Court of Appeal (WA)|2004-06-23|Before: Malcolm CJ

Jeans West Corporation Pty Ltd v Archer [2004] WASCA 132 (23 June 2004)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : JEANS WEST CORPORATION PTY LTD -v- ARCHER [2004] WASCA 132

Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA

Citation Number : [2003] WADC 166

Tort - Action for damages - Employer - Employee - Workers' Compensation and Rehabilitation Act 1981 - Restriction on court's power to award damages - Appeal from order staying proceedings

Workers' Compensation and Rehabilitation Act 1981

Fitzgerald v Muldoon [1976] 2 NZLR 615

Thomas v Arimco Pty Ltd (2000) 24 SR (WA) 142

1 MALCOLM CJ: At the conclusion of the hearing of this appeal, the Court unanimously ordered that the appeal be dismissed and that the appellant pay the respondent's costs of the appeal to be taxed. The Court announced that reasons for making those orders would be given later. In this respect, I agree with the reasons to be published by Heenan J.

2 MCLURE J: I have had the advantage of reading in draft form the reasons to be published by Heenan J. In the circumstances of this case, it is not necessary to decide whether the appellant was required to file a defence before making its strike out application and I reserve my position on that question. Otherwise, I agree with the reasons of Heenan J.

3 EM HEENAN J: This is an appeal from an interlocutory order of his Honour Judge Martino made in the District Court of Western Australia on 28 July 2003 staying, on terms, the respondent's (plaintiff's) action for damages for injuries alleged to have been sustained in his course of employment with the appellant (defendant) caused by negligence or other breach of duty. Leave to appeal to this Court was granted by Murray J by order dated 17 September 2003. At the conclusion of the hearing of the appeal the court unanimously ordered that the appeal should be dismissed, and that the appellant should pay the respondent's costs of the appeal to be taxed. The court announced that reasons for that decision would be given later. These are now my reasons for joining in that decision and those orders.

4 By his action in the District Court the respondent alleged that he sustained personal injury and consequent damage as a result of the appellant's negligence and/or breach of statutory duty which caused an accident on 4 July 1997. In his statement of claim the respondent pleads that this accident caused an injury to his lumbar spine requiring medical and surgical treatment together with other therapeutic management, all resulting in loss and damage. The action was commenced by a writ issued in the District Court on 9 November 2001. This was followed by a statement of claim dated 22 May 2002 and a defence dated 25 June 2002. Significantly, this defence consists only of an admission that the appellant was duly incorporated, a series of non-admissions and denials and a plea of contributory negligence.

5 The respondent's action is one which seeks the award of damages against his employer independently of the Workers' Compensation and Rehabilitation Act 1981 in respect of a disability referred to in s 93B of that Act. Consequently Div 2 Pt IV of the Act applies to the proceedings and "a court is not to award damages to a person contrary to [that]

Division" - s 93C. The significance of this for the present proceedings was succinctly stated by Martino DCJ at [3] and [4] as follows:

"It is clear from the papers that the plaintiff [respondent] has not made an election of the kind contemplated by the Division, that it has not been agreed that the plaintiff's [respondent's] degree of disability is not less than 30 per cent and that the plaintiff [respondent] made an application to the Workers' Compensation Directorate for a determination to that effect.

It also appears from the papers that that application was dismissed on the basis of the decision of the Full Court of the Supreme Court of Western Australia in Re Monger; ex parte Dutch [2001] WASCA 220; (2001) 25 WAR 96. An appeal from that decision of the review officer was dismissed by the compensation Magistrate on 22 July 2003. It is clear therefore that on the legislation as it presently stands, damages could not be awarded to the plaintiff [respondent]."

The appellant (defendant) therefore made application to a Registrar of the District Court in Chambers for an order to strike out the respondent's (plaintiff's) statement of claim and to dismiss his action, on the grounds that the claim was scandalous, frivolous, vexatious and/or an abuse of process - Rules of the Supreme Court 1971 O 20 r 19(1). The Registrar dismissed that application and the appellant (defendant), thereupon appealed from that decision to a Judge in Chambers resulting in a rehearing of the respondent's (defendant's) application pursuant to O 6 r 11 of the District Court Rules (1996) - Hazart Pty Ltd v Rademaker (1993) 11 WAR 26 per Malcolm CJ at 28. On that appeal the appellant (defendant) sought an order allowing the appeal and an order striking out the respondent's (plaintiff's) writ of summons.

