Workers' Compensation and Rehabilitation Act (1981), s 93B, s 93D(4), s 175

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

Midgley v Monger, The Director Conciliation and Review Directorate [2000] WASC 291

Commonwealth of Australia v SCI Operations Pty Ltd [1998] HCA 20; (1998) 192 CLR 285

Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) [1981] HCA 26; (1981) 147 CLR 297

Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87

James v Cowan [1930] HCA 48; (1930) 43 CLR 386

Mills v Meeking [1990] HCA 6; (1990) 91 ALR 16

Muller v Dalgety & Co Ltd [1909] HCA 67; (1909) 9 CLR 693

Newcombe v AME Properties Ltd (1995) 14 WAR 259

Pountney v Griffiths [1976] AC 314

Re Monger; ex parte Rock Engineering (Aust) Pty Ltd, unreported; FCt SCt of WA; Library No 980013; 22 January 1998

Rothmans of Pall Mall (Overseas) Ltd & Ors v Saudi Arabian Airlines Corporation [1981] QB 368

Webster v Lampard [1993] HCA 57; (1993) 177 CLR 598

1 O'SULLIVAN DCJ: This is an appeal from a decision of a Registrar of this court dismissing an application by the appellant (defendant) to have the writ herein set aside for want of jurisdiction. As such the matter comes before me to be decided afresh.

2 The plaintiff claims to have suffered injury from exposure to fumes while working at the defendant's mine and nickel smelter located near Kalgoorlie. He seeks damages for negligence and breach of statutory duty. The writ was filed on 19 March 1998 without leave of this court which the appellant unsuccessfully argued was necessary pursuant to s 93D(4) of the Workers Compensation and Rehabilitation Act 1981 ("the Act").

3 By his re-amended statement of claim the plaintiff defines the defendant's mine and/or nickel smelter as "the premises" and then pleads that at them:

"(i) the defendant conducted mining operations within the meaning of the Mines Safety and Inspection Act 1994;

(ii) in the course of those operations it engaged contractors including the plaintiff's employer Ralph M Lee and coordinated their activities;

(iii) the plaintiff in consequence of the above was a lawful entrant between 31 May 1996 and 30 July 1996 as a full time electrician;

(iv) the work on which the plaintiff was engaged and the work in which Ralph M Lee had contracted with the defendant related to matters over which the defendant had control or, but for the agreement between the defendant and Ralph M Lee would have had control and, accordingly, the plaintiff was deemed to be the defendant's employee for the purposes of section 9 of the Mines Safety and Inspection Act 1994 to that extent."

4 At the date of the writ s 93D(4) provided: "Proceedings in which damages are sought are not to be commenced without the leave of the District Court."

5 Section 93D is contained in Division 2 of Part IV of the Act. Part IV is headed "Civil proceedings in addition to or independent of this Act." Division 2 is entitled "Constraints on awards of common law damages." Section 93B which is within Division 2 states:

"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 ..."

6 It is not in dispute that the respondent (plaintiff) alleges that he suffered a disability as defined in the Act and that he has been paid compensation in respect of it. However the appellant also contends that it is to be regarded as the plaintiff's employer and that these proceedings should not therefore have been commenced without leave. This conclusion, it is submitted, is required because s 175(1) of the Act provides 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."

7 There is no doubt that the appellant was a "principal" within the meaning of that word in this provision. The question upon which this application turns is whether the section operates to define the appellant as an employer for the purposes of s 93B and Part IV Division 2.

8 Section 175(1) first appeared in the Act when it was passed in 1912 and there has been very little alteration to it over the years (see No 69 of 1912, s 9). At that time and until 1993 there was, of course, no provision to be found restricting the right of an injured worker to recover damages at common law.

