New South Wales Court of Appeal CITATION: Humphreys v Mulco Tool & Engineering Pty Ltd [2006] NSWCA 355 This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S): 21 September 2006 JUDGMENT DATE: 11 December 2006 JUDGMENT OF: Ipp JA at 1; McColl JA at 2; Basten JA at 108 DECISION: Appeal allowed with costs. CATCHWORDS: WORKERS COMPENSATION - whether commencement of proceedings to recover damages in respect of a work-related injury on 21 November 2001 in contravention of s151C of the Workers Compensation Act 1987, constituted an election for the purposes of s151A, precluding the worker from claiming permanent lump sum compensation under that Act STATUTORY INTERPRETATION - transitional provisions - whether by virtue of cl 9(1) of the transitional provisions in Schedule 6, Part 18C of the 1987 Act, the new s151A of the 1987 Act inserted by Schedule 1 of the Workers Compensation Legislation Further Amendment Act 2001 applied. (D) Arbitration (Civil Actions) Act 1983 Interpretation Act 1987 Workers Compensation Act 1926 Workers Compensation Act 1987 LEGISLATION CITED: Workers' Compensation (Amendment) Act 1953 Workers Compensation (Benefits) Amendment Act 1989 Workplace Injury Management and Workers Compensation Act 1998 Workers' Compensation Legislation Amendment Act 2000 Workers Compensation Legislation Further Amendment Act 2001 Workmen's Compensation Act 1906 (UK) Asplundh Tree Expert (Australia) Pty Ltd v Robertson [2006] NSWCA 471 Australian Iron & Steel Ltd v Hoogland [1962] HCA 13; (1962) 108 CLR 471 Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 80 ALJR 1214 Brighton Und Refern Plaster Pty Ltd v Boardman [2005] NSWCA 167 Brighton Und Refern Plaster Pty Ltd v Boardman [2006] HCA 33 Buck v Comcare (1996) 66 FCR 359 Burnett v Union Steamship Co of New Zealand Ltd (1936) SR (NSW) 119 Chang Jeeng v Nuffield (Australia) Pty Ltd [1959] HCA 40; (1959) 101 CLR 629 Coates v Commissioner for Railways (1960) 78 WN (NSW) 477 Coleman v Shell Company of Australia Ltd (1943) 45 SR (NSW) 27 Deng v GMS Fulfilment Services Ltd (2003) 25 NSWCCR 446 Electricity Commission of NSW v Yates (1991) 30 NSWLR 351 Gordon v Berowra Holdings Pty Ltd [2005] NSWCA 27; (2005) 62 NSWLR 427 Harbon v Geddes [1935] HCA 25; (1935) 53 CLR 33 CASES CITED: Harrison v Wythemoor Colliery Co Ltd [1922] 2 KB 674 Jol v State of New South Wales (1998) 45 NSWLR 283 Jones Bros Bus Company Pty Ltd v Baker; Wyong Shire Council v Graham (1992) 26 NSWLR 322 Latter v Shire of Muswellbrook [1936] HCA 70; (1936) 56 CLR 422 Mathisen v Wallarah Coal Company Ltd (1937) 37 SR (NSW) 530 O'Connor v S P Bray Ltd [1937] HCA 18; (1937) 56 CLR 464 O'Connor v S P Bray Ltd (1936) 36 SR (NSW) 248 Ostojic v Trazmet Pty Ltd [2005] NSWCA 145 Pye v Butterfield Cheese Factors Pty Ltd (1996) 39 NSWLR 425 Quigley v Australian Red Cross Society [1993] 9 NSWCCR 506 State of New South Wales v Connor [1999] NSWCA 251 State of New South Wales v Connor [2003] NSWCA 200 The State of New South Wales v Taylor [2001] HCA 15; (2001) 204 CLR 461 Union Steamship Co of New Zealand Ltd v Burnett [1937] HCA 19; (1937) 56 CLR 450 Whisprun Pty Ltd v Sams [2002] NSWCA 394 PARTIES: Jeffrey Humphreys - Appellant Mulco Tool & Engineering Pty Ltd - Respondent FILE NUMBER(S): CA 40986 of 2005 COUNSEL: M J Cranitch SC and A C Campbell – Appellant L King SC and M J Jenkins - Respondent SOLICITORS: Gerard Malouf & Partners – Appellant Rankin Nathan Lawyers - Respondent LOWER COURT JURISDICTION: Workers Compensation Commision LOWER COURT FILE NUMBER(S): WCC 11341 of 2004 LOWER COURT JUDICIAL OFFICER: Byron DP LOWER COURT DATE OF DECISION: 5 December 2005 LOWER COURT MEDIUM NEUTRAL CITATION: [2005] NSW WCC PD 146 JEFFREY HUMPHREYS V MULCO TOOL & ENGINEERING PTY LTD HEADNOTE The appellant was injured at work on 4 June 2001. He commenced proceedings to recover damages from the respondent in respect of his injuries in the District Court of New South Wales on 21 November 2001. The proceedings were commenced less than six months after notice of his injury was given to the respondent in contravention of s 151C(1) of the Workers Compensation Act 1987 (the " 1987 Act"). An Arbitrator dismissed the District Court proceedings in April 2003 on the basis that the appellant was not entitled to commence them by virtue of s 151C(1). On 31 March 2004 the appellant lodged a claim with the respondent's workers' compensation insurer for medical expenses and for "permanent impairment/pain and suffering" pursuant to ss 66 and 67 of the 1987 Act. The insurer denied liability on the basis that by commencing the District Court proceedings the appellant had made an irrevocable election under s 151A of the 1987 Act, as in force at 21 November 2001. A Deputy President in the Workers Compensation Commission upheld the insurer's plea and held that the appellant was precluded from commencing proceedings for permanent loss compensation under ss 66 and 67 of the 1987 Act by reason of his election to commence proceedings to recover damages in the District Court of New South Wales in 21 November 2001. The appellant appealed from that decision pursuant to s 353 of the Workplace Injury Management & Workers Compensation Act 1998. The appellant argued that s 151A did not apply to the proceedings to recover damages commenced in contravention of s 151C (the construction argument). The Workers Compensation Legislation Further Amendment Act 2001 (the "2001 Act"), which relevantly took effect on 27 November 2001, inserted a new s 151A in the 1987 Act pursuant to which, in substance, a person only ceased to be entitled to statutory compensation if he or she recovered damages in respect of an injury from the employer liable to pay compensation under the 1987 Act. Clause 9(1) of the transitional provisions contained in Schedule 6, Part 18C of the 1987 Act provided that an amendment made by Schedule 1 to the 2001 Act (which inserted the new s 151A) applied in respect of the recovery of damages after the commencement of the amendment even if the injury concerned was received before the commencement of the amendment) but did not apply in respect of the recovery of damages if proceedings for their recovery were commenced in a court before the commencement of the amendment. The appellant argued that the new s 151A applied to him on the basis that cl 9(1) only applied to proceedings where damages were recovered (the transitional provisions argument). HELD: per Basten JA (Ipp JA agreeing) in relation to the construction argument: 1. The appellant is entitled to pursue his claim for compensation in accordance with the current law: at [135]. 2. The statutory election is not made by commencing proceedings which the person has no entitlement to commence: at [126]. 3. Sections 151A and 151C should be read together so that, taken as part of a statutory scheme, the prohibition in s 151C is given effect in s 151A as a limitation on the period within which an effective election can be made: at [135]. 4. The election made in the present case was not legally effective, because the appellant was not at the relevant time a person entitled to make such an election: at [135]. McColl JA (dissenting) 5 The commencement of the District Court proceedings by the appellant constituted an election to recover damages pursuant to s 151A, by reason of which he ceased to be entitled to permanent loss compensation in respect of his injury: at [106]. 6 A construction of s 151A(3)(a) which holds that an election is only made when proceedings are commenced which comply with s 151C is inconsistent with the section and the scheme of Division 2, Part 5 of the 1987 Act: at [89] 7 Section 151A operates to make the commencement of proceedings either to recover damages or permanent loss compensation an irrevocable election to claim one of two alternative entitlements: at [78]. 8 Section 151A was part of a legislative scheme intended to preclude double proceedings, to ensure finality and to minimise costs: at [82]. 9 On the alternative construction: a. there would be no certainty as to when a worker who commenced proceedings in contravention of s 151C had made the s 151A election: at [93]; b. a contravening worker would be in a better position than a complying one. The Court should eschew a construction that favours a person who contravenes a legislative provision: at [94]. Held per Basten JA (Ipp and McColl JJA agreeing) in relation to the transitional provisions argument: 10 An election pursuant to s 151A to claim damages continues to operate as a bar to a claim for compensation, despite the repeal of the former s 151A(2) and (3): at [121]. ORDERS 1 Appeal allowed. 2 Decision of the Deputy President of the Workers Compensation Commission set aside. 3 Respondent to pay the Appellant's costs of the appeal. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40986/05 WCC 11341 of 2004 IPP JA McCOLL JA BASTEN JA Monday 11 December 2006 JEFFREY HUMPHREYS v MULCO TOOL & ENGINEERING PTY LTD Judgment 1 IPP JA: I agree with Basten JA. 2 McCOLL JA: This appeal concerns the question whether Jeffrey Humphreys, the appellant, who commenced proceedings in the District Court on 21 November 2001 to recover damages from Mulco Tools & Engineering Pty Ltd, his employer, in respect of a work-related injury, which proceedings were dismissed because they were commenced in contravention of s 151C of the Workers Compensation Act 1987 (the "1987 Act") was precluded from commencing proceedings in the Workers Compensation Commission for permanent loss compensation under ss 66 and 67 of the 1987 Act. 3 The issue turns principally on the construction of s 151A of the 1987 Act as in force on 21 November 2001, when it relevantly provided: "151A (1) In this section and in section 151V: damages does not include damages to which Part 6 of the Motor Accidents Act 1988 applies; permanent loss compensation means compensation under Division 4 of Part 3 (Compensation for non-economic loss). (2) A person to whom compensation is payable under this Act in respect of an injury is not entitled to both: (a) permanent loss compensation in respect of the injury; and (b) damages in respect of the injury from the employer liable to pay that compensation, but is required to elect whether to claim that permanent loss compensation or those damages . (3) The person makes that election (or is taken to have made that election): (a) by commencing proceedings in a court to recover those damages or by accepting payment of those damages (in which case the person ceases to be entitled to permanent loss compensation in respect of the injury); or (b) by commencing proceedings in the Compensation Court to recover that permanent loss compensation or by accepting payment of that permanent loss compensation (in which case the person ceases to be entitled to recover damages in respect of the injury). … (4) An election is irrevocable…" 4 The case has at all times been approached on the basis that the appellant is a person to whom compensation is payable under the 1987 Act, so that the threshold requirement in s 151A(2) is satisfied. 5 I have concluded that the commencement of the proceedings constituted an election for the purposes of s 151A by virtue of which the appellant ceased to be entitled to permanent loss compensation in respect of his injury and was thus precluded from commencing proceedings in the Workers Compensation Commission for permanent loss compensation under ss 66 and 67 of the 1987 Act. Statement of the case 6 The appellant was injured at work on 4 June 2001. He commenced proceedings to recover damages from the respondent in respect of his injuries in the District Court of New South Wales on 21 November 2001. The proceedings were commenced less than six months after notice of his injury was given to the respondent in contravention of s 151C(1) of the 1987 Act. 7 The appellant's proceedings were commenced in contravention of s 151C to seek to avoid the effect of the Workers Compensation Legislation Further Amendment Act 2001 (the "2001 Act") which relevantly took effect on 27 November 2001. It amended, inter alia, Part 5 of the 1987 Act in a manner which, as Sheller JA said in Clout Industrial Pty Ltd (in liquidation) v Baiada Poultry Pty Ltd [2004] NSWCA 89; (2004) 61 NSWLR 111 (at [3]) "severely curtailed the capacity of an employee to obtain damages from an employer …". 