FLETCHERS INTERNATIONAL EXPORTS PTY. LIMITED v. HODGES [2000] NSWCA 285

COUNSEL : J.E. Maconachie QC/G.M. Watson (Claimant/Appellant) M.J. Joseph SC/M.A. Robinson (Opponent/Respondent) SOLICITORS : Leitch Hasson Dent (Claimant/Appellant) McCabe Partners (Opponent/Respondent) CATCHWORDS : WORKERS COMPENSATION - Compensation Court - Jurisdiction of - Powers of - Practice in - Application for order for inspection of property - Whether may be made prior to commencement of proceedings seeking compensation - Whether may be made to enable worker to determine whether to apply for compensation or to sue for damages at common law - May not be made in such circumstances or for such purpose. Compensation Court Act 1984 LEGISLATION CITED : Compensation Court Rules Workers Compensation Court Act 1987 DECISION : Leave to appeal granted.; Appeal upheld.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40135/00 CC 7193/99

POWELL JA BEAZLEY JA HEYDON JA

FLETCHERS INTERNATIONAL EXPORTS PTY. LIMITED v. HODGES

JUDGMENT 1 POWELL JA: There is listed before the Court today an application for leave to appeal and, if leave be granted, an appeal, against a judgment delivered and order made by Walker CCJ in the Compensation Court on an application made by Summons brought by the present Opponent ("Mr. Hodges") for an order said to be made available by the provisions of Pt.20 r8 of the Compensation Court Rules ("the Court Rules"). 2 At the commencement of the hearing the Court observed that, there having been a number of earlier decisions of, and orders made by, individual judges of the Compensation Court Youssef v. Berlei (A division of Pacific Dunlop Limited) - Egan CCJ 29 February 1995 (unreported) Johncock v. Tony Madden Refrigerated Transport Pty. Limited - Campbell CJCC 22 July 1996 (unreported) Allouche v. Kalamazoo Australia Limited - Truss CCJ 30 April 1999 (unreported) Campas v. James Hardie Windows Pty. Limited - Davidson CCJ 26 November 1999 (unreported) Townsend v. Shipcove Pty. Limited - Neilson CCJ 16 December 1999 (unreported) to the same effect as the order made by Walker CCJ, the case appeared to be a test case, and, accordingly, that the Court would grant leave but that in the circumstances the Claimant ("Fletchers") should bear the costs of the application for leave and the appeal in any event. 3 In his First Amended Summons Mr. Hodges who, in August 1999, had been employed by Fletchers as a labourer, sought the following (inter alia) orders (RAB 2-3): "1. The Applicant have access to the Respondent's premises at Lot 11 Yarrandale Road, Dubbo, N.S.W., to inspect the premises, inspect and carry out experiments on all scissor lift machinery there and to observe the work processes there and to take any measures and photographs of the premises, machinery and processes. 2. Such inspection etc., to be by the Applicant, the Applicant's Solicitor and Counsel and by an Expert or Experts qualified by the Applicant. 3. Such inspection etc., to take place on a date and at a time to be agreed at the mutual convenience of the parties with liberty to apply in default of such agreement. 4. That the Applicant have leave to issue the following Subpoenas for Production returnable in the absence of any Application for Determination filed in this Court: (a) to Fletcher International Pty. Limited with the following schedule: - 'All documents relating to the purchase, maintenance and repair of all scissor lifts owned or operated at the premises of Fletcher International Pty. Limited located at Lot 11 Yarrandale Road, Dubbo, N.S.W., 2830 and all documents relating to the instruction and training of the employees of Fletcher International Pty. Limited in the use and operation of scissor lifts including safety issues involved in such use and operation. (b) To Zurich Financial Services Australia Limited and to Zurich Australian Workers Compensation Limited, each with the following schedule: - 'All documents relating to any accidents or incidents, and claims or legal proceedings arising from any accidents or incidents, occurring at the premises of Fletcher International Pty. Limited in Lot 11 Yarrandale Road, Dubbo, N.S.W., 2830 involving the use, operation, maintenance or repair of scissor lifts or the instruction or training of employees of Fletcher International Pty. Limited in relation to the use and operation of scissor lifts.' (c) To WorkCover Authority of New South Wales with the following schedule: 'All documents relating to the Authority's investigation of an accident which occurred to Michael William Hodges at the premises of Fletcher International Pty. Limited in Lot 11 Yarrandale Road, Dubbo, N.S.W, 2830 on the 21st August, 1999, including but not limited to records of interview, reports of technical inspection of any equipment or plant and any prosecutions or recommendations arising out of such investigation.'"

