KIMBERLY-CLARK AUSTRALIA PTY LTD v THOMPSON [2006] NSWCA 264 | Case summary

KIMBERLY-CLARK AUSTRALIA PTY LTD v THOMPSON [2006] NSWCA 264 | Case summary | Zoe

21 September 2006 KIMBERLY-CLARK AUSTRALIA PTY LTD v THOMPSON Judgment 1 IPP JA: I agree with Basten JA. 2 BRYSON JA: I have had the advantage of reading the draft of the judgment of Basten JA. I respectfully agree with his Honour's conclusions, which I reach by a different and shorter path. I have had considerable assistance from Basten JA's review and consideration of all legislative provisions which could bear on the construction of the definition of work injury damages in s 250 of the Workplace Injury Management Workers Compensation Act 1998 (NSW) (the Workplace Injury Act). Among other assistance, Basten JA's judgment shows that there are no textual considerations which establish in a clear way that my reading is not correct. 3 I do not attribute a high degree of consistency in the use of defined terms, or of other terms, to the drafting of workers compensation legislation, including the Workplace Injury Act. There is no strong inner logic which connects all the provisions of workers compensation legislation; the legislation is the product of accumulations over many decades, and there is no consistency in the policies which the accumulated provisions serve. 4 Although the words used can literally extend to the respondent's claim for damages for nervous shock which she sustained as a result of her husband's work injury and death, I am of the opinion that the definition of work injury damages does not extend to her claim. The damages she claims are not damages recoverable in respect of the death of her late husband: they are not damages in respect of an injury to her husband: in the way in which language is used in this definition, they are damages recoverable in respect of nervous shock to herself. As a consequence, other provisions of Chapter 7 do not operate upon her claim for damages for nervous shock, or on the proceedings she has brought so far as they are proceedings to recover damages of that kind. 5 The literal meaning of the phrase "in respect of" which links the operating words of the definition to the objects in paras (a) and (b) is elusive, and the phrase falls to be understood in context, and in relation to the subject matter of Chapter 7. I do not find it possible, after reviewing what Chapter 7 deals with overall, to understand that the legislature intended, and expressed its intention by so tenuous a link, that Chapter 7 including all its procedural and other requirements should apply to a claim such as the respondent's claim. On no ordinary consideration could such a claim be thought of as part of the subject matter of legislation dealing with work injuries. There is ample work for the definition to do by reference to damages in respect of the death of a worker without supposing that it was intended to extend not only to the claims of dependants under Fatal Accidents legislation but also to claims of persons who had suffered nervous shock caused by facts and circumstances of which the death of the worker was the central element. To my mind the question: Why would the legislature choose Chapter 7 in which to set about regulating claims of persons who were not employed by the employer and were not injured in the course of employment, but suffered nervous shock caused by a worker's death? can only receive the answer: No reason can be seen, so that that cannot be what was intended. 6 The answer is no different if the extended meaning of references to a worker who has been injured in s 4 (2) is brought under consideration: application of that extended meaning to any reference to a worker who has been injured in the definition of work injury damages does not produce the result that the respondent's damages are work injury damages. Terms which are defined inclusively or given extended meanings are not always used in those meanings. Although the definition is not expressly confined to situations where the context does not otherwise require, some such qualification should be understood: see McDowell v Baker (1979) 144 CLR 413 at 428. As it happens, the respondent falls within the extended meaning in s 4(2), and further she has actually claimed and has been awarded compensation in respect of her dependency. I cannot see that these circumstances have any impact on the application of the definition; if it applies to her, it applies equally to any other person who has a claim for damages for nervous shock caused by the death of her late husband. 7 The limited reach of the definition in s 250 is illustrated (although not demonstrated) by the bad fit of the respondent's nervous shock claim in other provisions of Chapter 7, most strikingly s 280A. I do not find recourse to provisions of the Workers Compensation Act useful in discerning what is meant by "in respect of" in this definition. It would be a strange quirk of language if the respondent was found to be caught by Chapter 7 and I do not think that can have been intended. 8 If it is said that I have reached this conclusion by treating the construction of the definition as a matter of impression I would respond that the impression is overwhelmingly strong. I agree with the orders which Basten JA has proposed. 9 BASTEN JA: The respondent to this application for leave to appeal, Ms Thompson, is the widow of the late Mark Steven Thompson, who died on 22 October 2001 of injuries received in the course of his employment with the Claimant, Kimberly-Clark Australia Pty Ltd ("the employer"). 10 Proceedings brought under the Workers Compensation Act 1987 (NSW) resulted in awards of compensation by the Compensation Court in favour of each of Ms Thompson and her two children. 11 On 21 May 2004 Ms Thompson (referred to below as "the plaintiff") commenced proceedings in the Supreme Court seeking damages under the general law. She brought proceedings in two capacities, namely on her own behalf for nervous shock resulting from the death of her husband and by way of proceedings under the Compensation to Relatives Act 1897 (NSW), as a widow and executrix of the estate of the deceased, for her own benefit and the benefit of two children of the marriage. 12 On 7 September 2004 the employer filed a notice of motion seeking that the statement of claim be dismissed on the basis that the plaintiff had failed to comply with procedures set out in Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) ("the Workplace Injury Act"). On 14 March 2005 Master Harrison dismissed the motion. From that decision, the employer appealed, that appeal being heard by Patten AJ and determined on 7 October 2005. His Honour concluded that the claims brought under the Compensation to Relatives Act fell within the operation of Chapter 7 of the Workplace Injury Act and, the prescribed procedures not having been followed, should be struck out. No appeal has been brought from that part of the judgment. However, with respect to the claim by the plaintiff for damages for nervous shock, his Honour upheld the decision of the Master and left the pleading on foot: see Thompson v Kimberly-Clark Australia Pty Ltd [2005] NSWSC 1009 at [31]. His Honour's reasoning is succinctly stated at [28] in the following terms: "There is nothing in the [Workplace Injury] Act itself which, in my opinion, points to an intention by the legislature to include claims for nervous shock in the definition of work injury damages. … In the result, I have reached the conclusion that a claim for nervous shock made by a third party, that is someone outside the employer/employee relationship, does not fall within Chapter 7." 13 The only question directly raised by this appeal is the correctness of that conclusion. However, it became clear that, more precisely identified, the question was whether the claim should be struck out because the plaintiff had failed to serve on the employer a "pre-filing statement", pursuant to s 315(1) of the Workplace Injury Act. 14 On the other hand, the scope of the argument presented by the parties ranged well beyond that provision and, indeed, beyond Chapter 7 of the Workplace Injury Act. In particular, close attention was paid to Part 5 of the Workers Compensation Act, which also places constraints upon proceedings for common law damages in relation to injuries to workers. Emphasis was placed on the need to ensure consistency of operation between Part 5 of the Workers Compensation Act and Chapter 7 of the Workplace Injury Act. Those arguments, so far as relevant, will be addressed below; it is appropriate to consider first the provisions of the Workplace Injury Act, which are of immediate application.

