Lee v Fletcher International Exports Pty Ltd

Background

1. The plaintiff alleges that she was injured in a workplace accident on 27 October 2020 (the "accident") in the course of her employment with the defendant. She says that she suffered physical and psychological injury following an incident in which she had been asked by a co-worker to assist in moving a box, and in doing so, her clothes were caught in a conveyor belt, dragging her into a machine.
2. On 27 October 2021 the defendant, being self-insured, declined the plaintiff's claim.
3. The plaintiff commenced proceedings against the defendant in the PIC on 19 January 2022. Prior to the commencement of those proceedings, the plaintiff moved to Queensland, where she still resides. The defendant is a corporation whose registered office is in New South Wales, and whose principal place of business is in New South Wales. It holds a self-insurer licence in NSW pursuant to Pt 7 Div 5 of the Workers Compensation Act and is regulated in that respect by the State Insurance Regulatory Authority ("SIRA").
4. The PIC proceedings passed through the conciliation and arbitration stage without resolution. The defendant raised a jurisdictional question early in the course of the PIC proceedings, alleging that the proceedings were beyond the jurisdiction of the PIC because they involved the exercise of federal jurisdiction, as defined in s 25 of the PIC Act. The defendant says that by virtue of its performance of functions under the statutory self-insurance regime, its position in these proceedings may be assimilated to that of the State of NSW.
5. The proceedings came before a Commissioner who determined that the PIC was not exercising federal jurisdiction and, therefore, had jurisdiction to determine the dispute. He then proceeded to determine the plaintiff's claim on its merits.
6. The defendant appealed, and on 23 September 2022, Deputy President Snell found that the question of whether or not the PIC had jurisdiction was itself not a question that the PIC was empowered to determine. Although the Deputy President was of the view that a determination in these proceedings would not involve the exercise of federal jurisdiction, he nevertheless found that the PIC Act reserves to this Court the power to determine whether or not federal jurisdiction is invoked. In this regard, the learned Deputy President applied the principles enunciated by the Court of Appeal in Attorney General for New South Wales v Gatsby (2018) 99 NSWLR 1; [2018] NSWCA 254 at [281]-[282] to the effect that the PIC did not have power to pronounce authoritatively on the limits of its own jurisdiction. Accordingly, in accordance with Burns v Corbett; Burns v Gaynor; Attorney General for NSW v Burns; Attorney General for NSW v Burns; NSW v Burns (2018) 265 CLR 304 at [3]; [2018] HCA 15 and Citta Hobart Pty Ltd v Cawthorn (2022) 96 ALJR 476; [2022] HCA 16 at [27], the learned Deputy President found that the original Member's decision was made without jurisdiction and had no legal force.
7. The plaintiff has, therefore, brought the present application in this Court.