8 The respondent defended the District Court proceedings, relying (inter alia) upon the contravention of s 151C(1), a plea it was given leave to add by amendment to its defence on 4 April 2003, the first day of a hearing before an Arbitrator to whom the proceedings had been referred pursuant to the Arbitration (Civil Actions) Act 1983. The Arbitrator dismissed the proceedings on the basis that "by virtue of section 151C(1) of the Workers Compensation Act 1987, the Plaintiff was not entitled to commence this action on 23 [sic, this should be 21] November 2001." The dismissal was expressed to be without prejudice to the appellant bringing "any fresh action on the cause of action", but the appellant did not pursue that course. 9 On 31 March 2004 the appellant lodged a claim with the respondent's workers' compensation insurer for medical expenses and for "permanent impairment/pain and suffering" pursuant to ss 66 and 67 of the 1987 Act. On 21 May 2004 the insurer informed the appellant that liability was denied for the claim for "lump sum compensation" (meaning thereby the ss 66 and 67 claims) on the basis that by commencing the District Court proceedings he had made an election under s 151A. 10 On 7 July 2004 the appellant filed an Application to Resolve a Dispute in the Workers Compensation Commission. The dispute was identified, relevantly, as being that the insurer had not made a decision within one month of the degree of permanent impairment being fully ascertainable or two months of being given all relevant particulars about the claim. The respondent again disputed the appellant's entitlement to lump sum compensation on the basis that by commencing the District Court proceedings he had made an irrevocable election in accordance with s 151A, as in force at 21 November 2001. 11 The dispute was referred to an Arbitrator for determination. On 26 November 2004 the Arbitrator determined that the appellant could bring his claim for compensation pursuant to ss 66 and 67 of the 1987 Act. 12 The respondent sought, and was granted, leave to appeal against the Arbitrator's decision. The appeal was heard by Deputy President Gary Byron and determined on 5 December 2005: Mulco Tools & Engineering Pty Limited v Humphreys [2005] NSWWCCPD 146. Between the date of the Arbitrator's decision and the Deputy President's determination this Court handed down judgment in Gordon v Berowra Holdings Pty Ltd [2005] NSWCA 27; (2005) 62 NSWLR 427 in which it held that proceedings commenced in contravention of s 151C, if otherwise properly brought, engaged the jurisdiction of the court and were not a nullity. Gordon v Berowra Holdings Pty Ltd was followed in Brighton Und Refern Plaster Pty Ltd v Boardman [2005] NSWCA 167. Both decisions were upheld in Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 80 ALJR 1214 and Brighton Und Refern Plaster Pty Ltd v Boardman [2006] HCA 33 respectively. 13 The Deputy President applied the Court of Appeal decisions and concluded (at [26]) that the District Court proceedings were "not a nullity and that the election to commence those proceedings was a valid election under s 151A(2) of the 1987 Act." He allowed the appeal, revoked the Arbitrator's decision and ordered: "Mr Jeffrey Humphreys is precluded from commencing proceedings for permanent loss compensation under ss 66 and 67 of the Workers Compensation Act 1987 by reason of his election to commence proceedings to recover damages in the District Court of New South Wales in 21 November 2001." 14 The appellant appeals from that decision pursuant to s 353 of the Workplace Injury Management & Workers Compensation Act 1998. He contends the Deputy President erred in law in finding that his commencement of proceedings to recover damages in contravention of s 151C(1) disentitled him from recovering compensation pursuant to ss 66 and 67 of the 1987 Act. Legislative framework 15 Until 1987, as I shall explain, a worker who suffered a work-related injury could pursue common law proceedings against his or her employer to recover damages in respect of that injury, as well as claim compensation under the Workers' Compensation Act 1926 (the "1926 Act"). Section 149 of the 1987 Act abolished a worker's common law right to recover damages in respect of a work-related injury from a negligent employer. It also repealed the 1926 Act. 16 In the Second Reading Speech to the 1987 Act, Mr Hills, the Minister for Industrial Relations, said (New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 14 May 1987, 12205–12206): "This legislation, which will apply to work-related injuries occurring on or after 1st July, 1987, represents the most important and comprehensive reforms affecting the workers' compensation system since the scheme was introduced more than sixty years ago. Major reform of the present system was made imperative because of its failure to provide fair and equitable benefits to injured workers at a cost the community could sustain. In brief, the system as we know it now is virtually out of control. This lack of control has resulted in the escalation of legal and medical costs, and in the prolonged duration of claims. It has developed because of the increasing diversion of resources, both human and financial, to the litigious nature of dispute settlement rather than to rehabilitation and meeting the ongoing needs of genuinely incapacitated workers … if there is an overwhelming theme in discussions about accident compensation systems, it is that common law fails to meet the needs of the seriously injured and diverts scarce resources from those requiring care to vested interests. The system of redemption and common law encourages an overuse of the medical and legal professions, resulting in unnecessarily high service costs. Just as importantly, the lump sum orientation of the present workers' compensation system acts as a positive disincentive to rehabilitation, because the overriding emphasis of the present system is to focus on the negative aspect of the victim's injuries and not on how that person can get back to a useful role in society." 17 Section 66 of the 1987 Act entitled a worker who claimed lump sum compensation to recover a percentage of $100,000 if he or she suffered a loss determined by reference to the Table set out in Pt 3, Division 4. Section 67 of the 1987 Act entitled a worker who suffered a loss mentioned in the Table to Pt 3, Division 4 to receive compensation by way of pain and suffering not exceeding $50,000 unless the compensation paid or payable under s 66 for the loss was less than 10% of the maximum amount from time to time referred to in s 66(1). 18 The s 67 right to claim compensation for pain and suffering was first introduced by the 1987 Act as Kirby P (with whom Gleeson CJ agreed entirely, and Clarke JA relevantly agreed) explained in Jones Bros Bus Company Pty Ltd v Baker; Wyong Shire Council v Graham (1992) 26 NSWLR 322 at 324-325: " From the 1926 Act to the 1987 Act: "…There was no equivalent in the Workers' Compensation Act 1926 (the 1926 Act) for s 67 of the 1987 Act providing compensation for pain and suffering as such. If a worker wished to recover money sums for pain and suffering, he or she could do so, under the former law, only if a damages case could be established, at common law, for breach of statutory duty or both. The provision of a statutory entitlement to compensation for pain and suffering under the 1987 Act was part of a legislative 'package' by which damages entitlements were to be abolished and, relevantly, those suffering work injuries confined to statutory compensation. By Pt 5 of the 1987 Act as originally enacted, Parliament abolished the right of a worker to recover damages from the employer in respect of an injury for which the employer was liable to pay compensation under the Act. That Part was, in its turn, repealed by the Workers Compensation (Benefits) Amendment Act 1989. A new Pt 5 was substituted. It restored the right to common law damages but with important limitations. Nevertheless, when s 67 of the 1987 Act was brought into law, it was part of the scheme to mollify the abolition of common law remedies by the provision (relevantly) of statutory compensation for pain and suffering, but subject to a cap established by s 67(1). By way of contrast, s 66 of the 1987 Act providing compensation for permanent injuries had a progenitor in s 16(1) of the 1926 Act . That provision dated back to the original form of that statute. As first enacted, a worker wishing to recover the lump sum provided under s 16 of the 1926 Act had to elect to do so. Following such election, the worker lost other entitlements (for example, to continuing weekly compensation, medical expenses, etc). The requirement of election remained a feature of s 16 of the 1926 Act until 1964. After 1964, the entitlement to the lump sum benefit provided in s 16 was in addition, and not alternative, to the entitlement to other benefits under the 1926 Act ." 19 As Kirby P noted, the Workers Compensation (Benefits) Amendment Act 1989 (the "1989 Act") amended the 1987 Act by inserting a new Part 5, Common Law Remedies. In the Second Reading Speech, Mr Fahey, the Minister for Industrial Relations, said (New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 1 August 1989, 8820-8821): "The purpose of this bill is to restore that right [of an injured worker to sue a negligent employer for damages at common law] retrospectively to 30 June 1987, and inject an immediate $295 million in extra benefits for seriously injured worker…Any worker may elect to sue at common law if the employer was negligent. However the recovery of damages will be restricted to seriously injured workers … This bill also raises the level of statutory benefits provided by the scheme on a no-fault basis." The Minister then detailed increases in amounts available under ss 66 and 67. 20 The Explanatory Note to the 1989 Act identified its objects as: "(a) to restore, retrospectively to 30 June 1987, common law rights to damages for serious work-related injuries; (b) to require injured workers to elect between the recovery of common law damages or the lump sum payments of workers compensation for so-called 'Table of Maims' injuries; (c) to modify the damages otherwise recoverable in a common law action for a work-related injury by imposing monetary thresholds and maximum limits and by making other changes in line with those applying to awards of damages in motor vehicle accidents." (emphasis added) 21 The Explanatory Note said of s 151A: "Section 151A requires an injured worker to elect between recovery of common law damages or the lump sum payment of so-called 'Table of Maims' injuries. The election is made by commencing court proceedings for damages or by accepting the lump sum compensation payment." 22 The new Part 5 applied to a cause of action in respect of an injury received by a worker at or after 4pm on 30 June 1987, or the death of a worker resulting from or caused by such an injury: s 151U(1). It had effect "as if sections 149 and 150, as originally enacted, had never been enacted": s 151U(2), 1987 Act. 23 Section 1 in Division 1 relevantly provided: "149 Definitions (1) In this Part: 'damages' includes: (a) any form of monetary compensation, and (b) without limiting paragraph (a), any amount paid under a compromise or settlement of a claim for damages (whether or not legal proceedings have been instituted), but does not include: (c) compensation under this Act; or … (2) A reference in this Part to compensation payable under this Act includes a reference to compensation that would be payable under this Act if a claim for that compensation were duly made." 24 Sections 151 – 151D appeared in Division 2. Section 151 provided: " Common law and other liability preserved 151 This Act does not affect any liability in respect of an injury to a worker that exists independently of this Act, except to the extent that this Act otherwise expressly provides. 