Workplace Injury Act - general operation 15 Legislative reform of workers compensation legislation and the regulation of common law damages for workplace injuries has been extensive over the last decade. However, the particular point which arises in this case concerns the boundary between the area covered by such statutory regulation and the area which remains within the scope and subject only to the requirements of the general law. In his conclusions, the primary judge noted that, as well as there being nothing in the Workplace Injury Act which pointed to the intention of the legislature with respect to this issue, there was nothing relevant in the second reading speech or in the report of the Hon T.W. Sheahan which preceded the amending legislation. 16 Rather than seek to restate the purposes underlying the legislative scheme, it is preferable to set out the objectives as identified in s 3 of the Workplace Injury Act: 3 System objectives The purpose of this Act is to establish a workplace injury management and workers compensation system with the following objectives: (a) to assist in securing the health, safety and welfare of workers and in particular preventing work-related injury, (b) to provide: • prompt treatment of injuries, and • effective and proactive management of injuries, and • necessary medical and vocational rehabilitation following injuries, in order to assist injured workers and to promote their return to work as soon as possible, (c) to provide injured workers and their dependants with income support during incapacity, payment for permanent impairment or death, and payment for reasonable treatment and other related expenses, (d) to be fair, affordable, and financially viable, (e) to ensure contributions by employers are commensurate with the risks faced, taking into account strategies and performance in injury prevention, injury management, and return to work, (f) to deliver the above objectives efficiently and effectively. 17 As might be expected, the statement of objectives focuses on the principal concerns of the system which undoubtedly relate to workplace injuries, rather than injuries which occur to persons who are not employees of a particular employer, or indeed, in the present case, to persons not in the workforce at all. 18 That is not to say that the legislation is not concerned with third party dependants of workers. In the case of death of a worker, his or her dependants have long been potential beneficiaries of the scheme of statutory compensation: see, eg, Workmen's Compensation Act 1910 (NSW), Second Schedule and Workers Compensation Act 1926 (NSW), ss 7(1) and 8(1). Further, where an individual may be the recipient of both statutory compensation and general law damages, legislative schemes have long sought to ensure that compensation payments be taken into account in making an award of damages, generally by reducing the damages as assessed, by the amount of payments received. 19 One mechanism for achieving these purposes has been to include in the legislation an extended meaning of the term "worker" or "injured worker". Thus, s 4(2) of the Workplace Injury Act provides: Extended meaning of injured worker A reference in this Act to a worker who has been injured includes, if the worker is dead, a reference to the worker's legal personal representative, or the worker's dependants, or any other person to whom or for whose benefit compensation is payable. 20 This provision has a long history. There was a similar provision in the Workmen's Compensation Act 1910 (NSW), s 2(2). In that provision, the extended meaning identified two persons or classes of person, namely the worker's legal personal representatives and his "dependents" (sic); there was no reference to a third category of those "for whose benefit compensation is payable". The purpose of that provision was tolerably clear: the extended references did not affect the identification of the injured worker, as the person who had suffered injury, but provided, in the case of death of the injured worker, for receipt of compensation by others on his behalf and allowed for those entitled to statutory compensation to enforce their rights under the legislation. 21 Expansion of the categories from two to three was achieved by the time of the Workers Compensation Act 1926 (NSW), s 6(2). It is apparent that the third category was intended as an expansion of the second, possibly because the statutory definition of "dependants", being those "wholly or in part dependent upon the earnings of the worker at the time of his death" may have been more limited than the category of persons who would receive payments in the event of death. However, the identification of the third category by reference to "any other person" to whom or for whose benefit "compensation" was payable, indicated that both other categories, or at least that of dependants, were included because each involved a class who might be recipients of statutory compensation. 22 This language is now found in s 4(2) of the Workplace Injury Act and in s 3(1A) of the Workers Compensation Act. The same purpose is apparent as under the earlier legislation. Further, because the extended definition only applies in the case of death of the worker, it makes no sense to treat the categories so identified as potential recipients of common law damages for injuries they themselves have suffered. There was no evident purpose, either in 1910, in 1926 or in 1998, in treating those who suffered nervous shock as the result of an industrial accident as being subject to constraints imposed on their general law rights by workers compensation legislation in the event that they were dependants of a worker who died, but not if the worker lived. 23 The logic of this conclusion is that the extended definition may apply in some circumstances but not in others. That is, perhaps, self-evident. A worker's legal personal representative may be a person who has no entitlement to statutory compensation arising from the worker's injury. The legal personal representative may be the worker's solicitor or any other relative or friend who is not a dependant. 24 This approach is consistent with the underlying concept of injury to which the workers compensation legislation applies. Thus, in the Workplace Injury Act, the word "injury" is defined primarily to mean "a personal injury arising out of or in the course of employment": s 4(1), injury. An explosion at an industrial site could injure workers and others in the vicinity, but in the latter case the injury would not arise out of or in the course of employment. Similarly, a motor accident may cause injury to an employee in the course of his or her employment, but may also cause injury to third parties having no association with the employer. Again, the injuries caused to the latter class would not fall within the apparent scope of the Workplace Injury Act, regardless of express exclusions. 25 The logic of this differential operation of the extended definition of "worker" and the centrality of the concept of "injury" arising out of or in the course of employment, were seen as critical considerations in McDowell v Baker (1979) 144 CLR 413. In that case dependants of a deceased worker had sued his employer for damages under legislation equivalent to the Compensation to Relatives Act. The question was whether, under the Workers Compensation Act 1916-1966 (Qld), the amount of damages was required to be reduced by the amount of compensation payable in respect of the injury. The answer to that question turned on the operation of s 9A of the Act which provided: (1) Where an injury in respect whereof a worker is entitled … to receive compensation from the Workers' Compensation Fund was received by the worker under circumstances creating also, independently of this Act, a legal liability in the employer to pay damages in respect of that injury … - (a) the amount of such damages which the employer is legally liable to pay shall … be reduced by the total amount of the compensation … prescribed by this Act to be made from the Fund in respect of the injury in question; and (b) subject to this section, the worker or his dependents shall receive from the Worker's Compensation Fund such reduced amount.

