Shatib v AY Formwork Pty Ltd

Statutory provisions and principles

1. Division 3 of Part 6 of the WIMWC Act identifies various procedures that must occur before the commencement of a proceeding for the recovery of work injury damages.
2. Relevantly, after a claimant has served a 'pre-filing statement' (s 315), s 316(1) obliges a defendant to respond within a stipulated time (28 days) and if that obligation is not complied with within a different stipulated time period (42 days), the claimant is permitted to commence a proceeding for the recovery of work injury damages.
3. Section 318 of the Act provides: "(1) For the purposes of court proceedings on a claim for work injury damages - ….. (b) the defendant is not entitled to file a defence that is materially different from any defence served on the claimant in response to the claimant's pre-filing statement within 42 days after service of the pre-filing statement, except with leave of the court, and ……. (2) The court is not to grant leave under this section unless satisfied that - (a) the material concerned was not reasonably available to the party when the pre-filing statement or defence was served, and (b) the failure to grant leave would substantially prejudice the party's case."

Principles

1. It is trite to observe that applications for summary dismissal will only succeed if the defendant establishes a high degree of certainty that even with the benefit of usual interlocutory processes, a plaintiff's claim will fail if it goes to trial (Agar v Hyde (2000) 201 CLR 552). Further, the circumstance, if it be established that a pleading is deficient for non-compliance with pleading rules, will not be determinative of a summary dismissal application.

AY Formwork's argument

1. AY Formwork submits that the statement of claim was silent on the place, or more accurately state, where the accident occurred. But other documents suggest that Mr Shatib wishes to make out a case that the accident occurred in Victoria. Those other documents included a notice to admit facts (Exhibit B) that was not disputed and was, therefore, deemed to be admitted under court rules (Uniform Civil Procedure Rules 2005 (NSW), r 17.4(2)).
2. That being so, AY Formwork submits that Victoria in the lex loci delicti; which governs the law for the tort. It further submits that such limitations upon the recoverability of damages as they arise in Victorian law are substantive - not procedural - citing John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503.
3. AY Formwork argues that the relevant Victorian statutory provisions are contained in the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic). Relevantly: 1. s 327 indicates that a worker may recover damages in respect of an injury (only) if it was a 'serious injury'. 2. s 328(1) provides that proceeding for damages cannot be brought unless the worker obtained a determination of a degree of impairment in accordance with Division 4, Part 5 of the Act and that agreement has been reached between the parties in relation to the degree of impairment or an assessment has been conducted by a Medical Panel. 3. s 335(1)-(2) requires an assessment of the degree of impairment of 30% or more, or a certificate from the Authority confirming the injury is a serious injury and consenting to the bringing of proceedings.
4. AY Formwork contends that Mr Shatib did not comply with the requirements in a and b; and no evidence that he obtained an assessment by or certificate from the Authority as required in c.
5. AY Formwork cited the authorities of Tam v Worksafe Victoria [2023] NSWSC 173 ("Tam") and Wickham Freight Lines Pty Ltd v Ferguson [2013] NSWCA 66 ("Wickham") (noting that the latter decision concerned predecessor legislation to materially similar effect) to support its proposition that these deficiencies cannot be retrospectively remedied.
6. AY Formwork contends, in light of its argument, that the proceedings are a nullity and should be dismissed.
7. Mr Stiles, Counsel for AY Formwork, conceded that, for the purposes of s 318(1)(b) of the Act, this argument was materially different to what AY Formwork advanced in its pre-filing defence. This, however, did not matter: the proceeding was a nullity.
8. On the premise, however, that this last submission was rejected, Mr Stiles virtually conceded that AY Formwork could not deny that the factual material to sustain its argument about the application of Victorian law was reasonably available to it when it filed its pre-filing defence. He did not dispute that by s 318(2)(a), the Court was precluded from granting leave to AY Formwork to plead its argument. This was so despite AY Formwork's contention that (for the purposes of s 318(2)(b)) its case was substantially prejudiced by reason of leave not being granted to it. It is self-evident that the requirements in s 318(2) are conjunctive.