25 As originally enacted s 151A(3) provided: "(3) the person makes that election: (a) by commencing proceedings in a court to recover those damages or by accepting payment of those damages (in which case the person ceases to be entitled to permanent loss compensation in respect of the injury); or (b) by accepting payment of that permanent loss compensation (in which case the person ceases to be entitled to recover damages in respect of the injury)." 26 Section 151A(3) was amended by Schedule 1 of the Workers Compensation Legislation Amendment Act 1998. Clause [64] inserted the words "(or is taken to have made that election)" in the opening words of the sub-section. Clause [65] amended sub-s (3)(b) by inserting the italicised words: "… (b) by accepting payment of that permanent loss compensation or by the Compensation Court making an award in respect of that permanent loss compensation (in which case the person ceases to be entitled to recover damages in respect of the injury)." 27 Sub-paragraph (3)(b) was omitted by the Workers Compensation Legislation Amendment Act 2000, Sch 4[1] (the "2000 Act") which inserted the sub–paragraph (3)(b) relevant to the present case, which I reproduce for convenience: "(b) by commencing proceedings in the Compensation Court to recover that permanent loss compensation or by accepting payment of that permanent loss compensation ( in which case the person ceases to be entitled to recover damages in respect of the injury )." 28 The Explanatory Note to the new sub-paragraph (3)(b) said: " Explanatory Note Item [1] amends the provision of the 1987 Act that requires a person entitled to compensation to elect whether to claim permanent loss compensation under the Act or damages from the employer at common law. The amendment provides that the commencement of proceedings in the Compensation Court to recover permanent loss compensation under the Act is an election to claim that compensation which prevents the claimant from recovering common law damages from the employer." 29 Schedule 4[2] of the 2000 Act also amended s 151A by inserting sub-paragraph (3A), which provided "(3A) The amendment of a claim that is the subject of proceedings before the Compensation Court to include a claim for permanent loss compensation is (for the purposes of subsection (3)(b)) taken to constitute the commencement of proceedings in the Compensation Court to recover that permanent loss compensation." 30 The Explanatory Note to sub-paragraph (3A) stated: " Explanatory Note Item [2] provides that for the purposes of the amendment in item [1] the amendment of a claim before the Compensation Court to include a claim for permanent loss compensation constitutes the commencement of proceedings to recover that compensation" 31 The amendments effected by the 2000 Act commenced on 2 April 2001. 32 In the Second Reading Speech to the Bill which became the 2000 Act, the Minister for Industrial Relations, the Hon J J Della Bosca said (Second Reading Speech, New South Wales Legislative Council, Parliamentary Debates, (Hansard), 1 November 2000, 9460 at 9461): "Schedule 4 alters s 151A of the Workers Compensation Act 1987. Currently, workers choose between common law damages or statutory compensation by starting proceedings for either damages or by accepting payment or receiving an award for lump sum compensation . This can result in two sets of legal costs for lump sum claims which are withdrawn before a payment is made or the Court makes an award. The amendments in Schedule 4 to the Bill propose to change the election provisions so that the injured worker will have made an election by accepting statutory lump sum compensation or common law damages, or by starting proceedings for damages or for statutory compensation. They will not be able to change partway through a hearing. This reform will not disadvantage seriously injured workers wishing to pursue common law damages. Lawyers are in a position to provide advice to their clients to enable them to make an informed decision about whether to pursue damages. …. Injured workers who elect common law damages and who are unsuccessful do not lose their continuing entitlements to weekly benefits or to medical expenses." (emphasis added) 33 As at 21 November 2001 s 151A provided: "Election — damages or "Table of Disabilities'' compensation 151A (1) In this section and in section 151V: damages does not include damages to which Part 6 of the Motor Accidents Act 1988 applies; permanent loss compensation means compensation under Division 4 of Part 3 (Compensation for non-economic loss). (2) A person to whom compensation is payable under this Act in respect of an injury is not entitled to both: (a) permanent loss compensation in respect of the injury; and (b) damages in respect of the injury from the employer liable to pay that compensation, but is required to elect whether to claim that permanent loss compensation or those damages. (3) The person makes that election (or is taken to have made that election): (a) by commencing proceedings in a court to recover those damages or by accepting payment of those damages (in which case the person ceases to be entitled to permanent loss compensation in respect of the injury); or (b) by commencing proceedings in the Compensation Court to recover that permanent loss compensation or by accepting payment of that permanent loss compensation (in which case the person ceases to be entitled to recover damages in respect of the injury). (3A) The amendment of a claim that is the subject of proceedings before the Compensation Court to include a claim for permanent loss compensation is (for the purposes of subsection (3)(b)) taken to constitute the commencement of proceedings in the Compensation Court to recover that permanent loss compensation. (4) An election is irrevocable, except that an election to claim permanent loss compensation may be revoked with the leave of the court given in accordance with this section. (5) If: (a) a person elects to claim permanent loss compensation in respect of an injury; and (b) after the election is made, the injury causes a further material deterioration in the person's medical condition that, had it existed at the time of the election, would have entitled the person to additional permanent loss compensation; and (c) at the time of the election, there was no reasonable cause to believe that the further deterioration would occur, the person may, with the leave of the court and on such terms (if any) as the court thinks fit, revoke the election and commence proceedings in the court for the recovery of damages in respect of the injury. (6) If the election is revoked the permanent loss compensation paid is not required to be repaid, except out of the damages recovered in accordance with section 151B. (7) If a liability to pay permanent loss compensation results from more than one injury to a worker, a reference in this section to permanent loss compensation is a reference to such part of that compensation as relates to the injury for which damages are recoverable." (emphasis added). 34 The new Part 5 did not entirely erase the scheme the 1987 Act had created. It left s 67 in place. Further, as the Second Reading Speech explained, it increased the amounts available as compensation under ss 66 and 67. Sections 66 and 67 are found in Division 4 of Part 3 of the 1987 Act and are, therefore, permanent loss compensation for the purposes of s 151A. 35 The remaining provisions in Division 2, ss 151B – 151D, provided: "151B Effect of recovery of damages from employer on payment of compensation. (1) If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act: (a) the person then ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid); and (b) the amount of any compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation. (2) This section does not apply to a person who recovers damages for non-economic loss in respect of an injury if the person does not recover any damages for economic loss in respect of that injury because of the operation of section 151H (No damages for economic loss unless injury serious). (3) A person who recovers damages for economic loss in respect of an injury but does not recover any damages for non-economic loss in respect of that injury because of the operation of section 151G (Damages for non-economic loss) is not prevented from recovering, and is not required to deduct under this section, any compensation under Division 4 (Compensation for non-economic loss) of Part 3 except compensation under s 67 (Compensation for pain and suffering). (4) In applying subsection (2) or (3) to a particular case: (a) the reason for the non-recovery of damages for economic loss or non-economic loss (respectively) must be solely the operation of section 151H or 151G (respectively), and not a combination of reasons (including, for example, a partial settlement or partial compromise of a claim); and (b) the amount of damages for non-economic loss applied in determining the operation of the threshold test in the relevant section must be calculated on the basis of the actual loss, and must not be reduced on the basis of any settlement or compromise or otherwise. 151C 6-months delay before commencement of court proceedings against employer for damages (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. 151D Time limit for commencement of court proceedings against employer for damages (1) (Repealed) (2) 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 more than 3 years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken. (3) The Limitation Act 1969 does not apply to or in respect of court proceedings to which this section applies. (4) This section does not apply to the commencement of court proceedings in respect of a claim within the meaning of Pt 5 of the Motor Accidents Act 1988 or Chapter 5 of the Motor Accidents Compensation Act 1999." (emphasis added) 36 As I have noted, in Berowra Holdings Pty Ltd v Gordon (at [36]) the High Court held that proceedings commenced in contravention of s 151C were not a nullity, or invalid, but engaged the jurisdiction and procedural rules of the court. Fundamental to that decision was the conclusion (see Berowra at [35]) that s 151C does not extinguish the worker's common law right to sue the employer for damages in any court of competent jurisdiction, but barred the remedy. 37 Section 151D(2) operated in the same manner. The expiry of the three year period in s 151D(2) did not extinguish the employer's liability: Almario v Allianz Australia Workers Compensation (NSW) Insurance Ltd [2005] NSWCA 19; (2005) 62 NSWLR 148 at [26]–[29] per Ipp JA (with whom Hodgson JA and Hunt AJA agreed). Thus s 151D also barred the remedy, but not the cause of action. The court could give leave to commence proceedings out of time, both before the statute-barred proceedings were commenced and nunc pro tunc after their commencement: Whisprun Pty Ltd v Sams [2002] NSWCA 394. 