GRATE LACE PTY LTD t/as GRATE LACE BRICKLAYING CO v THEISS WATKINS WHITE (CONSTRUCTIONS) PTY LTD AND ORS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, KIRBY P and SHELLER JA 14 September 1995, 11 October 1995 [1995] NSWCA 183 WORKERS' COMPENSATION — incapacity — disease of gradual onset — obligation of last employer — exclusion of irrelevant employments — bricklayer sensitised — held: (Allowing appeal): Liability fell on last employer employing worker as bricklayer. WORKERS' COMPENSATION — incapacity — disease contracted by gradual process — assignment of liability to particular employer — dermatological condition caused by exposure to allergen in cement — first manifestation in 1985 — subsequent bricklaying employments up to 1986 — in Compensation Court, Grayson C assigns liability to last employer — on review, Manser CCJ assigns liability to employer in whose employment sensitisation was first manifested upon return to Grayson C, the award is amended to conform to Manser CCJ's opinion — upon further appeal to the Court of Appeal — held: (1) Having regard to the date of commencement of proceedings, the appeal was limited to correction of an error or law; (2) Manser CCJ erred in law in his application of the provisions of the Act assigning liability to the last employer; (3) Having regard to the transitional provision contained in the Workers' Compensation Act 1987, the relevant, applicable section for determining liability was s15(1) of the 1987 Act; (4) Under that section the proper employer, liable to pay compensation, was the last employer. Smith v Mann (1932) 47 CLR 426 considered. Workers' Compensation Act 1926, s7(4), s7(5). Workers Compensation Act 1987, s15, Schedule 6, Pt4, CL4, CLS. Gleeson CJ I have had the benefit of reading in draft form the judgment of Sheller JA. I agree with the orders proposed by his Honour, and with his reasons for those orders. Kirby P Determining which employer is liable in workers' compensation law for incapacity resulting from long-acting dermatological and other injuries has always been difficult and contentious. The issue of causation in the law is itself so controversial that Parliament stepped in to provide a semi-arbitrary formula in s15 of the Workers Compensation Act 1987, substantially re-enacting s7(4) of the Workers' Compensation Act 1926. The object of the section is such that it should be capable of being applied simply by employers, workers and insurance clerks, to the saving of inconvenience to the worker denied the payment of weekly compensation and other benefits and to the saving of the expense of litigation as between the employers, to determine the employer (and insurer) primarily liable to pay compensation to the worker. 2 UNREPORTED JUDGMENTS S15 should be given a meaning which facilitates the carrying into effect of its obvious purpose, which is to affix the primary liability to pay compensation for death or incapacity, in the case of diseases contracted by a gradual process, upon the employer in whose employment the worker is at the time of the claim, or who last employed the worker. Provision is made by s15(2) for an account to be had between the worker's successive employers, but only up to twelve months preceding the death or incapacity or the date of the claim, as the case may be. It is in this subsection that the Act talks of an employment "to the nature of which the disease was due'"'. But I do not take that adjectival clause to have the consequence which Manser CCJ derived from it in this case. It is simply designed to excuse a completely irrelevant employment, eg, a bricklayer temporarily working in a florist shop where there is no exposure to an allergen such as Dycromate, found in cement, which apparently triggered off the worker's recurrent bouts of dermatitis which, in tum, occasioned his incapacity in this case. Once that thought is expelled from the mind, the decision-maker is taken back to the objects of s15 of the 1987 Act. These were to avoid unnecessary litigation; * to simplify the assignment of liability; * to remove the highly disputatious debate about "true" causation; and * to fix the last relevant employer with the primary liability (subject to the limited contribution right provided in s15(2)). Manser CCJ's basic mistake was, with respect, in endeavouring to return to the assignment of liability according to a notion of true causation. Upon that footing, his Honour was probably right to conclude that the original employer, in whose employment the worker had first suffered the dermatological condition, was the employer whose work activities had triggered the dermatitis and possibly "sensitised" the worker for all later employments of that kind. If s15 of the 1987 Act (and before it s7(4) of the 1926 Act) had not been there, his Honour's determination would have been rational and unassailable. At least it would have been incapable of being corrected in an appeal limited, relevantly, to a point of law. With respect, that approach overlooked the semi-arbitrary but very practical purposes of