Statutory history
131 The proper construction of s 14 of the Workers Compensation Act, and its inter-relationship with ss 4 and 9, cannot properly be understood without reference to the statutory history. The progenitor of the New South Wales Act was the Workmen's Compensation Act, 1897 [60 & 61 Vict, Ch 37] ("the 1897 UK Act") which contained two elements of critical importance:
"1. (1) If in any employment to which this Act applies personal injury by accident arising out of and in the course of the employment is caused to a workman, his employer shall, subject as herein-after mentioned, be liable to pay compensation ….
(2) Provided that:-
…
(c) If it is proved that the injury to a workman is attributable to the serious and wilful misconduct of that workman, any compensation claimed in respect of that injury shall be disallowed."
132 Two aspects of those provisions are noteworthy. First, the primary test involved the combination of two elements, namely that the injury be one arising "out of" the employment ("the causal condition") and "in the course of" the employment ("the temporal condition"): see Smith v Australian Woollen Mills Ltd [1933] HCA 60; 50 CLR 504. Secondly, the exception in relation to serous and wilful misconduct contained an element of uncertainty of purpose. On one view, it may have been intended to do no more than place the burden of proof on the employer in relation to such misconduct, once it was shown the accident appeared to have arisen out of and in the course of the employment. On the other hand, it was open to read the proviso as based on an assumption that, without such express provision, an injury attributable to serious and wilful misconduct could nevertheless be found to arise out of and in the course of the employment.
133 In its original form, there was no need to resolve the inter-relationship of the primary test and the exception. However, in 1906 the proviso was amended to include an exception with the effect that compensation would be disallowed as a result of serious and wilful misconduct, "unless the injury results in death or serious and permanent disablement": Workmen's Compensation Act 1906 ("the 1906 UK Act"). Putting to one side the addition of the word "solely" before the phrase "attributable to serious and wilful misconduct of worker", the language found in s 14(2) of the 1987 Act follows that of the 1906 UK amendment.
134 That amendment did require consideration of the relationship between the primary provision and the exclusionary provision. In AG Moore & Co v Donnelly [1921] 1 AC 329 a miner who had breached a regulation was denied compensation. As explained by Lord Blanesburgh in the subsequent case of Thomas v Ocean Coal Co Ltd [1933] AC 100 at 114:
"Donnelly in the course of his employment fired a shot by means of a fuse and detonator and retired. But in contravention of para 3(a) of the [Explosives in Coal Mines Order of 1913] he returned to the place of the shot in less than an hour, when the shot, which had missed fire, blew off in his face and permanently injured him. It was held that the Order was such that his breach of it took him outside the sphere of his employment, so that the risk in which he had involved himself had ceased to be reasonably incidental to that employment. In other words, his accident had not arisen out of and in the course of his employment as required by section 1, subsection (1), to which, as Lord Dunedin had pointed out, section 1, subsection (1)(b), was merely a rider."
135 In 1923, the 1897 UK Act was amended to include a provision, (s 7 of the Workmen's Compensation Act 1923) which later became s 1(2) of the Workmen's Compensation Act 1925, in the following terms:
"(2) For the purposes of this Act, an accident resulting in the death or serious and permanent disablement of a workman shall be deemed to arise out of and in the course of his employment, notwithstanding that the workman was at the time when the accident happened acting in contravention of any statutory or other regulation applicable to his employment, or of any orders given by or on behalf of his employer, or that he was acting without instructions from his employer, if such act was done by the workman for the purposes of and in connection with his employer's trade or business."
136 This provision was the progenitor of s 14(1) of the 1987 Act. As explained in Thomas v Ocean Coal, the deeming provision effectively set up a new test to be applied in such cases; Lord Blanesburgh stated at 114-115:
"It is instructive to see how this result has been accomplished by the new section. It is not by a statutory statement equivalent to an assertion that such an accident as Donnelly's did in fact arise out of and in the course of his employment. Such a statement would not have been true even in the mouth of the Legislature. It has not been made. What the section has said is that such an accident as Donnelly's, with any other accident covered by the terms of the section, shall be deemed to have arisen out of and in the course of the workman's employment whether in fact it did so nor not. In other words - differing in this from section 1, subsection (1)(b) - section 1, subsection (2) does not require that an accident within its scope shall arise out of and in the course of the employment at all. It is enough that the accident is of such a character that complying the conditions of the subsection it may thereunder 'be deemed' to have so arisen."
