Sydney Ports Corporation v Collins;National Direct Imaging Pty Ltd v Lamy

Court of Appeal (NSW)|2002-12-12|Before: Stein JA, Giles JA, Santow JA

Introduction 2 These are applications for leave to appeal heard together with the consent of the parties. 3 Both parties also agreed that the leave applications could be heard concurrently with the appeals. Both applications revolve around the issue of the proper construction to be given of s 151C of the Workers' Compensation Act 1987. In each case the claimant unsuccessfully applied to the District Court to strike out the opponent's Statement of Claim. 4 I will briefly refer to the judgments in each case to illustrate the issues before this court.

Judgments in the court below 5 In Sydney Ports Corporation v Collins the essential facts were that Mr Collins was employed by the claimant as a port officer on 23 July 2001 when he was seriously injured in an accident at work. It appears that the worker was walking across a gangway to a tug, when a shackle, supporting a counterweight, failed causing the worker to be thrown to the dock below. 6 On 14 September 2001 the worker commenced proceedings for modified common law damages in the District Court. The employer applied to strike out the Statement of Claim because it was filed within 6 months of notice of injury being given to the employer and contrary to s 151C of the Workers' Compensation Act (the WC Act). 7 At the hearing of the strikeout motion before Williams DCJ, the worker argued that his claim fell within either of the exceptions contained within s 151C(2) and therefore not bound by the 6 months rule in s 151C(1). 8 His Honour had evidence before him in affidavits from Mr Collins and Mr Hobday, the employer's representative. The worker was also briefly cross-examined. There was common ground between the evidence of the worker and Mr Hobday but some of what Mr Collins said was denied by Mr Hobday. His Honour did not attempt to resolve these discrepancies. I do not think that this matters and will approach the case on the basis of Mr Collins' version. Neither the claimant nor the opponent object to this being adopted as the appropriate course. 9 The material parts of the affidavit of the worker is as follows: 9. When the gangway was repaired shortly thereafter I expressed concern to Alan Chalker the Facility Officer of the Corporation and I said words to the effect, "I don't trust stainless steel for this application. He looked at the site. He later informed me "I have spoken to the Contractor and they have assured me that it is marine grade type 316 Stainless and they've assured me it's correct". I replied words to the effect, "There's nothing fantastic about 316 type stainless in that application. It's OK in salt water and it's OK out of salt water but it's no good in the splash zone". 10. After the accident I was taken to Casualty. Shane Hobday the General Manager visited me that afternoon in hospital who stated "We've [sic] investigating the matter". I was also visited by Kevin Rae the Shiftmaster. Either Shane or Kevin said, "The shackle broke" and I said "You'll probably find its grain boundary corrosion which I had expressed concern about previously". 11. During my stay at the Hospital. I received visits from Shane Hobday where the issue of the defective shackle was discussed amongst other things. I stated to him on more than one occasion words to the effect. "The question of responsibility will need to be determined by the Court. There is the issue of whether it is the manufacturer the contractor or the supplier who is responsible". He replied to me with words to the effect "You've suffered a serious injury and you'll have to act in your own best interests in terms of your quality of life". I took that to mean that he expected me to sue. 12. I was aware within days of the accident from numerous discussions and visitors that there was and will be an argument between the employer the manufacturer and the supplier of the shackle. 13. In a visit from Shane Hobday he was accompanied by Greg Martin in about the 3rd week whilst still in hospital. I was also being visited by Dr Godding. I had a conversation with him where I said words to the effect "Look, my interests and your interest coincide in this. We should be seeking compensation from the manufacturer and supplier of the shackle. I gained the impression from him that he was in agreement. I remember him nodding his head and smiling and making a general remark. 