s15 of the 1987 Act. That section obliged the Court to do what Commissioner Grayson in the initial hearing did, ie, to fix Theiss Watkins White (Constructions) Pty Ltd (Theiss) with liability, as the last employer. That employer was no florist shop, but another employer in the bricklaying industry in whose employ the worker was exposed to the allergen which, once again, triggered off his dermatitis. It was therefore an employer which fell within the terms of s15(1)(b) of the 1987 Act. It was the employer by whom compensation was payable. Because the previous relevant employment (ie by Clover Bricklaying Pty Ltd) concluded on 14 August 1985, more than one year before Theiss employed the worker, no basis for contribution under s15(2) arose. Unfortunately for it, Theiss had to accept the liability for paying weekly compensation, so long as the worker was incapacitated within the meaning of the Act. If this result occasions an apparent injustice to Theiss in this case (as Manser CCJ by inference must have thought), the answer which the Act gives is clear. In other like cases Theiss' insurer will probably escape liability where true notions of causation would have attached it. Looking at compensation cases overall, substantial justice will be done. Uncertainty of workers' entitlements will be reduced. The costs of litigation will be contained. It is the duty of this Court to \GRATE LACE PTY LTD t/as GRATE LACE BRICKLAYING CO v THEISS WATKINS WHIT (CONSTRUCTIONS) PTY LTD AND ORS (Sheller JA) give effect to these sensible statutory objectives and not to frustrate the instruction of Parliament in s15(1)(b) of the 1987 Act, viz: "15(1)(b) Compensation is payable by the employer in whose employment the worker is, or who last employed the worker." That employer was Theiss. The Commissioner was correct to so determine. In reaching a contrary view, Manser CCJ erred in law. I agree in the orders proposed by Sheller JA. Sheller JA INTRODUCTION From 8 January to 1 February 1985 the appellant, Grate Lace Pty Ltd, employed the second respondent, William Christopher Hollier, as a bricklayer. On or about 15 January 1985 the worker contracted a rash between his fingers and toes. He was off work for a number of months and paid compensation by the appellant. On 26 June 1985 he resumed work with the third respondent, Clover Bricklaying Pty Ltd (Clover) which employed him until 14 August 1985 when he was retrenched. He continued to suffer from a dermatological condition but lost no time from work in consequence. The first respondent, Theiss Watkins White (Constructions) Pty Ltd (Theiss), employed the worker from 11 September to 26 November 1986, when he ceased work because of dermatitis. Theiss paid him compensation from that date until 26 October 1987. Thereafter from 10 May to 21 December 1989 Commercial Enterprises employed him on light duties on a job site described as Skygarden. In August 1989, by an amended application for compensation under the Workers Compensation Act 1987, (the 1987 Act), the worker sought compensation, inter alia, from * the appellant, in respect of an injury between 8 January and | February 1985; * Clover, in respect of an injury between 26 June and 14 August 1985; and * Theiss, in respect of an injury between 11 September 1986 and 22 May 1987. The parties accept that the worker contracted a dermatological condition in his hands and feet after working in the bricklaying industry for about thirty years. RELEVANT LEGISLATION The worker claimed in respect of injuries he suffered before 30 June 1987, when the 1987 Act came into force and repealed and replaced the Workers Compensation Act 1926, (the 1926 Act). In each case the parties accepted that the injury, the dermatological condition, was a disease which was of such a nature as to be contracted by a gradual process within the meaning of s7(4) of the 1926 Act and s15(1) in Pt2 of the 1987 Act. The Savings and Transitional Provisions in Schedule 6 of the 1987 Act, Pt2, provided, relevantly, that Pt2 of the 1987 Act applied whether the injury was received before or after the commencement of that Part. However Schedule 6, Pt4, CL4(1) and CLS relevantly provided for s11(1) and s11(2) of the 1926 Act to continue to apply in respect of any period of incapacity for work occurring after the commencement of Division 2 of Pt3 of the 1987 Act. if it resulted from an injury received before that commencement. In short, in the present case the employer's liability to compensate was regulated by Pt2 of the 1987 Act. However s11(1) and s11(2) of the 1926 Act continued to apply in relation to the weekly payments of compensation payable. This distinction was not always observed in this case in the Compensation Court or in the notices of appeal but, since there was no material difference in the language of the relevants parts of the two Acts, the failure to maintain the distinction makes no difference to the outcome of this appeal. S15 of the 1987 Act, so far as material, provides: 4 UNREPORTED JUDGMENTS "(1) If an injury is a disease which is of