137 Section 14(1) of the 1987 Act is not in terms a deeming provision, nor does it refer to the causal and temporal conditions in s 4; it merely states that compensation "is payable" where its terms are complied with. Its language contrasts with that of ss 10, 11 and 12 which identify circumstances in which "for the purposes of this Act" the causal or temporal conditions in s 4 are satisfied. Subject to two further issues which remain to be addressed, one would expect from the legislative history that s 14(1) would operate, independently of the primary basis of entitlement, as achieved by the 1923 amendment to the 1897 UK Act.
138 There are two qualifications which need to be considered. First, as pointed out by Lord Atkin in Noble v Southern Railway Co [1940] AC 583 at 595-596, in the case of less serious injuries, it may still be necessary to consider whether an act of the worker, in contravention of a regulation applicable to the employment, or an order given by the employer, might take the conduct outside the scope of the primary test. Secondly, it will be necessary to consider whether the provision relating to "serious and wilful misconduct" operates in New South Wales as it did following the 1906 UK Act, namely as a rider to, and therefore relevant only when there had been satisfaction of, the primary test. Thirdly, where, on its face, the act was undertaken for the purposes of and in connection with the employer's business, it was not necessary to look at the subjective motive of the worker in disregarding the relevant regulation or instruction: Noble at 590 and 593-594 (Viscount Maugham); 596 (Lord Atkin).
139 Before leaving the UK legislation, it should be noted that there was (and is) no provision equivalent to s 10 of the 1987 Act with respect to periodic journey claims. That was a matter of some significance because the early English case law, discussed by Nielson J in the Compensation Court in Smith v Brown (1998) 16 NSWCCR 492 (relied on by the appellant) identified circumstances in which journeys to and from work could be seen as satisfying the test of being "in the course of employment". It was those cases, many of which dealt with travel by train to inaccessible places of employment, that led Nielson J to conclude that where a shearing contractor provided transport for a team of shearers to move between properties and their homes, the passengers in the car were in the course of their employment whilst travelling from a rural property, where they had been working, to their homes in Walgett. (Having reached that conclusion, his Honour nevertheless discussed the operation of s 10, to determine whether there had been a deviation or other basis for excluding the journey from one in which the passengers and driver were engaged, in the course of their employment, prior to the accident.)
140 The current United Kingdom provision reflects the extent to which journeys were covered by the primary basis of entitlement, according to UK case law: see Social Security Contributions and Benefits Act 1992 (UK), Pt V "Benefit for Industrial Injuries": s 99. The uncertainty arising from the earlier case law was described in 1986: see Lewis R, "Accidents Whilst Travelling and the Limits of Compensation for Industrial Injury" (1986) J Soc Welfare L 193.
141 The second qualification derives from the legislative history in New South Wales. The first Act in this State, the Workmen's Compensation Act 1910 (NSW) ("the 1910 Act") in fact derived from a New Zealand Act of 1900, but it is not necessary to refer to that source. The operative provision of the 1910 Act, s 5, providing the primary basis of entitlement, faithfully reflected s 1(1) of the 1897 UK Act. However, thereafter the form changed, s 6 not being by way of proviso to the primary basis of entitlement, but merely stating that the employer "shall not be liable" in respect of an injury "which is directly attributable to the serious or wilful misconduct of the workman". Section 5(1) and (2) of the Workmen's Compensation Act 1916 (NSW) ("the 1916 Act") reverted to the form of the 1897 UK Act, without the exception for serious and wilful misconduct giving rise to serious and permanent disablement. In other words, the 1916 Act did not pick up the amendments made by the 1906 UK Act.