14. On 10 September, 2001, after my release from the hospital. I had a conversation in the office of Shane Hobday wherein he stated to me "The defect in the shackle was thought to be a rare fault in manufacture. It was a 1000 to 1". I said, "I don't believe that". I believe I also said to him words to the effect in this conversation "The shackle failed in its intended application. It was a 6.6 ton shackle carrying a 730 kg load and it fails within a year, so its clearly not suitable in that application". We discussed the problem of suppliers and contractors overselling a defective product. I had a similar conversation with Alan Chalker but I believe that was after proceedings issued. 15. I had been informed by my wife whilst in hospital that she had been told that the injuries were the result of an "unforseen failure" and that "nobody was taking responsibility for the accident". She informed me that "your fellow employees can't help you" and that "the shackle has been tested by ERTS who way [sic] it was an annealing fault and an "unpredictable failure". At that time I was very unwell and my wife was having meetings with my Employer on my behalf. 16. It has been clear to me from all my conversations that all parties intend to deny liability in this matter. 17. I instructed my Solicitors Higgins & Higgins to arrange an investigator to interview witnessed [sic] prior to the issue of proceedings. I understand no assistance was provided to them. 18. In the absence of any information reports or assistance being provided to me and on the basis of my conversation with the Defendant I was dissatisfied as to the extent to which liability was admitted. 10 Williams DCJ posed questions as to whether on the evidence the employer had denied all liability, or admitted partial liability, in respect of which admission the worker was dissatisfied. 11 His Honour concluded: Having regard to the conversations referred to above in my view the admitted remarks of Mr Hobden amount in effect to an indication to the plaintiff that Mr Hobden's company was not responsible for the plaintiff's injuries. It seems to me that it was being made clear to the plaintiff in other words that he had a fight on his hands if he wanted to recover anything in respect of his claim. Whilst the employer was not expressly denying liability he was clearly indicating that liability was an issue and that the plaintiff would need to look after his own interests in that regard. The employer was not prepared to go down any path that led towards admitting liability in any way. In those circumstances it seems to me that the plaintiff was entitled to view the defendant's actions and words as a denial of all liability for injury. 12 The judge then turned to the alternative argument concerned with subpara (b) of s 151C(2) that, in making statutory workers compensation payments to the worker, the employer had made a partial admission of liability. It was submitted by the opponent below that the compensation payments constituted an admission of employment and injury in the course of employment. 13 Whilst in giving reasons his Honour utilised the phrases 'could be' and 'if that be the case', he concluded that the Statement of Claim was properly filed within the 6 month period by reliance on either s 151C(2)(a) or (b). 14 Lamy v National Direct Imaging Pty Ltd came before Balla DCJ. The worker was injured at work on 19 July 2001 and issued a Statement of Claim in the District Court on 26 November 2001 seeking modified common law damages, within the 6 month period contained in s 151C(1). The employer moved to strike out the Statement of Claim. 15 An unsuccessful attempt was made by the worker to rely on subpara (a) of s 151C(2) - that the failure of the claimant employer to answer a letter from the solicitors for the worker dated 23 November 2001 constituted a denial of all liability. 16 This finding by her Honour is not challenged by the opponent and accordingly may be put to one side. 17 However, the opponent further argued before her Honour that payments of statutory workers compensation to the worker constituted a partial admission of liability. In giving reasons for judgment her Honour said: I accept the submission made by counsel for the plaintiff that they should not be treated as two independent schemes and that an admission of liability in respect of the statutory scheme can be relevant to Part 5 of the Workers Compensation Act 1987.