38 The abolition of the common law right to recover damages from employees in respect of injuries for which employers were liable to pay compensation under the 1987 Act had applied to injuries suffered on or after 4pm on 30 June 1987, when the 1987 Act commenced: s 2(2); New South Wales Government Gazette 102, 17 June 1987. Accordingly the new Part 5 restored the common law right to damages albeit as modified, retrospectively to that date: Electricity Commission of NSW v Yates (1991) 30 NSWLR 351 at 354 per Handley JA (Clarke and Meagher JJA agreeing). In addition to the procedural modifications in Division 2, Division 3, Modified Common Law Damages, substantially modified damages a worker who suffered a work-related injury could recover from a negligent employer. The effect of the modifications was described by Handley JA (at 354) as follows: "…[T]he 1989 Act conferred retrospective common law rights which were significantly less advantageous than those the plaintiff would have enjoyed if the 1987 Act had never been passed. Section 151G governed the award of damages for non-economic loss. Subsection (1) provided that no damages are to be awarded for non-economic loss unless the injured worker's ability to lead a normal life is significantly impaired by the injury. Subsection (2) provided that the damages to be awarded should be a proportion of the maximum which might be awarded and initially this was fixed by subsection (3) at $180,000 which could only be awarded in 'a most extreme case'. Subsection (6) provided for a threshold of $75,000 below which no damages for non-economic loss were recoverable and shading-in provisions applied where the damages otherwise recoverable fell between $75,000 and $100,000. … While this appeal was pending Parliament again changed the law with retrospective effect. The Workers Compensation (Amendment) Act 1991 (the 1991 Act) was assented to on 26 March but Schedule 2 repealed s 151G(6) with effect from 1 February 1990 thus reducing the general damages threshold to $45,000 and the shading-in provisions to awards between $45,000 and $60,000. Section 151H(1) and s 151H(2) provide that no damages are awardable for economic loss unless the injury is serious. This was originally defined in relation to injuries between 30 June 1987 and 30 June 1989 as being one for which lump-sum compensation was awardable under s 66 which was not less than 60 per cent of the maximum or for which the damages for non-economic loss exceeded $100,000. The definition of 'loss' in s 65 allowed lump-sum compensation to be awarded for the permanent loss of the use or the efficient use of a part of the body." 39 I referred earlier to the 2001 Act, whose application the appellant sought to avoid by commencing his proceedings on 21 November 20021. Schedule 1.1 of the 2001 Act omitted ss 151G – 151I. A new s 151G was inserted which provided that the only damages which might be awarded were damages for past economic loss due to loss of earnings and damages for future economic loss due to the deprivation or impairment of earning capacity. A new s 151H provided that no damages might be awarded unless the injury resulted in the death of the worker or in a degree of permanent impairment of the injured worker of at least 15%, while a new s 151I capped the amount which could be recovered for past and future loss of earnings. After 27 November 2001 accordingly, a worker could no longer recover damages for non-economic loss from his or her employer in respect of a work-related injury and the right to recover damages for economic loss was severely circumscribed. 40 The 2001 amendments applied to the recovery of damages after their commencement even if the injury concerned was received before the commencement of the amendment, but did not apply in respect of the recovery of damages if proceedings for their recovery were commenced in a court before the commencement of the amendment: Sch 6, Pt 18C, cl 9(1): Asplundh Tree Expert (Australia) Pty Ltd v Robertson [2005] NSWCA 471. 41 The 2001 Act also inserted a new s 151A which relevantly provides: "151A Effect of recovery of damages on compensation (1) If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then (except to the extent that subsection (2), (3) or (4) covers the case): (a) the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid) , and (b) the amount of any weekly payments of compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and (c) the person ceases to be entitled to participate in any injury management program provided for under this Act or the 1998 Act." 42 The issue which arises in this case is, therefore, confined to cases commenced prior to 27 November 2001. Submissions on appeal 43 The appellant accepts that the District Court proceedings were not a nullity. He submits, however, that on an analysis of the doctrine of election (an analysis not undertaken in either written or oral submissions) and the "intention of workers compensation legislation", s 151A applies only to "validly commenced proceedings", rather than proceedings which, having been commenced in breach of s 151C, were susceptible to being struck out should the defendant raise the s 151C(1) contravention by way of defence. 44 The appellant argues that it was not the legislative intention to deny a worker his or her entitlement to lump sum compensation by commencing damages proceedings which contravened s 151C(1). He submitted that s 151C(1) was a procedural provision put in place to delay the expense of proceedings for the benefit of the defendant to encourage settlement negotiations. He argued that the respondent benefited from s 151C(1) as the worker had had to discontinue his District Court proceedings and ought not have a further benefit by denying the worker his lump sum benefits, otherwise available pursuant to the 1987 Act. He sought to rely on Quigley v Australian Red Cross Society [1993] 9 NSWCCR 506 at 516 where Manser J held that the expression "if a person commences proceedings …" in s 151V(2) of the 1987 Act contemplated "the commencement of proceedings which are valid proceedings". 45 The appellant also contends that prior to 27 November 2001 no worker who was injured after 27 May 2001 could institute proceedings for modified common law damages, unless the defendant waived compliance with s 151C(1). He argued that s 151A could not have been intended to operate in the manner found by the Deputy President "in a statutory regime that was to repeal Part 5" of the 1987 Act. 46 The appellant also advanced an argument which turned on the transitional provisions in cl 9(1), Sch 6, Part 18C of the 1987 Act. I agree with Basten JA's conclusion that cl 9(1) does not assist the appellant whose proceedings to recover damages were commenced prior to 27 November 2001, the date the new s 151A commenced. 47 The respondent submits that by force of s 151A the commencement of the District Court proceedings meant the appellant had elected to claim modified common law damages and that the effect of the election was to disentitle him from claiming permanent loss compensation pursuant to ss 66 and 67 of the 1987 Act. It contends the District Court proceedings were validly commenced and engaged the jurisdiction of the District Court, relying upon the line of authority which culminated in Berowra Holdings Pty Ltd v Gordon. 48 The respondent resists the argument that the appellant's "election" was not a "true election" as the appellant could not make a choice between "complete" rights because, as to damages, the claim was conditional upon whether or not the respondent waived reliance upon s 151C(1). The respondent also submitted that, in any event, the argument was unsound as s 151A is engaged at the moment of the commencement of proceedings. 49 The respondent submitted that s 151A identified the two rights available to a worker and, in effect, stipulated that they were inconsistent as a worker could not have access to both: cf Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634. The respondent also argued that s 151A created its own election regime and did not turn upon equitable principles of election. Workers compensation election provisions 50 Statutory provisions requiring an election between entitlements to common law damages or workers' compensation have a long history in workers' compensation legislation both in England and Australia. The construction of such provisions has often produced "acute divisions of judicial opinion": The State of New South Wales v Taylor [2001] HCA 15; (2001) 204 CLR 461 at [46] per Kirby J. 51 In New South Wales, prior to the 1987 Act, the division of judicial opinion turned on the meaning of s 63 of the 1926 Act which, prior to 1953, provided: "63 (1) Nothing in this Act shall affect any civil liability of the employer where the injury was caused by the personal negligence or wilful act of the employer or some person for whose act or default the employer is responsible; (2) In such a case the worker may, at his option, proceed under this Act or independently of this Act, but he shall not be entitled to compensation under this Act, if he has obtained judgment against his employer independently of this Act." 52 Section 63 was "an attempt on the part of the State Legislature to restate the law relating to the double remedies of an employee against the employer": Harbon v. Geddes [1935] HCA 25; (1935) 53 CLR 33 at 40 per Rich J. It was substantially on all fours with s 1(2)(b) of the Workmen's Compensation Act 1906 (UK): Latter v Shire of Muswellbrook [1936] HCA 70; (1936) 56 CLR 422 (at 448) per Evatt and McTiernan JJ. The view which had been taken of the English provision was that "the object of the Act [was] not to protect the employer against double payments, but against double proceedings": Harbon v. Geddes (at 42) per Starke J. 53 The controversy concerning the interpretation of s 63 turned on the question of what conduct on the part of a worker would amount to an irrevocable exercise of the option to accept compensation to the exclusion of damages: Chang Jeeng v Nuffield (Australia) Pty Ltd [1959] HCA 40; (1959) 101 CLR 629 at 642 per Kitto J. An allied controversy concerned the extent to which a person, making an election between remedies at common law in lieu of statutory benefits, must be aware of the choice being made and of the considerations relevant to that choice, before it could be said that an "election", as contemplated by the statute, had been effected: State of New South Wales v Taylor (at [45]–[46]) per Kirby J. 54 The controversy also turned on the question whether a workman's s 63(2) option was "only exercised when he gets a final decision in his favour, and that he is not stopped from one set of proceedings by commencing other proceedings which are not continued, or by getting a decision against him from which he appeals, or by getting a decision in his favour, which is afterwards reversed" (the "double recovery" theory) and the view that "the object of the Legislature is … to prevent the employer from being subjected to the expense, trouble and inconvenience of two sets of proceedings" (the "double proceedings" theory): Harrison v Wythemoor Colliery Co Ltd [1922] 2 KB 674 at 697–698 per Scrutton L.J. 55 These issues were canvassed early in the history of the 1926 Act in four decisions of the High Court: Harbon v Geddes, Latter v Shire of Muswellbrook, Union Steamship Co of New Zealand Ltd v Burnett [1937] HCA 19; (1937) 56 CLR 450 and O'Connor v S P Bray Ltd [1937] HCA 18; (1937) 56 CLR 464. Burnett and O'Connor were handed down on the same day. Dixon J's interpretation of s 63 was completely at variance with the interpretation adopted by Latham CJ, Evatt and McTiernan JJ (Union Steamship Co of New Zealand Ltd v Burnett (at 460)); Starke J's view was also at odds with his brethren. 56 The fissures were exposed in Harbon v Geddes. In Starke J's view (at 42) "the object of the [1926] Act is not to protect the employer against double payments, but against double proceedings". Thus it was sufficient for a worker to have intimated a claim for compensation to the employer to have proceeded under the 1926 Act and lost the right to proceed independently of it. However, in his Honour's view (at 43) the effect of the last words of s 63(2) ("but … of this Act") was that if a worker proceeded independently of the 1926 Act but did not obtain a judgment against the employer, the worker did not lose the right to statutory compensation. 