Plaintiff v Defendants

2 On 23 October 2007, an order was made pursuant to r 47.04 of the Rules of Court that the following questions be tried and determined as separate questions before trial of the proceeding:

(1) Does s 134AB of the Accident Compensation Act 1985 apply to an action for damages for physical or mental injury brought under s 19 of the Whistleblowers Protection Act 2001 in circumstances where the alleged detrimental action (if it occurred) and the alleged injury arose out of or in the course of employment?

(2) Does s 134AB and in particular s 134AB(1)(2)(3) and (16) of the Accident Compensation Act 1985 apply to the proceeding insofar as the plaintiff seeks to recover any damages for pecuniary loss and non-pecuniary loss in respect of injury arising out of or in the course of the plaintiff's employment with the first defendant?

3 The issue raised by the separate questions is whether s 19 of the Act permits the plaintiff to bring this proceeding to recover damages for the alleged injury without complying with s 134AB of the Accident Compensation Act. On behalf of the university, it is submitted that because the claim is in respect of injury arising out of or in the course of employment the plaintiff's entitlement to compensation for pecuniary and non-pecuniary loss is governed and, therefore, limited by the operation of s 134AB. It is common ground that if the plaintiff suffered injury as a consequence of the detrimental action, the injury arose out of or in the course of her employment. The relevant provisions of s 134AB are as follows:

(1) A worker who is, or the dependants of a worker who are or may be, entitled to compensation in respect of an injury arising out of or in the course of, or due to the nature of, employment on or after 20 October 1999 -

(a) shall not, in proceedings in respect of the injury, recover any damages for non-pecuniary loss except -

(iii) if subparagraphs (i) and (ii) do not apply, as permitted by and in accordance with this section; and

(b) shall not, in proceedings in respect of the injury recover any damages for pecuniary loss except -

(ii) if subparagraph (i) does not apply, as permitted by and in accordance with this section.

(2) A worker may recover damages in respect of an injury arising out of, or in the course of, or due to the nature of, employment if the injury is a serious injury and arose on or after 20 October 1999.

(3) A worker may not bring proceedings in accordance with this section unless -

(a) determinations of the degree of impairment of the worker have been made under section 104B and the worker has made an application under subsection (4); or

(b) subject to any directions issued under section 134AF, the worker elects to make an application under subsection (4) on the ground that the worker has a serious injury within the meaning of this section.

4 It is also common ground, for the purpose of this trial, that the plaintiff's injury is not a "serious injury" and that no serious injury certificate has been issued. Accordingly, if this proceeding is one to which s 134AB relates, the plaintiff was not permitted to commence the proceeding.

5 For the plaintiff it is submitted that s 19 of the Act created a new statutory cause of action which entitles the plaintiff to claim damages, including exemplary damages against the person who takes detrimental action and the right so created is unaffected by s 134AB of the Accident Compensation Act. Section 19 of the Act provides:

(1) A person who takes detrimental action against a person in reprisal for a protected disclosure is liable in damages to that person.

(2) The damages may be recovered in proceedings as for a tort in any court of competent jurisdiction.

(3) Any remedy that may be granted by a court with respect to a tort, including exemplary damages, may be granted by a court in proceedings under this section.

(4) The right of a person to bring proceedings for damages does not affect any other right or remedy available to the person arising from the detrimental action.

6 "Detrimental action" is defined in s 1 of the Act to include:

(c) discrimination, disadvantage or adverse treatment in relation to a person's employment, career, provision, trade or business, including the taking of disciplinary action.

7 The plaintiff has already sought and obtained compensation under the Accident Compensation Act for an anxiety disorder in respect of incapacity alleged to have commenced on 27 October 2005. The defendant accepted the claim. The compensation was in the form of weekly payments and medical and like expenses. The plaintiff contends, however, that her entitlement to compensation as an employee has no bearing upon her entitlement to damages pursuant to s 19 of the Act. This is because, so it is submitted, s 134AB of the Accident Compensation Act does not purport to regulate a claim for damages made pursuant to s 19 of the Act. Section 134AB is confined to traditional common law proceedings for damages arising out of a tort or breach of contract of employment. The plaintiff submits that at the time s 134AB was enacted, the statutory right of action created by s 19 of the Act did not exist.