And, … I am satisfied that the expression "notice of the injury" in sec 151C is the notice given under the statutory scheme and the reference in that section to a denial or partial admission of liability extends to communications made by the insurer relating to liability for payments under the statutory scheme. In these proceedings the relevant communication is the letter dated 10 August 2001 together with the insurer's conduct in making payments of compensation. There has accordingly been a partial admission of liability. The plaintiff has expressed his dissatisfaction with compensation payments only and sec 151C(2)(b) applies. 18 Before turning to the legislation I should mention that in the days leading up to late November 2001 many Statements of Claim were filed in the District Court on behalf of worker plaintiffs in an attempt to avoid amendments to legislation which would retrospectively affect workers compensation and common law rights. There have been a number of decisions given by judges of the District Court on the meaning and application of s 151C and some of them have been inconsistent. The proper construction of the provision is therefore of some importance.

The provision in s 151C 19 At the relevant time the provision in s 151C of the WC Act provided as follows: 6-months delay before commencement of court proceedings against employer for damages 151C. (1) A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until 6 months have elapsed since notice of the injury was given to the employer. (2) Despite subsection (1), the person is entitled to commence court proceedings against the employer if either of the following occurs: (a) the employer denies all liability in respect of the injurys, (b) the employer admits partial liability in respect of the injury but the person is dissatisfied with the extent to which liability is admitted. 20 The provision is in substantially similar terms to ss 52(1A) and 52(2) of the Motor Accidents Act 1988 (the MA Act). 21 Section 151C is within Part 5 of the WC Act which is entitled Common Law remedies. The Part provides a worker with rights to pursue a modified regime of common law damages if he or she elects to abandon rights to statutory compensation under the Act. 22 In Dandashli v Dandashli (Unreported, Court of Appeal, 15 December 1996), Handley JA said: Where a statute imposes a condition precedent of a procedural nature which must be satisfied prior to the commencement of proceedings, it will be difficult for a court to treat the condition as a condition subsequent which can be satisfied after proceedings have been commenced as that will be contrary to the intention of Parliament as expressed in the statutory language. 23 His Honour said that s 52(1A) of the MA Act was a provision of this character. The parties here accept that s 151C is also a provision of this character including, as it does, a condition precedent of a procedural nature which must be satisfied prior to the commencement of proceedings. 24 Taylor v Francoif (1990) 11 MVR 211 concerned s 52(2)(a) of the MA Act and the question of whether on the evidence the insurer had denied all liability. Handley JA said that there was no doubt that a denial of any liability or legal responsibility for the claimant's injuries would constitute the typical case under the provision. However, the letter the insurer relied on did constitute a denial of all liability in respect of the plaintiff's claim. As to the evident purpose of s 52 his Honour said: … [it] is to delay the commencement of legal proceedings to require and enable the parties, if possible, to negotiate an overall settlement. … The exception in s 52(2)(a) reflects the view that no good purpose is to be achieved by delaying the commencement of legal proceedings once it is clear, as the Chief Justice put it during argument, that the claimant has a fight on his hands, if he wants to recover anything in respect of his claim. The GIO's letter put an end to all negotiations. It informed the plaintiff's solicitors in the clearest terms that he had had a fight on his hands. It stated, as I have said, that because of the compensation paid under he 1987 Act the GIO had no legal liability for the plaintiff's injuries under the new Act. Of course a dispute as to quantum alone will not ordinarily satisfy the requirement of s 52(2)(a) but in this case it does. This claimant was informed by the GIO that in its view, based on its assessment of the quantum issue, the claimant should recover nothing under the new Act. 25 Counsel for the opponent Lamy submitted that the MA Act regime is an unhelpful analogy because of the great differences between the schemes under that legislation and the WC Act. However, there is little doubt that there are substantial similarities in procedural aspects of the respective statutes in so far as both contain virtually identical provisions barring common law proceedings for damages being instituted within 6 months of notice being given. 26 To this extent, therefore, cases determined under the similar provisions of the MA Act are of some assistance. 27 An examination of Part 5 of the WC Act and the provision in s 151C itself leads to the conclusion that the principal purpose of the 6 months delay in the commencement of legal proceedings is to enable the parties to negotiate a settlement if that is possible. 28 The exceptions in s 151C(2)(a) and (b) are a reflection that there is no good purpose served in delaying the commencement of proceedings once it is clear that the plaintiff has 'a fight on his hands' if he wants to recover anything with respect to his claim. 