57 Rich J (at 40) and Dixon J (at 47) held that to "proceed under this Act or independently" meant to take legal proceedings. Dixon J was also of the view (at 47-48) that s 63 was a provision concerned with double recovery. It intended "to continue in the worker two separate rights, one only of which he is to enjoy to the full beneficially" and "to imply that, if full satisfaction of one of the two alternative rights is obtained without legal proceedings, or without prosecuting legal proceedings to judgment, or award, or recorded agreement, the other alternative right shall be discharged." In his view (at 49) the section implied that "the discharge by satisfaction of one alternative right [barred] the other", but not that "a claim under the Act without any legal proceedings and the receipt of some compensation and some benefits constitute a bar of the workers' rights under the "general law". 58 Evatt and McTiernan JJ held (at 52) that a worker may be barred from proceeding at common law, by exercising the option to proceed under the 1926 Act, "under circumstances which indicate he has really and effectively exercised an option" in which case "he cannot recall his option". Before that could occur it must appear both that the worker did "proceed" and obtain compensation under the 1926 Act and "that the circumstances accompanying the worker's proceeding and obtaining compensation under the Act show that the worker, knowing that he had a right to bring proceedings at common law in respect of the same injury, chose to prefer the benefits obtainable under the Act." Their Honours adhered to their interpretation of s 63 in the succeeding cases: see Latter v Shire of Muswellbrook (at 422); O'Connor v S P Bray Ltd (at 464) and Union Steamship Co of New Zealand Ltd v Burnett (at 462). 59 Latham CJ also interpreted s 63 as meaning the worker could not be held to have exercised an option unless "he [knows] that there are two courses open and … with such knowledge, he adopts one of them": see Latter v Shire of Muswellbrook (at 433). 60 In Latter, Dixon J (at 438) adhered to his view that s 63 was intended to protect the employer from cumulative liability. Accordingly, a worker who had brought common law proceedings for damages against his employer in respect of his injury which had failed on the merits was not barred from making a claim for compensation. His Honour regarded the "cumulative liability" interpretation as "confirmed" if not made inevitable, by the final part of sub-s 63(2) disentitling a worker to compensation if he had obtained judgment against the employer independently of the 1926 Act saying (at 438): "For if the institution of such an action, although it failed, were enough to disentitle the worker to compensation, it would be absurd to enact that recovery of judgment should be a bar." 61 Dixon J agreed (at 439) with Jordan CJ's opinion in Burnett v Union Steamship Co of New Zealand Ltd (1936) SR (NSW) 119 (at 123): "It is manifest from the concluding words of sub-sec.2 that the fact that a worker commences proceedings at common law does not amount to an act of election taking away his right to compensation under the Act and barring his right to institute proceedings to recover such compensation. It is incredible that the Legislature should have said that a judgment in his favour should bar the right if it had intended that the writ should do so. " (emphasis added). 62 Dixon J rejected the construction favoured by Evatt and McTiernan JJ. In his view (Latter at 443-445): "To give an election to take one out of two courses, but not both, is a different thing from conferring a power to abandon one of them. The former is necessarily exercised when one of the two courses is taken. An intention to retain the right afterwards to take the second course would be beside the point … I am unable to agree in the conclusion based on the use in sec. (63(2)) of the word 'option' it appears to me to show no more than that the worker could pursue whichever right or remedy he liked. I do not see why the word should be taken to imply that the test is to be the worker's volition in choosing, rather than his act in pursuing to its conclusion, one of the alternative rights or remedies. ………. Under the English provision the choice is between proceedings. In his dissenting judgment in Bennett v. L. & W. Whitehead Ltd (1926) 2 K.B., at pp. 404, 405 Scrutton L.J. appears to me to answer the contention that the worker 'was not barred till he did an act by which he conclusively elected with full knowledge of the facts which course he intended to pursue.' He pointed out that the force of the argument depended on the nature of the option. After giving examples, he said:- 'I do not think you can escape the statutory prohibition against doing a thing by saying that, though you have done it; you have not elected to do it. If by statute you have an option to do A or B, but not both, and you have done A, it does not seem to me relevant to say `I have done A, but I have not elected to do it.' Unless it can be said that you do not take proceedings when you issue a writ and serve it on the defendant, I think you have elected to do what you have in fact done, and cannot take the other alternative'. The same view has been taken in the Supreme Court of New South Wales in Burnett v. Union S.S. Co. of New Zealand Ltd 36 SR (NSW) at 123 and O'Connor v. S.P. Bray Ltd 36 SR (NSW) at 256-264, where Jordan C.J. fully discusses the matter." (emphasis added) 63 In O'Connor v S P Bray Ltd the worker had received compensation under the 1926 Act, but the payments were terminated. He took proceedings in the Workers' Compensation Commission to establish that his incapacity continued, but an award was made in favour of the employer on the basis that he had recovered from his incapacity. He then took common law proceedings against his employer in respect of the same injury. The defendant pleaded, inter alia, that the worker had exercised his option of proceeding under the 1926 Act and been paid compensation in full satisfaction of his injuries. The jury was directed that a question it had to consider was whether, when the appellant took compensation and proceeded under the Workers' Compensation Act, he was aware that he might instead sue at common law. The jury found a general verdict for the worker, and deducted the amount he had received as compensation from the damages it awarded. The verdict was set aside in the Supreme Court on the basis that as one of the worker's two alternative rights had been fully satisfied, so far as it was possible by litigious or non-litigious proceedings, he could not sue at common law: see O'Connor v SP Bray Ltd (1936) 36 SR (NSW) 248 at 265. 64 The High Court allowed the worker's appeal. Dixon, Evatt and McTiernan JJ held that, as the jury by its verdict had found that when the appellant received compensation and proceeded under the 1926 Act he was not aware of his alternative rights under s 63 of that Act, he was entitled to maintain an action at common law in respect of the same injury. Starke J dissented, reiterating his view (at 473–474) that the 1926 Act "on its proper construction, protects the employer against two sets of proceedings", so that the worker had an option "… to proceed either under the Act or independently of the Act, and the exercise of the option in one way must exclude its exercise the other way". Dixon J observed (at 476) that if he had not been bound by the majority opinion in Latter, he would have concluded "the action was barred on the ground that the plaintiff had proceeded under the Workers' Compensation Act … [and] enjoyed in full his right to compensation under the Act and the liability of his employers thereunder has been satisfied." 65 Union Steamship Co of New Zealand Ltd v Burnett was the least satisfactory of the four cases. It was an appeal from the Supreme Court which had ruled in favour of the plaintiff in proceedings under the Compensation to Relatives Act 1897 on demurrers to a defence, three pleas in which asserted that the deceased worker had by virtue of various combinations of facts proceeded under the 1926 Act in a manner which disentitled his widow to relief. Starke J (at 459-460) would have upheld the appeal on the basis that by claiming compensation, as well as commencing legal proceedings in the Commission to recover compensation he had proceeded under the Act. According to the headnote (56 CLR 450 at 451) Dixon J thought two of the pleas sufficiently alleged the fulfilment of all the conditions necessary, according to the ratio decidendi of the majority in Latter, to bring the case within s 63(2), and therefore the demurrers ought to have been overruled. Evatt and McTiernan JJ were of opinion that the third plea was bad inasmuch as it failed to allege that the worker was ever aware that there was an option to proceed independently of the Act and further that the fourth and fifth pleas should be regarded only as argumentative pleas not properly raising any issue of law additional to that raised by the third plea. The court being equally divided, the decision of the Supreme Court was affirmed. 66 In Mathisen v Wallarah Coal Company Ltd (1937) 37 SR (NSW) 530 (at 532) Jordan CJ summarised the propositions he said had been established with respect to s 63 by the four High Court cases which, relevantly, were: "(2) Nothing short of the institution or continuance of a litigious proceeding against the employer under the Act can debar the worker from pursuing any common law right which he may have to sue his employer in negligence or trespass. (3) The institution or continuance of a litigious proceeding under the Act does not prevent the prosecution of the common law right unless it is proved that the litigious proceeding was instituted or continued with knowledge of the existence of the common law right as an available alternative. This is involved in the other crucial word 'option' … (4) If a litigious proceeding for compensation is commenced or continued with such knowledge, this constitutes an irrecoverable bar to the worker's common law rights. The worker, in such case, cannot discontinue the litigious proceeding and sue at common law." 67 In Latter (at 430) Latham CJ described s 63 as "difficult and obscure" and observed (at 435), "[t]he obscurity of sec. 63 is such that it might with advantage receive legislative consideration", a view Jordan CJ endorsed in Mathisen (at 534). 