142 Significant amendments were made by the Workers Compensation Act, 1926 (NSW) ("the 1926 Act"). The operative provision became s 7, which relevantly provided:
"7.(1) A worker who receives personal injury -
(a) in the course of his employment, whether at or away from his place of employment; or
(b) without his own default or wilful act, on the daily or other periodic journey between his place of abode and his place of employment,
(and in the case of the death of the worker, his dependants) shall receive compensation from his employer in accordance with this Act. …
(2) Compensation shall be payable in respect of any injury resulting in the death or serious and permanent disablement of a worker, notwithstanding that the worker was, at the time when the injury was received, in a place not directly concerned with his employment, but forming part of the employer's premises, or acting in contravention of any statutory or other regulation applicable to his employment, or of any orders given by or on behalf of his employer, or that he was acting without instructions from his employer, if such act was done by the worker for the purposes of and in connection with his employer's trade and business.
(3) Provided that -
…
(b) if it is proved that the injury to a worker is solely attributable to the serious and wilful misconduct of the worker, any compensation claimed in respect of that injury shall, unless the injury results in death or serious and permanent disablement, be disallowed;
(c) no compensation shall be payable on account of any injury to or death of a worker caused by an intentional self-inflicted injury."
143 This legislation picked up not only the 1906 UK amendments, but also the 1923 amendments. However, the structure of the Act had the potential to confuse the effect of the amendments. Thus, the provisos, now contained in sub-s (3) potentially affected not only the primary liability (contained in sub-s (1)), but also the daily or other periodic journey extension (contained in sub-s (1)) and the separate liability for serious and permanent disablement notwithstanding that the act was unauthorised or prohibited (now contained in sub-s (2)). Whether the variation caused by the restructuring was intentional, is not clear.
144 The Workers' Compensation (Amendment) Act 1929 (NSW) ("the 1929 Amendment Act") made further critical changes. It replaced s 7(1), but only so as to exclude the journey provisions from that subsection. More importantly, it replaced sub-s 7(2) so as to adopt the deeming provision in respect of unauthorised or prohibited conduct adopting the language of the 1923 UK amendment.
145 It may be noted that the novel structure of the 1926 Act omitted any reference to "arising out of" employment and, putting to one side journey claims, referred only to injury "in the course of" employment. The replacement of s 7(1) by the 1929 Amendment Act also removed reference to "in the course of" employment and introduced, for the first time, a definition of "injury" to mean "personal injury arising out of and in the course of the employment", to be included in s 6. That had the potential for significant confusion, which subsists today. The combination of the causal and temporal conditions in the primary provision, s 7(1), was not controversial. However, the creation of the new definition meant that the same factors were introduced (for the first time) in the alternative basis for compensation in s 7(2).
146 The creation of the separate definition was to have a further consequence when, in 1942, the provisions for journey claims were reintroduced. Was the term "injury" then found in s 7(1)(b), limited to an injury as defined? If so, it would have been unclear to what extent the new provision expanded the basis for entitlement to compensation.
147 The omission of the reference to the causal and temporal conditions appears to have arisen from adopting the scheme of the Workers' Compensation Act 1916 (Qld), which in turn appears to have relied upon an assortment of progenitors, including ones obtained from States of the USA. In the second reading speech of the 1929 Amendment Bill, the Minister stated (NSW Parliamentary Debates (2nd series) vol 117, 22 March 1929, p 4073, col 2):
"The first amendment deals with the definition of 'injury'. It brings that definition into line with the definition of the word 'accident' in the English Act. Both words mean the same thing."
148 The precise import of the Minister's statement is neither clear nor accurate. However, it is evident that the potential consequential effects of including the causal and temporal conditions within a new definition, were not intended or, in all likelihood, appreciated. It seems unlikely that the structural change was intended to affect the operation of the substantive provisions.
