy: [31]-[33]. A claim that the employer was in breach of an implied term of mutual trust and confidence in the contract of employment was also rejected: [42].
71 After addressing Ms Romero's claims at a factual level, Marshall J considered a jurisdictional point that had been raised by the employer in reliance on s 54(1) of the Seafarers Act. The employer submitted that s 54(1) was a complete bar to Ms Romero's case on the ground that she had lodged a claim for statutory compensation under the Seafarers Act in respect of a compensable injury, and that her claims in the Court could only be understood as arising from such an injury. Marshall J rejected these arguments, holding that -
(1) The consideration of the ordinary words of s 54 of the Seafarers Act conveys the meaning that it was designed to deal with claims in respect of negligence for personal injuries sustained in the course of employment and not those sustained as a consequence of treatment which breaches the Sex Discrimination Act or an employment contract: [47].
(2) This construction was supported by extrinsic material, namely the second reading speech of the Bill which was enacted as the Seafarers Act, and also the second reading speech for the Bill which was enacted as the Commonwealth Employees' Rehabilitation and Compensation Act to which I referred at [7] above.
(3) Parliament did not intend to bar a breach of contract claim to which injury was largely incidental: [50].
(4) The central focus of s 54 of the Seafarers Act was to ask what is being claimed, and Ms Romero was claiming a breach of the Sex Discrimination Act over which the Court had jurisdiction, and a breach of contract in respect of which there was accrued jurisdiction: [50]. On the other hand, the Seafarers Act was directed towards personal injury claims brought under common law: [51].
(5) Marshall J found that Ms Romero's claim, which included declaratory relief and an apology pursuant to s 46PO(4) of the AHRC Act, were not "in respect of" an injury, but instead, "in respect of" an alleged breach of the Sex Discrimination Act and in respect of an alleged breach of her employment contract: [52].
72 On appeal by Ms Romero, the employer cross-appealed on the ground that Marshall J had been in error in rejecting the claim that the Court lacked jurisdiction. The Full Court (Allsop CJ, Rares and McKerracher JJ) dismissed the cross-appeal, and at [103] adopted the reasons given by Marshall J. To those reasons, the Full Court added -
107 There is no doubt that the claim by Ms Romero in the proceeding below was a claim "in respect of" an alleged breach of the [Sex Discrimination Act] as well as a claim for breach of contract in the Court's accrued jurisdiction. As the Second Reading Speech makes clear, s 54 [of the Seafarers Act] is plainly directed towards personal injury claims brought under the common law.
108 To the primary judge's reasoning may be added the observation that s 6 [of the Seafarers Act] provides:
6 Injuries suffered by employees
A reference in this Act to an injury suffered by an employee is, unless the contrary intention appears, a reference to an injury suffered by the employee for which compensation is payable under this Act.
(Emphasis added)
109 Clearly damages either under the [Sex Discrimination Act] and the Australian Human Rights Commission Act 1986 (Cth) (AHRCA) or at common law for breach of contract are not compensation "payable under this Act" (ie the [Seafarers Act]). The claim under the [Sex Discrimination Act] is only capable of being pursued by virtue of s 46PO of the AHRCA.
110 Further, there could not possibly be any discernible policy reason to exclude such claims from the industry in which these parties were participants.
(Emphasis in original.)
73 As I have mentioned, the parties accepted that the reasoning in Romero was equally applicable to s 44 of the SRC Act, with the consequence that the respondent's AHRC complaint was not precluded by that provision. Further, no party submitted that the reasoning of Marshall J or the Full Court in Romero was to be doubted.
74 The primary judge's analysis proceeded on the premise that because remedies under s 46PO(4) were outside the scope of operation of s 44(1) of the SRC Act, it was difficult to see a policy reason for adopting a construction of the word "damages" when used in the SRC Act for conduct that was able to be litigated by an employee against his or her employer for unlawful discrimination: J [93]. At J [94], the primary judge stated that s 48(1) was intended to prevent double recovery, or double-dipping, which begged the question as to what the second dip is. His Honour's response to the question posed was that -
... It must be in respect of the causes of action or other proceedings for damages that s 44(1) provides do not lie against a Commonwealth employer in respect of an injury sustained by an employee in the course of which the employer would be liable (including vicariously) for damages. The [Disability Discrimination Act] and [Sex Discrimination Act] create just such causes of action for employees against their Commonwealth employers. Moreover, the [Disability Discrimination Act] was enacted after [the SRC Act] yet the Parliament did not limit the remedies under s 46PO(4) of the AHRC Act to "loss or damage suffered because of conduct of the respondent" by excluding injury within the meaning of [the SRC Act].
