Answer the question stated to the Full Court as follows:

is s.44 (of the Safety Rehabilitation and Compensation Act 1988 (Cth)) invalid in its application to the plaintiff?

Answer: As to a cause of action that was not statute barred before his action was commenced, s.44 is invalid in its application to the plaintiff. As to a cause of action that was statute barred, unnecessary to answer at this stage.

Order that the defendant pay the plaintiff's costs of the question stated.

Remit the matter to the Supreme Court of New South Wales for determination in accordance with this judgment.

MASON CJ, DEANE AND GAUDRON JJ Speaking generally, a person

employed by the Commonwealth or one of its agencies who suffered an

employment injury was, until 1988, entitled to workers' compensation

payments in accordance with the Compensation (Commonwealth Employees)

Act 1971 (Cth) ((1) There was an earlier scheme which commenced with

the Commonwealth Employees' Compensation Act 1930 (Cth) and

continued in various forms until 1971.) and, assuming negligence, was

also entitled to maintain an action for damages at common law ((2)

Note, however, that s.99 prevented any overlap in compensation and

damages payments.). The common law action might become barred in

accordance with a State limitation law if made applicable by s.79 of

the Judiciary Act 1903 (Cth) ((3) See Barton v. Commissioner for

Motor Transport [1957] HCA 50; (1957) 97 CLR 633 at 650; John Robertson and Co. Ltd.

v. Ferguson Transformers Pty. Ltd. (1973) 129 CLR 65 at 88-89, 93-95;

Maguire v. Simpson [1977] HCA 63; (1977) 139 CLR 362 at 376-377.).

2. A new scheme of compensation began on 1 December 1988 when the

substantive provisions of the [Commonwealth Employees' Rehabilitation

](/cgi-bin/viewdoc/au/legis/cth/num_act/ceraca1988534/)and Compensation Act 1988 (Cth) ("the Act") ((4) The Act is now

known as the Safety Rehabilitation and Compensation Act 1988 (Cth).

See the [Commonwealth Employees' Rehabilitation and Compensation

](/cgi-bin/viewdoc/au/legis/cth/num_act/ceracaa1992614/)Amendment Act 1992 (Cth), s.4.) came into force. Sections 1 and 2 of

the Act commenced operation on 24 June 1988. The Act continues the

compensation entitlement of workers who were injured before the scheme

began ((5) See s.124. Note, however, that this entitlement may be

restricted, depending on entitlement under previous legislation.),

but, in some cases, it purports to extinguish the right to sue for

3. The plaintiff, Mr Constantinos Georgiadis, suffered injury in

the course of his employment with the Australian and Overseas

Telecommunications Corporation Limited ("Telecom") on five occasions

before the new compensation scheme came into effect. The last two

injuries occurred on 7 May 1985 and 4 March 1986. He brought an

action for damages in the Supreme Court of New South Wales in respect

of all five injuries, but not before the new scheme began.

4. It would seem that the time for bringing proceedings with respect

to the first three injuries had expired well before Mr Georgiadis

commenced his action. For the moment, those injuries can be put to

one side and, unless otherwise indicated, what follows is concerned

only with the causes of action based on the injuries sustained on

7 May 1985 and 4 March 1986. For convenience, those causes of action

are referred to as though they constitute a single cause. It is

common ground that, unless the Act validly provides otherwise, it is a

5. By its defence, Telecom pleaded that Mr Georgiadis' cause of

action was barred by s.44 of the Act. That section provides:

"(1) Subject to section 45, an action or other

proceeding for damages does not lie against the

Commonwealth, a Commonwealth authority or an employee 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 Commonwealth or Commonwealth

authority would, but for this subsection, be

liable (whether vicariously or otherwise) for

damages;

...

whether that injury ... occurred before or after the

commencement of this section.

(2) Subsection (1) does not apply in relation to an

action or proceeding instituted before the commencement of

this section."

6. Section 45 of the Act allows an employee who elects to that

effect before any compensation is paid to bring proceedings for

damages for non-economic loss, but only if compensation is payable

under s.24, 25 or 27. Compensation is payable under s.27 only if it

is also payable under s.24. By s.124(3), a person is not entitled to

compensation under s.24 or 25 and, hence, not entitled under s.27, in

respect of a permanent impairment that occurred before the scheme came

into effect, unless he or she was also entitled to a lump sum under

the scheme which applied when the injury was sustained. It is common

7. By his reply, Mr Georgiadis asserted that the Act is invalid by

reason that it effects an acquisition of property, namely, his right

to bring an action for damages, other than on just terms as required

by s.51(xxxi) of the Constitution. After his reply was filed, the

proceedings were removed into this Court under s.40 of the Judiciary

Act. When the matter came on for hearing, the Chief Justice stated

the following question for the consideration of the Full Court:

"(O)n the basis of the facts alleged in the statement of

claim ..., is s.44 (of the Act) invalid in its application

to the plaintiff?"

8. It is well established that s.51(xxxi) operates as a

constitutional guarantee and that, for that reason, "acquisition"

and "property" as used in that paragraph are to be construed

liberally ((6) Bank of N.S.W. v. The Commonwealth ("the Bank

Nationalization Case") [1948] HCA 7; (1948) 76 CLR 1 at 349-350; Attorney-General

(Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361 at 370-371; Clunies-Ross v. The

Commonwealth [1984] HCA 65; (1984) 155 CLR 193 at 201-202; Australian Tape

Manufacturers Association Ltd. v. The Commonwealth [1993] HCA 10; (1993) 176

CLR 480 at 509.). In particular, s.51(xxxi) is "not to be confined

pedantically to the taking of title ... to some specific estate or

interest in land recognized at law or in equity ... but ... extends to

innominate and anomalous interests" ((7) Bank Nationalization Case

(1948) 76 CLR at 349 per Dixon J). And "property" as used in

s.51(xxxi) extends to "every species of valuable right and interest

including ... choses in action" ((8) Minister of State for the Army

v. Dalziel [1944] HCA 4; (1944) 68 CLR 261 at 290 per Starke J; see also at 285,

295.), "money and the right to receive a payment of money" ((9)

Australian Tape Manufacturers Association Ltd. v. The Commonwealth

(1993) 176 CLR at 509; Mutual Pools and Staff Pty. Ltd. v. The

Commonwealth, unreported, High Court of Australia, 9 March 1994 at 10

per Mason CJ, 23 per Deane and Gaudron JJ). Clearly, a right to

bring an action for damages for negligence is a valuable right ((10)

See, as to the value of a cause of action for personal injuries which

is lost in consequence of negligence on the part of a solicitor,

Johnson v. Perez [1988] HCA 64; (1988) 166 CLR 351; Nikolaou v. Papasavas, Phillips

and Co. [1989] HCA 11; (1989) 166 CLR 394; Kitchen v. Royal Air Force Association

(1958) 1 WLR 563.). Thus, the question in this case is whether s.44

is a law with respect to the acquisition of that right for a purpose in

respect of which the Parliament has power to make laws within

9. Telecom and the Commonwealth, intervening, resisted the claim

that s.44 involves an acquisition of property within s.51(xxxi) in two

ways. First, they argued that, so far as the issue in this case is

concerned, s.44 does no more than extinguish a cause of action which

was not sued upon before the new compensation scheme came into effect.

In this context, it was pointed out that, whatever else happened,

neither Telecom nor any one else acquired the cause of action which

Mr Georgiadis lost. The second argument was that s.44 did no more

than modify the limitation period applicable to a cause of action

which vested before the new scheme came into operation.

10. It is clear that "not every compulsory divesting of property

is an acquisition within s.51(xxxi)" ((11) Trade Practices Commission

v. Tooth and Co. Ltd. [1979] HCA 47; (1979) 142 CLR 397 at 408 per Gibbs J; The

Commonwealth v. Tasmania. (The Tasmanian Dam Case) [1983] HCA 21; (1983) 158 CLR 1 at

247 per Brennan J). And as Mason J pointed out in The Tasmanian Dam

Case ((12) (1983) 158 CLR at 145.), there is a distinction between a

taking, which is the subject of the Fifth Amendment to the United

States Constitution and an acquisition, with which s.51(xxxi) is

concerned. His Honour went on to say that to constitute an acquisition

within s.51(xxxi) "it is not enough that (the) legislation adversely

affects or terminates a pre-existing right that an owner enjoys in

relation to his property; there must be an acquisition whereby the

Commonwealth or another acquires an interest in property, however

slight or insubstantial it may be" ((13) ibid. at 145.).