149 Further changes have occurred, the significance of which may not have been appreciated at the time. Thus, the definition section in the 1926 Act (s 6(1)) commenced, "In this Act, unless the context or subject matter otherwise indicates or requires". Those words were not changed with the introduction of the new definition of "injury" in 1929. However, in the 1987 Act, the definition of "injury", now found in s 4, is not the subject of qualifying words relating to contrary intention.
150 In Webb v The Commissioner for Railways (NSW) [1938] HCA 24; 59 CLR 593 the High Court considered a claim by a worker under s 7(2), which, following the 1929 Amendment Act, deemed unauthorised acts to arise out of and in the course of employment in the circumstances prescribed. The worker had findings of fact against him in the Commission, with which the Court was not prepared to interfere. Rich J noted that it had been conceded that the injury could not have been found to have arisen out of and in the course of his employment: p 603. Nevertheless, that did not preclude his claim under s 7(2). His Honour held that the terminology "for the purposes of and in connection with his employer's trade or business" was "wider than the worker's employment": p 604. There was no suggestion in Webb that the definition of "injury" should be imported into the deeming provision, a step which would tend to render the provision ineffective. Whether that principle still prevails is less clear.
151 Not only have the introductory words to the definition section changed, but other provisions have been introduced. Thus, there are now provisions, said to operate "for the purposes of this Act", and thus in the nature of deeming provisions, which incorporate journey claims (s 10), recess claims (s 11) and claims by trade union representatives (s 12), as providing that certain injuries are injuries "arising out of or in the course of employment". Section 9A, which precludes compensation in respect of injuries unless the employment concerned "was a substantial contributing factor to the injury", does not apply to those provisions just referred: s 9A(4). However, there is no express exclusion in relation to s 14(1), despite the fact that that provision, in its earlier emanations, had, although not entirely consistently, been treated as an independent basis for an entitlement to compensation.
152 Thus, in Tompsett v Southern Portland Cement Ltd (1941) 41 SR(NSW) 126, Jordan CJ described the deeming provision in s 7(2) as dealing
"… only with cases where, but for some breach of regulation, etc, the worker would have been acting within the scope of his employment. It does not touch the case where, irrespectively of any prohibition, the thing done would stand outside the scope of his employment": at 130.
153 This proposition is sourced to the language of Lord Blanesburgh in Thomas v Ocean Coal at 115. Whether or not that support is available from the statement of Lord Blanesburgh, language supportive of the view explained by Jordan CJ may be found in the opinion of Lord Buckmaster, to which his Honour had earlier referred.
154 In Tiver Constructions Pty Ltd v Clair (1992) 110 FLR 239 at 247-248, the Northern Territory Court of Appeal, considered the statutory equivalents in that jurisdiction of subss 14(1) and (2) of the 1987 Act. The first relevant provision of the Workmen's Compensation Act 1949 (NT), subs 7(1), was in the usual form for a primary entitlement, providing for an injury arising out of or in the course of employment. Subsection 7(3) contained the exception for serious and wilful misconduct, in terms equivalent to s 14(2) of the 1987 Act (but omitting the qualifier, "solely"). Subsection 7(4) was similar in structure and effect to s 14(1) of the 1987 Act.
155 Relying on observations of Lord Macmillan in Harris v Associated Portland Cement Manufacturers Ltd [1939] AC 71 at 83-84, the Court in Tiver concluded that it was, in respect of a claim engaging each of subss 7(1), (2) and (4), open to the employer to demonstrate that the injury did not occur in the course of employment, regardless of the internal statutory exception. That approach was followed by the majority in this Court in Higgins v Galibal Pty Ltd (t/as Hotel Nikko Darling Harbour) (1998) 45 NSWLR 45 at 54 (Priestley JA, Stein JA agreeing; Powell JA dissenting). However, the suggestion that the analysis of Lord Macmillan applied in respect of s 7(4), which was the equivalent of s 14(1) of the 1987 Act, dealing with unauthorised activity is inconsistent with the context in which His Lordship spoke and the legislative history, as then well-understood
156 Two other variations in the legislation over time need to be noted. First, the dual requirement in the definition of "injury" in s 6 of the 1926 Act (as amended in 1929) was replaced in 1942, so as to make the causal and temporal factors alternative bases for entitlement: Workers' Compensation Act and Workmen's Compensation (Broken Hill) Act (Amendment) Act 1942 (NSW), s 2(a)(ii). That is, it was sufficient (prior to the enactment of s 9A) if the injury either arose out of the employment or arose in the course of the employment. For the latter to be satisfied, no causal link was required: Kavanagh v The Commonwealth [1960] HCA 25; 103 CLR 547 at 556 (Dixon CJ), dealing with similar language in s 9(1) of the Commonwealth Employees' Compensation Act 1930 (Cth).