8 Section 134AB of the Accident Compensation Act 1985 was enacted in 2000 in order to reintroduce the right of a worker to seek common law damages for serious injury which was work related. Some background to these provisions is set out in the judgment of the Court of Appeal in Barwon Spinners Pty Ltd & ors v Podolak[1]. The Court made reference to the second reading speech upon which the plaintiff now relies to contend that s 134AB regulates traditional common law proceedings only and does not purport to extend to regulating the new statutory right of action created by the Act. I set out the relevant part of the second reading speech:

The entitlement of injured workers to obtain damages at common law was removed by the former government on 12 November 1997 under the Accident Compensation (Miscellaneous Amendment) Act 1997. Only workers injured prior to 12 November 1997 retained the right to seek common-law damages.

The former rights, which were removed, provided access to common law by a requirement that the compensable injury be a serious injury. The test of serious injury was satisfied by a worker having a 30 per cent or greater permanent impairment as a result of compensable injury assessed according to the American Medical Association, Guides to the Evaluation of Permanent Impairment, second edition - the AMA Guides, second edition. On the 30 per cent test being satisfied a worker was deemed to have a serious injury and entitled to bring proceedings for common-law damages. A worker with a whole-person-impairment determination of less than 30 per cent had an entitlement to make an application to the Victorian WorkCover Authority [for a certificate] that the injury was a serious injury or alternatively make an application to the court seeking leave to bring proceedings on the basis that the injury satisfied the narrative test of serious injury. The narrative test examined the effect and consequences of the injury on the worker. The narrative test for serious injury in section 135A of the Accident Compensation Act 1985 contained a definition of 'serious injury', meaning:

(a) serious long-term impairment or loss of a body function; or

(c) severe long-term mental or severe long-term behavioural disturbance or disorder; or

The bill seeks to restore common-law rights for seriously injured workers who satisfy the former deeming test of 30 per cent or greater whole-person impairment which will now be assessed in accordance with the AMA Guides, fourth edition, and in the alternative, for workers who satisfy the narrative test of serious injury proposed by this bill. The government sees the deeming test to be the main gateway for access to common-law rights.

9 The plaintiff further submits that because the statutory right of action, first created by s 19, was enacted after the Accident Compensation Act there is no point of interaction or conflict between the two Acts. If, however, there is found to be an inconsistency, the plaintiff submits that the right created under s 19 prevails and limits the operation of s 134AB to the extent of any inconsistency. The plaintiff also submits that because s 19 provides for the recovery of damages for injury caused by "detrimental action" it should be read as a proviso to the more general provision of s 134AB of the Accident Compensation Act.

10 The plaintiff submits that the purpose of the Act is to protect persons, often employees who expose wrongdoing, from recrimination and adverse consequences as a result of disclosing information. She points to the second reading speech of the Attorney-General on 31 August 2000 in which he said:

This bill implements a key commitment of the Bracks Labor government to introduce legislation to protect persons disclosing information about serious misconduct or maladministration in the public sector. The Whistleblowers Protection Bill (the bill) demonstrates that this government is serious about ending the Kennett government's legacy of secrecy and lack of transparency, and instead supports the principles of open, honest and accountable government.

Whistleblowers are persons (often employees) who make an allegation or divulge information about wrongdoing on the part of another person or organisation. Whistleblowers generally come forward out of a highly developed sense of public duty and personal ethical standards.

They can play an important role in protecting the public interest by exposing serious public sector wrongdoing. Ensuring the accountability of public organisations and officials for their actions leads to higher standards and performance, and increases public confidence in the public sector. These are all aims that this bill seeks to promote.

In order to encourage people with information about public sector wrongdoing to come forward, the bill will protect genuine whistleblowers from recrimination or other adverse consequences as a result of disclosing the information. It will also establish a robust framework for investigating such complaints and ensuring that where allegations are found to have substance, rectifying action is identified and taken.

6. How does the bill protect whistleblowers?

Whistleblowers who disclose information from within an organisation will often be in breach of a statutory duty to maintain confidentiality in relation to the matter, or in breach of a confidentiality clause in, for example, an employment contract. Clause 15 provides that such confidentiality provisions do not apply to the making of protected disclosures. Therefore, no adverse consequence will flow to the whistleblower for having breached the obligation.

Clause 18 creates a criminal offence, punishable by 2 years imprisonment, of taking detrimental action against any person in reprisal for a protected disclosure.

In addition to the criminal offence, clause 19 creates a statutory right of action in tort for the whistleblower to sue for damages for reprisals and clause 20 enables the whistleblower to apply to the Supreme Court for an injunction or an order requiring the person who has taken the detrimental action to remedy that action. These forms of relief will be extremely useful for the whistleblower who, despite the criminal offences created by the legislation, suffers reprisals for coming forward.