68 The 1926 Act was amended in 1938 in two significant ways. First, a new s 63(3) was added which prevented a worker who had been paid compensation under the 1926 Act from maintaining proceedings independently of the Act against the employer in respect of the injury unless those proceedings were instituted within six months after the date of payment or, where more than one payment had been received, within six months after receipt of the first payment. Secondly, a new s 63A was inserted which provided that no application for determination could be filed in the Commission unless a written "notice of election", signed by the applicant and witnessed by the applicant's solicitor, was endorsed thereon, or annexed thereto. Sub-section (4) prescribed the form of the notice of election. It acknowledged the applicant's awareness that if the injury the subject of the application was caused by the personal negligence or wilful act of the employer or of some person for whose act or employer was responsible, then the applicant had the option to proceed either under the 1926 Act or independently of the Act and stated that the applicant did "not desire to proceed independently of the said Act" and elected to proceed under the Act in respect of the injury. Sub-section (5) provided that in any case to which sub-s 63(2) applied, a notice of election which complied with s 63A constituted a "final election by the worker, in pursuance of the option conferred by [sub-s 63(2)]…to proceed under this Act in respect of the injury" and was "a valid defence to any legal proceedings by any person whomsoever against the employer in respect of the injury other than proceedings under this Act." 69 The 1938 amendments did not receive ringing endorsement. In Coleman v Shell Company of Australia Ltd (1943) 45 SR (NSW) 27 (at 29), Jordan CJ criticised the Legislature's failure in 1938 to "take the course of recasting section 63(2) so as to make its meaning clear and thus cut at the roots of the jungle of judicial decisions by which it had been obscured, [but instead] … to allow the subsection to stand, and to qualify the effect of its three and a half lines as expounded by case law by adding three and a half pages to the statute book." 70 The effect of the 1938 amendments was considered by Kitto J in Chang Jeeng v Nuffield (Australia) Pty Ltd at 642-643: "… [T]he 1938 amendments left unaltered the situation created by the decisions of this Court in regard to the necessity for knowledge on the part of the worker if his institution of proceedings for compensation was to be relied upon as an exercise of his option. The two main things that were done may be usefully contrasted. On the one hand, s 63A provided a precise method by which the worker might make an irrevocable election in favour of compensation, thereby effectually ending his right to maintain proceedings independently of the Act. On the other hand, s 63(3) provided for the conditional termination of that right (and indeed any right to proceed against the employer which any person at all might have in respect of the injury) not by any exercise of the worker's option under subs (2), but by the operation of the subsection upon the fact of the worker's receiving a payment by way of compensation, whatever his intention and whether or not he knew that an alternative remedy was open to him. The receipt of the payment would not immediately and absolutely terminate the right, but it would bring about at once a new legal situation by giving subs (3) an immediate application to the particular case. It would at once set a term to the employer's liability to be sued independently of the Act." 71 In short, the effect of s 63 up to 1953 was that the worker's right to pursue statutory compensation was an alternative to the right to pursue common law proceedings. Section 63A was inserted to ensure there could be no doubt when the worker had exercised the s 63(2) option. 72 That position changed in 1953 when s 7(1)(c)(i) of the Workers' Compensation (Amendment) Act 1953 (the "1953 Act") omitted the old sub-s 63(2) and inserted a new sub-section providing: "(2) In such case the worker may proceed both under this Act and independently of this Act, but where in proceedings independently of this Act he accepts money brought into court by his employer or if he obtains judgment against his employer he shall not be entitled to any compensation under this Act other than compensation paid to him before such acceptance or judgment." 73 The 1953 Act also omitted s 63A. The new sub-s 63(2) applied to workers who had been injured before the 1953 Act commenced and who had not signed a s 63A notice of election, as well as to workers injured after the 1953 Act commenced: s 7(3). Section 63(5) provided that any payment of compensation in respect of the injury was a defence to proceedings independently of the 1926 Act in respect of the injury, a provision which had first been inserted in slightly different terms in 1938. 74 The effect of the 1953 amendment was to free s 63 of the 1926 Act "from all that was involved in the existence of an option"; "[t]henceforth a worker's rights under the Act were to be cumulative upon, instead of alternative to, any rights that he might have against his employer independently of the Act": Chang Jeeng v Nuffield (Australia) Pty Ltd (at 644) per Kitto J. In Australian Iron & Steel Ltd v Hoogland [1962] HCA 13; (1962) 108 CLR 471 (at 487) Windeyer J described the 1953 amendment as having "radically altered the law": "Since then an injured worker, instead of having to elect between taking compensation under the Act and pursuing to judgment an action for damages against his employer, has been able to do both. His rights under the Act are cumulative upon, not alternative to, his common law rights: but if he recovers judgment in an action against his employer further payments under the Act cease, and payments already received by him go in satisfaction of the judgment. This result was achieved by substituting a new subs (2) for the existing subs (2) of s 63 and by repealing s 63A. …" 75 Section 63(2) remained in the form it had reached by the 1953 amendment until the 1926 Act was repealed by the 1987 Act. Construction of s 151A 76 The restoration of the right to modified common law damages effected in 1989 did not involve altering the common law source of the worker's cause of action against the employer by transforming that right into one with a statutory foundation; the right of the worker to sue the employer for damages in any court of competent jurisdiction remained a right sourced at common law, albeit with its enjoyment regulated by Pt 5: Berowra Holdings Pty Ltd v Gordon (at [18]) per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ. I approach the construction of s 151A, therefore, on the basis that express language or necessary implication is required before the court will impute to the legislature an intention to abrogate or curtail fundamental rights or freedoms: Berowra Holdings Pty Ltd v Gordon (at [23]) per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ. 77 Sections 66 and 67 confer purely statutory rights, however those rights are significant statutory entitlements. Accordingly there should be a clear manifestation of a legislative intention to abrogate or curtail a worker's ss 66 and 67 entitlements before such a conclusion will be reached: cp Buck v Comcare (1996) 66 FCR 359 at 364. 78 In my view, the interpretation for which the appellant contends is not supported by a purposive, textual or contextual analysis of s 151A, by the cases in which it has been considered or by the legislative history. The legislature has expressed a clear intention to make a worker's commencement of proceedings either to recover damages or permanent loss compensation an irrevocable election to claim one of two alternative entitlements. The election regime it created would be frustrated if it was attended by the uncertainties which would arise if the appellant's argument was accepted. 79 The legislative history demonstrates the controversy which bedevilled the interpretation of s 63 of the 1926 Act. There was, at least until 1953 a manifest legislative intention to require the worker to elect between the alternative rights. The difficulty lay in identifying when that election had been made. One simple option flagged by both Dixon J and Jordan CJ was to make it plain that commencement of proceedings should bar the right to pursue the alternative remedy: see Latter (at 439) per Dixon J, referring approvingly to Jordan CJ in Burnett (at 123). It is that option which, in my view, the legislature adopted in s 151A. 80 Although Pt 5 restored a person's common law rights, that restoration was restricted both procedurally and substantively. The legislature intended to ensure the costs escalations which led to the abolition of common law rights, did not recur. It also wished to ensure that there was finality in workers' pursuits of their rights. 81 It sought to achieve its purpose by a scheme which required a worker who was entitled to compensation under the 1987 Act to elect between that right (insofar as permanent lump sum compensation was concerned) and damages. It is clear that when the legislature came to consider how to give effect to the election, it was conscious of the troubled legislative and judicial history of s 63. It was concerned that the s 151A(2) election should be demonstrable by an unequivocal act of the worker, capable of objective identification: cf Latter (at 443-444) per Dixon J. 82 If a worker chose recourse to litigation, whether at common law, or in the Compensation Court, the election provision attached at the moment those proceedings were commenced. To that extent, s 151A was a provision against double proceedings. The legislative intention to preclude double proceedings was manifest at least by the amendments to s 151A(3)(b) effected in 2000 which brought that sub-paragraph into line with s 151A(3)(a), so that the election in each case turn upon the commencement of proceedings. The purpose, as the Second Reading Speech explained, was to avoid two sets of legal costs. 83 The legislature's intention that s 151A should provide a precise method by which a person's election was made was reinforced in 1998 by the insertion of the words "or is taken to have made that election" in the opening words of the sub-section. That emphasised, if emphasis was needed, that the statutory election may be contrary to the facts; it was akin to a deeming provision: see Coates v Commissioner for Railways (1960) 78 WN (NSW) 477 at 384. 84 Section 151A(3) was also intended to as part of a scheme intended to encourage negotiation rather than immediate recourse to litigation: Berowra Holdings Pty Ltd v Gordon at [24]. A worker could negotiate to obtain either permanent lump sum compensation or damages. Acceptance of one was a bar to recovery of the other. To that extent, s 151A was a provision against double recovery. 85 Section 151A(4) made it plain that the s 151A(3) election was irrevocable. Thus the legislature was concerned with the legal consequence expressed in the maxim electio semel facta non patitur regressum [election once made, and plea witnessed, suffers not a recall. Co. Litt. 146.]: cf Harbon v. Geddes (at 48) per Dixon J. 86 Further, Pt 5, Division 2 only provided for two situations in which a person might recover either damages or permanent loss compensation, notwithstanding having made a s 151A(3) election. This supports the conclusion that the s 151A election, once made, does not permit recourse to the alternative form of relief save in the circumstances there provided. 87 An election to claim permanent loss compensation could be revoked enabling a person to commence proceedings in a court to recover damages in respect of the injury with the court's leave and in the circumstances prescribed by s 151A(5), which included whether, at the time of the election, there was no reasonable cause to believe that further deterioration would occur: s 151A(5)(c). In State of New South Wales v Taylor (at [10] – [22]), Gleeson CJ, McHugh and Hayne JJ held by majority (Kirby and Callinan JJ dissenting), on a textual analysis of s 151A(5) that the belief of the injured person or a person in his or her position was not relevant in applying s 151A(5)(c). 88 Secondly, if a person recovered damages in respect of an injury, that person ceased to be entitled to any further compensation (not merely permanent loss compensation) under the 1987 Act and any compensation already paid was, in substance, to be repaid: s 151B(1). However, a person who had recovered damages could recover compensation under the 1987 Act in the limited circumstances set out in sub-ss 151B(2) and (3). Thus a person who recovered damages for non-economic loss, but did not recover any damages for economic loss in respect of an injury because of the operation of s 151H could recover compensation under the Act: s 151B(2). Similarly a person who recovered damages for economic loss in respect of an injury, but did not recover any damages for non-economic loss in respect of the injury because of the operation of s 151G, was not prevented from recovering, and was not required to deduct under s 151B(1), any compensation under Div 4 of Pt 3 except s 67 compensation. 89 The appellant's submission that the s 151A(3)(a) election is only made when proceedings are commenced which comply with s 151C does not, in my view, withstand scrutiny. It is inconsistent with the plain words of s 151A(3) and the scheme of Division 2. 