(Emphasis added.)
75 I respectfully agree with the primary judge's conclusion that an order for damages, or an agreement to pay damages, on account of unlawful discrimination is outside the scope of s 48 of the SRC Act. I will express my own reasons for that conclusion.
76 The place to start is the text of the legislation, construed having regard to its history and context: see, Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ). Context should be regarded at the first stage and not at some later stage, and it should be regarded in its widest sense: SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 262 CLR 362 at [14] (Kiefel CJ, Nettle and Gordon JJ). Further, the SRC Act, which establishes a comprehensive scheme for no-fault compensation which includes limitations on common law rights, and the interaction between the recovery of damages and statutory compensation, must be considered as a whole to ascertain the objects of the Act and whether its provisions are intended to achieve harmonious goals: see generally, Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]-[71] (McHugh, Gummow, Kirby and Hayne JJ).
77 Section 44 of the SRC Act provides that "an action or other proceeding for damages" does not lie against the Commonwealth, a Commonwealth authority, or a licensed corporation in respect of a compensable injury. Applying the Full Court's decision in Romero, damages paid in compromise of a complaint to the AHRC alleging unlawful discrimination are, as a product of statutory construction that has regard to context and purpose, outside s 44. Such a complaint, or any proceeding that follows that complaint, is not "an action or other proceeding for damages" for the purposes of s 44, because it is not a common law action for damages of the type contemplated by the provision. It is clear that Part IV of the SRC Act includes dependants' claims within the concept of common law actions for damages notwithstanding that they owe their existence to statute. The term "common law" appearing in the extrinsic material and in the headings to ss 46, 47, and 50, is sensitive to context, and in this context it is used to distinguish claims for damages that involve establishing common law negligence or breach of statutory duty in order to found a claim for damages from other claims that are based in statute, such as no-fault compensation. That is a delineation that is well understood, and so much is clear from the explanatory memorandum to the 2001 amendments to which I referred at [18] above. It is also clear from the fact that dependants' claims are included within the text of ss 46, 47 and 50, which refer to "common law claims" in their headings. These headings, which were introduced by the 2001 amending Act, form part of the Act, and are indicative of the type of claims with which Part IV is concerned. Of special significance are the headings above ss 46 and 47 which contain the notice requirements in relation to common law claims against, respectively: (a) third parties; and (b) the Commonwealth, Commonwealth authorities, licensed corporations and other employees.
78 Section 48, which is concerned with the recovery of damages "in respect of" a compensable injury or death, should be construed in its surrounding context. The words "in respect of" may have a wide meaning, but as with other words and expressions, the meaning depends very much on the context in which it is found: State Government Insurance Office (Qld) v Rees [1979] HCA 52; 144 CLR 549 at 561 (Mason J), cited with approval in Workers' Compensation Board of Queensland v Technical Products Pty Ltd [1988] HCA 49; 165 CLR 642 at 647 (Wilson and Gaudron JJ). In the latter case, Deane, Dawson and Toohey JJ at 653-654 stated that undoubtedly the words "in respect of" have a wide meaning, but that "the phrase gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends".
