The proper construction of s 128
33 Section 128 provides:
Shared liability
If:
(a) an injury suffered by an employee arises out of, or in the course of, the employee's employment with more than one employer; and
(b) one of the employers has paid compensation to the employee in respect of the injury;
the employer who paid the compensation may, by an action in a court of competent jurisdiction, recover from the other employer or employers an amount equal to the compensation paid multiplied by the proportion of the contribution to the injury made by the employment of the other employer or employers.
34 The Appellant says that the word 'compensation' in s 128 means 'compensation under the Act'. Since the Respondent had dismissed both the estate's claim for compensation and Mrs O'Donnell's dependency claim and whereas the Tribunal had dismissed both of their ensuing appeals by consent, it followed that whatever the Respondent had paid Mrs O'Donnell could not have been paid under the Act. Consequently, the Appellant could not be liable under s 128 for the precondition in s 128(b) had not been met.
35 In more detail, the first step in this argument was as follows: the liability of the Respondent to pay compensation to an employee under the Act was contingent upon it having made a determination under s 24: 'The liability of an employer to pay compensation to a person under this Act is the liability of the employer to pay the amount or amounts that the employer determines, in accordance with this Act, to be payable to the person'. Until such a determination was made the employer had no liability to pay anything. A determination under s 24 was required to be in writing (s 127) and where such a determination was made the Respondent was bound to pay the compensation within 30 days of the date of the determination: s 130(1). In this case, the Respondent did not at any time prior to making the payments of $300,000 and $20,000 make a determination that any amount was payable either to the estate or to Mrs O'Donnell. Consequently, it had no liability to pay compensation to either under the Act. Thus the payments cannot have been payments of compensation under the Act and those payments cannot have operated to have discharged any liability that the Respondent had arising from the Act.
36 The second step was that this mattered because s 128 only applied to compensation which had been paid under the Act. It was true that s 128 referred to 'compensation' rather than 'compensation payable under this Act' but it was inevitable that those words were imported into s 128 by its use of the expression 'an injury suffered by an employee' in ss 128(a) and (b). This phrase was defined in s 6 to be 'a reference to an injury suffered by the employee for which compensation is payable under this Act'. Thus the injury referred to in s 128 had to be an injury for which 'compensation is payable under this is Act'. When that definition was brought to account the word 'compensation' appeared in s 128 four times. The first two occurrences arose from its importation via s 6 and were explicitly a reference to compensation payable under the Act. The third and fourth references were to the bare word 'compensation' and did not explicitly advert to 'compensation payable under the Act'. However, the word 'compensation' was to be given a uniform meaning throughout s 128. Thus, 'compensation' had to be construed as 'compensation under the Act' to avoid incoherence within s 128 itself.
37 The Respondent submitted that these contentions should be rejected for the reasons which were given by the primary judge. His Honour's approach was essentially as follows. First, the word which appeared in s 128 was 'compensation' and this was an ordinary word with an ordinary meaning. The two payments of $300,000 and $20,000 paid by the Respondent to the estate and Mrs O'Donnell were clearly compensation in this ordinary sense, whatever else one might say. Secondly, the question therefore became whether in construing s 128 that the ordinary meaning should be displaced in favour of the narrower meaning suggested by the Appellant, namely that 'compensation' meant 'compensation under the Act'. Necessarily this required a consideration of the terms of the Act. Thirdly, his Honour saw the Act as containing within it two distinct schemes, one concerned with the award of compensation to persons making claims such as employees, and the other a more particular scheme dealing only with rights of contribution between employers. Fourthly, whilst it was true that if the definition of 'injury suffered by an employee' in s 6 were applied to that expression in s 128 it would most likely mean that the references to compensation in s 128 should be read as references to 'compensation under the Act', the definition in s 6 was part of the general scheme his Honour identified as dealing with claims by employees and was inapplicable to s 128 which was part of the more particular scheme dealing with claims by employers for contribution. In that regard, it was to be noted that the definition in s 6 was expressed only to be applicable to the extent that the Act did not indicate a contrary intention. Fifthly, since the definition in s 6 was not to be imported into s 128, the word 'compensation' should be given its ordinary meaning in that provision which was therefore broad enough to include the payments which the Respondent had made. Finally, the Respondent was therefore entitled to recover contribution from the Appellant under s 128.
38 We do not accept that this construction is, with respect, correct. It may be accepted as orthodox in statutory interpretation that part of a statute may be characterised as being specific in nature and that, in such a case, it may often be legitimate to construe those parts as prevailing over other parts of the same statute which are of a more general nature. For example, in Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia [1932] HCA 9; 47 CLR 1 ('Anthony Hordern') the former Commonwealth Court of Conciliation and Arbitration had made an award in the clothing industry which required the employers bound by it to give preference to women who were members of the respondent union over women who were not. As Evatt J explained at 12, the point of this provision was to prevent the rise of sweat shops in which non-unionised women employees were exploited.