Legislative framework

1. Section 75 of the Commonwealth Constitution provides as follows: 75. Original jurisdiction of High Court. In all matters - (i.) Arising under any treaty: (ii.) Affecting consuls or other representatives of other countries: (iii.) In which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party: (iv.) Between States, or between residents of different States, or between a State and a resident of another State: (v.) In which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth: the High Court shall have original jurisdiction. [Emphasis added]
2. Section 25 of the PIC Act relevantly provides: compensation claim means - … (d) a claim for compensation or work injury damages to which the Workplace Injury Management and Workers Compensation Act 1998 applies. Compensation matter application - see section 26. Federal jurisdiction means jurisdiction of a kind referred to in section 75 or 76 of the Commonwealth Constitution. Relevant courts legislation means - (a) the District Court Act 1973 and the rules of court under that Act, and (b) the Civil Procedure Act 2005 and the regulations and uniform rules under that Act in their application to the District Court. … usual decision-maker, in relation to determining a matter concerning a compensation claim, means the person or body (whether or not the President or Commission) on which the function is conferred or imposed by this Act or enabling legislation.
3. Section 26 of the PIC Act provides: 26 Applications involving federal jurisdiction may be made to District Court (1) A person with standing to apply to the President or the Commission for a matter concerning a compensation claim to be determined by the usual decision-maker (a compensation matter application) may, with the leave of the District Court, make the application to the Court instead of the President or Commission. (2) The regulations may make provision for or with respect to - (a) who has standing to make an application for leave, and (b) excluding or including applications as compensation matter applications. (3) The District Court may grant leave for a compensation matter application to be made to the Court only if it is satisfied that - (a) an application was first made to the President or Commission, and (b) the determination of the matter by the usual decision-maker would involve an exercise of federal jurisdiction, and I the usual decision-maker would otherwise have had jurisdiction enabling the decision-maker to determine the application. (4) An application for leave must be - (a) filed with the District Court along with - (i) an application that has been completed in the form and manner required under this Act or enabling legislation for the kind of compensation matter application concerned, and (ii) if the parties to the compensation matter application have reached a settlement before leave is sought using a resolution process provided under this Act or enabling legislation - a copy of the terms of settlement, and (b) accompanied by the applicable fee (if any) payable for the compensation matter application unless it has already been paid. (5) The District Court may - (a) remit a compensation matter application for determination by the usual decision-maker if the Court is satisfied that the usual decision-maker has jurisdiction to determine it, and (b) do so instead of granting leave or after granting leave. (6) If the District Court remits a compensation matter application to be dealt with by the usual decision-maker, the Court may make such orders that it considers appropriate to facilitate the determination of the application by the decision-maker. (7) The usual decision-maker is to determine any compensation matter application that is remitted to the decision-maker in accordance with any orders made by the District Court.
4. The application by the plaintiff to obtain leave from the District Court is made under s 26(3) of the Act. In order for the District Court to have the power to grant leave for a compensation matter application to be made to the District Court, it must be satisfied that: 1. An application for compensation was first made to the President or the Personal Injury Commission; and 2. The determination of the matter by the usual decision-maker would involve an exercise of federal jurisdiction; and 3. The usual decision-maker would otherwise have had jurisdiction enabling the decision-maker to determine the application.
5. As set out above, "compensation claim" as used in s 26(1) is relevantly defined in s 25 of the PIC Act to include a claim for compensation or work injury damages to which the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the "Management Act") applies. The Management Act applies to claims for compensation or work injury damages for personal injury arising out of or in the course of employment.
6. Chapter 7 of the Management Act establishes a system to optimise the timely, safe and durable return to work for workers following workplace injuries. An insurer, including a self-insurer, has obligations under the Management Act to establish, maintain and give effect to an injury management program. Insurers are obliged, for example, to pay compensation promptly (s 74A) and provide certain notices (e.g. in Ch 3 Pt 3).
7. The Workers Compensation Act relevantly provides as follows: 3 Definitions (cf former s 6 (1), (2), (13)) (1AA) In this Act, words and expressions have the same meanings as they have in the 1998 Act, unless this Act provides otherwise. (1) In this Act - … injury is defined by section 4. … self-insurer means - (a) the holder of a licence in force under Division 5 of Part 7, and (b) a subsidiary of the licence holder covered for the time being by the licence neither a person appointed as a nominal defendant (as provided by section 211A), and (c) any Government employer covered for the time being by the Government's managed fund scheme (as provided by section 211B). … 4 Definition of "injury" (cf former s 6 (1)) In this Act - injury - (a) means personal injury arising out of or in the course of employment, (b) includes a disease injury, which means - (i) a disease that is contracted by a worker in the course of employment but only if the employment was the main contributing factor to contracting the disease, and (ii) the aggravation, acceleration, exacerbation or deterioration in the course of employment of any disease, but only if the employment was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease, and (c) does not include (except in the case of a worker employed in or about a mine) a dust disease, as defined by the Workers' Compensation (Dust Diseases) Act 1942, or the aggravation, acceleration, exacerbation or deterioration of a dust disease, as so defined. … 9 Liability of employers for injuries received by workers - general (cf former s 7 (1) (a)) (1) A worker who has received an injury (and, in the case of the death of the worker, his or her dependants) shall receive compensation from the worker's employer in accordance with this Act. (2) Compensation is payable whether the injury was received by the worker at or away from the worker's place of employment.
8. Part 7 of the Workers Compensation Act provides for insurance to be obtained by employers for the full amount of their liability under the Act (s 155), although certain employers are exempt (s 155AA). Part 7 Division 5 establishes a mechanism by which employers or employers' parent companies may apply to SIRA for a licence (s 210), which may or may not be granted in SIRA's discretion, and which is subject to certain conditions referred to in s 212 and the provision of security by way of deposit, bond or guarantee (ss 213-215B). A self-insurer under the Workers Compensation Act remains subject to the supervision of SIRA (e.g. obliged to comply with a direction with respect to claims procedures given by SIRA (s 194), be subject to performance and accounting audits by SIRA (ss 202 and 202A)).
9. It was not disputed that the plaintiff's claim is a compensation claim or that she had standing to apply to the President or the Commission in respect of such a compensation claim within the meaning of s 26(1) of the PIC Act. Similarly, there was no issue between the parties that the PIC is the usual decision-maker in relation to her compensation claim.
10. Accordingly, the matter before this Court was a "compensation matter application" within the meaning of the chapeau of s 26(3) of the PIC Act. Apart from the jurisdictional issue, therefore, there was no question between the parties that the usual decision-maker at the PIC would otherwise have had jurisdiction enabling the decision-maker to determine the application.
11. No issue as to s 26(4) of the PIC Act arises.
12. The real issue in dispute between the parties was whether the determination of the matter by the usual decision-maker would involve "an exercise of federal jurisdiction", defined in s 25 of the PIC Act as jurisdiction of a kind referred to in s 75 of the Commonwealth Constitution.