79 The definition of "damages" which I set out at [10] above is important, because it includes "any amount paid under a compromise or settlement of a claim for damages". For the purposes of s 48, a claim for damages would include at least any claim for damages that falls outside the preclusion brought about by s 44, which would encompass claims against third parties, and claims by dependants. But in my view, coherence requires that the references to "damages" in s 48 and in the definition of "damages" in s 4(1) are to damages of the type with which the other provisions of Part IV of the SRC Act including ss 44, 46, 47 and 50 are concerned, namely damages recoverable in common law actions for damages. To put it another way, the recovery of damages in respect of an injury to an employee is a recovery of damages where the injury is the subject-matter of the cause of action because damage is the gist of a common law cause of action in negligence. A complaint to the AHRC alleging unlawful discrimination is different. Its foundation is not the injury but the unlawful discrimination. This point was made by Basten JA in Gardiner v Laing O'Rourke Australia Construction Pty Ltd [2020] NSWCA 151; 102 NSWLR 599 at [40] in relation to the Anti-Discrimination Act 1977 (NSW) when considering its operation in the context of the New South Wales workers' compensation legislation. That is not to say that an injury as a consequence of unlawful discrimination may not be the subject of the assessment of statutory damages under s 46PO(4)(d) of the AHRC Act. But the damages are to be characterised as being in respect of the unlawful discrimination, because that is the gist of the claim. This was in substance the point made by Marshall J at first instance in Romero at [52] in reasons with which the Full Court agreed.
80 Comcare submitted that one of the objects of s 48 was to prevent double-dipping. But as the primary judge stated at J [94], this begs the question as to what is the second dip. The issue is one of potential over-compensation. The prospect of over-compensation may be addressed by a respondent to a complaint to the AHRC as part of the conciliation process, or by a court should an application be made for a remedy under s 46PO(4) of the AHRC Act. Although the basis upon which damages may be awarded for unlawful discrimination is statutory, there is no reason to think that in order to avoid over-compensation the assessment of damages should not, in an appropriate case, take account of payments of no-fault statutory compensation if the compensation is not repayable. The law has a well-entrenched policy against permitting the recovery of damages representing a loss that is greater than that suffered. In Boncristiano v Lohmann [1998] 4 VR 82 at 89, Winneke P referred to this policy in the following terms -
… The law, which now embraces equity, will not permit a plaintiff, whatever procedural device is used, to recover more than the damages which have been suffered, no matter what the cause of action upon which he proceeds against the various defendants: see per Purchas L.J. in Townsend's case [Townsend v Stone Toms & Partners (1984) 27 BLR 26 (CA)] at 49. This principle was accepted by Steyn J. (as he then was) in Banque Keyser Ullman S.A. v. Skandia (U.K.) Insurance Co. Ltd. (No. 2) [1988] 2 All E.R. 880 at 881-2.
81 This general principle was also referred to by the majority in Haines v Bendall [1991] HCA 15; 172 CLR 60 at 63, approving Lord Reid's reference in Parry v Cleaver [1970] AC 1 at 13 to the "universal rule that the plaintiff cannot recover more than he has lost".
82 In relation to the interaction between the assessment of damages and the receipt of no-fault statutory benefits for an injury that are not liable to be repaid, the applicable principles are those referred to in The National Insurance Co of New Zealand Ltd v Espagne [1961] HCA 15; 105 CLR 569, Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120, Redding v Lee [1983] HCA 16; 151 CLR 117, Manser v Spry [1994] HCA 50; 181 CLR 428, Kempsey District Hospital v Thackham (1995) 36 NSWLR 492, and Franklins Self Serve Pty Ltd v Wyber [1999] NSWCA 90; 48 NSWLR 249. In Manser v Spry, Ms Spry injured her neck and back in a transport accident as a result of the negligence of Mr Manser and brought a claim for damages. She later received no-fault benefits for an aggravation of her neck and back that she sustained at work which were not recoverable. The question in issue was whether the no-fault benefits should be taken into account in reduction of the damages assessable against Mr Manser. The Court referred to the authorities that require that legislative intent be ascertained, and held at 438-439 that the Workers Rehabilitation and Compensation Act 1986 (SA), under which the no-fault benefits were paid -
... was not designed to confer benefits to be added to the damages to which the worker might otherwise be entitled at common law for a loss caused by an event which is not work related. The compensation benefits paid or payable under the Act are ordinary incidents of a worker's employment which must be taken into account in assessing the damages of a plaintiff-employee for loss and damage for which a tortfeasor is liable at common law.