11. There is another aspect of the distinction between a taking and

an acquisition which is significant in the present case. "Taking"

directs attention to whether there has been a divesting, a question

which is answered by looking to the position of the person who claims

that he has been deprived of his property. On the other hand,

"acquisition" directs attention to whether something is or will be

received. If there is a receipt, there is no reason why it should

correspond precisely with what was taken. That is particularly so

with "innominate and anomalous interests" ((14) Bank Nationalization

Case (1948) 76 CLR at 349.). Thus, the fact that neither Telecom nor

any one else now has the cause of action which was previously vested in

Mr Georgiadis is not conclusive of the question whether there has been

an acquisition of property for the purposes of par.(xxxi).

12. Telecom and the Commonwealth relied on the difference between a

taking and an acquisition to argue that the extinguishment of a cause

of action cannot constitute an acquisition. Of course, it will often

be the case that it does not, as, for example, where the cause of

action is extinguished by judgment or by the effluxion of time ((15)

Note, this will only occur if there is legislation which bars the

action rather than the remedy. See, on this general question, The

Commonwealth v. Verwayen (1990) 170 CLR 394 at 405, 456, 473, 486-487,

497.). But the position may well be different in other circumstances.

13. It is often said in relation to constitutional guarantees and

prohibitions that "you cannot do indirectly what you are forbidden

to do directly" ((16) Wragg v. State of New South Wales [1953] HCA 34; (1953) 88 CLR

353 at 387-388. See, with respect to s.51(xxxi), Bank Nationalization

Case (1948) 76 CLR at 349-350; Attorney-General (Cth) v. Schmidt

(1961) 105 CLR at 371. See, generally, Grannall v. Marrickville

Margarine Pty. Ltd. [1955] HCA 6; (1955) 93 CLR 55 at 78; Caltex Oil (Aust.)

Pty. Ltd. v. Best [1990] HCA 53; (1990) 170 CLR 516 at 522-523.). That maxim is, in

fact, an important guide to construction, indicating that guarantees

and prohibitions are concerned with substance not form. Within that

context, it is relevant to consider, by way of example, a vested cause

of action against the Commonwealth for goods sold and delivered. If

legislation extinguished that cause of action, it would, in substance,

effect its acquisition ((17) See Mutual Pools and Staff Pty. Ltd. v.

The Commonwealth unreported, High Court of Australia, 9 March 1994 at

10 per Mason CJ, 24 per Deane and Gaudron JJ; see also at 61 per

McHugh J), for the Commonwealth, having obtained the goods in

exchange for its promise to pay, would be freed from its liability on

that promise. Accordingly, "acquisition" in s.51(xxxi) extends to

the extinguishment of a vested cause of action, at least where the

extinguishment results in a direct benefit or financial gain (which,

of course, includes liability being brought to an end without payment

or other satisfaction) and the cause of action is one that arises

under the general law. The position may be different in a case

involving the extinguishment or modification of a right that has no

existence apart from statute. That is because, prima facie at least

and in the absence of a recognized legal relationship giving rise to

some like right, a right which has no existence apart from statute

is one that, of its nature, is susceptible of modification or

extinguishment. There is no acquisition of property involved in the

modification or extinguishment of a right which has no basis in the

general law and which, of its nature, is susceptible to that course.

A law which effected the modification or extinguishment of a right of

that kind would not have the character of a law with respect to the

acquisition of property within s.51(xxxi) of the Constitution ((18)

See Health Insurance Commission v. Peverill, unreported, High Court of

Australia, 9 March 1994 per Mason CJ, Deane and Gaudron JJ).

14. So far as the issues in this case are concerned, the effect of

s.44, if valid, is to extinguish a vested cause of action that arose

under the general law. That is so even if the right to proceed

against the Commonwealth is properly identified as a statutory right.

And its effect is to confer a distinct financial benefit on the

Commonwealth and its agencies in respect of their pre-existing

liability for employment injuries falling outside s.45 of the Act.

In our view, the position is no different from that involved in the

extinguishment of a vested cause of action against the Commonwealth

for goods sold and delivered. Doubtless, Mr Georgiadis and other

workers provided their skill and labour on the basis that they were

entitled to damages at common law as well as workers' compensation

benefits if injured as a result of Telecom's negligence. In that

context, the right to damages can realistically be seen as part of the

overall quid pro quo for the work performed. Thus and so far as it

bears on the issues in this case, s.44 is, in substance, if not in

form, a law for the acquisition of causes of action against the

Commonwealth and its agencies which vested in employees before s.44

came into operation but which now fall outside s.45 of the Act.

15. Not every Commonwealth law with respect to the acquisition of

property falls within s.51(xxxi) of the Constitution. It may be

outside that paragraph because, although it effects an acquisition

of property, it is a law of a kind that is clearly within some other

head of legislative power ((19) As to why this is so, see Mutual Pools

and Staff Pty. Ltd. v. The Commonwealth, unreported, High Court of

Australia, 9 March 1994 at 7-9 per Mason CJ, 25-26 per Deane and

Gaudron JJ). That is the case with a law imposing taxation or a law

providing for the sequestration of the estate of a bankrupt. Or it may

be outside s.51(xxxi) because it effects an acquisition of a kind that

does not permit of just terms, as in the case of a law imposing a

penalty by way of forfeiture ((20) See Director of Public Prosecutions

v. Lawler, unreported, High Court of Australia, 9 March 1994 at 2-3 per

may fall outside s.51(xxxi) because it cannot fairly be characterized

as a law for the acquisition of property for a purpose in respect of

which the Parliament has power to make laws. That will generally be

the case with laws directed to resolving competing claims or providing

for "the creation, modification, extinguishment or transfer of rights

and liabilities as an incident of, or a means for enforcing, some

general regulation of the conduct, rights and obligations of citizens

in relationships or areas which need to be regulated in the common

interest" ((21) Mutual Pools and Staff Pty. Ltd. v. The Commonwealth,

unreported, High Court of Australia, 9 March 1994 at 28 per Deane and

16. It cannot be said that a law extinguishing a cause of action

for damages for employment injuries sustained as the result of the

negligence of the Commonwealth or its agencies is so clearly within

some other head of legislative power that it falls outside s.51(xxxi),

as is the case with a law imposing taxation. Nor does s.44 of the Act

effect an acquisition of a kind that does not permit of just terms,

as is the case with a law imposing a penalty by way of forfeiture.

However, the argument that s.44 does no more than modify the

limitation period applicable to a cause of action which vested before

the new scheme began is, in effect, an argument that s.44 is not

fairly characterized as a law with respect to the acquisition of

17. However, it is by no means accurate to describe s.44 as a

law modifying the limitation period applicable to causes of action

with respect to injuries sustained by Commonwealth employees before

the new scheme came into effect. Subject to s.45, which does not

apply in the present case, s.44 puts an end to a cause of action

against the Commonwealth or its agencies if it was not sued upon

before it, s.44, came into effect. Section 44 operated once and

for all as a final measure terminating those causes of action which

fall outside s.45, not as a measure prescribing the time in which

proceedings were to be commenced. Moreover, even if s.44 is

characterized as a law with respect to the rights and liabilities of

Commonwealth employees, on the one hand, and the Commonwealth and its

agencies, on the other, in relation to employment injuries, it does

not follow that it lacks the character of a law with respect to the

acquisition of property for a purpose for which the Parliament has

power to make laws ((22) See, as to the laws which bear more than one

character, Victorian Stevedoring and General Contracting Co. Pty. Ltd.

and Meakes v. Dignan [1931] HCA 34; (1931) 46 CLR 73 at 103-104; Crowe v. The

Commonwealth [1935] HCA 63; (1935) 54 CLR 69 at 94; Herald and Weekly Times

Ltd. v. The Commonwealth [1966] HCA 78; (1966) 115 CLR 418 at 434; Murphyores

Incorporated Pty. Ltd. v. The Commonwealth [1976] HCA 20; (1976) 136 CLR 1 at

8, 20-21; Mutual Pools and Staff Pty. Ltd. v. The Commonwealth,

unreported, High Court of Australia, 9 March 1994 at 27 per

18. One consequence of s.51(xxxi)'s operation through

characterization and concern with substance is that there will

inevitably be borderline cases in which the question whether a law

bears the distinct character of a law with respect to the acquisition

of property for a s.51(xxxi) purpose is finely balanced. The present

is such a case. On balance, we have reached the conclusion that s.44

19. It may well be that, if s.44 appeared in legislation establishing

a compensation scheme applying to employers and employees generally

(assuming power to enact a scheme of that kind), it would not fairly

be characterized as a law for the acquisition of property for a

purpose for which the Parliament has power to make laws. But when

s.44 is viewed in the context of a scheme which applies only to

Commonwealth employees, it may be fairly characterized as a law for

the acquisition of the causes of action which vested in those

employees prior to the commencement of the new scheme. That

acquisition is for the purposes of that scheme, that is to say, it is

for a purpose for which the Parliament has power to make laws. It is

true that s.44 may be susceptible of other characterizations for other

purposes. For the purposes of s.51(xxxi) of the Constitution,

however, it bears a distinct character as a law with respect to the

acquisition of property within that paragraph ((23) See, generally,

Mutual Pools and Staff Pty. Ltd. v. The Commonwealth, unreported, High

Court of Australia, 9 March 1994 at 8-9 per Mason CJ, 27 per Deane

20. The Act provides no compensation whatsoever with respect to the

causes of action which vested before the new scheme commenced and

which, being outside s.45, are, in substance, acquired by s.44.