39 The Conciliation and Arbitration Court had a specific power to include in an award a clause requiring employers to give preference to unionised labour in s 40 of the former Commonwealth Conciliation and Arbitration Act 1904 (Cth). However, s 40 had been interpreted in such a way that it could not be used so as to allow preference to be given to one set of union members over another. The employer submitted that the provision gave preference to female members of the union over male members of the union and hence could not be justified under s 40. A majority of the High Court accepted this proposition. However, there was also a general power given to the Arbitration Court by ss 24(2) and 38(a) to hear and resolve industrial disputes and the union sought to argue that even if the clause could not be justified under s 40 it was authorised by these more general provisions. The employer denied this and its counsel, Mr Robert Menzies QC, submitted that s 40 was a 'code' whose strictures would be idle if resort could be had to the general power ss 24(2) and 38(a) to outflank them. The High Court agreed. At 7, Gavan Duffy CJ and Dixon J said this of the ability of the general power to be used to outflank the restrictions imposed on the particular power:
But, in our opinion, the general power of the Court does not authorize his order. The order deals with preference of members of an organization over other persons in employment, and over that subject a limited and qualified power is specifically given by sec. 40. Extensive and unfettered as the authority of the Court of Conciliation and Arbitration to award preference in settlement of a dispute might have been in virtue of its general power, yet, when sec. 40 expressly gives a special power, subject to limitations and qualifications, surely it must be understood to mean that the Court shall not exercise an unqualified power to do the same thing. When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.
McTiernan J reached a similar conclusion at 20. Starke and Evatt JJ dissented on the operation of s 40.
40 A similar conclusion was reached in David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; 184 CLR 265. In that case, specific provision was made in Pt 5.4 of the former Corporations Law (Vic) for the circumstances in which the time for compliance with a statutory demand might be extended and these did not include any power to extend where the 21 day compliance period had already passed. The question was whether the general power to extend time in s 1322 (which was not so limited) could nevertheless be used to extend that time. Gummow J, with whom all of the other Justices agreed, held applying Anthony Hordern that it could not.
41 The question of whether one set of provisions provides a code so that more general provisions in a statute do not apply therefore requires a consideration of the terms of the statute and for an assessment to be made of whether such a negative implication may be drawn. The primary judge identified the general scheme as consisting principally of Pt 2 (which deals with claims by employees for compensation) but also including some other provisions such as s 6. On the other hand he identified the particular scheme as being contained principally in s 128 (which is located in Pt 9) and s 25 (which is located in Div 3 of Pt 1). His Honour took some comfort in that conclusion from the fact that Pt 9 is headed 'Miscellaneous' as is Div 3 of Pt 1, that is to say, ss 25 and 128 both appeared in sections of the statute headed 'Miscellaneous' (although not in the same part of the Act).
42 We do not agree that s 128 is part of such a code (or 'scheme' as the primary judge called it). As its heading suggests, s 128 deals with the topic of 'Shared liability'. An employer suing under it must demonstrate three things:
(a) that there is an injury suffered by an employee which arose out of, or in the course of, the employee's employment with more than one employer;
(b) that it has paid compensation to the employee in respect of the injury; and
(c) the proportion of the contribution to the injury made by the employment by the other employers.
43 In such a suit, a respondent employer may resist the suit by negativing any of these three matters. That is, it may seek to show that the employee was not injured at all, that the injury did not arise from their employment, or that the first employer has never paid compensation. It may also contest its level of contribution. What it may not do, however, is allege that the compensation which was paid was not reasonable. Such an allegation finds no foothold in s 128 which could give it any consequence. Consequently, the respondent-employer has no entitlement to contest the quantum of the underlying principal liability determined by the employer who has paid the employee's claim.
44 At least where an employee has elected not to pursue their common law rights (cf s 55), the liability of an employer to pay compensation to an employee is largely regulated by Pt 2. Taking the example of a death claim where the deceased worker left a dependant, this is regulated by Pt 2 Div 2 ('Injuries resulting in death'). Subsections 29(1) and (3) provide:
Compensation for injuries resulting in death
(1) This section applies if an injury to an employee results in the employee's death.
…
(3) If the employee dies leaving dependants some or all of whom were, at the date of the employee's death, wholly dependent on the employee:
(a) subject to this section and to sections 28 and 30, compensation of $412,000 is payable for the injury; and
(b) that compensation is payable for the benefit of those dependants.
The Court was told that as at the date of Mr O'Donnell's death, the sum of $412,000 had been indexed to $458,958.51.