Scope of Chapter 7 26 The next question must be whether Chapter 7 has operation in relation to a claim for damages, where there is no claim for statutory compensation available or on foot. That Chapter 7 makes provision for damages claims is beyond doubt - see generally Attileh v State Rail Authority (2005) 62 NSWLR 439 dealing with aspects of the temporal operation of the provisions - the question is in what circumstances it operates. 27 Section 250, includes the following definition: work injury damages means damages recoverable from a worker's employer in respect of: (a) an injury to the worker caused by the negligence or other tort of the employer, or (b) the death of the worker resulting from or caused by an injury caused by the negligence or other tort of the employer, whether the damages are recoverable in an action for tort or breach of contract or in any other action, but does not include motor accident damages. 28 According to the plaintiff, this provision has no operation in relation to her claim for damages. Her claim, she contended, is not in respect of an injury to her husband, but in relation to an injury (nervous shock) to her. Similarly, unlike a Compensation to Relatives Act claim, it is not a claim for damages in respect of the death of her husband, but in respect of the injury caused to her. The correctness of this contention, accepted by the primary judge, is at the heart of this appeal. However, before addressing that issue it is convenient to consider the aspects of Chapter 7 potentially relevant to the plaintiff's claim. 29 Chapter 7 has 10 parts. No reference was made in argument to Parts 7-10 which, broadly speaking, can be ignored for present purposes. Primary reference was made to Part 6, which is headed "Court proceedings for work injury damages". However, before turning to that Part, it is convenient to identify the contents of Parts 1-5. 30 Part 1, headed "Preliminary" deals with matters of interpretation and the application of the Chapter and constitutes ss 250 and 251, to which reference has already been made. 31 Part 2 has two divisions, the first providing for notice of injury and the second for making a claim for compensation or damages. Division 1 has no application because it is only relevant in respect of injuries received after the commencement of the section, and Mr Thompson died on 22 October 2001, well before its commencement. It may be assumed, although there is no specific allegation in the pleadings, that the plaintiff's injury was also suffered before this date. The application of Division 2 is identified in s 259, which reads as follows: 259 Application of Division (1) This Division applies to the making of a claim after the commencement of this section (even if the injury concerned was received before the commencement of this section). (2) However, this Division does not apply to the making of a claim for work injury damages if court proceedings to recover the work injury damages concerned were commenced before the commencement of this section.