9 Although s 175(1) expressly deems a "principal" as defined, to be an employer in the circumstances contemplated by the section the word "employer" is also defined in s 5 which provides as follows:

" 'employer' includes any body of persons, corporate or unincorporated, and the legal representative of a deceased employer, and, where the services of a worker are temporarily lent or let on hire to another person with whom the worker has entered into a contract of employment the latter shall, for the purposes of this Act, be deemed to continue to be the employer of the worker whilst he is working for that other person;

the term 'employer' shall extend to any person for or by whom any worker, as defined in paragraph (a) or (b) of the definition of 'worker', works or is engaged; and

'employer' in relation to liability to pay compensation for or in respect of a disability to a worker, means the employer in the relevant employment;"

10 Paragraphs (a) and (b) of the definition of 'worker' in the Act provide:

"the term 'worker' save as aforesaid also includes -

(a) any person to whose service any industrial award or industrial agreement applies; and

(b) any person engaged by another person to work for the purpose of the other person's trade or business under a contract with him for service, the remuneration by whatever means of the person so working being in substance for his personal manual labour or services,

11 The definition of employer in s 5 does not include a principal as defined in s 175(1). In my view if the intention of the legislature was to treat all "principals" as employers of injured workers so that the provisions of the Act generally applied to them it would have been appropriate to have amended s 5. In my opinion this points to a narrower application of s 175 than that contended for by the appellant.

12 Section 175(1) deems a principal to be the employer of a worker "for the purposes of this Act". In my view these words refer to the purposes set out in s 3 which provide :

(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."

13 It is to be noted that the exclusion or limitation of common law claims is not expressed to be a purpose in this section and that when s 93D was introduced into the Act the opportunity was not taken to amend it. In Midgley v Monger, The Director Conciliation and Review Directorate [2000] WASC 291, Miller J made the same point at [23].

14 Section 175(2) and s 175(3) provide:

"(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."

15 Section 175(1) creates a liability in a principal to pay compensation to an injured worker but it is a liability in respect of which the principal has a right of indemnity under s 175(2). Moreover the liability is limited to situations contemplated by s 175(3). In these circumstances it seems to me that to regard s 175(1) as having the effect contended for by the appellant would be to treat a principal more generously than the common law employer of the worker. It is one thing to limit common law actions against a person who bears an ultimate statutory liability to compensate an injured worker. It is another to limit it in favour of someone who will often bear no financial burden at all.

16 In my view the language of s 175 is apt to describe claims for compensation but not claims at common law. Thus the words "damages" and "action" are not to be found in the section (cf. s 92 and s 93). Moreover s 175(2) and s 175(3) contemplate that a principal should become liable "under this section". No liability at common law arises under the section at all. Section 175(1) provides that both the principal and the contractor "are jointly and severally liable to pay any compensation which the contractor, if he were the sole employer would be liable to pay under the Act." In my view the liability "under this section" referred to in subsections (2) and (3) of s 175 is the liability created in subsection (1).

17 In Bird v The Commonwealth [1988] HCA 23; (1988) 165 CLR 1, Deane and Gaudron JJ said at 9:

"Moreover it is well to remember that employees' compensation legislation, such as the Act and the regulations, is remedial in its character and 'like all such Acts, should be construed beneficially': Bist v London South West Railway Co. The 'established principle' was correctly identified by Fullager J in the course of his dissenting judgment in Wilson v Wilson's Tile Works Pty Ltd: 'where two constructions of a Workers' Compensation Act are possible that which is favourable to the worker should be preferred.' If a person or a case falls within the general spirit of such remedial legislation and there are two possible interpretations the courts ought not to construe the Act so as to exclude that person or case: cf. Pearce, Statutory Interpretation in Australia 2nd ed (1981) pp 137 - 138. Indeed, in McDermott v The Owners of S.S. Tintoretto, a case in which the House of Lords read words into a provision of a Workmen's Compensation Act in favour of the employee, Lord Shaw commented that he would regard it 'to be quite unsound, and to be productive of wrong and mischief' to interpret such a remedial statute 'in the spirit of meticulous literalism.' That comment of Lord Shaw was quoted with approval ('a valuable contribution') by Isaacs J in this Court in George Hudson Ltd v Australian Timber Workers' Union."

18 In my view, in construing the provisions of the Act it is appropriate to adopt the approach referred to in this passage and, 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.

19 In my opinion the appeal should be dismissed.