6 The respondent (plaintiff) opposed the strike out application on the grounds that the Minister responsible for the Workers' Compensation and Rehabilitation Act had issued a media statement dated 19 December 2002 stating his intention to introduce into the Parliament amendments to the Act to reinstate the rights of some workers denied the opportunity to pursue common law action by the decision in Re Monger; ex parte Dutch [2001] WASCA 220; (2001) 25 WAR 96. The Minister had also written to the respondent's (plaintiff's) solicitors stating that the proposed amendments to address the Dutch decision would be retrospective and that it was envisaged that their client would be able to re-submit his claim following the enactment of the legislation.

7 Since then the Minister has introduced a Bill to the Parliament to amend the Workers' Compensation and Rehabilitation Act 1981 in various respects including a proposed amendment to reinstate the rights of certain workers who had lost their opportunity to pursue claims for damages at common law in the light of the decision in Dutch. A copy of this proposed legislation, namely the "Workers' Compensation Reform Bill 2004" which had been introduced to Parliament on 5 May 2004 was tendered by consent as an exhibit on this appeal. The explanatory memorandum relating to that Bill foreshadows an intention to amend s 93E of the Act "to redress, with retrospective application, decisions of the Supreme Court, including Re Monger; ex parte Dutch & Ors [2001] WASCA 220 ... ". Of course, there can be no certainty that the Bill will be enacted by the Parliament either in its proposed form or at all. Nevertheless, it does constitute a significant indication of a possible change of the law in this area which might eventuate in the relatively near future.

8 In the proceedings in the District Court the respondent submitted that, in view of the pending proposed legislative changes, his action should not be struck out. His Honour accepted these submissions and said at [8] and [9]:

"In this case the plaintiff [respondent] seeks that his action not be struck out so that if the legislation which has been foreshadowed by the responsible Minister does enable him to proceed with his claim for damages he can do so in this action and thereby avoid being time barred.

Having regard to the statements by the responsible Minister to which I have referred, I do not regard the plaintiff's [respondent's] current action as vexatious or an abuse of process. It does not seem to me to be vexatious or an abuse to request time to enable the plaintiff [respondent] to see whether or not the foreshadowed legislation entitles him to proceed with his claim. Clearly, however, no further costs should be incurred in this action until that issue is clarified."

Accordingly, Martino DCJ ordered that the action should be stayed and that the parties should be granted liberty to apply. In the event his Honour made an order staying the action, adjourning the appeal sine die, granting liberty to either party to apply for the stay to be lifted on seven days' notice, deferring the case management milestones for six months and reserving costs.

9 It is from this order that the appeal is brought, by leave, to this Court on the following grounds:

"1. The learned Judge erred in law in that, having found that the respondent (plaintiff) could not obtain an award of damages by reason of the provisions of Division 2 of Part IV of the Workers' Compensation & Rehabilitation Act 1981 (as amended) ('the Act') as it presently stands, he failed to strike out the Writ of Summons as vexatious or an abuse of process by reason of taking into account foreshadowed changes to the Act outlined in a statement issued by the Honourable Mr John Kobelke dated 19 December 2002.

2. The learned Judge erred in law in failing to determine the appeal according to law by finding that it was not an abuse of process for the respondent (plaintiff) to request time to ascertain if foreshadowed legislation would enable the respondent (plaintiff) to proceed with the action in the future."

10 On this appeal the appellant (defendant) seeks an order striking out the writ of summons again on the basis that it is scandalous, frivolous, vexatious and/or an abuse of process. However, in the alternative the appellant seeks judgment pursuant to RSC O 16 r 1(1). There was no such alternative application for summary judgment before Martino DCJ in the District Court and there is, therefore, no basis upon which such relief can be sought on this appeal. After that was pointed out counsel for the appellant did not press this aspect of the appeal further.