The proceedings were commenced after the commencement of the section. 32 Despite the definitions in Part 1 of Chapter 7, but consistently with the definition in s 4(1) of the term "claim", that term is clearly intended to cover both a claim for compensation and a claim for work injury damages in this Division: see also ss 280A and 312 below, and see Attileh v State Rail Authority (2005) 62 NSWLR 439 at [19]. One of the provisions with which it is said the plaintiff failed to comply is s 260 which, so far as relevant, provides: 260 How a claim is made (1) A claim must be made in accordance with the applicable requirements of the WorkCover Guidelines. … (5) The failure to make a claim as required by this section is not a bar to the recovery of compensation or work injury damages if it is found that the failure was occasioned by ignorance, mistake or other reasonable cause or because of a minor defect in form or style. 33 Whether reliance was pressed in relation to failure to comply with this provision was unclear from the course of the argument. Although the primary judge noted an allegation that the plaintiff had failed to make a claim in accordance with s 260, he made no other factual findings in respect of that complaint. No attempt was made by the employer to identify "the applicable requirements" of the Guidelines. Indeed, no guidelines made for the purposes of this provision were identified. Further, because of the express terms of sub-s (5), it is difficult to see how a failure to comply with s 260(1) could in any event result in a striking out of a statement of claim. 34 Part 3 of Chapter 7 is headed "Dealing with claims". Divisions 1-3 appear to be concerned with compensation claims and no reliance was placed upon them by the employer. Indeed, no reliance was placed on any part of Part 3 by the employer. However, Division 4 cannot be entirely ignored. The first section in Division 4, s 280A, added after the original form of Chapter 7 had been passed, but prior to its commencement, provides as follows: 280A Claim for lump sum compensation a pre-condition to damages claim A claim for work injury damages in respect of an injury cannot be made unless a claim for lump sum compensation in respect of the injury is made before or at the same time as the claim for work injury damages. 35 It is common ground that the plaintiff has not (and never has had) a claim for "lump sum compensation". That term is defined to mean compensation under Division 4 (Compensation for non-economic loss) of Part 3 of the Workers Compensation Act: Workplace Injury Act, s 4(1), lump sum compensation. That part of the Workers Compensation Act deals with payments in respect of permanent impairment of the worker who is injured. The employer does not suggest that it can have any application to a third party, whether a dependant or not. The employer says that s 280A can be disregarded as irrelevant. On the other hand, the plaintiff says that s 280A demonstrates the correctness of her position, namely that Chapter 7 has no operation in relation to her claim for damages. 36 As noted above, the requisite step with which there has been, according to the employer, no compliance, is s 315, which comes in Part 6 of Chapter 7. However, to understand s 315, it is necessary to note the operation of s 281, the section immediately following s 280A, which relevantly provides as follows: 281 Liability to be accepted and settlement offer made (1) The person on whom a claim for lump sum compensation or work injury damages is made must, within the time required by this section, determine the claim by: (a) accepting liability and making a reasonable offer of settlement to the claimant, or (b) disputing liability. (2) A claim must be so determined: (a) within 1 month after the degree of permanent impairment first becomes fully ascertainable …, or (b) within 2 months after the claimant has provided to the insurer all relevant particulars about the claim, whichever is the later. … (6) This section does not apply to a claim for work injury damages in respect of the death of a person, except as the WorkCover Guidelines may otherwise provide. 37 Part 4 has no relevant operation, as it is limited to compensation dispute determination. Part 5 also has no relevant operation because it deals only with expedited assessment of compensation. 38 One then turns to Part 6, which has five divisions. Division 1 contains definitions of "claimant" and "defendant", a claimant meaning "a claimant for work injury damages": s 311. Section 312 provides: 312 Forum for court proceedings Proceedings in respect of a claim for work injury damages may be taken in any court of competent jurisdiction, subject to this Part. 39 Part 6, Div 2 provides a threshold for the award of damages where there is a dispute as to the degree of permanent impairment of the injured worker: s 313. 40 Division 3 deals with "pre-filing statements". Section 315, including the notes thereto, should be set out in full as it is the provision on which the employer relies for denying the plaintiff's entitlement to proceed in court. 315 Requirement for pre-filing statement before commencing court proceedings (1) Before a claimant can commence court proceedings for the recovery of work injury damages, the claimant must serve on the defendant a pre-filing statement setting out such particulars of the claim and the evidence that the claimant will rely on to establish or in support of the claim as the Rules may require. Note: Section 314 prevents a pre-filing statement being served if there is a dispute as to whether the degree of permanent impairment is sufficient for an award of damages. (2) The pre-filing statement cannot be served unless: (a) the person on whom the claim is made wholly disputes liability for the claim, or (b) the person on whom the claim is made has made an offer of settlement to the claimant pursuant to the determination of the claim as and when required by section 281 and 1 month has elapsed since the offer was made, or (c) the person on whom the claim is made has failed to determine the claim as and when required by section 281. Note: The determination of a claim in accordance with section 281 requires the making of a reasonable offer of settlement (if liability is wholly or partly accepted). Failure to make a reasonable offer of settlement constitutes a failure to determine the claim. Section 74 requires notice of a dispute as to liability to be given. 41 The reference in sub-s (1) to the "Rules" is a reference to the Workers Compensation Commission Rules 2003 (NSW): Workplace Injury Act, s 4(1), Rules. Rule 80 provides that, for the purposes of s 315, a pre-filing statement is to "consist of a copy of the statement of claim intended to be filed in the court" and is to include certain attachments. No reference was made to other documents in the course of the hearing of the appeal and it may be assumed that none are relevant. 42 The first difficulty with the application of s 315(1) is that there is a precondition to its requirement, which appears to depend upon the application of s 281. Thus, reference to s 281 is expressly made in paragraphs (b) and (c) of sub-s 315(2); although there is no reference to s 281 in paragraph (a), that paragraph identifies the other possibility, namely "disputing liability", referred to in s 281(1)(b). Absent engagement of s 281, there is no express procedure for the person against whom the claim is made to dispute liability. 43 Section 315(2) is expressed in absolute and unequivocal terms. The drafter must have been aware that s 281 was not always applicable and did not apply in respect of a claim for work injury damages in respect of the death of a person, absent provision to the contrary in the Guidelines: s 281(6). There are two possible consequential inferences: first, it may have been intended that no claim for work injury damages can be made in respect of the death of a person. Alternatively, the requirements of s 315(1) do not apply to a claim for work injury damages in respect of the death of a person. The first alternative is not open; s 281(6) clearly envisages that such a claim can be made and merely provides that s 281 "does not apply". As a result s 315 is not engaged. Absent an opportunity for there to be a claim for lump sum compensation, neither s 281 nor s 315 can have operation. Accordingly, even if the plaintiff's claim is a work injury damages claim to which Chapter 7 applies, contrary to the view expressed at [56] below, s 315 has no operation in relation to it and the specific complaint raised by the employer must fail. However, this conclusion itself provides support for the view that the assumption is wrong and that a claim by or on behalf of a person other than the employee is not a claim for work injury damages. 44 The third and final provision relied upon by the employer is s 318A, which comes in Part 6, Division 4, dealing with mediation. So far as relevant, s 318A provides: 318A Mediation of claim before commencement of court proceedings (1) A claimant must refer a claim for work injury damages for mediation under this Division before the claimant can commence court proceedings for recovery of those work injury damages. The claim cannot be referred for mediation until at least 28 days after the pre-filing statement has been served on the defendant under Division 3.