83 Thus, as Kempsey District Hospital v Thackham illustrates, statutory compensation that has been paid and which may be payable to an employee in the future can affect the assessment of damages. Kempsey District Hospital v Thackham, and the other cases involving similar issues to which I referred above, concerned the assessment of damages at common law. In Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82; 223 FCR 334 (Oracle), Besanko and Perram JJ stated at [130] in relation to the AHRC Act that the statutory objects and purposes of a power to award damages may inform the proper approach to causation in a particular case. I venture the view that in a case such as the present, which concerns an award of damages under statute, the search for legislative intent of the type referred to in Manser v Spry might include whether the power to award damages under s 46PO(4)(d) of the AHRC Act requires that non-refundable payments of compensation under the SRC Act should be taken into account in the assessment of damages so as to avoid over-compensation.
84 In adverting to the above issues, I am not to be taken as deciding that compensation paid under the SRC Act must be taken into account in assessing damages under s 46PO(4) of the AHRC Act. The point was not argued on this appeal, and it is not an issue that arises directly because the respondent's claim was compromised. I am saying no more than that the assessment of damages under s 46PO(4) is an appropriate point at which any question of over-compensation can be argued and addressed. That is because there are sound reasons why any question of over-compensation should be an issue for the assessment of damages under the AHRC Act, rather than a reason supporting the construction of s 48 of the SRC Act that Comcare advances. An award of general damages under statute in a case involving unlawful discrimination or sexual harassment can compensate a claimant for damage that goes well beyond any injury of the nature that is compensable under the SRC Act or by an award of damages at common law. This is illustrated by the leading cases on the assessment of damages under the AHRC Act, such as Oracle, and Hughes v Hill. The insult, distress, anxiety, unhappiness, and humiliation suffered by a claimant as a result of an act of discrimination or sexual harassment are compensable in addition to any mental or physical injury that might result from the unlawful acts. The existence of a power differential between a claimant and a respondent may be relevant to the assessment, and the objects of the discrimination legislation may be relevant: Oracle at [130] (Besanko and Perram JJ); Hughes v Hill at [51]-[52] (Perram J).
85 What follows from the above is that there will be no necessary correlation between damages assessed under the AHRC Act, and compensation paid under the SRC Act. This was accepted by Comcare. In its written submissions Comcare said that, "s 48 applies if an employee recovers any damages in respect of an injury being an injury, loss or damage in respect of which compensation is payable under the SRC Act, whether or not the precise amount of such damages can be determined: see s 48(1)(a)" (emphasis in original). Comcare submitted that this effect was ameliorated by s 48(7). But s 48(7) is a very blunt tool. In the case of an injury (as distinct from loss of or damage to property used by an employee that is also covered by s 48(1)), s 48(7) requires an employee to establish to the satisfaction of Comcare that a part of the damages did not relate to the injury. This will likely be a difficult task in the case of an indivisible award of general damages. The result is that on Comcare's construction of s 48, any award of damages under the AHRC Act, provided that it is in respect of a compensable injury, will trigger an obligation to repay all compensation without regard to whether the compensation was on account of incapacity for work, medical expenses, or non-economic loss, and will result in the termination of any further compensation entitlements.
86 This brings me to a further point, which is that the prospect that a compromise of, or an award of damages in relation to, a discrimination or sexual harassment complaint might trigger the results referred to above could have a chilling effect on the bringing of such complaints in a way that might undermine the objects of the discrimination legislation and the AHRC Act. In making constructional choices, it is permissible for the Court to have regard to the operation of other statutes as part of the legislative context, at least where the other legislation was in existence at the time of the enactment of the legislation under consideration: see, for example, Palgo Holdings Pty Ltd v Gowans [2005] HCA 28; 221 CLR 249 at [31] (McHugh, Gummow, Hayne and Heydon JJ); Customs and Excise Commissioners v Hedon Alpha Ltd [1981] 1 QB 818 at 824 (Stephenson LJ) and 827 (Griffiths LJ). Here, the enactment of the Sex Discrimination Act pre-dated the SRC Act, and the terms in which it was originally enacted provided for the making of complaints to the Human Rights and Equal Opportunity Commission, conciliations by the Commission, and the making of declarations by the Commission that a respondent should pay a complainant damages, noting that this last feature of the legislation did not survive Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; 183 CLR 245. The potential chilling effect on discrimination complaints is not decisive, but it gives reason to pause before accepting Comcare's submissions.