29 Atikullah v Sefton (2001) 53 NSWLR 574 is another case on ss 52(1A) and 52(2) of the MA Act. Hodgson JA had this to say about the purpose of the provisions: [64] In my opinion, the scheme of the Act is to encourage pre-litigation negotiations concerning the quantum of damages: this is particularly clear in s 52(1A)(c), which requires a claimant not only to respond to an insurer's offer but also to wait a further twenty-eight days after that response before commencing proceedings. On the other hand, the Act recognises that if the insurer denies all liability, it is fairly pointless to continue with such negotiations. In my opinion, the Act takes a similar position where what is admitted is liability only for a portion of whatever the actual loss turns out to be. In that case again, negotiations concerning the quantum are unlikely to be fruitful. That approach in my opinion accords well with the form of words "partial liability". It is also the approach reflected in the decision of Hill v Bolt , in which the Court of Appeal proceeded on the basis that an admission of liability subject to an allowance for contributory negligence was an admission of partial liability. 30 It is the submission of Mr Hoeban QC, who has appeared for both claimants, that the exception in s 151C(2)(a) is to be approached in an objective fashion and that his Honour's approach was in part a subjective one relying on what the worker believed the situation to be. For example, he points to Williams DCJ's conclusion 'that the plaintiff was entitled to view the defendant's actions and words as a denial of all liability for injury'. 31 In my opinion, the approach to the exception in s 151C(2)(a) must be an objective one. On behalf of the opponent Collins, Mr Hislop QC appears to accept this but argues that his Honour's references to the subjective views of the worker do not matter because an analysis of the affidavit of Collins, and such of it as was conceded by the employer's representative, entitled his Honour to find as he did. That is, that the employer was in effect saying, 'we are not liable, you must look elsewhere for damages'. 32 In other words, it is submitted that it was clear that the worker had a fight on his hands and this was sufficient to constitute a denial of all liability. 33 The court needs to examine the evidence of Mr Collins in his affidavit set-forth earlier in order to determine whether it was open to his Honour to form the conclusion that the employer had denied all liability for the injury. 34 The conversation between the worker and Mr Chalker in paragraph 9 of the affidavit of Collins does not appear to be of any relevance, other than perhaps marginal. 35 Paragraph 10 of the affidavit is indicative of the worker being told by the employer's representative that the cause of the fall was the breaking of the shackle and that the employer had concern over the adequacy of the shackle. 36 In paragraph 11 the worker says that while he was in hospital he told Hobday that the question of responsibility for the accident would need to be determined by the court. 37 Collins said to Hobday that there was an issue whether the manufacturer of the shackle, the contractor or the supplier was responsible for what occurred. Significantly, the worker did not suggest that his employer was responsible. 38 The opponent said that Hobday responded: You've suffered a serious injury and you'll have to act in your own best interests in terms of your quality of life. 39 Collins went on to say that he took that to mean that 'he expected me to sue'. Collins' subjective belief may be put to one side. Since what Collins claims that he said to Hobday did not involve any suggestion of the employer being responsible for the accident, rather the manufacturer, contractor or supplier, it is impossible to objectively interpret Hobday's response as a denial of all liability in respect of the injury. 40 Paragraph 13 of the affidavit refers to Collins saying to the employer's representative words to the effect: Look, my interests and your interests coincide in this. We should be seeking compensation from the manufacturer and supplier of the shackle. 41 Collins said that he 'gained the impression' that Hobday agreed because he nodded his head. Again, how this can objectively be interpreted as a denial of all liability is impossible to conceive. There was no claim of liability against the employer made by the worker in the conversation with the employer's representative in paragraph 13 and, unsurprisingly, no answer was made by Hobday. 42 Paragraph 14 sets out a conversation which Collins says took place on 10 September 2001 after his release from hospital. He said that Hobday told him that the defect in the shackle was thought to be a rare fault in manufacture. Collins said that they discussed 'the problem of suppliers and contractors overselling a defective product'. Again this conversation is devoid of any denial of liability by the employer. Rather the discussion once more seems to concentrate on the possible responsibility of the manufacturer, supplier or contractor. 43 Paragraph 15 concerns conversations between the worker and his wife and says nothing as to whether the employer denied liability for the injuries caused to Collins in the accident. 44 Paragraph 16 contains a subjective conclusion by Mr Collins that all parties intended to deny liability. It provides nothing by way of an answer to the question of whether, objectively speaking, it can be concluded from the evidence that the employer was denying all liability for the worker's injury. 45 Paragraph 18 states that on the basis of his conversations with the employer's representative, Collins 'was dissatisfied as to the extent to which liability was admitted'. This is of course inconsistent with paragraph 16 which maintains that it was clear that all parties (including the employer) intended to deny liability. One assumes that paragraph 18 was included in the affidavit to prove the dissatisfaction of the worker under sub-clause (b) of s 151C(2). However, it fails to identify the extent to which liability was alleged to have been admitted by the employer. 