The importance of statutory context in construing words of such potential breadth was also emphasised in State Government Insurance Office (Qld) v Crittenden (1966) 117 CLR 412, esp. at 415-416 and 418 (Taylor J), dealing with a claim for loss of consortium under The Motor Vehicles Insurance Act 1936 (Qld). 48 Bearing in mind the importance of a specific statutory context, the discussion of similar language in The Workers' Compensation Board (Qld) v Technical Products Pty Ltd (1988) 165 CLR 642 was seen as directly relevant by the primary judge in the present case. That case, like the present, arose out of a claim by the wife of an injured worker for damages for nervous shock and psychiatric illness suffered in consequence of her husband's injuries. The liability of the employer was not directly in dispute, but rather the obligation of the Board, as insurer, to indemnify the employer in relation to the wife's claim. The case illustrates the point identified above, namely that nervous shock claims may arise quite independently of the extended definition of "worker", which only operates where the injured worker has died. In Workers' Compensation Board, the worker was severely injured but did not die. Accordingly the extended definition of "worker" was irrelevant. The question turned on the construction of s 8 of The Workers' Compensation Act 1916 (Qld) which relevantly provided as follows: "Every employer shall insure himself and keep himself insured with the Board against all sums for which, in respect of injury to any worker employed by him, he may become legally liable by way of - (a) compensation under this Act; and (b) in the case of injury as aforesaid … damages arising under circumstances creating also, independently of this Act, a legal liability in the employer to pay damages in respect of that injury." 49 As noted in the joint judgment of Deane, Dawson and Toohey JJ (at p 653) the employer argued "that the words 'in respect of' have a wide signification and that liability in damages for harm to a third person, such as nervous shock, caused by injury to a worker is a liability to pay damages in respect of that injury". 50 Their Honours accepted the potential breadth of the phrase, at 656: "In the context of some enactments words such as 'damages in respect of an injury' or, at all events, words such as 'liability for damages in respect of an injury' may extend to liability at the suit of some person other than the person sustaining the injury."