11 Section 1 of the Act describes the purposes which are:

(a) to encourage and facilitate disclosures of improper conduct by public officers and public bodies; and

(ii) persons who may suffer reprisals in relation to those disclosures; and

(c) to provide for matters disclosed to be properly investigated and dealt with.

12 The plaintiff submits that an action for loss and damage brought under s 19 of the Act need not be confined to injury or serious injury. If an employee is prohibited from bringing a proceeding in relation to a workplace related injury caused by detrimental action, it will become necessary to disentangle the loss and damage attributable to the injury from that attributable to intimidation, harassment, discrimination, disadvantage and adverse treatment.

13 The first and second defendants, like the plaintiff, submit that both enactments sit comfortably with each other. Persons who may suffer detrimental action in reprisal for a protected disclosure may, but need not, include employees. The injury suffered may, or may not, arise out of or in the course of employment. They submit that if a claim is made in respect of injury arising out of and in the course of their employment the claim is amenable to the limitations imposed by s 134AB. There being no inconsistency, there is no occasion to consider whether the provisions of the Accident Compensation Act are to be read down as if s 19 of the Act is a proviso.

14 The plaintiff relies upon the judgment of Ashley J in Bentley v Furlan[2] in which his Honour considered the relationship between s 86(1) of the Sentencing Act 1991, which authorised the court to pay compensation to a victim following a conviction for a crime and the provisions of s 93(1) of the Transport Accident Act 1986, which prohibited a person recovering damages in respect of an injury or death as a result of a transport accident except in accordance with that section. The plaintiff in that case was injured in a transport accident when he was struck by a motor vehicle driven by the defendant. The defendant was convicted of a number of related offences. Ashley J found that an application for compensation under s 86(1) of the Sentencing Act had no point of connection with claims regulated under the Transport Accident Act other than that both claims may include compensation for pain and suffering. His Honour held that the relevant provisions of the Transport Accident Act addressed traditional common law proceedings and not an application for pain and suffering compensation made under s 86(1) of the Sentencing Act. The plaintiff, in the present case, seeks to draw the same distinction notwithstanding the obvious differences between the legislation under review in that case and in this case. For that reason, the analysis undertaken by Ashley J in Bentley v Furlan is of limited assistance in the resolution of the present dispute.

15 In my opinion, an important feature of this proceeding, being a claim for damages, including exemplary damages under s 19 of the Act, is that the cause of action was not known to the law prior to the enactment of the legislation. It is instructive to compare the basis for compensation under s 19 of the Act with the Accident Compensation Act. The Accident Compensation Act is concerned with compensation for injury, permitting the commencement of a proceeding to recover damages only where there is serious injury. Injury is defined to mean "any physical or mental injury" and, without limiting the generality of that definition, includes -

(b) a disease contracted by a worker in the course of the worker's employment (whether at, or away from, the place of employment);

(c) a recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing injury or disease;[3]

16 Under the Act a person who takes detrimental action against a person in reprisal for a protected disclosure is liable in damages to that person. Detrimental action includes injury but importantly, extends to what may be described as collateral damage to a person's career, profession or trade, all of which may be apt to describe aspects of loss and damage suffered by employees as well as other classes of person. The breadth of the compensable loss and damage under the Act defines the cause of action within an entirely different category to claims under the Accident Compensation Act, notwithstanding an overlap that might occur in the case of injury.

17 Section 19(4) of the Act is also important as it expressly preserves the right of a plaintiff, claiming compensation under the Act, to claim additional rights and remedies. In my view the claim made by the plaintiff for compensation under the Accident Compensation Act for workplace related injury is such an additional right. Section 19(4) reflects a legislative intention to create a new right to compensation and remedies which are additional to those already in existence. There is a corresponding intention evident from that provision that the rights and remedies created by s 19 are not to be limited by the existence of those other rights and, more particularly, any limitation upon them. In my opinion s 19 creates a new, novel and additional class of rights and remedies to those which already existed, including rights under the Accident Compensation Act. The remedies available under s 19 are not to be limited by a reflection of the limitations upon the exercise of existing rights such as that imposed under s. 134AB for work related injury.