46 I am wholly unable to extract from the worker's affidavit, his oral evidence and the affidavit of Hobday, that the employer was denying all liability for the injury to Collins. There is simply no way that the evidence, viewed objectively, could lead to the conclusion that the employer was saying 'we are not liable' or 'you have a fight on your hands'. On the contrary, it is difficult to conclude that Collins in fact indicated to his employer that he held it liable for his injury. None of the responses or statements by the employer indicate any attitude or position to the question of its legal responsibility for the injury to Collins. Indeed, the whole thrust of the discussions seems to have centred around the possible legal responsibility to the opponent of the manufacturer and supplier of the shackle, as well as the contractor. There was really no suggestion inherent in the discussions that there was going to be a contest in court between the worker and his employer or a denial of all liability for the worker's injury by the employer. It is simply not open to construe what occurred between the worker and Hobday and others, as such a denial of liability. 47 Mr Hislop submits that the dismissal of the strike out application is justified on the mere basis of there being disputed questions of fact. I do not think that is the case. His Honour did not determine the disputed conversations between Collins and Hobday. It seems that his Honour was prepared to look at the matter on the basis of the whole of the evidence before him. As I have said, I am prepared to approach the case on the basis of accepting all of what Collins deposed. 48 The other argument put by Mr Hislop is based on the principles explained by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128 - 129. Striking out the opponent's Statement of Claim, thus terminating his action, should of course be 'sparingly employed' by a court. 49 Applying each of the various ways in which the tests have been enunciated leads to the inevitable conclusion that there is simply little or no objective evidence, by conduct or inference, that the employer had denied all liability for the injury of the worker. 50 On my assessment this conclusion is plain and obvious, indeed manifest. It simply does not admit of reasonable argument to the contrary. 51 Turning to the argument under exception (b) in s 115C(2), Mr Hislop seeks to support the judgments of Williams DCJ and Balla DCJ that the payment of statutory workers compensation by the employer constituted a partial admission of liability in respect of the worker's injury. Mr Hislop submits that the payments constitute an admission of injury and that it occurred in the course of employment. This constitutes, so he submits, a partial admission of liability, and one with which the worker was not satisfied. 52 The main burden of upholding this argument on behalf of the opponents fell upon counsel for the opponent Lamy in the second appeal. The decision of Balla DCJ held that the reference in s 151C(2) to a partial admission of liability extended to communications made by the insurer relating to liability to make payments under the WC Act. 53 It is the submission of Mr Baran of counsel, appearing on behalf of the opponent, that the words 'at common law' should not be read 'into subparas (a) and (b) of s 115C(2) after the word 'liability'. He further submitted that the admissions made in the insurer's letter of 19 August 2001 (White AB 64) can be relied upon as an admission of damage and injury. These constitute a partial admission of liability in subsequent proceedings against the employer for modified common law damages, since damage is an ingredient in the cause of action. 54 I am unable to accept this construction of s 115C(2). Given the subject matter of Part 5 of the WC Act - common law remedies, and the words used in s 115C itself, there is no doubt that the references to denial and partial admission of liability are references to the proposed proceedings in a court for modified common law damages. They cannot and do not refer to either a denial of liability or to a partial admission of liability to pay statutory compensation under the WC Act. 55 There are a number of reasons why this is so. First, the whole of s 115C(1) is premised on the fact that the plaintiff is a person to whom compensation is payable under the WC Act. Second, the provision, indeed the Part, concerns the commencement of court proceedings for damages with respect to the worker's injury 'against the employer liable to pay that compensation'. This, as well as the introductory words to ss (2), make it plain that sub para (a) is not concerned with a denial of liability under the WC Act. It is only concerned with a denial of all liability with respect to the prospective action in a court for modified common law damages. 56 Similarly, sub para (b) must relate to the commencement of an action for modified common law damages. It is speaking of an admission of partial liability in the proposed common law proceedings. Indeed, that is what the introductory words to sub cl (2) say. 57 An admission of liability to pay statutory benefits under the WC Act, and their payment, cannot be an admission of partial liability in the proposed common law proceedings. If it were the case, there would seem to be little point in having a 6 month delay in ss (1). It would rarely apply and would defeat the purpose of the provision to encourage negotiation between the parties. That the 6 month delay might also have other purposes, such as rehabilitation or treatment of the worker, does not, it seems to me, assist the opponent. 58 Put simply, the whole context of s 151C(2) (a) and (b) and Part 5 is a claim for modified common law damages. Admissions as to the payment of statutory benefits under the WC Act are simply not partial admissions of common law liability. 59 Accordingly both judges in the District Court were in error in relation to their construction of s 151C(2)(b) of the WC Act. 60 The notices of motion before their Honours should have been upheld and the respective Statements of Claim struck out because of their non-compliance with s 151C(1). 61 The following orders are proposed:

