High Court of Australia|1994-03-09|Before: Mason CJ

Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297; (1994) 119 ALR 629; (1994) 68 ALJR 272 (9 March 1994)

GEORGIADIS v AUSTRALIAN AND OVERSEAS TELECOMMUNICATIONS CORPORATION (1994) 179 CLR 297

MASON CJ(1), BRENNAN(2), DEANE(1), DAWSON(3), TOOHEY(4), GAUDRON(1) AND McHUGH(5) JJ

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

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.

Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6;

At a glance

Court

Decision date

Before

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Judgment (977 paragraphs)

Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297; (1994) 119 ALR 629; (1994) 68 ALJR 272 (9 March 1994)

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Legislation Cited (36)

Cases Cited (54)