4 The circumstances which gave rise to the application which was made by Mr. Hodges were described by his solicitor in an Affidavit sworn by her in support of the application as follows (RAB 5-6): "3. On the 21st August, 1999 the Applicant, at the direction of the employer, was working on a scissor forklift platform cleaning the walls and ceilings of a chiller when the scissor forklift malfunctioned and the platform accelerated upwards crashing (sic) the Applicant between the ceiling and the platform. 4. The Applicant suffered the following injuries: i. A fracture/subluxation of the C2/3 with associated cord oedena (sic) from the C2/3 to the mid C4 vertebral body; ii. Comminuted fracture of the right body of the mandible; iii. Right brachial plexus injury; and iv. Right upper limb fractures. ……… 6. Based on the Applicant's instructions of injury and incapacity together with supporting medical evidence of The Prince Henry Hospital, it is anticipated that the Applicant's condition will be a serious injury for the purpose of the Workers Compensation Act, 1987, as amended, which would entitle the Applicant to commence Common Law Proceedings. 7. On instructions from the Applicant, the circumstances of the accident suggest negligence on part of the Respondent employer. 8. In order to advise the Applicant on whether he should forfeit his entitlements pursuant to Section 66 and 67 of the Workers Compensation Act, 1987, as amended, an investigation on liability is required. 9. In order to investigate liability it is necessary for the Applicant's legal representative, an expert witness and Counsel to attend the Respondent's premises for the purpose of a view."

5 As is apparent, it was not Mr. Hodges' object in bringing that application to claim compensation - such an application would have needed to be commenced by the filing of an Application for Determination (see Court Rules Pt. 5 r.1) - but to obtain information which would enable him to determine whether or not he ought to proceed to claim compensation from Fletchers - and, in particular, compensation pursuant to the provisions of ss. 66 and 67 of the Workers Compensation Act 1987 ("the Act") - or to commence proceedings at common law seeking to recover from Fletchers damages for negligence. 6 Section 151A of the Act, which was introduced into the Act in 1989 by the Workers Compensation (Benefits) Amendment Act 1989 as part of a package restoring to employees who have been injured modified common law damages, provides as follows: " 151A Election - damages or 'Table of Disabilities' compensation (1) In this section and in section 151V: damages does not include damages to which Part 6 of the Motor Accidents Act 1988 applies. permanent loss compensation means compensation under Division 4 of Part 3 (Compensation for non-economic loss). (2) A person to whom compensation is payable under this Act in respect of an injury is not entitled to both: (a) permanent loss compensation in respect of the injury, and (b) damages in respect of the injury from the employer liable to pay that compensation, but is required to elect whether to claim that permanent loss compensation or those damages. (3) The person makes that election (or is taken to have made that election): (a) by commencing proceedings in a court to recover those damages or by accepting payment of those damages (in which case the person ceases to be entitled to permanent loss compensation in respect of the injury), or (b) by accepting payment of that permanent loss compensation or by the Compensation Court making an award in respect of that permanent loss compensation (in which case the person ceases to be entitled to recover damages in respect of the injury). (4) An election is irrevocable, except that an election to claim permanent loss compensation may be revoked with the leave of the court given in accordance with this section. (5) If: (a) a person elects to claim permanent loss compensation in respect of an injury, and (b) after the election is made, the injury causes a further material deterioration in the person's medical condition that, had it existed at the time of the election, would have entitled the person to additional permanent loss compensation, and (c) at the time of the election, there was no reasonable cause to believe that the further deterioration would occur, the person may, with the leave of the court and on such terms (if any) as the court thinks fit, revoke the election and commence proceedings in the court for the recovery of damages in respect of the injury."

(As is apparent, the leave to revoke an election may be granted by the court in which it is sought to commence proceedings for the recovery of damages - see Taylor v. State of New South Wales (1999) 46 NSWLR 322 .) 7 The application which was brought by Mr. Hodges was based not upon the provisions of the Act or of the provisions of the Workplace Injury Management and Workers Compensation Act 1998 ("the Management Act") but upon the provisions of Pt 5 rr 11A, 11B and Pt 20 r8 of the Court Rules. 8 The Management Act provides (inter alia) as follows: " Division 6 Proceedings before the Compensation Court 105 Jurisdiction of Court Subject to this Act and the Compensation Court Act 1984, the Compensation Court has exclusive jurisdiction to examine, hear and determine all matters arising under this Act (except Part 5 of the 1987 Act)."