157 Secondly, a more expansive view of the "course of employment" has been taken in relation to worker's living away from home or temporarily away from their place of residence, being cases commonly referred to as "interval" or "interlude" cases: see, eg, Hatzimanolis.
158 Much of the debate appears to have arisen from the use in Hatzimanolis of the term "gross misconduct" as a basis for taking a worker outside the course of his or her employment, during an interval within an episode of employment: at 484. It has been treated as significant that the High Court did not use the well known phrase "serious and wilful misconduct", although the phrase used may differ in meaning only in respects which are immaterial: see Tiver at 246-8; Higgins at 57E (Priestley JA).
159 Whether or not that is so, it is clear that the High Court in Hatzimanolis did not direct its attention to s 14(2) in the 1987 Act. If it had, it would have needed to consider whether the worker suffered a serious and permanent disablement. Hatzimanolis, therefore, does not address the question which arises in the present case, namely whether s 14(1) provides an independent entitlement to compensation, whereas s 14(2), consistently with its historical origins, constitutes an exception from the primary entitlement, subject to a qualifying exception in favour of injuries resulting in death or serious and permanent disablement. In Higgins, Priestley JA concluded (p 58B-C):
"Thus, I read s 14(2) as if it said:
'If it is proved that an injury to a worker which but for this subsection would because of the worker's serious and wilful misconduct be denied compensation under s 9 because of the case law taking the worker out of the defined meaning of injury, by virtue of this subsection when that injury is solely attributable to the serious and wilful misconduct of the worker and results in death or serious and permanent disablement compensation is payable in respect of that injury.'"
160 His Honour stated that he adopted that approach, because the only alternative would be to give s 14(2) "no operation at all". However, that appears to give s 14(2) a form similar to s 14(1) as an independent source of entitlement. Historically the provisions served different functions; s 14(2) started life as a limitation on the primary entitlement in the case of relevant misconduct. When a qualifying exception was made to it, in the case of death or serious and permanent disablement, the appropriate reading required that the primary entitlement to compensation was restored, by disregarding the disqualifying misconduct: it did not create a new form of entitlement. Thus the injury must, at that time, otherwise have arisen out of and in the course of the employment.
161 It is also necessary to refer to the decision of this Court in WorkCover Authority of NSW v Walsh [2004] NSWCA 186. That case involved a worker employed as a truck driver who, on a break during a trip from Wagga Wagga to Sydney, took methamphetamine to keep him awake for the remainder of the journey, but died as a consequence of taking the drug. A claim by his dependants succeeded before the Commission. In this Court, an appeal by the WorkCover Authority, (being the party responsible for the uninsured employer) was dismissed.
162 The reasoning was largely unremarkable. It involved two considerations of no present relevance, first, the Court rejected an argument based upon what were said to be analogous circumstances in which a claim had failed, namely where a worker left his duties, went to a room within the place of employment, and injected himself with heroin, as a result of which he collapsed over a heater and suffered serious burns: see Pollock v Stickfast Labels Pty Ltd (In liq) [2002] NSWCA 360; 24 NSWCCR 279. In Pollock the act of the worker was entirely unrelated to his employment, being to satisfy a personal addiction. In Walsh, the ingestion of methamphetamine was to permit the worker to continue with his work, namely to keep himself awake through a long period of driving. Secondly, Walsh rejected a claim that the death was an intentional self-inflicted injury, within the scope of s 14(3).
