District Court New South Wales Medium Neutral Citation: Stanley v Lachlan Shire Council [2023] NSWDC 262 Hearing dates: 12 July 2023 Date of orders: 21 July 2023 Decision date: 21 July 2023 Jurisdiction: Civil Before: Weber SC DCJ Decision: (1) Leave is granted to the plaintiff to commence proceedings in this Court pursuant to s 26 of the Personal Injury Commission Act 2020 (NSW). (2) Costs of the motion be costs in the cause. Catchwords: WORKERS COMPENSATION — Compensation dispute determinations — Referral of dispute to Commission CONSTITUTIONAL LAW — Judicial Power — Federal jurisdiction Legislation Cited: Commonwealth Constitution, s 75 Constitution Act 1902 (NSW), s 51 Interpretation Act 1987 (NSW), ss 21, 112 Judiciary Act 1903 (Cth), s 39(2) Local Government Act 1993 (NSW), s 220 Personal Injury Commission Act 2020 (NSW), ss 26, 27 Cases Cited: Australasian Temperance and General Mutual Life Assurance Society Ltd v Howe (1922) 31 CLR 290; [1922] HCA 50 Burns v Corbett (2018) 265 CLR 304; [2018] HCA 15 Crouch v Commissioner for Railways (Qld) (1985) 159 CLR 22; [1985] HCA 69 Deputy Commissioner of Taxation v State Bank (NSW) (1992) 174 CLR 219; [1992] HCA 6 Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5; 96 ALJR 234 Lee v Fletcher International Exports Pty Ltd [2023] NSWDC 71 Searle v McGregor [2022] NSWCA 213 Texts Cited: None Category: Principal judgment Parties: Jammie Michael Stanley (Plaintiff) Lachlan Shire Council (Defendant) Representation: Counsel: Mr T Grimes (Plaintiff) Mr J Beran (Defendant) Solicitors: Gerard Malouf & Partners Law (Plaintiff) Bartier Perry (Defendant) File Number(s): 2023/00120527 Publication restriction: None JUDGMENT Introduction 1. The plaintiff commenced these proceedings by way of summons. In the summons, the plaintiff seeks leave pursuant to s 26(3) of the Personal Injury Commission Act 2020 (NSW) (the Act) to commence proceedings for compensation in this Court. The plaintiff further seeks an order pursuant to s 27 of the Act that the matter be remitted to the President of the Personal Injury Commission (PIC) to be determined by a Member. 2. The proceedings concern the claim in respect of workplace injuries allegedly sustained by the plaintiff while in the employ of the defendant Council. I was told from the Bar Table that these injuries were allegedly incurred while the plaintiff was working as part of a road maintenance crew. 3. The plaintiff now lives in Queensland and as such there is a possible issue of Federal jurisdiction which arises. A Member of the PIC determined that the issue of possible Federal jurisdiction was arguable, and took the view that she did not have power to determine that question. 4. The proceedings were thus discontinued in the PIC and these proceedings were commenced. 5. The reference to "Federal jurisdiction" is in reality a shorthand reference to section s 75 of the Commonwealth Constitution ("the Constitution") which is in the following terms: Original jurisdiction of High Court. In all matters— (i.) Arising under any treaty: (ii.) Affecting consuls or other representatives of other countries: (iii.) In which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party: (iv.) Between States, or between residents of different States, or between a State and a resident of another State: (v.) In which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth: the High Court shall have original jurisdiction. 1. Section 39(2) of the Judiciary Act 1903 (Cth) is in the following terms: (2) The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject-matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, except as provided in section 38, and subject to the following conditions and restrictions: (a) A decision of a Court of a State, whether in original or in appellate jurisdiction, shall not be subject to appeal to Her Majesty in Council, whether by special leave or otherwise. 1. ln Burns v Corbett (2018) 265 CLR 304; [2018] HCA 15, the High Court confirmed that State Parliaments do not have legislative capacity to confer on a State administrative tribunal Federal judicial power to determine matters of a kind described in sections 75 or 76 of the Constitution. The PIC is such a Tribunal. 2. The plaintiff says that in fact there is no question of Federal jurisdiction. This is so he says, as for the purposes of section 75(iv) of the Constitution, the defendant Council was neither a resident of a different State to the plaintiff, nor is the Council a State. Upon this basis, that the plaintiff sought the remittal of the matter to the usual decision-maker in the PIC, pursuant to s 26(5) of the Act. 3. The parties were agreed that there were two issues arising namely: 1. Whether the Council was a resident of the State of New South Wales; and 2. Whether the Council was for relevant purposes as an emanation of the State of New South Wales. 1. Understandably the parties conducted the hearing by presenting arguments on these two issues as being distinct from each other. For reasons upon which I shall later briefly refer, I believe that the issues in fact may be interrelated. The Resident Issue 1. As I have earlier indicated the plaintiff argued that the Council was not a resident of the State of New South Wales. In that regard, he relied on the decision of the High Court in Australasian Temperance and General Mutual Life Assurance Society Ltd v Howe (1922) 31 CLR 290; [1922] HCA 50 (Howe). In that case, the Court held that for the purposes of s 75 (iv) of the Constitution the noun "resident" was applicable only to a natural person, and was not applicable to legal entities of a non-human kind such as corporations. The plaintiff contended that this dicta would extend to entities such as the Council. 