RJ Brodie (Holdings) Pty Ltd v Pennell

High Court of Australia|1968-07-01|Before: Owen JJ, Jacobs J, Walsh J

High Court of Australia Kitto Taylor, Menzies, Windeyer and Owen JJ. RJ Brodie (Holdings) Pty Ltd v Pennell [1968] HCA 73

On 6th November 1964 the respondent, as a "worker" within the meaning of the Workers' Compensation Act, 1926-1964 N.S.W., obtained an award which, inter alia, provided for compensation in respect of partial incapacity resulting from injuries arising out of or in the course of his employment with the appellant. Partial incapacity was found to exist from 1st September 1964 onwards and the weekly amount of compensation, assessed pursuant to s. 11 (1) of the Act, was £10, that being the difference between his average weekly earnings before the injury and the amount which the Commission found he would be able to earn after the injury and during the period of partial incapacity.

(a) In the case of partial incapacity, the weekly payment shall in no case exceed the difference between the amount of the average weekly earnings of the worker before the injury, and the average weekly amount he is earning, or is able to earn, in some suitable employment or business, after the injury, but shall bear such relation to the amount of that difference as under the circumstances of the case may appear proper.

whilst s. 11 (2), to which it will be necessary to refer, was as follows: An employer shall provide suitable employment for his injured worker during the worker's partial incapacity for his pre-injury employment.

Upon any failure by such employer to provide suitable employment as aforesaid the worker's incapacity for work shall be deemed to be total, and he shall be compensated accordingly.

It was with the provisions of s. 11 (2) in mind that on 28th November 1964 the respondent wrote to the appellant requesting it to "provide me with suitable employment" but on 4th December 1964 the appellant replied and regretted "that we are unable to offer you suitable light employment". Thereupon, on 23rd February 1965, the respondent, contending that in the circumstances his compensation should be assessed as for total incapacity, applied to the Commission for a variation of the existing award. In the result the application was successful and compensation payable to the respondent was re-assessed "on the basis of notional total incapacity".

Although it was conceded before the Commission that the respondent was a worker whose compensable injuries had resulted at all material times in partial incapacity for his pre-injury employment, his right to compensation pursuant to s. 11 (2) from 9th December 1964 onwards was contested on the ground that as and from that date he had been engaged in a business undertaking from which he had derived a profit. His actual participation in the work undertaken in the business was, as his profits were, comparatively small and after payment of his outgoings he was left with a sum of £35 or thereabouts from a venture which had extended over approximately six months.

It is apparent that before the Commission the appellant contested its liability to pay compensation as for total incapacity after 9th December 1964 simply on the authority of Chudleigh v. David Bros. Pty. Ltd. [1] . That is to say, that its argument asserted that the mere fact that the respondent had earned profits in a business between 9th December 1964 and the date of the hearing was fatal to his claim pursuant to s. 11 (2) in respect of that period. This contention failed and, pursuant to s. 37 of the Act, the matter came before the Court of Appeal upon a case stated which raised for determination the question whether the Commission erred in law in holding "that since 9th December 1964 the respondent was liable to pay the applicant compensation on the basis of a notional total incapacity in accordance with the provisions of s. 11 (2) of the Workers' Compensation Act, 1926-1964 ". The members of the Court of Appeal divided on the question, two being of the opinion that it should be answered in the negative and one being of the contrary opinion. It is from the order of that Court that this appeal is now brought.

The majority in the Court of Appeal seems to have thought that Chudleigh's Case [1] did not support the wide proposition advanced by the appellant at the hearing. What was decided by that case, it was said by Jacobs J., "was that no worker was entitled even under s. 11 (2) to receive more by way of combination of actual earnings and compensation than his pre-injury average weekly earnings". "That was", he said, "the effect of the decision in Chudleigh's Case [1] and that was the intendment of its reasoning, despite the general statements which were made". Walsh J. did not agree with this view; he was satisfied that it was of the essence of the decision in Chudleigh's Case [1] that s. 11 (2) was "inapplicable in a case where the applicant for an award under it was earning money". Nevertheless he was not "entirely convinced" by the reasoning in the case but he was not prepared to say that it was manifestly wrong and to substitute some other view of the meaning of an admittedly difficult statutory provision.

(1961) 79 W.N. (N.S.W.) 517. 2. (1961) 79 W.N. (N.S.W.) 517. 3. (1961) 79 W.N. (N.S.W.) 517.

As we read Chudleigh's Case [1] we think it is clear enough that it adopts the view that a worker may not take advantage of s. 11 (2) when he is working and earning money whatever the amount of his earnings may be. This is manifest in the summation of the views of the Court at pp. 522, 523, where it is said: "In my view s. 11 (2) takes its stand only where the injured worker is not earning anything. He makes a claim for compensation. Section 11 (2) is designed to meet the case where the employer says to the injured worker "you are despite your injury able to earn something by working in a suitable job albeit at a reduced wage". At this point sub-s. (2) says to the employer you cannot be heard to say this. You have the onus of proving your statement and you can either provide that suitable job yourself or pay compensation on the basis of total incapacity. If the employer finds suitable employment at a lesser rate than the pre-accident earnings he must make up the difference under s. 11 (1). In my opinion such is the case here. The mandatory language of s. 11 (2) will only operate in Chudleigh's case if and when he claims that he cannot earn anything. Whilst he is earning a post-accident wage his rights are to be quantified under s. 11 (1). The collocation of s. 11 (2) with s. 11 (1) (a) in the same section affords ample warrant for construing s. 11 (2) as having no application to the case where the man "is earning". If this construction be adopted, any difficulty in giving to s. 11 as a whole a consistent and coherent meaning disappears, and furthermore s. 11 (2) becomes consistent with the whole doctrine of the compensation laws." To ignore the plain meaning of these passages would be, in our opinion, to disregard the very basis of the decision.