Their Honours then considered a number of authorities, including the decision of this Court in Rheem Australia Ltd v Manufacturers' Mutual Insurance Ltd [1984] 2 NSWLR 370, in which this Court held that a policy of insurance under the Workers Compensation Act 1926 (NSW) encompassed liability pursuant to the Compensation to Relatives Act 1897 (NSW) so that the phrase "liability for any injury to any worker" extended beyond liability to the injured worker himself. (Consistently with Rheem , the primary judge in the present case accepted that the definition of "work injury damages" extended to such a statutory liability.) The joint judgment in Workers' Compensation Board continued (at p 657): "The most that can be drawn from these decisions dealing with differently worded provisions is that the use of the phrase 'in respect of' does not, of itself, extend the meaning of an expression such as 'damages in respect of injury to any worker' so as to include damages payable to a person other than the worker. … The general context of ss.8(1) and 9A is that of an Act with the object of providing benefits to injured workers and their dependants. There is nothing in the scope of its provisions which would warrant giving the words 'damages in respect of that injury' in s.8(1)(b) any meaning other than that which they naturally bear." 51 Similar views were expressed in the joint judgment of Wilson and Gaudron JJ. Their Honours also identified the statutory object in similar terms (at p 652): "The material sections of the Act are concerned with the protection of workers and their dependants in respect of injury suffered by the worker in the course of his employment. It is to that end that s.8(1) obliges every employer to insure and keep himself insured with the Board against all sums for which he may become liable to pay to the worker or his dependants as compensation or damages. It will be alien to that purpose for an employer to be obliged to insure with the Board against liability to any person at all for negligence in respect of an injury suffered by a worker. Such an obligation would not necessarily serve to protect the worker or his dependants in any way at all." 52 The difficulty with the conclusion that a claim for nervous shock by a third party is "in respect of" an injury to a worker is that it may not depend upon an actual injury to any worker. This point was identified by Deane, Dawson and Toohey JJ in Workers' Compensation Board at pp 655-656: "The phrase 'damages in respect of that injury' in s.8(1)(b) is clearly a reference to 'damages in respect of injury to a worker'. The natural meaning of the expression is, therefore, damages payable to a worker and assessed by reference to his injury. So construed, the expression would exclude damages for nervous shock to a person other than a worker, not only because such damages are payable to a person other than the worker, but also because the damages are measured by the extent of the nervous shock and its consequences and not by the extent of the injury causing the nervous shock and its consequences … . Moreover, to read the expression as referring to damages for nervous shock to a third party occasioned by injury to a worker gives rise to an anomaly. Nervous shock may be caused not only by injury to another but also by placing another in peril. Damages awarded in the latter situation would, where the person placed in peril was a worker, be for breach of the same duty of care, but would clearly not be covered by s.8(1)(b)." 53 In Manufacturers' Mutual Insurance Ltd v G.E. Hooper (1987) 4 ANZ Insurance Cases ¶60-768, Clarke J held that a payment to the wife of a deceased worker was a payment covered by an insurance policy held by the employer in respect of its liability "for" any injury to a worker or a person deemed to be a worker. After considering the judgments of this Court in Rheem Australia, his Honour concluded (p 74-660, col 2): "It follows that I am bound to conclude that the defendant is entitled to indemnity if his liability to the plaintiffs in the two cases is consequent upon, or in respect of, injury to a worker. Even so, Mr Sperling argued, there should be no liability in respect of claims for nervous shock or at the instance of rescuers. That was because neither of these claims was dependent upon the plaintiff establishing actual injury to a worker. A rescuer may receive injury when he goes to the assistance of someone whom he fallaciously believes is injured … Likewise a plaintiff may suffer nervous shock as a consequence of an erroneous belief that her husband, the worker, has been injured."