90 Further, the appellant's submission that his commencement of proceedings was ineffective to operate as an election because of the s 151C contravention is inconsistent with the joint judgment in Berowra Holdings Pty Ltd v Gordon, which explained: "35 … Section 151C does not extinguish rights or create new rights. Rather, it postpones the remedy for the common law right to initiate proceedings in a court of competent jurisdiction. The 'right' which s 151C does confer is conferred upon the defendant employer and must be raised in accordance with the procedural rules appurtenant to the particular court. 36 Proceedings commenced by a worker in contravention of s 151C engage the jurisdiction and procedural rules of the court in question. Such proceedings are vulnerable to an application by the defendant to strike out the initiating process or to move for summary dismissal, but they are not a 'nullity' …" 91 Once it is recognised that the appellant's proceedings validly engaged the court's jurisdiction notwithstanding they were commenced in contravention of s 151C, the conclusion that the s 151A election operated is inevitable. 92 Further, the appellant's interpretation would lead to anomalies which militate against its acceptance. 93 First, there would be no certainty as to when a worker who commenced proceedings in contravention of s 151C had made the s 151A election. This is completely contrary to the scheme of Division 2. 94 Secondly, a worker who commenced proceedings in contravention of s 151C, but later discontinued the proceedings, or even pursued them to finality, but lost, or recovered less than was hoped, not having made the s 151A election, could commence proceedings in the Compensation Court to recover permanent loss compensation. There is no question but that a complying worker who discontinued the proceedings for damages, or even pursued them to finality, but lost, or recovered less than was hoped would have made a s 151A election and, accordingly, would not be able to claim permanent lump sum compensation. On the appellant's construction a contravening worker would be in a better position than a complying one. The Court should eschew a construction that favours a person who contravenes a legislative provision. 95 Finally I note that although there has been little consideration of s 151A, certainly none on the present point, such consideration as there has been favours the respondent's argument. 96 Pye v Butterfield Cheese Factors Pty Ltd (1996) 39 NSWLR 425 concerned the question whether a worker injured in the Australian Capital Territory in the course of his employment who, by virtue of s 13 of the 1987 Act was entitled to, and did, claim compensation under that Act, had made a s 151A election by commencing proceedings against his employer to recover damages in the ACT Supreme Court. The case concerned s151A as it stood prior to the 2000 amendment. The Court held that where a worker's claim for common law damages was brought in another jurisdiction which was both the forum and the place of the tort, the commencement of such proceedings was not an election for the purpose of s 151A(3)(a) the 1987 Act. Gleeson CJ said of s 151A: "The election to which s151A refers is an election to be made by a person who, by force of that section, is not entitled to both permanent loss compensation and damages. The legislative denial of the entitlement, and the requirement to elect, are the opposite sides of the one coin. … The requirement to elect is the corollary of the denial of the entitlement to sue for damages as well as to claim compensation. If the denial does not operate, neither does the requirement to elect." (emphasis added) 97 State of New South Wales v Connor [2003] NSWCA 200 concerned the question whether an injured worker who commenced proceedings in 1998 to recover damages against his employer after being given leave to do so by Hidden J pursuant to s 151D of the 1987 Act (a leave held by this Court to have been erroneous) was taken to have made an election for the purposes of s 151A as it stood prior to the 2000 amendment and had, therefore, lost his entitlement to claim permanent loss compensation. Sheller JA (with whom Hodgson and Santow JJA agreed) held that he had. As in Pye's case Sheller JA referred to the pre-1989 version of s 151A(3)(b) but nothing turns on that for present purposes. 98 The history of the matter is set out in Sheller JA's judgment. In short, in the first decision, State of New South Wales v Connor [1999] NSWCA 251, this Court held that Hidden J erred in interfering with Master Greenwood's discretionary refusal of the worker's s 151D application to extend the time for bringing common law proceedings pursuant to s 151D of the 1987 Act. The Court set aside Hidden J's orders and reinstated Master Greenwood's orders refusing the s 151D application. Prior to the Court of Appeal's decision the worker had filed his statement of claim in the Supreme Court on 29 December 1988. After the first decision the worker filed an application for determination for compensation under Pt 3 Div 4 of the 1987 Act for non-economic loss (s 66) and for permanent injuries based on 90% of a most extreme case (s 67) in the Compensation Court. The employer responded to that claim asserting that by filing his statement of claim to recover common law damages the worker had irrevocably elected pursuant to s 151A of the 1987 Act to claim damages in respect of the injury from the employer liable to pay that compensation and had thereby lost his entitlement to permanent loss compensation in respect of the injuries. 99 The worker then sought to reopen the first appeal to vary the orders of the Court to add orders revoking the leave granted by Hidden J ab initio, order that the commencement of the proceedings by filing the statement of claim pursuant to Hidden J's orders was "void, as being of no legal effect" and an order that "the statement of claim and the filing of the statement of claim are set aside ab initio." 100 Sheller JA said: "9 On their face the three orders now sought are unusual if not unprecedented and of little, if any, utility in overcoming the effect of Mr Connor's election to commence proceedings to recover common law damages. That election was made when Mr Connor commenced those proceedings. The irrevocable election springs from Mr Connor's act in doing so on 29 December 1998. … 11 Section 151A requires a person to whom compensation is payable under the Act in respect of an injury to elect whether to claim that permanent loss compensation or damages in respect of the injury from the employer liable to pay that compensation. The injured person is not entitled to claim both. ...In no circumstance does the Act allow revocation of an election to claim damages in respect of the injury from the employer. 12 If a person commences proceedings as contemplated by s151D within three years after the date on which the injury was received, that person runs the risk that the proceedings may fail on grounds that would not have precluded recovery of permanent loss compensation. In that case, the election having been made, permanent loss compensation, even if otherwise available, cannot be recovered. …once the person injured commences proceedings in a court to recover damages in respect of the injury, that person elects to follow that course and loses the right to claim permanent loss compensation." (emphasis added) 101 Ostojic v Trazmet Pty Ltd [2005] NSWCA 145 concerned the form of s 151A(3)(b) in force prior to the amendment effected by the 2000 Act. The issue was whether a worker who had sought to recover lump sums pursuant to ss 66 and 67 of the 1987 Act in respect of impairment to his neck, back and right leg as well as lump sum compensation for pain and suffering, but who recovered only a lump sum of $780 for partial loss of use of his left thumb, was debarred from pursuing a claim for damages against his employer at common law. 102 The statement of claim in the common law proceedings made no claim in respect of damage to the left thumb. While it claimed in relation to injuries which had been the subject of the unsuccessful ss 66 and 67 claims, it also added new claims: see judgment at [28]. The worker resisted the proposition that the Commission's award in respect of the loss of permanent use of his left thumb constituted an election pursuant to s 151A which debarred him from seeking common law damages. He argued that, in the context of s 151A, there could be more than one injury as a result of a workplace accident with the potential for multiple elections, one for each injury or each item of injury: judgment at [41]. 103 Santow JA (with whom Giles and Tobias JJA agreed) rejected (at [72] ff) the worker's argument that "injury" in s 151A(2) should be read distributively in terms of each item of injury rather than refer to the totality of the injurious consequences from the workplace accident, saying: "73 However, that interpretation involves both a degree of absurdity and some dissonance with s 151A(5). The absurdity is that it would mean … that a plaintiff who suffered harm in a workplace accident would be entitled to bring a series of actions for common law damages nominating a different consequence of his accident in serial fashion. That would thereby allow a series of different elections for each site of injury, with the possible exception of those injuries that are the consequence of other injuries resulting directly from the workplace accident. It is difficult to discern any rational legislative purpose in such complexity. This is especially when the legislation is clearly directed to a simple legislative scheme requiring the worker to choose which compensatory regime he or she wishes to pursue, with an election being deemed to have been made by reference to the course chosen." (emphasis added) 104 Accordingly, he concluded (at [79]) that the worker "made his election in respect of the totality of his claims when he was awarded $780." 105 Finally, in this respect, I note that in Quigley v Australian Red Cross Society (at 514) Manser J observed that "the … clear intention [of Pt 5 as introduced in 1989] was to prevent a worker plaintiff from proceeding both for damages and for compensation under the Workers Compensation Act under sections 66 and 67, in respect of the same injury." As I have noted, the appellant relies on Manser J's conclusion in Quigley that "commence proceedings" in s 151V(2) contemplated "the commencement of proceedings which are valid proceedings". I confess to having difficulty with Manser J's conclusion which appears to be inconsistent with this Court's decision in Electricity Commission of NSW v Yates which his Honour had cited extensively. His Honour did not articulate his reasons for his conclusion and, in my view, the decision does not repay further consideration. 106 The commencement of the District Court proceedings by the appellant constituted an election to recover damages pursuant to s 151A, by reason of which he ceased to be entitled to permanent loss compensation in respect of his injury. 107 The Deputy President did not err. The appeal should be dismissed with costs. 108 BASTEN JA: This appeal is brought from a decision of the Workers Compensation Commission, constituted by a presidential member. The appeal was brought by the worker, as a party to those proceedings, who was aggrieved by a decision of the Commission "in point of law": see Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 353(1). The decision dismissed an application for compensation on the basis that the Appellant had elected to claim damages in respect of the injury and was thus barred from making a claim for compensation. Background 109 The Appellant claims that he was injured at work, on 6 June 2001. Notice of injury was given to the employer on the same day and a claim for compensation was made at that time. 110 Pursuant to s 151C, as in force at all relevant times, a person to whom compensation is payable under the Workers Compensation Act 1987 (NSW) ("the 1987 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": s 151C(1). 