Accordingly, s.44 is invalid to that extent by reason that it effects

an acquisition of property other than on just terms as required by

s.51(xxxi) of the Constitution.

21. As noted earlier, what has been said thus far concerns only

the two causes of action which were not statute barred before these

proceedings were commenced. The position with respect to a statute-

barred cause of action was not explored in argument. It is arguable

that a cause of action that is statute barred, whether it is the

action or the remedy that is barred, is not a valuable right and,

thus, not property for the purposes of s.51(xxxi). Whatever the

position, the reserved question, as it bears on a statute-barred cause

of action, is largely, if not entirely, academic. It does not require

We would answer the question reserved as follows:

As to a cause of action that was not statute barred before

his action was commenced, s.44 is invalid in its application

to the plaintiff. As to a cause of action that was statute

barred, unnecessary to answer at this stage.

BRENNAN J The plaintiff, Mr Georgiadis, had a claim for damages for

negligence occasioning personal injuries against his employer, the

Australian Telecommunications Commission. By successive legislative

provisions ((24) Telecommunications Act 1975 (Cth), ss.4, 4A (inserted

by Telecommunications Amendment Act 1988 (Cth), s.6); [Australian

](/cgi-bin/viewdoc/au/legis/cth/num_act/atca1989453/)Telecommunications Corporation Act 1989 (Cth), ss.12, 13;

Australian and Overseas Telecommunications Corporation Act 1991

(Cth), s.11(b).), the Commission's liability became the liability of

the defendant Corporation. On 17 September 1990 the plaintiff

commenced proceedings in the Supreme Court of New South Wales to

enforce his claim. His statement of claim alleges a series of

incapacitating accidents and it may be that some of his claims or part

of his claim would be barred by operation of the general statute of

limitations. Section 44 of the [Commonwealth Employees' Rehabilitation

](/cgi-bin/viewdoc/au/legis/cth/num_act/ceraca1988534/)and Compensation Act 1988 (Cth) ("the 1988 Act") ((25) Now called the

Safety Rehabilitation and Compensation Act 1988 (Cth).) was pleaded as

a bar to the whole of the plaintiff's action. The matter was removed

into this Court in order to determine the constitutional validity of

s.44 in its application to the plaintiff's claim. It is unnecessary

to consider whether s.44 had any effect on the plaintiff's "stale"

claims. The validity of s.44 can be tested by reference to its effect

on claims which, s.44 apart, are enforceable against the defendant.

Section 44(1) reads as follows:

" Subject to section 45, an action or other proceeding

for damages does not lie against the Commonwealth, a

Commonwealth authority or an employee 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 Commonwealth or Commonwealth authority

would, but for 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;

whether that injury, loss or damage occurred before or

after the commencement of this section."

It is common ground that s.45 has no application to the plaintiff's

2. The question is whether the extinguishment of the plaintiff's

cause of action is an "acquisition of property on just terms from

any ... person for any purpose in respect of which the Parliament

has power to make laws" within the meaning of that text quoted from

s.51(xxxi) of the Constitution.

3. The Commonwealth submitted that, if the extinguishment of the

plaintiff's cause of action amounts to an acquisition of property,

s.44 provides just terms for the acquisition "taking into account the

interests of the community". It was submitted that the plaintiff

could have brought his action after s.44 was enacted but before it was

proclaimed to come into force on 1 December 1988 and that the 1988 Act

merely shortened the limitation period. But it is erroneous to regard

s.44(1) as operating simply to shorten a period of limitation: in

terms it extinguished the causes of action to which it refers that

were in existence when s.44(1) was proclaimed to commence under s.2(2)

of the 1988 Act. The validity of a law must be tested by reference to

its legal operation on proprietary rights ((26) Fairfax v. Federal

Commissioner of Taxation [1965] HCA 64; (1965) 114 CLR 1 at 7; Actors and Announcers

Equity Association v. Fontana Films Pty. Ltd. [1982] HCA 23; (1982) 150 CLR 169 at

216.). If it imposes a burden which is otherwise invalid, it does not

acquire validity merely because an affected person could have acted to

avoid the burden before the law came into force. Further, it was

submitted that the legislative scheme which then came into force

provided monetary and other benefits without proof of negligence and

provided for speedy rehabilitation for injured workers and incentives

for their early return to work. The benefits provided by the 1988 Act

do not provide just terms for the extinguishment of a cause of action

vested in an injured worker. If a worker is entitled at common law to

a lump sum award in damages, it is not within the power of the

Commonwealth under s.51(xxxi) to limit the amount which it or a

statutory authority may have to pay the worker ((27) Johnston Fear and

Kingham and The Offset Printing Co. Pty. Ltd. v. The Commonwealth

[1943] HCA 18; (1943) 67 CLR 314 at 322, 327.) or to delay the worker's entitlement

to payment ((28) The Commonwealth v. Tasmania (the Tasmanian Dam Case)

[1983] HCA 21; (1983) 158 CLR 1 at 291.). In determining the issue of just terms,

the Court does not attempt a balancing of the interests of the

dispossessed owner against the interests of the community at large.

The purpose of the guarantee of just terms is to ensure that the owners

of property compulsorily acquired by government presumably in the

interests of the community at large are not required to sacrifice their

property for less than its worth. Unless it be shown that what is

gained is full compensation for what is lost, the terms cannot be found

to be just. Section 44 purports to extinguish a plaintiff's cause of

action without compensation; it does not provide just terms for the

4. The validity of s.44 therefore depends on whether s.44 provides

for an acquisition of property. For reasons which I have given in

Mutual Pools and Staff Pty. Ltd. v. The Commonwealth ((29) Unreported,

9 March 1994.), I would hold that, if the plaintiff's rights against

the Commonwealth were proprietary in nature, the extinguishment of

those rights by s.44 would amount to an acquisition of property. The

Corporation acquired a release from liability in damages to the

plaintiff and as that liability was the correlative of the plaintiff's

claim, the release acquired is of the same nature as the claim

extinguished. What, then, is the nature of a claim in negligence for

5. A plaintiff's claim in negligence causing personal injuries is

a chose in action, as the Court of Appeal decided in Curtis v.

Wilcox ((30) (1948) 2 KB 474.). In that case it was held that a

wife's claim for damages for pre-nuptial negligence was part of her

property ((31) By s.24 of the Married Women's Property Act 1882

(U.K.), "property" was defined to include a thing in action.) for

which she was entitled to sue her husband pursuant to the Married

Women's Property Act. Although such a cause of action is not

assignable, their Lordships rejected the argument that assignability is

the test of whether a claim in negligence was a chose in action ((32)

(1948) 2 KB at 481.) and, in my respectful opinion, rightly so. It is

not by reason of its nature that such a claim is not assignable; it is

for reasons of public policy that the courts have held that such a

claim is not assignable ((33) Trendtex Trading v. Credit Suisse (1982)

AC 679 at 703 per Lord Roskill.), thereby avoiding the evils of

champerty ((34) ibid.; see also per Lord Denning MR in the Court of

Appeal: (1980) QB 629 at 656.). And, as Mason J pointed out in Reg.

v. Toohey; Ex parte Meneling Station Pty. Ltd. ((35) [1982] HCA 69; (1982) 158 CLR