11 The appellant's (defendant's) application to dismiss this action as scandalous, frivolous, vexatious or as an abuse of process on the grounds that provisions of Pt IV Div 2 of the Workers' Compensation and Rehabilitation Act 1981 would prevent a court from awarding damages in the action is not without precedent. However, in my respectful view, it is nevertheless an irregular procedure.

12 Any statutory defence to an action or any other statutory provision which may render the proceedings, or their ultimate objective non-maintainable, should be specifically pleaded as a defence - RSC O 20 r 9(1). It is said that the purpose of this rule is to require any party who has a special ground of defence or who raises an affirmative case to destroy a claim or defence, as the case may be, to plead specifically the matter he relies on for this purpose so that, for reasons of practice, justice and convenience, that party must tell his opponent what he is coming to court to prove - per Buckley LJ in Re Robinson's Settlement; Gant v Hobbs [1912] 1 Ch 717 at 728. This includes any statutory defence - Nicholson v Colonial Mutual Insurance Co [1887] VicLawRp 15; (1887) 13 VLR 58 at 63 and Teague v Jones [1925] VicLawRp 26; [1925] VLR 205. However, it is recognised that the rule does not prevent the court from giving effect in a special case to a defence which one but not all of the defendants pleaded - Pirie v Richardson [1927] 1 KB 448 at 453.

13 In my view the appellant (defendant) should have pleaded the provisions of Pt IV Div 2 of the Act, or any other statutory provision or point of law, upon which it relies for its assertion that the respondent's (plaintiff's) claim is not maintainable. It is not to the point that the decision in Dutch (supra) was only given after the original defence in this action was drawn and filed because it has always been open for the appellant (defendant) to apply for leave to amend its defence to plead these grounds - RSC O 20 r 10. One of the principal functions of pleadings is for the parties to identify those issues which are in contest in the proceedings and which, therefore, require a decision by the court. The failure of a party to plead a particular issue, for example a conventional limitation provision, will mean that such a defence cannot be relied upon by the party who should have raised it in its pleading - Teague v Jones (supra). Furthermore, the obligation upon the party relying upon such a special defence to plead it, also allows the opposing party to respond to that plea, whether by way of reply or subsequent pleadings by leave, thus enabling any relevant issue to be identified which may be an answer to that special plea or render it unavailable. Obvious examples may be waiver, or estoppel. Whether such pleas would be capable of providing an answer to this proposed defence, or whether indeed there is any answer to such a defence, does not arise in the present case. Perhaps the existence of an irrefutable defence, which the appellant asserts occurs in the present circumstances, is the best of all reasons to insist that it be specifically pleaded so that it will come to the notice of the opposing party and the court at the earliest opportunity. Such a plea may be sufficient to cause the opposing party to abandon the action without any determination by the court or, failing that, may allow the action to be disposed of by a final judgment on a point of law or by some other summary procedure.

14 However, in the present case the respondent (plaintiff) made no objection to the course of procedure adopted by the appellant (defendant) in seeking to strike out the statement of claim, and have the action dismissed, because of the existence of an alleged statutory defence which had not been pleaded. In the circumstances it is necessary to continue to deal with the application on that footing despite the anomalies in this procedure.

15 The principal submission for the appellant is that the learned Judge in the District Court was in error in failing to apply the law as it stood at the time and in allowing the action to remain on foot awaiting the prospective introduction of the possible amending legislation. The appellant cited Ramsay & Anor v Aberfoyle Manufacturing Co (Australia) Pty Ltd & Anor [1935] HCA 75; (1935) 54 CLR 230 for the proposition outlined by Starke J at 253 that:

"Courts of law, however, can only act upon the law as it is, and have no right to, and cannot, speculate upon alterations in the law that may be made in the future."

The appellant also cited a subsequent decision of the District Court in De San Miguel v Ryanex Pty Ltd [2003] WADC 263 where Greaves C declined to follow the decision in the present case and held that to allow such an action to continue would be an abuse of the process of the court. Many of the authorities on this point are collected in the judgments in Re Minister for Minerals and Energy; ex parte Wingate Holdings Pty Ltd [1987] WAR 190 where a majority of the court (Wallace and Olney JJ) granted an adjournment of a return of an order nisi for a writ of certiorari on the grounds that parliamentary intervention to amend the law on the point was imminent. In his dissenting judgment Burt CJ would have refused the adjournment on the grounds that:

"A party invoking the jurisdiction of the court must be permitted to seek his justice upon that basis and the court cannot deny him that right because of a reasonable expectation that at some future date the law will be changed and with that change that his rights according to law will be changed."