The plaintiff

1. The plaintiff's position is straightforward. She maintains that the proceedings do not involve the exercise of federal jurisdiction. Essentially this is because, she contends, the matter is a compensation matter application within the meaning of s 25 of the PIC Act, and it is between two private parties: one a resident of Queensland and the other not being a resident of any State due to it being a corporation.
2. If this be correct, the matter does not fall within s 75 of the Constitution and there is no impediment to the PIC exercising jurisdiction. This is subject of course to the proviso that the PIC does not have the power to determine its own jurisdiction, which falls to this Court.

The defendant

1. The defendant's position was more complex. While acknowledging that it is a private corporation and has no residence for the purpose of s 75 of the Constitution, the defendant says that it relevantly exercises functions which are those exercised by a State, and accordingly, its position is properly characterised as that of the State for the purpose of s 75 of the Constitution and, by extension, s 25 of the PIC Act.
2. The defendant draws some support for this proposition from Crouch v Commissioner for Railways (Queensland) (1985) 159 CLR 22; [1985] HCA 69. There, in considering an action brought against the Queensland Commissioner for Railways, a corporation sole, the plurality of the High Court (Mason, Wilson, Brennan, Deane and Dawson JJ) stated: …neither a person appointed as a nominal defendant to represent a State in an action to enforce a claim against the State nor a State Minister who sues in his or her own name on behalf of the State to enforce a right of the State constitutes the State. The subject of the action in which he or she is sued or sues in that capacity might well however, depending upon the context, properly be described as a "matter" between the other party and the State against which or for whose benefit the claim lies, at whose expense it is resisted or pursued and from or by whose treasury any verdict will be satisfied or received. [At 36-37]. …. When the word "matter" is used in Ch. III of the Constitution in its ordinary prima facie sense of the subject matter for determination in a legal proceeding rather than the legal proceeding itself, it focuses attention upon the substance of the dispute…whether a particular "matter" lies within the original jurisdiction of the Court under s. 75(iv) as a matter "[b]etween States" or as a matter "between a State and a resident of another State" falls to be determined by reference to the substantial subject matter of the controversy and not by reference only to the form in which the legal proceedings involving it happen to be framed. [At 37].
3. By reason of its role as a self-insurer, particularly as a participant in a scheme mandated by the Workers Compensation Act, the defendant says that it is performing functions which are properly characterised as those of the State of NSW.
4. Further, the defendant says that the fact of the dispute arises from the defendant's declinature of liability, which is an exercise of its functions as a self-insurer. It is that declinature that gives rise to the jurisdiction of the PIC or Court, as the case may be, because that is the predicate of the dispute. Accordingly, one must look to that status as the relevant capacity in which the defendant is sued.

Consideration

1. The defendant does not contend that it is a resident of NSW within the meaning of s 75(iv) of the Commonwealth Constitution. It is well-established that "resident" for the purpose of ss 75 and 76 of the Constitution is confined to natural persons and does not include corporations: Crouch at 28.

Can the position of the defendant be assimilated to that of the State of NSW?