327 at 342-343; see also Australian Capital Television Pty. Ltd. v. The

Commonwealth [1992] HCA 45; (1992) 177 CLR 106 at 165-166.): "Assignability is not

in all circumstances an essential characteristic of a right of

property." It needs no extension of the meaning of "property" in

s.51(xxxi) to comprehend a chose in action for damages for negligence

causing personal injury. That paragraph, which is construed liberally

as befits a constitutional guarantee of just terms ((36) Australian

Tape Manufacturers Association Ltd. v. The Commonwealth [1993] HCA 10; (1993) 176 CLR

480 at 509.), protects common law choses in action which are vested in

an individual ((37) Minister of State for the Army v. Dalziel [1944] HCA 4; (1944)

6. The Commonwealth, pointing to the common law immunity of the

Crown from liability in tort, submitted that the right to sue the

Commonwealth in tort is the creation of Commonwealth law (notably

ss.56 and 64 of the Judiciary Act 1903 (Cth)) and that a cause of

action that is seen to depend on a law of the Commonwealth is

inherently liable to extinguishment by any subsequent law of the

Commonwealth. Assuming, without deciding, that the Commonwealth's

liability in tort is dependent on laws of the Commonwealth, that

liability is not the creature of statute. The liability is created

by the common law and, provided the corresponding common law cause

of action is vested, the person in whom it is vested is entitled to

the protection of s.51(xxxi). It may be - it is not necessary to

decide - that the Commonwealth's immunity in tort was removed by laws

of the Commonwealth but, so long as that immunity is removed, the

causes of action created by the common law and vested in a person are

protected by s.51(xxxi).

7. I would therefore hold that s.44(1) of the 1988 Act attracts the

operation of s.51(xxxi) of the Constitution and, in relation to causes

of action enforceable at the time when s.44(1) commenced, is invalid.

I would answer the question reserved in the same terms as the answer

DAWSON J The plaintiff, Mr Georgiadis, commenced an action in

the Supreme Court of New South Wales against the defendant, a

Commonwealth authority, claiming damages in negligence for personal

injuries sustained in the course of his employment by the Australian

Telecommunications Commission, whose assets and liabilities were

transferred to the defendant. In addition to denying negligence, the

defendant pleaded by way of defence that the plaintiff's claim is

barred by s.44 of the Safety Rehabilitation and Compensation Act 1988

(Cth) ("the 1988 Act"). The plaintiff in his reply alleged that the

1988 Act is beyond the power of the Commonwealth Parliament by reason

of s.51(xxxi) of the Constitution. Section 51(xxxi) provides that the

Parliament may make laws with respect to the acquisition of property

on just terms from any State or person for any purpose in respect of

2. The matter was removed into this Court under s.40(1) of the

Judiciary Act 1903 (Cth). During the course of proceedings in this

Court the Chief Justice stated a question for the consideration of the

Full Court, namely, whether, on the basis of the facts alleged in the

statement of claim, the 1988 Act is invalid in its application to the

"(1) Subject to section 45, an action or other

proceeding for damages does not lie against ... a

Commonwealth authority ... 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 ... Commonwealth authority would, but

for this subsection, be liable (whether vicariously

or otherwise) for damages;

...

whether that injury, loss or damage occurred before or after

the commencement of this section."

"(1) Where:

(a) compensation is payable under section 24, 25 or 27

in respect of an injury to an employee; and

(b)... a Commonwealth authority ... would, but for

subsection 44(1), be liable for damages for any

non-economic loss suffered by the employee as a

result of the injury;

the employee may, at any time before an amount of

compensation is paid to the employee under section 24, 25 or

27 in respect of that injury, elect in writing to institute

an action or proceeding against ... the Commonwealth

authority ... for damages for that non-economic loss.

(2) Where an employee makes an election:

(a) subsection 44(1) does not apply in relation to an

action or other proceeding subsequently instituted

by the employee against ... the Commonwealth

authority ... for damages for the non-economic loss

to which the election relates; and

(b) compensation is not payable after the date of the

election under section 24, 25 or 27 in respect of

the injury.

(3) An election is irrevocable.(

(4) In any action or proceeding instituted as a result

of an election made by an employee, the court shall not

award the employee damages of an amount exceeding $110,000

for any non-economic loss suffered by the employee."

3. Thus s.44 of the 1988 Act removes the common law right of an

employee to claim damages against a Commonwealth authority unless s.45

applies. Section 45 only applies if s.24, 25 or 27 applies ((38)

Safety Rehabilitation and Compensation Act, s.45(1)(a).). Under

s.124(3), ss.24 and 25 do not apply to a person injured before the 1988

Act commenced if "the person was not entitled to receive compensation

of a lump sum in respect of that impairment ... under the (Compensation

(Commonwealth Government Employees) Act 1971 (Cth) ("the 1971 Act")) as

in force when the impairment ... occurred". Under the 1971 Act the

plaintiff was entitled to weekly or other compensation and to pursue a

claim for damages at common law ((39) See the 1971 Act, s.99, between

its commencement on 1 September 1971 and its repeal on 1 December

1988.). However, he was not entitled to a lump sum. A lump sum was

only payable to an employee under the 1971 Act for the incapacities set

out in ss.39-42 of the 1971 Act, which do not include back injuries.

The plaintiff's claim is in respect of a back injury. It follows that

ss.24 and 25 of the 1988 Act do not apply to the plaintiff. Liability

under s.27 of the 1988 Act is dependent upon liability under s.24 of

4. The result is that the plaintiff could, but for the 1988 Act,

claim damages at common law. The 1988 Act purports to extinguish the

plaintiff's claim for damages for his back injury, although it would

allow a common law claim for damages for non-economic loss for a

similar injury occurring after the commencement of the 1988 Act.

5. It may be assumed for the purpose of this decision that the right

to maintain an action for the recovery of unliquidated damages for

personal injury constitutes property for the purposes of s.51(xxxi),

whilst recognizing that it is a personal right which is not capable

of assignment at law or in equity and would, in other contexts, not

be regarded as property ((40) See Poulton v. The Commonwealth (1953)

89 CLR 540 at 602; Hepples v. Federal Commissioner of Taxation (1990)

94 ALR 81 at 102-103.). Although I do not find it necessary

in this case to decide whether the plaintiff's bare right of action

constitutes property, it is appropriate to recognize that, because

s.51(xxxi) forms a guarantee against unjust appropriation, the word

"property" in that paragraph is to be given a generous interpretation.

It extends to innominate and anomalous interests not recognized as

proprietary either at law or in equity ((41) See Bank of N.S.W. v. The

Commonwealth ("the Bank Nationalization Case") [1948] HCA 7; (1948) 76 CLR 1 at

349-350; The Commonwealth v. Tasmania (The Tasmanian Dam Case) [1983] HCA 21; (1983)

6. But having said that, it is also necessary to observe that

s.51(xxxi) is concerned, not with the acquisition of financial benefit

or advantage, but with the acquisition of property. Property's worth

is not the same thing as property and the divesting of a proprietary

right is not the same thing as acquiring it. The divesting of a

proprietary right may amount to a taking, and were s.51(xxxi) to

contain a prohibition against the taking of property without just

compensation as does the Fifth Amendment in the United States, the

situation would be different. But the emphasis in s.51(xxxi) is on

acquisition and "there must be an acquisition whereby the Commonwealth

or another acquires an interest in property however slight or

insubstantial it may be" ((42) The Tasmanian Dam Case (1983) 158 CLR

at 145 per Mason J See also Reg. v. Ludeke; Ex parte Australian

Building Construction Employees' and Builders Labourers' Federation

[1985] HCA 84; (1985) 159 CLR 636 at 653; Australian Capital Television Pty. Ltd. v.

The Commonwealth [1992] HCA 45; (1992) 177 CLR 106 at 166, 198.).

7. The plaintiff's argument is that by extinguishing his right of

action against the defendant, the defendant acquired a benefit in the

form of the reduction of its liability to the plaintiff so that, in

effect, it acquired the plaintiff's right of action. I am unable to

accept that argument. For the reasons which Toohey J and I gave in

Mutual Pools and Staff Pty. Ltd. v. The Commonwealth ((43) Unreported,

9 March 1994.), any benefit or financial advantage derived by the

defendant was not in the form of property. The plaintiff's right of

8. The plaintiff placed reliance upon a passage in the judgment of

Deane J in The Tasmanian Dam Case in which he said ((44) (1983) 158

"Where, however, the effect of prohibition or regulation is

to confer upon the Commonwealth or another an identifiable

and measurable advantage or is akin to applying the

property, either totally or partially, for a purpose of the

Commonwealth, it is possible that an acquisition for the

purposes of s.51(xxxi) is involved. The benefit of land

can, in certain circumstances, be enjoyed without any active

right in relation to the land being acquired or exercised:

see, e.g., Council of the City of Newcastle v. Royal

Newcastle Hospital ((45) [1957] HCA 15; (1957) 96 CLR 493; (1959) 100 CLR 1.).