Mr Shatib's contentions

1. Mr Shatib argues that it is not open to AY Formwork to rely upon the Victorian legislation. His argument extended beyond the simple point that AY Formwork was precluded from relying upon the Victorian legislation because of the operation of s 318; although of course he relied upon that provision too.
2. His Counsel, Mr Young raised the following points in response to AY Formwork's contention that Victorian law applied.
3. First, Mr Shatib relied upon the circumstances that he had been in receipt of statutory workers compensation benefits under the Workers Compensation Act 1987 (NSW) ('WC Act') and had, along with his legal representatives, taken time-consuming and expensive steps to go through the procedural preconditions to the commencement of a proceeding in New South Wales under the Act. Although it knew (actually or constructively) of facts (such as the place of the accident) and some evidentiary indications that Mr Shatib lived in Victoria for a month up to the accident (see Annexures G & H to Ms Tancred's affidavit (Exhibit A on the motion)) AY Formwork said nothing about the application of Victorian law in its pre-filing defence. Mr Shatib argued that a conventional estoppel arose; whose posited effect would be to preclude AY Formwork from relying upon the operation of the provisions of the Victorian legislation as a defence to his statement of claim. This point, if it was good, would mean that the Court would not need to engage with the merits of AY Formwork's reliance upon Victorian legislation.
4. Secondly, Mr Shatib raised what he considered a reasonably arguable answer to AY Formwork's argument on the merits. This argument featured the following steps: 1. Mr Shatib was receiving statutory compensation benefits on the premise that he sustained an injury in the course of employment connected with New South Wales (WC Act, s 9AA(1)); 2. the circumstance that he was outside New South Wales when the injury happened did not preclude his receiving compensation on the predicate that his employment was connected with NSW (s 9AA(2)); 3. his employment was connected with New South Wales in any of the alternative ways set out in s 9AA(3): 1. New South Wales is the state in which he usually worked; 2. New South Wales is the state in which Mr Shatib was usually based, for the purposes of that employment; 3. If no State could be identified (in (i) or (ii)) the State in which AY Formwork's principal place of business in Australia was located. (s 9AA(3)(a)-(c))
5. Pausing here, it is pertinent to observe some of the authorities that have construed s 9AA. It has been said that s 9AA(3) presents a series of cascading tests for determining the State to which the worker's employment is connected [1] . The expression 'usually worked' has been interpreted as mean a worker's 'habitual or customary' place or the place where s/he works 'in a regular manner' [2] . It does not mean the place where s/he works for a majority of the time [3] . Where the issue is contested, the onus of proof in establishing s 9AA rests with the worker [4] ; although there can be a shifting of the evidentiary onus on to the employer where the worker adduces evidence to prove it on a prima facie basis [5] .
6. Returning now to Mr Shatib's analysis: (d) Mr Shatib accepted that he could not contend that he 'usually worked' in New South Wales. But a Court could find that, New South Wales was the State in which he was 'usually based' for the purposes of employment. But if the Court was not inclined to make that finding, and inn the last resort, however, the Court could find that AY Formwork's principal place of business was in New South Wales. (e) it being the case that Mr Shatib's employment was connected with New South Wales when his (alleged) injury occurred, the provisions in Division 1A of Part 5 of the WC Act (titled 'Choice of Law') applied. These relevantly indicated that: 1. given that compensation was payable (and had indeed been paid) the 'substantive law' of New South Wales governed the questions whether or not a claim for damages in respect of the injury (caused, relevantly, by the employer's negligence) could be made and, if it could be made, the determination of the claim (ss 150A, 150B(1)); 2. 'substantive law' included, amongst other things, laws that limited the kinds of injury, loss or damage for which damages or compensation may be recovered and laws which precluded the recovery of damages or compensation or limits the amount of damages or compensation that can be recovered and a provision of a State's legislation about damages for a work related injury, whether or not it would be otherwise regarded as procedural in nature (s 150E(c)-(d) and (g)); 3. it made no difference that under the substantive law of Victoria the nature of the circumstances were such that they would not have given rise to a cause of action had they occurred in Victoria or the circumstances on which the claim was based did not give rise to a cause of action (s 150F).
7. Mr Young submitted that his argument based upon the provisions of the Workers Compensation Act was reasonably arguable so as to outflank the operation of Victorian legislation that AY Formwork relied upon. It was unnecessary to be any more definitive than that for the purpose of Mr Shatib defending an application for summary dismissal or strike out.

AY Formwork's submission in reply

1. AY Formwork disputed that there was doubt about s 9AA(3) of the WC Act. To the contrary, the evidence before the Court on the application clearly indicated that in the period of a month leading up to the date of the injury, he had been living in Victoria and even had an address in that state to which correspondence could be sent.