9 The Compensation Court Act 1984 ("the Court Act") provides (inter alia) as follows: " 15 (1) The Court shall have the jurisdiction vested in it by or under this or any other Act. (2) The Court has the functions vested in the District Court in respect of the following matters: (a) compelling the attendance of witnesses and examining them on oath, affirmation or declaration; (b) compelling the production, discovery and inspection of books, records, documents and other papers; ……… Rule Committee 42. (1) Where, in this or any other Act, it is provided that rules of Court may or shall be made, those rules shall be made by a Rule Committee … Rules 43 (1) Rules of Court may be made for or with respect to: (a) all matters of procedure and practice, including the prescription of forms to be used in any proceedings before the Court and the payment of witnesses' expenses; ……… (2) Without affecting the generality of subsection (1), rules of Court may be made, in relation to matters within the Court's jurisdiction, for or with respect to: (a) the conduct of call-overs of matters for hearing by the Court; (b) the issue and return of subpoenas; (c) the listing of matters and the removal of matters from lists; (d) the commencement of proceedings; (e) pre-hearing conferences and arbitration; (f) the charging of fees for interpreting services; (g) the enforcement of awards, orders, determinations, rulings, directions or decisions of the Court; ………" 10 The Court Rules provide (inter alia) as follows: " PART 1 - PRELIMINARY Interpretation 5. (1) In these rules - ……… "originating process" , in relation to any proceedings, means the document by the filing of which the proceedings are commenced; "proceedings" means proceedings to the Court; ……… Procedure wanting or in doubt 7. (1) Where a person desires to commence proceedings or take any step in any proceedings, and the manner or form of procedure is not prescribed by the Act, the Compensation Act or the rules, or by or under any other Act, or the person is in doubt as to the manner or form of procedure, the Court may, on application by the person or of its own motion, give directions. (2) Proceedings commenced in accordance with the directions of the Court shall be well commenced. (3) A step taken in accordance with the directions of the Court shall be regular and sufficient. PART 5 - COMMENCEMENT OF PROCEEDINGS Division 1 - Application for Determination and General Originating process 1. Except as otherwise provided in the rules or by or under any Act, the originating process in respect of any proceedings shall be an application for determination. ……… Time of commencement 3. Proceedings shall be commenced when the originating process in respect of the proceedings is filed. ……… Division 2A Proceedings commenced by summons 11A Application and Procedure (1) This Division applies to proceedings commenced by summons. (2) For the purposes of Division 1 of Part 5, a Summons is an originating process. (3) The procedure for the hearing and disposal of a Summons shall be as near as practicable to that applicable to the hearing and disposal of a notice of motion in accordance with the provisions of Part 14 (2), (3), (4) and (5). 11B Particular proceedings commenced by summons The following proceedings shall be commenced by summons where no proceedings have been commenced in relation to the subject matter in dispute: ……… (b) for an order for inspection of property in the nature of the orders set out in Part 20 rule 8 and in accordance with the procedures therein applicable. ……… PART 20 - MEDICAL EXAMINATIONS, INSPECTION OF PROPERTY ETC.

……… Division 3 - Inspection of property etc. Inspection of property etc. 8. (1) The Court may, for the purpose of enabling the proper determination of any matter in question in any proceedings, make orders, on terms, for - (a) the inspection of any property; (b) the taking of samples of any property; (c) the making of any observation of any property; (d) the trying of any experiment on or with any property; or (e) the observation of any process. (2) An order under subrule (1) may authorise any person to enter any land or to do any other thing for the purpose of getting access to the property. (3) A party applying for an order under this rule shall, so far as practicable, serve notice of the motion on each person who would be affected by the order if made. (4) in this rule, "property" includes any land and any document or other chattel, whether in the ownership, possession, custody or power of a party or not."