Thus, if the Parliament were to make a law prohibiting any

presence upon land within a radius of 1 kilometre of any point on

the boundary of a particular defence establishment and thereby

obtain the benefit of a buffer zone, there would, in my view, be

an effective confiscation or acquisition of the benefit of use

of the land in its unoccupied state notwithstanding that

neither the owner nor the Commonwealth possessed any right

to go upon or actively to use the land affected."

But in that passage, as I understand it, his Honour is referring to an

effective acquisition of the land or rights in the land, that is to

say, the acquisition in effect of rights of a proprietary nature. I

do not understand his Honour to be saying that the acquisition of a

financial advantage equivalent to the worth of the land or the rights

in it would be the same thing as the acquisition of the land or those

9. For these reasons, I would hold that the 1988 Act is not invalid

in its application to the plaintiff and would answer the question

TOOHEY J On 2 October 1992 there was an order for the removal into

"the cause constituted by the Notice of Appeal and the

Notice of Contention in proceedings numbered 15392 of 1990

in the New South Wales Supreme Court, Common Law Division".

In the course of the hearing the Chief Justice stated a question for

the consideration of the Full Court, namely, whether on the basis of

the facts alleged in the statement of claim, s.44 of the [Commonwealth

](/cgi-bin/viewdoc/au/legis/cth/num_act/ceraca1988534/)Employees' Rehabilitation and Compensation Act 1988 (Cth)

("the Act") ((46) The Act is now known as the [Safety Rehabilitation

](/cgi-bin/viewdoc/au/legis/cth/consol_act/sraca1988368/)and Compensation Act 1988 (Cth); see the [Commonwealth Employees'

](/cgi-bin/viewdoc/au/legis/cth/num_act/ceracaa1992614/)Rehabilitation and Compensation Amendment Act 1992 (Cth).) is invalid

2. The proceedings began with an action for damages for negligence

by the plaintiff, Mr Georgiadis, against his employer, the Australian

Telecommunications Corporation, a statutory body established by

the Telecommunications Act 1975 (Cth) ((47) Prior to the enactment of

the Telecommunications Amendment Act 1988 (Cth), the applicant was

employed by the Australian Telecommunications Commission whose assets

and liabilities were transferred to the Corporation upon the coming

into operation of the amending Act. The Commission had assumed the

relevant assets and liabilities of the Postmaster-General's Department

on enactment of the Telecommunications Act 1975 (Cth).). It is

alleged in the statement of claim that between 1974 and 1986 the

plaintiff suffered personal injuries in the course of his employment.

The defendant, which is the statutory successor to the employer

including its liabilities ((48) See [Australian Telecommunications

](/cgi-bin/viewdoc/au/legis/cth/num_act/atca1989453/)Corporation Act 1989 (Cth); [Australian and Overseas Telecommunications

](/cgi-bin/viewdoc/au/legis/cth/num_act/aaotca1991565/)Corporation Act 1991 (Cth).), pleaded in its defence to the statement

of claim that the plaintiff's claim "is barred by statute, to wit

Section 44 of the Commonwealth Employees Rehabilitation and

" (1) Subject to section 45, an action or other

proceeding for damages does not lie against the

Commonwealth, a Commonwealth authority or an employee 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 Commonwealth or Commonwealth

authority would, but for 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;

whether that injury, loss or damage occurred before or

after the commencement of this section.

(2) Subsection (1) does not apply in relation to an

action or proceeding instituted before the commencement of

this section."

The plaintiff's action was not instituted before the commencement of

3. In lieu of an action for damages, the Act introduced a scheme

of compensation providing weekly payments for incapacity ((49) s.19.)

and, in relation to permanent impairment, lump sums ((50) s.24.),

interim payments ((51) s.25.) and certain additional sums for

4. Where compensation is payable for permanent impairment and but

for s.44(1) there would be liability for non-economic loss, an

employee may elect to institute an action against the Commonwealth for

damages for that non-economic loss rather than be compensated pursuant

to the statutory scheme. The election is irrevocable. Section 44(1)

does not then apply in relation to that action; the damages which

may be awarded by a court for non-economic loss are limited to

5. But a person is not entitled to compensation in respect of a

permanent impairment unless he or she was entitled to a lump sum in

respect of that impairment "under the 1971 Act as in force when the

impairment ... occurred" ((54) s.124(3)(b)(iii).). The "1971 Act" is

a reference to the Compensation (Commonwealth Government Employees) Act

1971 (Cth) ((55) The 1971 Act was originally called the Compensation

(Commonwealth Employees) Act. It became the Compensation (Australian

Government Employees) Act upon enactment of an amending act of the same

name in 1973. The present title was inserted by the Compensation

(Commonwealth Government Employees) Amendment Act 1976.)

which the Act repealed. The plaintiff was not entitled to a lump sum

for permanent impairment to his back under the 1971 Act. He was

therefore not entitled to receive compensation of a lump sum for

that impairment under the Act. Accordingly he was not entitled to

compensation for non-economic loss, such compensation being available

only where "an injury to an employee results in a permanent impairment

and compensation is payable in respect of the injury under

section 24" ((56) s.27(1).). And because compensation is not payable

for permanent impairment under the Act, the plaintiff may not elect to

claim damages for non-economic loss pursuant to s.45 of the Act.

6. The plaintiff contends that the extinguishment of his common

law action for damages for non-economic loss (and the deprivation

of his entitlement to full recovery of economic loss, for he would

only have been able to recover weekly payments of compensation and

medical expenses) constitutes an acquisition of property from him

within the meaning of s.51(xxxi) of the Constitution, with a

consequent obligation for the payment of just terms for that

acquisition. The scheme of compensation available to the plaintiff,

7. It is accepted, for the purpose of resolving the constitutional

issue, that immediately prior to the passing of the Act the plaintiff

had a right of action against the defendant in respect of his

injuries, including an entitlement to damages for non-economic loss.

The capacity of a person to bring a suit against the Commonwealth,

whether in contract or in tort, appears in s.56 of the Judiciary Act

1903 (Cth). Section 64 of the Judiciary Act ensures that in an action

against the Commonwealth "the rights of parties shall as nearly as

possible be the same ... as in a suit between subject and subject".

The Telecommunications Act established the Australian

Telecommunications Corporation (and the Commission before it) as a

body corporate, capable of being sued in its corporate name ((57)

ss.4, 21.). The defendant was incorporated under the Corporations Law

of the Australian Capital Territory ((58) [Australian and Overseas

](/cgi-bin/viewdoc/au/legis/cth/num_act/aaotca1991565/)Telecommunications Corporation Act 1991 (Cth).).

8. As the argument was presented, the first step must be to inquire

whether in truth the right of action available to the plaintiff before

the Act was property. Overshadowing this inquiry is the wider

question whether the extinguishment of a right of action such as

existed here is within the general conspectus of s.51(xxxi).

9. As to the immediate inquiry, what the plaintiff had was a right

of action in tort against the defendant. Such a right is regarded as

a legal chose in action ((59) Halsbury's Laws of England, 4th ed.,

vol.6, par.8.). That a chose in action is ordinarily property is not

debatable ((60) Minister of State for the Army v. Dalziel [1944] HCA 4; (1944) 68

CLR 261 at 285, 290, 295; Bank of N.S.W. v. The Commonwealth ("the

Bank Nationalization Case") [1948] HCA 7; (1948) 76 CLR 1 at 349; The Commonwealth

v. Tasmania (The Tasmanian Dam Case) [1983] HCA 21; (1983) 158 CLR 1

tort of conversion has been treated as "incapable of assignment either

at law or in equity" ((61) Poulton v. The Commonwealth (1953) 89 CLR

540 at 602.). Lord Wilberforce observed in National Provincial Bank

Ltd. v. Ainsworth ((62) [1965] UKHL 1; (1965) AC 1175 at 1247-1248; see also The

Queen v. Toohey; Ex parte Meneling Station Pty. Ltd. [1982] HCA 69; (1982) 158 CLR 327

at 342; Australian Capital Television Pty. Ltd. v. The Commonwealth

[1992] HCA 45; (1992) 177 CLR 106 at 165-166.):

"Before a right or an interest can be admitted into the

category of property, or of a right affecting property, it

must be definable, identifiable by third parties, capable

in its nature of assumption by third parties, and have some

degree of permanence or stability."