Consideration

1. AY Formwork's success depends upon its contention that inarguably there was an absence of connection between the incident and New South Wales law such that Mr Shatib's case should be dismissed. That is, its contention is unanswerable such that it does not even need to plead the defence that Victorian legislation governed the substantive law.
2. I do not accept AY Formwork's submissions in this regard.
3. At a procedural level, I regard AY Formwork's argument about Victorian law governing the right to bring an action and/or the recovery of damages as purporting to amount to a complete defence to the statement of claim. Ordinarily, it would be expected (and its alternative prayer 3 of its motion implicitly acknowledges) that it would be pleaded in a defence to a statement of claim; and Mr Shatib would thereafter raise any counter-argument in a Reply (UCPR, r 14.14(2)).
4. In my opinion, Mr Shatib has, as a matter of law, a reasonably arguable response to AY Formwork's argument that Victorian law is the lex loci delicti, which is founded in conventional estoppel.
5. That response does not depend on whether it is actually true that Victorian law substantially governs the parties rights. The rationale for estoppel by representation, of which conventional estoppel is a species, is that: "When a person makes to another the representation … [that] such and such things do exist, and you may act upon that basis, it seems to me of the very essence of justice that, between the two parties, their rights shall be regulated, not by the real state of facts, but by that conventional state of facts … upon the basis that that is accurate which you induced the other side to take as the basis upon which he was to act." [6]
6. As Dixon J put it in Grundt v Great Boulder Proprietary Gold Mines Ltd (1937) 59 CLR 641 at 676-7: "Parties may adopt as the conventional basis of the transaction between them an assumption which they know to be contrary to the actual state of affairs."
7. It may be that the real state of facts, or actual state of affairs, is that the Victorian law will apply, but that is not the conventional basis upon which the parties acted prior to AY Formwork's change of position in October 2023; after it had filed its pre-filing defence and after the mediation; which was the last remaining procedural condition that needed to be complied with prior to Mr Shatib's right to commence the proceeding being satisfied.
8. As s 150A of the WC Act indicates, once the position has been reached that compensation is payable under a workers compensation scheme of a State, it is the substantive law of that State that governs the existence and determination of a claim for work injury damages. In this case, compensation has not only been payable to but has actually been paid by AY Formwork's insurer to Mr Shatib under a compensation scheme in New South Wales. It is reasonably arguable that AY Formwork has represented to Mr Shatib the factual underpinning for the entitlement to receive compensation in s 9AA(1) of the same legislation - that Mr Shatib's employment was connected with New South Wales. This representation might be regarded as a statement of law or perhaps a statement of mixed fact and law but in either case, a conventional estoppel can lie. [7]
9. Arguably, Mr Shatib adopted and acted upon that representation by undertaking the necessary procedural steps to support his claim for work injury damages under Part 6 of Chapter 7 of the WIMWC Act. The stage had been reached in the dispute that all of the procedural requirements had been reached in Part 6, including a mediation. That being so, it was also reasonably arguable that upon fulfilment of the conditions under Part 6 the Act, he was entitled (under s 151 of the WC Act) to commence a proceeding for work injury damages.
10. By its statement on 12 October 2023 that "Victoria was the state of connection" and by the provisions it pleaded (without the Court's leave) in its Defence of 30 January 2024, AY Formwork arguably seeks to resile from the position mutually adopted by the parties; and which underpinned the payment by its workers compensation insurer of benefits to Mr Shatib.
11. Conceivably, if instead of commencing to pay the statutory compensation benefits the insurer had said that the worker was not entitled to them, since it was Victorian law and not New South Wales law which had the relevant connection to the injury, the worker could have taken steps to seek compensation and/or damages under Victorian law.
12. To permit AY Formwork to rely upon this position, representing a change from the assumption mutually adopted by the parties, would mean that Mr Shatib would arguably sustain the detriment of needing to undergo a whole new set of procedural pre-conditions under a different statutory regime in order to commence a court proceeding. Such detriment would arguably be especially 'material' since, if AY Formwork was right, a three year limitation under the Victorian legislation (s 5(1AA)) would mean that his action for damages under Victorian law would be statute-barred. In my opinion, it is unnecessary to finally determine the effect of the representation conveyed in the 12 October 2023 s 78 notice on the aspect of conventional estoppel concerned with detriment occasioned by change of position. That should be a matter for the hearing.
13. In a certain way, the current dispute between the parties resembles the sort of situation arising in The Commonwealth v Verwayen (1990) 170 CLR 394. In an interlocutory application being determined in an inferior court, this is hardly the occasion for me to consider and venture observations about the High Court's decision in that case beyond noting, for present purposes, the commentary of the present editor of Estoppel By Conduct and Election that the decision as to whether the Commonwealth was entitled to change its position to rely upon a limitation period could have been resolved by the doctrine of conventional estoppel [8] .
14. Finding, as I do, that it is reasonably arguable that AY Formwork is precluded from asserting that there is no employment connection to New South Wales, it also follows that it is also reasonably arguable that it is New South Wales law, and not Victorian law, which regulates Mr Shatib's entitlement and/or excludes or limits the recovery of compensation or damages.
15. Further, contrary to AY Formwork's submission, I do not consider that I am precluded by authority to hold that it is reasonably arguable for a conventional estoppel to lie. As I read the decisions of Tam and Wickham, the availability to the worker of a conventional estoppel was not in issue in those cases. For example, in Wickham the worker in that case did not appear to have sought and had paid to him compensation under the statutory scheme in the WC Act, before he commenced his proceeding for damages.
16. Another problem for AY Formwork is that, on the facts, and putting aside momentarily the reality of the compensation benefits being already paid, it is not so clearcut that Mr Shatib would not now be able to prove a connection between the incident and New South Wales. This itself makes it inappropriate for the Court to accede to a summary dismissal application. In my view what the High Court said in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 533-537 about the undesirability of limitation questions being determined in interlocutory proceedings unless in the clearest of cases applies also to choice of law questions governing the substantive law for a claim for work injury damages.
17. Having rejected AY Formwork's argument that its point about the governing law is so unassailable as to warrant summary dismissal or striking out of MR Shatib's claim without it having to plead the defence, AY Formwork would necessarily have to plead the point in a Defence.
18. However, AY Formwork now raises the defence at a point when, by force of s 318(1)(b) of the Act, it is shut out from raising the defence and when it (virtually) concedes that, because of s 318(2)(a), it is not now entitled to leave to rely upon it. In short, it is too late to run the defence that Victorian law governed the parties rights and in the circumstances precludes Mr Shatib from commencing and prosecuting his action for damages.
19. In short, I am not persuaded to the necessary degree of high certainty that Mr Shatib could not argue against the argument raised by AY Formwork to support the summary disposal or striking out of this proceeding. The defendant's notice of motion dated 7 March 2024 is therefore dismissed.