The opponent/respondent to have a certificate under the Suitor's Fund Act if otherwise entitled.

Order of Williams DCJ dismissing the Notice of Motion be set aside and, in lieu thereof, uphold the Notice of Motion and dismiss the Statement of Claim.

The opponent/respondent to have a certificate under the Suitor's Fund Act if otherwise entitled.

Order of Balla DCJ dismissing the Notice of Motion be set aside and, in lieu thereof, uphold the Notice of Motion and dismiss the Statement of Claim. 62 GILES JA: In each of these cases an injured worker brought proceedings for modified common law damages in the District Court and the employer unsuccessfully applied to strike out the statement of claim on the ground that the proceedings were commenced before six months had elapsed since notice of the injury was given to the employer. These are applications for leave to appeal on which full argument was heard so that, if leave to appeal were granted, the appeals could be determined without further hearings. 63 At issue was the proper construction and application of s 151C of the Workers Compensation Act 1987 ("the Act"), at the relevant time providing - "151C(1) A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until 6 months have elapsed since notice of the injury was given to the employer.

(2) Despite subsection (1), the person is entitled to commence court proceedings against the employer if either of the following occurs:

(a) the employer denies all liability in respect of the injury,

(b) the employer admits partial liability in respect of the injury but the person is dissatisfied with the extent to which liability is admitted." 64 The parties proceeded on the basis that s 151C imposed a condition precedent such that proceedings commenced prior to the lapse of the six months were not validly commenced unless one of the alternatives (a) and (b) in s 151C(2) was satisfied, see Budge v Kimmorley (1991) 14 MVR 245; Dandashli v Dandashli (CA, 15 December 1996, unreported) and Hill v Bolt (1992) 28 NSWLR 329 as to analogous provisions of the Motor Accidents Act 1988. With the coming into force of the Workers Compensation Legislation Amendment Act 2001 on 27 November 2001, whether proceedings claiming modified common law damages had been validly commenced prior to that date gained particular significance. Many proceedings were commenced by workers in anticipation of that legislation, and there have been a number of decisions in the District Court, some inconsistent, as to the construction and application of s 151C. It is appropriate that leave to appeal be granted.

Section 151C in general 65 An injured worker can claim modified common law damages from his employer if he elects to abandon his entitlement to statutory compensation under the Act. However, the worker is barred from immediately bringing proceedings against the employer, and must wait for six months, unless the employer denies all liability in respect of the injury or the employer admits partial liability but the worker is dissatisfied with the extent to which liability is admitted. Despite the submissions to the contrary, it is plain that the objective is to require the worker to seek his damages by negotiation with the employer rather than litigation in the first instance, with an entitlement to proceed to litigation if negotiation is unlikely to be fruitful because the employer has denied all liability or has admitted partial liability but not to an extent satisfactory to the worker. The statutory schemes are not completely identical, but they are very similar and the particular bars are closely related, and the observations concerning the equivalent s 52(1A) and (2) of the Motor Accidents Act in Taylor v Francoif (1990) 11 MVR 211 at 213-4 and Atikullah v Sefton (2001) 53 NSWLR 574 at 590 are pertinent. 66 The words "denies all liability in respect of the injury" in s 151C(2)(a) are strong. (With the 2001 amendments they became "wholly denies liability in respect of the injury", although we are concerned with the earlier form of words.) Denial of all liability does not need an express claim by the worker upon the employer - anticipatory rejection of any claim to damages will show that negotiation is unlikely to be fruitful just as much as rejection of a claim once made, if not more so. A denial of liability can be found in conduct as well as words. But the strong words will not be fulfilled by failure to volunteer liability, and are unlikely to be fulfilled by failure to respond to a claim. Silence or equivocation is not denial. There must be true denial of liability. 67 The words "admits partial liability with respect to the injury" are a little curious, since the employer is either liable or not liable and there is no intermediate position. They must refer to acceptance of liability but reservation as to contributory fault on the part of the worker, see Hill v Bolt at 333 and Atikullah v Sefton at 590. For whether they also refer to acceptance of liability but reservation as to the quantum of damages payable to the worker see Atikullah v Sefton at 590.