1. In my view, the position of the defendant cannot be assimilated to that of the State of NSW in the circumstances before the Court.
2. Federal jurisdiction is only enlivened when there is a "matter" between a State and a resident of another State. "Matter" is not synonymous with a legal proceeding but means the subject matter for determination in a legal proceeding. The question whether a particular "matter" lies within the original jurisdiction of the High Court under s 75(iv) as a matter "between a State and a resident of another State" falls to be determined by reference to the substantial subject matter of the controversy and not by reference only to the form in which the legal proceedings involving it happen to be framed: Crouch at 37.
3. In Crouch at 39-40, the plurality of the High Court considered a number of factors in determining whether the subject matter of that claim was a claim against an instrumentality or emanation of the State sued in its capacity as such. In that case, the claim arose from the discharge of traditional governmental functions of the State; the burden of any judgment if the plaintiff's claim should succeed would fall upon the Consolidated Revenue of the State and the funds involved in resisting the claim were to come from the same source.
4. None of those factors are present in the matter currently before the Court. The claim does not arise from the discharge of traditional governmental functions of the State. The defendant is a private corporation engaged in trade or commerce. The plaintiff brings proceedings in her capacity as an employee seeking compensation for an alleged workplace injury suffered in the course of employment. As a self-insurer, it may be inferred that the defendant will meet both the plaintiff's claim and the burden of any judgment should the plaintiff ultimately succeed.
5. The defendant is sued in its capacity as the plaintiff's employer at the time of the accident. The relevant source of the plaintiff's entitlement is s 9 of the Workers Compensation Act, which imposes a liability on the defendant as employer to pay compensation. This is a private, inter partes relationship between an employer and employee, and does not raise any matter which can properly be described as a matter in which a function of a State is engaged.
6. The matters raised by the defendant as assimilating the position of the defendant to that of the State are not sufficient, in my view, to do so. While there is no doubt that the Management Act imposes real and substantive obligations on an insurer, including a self-insurer, I do not find that they either are functions of the State, nor that they are the true "matter" between the parties in the sense required for s 75(iv) of the Constitution to be engaged. The defendant's alleged liability is that of an employer. The fact that it may have obligations under the Management Act to assess claims, make payments and discharge certain other obligations as to the payment of medical expenses does not alter the substantial subject matter of the controversy. In any event, the evidence does not establish a claim arising out of an allegation of breach by the defendant of its obligations under the Management Act.
7. Accordingly, I find that the position of the defendant cannot be treated as that of the State within the meaning of s 75 of the Commonwealth Constitution for the purpose of s 26 of the PIC Act. It follows that there is no federal jurisdiction invoked in determination of the plaintiff's compensation claim.

What orders ought be made?

1. As the PIC does not itself have power to determine its own jurisdiction, it falls to this Court to do so and to make appropriate orders for the further conduct of these proceedings. I am satisfied that the present matter does not raise any issue of federal jurisdiction and the usual decision-maker, in this case the PIC, has jurisdiction to determine the plaintiff's compensation matter.
2. The plaintiff says that s 105(1) of the Management Act confers exclusive jurisdiction on the PIC to hear this matter, and I am compelled to remit it to the PIC if satisfied that the matter does not raise any question of federal jurisdiction. Section 105(6)(b) of the Management Act relevantly defines "Commission" as used therein to include this Court to the extent that it has jurisdiction to examine, hear and determine. I do not accept that s 26(5) of the PIC Act does not confer a discretion on the Court to determine whether or not to remit the proceedings to the PIC, and I, therefore, approach this question as an exercise of discretion.
3. In my view, it is appropriate for the proceedings to be remitted to the President of the PIC to facilitate the determination of the plaintiff's compensation matter application. The PIC is already seised of the matter and is a specialist tribunal created as a forum to resolve the real issues in proceedings justly, quickly, cost effectively and with as little formality as possible: s 3(c) PIC Act. Further, the President of the PIC is best placed to determine what steps ought be taken for the future conduct of this matter, and I note that the merits have already been considered, both at first instance and on appeal to the Deputy President.
4. Accordingly, I will remit the matter to the PIC under s 26(5)(a) of the PIC Act.
5. Costs should be costs in the cause, however, if either party seeks a different costs order, I will grant liberty to apply within seven days for any different costs order.

Orders

1. I make the following orders: 1. Grant leave to commence proceedings in this Court pursuant to s 26(3) of the Personal Injuries Commission Act 2020 (NSW) insofar as is necessary to determine the current application. 2. Pursuant to s 26(5) of the Personal Injuries Commission Act 2020, remit the proceedings to the President of the Personal Injuries Commission to be determined by a Member of the Personal Injuries Commission and for the President to make such orders as he or she considers appropriate to facilitate the determination of the application. 3. Costs be costs in the cause of the proceedings in the Personal Injuries Commission. 4. The parties have liberty to apply by 31 March 2023 if any variation to the costs order herein is sought.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 March 2023