Workers Compensation Act 57 Finally, it is necessary to consider whether any different conclusion is suggested, as the employer argued, by reference to the Workers Compensation Act. There is no doubt that the Workers Compensation Act and the Workplace Injury Act comprise two pieces of inter-related legislation. There is an expressed intention that the two Acts be read together: Workers Compensation Act, s 2A(2). That provision further states that "a reference in this Act to this Act includes a reference to the [Workplace Injury] Act." (That direction may not be capable of literal application in all cases.) However, s 2A(3) provides that in the event of inconsistency, the Workplace Injury Act prevails to the extent of the inconsistency. 58 The Workers Compensation Act contains provisions giving extended reference to the concept of a "worker" (s 3(1A)) and defining "injury" (s 4), which mirror those in the Workplace Injury Act discussed above. 59 Part 5 is headed "Common law remedies" and deals in Division 3 with damages available in respect of an injury to a worker or the death of a worker resulting from or caused by an injury. The application of that Division, is dealt with in s 151E in language similar to, although not identical to, the definition of "work injury damages" in Chapter 7 of the Workplace Injury Act, s 250. Section 151F provides that a court may not award damages to a person contrary to the Division and s 151G provides that damages may only be awarded for past economic loss due to loss of earnings and future economic loss due to the deprivation or impairment of earning capacity. No issue arises on this appeal as to the application or otherwise of those provisions, because no question has yet arisen as to the assessment of damages. The argument relied on by the employer is somewhat more indirect. It submits that, if Division 3 of Part 5 of the Workers Compensation Act applies in relation to these proceedings, because of the common premise on which both this Part and Chapter 7 of the Workplace Injury Act operate, namely that this is a claim for work injury damages, it follows that Chapter 7 must have application to the current proceedings. 60 The logic of this argument will need to be addressed, but it is convenient first to consider the basis upon which it is said that Division 3 of Part 5 has application. In substance, that contention rests upon one provision, which is said only to have application if the assumption is correct. The relevant provision is s 151P, which reads as follows: 151P Damages for psychological or psychiatric injury No damages for psychological or psychiatric injury are to be awarded in respect of an injury except in favour of: (a) the injured worker, or (b) a parent, spouse, brother, sister or child of the injured or deceased person who, as a consequence of the injury to the injured person or the death of the deceased person, has suffered a demonstrable psychological or psychiatric illness and not merely a normal emotional or cultural grief reaction. 61 It is said that the categories of potential beneficiaries in paragraph (b) only make sense if such persons had an independent right of action for nervous shock, which was governed by Division 3 of Part 5 of the Act. However, because Division 3 applies to awards of work injury damages, a claim such as that of the plaintiff must be a claim for work injury damages. Accordingly, such claims as the plaintiff's must be governed by Chapter 7 of the Workplace Injury Act. 62 The intended operation of this provision is not without its difficulties. The condition of suffering a demonstrable psychological or psychiatric illness, and not merely a normal emotional or cultural grief reaction, can be referable only to the nature of an injury suffered by a person falling within paragraph (b). However the word "injured" and "deceased" are used five times in paragraphs (a) and (b) and the word "injury" is used once in paragraph (b), each of these references being a reference to the injury suffered by the worker. For damages to be awarded in favour of, say, a spouse who suffers a demonstrable psychological or psychiatric illness, the word "injury" in the chapeau must refer to an injury to the spouse. However, his or her injury is not a "personal injury arising out of or in the course of employment", as required by the definition of "injury" as set out in s 4. There is no other provision in Part 5 which suggests that injury could have such a meaning. To the contrary, the definition is otherwise consistently applicable by reference to the employment of the worker whose injury is the source of the liability to pay damages. 63 Counsel were able to offer no explanation for this apparent anomaly. Nor does the history of the provision provide assistance. It was introduced by the Workers Compensation (Benefits) Amendment Act 1989 (NSW), which introduced Part 5 in its original form. The second reading speech gives no indication as to the intended scope and operation of paragraph (b). Significantly, however, the same amending Act introduced s 151 which reads: 151 Common law and other liability preserved This Act does not affect any liability in respect of an injury to a worker that exists independently of this Act, except to the extent that this Act otherwise expressly provides.