This statement must be read in light of the decision of the

House of Lords in Trendtex Trading v. Credit Suisse ((63) (1982) AC

679.) where Lord Roskill (with whom Lord Edmund-Davies, Lord Fraser of

Tullybelton and Lord Keith of Kinkel agreed), speaking of litigation in

relation to failure to honour a letter of credit, said ((64) ibid. at

"The court should look at the totality of the transaction.

If the assignment is of a property right or interest and

the cause of action is ancillary to that right or interest,

or if the assignee had a genuine commercial interest in

taking the assignment and enforcing it for his own benefit,

I see no reason why the assignment should be struck down as

an assignment of a bare cause of action or as savouring of

maintenance."

10. This dictum was applied by Needham J in Re Timothy's Pty. Ltd.

and the Companies Act ((65) (1981) 2 NSWLR 706.) and was referred to

by Young J in Beard v. Baulkham Hills Shire Council ((66) (1986) 7

NSWLR 273 at 281.). And it may be noted that in Compania Colombiana

de Seguros v. Pacific Steam Navigation Co. ((67) (1965) 1 QB 101 at

121-122.) Roskill J, as his Lordship then was, saw no difficulty in

upholding the assignment of a right of action in a personal injury case

11. However, the issues before the Court do not involve an

assignment; assignability is relevant only for the light it throws

on the concept of property. The plaintiff had a right to receive a

payment of money by way of damages. The term "property" in s.51(xxxi)

"extends to innominate and anomalous interests" ((68) Bank

Nationalization Case (1948) 76 CLR at 349 per Dixon J). Consistent

with the view of the majority in Australian Tape Manufacturers

Association Ltd. v. The Commonwealth ((69) [1993] HCA 10; (1993) 176 CLR 480 at 509.)

, that right must be regarded as constituting "property" for the

purposes of s.51(xxxi). But it is the chose in action which

constitutes property. Whether money answers that description does not

arise in the present case. That matter is discussed in the judgment of

Dawson J and myself in Mutual Pools and Staff Pty. Limited v. The

Commonwealth ((70) Unreported, High Court of Australia, 9 March 1994.).

12. However, it does not follow that the defendant acquired that

property from the plaintiff. It must be accepted that s.51(xxxi)

is a constitutional guarantee of just terms and should be liberally

construed ((71) Dalziel (1944) 68 CLR at 276, 284-285;

Attorney-General (Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361 at 370-372; Trade

Practices Commission v. Tooth and Co. Ltd. [1979] HCA 47; (1979) 142 CLR 397 at 403;

Clunies-Ross v. The Commonwealth [1984] HCA 65; (1984) 155 CLR 193 at 201-202;

see also Street v. Queensland Bar Association [1989] HCA 53; (1989) 168 CLR 461

at 527.). And it must be accepted also that it is the substance

not the form of the impugned law that is to be considered. A merely

circuitous device to avoid the constitutional guarantee will not be

upheld ((72) Bank Nationalization Case (1948) 76 CLR at 349-350;

Trade Practices Commission v. Tooth and Co. Ltd. (1979) 142 CLR

at 407; Cole v. Whitfield [1988] HCA 18; (1988) 165 CLR 360 at 399-400;

Hematite Petroleum Pty. Ltd. v. Victoria [1983] HCA 23; (1983) 151 CLR 599 at

633, 662-663; Philip Morris Ltd. v. Commissioner of Business

Franchises (Vict.) [1989] HCA 38; (1989) 167 CLR 399 at 433.). Nevertheless, as

Dawson J and I said in Australian Tape Manufacturers Association

"(F)or the paragraph to apply it must be possible to

identify an acquisition of something of a proprietary

nature. The mere extinction or diminution of a proprietary

right residing in one person does not necessarily result in

the acquisition of a proprietary right by another ((74) A

distinction between deprivation of property and acquisition of

was made by the Privy Council in Govt. of Malaysia v. Selangor Pilot

Assoc. (1978) AC 337 especially at 347-348.).

Giving full effect to these principles, the result is that there

was no acquisition by the defendant of a proprietary right. It is

unnecessary to consider those decisions in which a compulsory

divesting of property has been held not to be an acquisition within

s.51(xxxi) or to identify a principle which allows those cases to be

distinguished from others in which a compulsory divesting has been

held to have occurred ((75) See Trade Practices Commission v. Tooth

and Co. Ltd. (1979) 142 CLR at 408.). The right to bring a suit

against the Commonwealth in tort is conferred by Commonwealth

legislation and it is hard to see how a law which affects that right,

even a law diminishing or extinguishing it, can fall within

The Act effects no acquisition of property by the Commonwealth. As

was said in The Queen v. Ludeke; Ex parte Australian Building

Construction Employees' and Builders Labourers' Federation ((76)

[1985] HCA 84; (1985) 159 CLR 636 at 653.):

"there is nothing in the Act that provides for the

acquisition of those rights - they may be extinguished, but

not acquired".

13. No doubt the defendant has benefited from the operation of s.44

of the Act in that a person in the position of the plaintiff can no

longer recover damages for non-economic loss. But that falls far

short of saying that there was an acquisition of property by the

defendant. The dichotomy between extinguishment and acquisition

cannot be pressed too far; the two are not necessarily incompatible.

But, in the end, as Mason J said in The Tasmanian Dam Case ((77)

"To bring the constitutional provision into play ... there

must be an acquisition whereby the Commonwealth or another

acquires an interest in property, however slight or

insubstantial it may be."

It is not possible to identify the acquisition of an interest in

property by the defendant. What has happened is that a right which

once existed no longer exists. It was said by the defendant that few

persons stood to be affected by the provision. That may be so but it

cannot be a touchstone by which to determine whether there has been an

acquisition of property from the plaintiff. However, as I have

concluded that there was no such acquisition it is unnecessary to

14. It follows that s.44 of the Act is not invalid in its application

McHUGH J This action was commenced in the Supreme Court of New

South Wales but was removed into this Court under s.40(1) of the

Judiciary Act 1903 (Cth). Pursuant to s.18 of that Act, Mason CJ

has stated the following question for consideration by the Full Court:

on the basis of the facts alleged in the statement of claim of the

plaintiff is s.44 of the [Commonwealth Employees' Rehabilitation

](/cgi-bin/viewdoc/au/legis/cth/num_act/ceraca1988534/)and Compensation Act 1988 (Cth) ("the 1988 Act") invalid in its

application to the plaintiff? More specifically, the issue for

determination is whether the 1988 Act acquired the property of the

plaintiff contrary to s.51(xxxi) of the Constitution. That paragraph

empowers the Parliament of the Commonwealth to make laws for the

acquisition of property on just terms from any State or person for

any purpose in respect of which the Parliament has power to make laws.

The plaintiff alleges that the 1988 Act provided for the acquisition

by the Commonwealth of the plaintiff's right to sue the defendant for

damages for back injuries which he received during the course of his

employment with the defendant's predecessor. If the predecessor of

the defendant was liable to the plaintiff, that liability became a

liability of the defendant by virtue of s.11 of the [Australian and

](/cgi-bin/viewdoc/au/legis/cth/num_act/aaotca1991565/)Overseas Telecommunications Corporation Act 1991 (Cth).

2. The plaintiff alleges that, during the period February 1974 to

March 1986, he suffered five injuries to his back in the course of

his employment. The last injury occurred on or about 4 March 1986.

Weekly compensation payments in respect of those injuries were

received by the plaintiff pursuant to the provisions of the

Compensation (Commonwealth Employees) Act 1971 (Cth) ("the 1971 Act").

On 17 September 1990, the plaintiff commenced a common law action for

damages for negligence in respect of these injuries against the

defendant's predecessor in the Supreme Court of New South Wales. The

negligence relied on was a breach of the employer's common law duty to

take reasonable care for the safety of its employees. If the facts in

the statement of claim filed in that Court are true, they establish

that, before the enactment of the 1988 Act, the plaintiff had a common

law right of action for damages against the defendant's predecessor

even if part of the cause of action was statute barred by operation

of the Limitation Act 1969 (N.S.W.). In its statement of defence,

however, the defendant alleges that the whole of the plaintiff's

claim is barred by s.44 of the 1988 Act. The plaintiff has filed a

reply which alleges that the 1988 Act is unconstitutional because it

breaches the terms of s.51(xxxi) of the Constitution.