45 Like every stipulation in Pt 2 the compensation obligation is expressed in the passive voice and omits any reference to or by whom the compensation is to be paid. The obligation thus created is inchoate. Section 24 makes clear that this inchoate obligation is crystallised into an obligation on the employer actually to pay compensation on the happening of an event, namely, a determination by the employer of the amount which is to be paid. It provides:
Liability to pay compensation
The liability of an employer to pay compensation to a person under this Act is the liability of the employer to pay the amount or amounts that the employer determines, in accordance with this Act, to be payable to the person.
46 Thus, at least as far as s 24 is concerned, the only compensation paid under the Act is compensation determined by an employer to be payable. Specific machinery is then provided in Pt 5 for the making of such 'determinations' and, as already noted, a review structure is erected in Pt 6 with the employer performing an initial reconsideration which may be followed by a review by the Administrative Appeals Tribunal. In both case, what results is still a 'determination'.
47 Thus, continuing with the example of s 29 and the situation of a deceased employee leaving behind a dependant, the employer has no liability to pay anything unless (a) there is an injury which results in death; (b) compensation is payable under s 29(3); and, (c) the employer determines an amount of compensation to be paid under s 24.
48 Returning then to s 128, it would be surprising if a provision headed 'Shared liability' could generate a liability in an employer under a claim for contribution when it would have had no liability under the Act if a claim had been directly made upon it by the employee. Put another way, common sense suggests that an employer against whom a claim for contribution is made under s 128 ought to be able to defend itself by denying that a claim could have been made against it under the Act. Were it otherwise, it would mean that that employer's liability would turn upon the fortuitous circumstance of whether the claim was made on it first (in which case it could refuse the claim) or instead made on it under s 128 by way of contribution (in which case this would not be open to it). This would tend to suggest that where s 128(a) refers to 'an injury suffered by an employee' it is most likely referring to an injury suffered by an employee for which compensation is payable under the Act. In fact, s 6 defines 'an injury suffered by an employee' to be a reference to 'an injury suffered by the employee for which compensation is payable under this Act' unless the contrary intention appears.
49 The primary judge thought that s 6 did not apply to s 128 (that is, there was a contrary intention exhibited by the Act). His Honour's analytical motive for this reading is clear: if s 6 were applied to s 128(a) it would be very difficult to contend that the reference to compensation in s 128(b) could be other than a reference to compensation under the Act for so to conclude would involve giving the word 'compensation' two different meanings in one section, an unlikely outcome.
50 The difficulty with this approach, with respect, is that it has the unexpected consequence that an employer against whom a claim for contribution under s 128 is made cannot avail itself of the defence that the injury was not one for which compensation was payable under the Act. And this is so even if it could have refused the claim on that basis had the primary claim been made against it.
51 To give a concrete example, it may be noted that a claim for compensation for an injury which involves an incapacity for work (under Pt 2 Div 3) is not payable, by virtue of s 38(1), if the employee has reached the pension age. It would be anomalous if an employer defending a contribution claim under s 128 were not permitted to point out that it could not be liable because of s 38(1). But this is the consequence if s 128(a) is not read in light of the definition s 6. Far from s 128 exhibiting an intention that the definition in s 6 should not apply to it, the contrary seems to us to be the case.
52 Once that conclusion is reached, however, it is inevitable that the reference to compensation in s 128(b) must be a reference to compensation payable under the Act. For, at this point, one knows that s 128(a) through s 6 is referring to compensation payable under the Act and to read 'compensation' in s 128(b) as having a broader meaning would mean the word had two different meanings in the same provision which, in this case at least, would appear to be an unjustifiable construction. Consequently, 'compensation' in s 128 means 'compensation under the Act'.
53 We note for completeness the High Court's decisions in Joyce v Australian United Steam Navigation Company Ltd [1939] HCA 31; 62 CLR 160 and Union Steamship Company of Australia Pty Ltd v King [1988] HCA 55; 166 CLR 1 both of which were concerned with predecessor to the Act, the Seamen's Compensation Act 1911 (Cth). That statute contained a provision (s 5) preventing a seaman who obtained compensation under it from obtaining 'compensation' independently of that Act; in practical terms, the object of the provision was to ensure that a seaman could not recover common law damages or workers' compensation under a State Act if he had already recovered under the Commonwealth statute. Given that context, it was held that 'compensation' in s 5 was at large. In the context where s 5 was regulating remedies outside the Act this is unsurprising. These decisions are irrelevant to the present issue.