such a nature as to be contracted by a gradual process - (a) the injury shall, for the purposes of this Act, be deemed to have happened (i) at the time of the worker's death or incapacity; or (ii) if death or incapacity has not resulted from the injury - at the time the worker makes a claim for compensation with respect to the injury; and (b) compensation is payable by the employer in whose employment the worker is or who last employed the worker. (2) Any employers who, during the 12 months preceding a worker's death or incapacity or the date of the claim (as the case requires), employed the worker in any employment to the nature of which the disease was due shall be liable to make to the employer by whom compensation is payable such contributions as, in default of agreement, may be determined by the Compensation Court." The first two paragraphs of s7(4) of the 1926 Act were, for present purposes, to like effect and used similar language as s15(1)(b) and s15(2), in so far as they provided for the case of incapacity. S7(5) of the 1926 Act, so far as material, provided that for the purposes of subs(4) "the injury should be deemed to have happened at the time of the worker's incapacity". THE FIRST HEARING The worker's application came before Commissioner Grayson who, on 27 September 1990, made an award in favour of the worker against Theiss for weekly payments from 26 October 1987 and in favour of the appellant and Clover. The Commissioner said that the worker's claim for compensation was pursuant to the saved provisions of the 1926 Act, most relevantly, although not exclusively, on the basis of the pleadings, s11(1) and s11(2) of that Act. The pleadings referred also to s12A of the 1926 Act. The Commissioner found that the worker suffered from a dermatological condition with which he had been afflicted since January 1985 as a result of lengthy exposure to an allergen known as Dycromate which is found in cement. As a result he had effectively been forced to retire from his life time vocation of bricklaying. The Commissioner found that he first noticed the dermatological condition on his hands and feet one week after he was employed by the appellant, that he was off for a number of months and compensated and that he continued to suffer from the dermatological condition when Clover employed him. The Commissioner said: "Now moving relevantly through the period of time involving [another] employer which has best excused, the worker next obtained employment in or about September 1986 with [Theiss] and it would seem on the evidence, carried out duties related to that employment until or about November 1986 at which time he again ceased due to the dermatological condition. He was paid compensation by [Theiss] from the date I apprehend that he ceased work until 26 October 1987. Thereafter and until he next obtained employment in 1989 he subsisted on social welfare benefits." The Commissioner considered that the worker was amply supported in his allegation of disease of gradual onset and accepted the evidence of Dr Freeman, a dermatologist. In her report of 15 March 1988 Dr Freeman said that the workers dermatitis had been caused principally by an allergy to Dycromate in cement and that such an occurrence was well known to take place in bricklayers when they had been working in the trade for many years. The Commissioner went to s7(4) \GRATE LACE PTY LTD t/as GRATE LACE BRICKLAYING CO v THEISS WATKINS WHITE (CONSTRUCTIONS) PTY LTD AND ORS (Sheller JA) of the 1926 Act to determine the question of liability. Instead he should have gone to s15(1) and s15(2) of the 1987 Act. However, as I have said, this makes no difference to the result. The Commissioner found that the worker "on medical advice and in the light of his own experience since the onset of the condition can no longer work on vocational endeavours which bring him into contact with cement and it would take very little appreciation of the dictates of industrial life to realise that he would indeed be at a significant disadvantage in the labour market most readily available to him." Applying s11(1) of the 1926 Act the Commissioner assessed the worker's probable earnings but for the injury and what he would be able to earn after the injury. The question remained which of the respondents, relevantly the appellant and Theiss, should be visited with the liability to pay compensation. In the Commissioner's opinion s7(4) clearly directed the Court to the last employer, Theiss. No doubt, if he had been looking at s15(1) of the 1987 Act, the Commissioner would have arrived at the same conclusion. He accepted that the worker suffered injury whilst in the appellant's employ but said that s7(5) (compare s15(1)(a)(i) of the 1987 Act) was relevant only to the determination of the time of occurrence of injury as distinct from the employer who should be made liable for it. In his opinion it was the last employer in time, Theiss, who should be made liable for compensation. Theiss applied for a review. THE SECOND HEARING The application for review came