3. The 1988 Act extinguishes all rights to sue the Commonwealth

or a Commonwealth authority for damages for injuries sustained in

the course of employment with the Commonwealth or a Commonwealth

authority. In place of those rights is substituted a statutory

scheme of compensation which provides for lump sums for permanent

impairment ((78) ss.24, 25.), weekly payments for incapacity ((79)

s.19.), medical expenses ((80) s.16.) and sums for non-economic loss

((81) s.27.). According to the second reading speech ((82)

Commonwealth, House of Representatives, Parliamentary Debates

(Hansard), 27 April 1988 at 2191-2195.) explaining the Commonwealth

Employees' Rehabilitation and Compensation Bill 1988, the purpose of

the proposed Act was to "provide incentives for injured employees to

return to work as soon as possible" and to "provide greater powers in

relation to rehabilitation". These objectives were said to be the

Commonwealth's response to a 700 per cent increase in government

expenditure on workers' compensation over the decade between 1976 and

1986. The Minister attributed the increase to inefficiencies in the

1971 Act and to long delays in the court system in bringing negligence

actions on for hearing. Both factors were said to provide

disincentives for injured workers to return to work and to encourage

them to maximise the extent and duration of their injuries. The

Minister stated that the new Act was an attempt to reverse this

4. The 1988 Act was assented to on 24 June 1988. By proclamation

published on 1 July 1988, the commencement date for most provisions

was fixed as 1 December 1988. The Act does not apply to any action

instituted before the commencement date. But this does not assist

the plaintiff - his action was commenced over 20 months after the Act

"(1) Subject to section 45, an action or other

proceeding for damages does not lie against the

Commonwealth, a Commonwealth authority or an employee 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 Commonwealth or Commonwealth

authority would, but for 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;

whether that injury, loss or damage occurred before or after

the commencement of this section.

(2) Subsection (1) does not apply in relation to an

action or proceeding instituted before the commencement of

this section."

5. Section 45 provides for an employee to elect between compensation

under the Act and damages at common law for non-economic loss. That

"(1) Where:

(a) compensation is payable under section 24, 25 or 27

in respect of an injury to an employee; and

(b) the Commonwealth, a Commonwealth authority or

another employee would, but for subsection 44(1),

be liable for damages for any non-economic loss

suffered by the employee as a result of the

injury;

the employee may, at any time before an amount of

compensation is paid to the employee under section 24, 25 or

27 in respect of that injury, elect in writing to institute

an action or proceeding against the Commonwealth, the

Commonwealth authority or other employee for damages for

that non-economic loss.

(2) Where an employee makes an election:

(a) subsection 44(1) does not apply in relation to an

action or other proceeding subsequently instituted

by the employee against the Commonwealth, the

Commonwealth authority or the other employee for

damages for the non-economic loss to which the

election relates; and

(b) compensation is not payable after the date of the

election under section 24, 25 or 27 in respect of

the injury.

(3) An election is irrevocable.

(4) In any action or proceeding instituted as a result

of an election made by an employee, the court shall not

award the employee damages of an amount exceeding $110,000

for any non-economic loss suffered by the employee."

"(1) Subject to this Part, this Act applies in

relation to an injury, loss or damage suffered by an

employee, whether before or after the commencing day.

...

(3) A person is not entitled to compensation under

section 24 or 25 in respect of a permanent impairment, or

under section 17 in respect of the death of an employee,

being an impairment or death that occurred before the

commencing date, if:

(b) the person was not entitled to receive

compensation of a lump sum in respect of that

impairment or death:

...

(iii) in any other case - under the 1971 Act as

in force when the impairment or death

occurred."

6. The 1971 Act did not provide for a lump sum payment for permanent

impairment to the back. Because the plaintiff's injuries were

sustained before the commencing date of the 1988 Act and he was not

entitled to a lump sum payment under the 1971 Act, he falls within

s.124(3)(b)(iii). Thus, he has no right to sue at common law for

damages for his injuries and no right to obtain a lump sum payment

under the 1988 Act for his disabilities. In his case, s.45 does not

qualify the operation of s.44. Consequently, he no longer has any

right to sue the defendant at common law for damages in respect of his

injuries. His remedies are confined to weekly payments for incapacity

Section 51(xxxi) of the Constitution

7. In my opinion, s.44 of the Act in its application to the plaintiff

was not a law with respect to the "acquisition of property from any

... person for any purpose in respect of which the Parliament has

power to make laws" ((83) Constitution, s.51(xxxi).). This is so

notwithstanding that the 1988 Act extinguished the liability of the

defendant to pay damages to the plaintiff in respect of his injuries.

It is true that, as a result of that Act the plaintiff has been

deprived of a chose in action, and a chose in action is property for

the purposes of s.51(xxxi) of the Constitution ((84) Minister of State

for the Army v. Dalziel [1944] HCA 4; (1944) 68 CLR 261 at 290.). Furthermore, the

defendant has gained a corresponding benefit of commensurate value.

However, the Commonwealth authority has not acquired the property of

the plaintiff. This is because the right of the plaintiff to bring his

action was dependent upon federal law and was always liable to be

revoked by federal law. If a right is dependent upon a federal law enacted under a power other than s.51(xxxi), and can be extinguished under that power, then that extinguishment will not fall within the terms of s.51(xxxi). To use the words of Dixon CJ in Burton v. Honan ((85) [1952] HCA 30; (1952) 86 CLR 169 at

180.), "the whole matter lies outside the power given by s.51(xxxi)"

of the Constitution.

8. At common law the Crown was not liable to be sued in an action

for tort ((86) Farnell v. Bowman (1887) 12 AC 643.). This was the

consequence of the common law maxim that "the king can do no wrong"

((87) Quick and Garran, The Annotated Constitution of the Commonwealth,

(1901) at 805.). Nor did a petition of right lie in respect of a

claim for damages for personal injuries arising from a tort committed

by the Crown or a Crown employee ((88) Attorney-General v. De Keyser's

Royal Hotel [1920] UKHL 1; (1920) AC 508 at 523; Viscount Canterbury v. The Queen

Commonwealth v. New South Wales ((89) (1923) 32 CLR 200.), the Court

held that s.75(iii) of the Constitution conferred jurisdiction on the

Court to hear an action in tort against the Commonwealth. But the more

widely accepted view is that the Commonwealth's liability in tort

arises from s.64 and perhaps s.56 of the Judiciary Act ((90) See

Maguire v. Simpson [1977] HCA 63; (1977) 139 CLR 362; The Commonwealth v. Evans Deakin

Industries Ltd. [1986] HCA 51; (1986) 161 CLR 254 at 263-264; Breavington v. Godleman

[1988] HCA 40; (1988) 169 CLR 41 at 68-69 per Mason CJ, 101-105 per Wilson and

Gaudron JJ, 117-118 per Brennan J, 139-140 per Deane J, 151-153 per

Dawson J, 169 per Toohey J See also Cowen and Zines, Federal

Jurisdiction in Australia, 2nd ed. (1978) at 35-38; Wynes, Legislative

Executive and Judicial Powers in Australia, 5th ed. (1976) at 455-461.).

At all events, I do not think that s.75(iii) of the Constitution is

the source of the liability of the Commonwealth. I agree with the view

of Dixon J in Werrin v. The Commonwealth ((91) [1938] HCA 3; (1938) 59 CLR 150 at

167.) "that the right of the subject to recover from the Crown in

right of the Commonwealth, whether in contract or in tort, is the

creature of the law which the Federal Parliament controls". If the

Judiciary Act is the source of the Commonwealth's liability, then, in

the light of s.78 of the Constitution, it is difficult to see why the

Commonwealth cannot extinguish any accrued right of action in tort

against itself. Section 78 provides that the Parliament "may make laws

conferring rights to proceed against the Commonwealth or a State in

respect of matters within the limits of the judicial power". If s.78

is the source of power to enact ss.56 and 64 of the Judiciary Act, as I

think is the case ((92) cf. Maguire (1977) 139 CLR at 370, 404-405. I

cannot accept the restrictive reading given to s.78 in The Commonwealth

v. New South Wales (1923) 32 CLR 200.), it would also seem to

authorise laws repealing or modifying laws conferring rights to proceed

against the Commonwealth. It is hardly to be supposed that once the

Parliament makes the Commonwealth liable to be sued for its conduct in

any particular field, the Parliament has no power to abolish or modify

the right to proceed against the Commonwealth in that field. Moreover,

if s.78 is the source of ss.44, 45 and 124 of the 1988 Act, as I think

it is, no question of complying with s.51(xxxi) arises. That

paragraph is conferred subject to the Constitution, including s.78.