87 While it might be said, as senior counsel for Comcare submitted, that the above conclusions have the consequence that Comcare, rather than a contravener of discrimination legislation, bears the burden of the cost of statutory compensation on account of an injury resulting from unlawful discrimination, that is a consequence of the operation of s 50 of the SRC Act, which it was accepted did not enable Comcare to exercise any rights of subrogation in these circumstances. Moreover, this submission is akin to submitting that Comcare should not bear the burden of the cost of compensation in respect of an injury resulting from some other legal wrong on the part of an employer or another employee covered by the Act, such as negligence, or breach of statutory duty. But that is not how the scheme under the SRC Act operates. Subsection 50(9) excludes the Commonwealth, a Commonwealth authority, a licensed corporation and an employee from the persons against whom Comcare may exercise its statutory right of subrogation, and s 51(6) contains a corresponding exclusion in relation to the statutory garnishee rights. As between Comcare and an employer or other employee, Comcare bears the burden of the statutory compensation.
88 If a person liable for unlawful discrimination or sexual harassment is a third party, then there are other difficulties in relation to s 50. It could hardly be supposed that Comcare could, in the name of an employee, lodge or assume conduct of a complaint to the AHRC and pursue a claim for compensation on the ground of unlawful discrimination or sexual harassment. No party to the appeal suggested that it could. For one thing, it might be said that the standing given under s 46P of the AHRC Act to bring a complaint is to bring a complaint that is personal to the person or persons aggrieved. Further, s 50 of the SRC Act which is headed "Common law claims against third parties" is engaged where the injury occurred in circumstances that appear to create a legal liability in a person to pay damages. Formulations similar to s 50(1)(b) of the SRC Act are of long standing in third party recovery provisions in workers' compensation legislation: see Workmen's Compensation Act 1897 (Eng), s 6; and Tooth & Co Ltd v Tillyer [1956] HCA 49; 95 CLR 605, which concerned the Workers' Compensation Act 1926 (NSW), s 26. The formulation refers to the occurrence of an injury that would appear to give rise to liability. In the present case, any liability of the Commonwealth or other employee for damages for the respondent's injury was annihilated by s 44. Further, a liability to pay damages in respect of the unlawful discrimination would arise only upon the President of the AHRC terminating the conciliation of a complaint in circumstances where a proceeding could be brought without leave, or alternatively if leave of the Court was required, leave was given. There would be other difficulties that it is unnecessary to traverse, especially given that it was not in dispute that Comcare cannot subrogate an employee's complaint to the AHRC. The short point is that the recovery of damages in respect of unlawful discrimination does not fit coherently within the scheme established by Part IV of the SRC Act.
89 For the above reasons, the recovery of a payment made in compromise of a discrimination or sexual harassment complaint made under the AHRC Act, or in satisfaction of an order for the payment of damages under s 46PO(4) of the AHRC Act is outside the terms of s 48.
90 Before leaving this section of these reasons, I wish to record that I have not overlooked the decision of Logan J in Turner v Commonwealth of Australia [2019] FCA 463; 367 ALR 724, which is a revised ex tempore decision involving the approval of the compromise of a claim by a person under disability for relief under the Public Interest Disclosure Act 2013 (Cth) as a result of alleged reprisals. In giving reasons approving the compromise, Logan J stated at [29] that it was at least likely that if the proceedings continued and a compensatory sum were ordered, the applicant would be obliged to make a refund to Comcare pursuant to s 48 of the SRC Act, and that was a factor that his Honour took into account in conjunction with counsel's opinion in forming the view that the compromise was reasonable. It does not appear that the question whether s 48 of the SRC Act applied was contested in Turner, and indeed it appears that the compromise that was approved, although confidential, would not have led to any net sum in the hands of the applicant after payment of his costs, and therefore the operation of s 48 did not in any practical sense arise: see [25].