before Manser CCJ who delivered judgment on 11 September 1991. His Honour concluded that the appellant was the employer properly to have been found to be liable to the worker in the primary sense and returned the matter to Commissioner Grayson to assess Grate Lace's liability under s11 of the 1926 Act. Manser CCJ restated though in somewhat different terms the findings the Commissioner made. The judge concluded on these findings that "\..it is the condition which first manifested itself in January 1985 which continues in a chronic state but which may wax and wane in direct proportion to the worker's contact with the relevant allergan. In other words, if the dermatological condition referred to by the Commissioner, is the manifestation of the allergy to dycromate to which the worker has been exposed in using cement over a large number of years and that condition has continued in a chronic state, waxing and waning in direct proportion to the worker's contact with dycromate, then, the injury occurred in January 1985." The incapacity suffered by the worker included both an inability to work in vocational endeavours which brought him into contact with cement and inability to work when the condition waxed due to the worker's contact with a relevant allergen. Consequently, his Honour said, putting aside considerations of s7(4), the Commissioner's findings led to the conclusion that the worker had "a relevant incapacity" from the time of the onset of the condition in January 1985. His Honour's reference to "a relevant incapacity" is significant in light of what he said later in his judgment. His Honour referred to s7(4) and s7(5) as in force at the relevant time. He held that the appellant was liable because it was the employer in whose employment the worker was when the disease manifested itself in the form of a dermatological condition. The incapacity must have commenced then because, firstly, the worker was unfit for his employment for some months; and secondly, he was prevented from continuing in his employment without risk of acute disability if he became 6 UNREPORTED JUDGMENTS exposed to Dycromate. His Honour then said: "The Commissioner, with respect, appears to have assumed that the 'incapacity' which was relevant for the application of sub s5 so as to determine under sub s4 the identity of the employer liable to pay the worker compensation, was the incapacity which occurred during the employment by Theiss." His Honour acknowledged that there was an occurrence of incapacity during the employment by Theiss but held that the relevant incapacity occurred or commenced from the time of the onset of the condition in January 1985. This he explained by saying that it was not "the last employer in time" who was made liable by the application of s7(4) and s7(5), but the employer who was employing or who last employed the worker in employment to the nature of which the disease was due at the time when the injury was deemed to have occurred. S7(5) of the 1926 Act was replaced by s15(1)(a) of the 1987 Act. In support of his conclusion the judge called in aid a passage from the judgment of Dixon J in Smith v Mann (1932) 47 CLR 426 at 449 where his Honour said that the purpose of s7(4) of the 1926 Act was "to pitch upon the latest employer for the purpose of immediate liability to the worker, leaving him to recover over from others by way of contribution. The description of the disease implied in the expression in the second paragraph, "employment to the nature of which the disease was due' may properly be carried back into the first paragraph for the purpose of understanding its meaning. In other words, the diseases dealt with are those which are contracted by a gradual process and are due to the nature of an employment. The expression in the first paragraph 'in whose employment the worker is or who last employed the worker' implies a reference to a point of time or event, and it is apparent that the occurrence of incapacity is the event or time intended. The employer at the time of, or last before, the incapacity is made primarily liable." Compare s15(2) of the 1987 Act. His Honour held that once s7(4) had been applied to determine the employer who was primarily liable to the worker for compensation or incapacity resulting from the injury being the disease of gradual onset, any employer who employed the worker subsequently and whose employment caused an aggravation to the worker's disease, became liable to pay the worker compensation under s7(1)(a) which, when the definition of injury in s6(1) was applied, made the employer liable for injuries which included the aggravation, acceleration, exacerbation or deterioration of any disease, where the employment was a contributing factor to such aggravation, acceleration, exacerbation or deterioration. By this means his Honour concluded that the appellant was the employer properly to have been found to be liable to the worker in the primary. THE THIRD HEARING On the matter coming back to him on 17 March 1992 Commissioner Grayson revoked the award and