18 To deny to the plaintiff the right to claim the full range of compensation available under the Act, merely because the plaintiff is an employee who suffered detrimental action arising out of or in the course of employment would, in my view, offend the legislative purpose by significantly limiting the objects of the Act as an instrument of protection for persons many of whom will be employees. If the defendant's submission is accepted an employee, in the position of the plaintiff, must dissect from any "injury" the other compensable detriment which may become difficult when the cause of the collateral damage overlaps with the cause of the injury. The injury may be a by-product of the damage to employment and career prospects.

19 Furthermore, when a court, faced with a claim for an award of exemplary damages, comes to consider whether the defendant acted in contumelious disregard of the plaintiff's rights[4], the rights under consideration must be all of the plaintiff's rights under the Act. Is a court to disregard the conduct of the employer insofar as it caused injury? Such an outcome could not have been intended by the legislature. In my view, to require a plaintiff to confront such complexity when formulating a claim under s 19 would act as a very great disincentive to disclosure and compromise the purpose of the Act. To deploy, with licence, the words of Ashley J in Bentley v Furlan, I am convinced that the two legislative schemes can comfortably co-exist.

20 In Reeves-Board v Queensland University of Technology[5] Mullins J considered a similar question in relation to the interface between the WorkCover Queensland Act 1996 and the Whistleblowers Protection Act 1994. Under s 302 of the WorkCover Act certain procedural conditions were required to be satisfied before a claimant was permitted to commence a proceeding for damages. The plaintiff in that case claimed damages for the tort of reprisal pursuant to s 43(1) of the Whistleblowers Act which provided that "a reprisal is a tort and a person who takes a reprisal is liable in damages to anyone who suffers detriment as a result". Detriment was defined as including personal injury or personal prejudice to safety; property damage or loss; intimidation or harassment; adverse discrimination, disadvantage or adverse treatment about career, profession, employment, trade or business; threats of detriment; and financial loss from detriment. Mullins J held that to the extent that the plaintiff was seeking to recover damages for personal injury for the tort of reprisal, the personal injury arose out of her employment by the university and the claim was amenable to the conditions for the commencement of a proceeding under s 302 of the WorkCover Queensland Act. Her Honour concluded:

Although the [Whistleblowers Act] is remedial legislation, the [WorkCover Act] was enacted subsequently. The provisions of the [WorkCover Act] must be given effect in relation to a cause of action arising under the [Whistleblowers Act] if that is the effect of the [WorkCover Act]. There is no provision that the respondent can point to which shows an intention of the legislature to exclude causes of action under the [Whistleblowers Act] from the operation of the [WorkCover Act].

To the extent that the claim for damages for the tort of reprisal seeks to claim damages for personal injury by an employee from an employer to which the employment was a significant contributing factor, there must be compliance with s 302 of the [WorkCover Act] in relation to the commencement of the proceeding for damages for personal injury.

21 The Queensland legislative provisions under consideration by Mullins J are different in some material respects to the Victorian legislation now under consideration. The Act creates a new statutory cause of action. In Queensland the WorkCover Act was enacted after the Whistleblowers Act. In Victoria, the Accident Compensation Act pre-dated the Act. Quite apart from the sequence of the legislation, I am firmly persuaded that the rights granted under s 19 are in addition to and not limited by the Accident Compensation Act. Section 134AB does not purport to regulate a statutory cause of action which did not exist at the time of its enactment. Rights under the Accident Compensation Act fall readily within the saving provision of s 19(4) which discloses an intention that the rights created thereunder should not be limited by the existence of other rights and consequently, limitations on the exercise of those rights such as the limitation imposed by s 134AB of the Accident Compensation Act.

22 The purpose of the Act would be frustrated if those who suffered detrimental action in the workplace were denied the full range of remedies available under the Act merely because any injury they suffer arose out of or in the course of their employment. In my opinion the two legislative schemes are designed to and can co-exist without the need to read down or imply a proviso to s.134AB. There is no inconsistency. Section 134AB of the Accident Compensation Act does not prohibit a claim for damages for physical or mental injury (not being serious injury) under s 19 even though the injury arose out of or in the course of employment. Nor is the plaintiff precluded from bringing this proceeding for damages, including exemplary damages under s 19 of the Act. Accordingly, I would answer both questions, No.

[1] [2005] VSCA 33; (2005) 14 VR 622 at [626-7].

[2] [1999] VSC 481.

[3] Section 5, Accident Compensation Act 1985.

[4] Coloca v BP Australia Ltd [1992] VicRp 74; [1992] 2 VR 441.

[5] (2002) Qd R 85.