Workers' Compensation and Rehabilitation Act (1981), s 93B, s 175

In the factual circumstances Part IV, Division 2 of the Act applies

Bird v The Commonwealth [1988] HCA 23; (1988) 165 CLR 1

Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404

Koljibabic v WMC Resources Limited [2001] WADC 202

Koljibabic v WMC Resources Limited [2001] WADC 286

Employers' Mutual Indemnity Association Ltd v KB Hutcherson Pty Ltd (1976) 2 NSWLR 302

Federal Commissioner of Taxation v Brewing Investments Ltd [2000] FCA 920

Federal Commissioner of Taxation v Comber (1986) 10 FCR 88

Re Transport Industry (General Carriers) Contract Determination (1993) 46 IR 154

Wacal Developments Pty Ltd v Realty Developments Pty Ltd [1978] HCA 30; (1978) 140 CLR 503

1 HAMMOND CJDC: This is the determination of a preliminary issue arising out of the interpretation of the Workers' Compensation and Rehabilitation Act 1981 ("the Act").

2 There has been a Schedule of Agreed Facts settled for use in this trial of the stated preliminary issue and the plaintiff and the defendant agree to the following facts:

1. The defendant operates an abattoir.

2. The plaintiff was employed by the third party as a meat process worker.

3. The third party agreed to hire labour to the defendant to work at the defendant's abattoir.

4. Pursuant to the agreement the plaintiff's services were hired out to the defendant to work at the defendant's abattoir.

5. On 3 August 1998 and between 28 October 1998 and 18 October 1999 the plaintiff was performing work at the abattoir which was directly a part or process in the trade or business of the defendant.

6. For the purpose of s 175 of the Workers' Compensation and Rehabilitation Act 1981 the defendant is a deemed employer of the plaintiff.

3 The issue for determination before me is this question, "does Part IV, Division 2 of the Act apply to the plaintiff's claim?"

4 I turn firstly to this Part IV, Division 2 of the Act and s 93B relevantly reads as follows:

"93B. Application of this Division

(1) This Division applies to the awarding of damages against a worker's employer independently of this Act in respect of a disability suffered by a worker if -

(a) the disability was caused by the negligence or other tort of the worker's employer; and

(b) compensation has been paid or is payable in respect of the disability under this Act, or would have been paid or be payable but for section 22.

(2) This Division applies even if the damages resulting from the negligence or other tort of the worker's employer are sought to be recovered in an action for breach of contract or other action.

(3) This Division does not apply to the awarding of -

(a) damages to which the Motor Vehicle (Third Party Insurance) Act 1943 applies;

(c) damages of a class that is excluded by the regulations from the application of this Division.

(4) A reference in this section to the worker's employer includes a reference to a person for whose acts the employer is vicariously liable."

5 This section and indeed this division was inserted into the Act by Act No 48 of 1993 and it would appear beyond argument that the purpose of the Amending Act was to achieve "Constraints on awards of common law damages", that being the heading to Division 2 inserted by Act No 48 of 1993, s 4(3).

6 Section 175 of the Act relevantly provides in subsections (1), (2) and (3) as follows:

"(1) Where a person (in this section referred to as the principal) contracts with another person (in this section referred to as the contractor) for the execution of any work by or under the contractor and, in the execution of the work, a worker is employed by the contractor, both the principal and the contractor are, for the purposes of this Act, deemed to be employers of the worker so employed and are jointly and severally liable to pay any compensation which the contractor if he were the sole employer would be liable to pay under this Act.

(2) The principal is entitled to indemnity from the contractor for the principal's liability under this section.

(3) The principal is not liable under this section unless the work on which the worker is employed at the time of the occurrence of the disability is directly a part or process in the trade or business of the principal."

7 It is therefore clear in the instance before me for determination that:

(b) The defendant, Benale Pty Ltd, is "the principal", and

(c) The third party, Skill Hire Pty Ltd, is "the contractor".

8 The plaintiff's claim is that an injury received by him was caused by the negligence of the defendant in specified particulars of which negligence appear in the pleadings.

9 The defendant is not the employer of the plaintiff (in the ordinary sense of that concept) but clearly pursuant to s 175(1) of the Act he and the third party are "deemed to be employers of the worker so employed and are jointly and severally liable to pay the compensation which the contractor if he were the sole employer would be liable to pay under this Act."

10 The issue therefore crystallises to this question as to whether or not the restriction or limitation on the award of "common law" damages clearly envisaged by Division 2 of the Act is applicable in the case of an action brought against the defendant in this matter who is to be regarded as an employer of the plaintiff only by virtue of the deeming provisions of Section 175 of the Act.

11 The matter was argued before me on 7 December 2001 and in the course of that argument a decision of Registrar Kingsley of this Court given in a matter of Koljibabic v WMC Resources Limited [2001] WADC 202 delivered extemporaneously on 26 July 2001 was referred to. In that decision the learned Registrar came to the view that the deeming provisions of s 175 were irrelevant to the issue of common law damages and did not therefore place any limitation on the recovery of damages in appropriate cases from the entity deemed to be an employer only by reason of s 175.