9. However, even if s.78 does not authorise the enactment of ss.44,

45 and 124 of the 1988 Act, the Parliament has power to regulate the

conditions of employment of its employees and that includes the power

without paying compensation to abolish or modify any accrued rights

of its employees, as employees, to bring actions for damages against

the Commonwealth. The power of the Parliament to enact laws

regulating the conditions of employment of Commonwealth employees

and to legislate for a comprehensive scheme of injury compensation

for Commonwealth employees is not open to doubt. Whether the source

of the power is s.52(ii), or a combination of ss.51, 61, 78 and

51(xxxix), of the Constitution, the Parliament has power to enact such

laws in substitution for or in addition to any common law rights or

duties which might otherwise exist. The plenary power to legislate

with respect to the conditions of employment of Commonwealth public

servants carries with it the power to grant, withhold or abolish any

condition or right otherwise arising out of the employment including

any condition or right arising under the common law. Any such

retrospectively ((93) R. v. Kidman [1915] HCA 58; (1915) 20 CLR 425; Polyukhovich v.

The Commonwealth [1991] HCA 32; (1991) 172 CLR 501 at 714-715, 717-720.).

10. The obligation of the defendant's predecessor to take reasonable

care for the safety of the plaintiff was one of the conditions of the

employment contract between that authority and the plaintiff. Any

breach of the condition gave rise to a breach of contract as well as

a tort ((94) Jury v. Commissioner for Railways (N.S.W.) [1935] HCA 29; (1935) 53 CLR

273 at 290; Davie v. New Merton Board Mills Ltd. (1959) AC 604 at 619.).

Indeed, the 1971 Act expressly recognised the right of an employee

to take proceedings against the Commonwealth at common law ((95)

s.99.). However, the right to take those proceedings arose from the

operation of the Judiciary Act. Without that Act, the plaintiff had no

cause of action against the Commonwealth. The Commonwealth can only be

made liable in action for damages for personal injury if the Parliament

has legislated to make it liable. Thus, the common law rights of the

plaintiff against the defendant's predecessor were enforceable only as

federal law and depended on the authority of the Parliament of the

Commonwealth. Because under the Judiciary Act the rights of the

Commonwealth and its employees "shall as nearly as possible be the same

... as in a suit between subject and subject" ((96) s.64.), the

plaintiff had the right, before the 1988 Act was passed, to bring an

action for damages in respect of his employment injuries at any time

during the period of limitation in force in the place where the action

was commenced. But this does not mean that the Parliament could not

alter the right of the plaintiff to bring an action for damages for

11. For the reasons which I gave in Health Insurance Commission v.

Peverill ((97) Unreported, 9 March 1994.), it is clear that the

Parliament could alter the conditions of employment of employees of the

Commonwealth at any time. It could alter those rights even after an

employee had fulfilled the conditions which gave rise to any particular

right ((98) See Dodge v. Board of Education of Chicago [1937] USSC 141; (1937) 302 US

74; Peverill, unreported, 9 March 1994.). If the 1988

Act had abolished the rights to weekly payments and medical expenses

conferred by the 1971 Act, no question of the acquisition of property

for the purpose of s.51(xxxi) could have arisen. Participants in a

field which is regulated by legislation have no constitutional right

to the continuation of any legislative scheme or any part of it ((99)

Lynch v. United States [1934] USSC 132; (1934) 292 US 571 at 577; F.H.A. v. The

Darlington, Inc. [1959] USSC 2; (1958) 358 US 84 at 91; Connolly v. Pension Benefit

Guaranty Corp. [1986] USSC 31; (1986) 475 US 211 at 227.). Parliament can alter or

12. If the Commonwealth had retrospectively abolished the common law

duty of care which it owed to its employees, it would be difficult

to see how such legislation could amount to an acquisition of the

property of the plaintiff for the purpose of s.51(xxxi) of the

Constitution even though his right of action had accrued. Such a law

would do no more than retrospectively change the duty of care of the

Commonwealth. It would not be a law for the "acquisition of property

... for any purpose in respect of which the Parliament has power to

make laws". Even on the most liberal construction of that paragraph,

it is difficult to see how the retrospective abolition of an element

of a cause of action can constitute an acquisition of property for the

purpose of the paragraph. No doubt the law would have the effect that

the plaintiff's chose in action - his right of action - had become

worthless. But unless every extinguishment of a cause of action

against the Commonwealth is to be regarded as an acquisition of

property by the Commonwealth, I do not see how the law would attract

the operation of s.51(xxxi). The Court must look at the substance

of the matter to determine whether an extinguishment is in fact an

acquisition. But, when that analysis is complete, the distinction

between extinguishment and acquisition is a real distinction for the

purpose of s.51(xxxi) ((100) The Commonwealth v. Tasmania (The

Tasmanian Dam Case) [1983] HCA 21; (1983) 158 CLR 1 at 145; Reg. v. Ludeke; Ex parte

Australian Building Construction Employees' and Builders Labourers'

Federation [1985] HCA 84; (1985) 159 CLR 636 at 653.). If a right against the

Commonwealth is subject to alteration or revocation, its alteration or

extinguishment does not constitute an acquisition of property.

13. If the conclusion is correct that, under its power to regulate the

employment of Commonwealth employees, Parliament can retrospectively

abolish the Commonwealth's duty of care without complying with

s.51(xxxi), even in a case where a plaintiff alleges a breach of that

duty, it must follow that the Parliament can abolish a cause of action

for breach of duty, accrued before the commencement of the 1988 Act,

without complying with s.51(xxxi). The employee's right to bring

an action for damages against the Commonwealth or a Commonwealth

authority in respect of an injury sustained in the course of

employment before 1988 was not a right standing outside federal law.

It derived, as I have said, from the Judiciary Act. It was not

comparable to a right of action which a Commonwealth employee might

have against a third party and which did not depend on federal law.

What basis then is there for concluding that the Parliament could

not modify the operation of the Judiciary Act by enacting ss.44, 45

and 124 of the 1988 Act? Even if s.78 of the Constitution did not

authorise the enactment of those sections, the general power to make

laws with respect to the employment of Commonwealth employees surely

14. The right to bring an action against the Commonwealth or one of

its authorities was as much a condition of employment as the duty of

the Commonwealth or the authority to maintain a safe system of work.

Furthermore, the right was one which arose from breach of another

condition of employment - the right to have a safe system or place of

work. Although, prior to the enactment of the 1988 Act, the Judiciary

Act enabled employees of the Commonwealth to enjoy common law

rights of action for employment injuries, those rights like other

federal rights of employment could be recalled, prospectively or

retrospectively. Once it is recognised that the Parliament may

legislate retrospectively, it follows that the Parliament could

15. It may be, as counsel for the plaintiff suggested, that the

extinguishment of the plaintiff's right of action was the result of a

legislative oversight. But whether or not that suggestion is correct,

what the Parliament has done was within its powers. The 1988 Act

simply provides for a new and comprehensive scheme of compensation

for employment injuries in substitution for the earlier scheme which

depended on the interaction of the 1971 Act and the common law. The

social philosophy of the 1988 Act is that a scheme of statutory

compensation is more likely to promote the rehabilitation of injured

employees than a scheme which involves an unlimited common law right

of an action for damages for employment injury. To achieve that end,

the 1988 Act places stringent conditions on the maintenance of common

law actions and imposes a "cap" on the amount of damages that can be

awarded for non-economic loss ((101) s.45(4).). In so far as injuries

occurring before the commencement of the 1988 Act were concerned, the

Act permits a common law action to be brought provided that the

employee was entitled to a lump sum payment under the previous

legislation in respect of the injury that was the subject of the

action. However, actions in respect of pre-1988 Act injuries are also

subjected to the "cap" of $110,000 for damages for non-economic loss.

16. No doubt the provisions of the 1988 Act are significantly

different in material respects from the scheme which operated as the

result of the 1971 Act and the common law right of action. But they

simply substitute one legislative scheme for another. It may be that

some, perhaps many, employees are worse off under the 1988 Act than

they were under the 1971 Act and the common law. But that cannot

affect the validity of the legislation. The 1988 Act in abolishing

rights of action in respect of pre-Act injuries which had been

commenced before 1 December 1988 did not acquire rights which were

beyond the reach of the Parliament. It merely altered or extinguished

rights which were conferred by the 1971 Act and the Judiciary Act.

Altering or extinguishing those rights - even accrued rights - did not

effect an acquisition of property for the purpose of s.51(xxxi) of the

Constitution.

17. The question in the case stated should be answered no.