2. The legal status of Local Councils in this State is defined by s 220 of the Local Government Act 1993 (NSW) which is in the following terms: 220 Legal status of a council (1) A council is a body politic of the State with perpetual succession and the legal capacity and powers of an individual, both in and outside the State. (2) A council is not a body corporate (including a corporation). (3) A council does not have the status, privileges and immunities of the Crown (including the State and the Government of the State). (4) A law of the State applies to and in respect of a council in the same way as it applies to and in respect of a body corporate (including a corporation). 1. Section 220(1) contains terms that are defined in s 21 of the Interpretation Act 1987 (NSW) which, inter alia includes: "individual" means a natural person. … "the State" means the State of New South Wales. 1. The defendant relied upon s 220(1) to say that as the Council had the legal capacity and powers of the natural person, it was thus to be treated as a natural person. As such it was argued that the Council was a resident of New South Wales, and that nothing in Howe precluded that conclusion. 2. I do not accept this argument. In my view, section 220(1) does not constitute the Council as a natural person, rather it starts from the premise that the Council is not a natural person, but then seeks to describe the legal capacities and power of a Council by reference to the legal capacity and power of a natural person. 3. The defendant went on to argue that it was a resident, and moreover was a resident of the State of New South Wales. In light of my conclusion as to the threshold question of whether the Council can be a resident, I do not consider it necessary to consider that the argument that in any length. I should say however that the defendant based this argument on the proposition that the Council was a body politic, being a group of people who were resident in New South Wales, and as such the Council was also resident in New South Wales. 4. I do not accept this argument. The electors of the defendant need not be residents of the Lachlan Shire Council local government area, indeed the electors may not even be residents of Australia. This is clear from the fact that any person who owns rateable land in the Council district is eligible to be an elector (see s 266(1)(b) of the Local Government Act). Is the Council an Emanation of State of NSW? 1. The plaintiff submitted that the Council was not an emanation of the State of NSW. He pointed out that unlike the Transport Accident Commission of Victoria which was the relevant insurer in Searle v McGregor [2022] NSWCA 213, the Council was not a government instrumentality created by statute. 2. The plaintiff relied on the decision of Andronos SC DCJ in Lee v Fletcher International Exports Pty Ltd [2023] NSWDC 71. In that case, his Honour concluded the defendant was not an emanation of State of New South Wales. 3. His Honour came to this conclusion in Lee's case as, inter alia, the defendant in that case was a private corporation with no relevant connection to the State of New South Wales. Indeed, in my view, the only arguable nexus between the State and the defendant in Lee was quite tenuous, being that the defendant was held a self-insurer licence under the Workers Compensation Act 1987 (NSW). 4. In Lee v Fletcher International Exports Pty Ltd, his Honour stated: "[31] In Crouch at 39-40, the plurality of the High Court considered a number of factors in determining whether the subject matter of that claim was a claim against an instrumentality or emanation of the State sued in its capacity as such. In that case, the claim arose from the discharge of traditional governmental functions of the State; the burden of any judgment if the plaintiff's claim should succeed would fall upon the Consolidated Revenue of the State and the funds involved in resisting the claim were to come from the same source. [32] None of those factors are present in the matter currently before the Court. The claim does not arise from the discharge of traditional governmental functions of the State. The defendant is a private corporation engaged in trade or commerce. The plaintiff brings proceedings in her capacity as an employee seeking compensation for an alleged workplace injury suffered in the course of employment. As a self-insurer, it may be inferred that the defendant will meet both the plaintiff's claim and the burden of any judgment should the plaintiff ultimately succeed." 1. The reference to Crouch by his Honour was a reference to Crouch v Commissioner for Railways (Qld) (1985) 159 CLR 22; [1985] HCA 69. 2. In my view the situation in the present case is entirely different from the fact situation confronting his Honour in Lee. I take this view as the Council is not a private corporation, and the alleged injury occurred during the discharge of traditional government functions of the State; namely roadworks. 3. The plaintiff relied further on s 220 of the Local Government Act. 4. The plaintiff says that pursuant to that section the Council was a "mere body politic" which does not have the status of the Crown. 5. I do not accept this argument. 6. Local Councils are established pursuant to powers granted to the legislature of New South Wales pursuant to s 51 of the Constitution Act 1902 (NSW) which is in the following terms: 51 Local government (1) There shall continue to be a system of local government for the State under which duly elected or duly appointed local government bodies are constituted with responsibilities for acting for the better government of those parts of the State that are from time to time subject to that system of local government. (2) The manner in which local government bodies are constituted and the nature and extent of their powers, authorities, duties and functions shall be as determined by or in accordance with laws of the Legislature. (3) The reference in subsection (2) to laws of the Legislature shall be read as a reference to laws that have been enacted by the Legislature, whether before or after the commencement of this section, and that are for the time being in force. 