orders made on 27 September 1990 and entered an award in the worker's favour against the appellant for weekly payments from 26 October 1987 to 9 May 1989. APPEAL By consent and with leave the appellant filed an amended notice of appeal. The parties accepted that, since the proceedings had been commenced before the coming into force of Act No 118 of 1989, the appeal was limited to a point of law or the admission or rejection of any evidence; CL5(1) of Schedule | to that Act. \GRATE LACE PTY LTD t/as GRATE LACE BRICKLAYING CO v THEISS WATKINS WHITE (CONSTRUCTIONS) PTY LTD AND ORS (Sheller JA) The appellant's grounds of appeal were put in the most general terms. The appellant said that Manser CCJ erred in failing to apply s7(4) of the 1926 Act in relation to the incapacity for which compensation was claimed, namely, the incapacity which arose on and from November 1986 when the worker ceased working for Theiss. As I have said his Honour accepted that incapacity occurred during the time Theiss employed the worker. That conclusion was inevitable. Clearly within the meaning of s33 of the 1987 Act, which applies, that incapacity for work resulted from an injury, as defined by s4. namely a disease, contracted by the worker in the course of employment, to which the employment was a contributing factor. Commissioner Grayson so approached the matter and concluded that s7(4) (and the same can be said of s15(1)(b)) meant that compensation was payable by the employer in whose employment the worker was last employed subject only to the condition, read into that provision by Dixon J in Smith v Mann, that it be employment to the nature of which the disease was due. As Dixon J pointed out, that implies a reference to a point of time or event and the occurrence of incapacity is the event or time intended. It is unnecessary to turn to the deeming provision which in this case obscures rather than enlightens: compare Williams v Metropolitan Coal Co Ltd (1948) 76 CLR 431 at 450. In the language of Dixon J, the employer at the time of, or last before, the incapacity is made primarily liable. Manser CCJ approached the matter quite differently. His approach is nearly illustrated by his statement that incapacity must have commenced in January 1985 first because the worker was unfit for his employment for some months and second because he was prevented from continuing in his employment "without risk of acute disability if he became exposed to Dycromate". It is no doubt true that if, at that time, the worker acquired a susceptibility to further outbreaks of dermatitis and was "sensitised", he was partially incapacitated. That incapacity could have been permanent. The worker could have called in aid s47 of the 1987 Act, which provides that a worker who, as the result of injury, is unable without substantial risk of further injury to engage in employment of a certain kind because of the nature of that employment shall be deemed to be incapacitated for employment of that kind. S12A was the equivalent section of the 1926 Act and was referred to in the worker's claim against the appellant. But there is nothing in the reasoning of Commissioner Grayson to suggest that, if the case was presented in this way, it was proved. The fact that the worker resumed employment in the industry as a bricklayer tended against it, though not decisively; compare. Green v Wilmers and Gladwin Pty Ltd (1965) WCR 62 at 64; Arnotts Snack Products Pty Ltd v Yacob (1985) 155 CLR 171 at 178. But however that may be, if there is a later occurrence of incapacity and then a claim for weekly compensation for a period which starts thereafter, in my opinion, s15(1)(b) applies to make the employer, which employed the worker in employment to the nature of which the disease was due, at the time of, or last before, the incapacity primarily liable. CONCLUSION In my opinion the appeal should be upheld and the award made by Commissioner Grayson on 27 September 1990 restored. I propose the following orders: 1. Appeal allowed; UNREPORTED JUDGMENTS 2. Set aside the orders made by Manser CCJ on 11 September 1991 and the award made by Commissioner Grayson on 17 March 1992; 3. Confirm the award made by Commissioner Grayson on 27 September 1990; 4. The first respondent, Theiss Watkins White (Constructions) Pty Ltd to pay the costs of the appellant, the second respondent, William Christopher Hollier, and the third respondent, Clover Bricklaying Pty Ltd, of the review before Manser CCJ, of the further proceedings before Commissioner Grayson on 17 March 1992 and of this appeal; 5. The first respondent, Theiss Watkins White (Constructions) Pty Ltd to have a certificate under the Suitors Fund Act 1951, if so qualified. COUNSEL: Appellant: PM Hall QC/CJ Wynyard First Respondent: (Theiss) DJ Higgs/PC Sweeney Second Respondent: (Hollier) GJ McCready Third Respondent: (Clover) GF Little SOLICITORS: Appellant: Gadens Ridgeway First Respondent: (Thiess) Hickson, Lakemand and Holocombe Second Respondent: (Hollier) Taylor and Scott Third Respondent: (Clover) AO Ellison and Co