Teofilo v State of New South Wales

Supreme Court of NSW|2007-07-09|Before: Young CJ, Mahoney J

CITATION : Teofilo v State of New South Wales [2007] NSWSC 767

HEARING DATE(S) : 09/07/07 JURISDICTION : Equity Division

DECISION : Declaration made in plaintiff's favour.

LEGISLATION CITED : Crown Proceedings Act 1988, s 7 Workplace Injury Management and Workers Compensation Act 1998, ss 3, 105(1), 352, 353, 362

Ellinas v Ellinas (No 2) [1979] 1 NSWLR 431 CASES CITED : Law Society of New South Wales v Weaver [1974] 1 NSWLR 271 P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366

PARTIES : Adam Teofilo (P) State of New South Wales (D)

COUNSEL : S Gibb SC and S Moffet (P) J Catsanos (D)

SOLICITORS : Walker Legal (P) DLA Phillips Fox (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3215/07 - TEOFILO v STATE OF NEW SOUTH WALES JUDGMENT 1 HIS HONOUR: The plaintiff seeks a declaration that the defendant is obliged to pay him the amount of weekly payments awarded to him by Arbitrator Lancken of the Workers Compensation Commission of New South Wales on 26 February 2007. 2 The background to the present claim is that the plaintiff was a police officer who alleged that he suffered an injury for which the Police Service was liable to pay compensation. His application was dealt with by Arbitrator Lancken in his favour and a weekly award was made. 3 On 12 April 2007, the Police Service lodged an appeal to a Presidential member of the Commission. I suppose it was actually an application for leave to appeal, because appeals appear to be only by leave in that Commission. The grounds of the appeal are a little obscure in the way they are expressed, but one would appear to be that as the plaintiff's employment with the Police Service was about to come to an end in any event, it was wrong for the arbitrator to make a continuing award. However, the arbitrator awarded the plaintiff weekly benefits of $321.93 per week and according to a certificate in evidence of 6 July 2007, weekly benefits totalling $4,539.90 are unpaid. A certificate to that effect could, pursuant to Workers Compensation legislation, be lodged with a local court and judgment could be entered for the plaintiff, who could have execution subject to any application made by the defendant for a stay of execution. 4 The plaintiff, however, says that it is a cumbersome process to have to, each week or each so often, apply for a certificate from the Registrar of the Workers Compensation Commission and then register that certificate with the local court. He says that there is no provision in the current Workers Compensation legislation for a stay of a weekly award of compensation and there is no reason why, despite the fact that an appeal has been lodged, he should not be paid his weekly amount and that he is entitled to approach this Court to have it declared that the defendant is liable to make the payment. 5 The plaintiff recognises that a declaratory order is not an executive judgment, but the custom has been in the past that the Crown recognises the declaratory judgment of the Supreme Court so that execution processes are rarely necessary. The position of the Crown was explained by Mahoney J in P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 at 383-84. It is unnecessary to go into further detail as to whether s 7 of the Crown Proceedings Act 1988 applies to a declaratory judgment. 6 There is no doubt that the arbitrator made his award and that an appeal is pending. There is, however, considerable doubt as to when the appeal will actually be heard. Someone said from the Bar table that it might be eighteen months, but there is no evidence of that. However, there is a distinct flavour in this case that the Workers Compensation legislation was put together on the basis that there would be sufficient funding of the Workers Compensation Commission and enough staff and judicial officers to enable appeals to be heard expeditiously, but that for some reason or other this is not occurring in practice. Hence, the situation appears to be that a worker can receive an order for a weekly payment from an arbitrator and be paid absolutely nothing by his employer for a period exceeding a year. The remedy, it would seem, apart from any application to this Court, is that under the Workplace Injury Management and Workers Compensation Act 1998, s 362, the worker can obtain a certificate as to how much is owing and under s 362(3): "A certificate of the Registrar under this section that is filed in the registry of a court having jurisdiction to give judgment for a debt of the same amount as the amount stated in the certificate, operates as such a judgment." 7 Accordingly, the worker could register his certificate in the local court and then endeavour to issue execution. However, there he may have a problem because the real defendant is the Crown and, under s 7(2) of the Crown Proceedings Act, execution is not to be issued out of any Court against the Crown or any property of the Crown. Thus, it would seem that if a judgment is registered under s 362(3) of the Workplace Injury Management and Workers Compensation Act the worker would have to obtain a mandamus for the Treasurer to pay out the amount under section 7(1) of the Crown Proceedings Act. 8 During argument it was put that if the normal procedure was followed, then the Police Service would be able to get a stay of execution in the local court, but now that my attention has been drawn to s 7 of the Crown Proceedings Act, this would not appear to be feasible. 9 Accordingly, one has a situation where s 3 of the Workplace Injury Management and Workers Compensation Act makes it plain that the objectives of the system are: to provide effective measures to assist injured workers; to promote their return to work as soon as possible and to provide injured workers and their dependants with income support during incapacity. The system to be fair, affordable and financially viable. Yet one also has the situation that even a worker who has convinced an arbitrator of the righteousness of his or her claim, can be denied any sustenance at all for perhaps a year or eighteen months, merely because the employer puts on an appeal. Furthermore, when the employer is the Crown, there is no way at all that even a registered judgment can get the worker cash in his or her hand to enable them to buy food and other necessities whilst the appeal is working its way through the system, other than by hiring a lawyer and getting a mandamus against the Treasurer. 10 However, despite all those problems, the Crown argues in this case that this Court has no jurisdiction to alleviate the problem. Primarily, its counsel, Mr Catsanos, argues that s 105(1) of the Workplace Injury Management and Workers Compensation Act provides: "Subject to this Act, the Commission has exclusive jurisdiction to examine, hear and determine all matters arising under this Act ..."