If general law liabilities in respect of injuries to workers are only affected as expressly provided, no broader intention should be inferred in relation to persons who are not workers. Consistently with that approach, and accepting that s 151P expressly applies to those who are not workers, there can be no implied affectation of other rights of non-workers, beyond those expressly identified in s 151P. Any proposed implication that other provisions of Part 5 of the Workers Compensation Act , let alone provisions of the Workplace Injury Act , are thereby engaged by implication is untenable. 64 Nevertheless, the employer says it is entitled to succeed as a matter of authority. The authority relied upon was the decision of this Court in Gifford v Strang Patrick Stevedoring Pty Ltd (2001) 51 NSWLR 606, a case bearing certain factual similarities to the present in that it concerned a claim by a widow and three children claiming damages for nervous shock arising from the death during a work accident of the widow's late (albeit estranged) husband and father of the three children. The authority of the case on this point depends upon one sentence in the judgment of Hodgson JA (with which Handley JA and Ipp AJA agreed) in which his Honour was seeking to identify the issues at the trial. At [12], his Honour set out ss 151, 151E, 151F and 151P of the Workers Compensation Act, preceded by the following statement: "Because the accident occurred during the course of the deceased's employment by the respondent, Pt 5 of the Workers Compensation Act 1987, entitled 'common law remedies', applies." 65 It is clear from a reading of the judgments in that case that no issue arose in relation to that statement. It was clearly common ground that the provisions did apply to the widow's action in nervous shock, the only issues being the proper construction of those provisions. The case went on appeal to the High Court: see Gifford v Strang Patrick Stevedoring Pty Ltd (2003) 214 CLR 269. The common assumption as to the application of s 151P continued to operate. However, while the decision of this Court, which precluded recovery by the widow, would have been the same whether or not s 151P in fact operated, the same cannot be said in relation to the decision of the High Court. In this Court, Ms Gifford failed because she merely heard of the death of Mr Gifford and had not seen the incident, nor been present at its immediate aftermath. By the time the case reached the High Court, that conclusion had been overtaken by decisions in that Court in Tame v New South Wales and Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317. Having determined that the common law principles were not so constrained, it became necessary for the High Court to consider whether s 4(1) of the Law Reform (Miscellaneous Provisions) Act 1944 (NSW) provided an exclusive statement of the general law liability for nervous shock, or whether it merely reversed a particular constraint imposed by the general law. Accepting the latter as the appropriate approach, the next question was whether s 151P conferred an independent right to recover damages or whether it constituted a limitation on awards of damages in particular cases. It was accepted by all members of the Court that s 151P had a limiting effect, but made an exception in relation to a specific category of persons. Thus Gummow and Kirby JJ, in a passage agreed with by Gleeson CJ at [24], stated at [93], after referring to paragraph (b) of s 151P: "It may thus be said that the New South Wales legislature has specifically turned its mind to the issue that arises in the present appeals and has accepted that damages may be awarded to the child of a deceased employee who, as a consequence of the death, has suffered a 'demonstrable psychological or psychiatric illness'."

KIMBERLY-CLARK AUSTRALIA PTY LTD v THOMPSON

At a glance

Court

Decision date

Before

Source

Judgment (50 paragraphs)

Parties

Legislation Cited (13)

Cases Cited (11)

Cited By (6)