1. Further, as I have earlier indicated, a local council is created, pursuant to the Local Government Act, as a body politic of the State of New South Wales. Section 112 of the Interpretation Act provides as follows: (1) In any Act or instrument— (a) a reference to an officer, office or statutory body is a reference to such an officer, office or statutory body in and for New South Wales… 1. On this basis, the defendant submitted that the Local Government Act creates local councils in and for the State of New South Wales. I agree with the submissions. 2. Further the defendant submitted that pursuant to the State's Constitution, local councils are created for the "better government" of the parts of the State that they represent. A local council is a creation of and instrumentality of a state: see Hobart International Airport Pty Ltd v Clarence City Council [2022] HCA 5; 96 ALJR 234 at [60] per Kiefel CJ, Keane and Gordon JJ. 3. It should be also noted that the use of the words "a State" in section 75 of the Constitution has been extended to include instrumentalities of the State. In Crouch v Commissioner for Railways (Qld), Gibbs CJ stated follows: "[11] In the light of these authorities it should be concluded that the words "a State" in s.75(iv) are wide enough to include an agency or instrumentality of a State. Elsewhere in the Constitution, when "State" is used to refer to a polity, rather than to a geographical area, it appears to be used in that wide sense - see, e.g., ss.78, 109 and 114. In general, a constitutional provision conferring jurisdiction should not be given a narrow construction. It is true that if the only object of the conferral of federal jurisdiction in matters between a State and a resident of another State had been "to avoid partiality, or the suspicion of partiality" (Quick and Garran, The Annotated Constitution of the Australian Commonwealth, at p.778), there would have been little or no justification for the provision. However, there were reasons of procedural convenience for giving the High Court competence to entertain proceedings to which the States were parties, and the status of the disputants might have been regarded as sufficient reason to confer original jurisdiction on the High Court in matters between States. In any case, I have already indicated that the Court should not give a restricted meaning to a constitutional provision of this kind simply because it thought it inconvenient. There seems to me no sufficient reason why the words "a State" in s.75(iv) should not be given the wide meaning which they are capable of bearing." 1. I agree with the defendant's contention. In my view the Council is an emanation of the State of New South Wales empowered with the role of performing certain aspects of the governance of New South Wales, albeit within geographical boundaries ascribed to it. 2. I do not consider that it is in any way is appropriate in these circumstances to label the Council a "mere body corporate" as the plaintiff in his submissions did. To my mind Council plays an important role in the governance of the State of New South Wales, created so to do by the State. 3. I also do not accept that s 220(3) of the Local Government Act anyway assists the plaintiff. That provision in my view is directed to the issue of the doctrine of usually described as the "Shield of the Crown". 4. The fact that the Council does not have the status, privileges and immunities of the Crown in my view does not preclude it from being nonetheless an emanation of the Crown. As was explained by the High Court of Australia in Deputy Commissioner of Taxation v State Bank (NSW) (1992) 174 CLR 219; [1992] HCA 6: "… The "Shield of the Crown" doctrine has evolved as a means of ascertaining whether an agency or instrumentality "represents" the Crown for the purposes depending on the purpose of determining whether that agency or instrumentality is bound by statute enacted by the legislature. The doctrine is in essence an aid to the process of statutory interpretation whereby the courts seek to ascertain the legislative intent of Parliament. Hence it has been said that an agency or instrumentality may be endowed with the attributes of the Crown for one purpose but not for others.": [19]. 1. I thus conclude the Council is an emanation of the State of New South Wales and thus of the proceedings involve matters of Federal jurisdiction, beyond the jurisdiction of the PIC. 2. I should also add that earlier in these reasons I have indicated that notwithstanding that for good reasons the parties argued the two issues in the proceedings as being distinct from each other, in my view, they are to some extent interrelated. I take this view as if as, I have found, the Council is an emanation of the State of New South Wales, it is difficult to conceive that it could also be a resident of the State of New South Wales. Conclusion 1. It follows that leave should be granted to the plaintiff to commence proceedings in this Court, but the order seeking the remittal of the proceedings to the PIC should be refused. Costs 1. Given the nature of the application which was necessary to be determined in the proceedings due to factors which were unrelated to the conduct of the parties, I believe that as the interests of justice dictate that the costs of the motion be the costs of the cause. Orders: 1. Accordingly, I make the following orders: 1. Leave is granted to the plaintiff to commence proceedings in this Court pursuant to s 26 of the Personal Injury Commission Act 2020 (NSW). 2. Costs of the motion be costs in the cause. ********** 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: 21 July 2023