means that this Court has no jurisdiction at all to deal with the problem. 11 It is doubtful whether s 105(1) has the effect for which Mr Catsanos argues. It is significant that the Act uses the words "examine, hear and determine", that indicates that the exclusive jurisdiction is up to the point of determination. Matters of enforcement and ancillary matters outside that determination are not the subject of the prohibition. That construction is reinforced by s 362 itself, which provides that it is the Local Court or the District Court where the award is to be enforced and, at least where the employer is not the Crown, where any debate as to whether there should be a stay of enforcement is to be determined, rather than the Commission. Indeed, the Commission appears to have no power or no machinery to deal with applications for stay. 12 Mr Catsanos, however, says determination not only includes the determination by the original arbitrator but also a determination by a Presidential member of the Commission on appeal. He points to the difference in wording between the appeal under s 352 of the Act to a Presidential member, and under s 353 to the Court of Appeal. The word "determination" is used in connection with a Presidential member's reconsideration of the award. 13 The significance of this cannot be gainsaid, but it needs to be balanced against the remainder of the indications and it also needs to be reviewed against the law that this Court's declaratory jurisdiction is not to be deemed to be taken away unless there are clear words in the legislation removing jurisdiction; see eg Law Society of New South Wales v Weaver [1974] 1 NSWLR 271 at 272. 14 It is also noteworthy that in cases of enforcement of family law orders, even though the Family Court was given exclusive jurisdiction, this Court considered that various matters of enforcement after final determinations were made by the Family Court were not matrimonial causes; see eg Ellinas v Ellinas (No 2) [1979] 1 NSWLR 431 (CA). On my view, on the proper construction of s 105(1) of the Workers Compensation legislation this Court has jurisdiction to make a declaration. 15 The next question is whether this Court should in the exercise of its discretion, decline to do so. 16 One significant matter raised by Mr Catsanos was that there is no utility in granting such a declaration. This is because all that a declaration would say would be what everybody already knows, and that is that there is a determination by an arbitrator that the plaintiff was entitled to an award. The declaration cannot be the subject of enforcement procedures and there is an alternative method in registering the award in the Local Court. That is a weighty argument. 17 However, on the other side, the Act in s 3 sets out its aims, one of which is to protect the worker, and on the existing scenario, with tremendous delays in hearing appeals, the worker is without sustenance or may well be without sustenance, which is not in accordance with the scheme of the Act. Of course, if the worker is to receive moneys and then the appeal is successful, and the worker happens to have used it all to buy food, there will be nothing left to be returned to the defendant, that is a significant matter. 18 On the other hand, as between the Crown and the worker, one would have thought that the worker's problems about finance are going to be more significant than those of the Crown. 19 Another significant matter is that, ordinarily, when considering stays, one assumes that the determination below was correct. All these factors need to be taken into account. 20 Another factor that needs to be taken into account is that it is exercise of traditional equitable jurisdiction, which in the olden days would have been dealt with by a Bill of Peace, that where the ordinary law requires multiple applications to be made, equity will seize the issue, determine it once and for all and make declarations as to the rights: see, for instance, Ashburner's Principles of Equity, 2nd ed, 1933, p 8. 21 Putting all these matters together, in my view, as a matter of discretion the Court should make the order. 22 The next matter is, what is the form of the order? The form sought in the plaintiff's short minutes is:

"(1) At all material times since 28 May 2007, the defendant has been obliged to pay to the plaintiff all amounts ordered by the Workers Compensation Commission ('the Commission') in Matter No 17269-2006 to be paid by the defendant to the plaintiff and referred to in paragraph 1 of the certificate of determination issued by the Commission on 12 April 2007.

(2) Unless and until the defendant ceases, by operation of law, to be obliged so to do, the defendant continues to be obliged to pay to the plaintiff all such amounts which hereafter become due and payable by the defendant to the plaintiff." 23 Mr Catsanos says that that declaration is too wide and should be framed, if a declaration is to be made, that the plaintiff is entitled under the order of the Commission to be paid certain moneys. His main concern is that if the Presidential member of the Commission determines that the appeal should be allowed and that the moneys should be paid to the plaintiff or no moneys paid to the plaintiff after a certain time, that there will be a determination of this Court that the moneys are nonetheless payable. 24 Mr Gibb SC, for the plaintiff, concedes that that is not intended and I think the thing to do is to stand the matter over for short minutes to be brought in so that the appropriate form of declaration can be tightened up. The defendant should pay the plaintiff's costs of the proceedings. I publish these reasons. 25 I will stand the matter over until Friday 13 July 2007 at 9.50 am so that short minutes can be brought in as to the proper form of order. 26 Mr Catsanos has asked for a stay, but that is inappropriate for a declaratory order. 27 Since I gave my reasons, Mr Gibb has tendered a letter, which will be exhibit PX03, as to an offer that was made on 5 July. However, it does not seem to me: (1) in light of the terms of that offer; (2) in the way the matter was argued; (3) the fact that this was the first case of this type; and (4) that I do not, in any event, think that the costs on an indemnity basis and the ordinary basis are of any significant difference, that I should decline to make an order for costs other than the ordinary order for costs.

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