12 At the time of argument before me on 7 December 2001 it was not known either to the parties or myself that the decision of Registrar Kingsley had been appealed to his Honour Judge M D F O'Sullivan QC and that such appeal had been heard on 21 November 2001.

13 Subsequent to the completion of the hearing before me counsel informed me of the decision handed down by Judge O'Sullivan on 20 December 2001.

14 His Honour dismissed the appeal against the decision of the learned Registrar and said this at 18:

"In my view, in construing the provisions of the Act it is appropriate to adopt the approach referred to in this passage and, in so doing, to conclude that s 175(1) deems a principal to be an employer for the purpose of creating a liability to pay compensation under the Act and no more."

15 The issue is however of course still before me for determination and it is clearly apparent that this is an important issue and one which has not yet gone before the Full Court for determination.

16 I have however considered not only the submissions made by counsel before me but also the reasons for judgment of the learned Registrar and of his Honour Judge O'Sullivan.

17 There are difficulties herein which are not easy to resolve and perhaps I might say in passing that the difficulties may have been caused in part by the fact that the 1993 legislation which was intended to limit and constrain the awards of "common law" damages was included in an Act whose basic purpose was as set out in s 3 of the Act reading as follows:

(ii) certain dependants of those workers where the death of the worker results from such a disability;

(b) to promote the rehabilitation of those workers with a view to restoring them to the fullest capacity for gainful employment of which they are capable;

(c) to promote safety measures in and in respect of employment aimed at preventing or minimizing occurrences of disabilities; and

(d) to make provision for the hearing and determination by the dispute resolution bodies of disputes between parties involved in workers' compensation matters in a manner that is fair, just, economical, informal and quick."

and which did not rely upon the establishment of negligence to ground a "common law" action.

18 Be that as it may the issue before me is one of constriction of a statutory provision which on its face does not appear to promote or provide an absurd or untenable situation. The words of s 93B of the Act are on the face of it clear enough.

19 By virtue of the enactment of the wide ranging Act No 48 of 1993, the principal Act has changed its integral character. It is no longer an Act dealing with the compensation of injured workers. It is an Act that now (inter alia) clearly seeks to constrain the award of "common law" damages to workers by limiting the right to claim damages for tort to those where higher levels of loss are established.

20 It therefore, in my view, serves no useful purpose to return to the provision of s 3 of the Act and to seek therefrom a conclusion that would limit the application of Act No 48 of 1993.

21 I turn now to the judgment of McHugh JA (as he then was) in Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 421 where his Honour details:

"The modern approach to statutory construction:

...

Where the text of the legislative provision which embodies the proposition is grammatically capable of only one meaning and neither the context, the purpose of the provision nor the general purpose of the Act throws any real doubt on that meaning, the grammatical meaning must be taken as representing Parliament's intention as to the meaning of the law. A court cannot depart from the grammatical meaning of a provision because that meaning produces anomalies or injustices where no real doubt as to the intention of Parliament arises: Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 at 305, 320 and Stock v Frank Jones (Tipton) Ltd [1978] 1 WLR 231 at 234-235, 237, 238; [1978] 1 All ER 948 at 951, 954, 955. If the grammatical meaning does give rise to an injustice or anomaly, however, a real doubt will usually arise as to whether Parliament intended the grammatical meaning to prevail: cf Cooper Brookes (at 320). As Cardozo J said in Re Rouss 116 NE 782 at 785 (1917): 'Consequences cannot alter statutes, but may help to fix their meaning.' A resulting anomaly or injustice is not itself, however, a ground for departing from the grammatical meaning. Equally the natural and ordinary grammatical meaning of the provision is not decisive. The courts no longer follow statements to the effect of that of Higgins J in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd [1920] HCA 54; (1920) 28 CLR 129 at 162, that 'when we find what the language means, in its ordinary and natural sense, it is our duty to obey that meaning, even if we think the result to be inconvenient or impolitic or improbable': see Cooper Brookes (at 319-320).

Ascertaining the ordinary grammatical meaning of a legislative provision is only the first step in the process of statutory construction."

22 With the greatest respect to the contrary views expressed by his Honour Judge O'Sullivan and Registrar Kingsley, I cannot find that there is any room for doubt as to the application of Division 2 of the 1993 Act. It clearly refers to the "employer". The Act contained the s 175 provision at that point deeming two classes of persons to be the employer "for the purposes of this Act".

23 I am conscious of the dicta of Deane and Gaudron JJ in Bird v The Commonwealth [1988] HCA 23; (1988) 165 CLR 1 at 9 referred to by his Honour Judge O'Sullivan in Koljibabic v WMC Resources Limited [2001] WADC 286 at 17 but at the end of the day it is my finding that the legislation I am considering no longer fills the definition of simply workers' compensation legislation, it has wider purposes.

24 With regret I must disagree with my colleagues. I must find that Part IV, Division 2 of the Act does apply to the plaintiff's claim in the factual circumstances set out in the Statement of Agreed Facts.