Denial of all liability 68 This alternative arose only in Sydney Ports Corporation v Collins. The worker and an officer of the employer gave evidence of communications from the employer prior to the commencement of the proceedings. The worker submitted that the employer's conduct by and in relation to the communications amounted to denial of all liability. The evidence was largely consistent, but the employer's officer denied saying some of the things attributed to him by the worker. The judge did not resolve the differences, but held that on the basis of "the admitted remarks" of the employer's officer there was a denial of all liability. 69 The worker submitted that the summary relief of striking out the statement of claim was not available because there was an issue of fact to be tried, whether the employer had denied all liability. The employer countered this by willingness to have that issue determined on the basis that the worker's evidence should be accepted in full. The worker had the opportunity to put before the court all the evidence he desired going to denial of all liability, and it was not suggested that in a more full hearing further evidence would be available. In my view, if the evidence be taken at its most favourable to the worker the principles for which General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 is conventionally cited will not be offended. 70 The worker relevantly said in his affidavit [the errors are in the original] - "10. After the accident I was taken to Casualty. Shane Hobday the General Manager visited me that afternoon in hospital who stated 'We've investigating the matter'. I was also visited by Kevin Rae the shiftmaster. Either Shane or Kevin said, 'The shackle broke' and I said 'You'll probably find its grain boundary corrosion which I had expressed concern about previously'. 11. During my stay at the Hospital. I received visits from Shane Hobday where the issue of the defective shackle was discussed amongst other things. I stated to him on more than one occasion words to the effect 'The question of responsibility will need to be determined by the Court. There is the issue of whether it is the manufacturer the contractor or the supplier who is responsible.' He replied to me with words to the effect 'You've suffered a serious injury and you'll have to act in your own best interests in terms of your quality of life'. I took that to me that he expected me to sue. 12. I was aware within days of the accident from numerous discussions with visitors that there was and will be an argument between the employer the manufacturer and the supplier of the shackle. 13. In a visit from Shane Hobday he was accompanied by Greg Martin in about the 3rd week whilst still in hospital. I was also being visited by Dr Godding. I had a conversation with him where I said words to the effect 'Look, my interests and your interests coincide in this. We should be seeking compensation from the manufacturer and supplier of the shackle. I gained the impression from him that he was in agreement. I remember him nodding his head and smiling and making a general remark. 14. On 10 September, 2001, after my release from the hospital. I had a conversation in the office of Shane Hobday wherein he stated to me 'The defect in the shackle was thought to be a rare fault in manufacture. It was 1000 to 1'. I said, 'I don't believe that.' I believe I also said to him words to the effecting this conversation 'The shackle failed in its intended application. It was a 6.6 ton shackle carrying a 730 kg load and it fails within a year, so its clearly not suitable in that application.' We discussed the problem of suppliers and contractors overselling a defective product. I had a similar conversation with Alan Chalker but I believe that was after proceedings issued. 15. I had been informed by my wife whilst in hospital that she had been told that the injuries were the result of an 'unforseen failure' and that 'nobody was taking responsibility for the accident'. She informed me that 'your fellow employees can't help you' and that 'the shackle has been tested by ERTS who way it was an annealing fault and an 'unpredictable failure'. At that time I was very unwell and my wife was having meetings with my Employer on my behalf. 16. It has been clear to me from all my conversations that all parties intend to deny liability in this matter. 17. I instructed by Solicitors Higgins & Higgins to arrange an investigator to interview witnessed prior to the issue of proceedings. I understand no assistance was provided to them. 18. In the absence of any information reports or assistance being provided to me and on the basis of my conversation with the Defendant I was dissatisfied as to the extent to which liability was admitted." 71 The brief cross-examination of the worker did not materially add to this. 72 So far as the worker stated his subjective opinion that the employer denied liability and that he was expected to sue, if admissible at all that must give way to an objective assessment of whether, by words or conduct, the employer denied liability. I am prepared to assume that a possible claim for damages by the worker against the employer underlay the various communications to which the worker referred, although on one view of the worker's evidence he rested upon his statutory entitlements against the employer and had in mind only action against the manufacturer and supplier of the broken shackle (who "the contractor" was is obscure). 73 What is absent, in my view, is any words or conduct from the employer constituting denial of all liability. The employer did not volunteer liability, and it conveyed that the breaking of the shackle was a chance failure, but it did not go further and assert that it was therefore free of liability. Indeed, implicit in the apparent agreement that there should be a united front in seeking compensation from the manufacturer and supplier of the shackle was acceptance of the possibility, at least, that the employer was liable to the worker. The high point of the evidence, with a degree of generosity to the worker, is if his wife's statement that "nobody was taking responsibility for the accident" reflected something said in meetings with the employer, but that does not go beyond personal responsibility and falls well short of denial of the employer's liability. 74 In my view, and taking the evidence at its most favourable to the worker, to the level of satisfaction appropriate for summary relief there was not a denial of all liability by the employer.