16 In the present case I do not consider that such a stark choice between the application of the law as it stands at present, and as it may well stand in the near future if Parliament does enact the proposed amendments to the law, truly exists. The provisions of Div 2 Pt IV of the Act and, in particular s 93C, do not prohibit the institution of an action for damages by an employee in circumstances where the Act, otherwise, restrains a court from making an award of damages. As was said in Western Metals Zinc NL v Wesfarmers Transport Ltd & Anor [2003] WASCA 152 by a court constituted by Wheeler, Hasluck and McLure JJ at [30]:

"Given that the [Act] has been amended to remove the express prohibition on commencing an action, it must be assumed that Parliament has now deliberately chosen not to prevent the bringing of an action. There may be good reasons of policy for directing the prohibition to the stage of the award of damages, rather than that of institution of the action. For example, as Nisbet DCJ pointed out in Thomas v Arimco Mining Pty Ltd (2000) 24 SR (WA) 142, it may be that a limitation period might be about to expire and a worker might need to institute proceedings at a time at which it was not clear whether or not the worker had a relevant level of disability."

There may also be other reasons which would render it advisable for a worker in like circumstances to institute proceedings. What is clear, however, is that the Act does not prevent the institution or prosecution of proceedings because its effect is only to prevent the court from awarding damages. There would seem to be no reason why, if they were so disposed, the parties themselves could not settle such an action on terms resulting in some benefit to a plaintiff worker so long as no judgment of a court awarding damages was sought in that process.

17 In these circumstances there does not seem to be any reason to regard the institution or prosecution of such an action, still less its pendency subject to a stay order for six months, as constituting an abuse of the process of the court or as involving any scandalous, vexatious or frivolous proceedings.

18 The situation is essentially a simple one. The respondent (plaintiff) has instituted an action for damages for personal injuries alleging negligence or breach of statutory duty by his employer the appellant (defendant). Those are well recognised and established causes of action. There has been no suggestion that there is anything but a genuine dispute in relation to the issues joined on the pleadings in that action, namely whether the respondent (plaintiff) was injured and suffered damage as he alleges and, if so, whether this was due to any negligence or breach of duty by the appellant (defendant) and, further if it was, whether there was any contributory negligence by the respondent (plaintiff). Nor is it suggested that the provisions of Pt IV Div 2 of the Act prohibit the institution or pendency of this action as distinct from denying any access to an ultimate award of damages from the court.

19 Accordingly, there is nothing in the law as it stands to require or compel dismissal of the respondent's claim. Indeed, the fact that the prohibition on the court awarding damages in this present action will not have its effect unless and until a point is reached where the plaintiff otherwise establishes an entitlement to damages such as success in a trial or upon an admission by the appellant that it has incurred such a liability emerges, means that there is always the possibility that a change in the law between now and then may remove that ultimate obstacle to obtaining the remedy which the plaintiff is seeking. That obstacle does not have to be faced until that point arrives.

20 In some cases an expectation that this obstacle may disappear because of some future change in the law may be no more than an unrealistic and fanciful hope to which no court or judicial officer should attach any significance. However, in other cases such as in the present circumstances, with a Ministerial Statement and a Bill before Parliament designed to have that effect, there is plainly a distinct possibility that that obstacle to the achievement of the relief which the appellant is seeking, may be removed before it is reached. In these circumstances I consider that Martino DCJ was correct to decline to strike out the respondent's (plaintiff's) statement of claim and in declining to dismiss his action. It was for these reasons that I joined in the decision to dismiss this appeal.

Compensation and Rehabilitation Act 1981

Rehabilitation Act 1981

Jeans West Corporation Pty Ltd v Archer [2004] WASCA 132

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Jeans West Corporation Pty Ltd v Archer [2004] WASCA 132 (23 June 2004)

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