11 Pt. 20, r 8 of the Court Rules appears to have been derived from SCR Pt 25, r8 (see also District Court Rules Pt 23 r 9). SCR Pt 25, r 8, which formed part of the Fourth Schedule to the Supreme Court Act 1970 when enacted, appears to have been derived from s.104 of the Common Law Procedure Act ("the CLP Act") which, as amended by the Common Law Procedure (Amendment) Act 1962, following the decision of the Full Court in Grapulin v. Cartons and Corrugated Papers Pty. Ltd. (1960) 61 SR 348, was as follows: "104. (1) Upon the application of either party the Court or a Judge may make a rule or order upon such terms as to costs and otherwise as the Court or Judge thinks fit for the inspection by any one or more of the following, that is to say, the jury, such party, his counsel, solicitor and such other person as the Court or Judge in such rule or order may designate of any real or personal property, the inspection of which may be material to the proper determination of the question in dispute." 12 The power to authorise an inspection embodied in s. 104 of the CLP Act was not an inherent power of the old common law courts - a situation to be compared with the power of the Court of Chancery to allow pre-action discovery (see Norwich Pharmacal Co. v. Customs and Exercise (1974) AC 133) - but a power conferred on them by s.58 of the Common Law Procedure Act 1854 (England) adopted here as s.24 of the Common Law Procedure Act 1857 (20 Vic No. 31) and, as varied, then incorporated into the CLP Act. The provisions of s.104 of the Common Law Procedure Act permitted inspection after commencement and before pleading in an appropriate case but, as is apparent, did not permit inspection prior to the commencement of any relevant proceedings. 13 The provisions of Pt 23 r 9 of the District Court Rules are expressly authorised by s.68(2) of the District Court Act 1973 which provides (inter alia): "68. ……… (2) Without limiting the generality of subsection (1), the rules may make provisions for or with respect to empowering the court to order that: - ……… (e) a party to be at liberty to inspect property, whether real or personal and whether or not in the possession or control of any party, for the purposes of any action. ………" 14 In his Judgment Walker CCJ, after considering some of the earlier judgments to which I referred above wrote (inter alia) (RAB 47-48): " ……… RESOLVING THE MATTER 17. Considering the case law I have reviewed I find myself in agreement with my colleagues (sic) judgments and determine: 1. Elections made pursuant to s 151A of the 1987 Act are a matter arising under the Act in respect of which this Court exercises concurrent jurisdiction. 2. The nature of such an election is to determine whether or not to proceed with a claim under s.66 and 2.67 of the Act. 3. This Court has inherent power to make orders for inspection. 18. I therefore find this Court has power to make the orders requested. ……… ORDERS 22. I therefore make the following orders: 1. That pursuant to the powers vested in the Court by CCR 20.8(1): (a) The employer grant the worker access to the premises at Lot 11 Yarrandale Road Dubbo NSW to inspect those premises; carry out experiments on all scissor lift machinery there, to observe the system of work and its processes and to take photographs of the premises, machinery and processes. (b) The worker, his solicitor, counsel and any experts qualified by the worker are granted permission to attend the inspection. (c) The inspection shall take place on a date and at a time agreed upon by the parties. I grant liberty to apply if agreement cannot be reached."

15 The case which Fletchers sought to make in the submissions which were lodged on its behalf was as follows (RAB 52-54):

an order for the inspection of property under Pt. 20 r 8 of the Court Rules cannot be made unless it is "for the purpose of enabling the proper determination of any matter in question in any proceedings."

Pt. 1 r 5 of the Court Rules defines "proceedings" to mean "proceedings in the Court."

Part 5 r 3 of the Court Rules states that "proceedings shall be commenced when the originating process in respect of a proceedings is filed."

at hearing, it was conceded by Mr. Hodges that no proceedings had been commenced and that the inspection of the premises was for the purpose of providing proper advice to Mr. Hodges on his likelihood of succeeding in a suit at common law;

the authorities, so it was submitted, are clear - an order for inspection of premises should not be made until the proceedings are commenced and as such an inspection therein becomes necessary for the proper determination of some question in those proceedings (reference was made to the decision of Hunt J (as he then was) in Cummings v. 2KY Broadcasters Pty. Limited [1981] 1 NSWLR 246 ). 16 In addition to those grounds, Fletchers sought to raise an argument that the provisions of Pt 20 r 8 of the Court Rules were beyond the power of the Compensation Court to make. In the circumstances, however, I would prefer not to deal with that question until it clearly arises for decision. 17 The case which Mr. Hodges sought to make was, in short, as follows (RAB 56-59):

the Act is beneficial legislation intended to be for the advantage of workers in this State and should not be narrowly construed or interpreted;