54 This disposes of the primary judge's construction of s 128. At the hearing of the appeal, the Respondent also submitted, in the alternative, that if the definition in s 6 did apply to s 128, then the word 'payable' simply meant 'able to be paid'. On this view, it was enough that compensation had been paid and that, at least in principle, could have been paid under the Act if a determination had been made. It was not necessary for the payment itself in fact to have been made under the Act (or, implicitly, for there to have been a determination).
55 We reject this submission. The expression 'compensation is payable under this Act' in s 6 is not a reference to an ability or potentiality for compensation to be paid under the Act. Rather, it means compensation which is due to be paid. The Macquarie Dictionary defines 'payable' as meaning in law 'imposing an immediate obligation on the debtor' and the Oxford Dictionary says much the same and that it means of a sum of money that it 'is to be paid; due, owing, [or] falling due.' Thus when the Act says that compensation is payable under it this is a normative statement rather than one descriptive of a range of potentialities; when a tax bill is said to be payable one is not being told that it is capable of being paid, one is being told that it is to be paid.
56 For all of these reasons, the reference to compensation in s 128(b) is a reference to compensation which is payable under the Act. Because the only liability the Act actually imposes on an employer is the liability referred to in s 24 to pay the amount of compensation determined by it, it follows that the compensation referred to in s 128(b) can only be compensation which the employer has paid under a formal determination by it (or by the Tribunal on review) to pay. If, as here, there has been no such determination then s 128 is not enlivened.
57 We should say for completeness that one part of the rationale for the primary judge's construction of s 128 was a desire to facilitate the settlement of claims under the Act. Before this Court the Appellant submitted that there was no place for such a view. Its submission was that each of the decisions contemplated by the Act - the initial decision by the employer, the reconsideration decision and the review by the Tribunal - were administrative decisions which required the performance of actual administrative functions to discharge. So for example, the Act required the employer to determine whether an employee was incapacitated for work and, if so, what the extent of the incapacity was. There could, on this view, be no room for a concept such as a commercial settlement.
58 It has been accepted that the SRC Act constitutes a code in relation to compensation such that it is not possible for an employer and employee to reach a contractual accommodation which is not contemplated by it. For example, in Behan v Australian Telecommunications Corporation (1990) 26 FCR 337 ('Behan') it was held that the Corporation could not reach an agreement to commute its periodic compensation liability to a lump sum liability because this was not contemplated by the statute. There are obiter dicta to similar effect in Dowell Australia Ltd v Archdeacon [1975] HCA 29; 132 CLR 417 at 425 per McTiernan J and Australian National Railways Commission v Commission for Safety Rehabilitation and Compensation of Commonwealth Employees (1992) 35 FCR 344 at 353 per von Doussa J. None of these concerned the Act but the Full Court has recently expressed the view that much of what is understood about the SRC Act may be applicable to the Act: Commonwealth v Snell [2019] FCAFC 57; 370 ALR 1 at 11 [34].
59 If employers and employees were entirely at liberty contractually to deal with the rights generated by workers' compensation statutes then it is easy to see that this could result in the undermining of the policy of the legislation. It would be tolerably clear, for example, that a provision in an employment contract by which an employee agreed they were not entitled to make claims for compensation under the Act would be void on the basis explained in Behan.
60 The application of that principle in this case would focus attention on the bargain struck between the Respondent on the one hand, and the estate and Mrs Donnelly on the other. The Appellant submitted that the payments which had been made of $300,000 and $20,000 were well below what the Act required. The liability of the Respondent to pay compensation to the estate was governed by s 39 which provided how claims for permanent impairment were to be assessed. It required the Respondent to assess the degree of Mr O'Donnell's permanent impairment as a percentage and then apply that to a statutory maximum. In the case of Mrs O'Donnell's dependency claim it would have been necessary to assess whether Mrs O'Donnell was fully dependent on Mr O'Donnell or whether she was partially dependent. Under s 29 if she were partially dependent it would have then been necessary for the Respondent to assess what she had lost as a result of the death of her husband and to award an 'appropriate' sum under the statutory maximum applying in the case of a claimant who was fully dependent.
61 Both of these processes would have involved the exercise of a power of assessment which had no fixed outcome and which may, perhaps loosely, be described as discretionary. Those discretions did not yet arise in this case because at the relevant time the Respondent had not determined itself to be liable to pay compensation. Had it done so in relation to both claims then these processes of assessment would have arisen. If that had occurred then there might have been occasion to consider the more subtle question of whether an employer may agree to a particular answer to these discretionary questions and within what limits. Although it may be that the approach in Behan means that this cannot be done we would leave for an occasion in which the question actually arises any definitive determination of whether the exercise of such processes of discretionary assessment cannot be the subject of compromise. It should go without saying that even if such a compromise were possible it would be legally inefficacious unless and until embodied in a decision made under the Act.