163 Relevantly for present purposes, Walsh turned upon rejection of the proposition that, whilst his conduct was otherwise in the course of his employment, the deceased's act in taking methamphetamine was "gross misconduct" and took him outside the course of his employment. After a careful consideration of the leading authorities, Tobias JA rejected that submission on two "independent" bases. The first was that s 14(2) "neutralised" the effect of the "gross misconduct": at [56]. The second was that the misconduct was not such as to take him outside the course of his employment in the sense that his act was "entirely foreign or repugnant to his employment": at [56]. In the end his Honour concluded that "the ingestion by the deceased of the amphetamines did not take him outside the course of his employment" but that, if it did, "s 14(2) applies to entitle his dependants to compensation": at [63].
164 There remains the question of the relationship of s 14(1) to the primary basis of entitlement. The legislative history suggests it provides an independent basis of liability. On the other hand, the placement of the conditions of entitlement in a definition section place that view in doubt.
165 Generally, the importation of a definition into the language used in an operative provision will be understood to be subject to an implied qualification, "unless the contrary intention appears", in the absence of express language to that effect: Interpretation Act 1987 (NSW), s 6. That implication arises because it is always necessary to read the language of a statute in context, a principle which applies as much to a definition as to an operative provision. No doubt it is appropriate, as emphasised in Pearce and Geddes, Statutory Interpretation in Australia (6th ed, 2006) at [6.62], not to depart too readily from the direction as to meaning provided by an express definition. On the other hand, as explained by Dixon CJ in the context of another provision of the 1926 Act, in Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; 92 CLR 390 at 397:
"It may be illogical to speak of a man as a recipient of a sum of money in prescribing the calculation on the result of which his receiving the money is contingent, but the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed."
166 The importance of the general principle that words must be read in their context so as to give effect, consistently and coherently, to the apparent purpose of the provision so read, has been described as a "cardinal rule of statutory interpretation": K&S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; 157 CLR 309 at 315 (Mason J). For that reason, the absence of an express provision, and even the deletion of an express provision, in relation to contrary intention, is not determinative of the circumstances in which the definition of "injury" should be applied.
167 History suggests that the s 4 definition of "injury" should not be imported into s 14(1), which has its own criteria of connection with the employer's trade or business. That construction, however, was considered and rejected, after expressly addressing the history of the provision, in Love v Lysaghts Works Pty Ltd (1957) 57 SR(NSW) 70 (Herron, Sugerman and McClemens JJ). Even McClemens J, who dissented as to the result, felt unable to support such a construction as it would have involved the term "injury" being used in its defined sense in one part of then s 7, but not in another. His Honour concluded that a finding that the injury arose from an act done "for the purposes of and in connection with his employer's trade" (being the final words of the present s 14(1)) satisfied the alternative (causal condition) in the definition of "injury", as arising out of the employment: at 90. (The other members of the Court were unable to determine whether such a factual finding had been made.)
168 The need to satisfy at least one limb of the definition of "injury", when applying s 14(1), has been followed by Nielson J in the Compensation Court in Clyde v State of New South Wales (TAFE Commission) [1995] NSWCC 38; 12 NSWCCR 541 at 561 and Stojkovic v Telford Management Pty Ltd [1998] NSWCC 8; 16 NSWCCR 165 at [48]. It was also followed by this Court in Wheeler v Commissioner for Railways [1969] 2 NSWR 474. It was not suggested in the present case that this line of authority should not be followed, nor that it was clearly wrong.
169 In any event, whether s 14(1) provides an independent basis of entitlement, or whether the use of the term "injury" imports the definition including the primary basis of entitlement, is not a matter which needs to be determined in these proceedings, despite the fact that the issues were raised on the arguments presented by the parties. It is sufficient to assume, in favour of the appellant, that an independent basis of claim is available under s 14(1). On the findings of fact made by the Commission, as discussed below, such a claim would fail.