The plaintiff's motion

1. Entwined as the arguments apparently were between both motions, no particular attention was brought by the parties to the orders sought in Mr Shatib's motion.
2. It inevitably follows, however, from the above findings that paragraphs 11-14 of its Defence filed on 30 January 2024 must be struck out for AY Formwork's raising factual allegations which were materially different to matters raised in its pre-filing defence (and not obtaining the Court's leave to rely upon them).
3. As to paragraph 2 of the Defence, I accept that AY Formwork's statement of non-admission (to the allegation in paragraph 2 of the statement of claim that at all material times Mr Shatib was employed by it as a formwork carpenter) is materially different to the admission in draft version of its Defence in the pre filing Defence. No reason was specifically advanced on AY Formwork's behalf as to why leave should be granted to it to raise the current defence. Paragraph 2 of AY Formwork's Defence should also be struck out and it should replead that paragraph to accord with its defence in the Pre-filing Defence.
4. For similar reasons, I accept Mr Shatib's application that there are material differences between paragraphs 3 and 4 of its Defence and corresponding paragraphs in its pre-filing Defence. It is difficult to tease this out because some of the paragraphs (numbered 2 and 3) in the draft defence in the pre-filing Defence tended to roll up multiple assertions. The most practicable course is to strike out paragraphs 3 and 4 of the Defence filed on 30 January 2024 and grant liberty to re-plead those paragraphs in a fashion that is in conformity with the position it expressed in the pre-filing Defence.
5. I therefore substantially accede to Mr Shatib's applications as contained in orders 1-3 of his notice of motion of 28 February 2024.
6. In the light of my reasons, it is clear that Mr Shatib is the clear winner of these interlocutory applications which are discrete. The costs order I make will reflect that outcome. If either party wishes to contend that some other costs order is appropriate, they may apply to set aside or vary the costs order I propose within 14 days.

Order

1. The Court orders that: 1. The defendant's notice of motion dated 7 March 2024 is dismissed. 2. Paragraphs 2-4 (incl) and 11-14 (incl) of the defendant's Defence dated 30 January 2024 are struck out with the defendant having liberty to replead paragraphs 2-4 in conformity with these reasons within 7 days. 3. The defendant is to pay the plaintiff's costs of and occasioned by its motion dated 7 March 2024 and the plaintiff's notice of motion dated 28 February 2024. 4. The proceeding is returnable before the Judicial Registrar for mention on 30 April 2024.

Endnotes

1. Klemke v Grenfell Commodities Pty Ltd [2011] NSWWCCPD 27 at [20]
2. Martin v R J Hibbens Pty Ltd [2010] NSWWCCPD 83 at [61]-[67].
3. Workers Compensation Nominal Insurer v O'Donohue [2014] NSWWCCPD 1 at [57]
4. Merrick v Nationwide Transport Solutions and Workers Compensation Nominal Insurer [2010] NSWWCCPD 106 at [58]
5. Ibid at [58]
6. Burkinshaw v Nicholls (1878) 3 App Cas 1004 per Lord Blackburn at 1026
7. P Keane AC KC, Estoppel by Conduct and Election (Sweet & Maxwell, 3rd ed, 2023) at [2.013]-[2.014]
8. Ibid at [15.030]-[15.035] 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: 23 April 2024