But we also think that the qualification which that decision placed upon operation of s. 11 (2) does not satisfactorily resolve the problems to which the sub-section gives rise. A clue to the true solution may, perhaps, be found in the somewhat loose language of the sub-section itself for the "provision" of suitable employment involves an element of mutuality. Employment is not a commodity which can be provided merely by an offer; it can in strictness be provided only by the employer and employee entering into and performing their obligation under a contract of service and this involves the co-operation of both employer and employee. There can, of course, be no "failure" on the part of an employer to provide suitable employment if the employee refuses, and continues to refuse, to enter his employment, or, if the facts show that the employee's conduct is inconsistent with the necessary degree of co-operation on his part. Such would be the case where the employee has undertaken full-time employment with another employer so long as such employment continues, or, where the employee moves his residence to a place so remote from the employer's place of business as to be quite incompatible with employment by that employer. Likewise, it would seem, the position would be the same where after his partially incapacitating injury the worker suffers further injuries or sickness resulting in total incapacity for any form of work. It must be remembered that not only is the obligation to provide suitable employment a continuing one but there must also be a continuing failure to provide suitable employment in order to entitle a worker to continuing benefits pursuant to s. 11 (2) and, in our view, there cannot be a continuing failure where the circumstances are such that it can be seen that throughout any relevant period the employee is not ready, willing or able to enter the employ of the pre-injury employer.

Whether or not there has been any such failure in relation to any period during the continuance of the partial incapacity is, of course, a question of fact to be determined in the light of all the circumstances including the situation of the worker. If throughout any such period he is engaged in activities which would have made it impossible for him at the same time to have performed the duties of an employment with his former employer there cannot be said to be a failure on the latter's part to provide suitable employment. This being so the vital question of fact in the present case was allowed to go by default on the original hearing for the only ground upon which the appellant denied liability pursuant to s. 11 (2) was that since the respondent had earned money after 9th December 1964 that sub-section did not apply. The question now is whether in the circumstances of the case the matter should be remitted to enable the Commission to determine the material question of fact. The appellant has asked us to adopt this course but upon a perusal of the evidence in the case it seems to us that there is no real basis for asserting that the very minor activities in which the respondent engaged after 9th December 1964 were such as to preclude him from asserting that he was, during the period in question, ready willing and able to enter into "suitable employment" with the appellant. This being so we think it is appropriate simply to order that the appeal be dismissed.

Special leave to appeal was granted to the appellant employer in order that it might contend that the decision of the Full Court of the Supreme Court of New South Wales in Chudleigh v. David Bros. Pty. Ltd. [1] , which was concerned with the construction of s. 11 (2) of the Workers' Compensation Act, 1926-1964 N.S.W., was correctly decided and governed this case. The majority of the Court of Appeal of the Supreme Court had, in answering in favour of the respondent worker a question stated by the Workers' Compensation Commission, distinguished the earlier decision in such a way as to cast doubt upon its correctness.

As the argument upon this appeal proceeded it became apparent that the appellant relied upon Chudleigh's Case [1] only as a last resort and that the primary contention on its behalf was that the matter should be remitted to the Workers' Compensation Commission for reconsideration of its decision that there had been a failure on the part of the appellant to provide a worker partially incapacitated for his pre-injury employment with suitable employment as required by s. 11 (2) of the Workers' Compensation Act.

In my opinion the appellant's primary submission should be rejected. The Workers' Compensation Commission found there was a failure to provide employment as required by s. 9. It is conceded that upon the evidence the Commission was right in so finding in respect of the period from 4th to 9th December, but the contention was that the Commission was in error in finding a failure to provide employment continuing beyond that date. I do not think that the question of law which the appellant now seeks to raise, i.e., the meaning of the phrase "failure to provide suitable employment", ever did arise before the Workers' Compensation Commission or the Supreme Court and I consider that the appellant is not at liberty to raise it in this Court. See Workers' Compensation Act, s. 37. Moreover, I consider that there was no evidence before the Workers' Compensation Commission upon which it could properly find that the failure, which it is conceded did take place, ceased on 9th December. All that happened was that the worker, having received a letter dated 4th December 1964 from the appellant stating "we regret that we are unable to offer you suitable light employment", bought two buildings for demolition and sale and employed two men under his part-time supervision to pull them down and reassemble them. The respondent over the period from 9th December 1964 to 22nd June 1965 made a profit of about £35 out of this enterprise. These circumstances afforded no basis for a conclusion that the respondent's "failure" came to an end on 9th December 1964.

The provision of employment imports, of course, mutuality between the employer and the worker and it is not difficult to see that where it is the worker who is responsible for a lack of mutuality there is no failure on the part of the employer to provide employment. How this principle should be applied to particular circumstances is not a matter to be dealt with now. It is sufficient to say that there was no evidence before the Commission upon which it could have found that the non-provision of employment which here occurred was in any sense the responsibility of the worker. It was wholly the responsibility of the appellant.

In Chudleigh's Case [1] it was decided, as the headnote accurately records, that "s. 11 (2) of the Workers' Compensation Act, 1926-1960, operates only when a partially incapacitated worker is not earning any remuneration at all, although able to earn some wage". With this I do not agree. There is no warrant in the section for denying its operation to a worker otherwise within its terms who earns some money while, for instance, waiting for his former employer to fulfil his obligation to provide suitable employment. The section is one of great difficulty which must give rise to many anomalies, but to deny its operation to a worker simply because he is earning some money is no solution of its problems and is unwarranted by its language.

As, in my opinion, both submissions of the appellant fail, I think that what this Court should now do is simply to dismiss the appeal with costs.

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