Pt 5 of the Act introduced a system of modified common law damages and pursuant to s.151E its provisions apply and limit damages entitlements in respect of an injury to a worker;

s.151A of the Act requires a person to whom workers compensation is payable under the Act to make an election whether to claim permanent loss compensation under the Act or to claim damages at common law;

s.151A(3) provides that a person makes that election to claim damages either by commencing proceedings for damages or by accepting payment of those damages;

s.151A(4) provides that an election made to claim damages is irrevocable;

there is no form of preliminary discovery in New South Wales other than to identify the proper defendant to a claim for damages and the provisions of SCR Pt 3 do not enable the prospective plaintiff to bring an action for the preliminary discovery for some collateral purpose;

because of the irrevocable nature of a commencement of proceedings for damages at common law and the unavailability of any other means of inspection Pt 20 r 8 of the Court Rules should be construed liberally to allow the Court to order an inspection of property so as to enable a worker to determine whether he might have rights at common law and if so whether to pursue those rights. 18 In addition, Mr. Hodges sought to reply upon a Notice of Contention which raised the following matters: "1. Part 1 Rule 7 of the Compensation Court Rules gives to the Compensation Court the power to make directions, where the manner or form of procedure is wanting or in doubt; 2. In the event that the Court considers Part 20 Rule 8 does not confer power on the Compensation Court to make the orders made by the Court below, the opponent/respondent relies on CCR Part 1 Rule 7 as vesting power in the Compensation Court to make directions in like terms; 3. The commencement of such proceedings for directions by summons instead of by way of notice of motion does not vitiate the proceedings: CCR Part 6 Rule 9, Part 5 Rule 11A(3) and Part 1 Rule 6."

19 It seems to me that, even if - which for the purposes of this appeal I am prepared to accept - the provisions of Pt 20, r 8 of the Court Rules are within the rule making power of the Compensation Court, the application which was made and dealt with by Walker CCJ was not within the scope of that rule. I say this for the following reasons:

1. as has been earlier noted, the introductory words to Pt 20 r 8 are as follows: "The Court may, for the purpose of enabling the proper determination of any matter in question in any proceedings, make orders on terms for: - (a) the inspection of any property."

2. as has also been earlier noted Pt 5 r 11B is as follows: "11B Particular Proceedings Commenced by Summons. The following proceedings shall be commenced by summons, when no proceedings have been commenced in relation to the subject matter in dispute: - ……… (b) for an order for inspection of property in the nature of the orders set out in Pt 20, r 8 and in accordance with the procedures therein applicable,"

3. it is, in my view, clear - and indeed the contrary has really not been suggested - that the purpose of the application made to Walker CCJ was, not to enable the Compensation Court to determine any matter in dispute in an application for compensation - whether pending or merely contemplated - pursuant to an Application for Determination in that Court but, to enable Mr. Hodges to determine whether or not he should commence proceedings pursuant to an application for determination or, alternatively, commence proceedings at common law for damages. 20 Nor do the provisions of Pt 1 r 7 of the Court Rules provide any support for the Order made by Walker CCJ:

1. as I have already indicated, I have, for the purposes of this appeal been prepared to proceed upon the basis that the provisions of Pt 20 r 8 of the Court Rules are within the rule making power of the Compensation Court;

2. if they are not, then, the Compensation Court being a statutory court, contrary to the view expressed by Walker CCJ, cannot draw upon any inherent jurisdiction ( R. v. Forbes; Ex parte Bevan (1972) 127 CLR 1 ; D.J.L. v. Central Authority (1999-2000) 74 ALJR 706; 170 ALR 659 ), and the provisions of Pt 1 r 7 of the Court Rules - which are directed only to matters of practice - are unable to provide a source of power. 21 It follows, in my view, that the Order which Walker CCJ made was unsustainable a situation which the Government may think calls for remedial legislation. 22 I would therefore propose that the following Orders be made:

1. ORDER that leave be, and be deemed to have been, granted to the Claimant to appeal from the judgment delivered, and Order made by Walker CCJ on 14 February 2000.

UPON the Claimant by its counsel undertaking to the Court to have filed forthwith a Notice of Appeal in the form included in the papers.

2. ORDER that the appeal be upheld and that the Order made by Walker CCJ be set aside.

3. ORDER that the Claimant pay the costs of the Opponent of the application for leave to appeal and of the appeal.

25 POWELL JA: It being noted that the undertaking is given, the Orders of the Court are thus those which I have proposed. **********

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