Admission of partial liability 75 This alternative arose in both cases, in Sydney Ports Corporation v Collins as an alternative somewhat conditionally found ("it could be argued" became a basis for decision) and in the case of National Direct Imaging Pty Ltd v Lamy as the operative alternative. In each case the partial admission of liability was found in the payment by the employer to the worker of statutory workers compensation entitlements, plus in National Direct Imaging Pty Ltd v Lamy a letter in which the employer's workers compensation insurer said that it accepted his claim to workers compensation entitlements. 76 In Sydney Ports Corporation v Collins the worker submitted that making the payments admitted (i) injury (ii) in the course of employment, two elements of any claim for modified common law damages, and that there was thereby a partial admission of liability. I am unable to agree. Admission of injury, for example, is consistent with denial of all liability in respect of the suffering of the injury, and is not a partial admission of liability within the meaning of s 151C(2)(b). In Bradley v Jones (CA, 28 June 2001, unreported) it was held that admission of breach of a duty of care was not an admission of liability within s 45(2) of the Motor Accidents Act (see at [13] - [14]); it is not necessary to decide whether that would be so for s 151C(2)(b), but lesser admission of facts relevant to liability is not partial admission of liability. 77 In National Direct Imaging Pty Ltd v Lamy the worker made the same submission, but also made a wider submission, that "liability" in s 151C(2) included liability to pay statutory workers compensation entitlements. It was said that the word was not confined by reference to modified common law damages, and that liability encompassed all kinds of liability including to pay statutory workers compensation entitlements. I am unable to agree. Section 151C is concerned with, and only with, claims for modified common law damages. By the introductory words in s 151C(1) the worker is necessarily entitled to payment of compensation under the Act, and if the submission were correct there would always be an admission of partial liability: that would make nonsense of the provision. The proceedings with which s 151C are concerned are proceedings claiming modified common law damages, and "liability" in s 151C(2) plainly means liability for modified common law damages. 78 In my opinion, to the level of satisfaction appropriate for summary relief in neither case was there a partial admission of liability by the employer. 79 I agree with the orders proposed by Stein JA. 80 SANTOW JA: I agree both with the reasons of Stein JA and of Giles JA and the orders they propose.

Last Modified: 02/24/2003 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.

CITATION : Sydney Ports Corporation v Collins;National Direct Imaging Pty Ltd v Lamy [2003] NSWCA 28 HEARING DATE(S) : 12 December 2002 JUDGMENT DATE : 20 February 2003

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