111 With respect to the Appellant's injury, that period did not expire until 5 December 2001. Nevertheless, on 21 November 2001, the Appellant commenced proceedings for damages in the District Court. Those proceedings were ultimately dismissed on 12 March 2003, by an arbitrator. The reason for the dismissal was the failure to comply with s 151C(1) of the 1987 Act. 112 On 27 November 2001 certain amendments made by the Workers Compensation Legislation Further Amendment Act 2001 (NSW) ("the 2001 Amendment Act") commenced. It will be necessary to say more about those amendments, and the transitional provisions in relation to them, shortly. 113 On 31 March 2004 the Appellant lodged a claim for non-economic loss compensation, payable under ss 66 and 67 of the 1987 Act. The employer argued that the commencement of proceedings for damages in the District Court had constituted an election and, pursuant to the repealed s 151A of the 1987 Act, the Appellant was now precluded from making a claim for "permanent loss compensation", which was defined in the old s 151A to mean compensation under Part 3, Division 4 of the 1987 Act, including claims under sub-ss 66(1) and 67(1): see old s 151A(1). On 5 December 2005 Deputy President Byron accepted the employer's argument and made an order which stated: "Mr Jeffrey Humphreys is precluded from commencing proceedings for permanent loss compensation under sections 66 and 67 of the Workers Compensation Act 1987 by reason of his election to commence proceedings to recover damages in the District Court of New South Wales on 21 November 2001." 114 The Deputy President concluded that this result was dictated by the decision of this Court in Gordon v Berowra Holdings Pty Ltd (2005) 62 NSWLR 427, which held that commencement of proceedings in breach of s 151C(1) did not constitute a nullity, with the result that, if no objection were raised by the employer in a timely fashion, the claim might properly proceed to a judgment in favour of the plaintiff. The conclusion reached in this Court has since been confirmed by the High Court in Berowra Holdings Pty Ltd v Gordon (2006) 80 ALJR 1214. Entitlement to make claim 115 In Asplundh Tree Expert (Australia) Pty Ltd v Robertson [2006] NSWCA 471 at [13] Handley JA (with whom Spigelman CJ and McColl JA agreed) referred to "the well known general rule that the rights of the parties are determined as at the date proceedings are commenced: in Re Keystone Knitting Mills' Ltd Trademark [1929] 1 Ch 92 (CA) 103, 105, 107." Applying that principle, Mr Humphreys' right to claim compensation under the 1987 Act is to be determined by reference to the law as it stood when he made his claim, namely 31 March 2004. (His claim for compensation was not for "permanent loss compensation", that term having meaning only under the repealed s 151A.) The law as at that date is not in doubt: his entitlement to compensation under the 1987 Act ceased, in respect of the injury concerned, when he recovered damages in respect of that injury from the employer liable to pay compensation under the 1987 Act: s 151A(1). He had not, as at 31 March 2004, recovered damages from his employer. 116 As noted above, the Commission reached a contrary conclusion, not on the basis of the then current law, but on the basis of the former s 151A(2), which had been repealed by the 2001 Amendment Act. Pursuant to that provision, which is set out below at [122], a person in the position of the Appellant was required to elect whether to claim compensation or damages. For the decision of the Commission to be upheld, two conditions must be satisfied, namely that: (a) an election by commencement of proceedings for damages, prior to the commencement of the 2001 Amendment Act, must continue to operate as a bar on a claim for compensation thereafter, and (b) the commencement of proceedings by a person not entitled to commence proceedings, by virtue of s 151C of the 1987 Act, must have constituted a valid election under s 151A(3) at the time the proceedings were commenced, namely 21 November 2001. First condition: the transitional provisions 117 Whether or not the "election" continued to operate as a bar to a claim for compensation, after the repeal of the section under which the election was made, depends, at least in part, on the operation of the transitional provisions contained in Schedule 6, Part 18C of the 1987 Act, as amended by the 2001 Amendment Act. The argument in this Court focussed on cl 9(1). That provision reads: 9. Amendments relating to common law damages 9(1) An amendment made by Schedule 1 to the Workers Compensation Legislation Further Amendment Act 2001 applies in respect of the recovery of damages after the commencement of the amendment (and so applies even if the injury concerned was received before the commencement of the amendment) but does not apply in respect of the recovery of damages if proceedings for their recovery were commenced in a court before the commencement of the amendment. 118 One of the amendments made by Schedule 1 was the repeal of old s 151A and the insertion of new s 151A, subsection (1) of which reads as follows: 151A Effect of recovery of damages on compensation (1) If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then … : (a) the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and (b) the amount of any weekly payments of compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and (c) the person ceases to be entitled to participate in any injury management program provided for under this Act or the 1998 Act. 119 The replacement of s 151A had two separate effects. First, the repeal removed the requirement for election contained in the old provision; secondly, the insertion of the new provision imposed a statutory limitation in respect of the recovery of damages. Clause 9(1) concerns the amendment so far as it is "in respect of the recovery of damages": it does not purport to operate in respect of the recovery of compensation. 120 That distinction is emphasised by sub-cl 9(3) which, together with its note, provides: (3) An amendment made by Schedule 1.1 to the Workers Compensation Legislation Further Amendment Act 2001 does not apply in a case where a person has elected to claim permanent loss compensation under section 151A before the commencement of the amendment. Note . This will enable such an election to be revoked in the circumstances provided by section 151A and common law damages recovered on the basis of the law in force at the time of the original election. 121 This provision does not in terms provide for the effect of an election made by the commencement of proceedings, where those proceedings have not resulted in the recovery of damages. However, it is based upon an assumption that an election to claim compensation would operate as a bar to the right to recover damages and that the repeal would otherwise have removed the right of revocation with respect to that form of election, contained in old s 151A. The assumption is, therefore, consistent with the view that an election to claim damages will continue to operate as a bar to a claim for compensation, despite the repeal of the former s 151A(2) and (3). This conclusion is consistent with the general rule contained in s 30 of the Interpretation Act 1987 (NSW) that a repeal will not affect the previous operation of the Act, or anything duly suffered or done under the old provision: s 30(1)(b). Accordingly, the immunity from a claim for compensation, enjoyed by the employer immediately before the repeal of the old s 151A, will remain unaffected by the repeal. The first condition for validity of the Commission's decision is satisfied. Condition 2: was the "election" effective? 122 Section 151A, as in force prior to the commencement of the 2001 Amendment Act, relevantly provided as follows: 151A Election – damages or "Table of Disabilities" compensation … (2) A person to whom compensation is payable under this Act in respect of an injury is not entitled to both: (a) permanent loss compensation in respect of the injury, and (b) damages in respect of the injury from the employer liable to pay that compensation, but is required to elect whether to claim that permanent loss compensation or those damages. (3) The person makes that election (or is taken to have made that election): (a) by commencing proceedings in a court to recover those damages or by accepting payment of those damages (in which case the person ceases to be entitled to permanent loss compensation in respect of the injury), or (b) by commencing proceedings in the Compensation Court to recover that permanent loss compensation or by accepting payment of that permanent loss compensation (in which case the person ceases to be entitled to recover damages in respect of the injury). … (4) An election is irrevocable, except that an election to claim permanent loss compensation may be revoked with the leave of the court given in accordance with this section. 123 The statutory context for this provision was provided by ss 151C and 151D, which, so far as relevant read as follows: 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 an 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. 151D(2) 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 more than 3 years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken. 124 Accepting that the proceedings commenced by the Appellant were not a nullity, as held by Berowra Holdings, there is a separate question as to whether, by commencing proceedings in contravention of s 151C(1), the Appellant in fact made a statutory election for the purposes of s 151A(3)(a). A literal reading of that provision taken in isolation would suggest that he did. He commenced proceedings in the District Court, which proceedings were dismissed, but which were legally effective to engage the jurisdiction of the Court. 125 However, reading ss 151A and 151C together, a different conclusion is open. The operation of s 151C(1) was noted in the joint judgment in Berowra Holdings, 80 ALJR 1214 at [35]: "Section 151C does not extinguish rights or create new rights. Rather, it postpones the remedy for the common law right to initiate proceedings in a court of competent jurisdiction. The 'right' which s 151C does confer is conferred upon the defendant employer and must be raised in accordance with a procedural rule pertinent to the particular court." 126 Thus, s 151C(1) is not expressed in terms of a prohibition: rather, it is expressed in terms of entitlement to commence proceedings, so that the prospective plaintiff, being a person to whom compensation is payable under the Act, "is not entitled to commence court proceedings for damages" until six months have elapsed since notice of the injury was given. The purpose of that section is also succinctly identified in the joint judgment in Berowra Holdings at [24]: "It may be accepted that the primary objective of s 151C is to encourage an injured worker to attempt in the first instance to satisfy his or her claim for damages by negotiation with the employer rather than by immediate recourse to litigation." That being the purpose, it would be unlikely, and indeed subversive of that purpose, if the Parliament permitted the employee to make an effective election to pursue a claim for damages within the six month period. Accordingly, it would not be envisaged, consistently with s 151C(1), that the election made "by commencing proceedings", for the purposes of s 151A(3)(a), would occur within the six month period. So understood, the "person" referred in that provision is a person who is "entitled to commence court proceedings", as described in s 151C(1). Thus, the statutory election is not made by commencing proceedings which the person has no entitlement to commence. 127 There is nothing inconsistent in this conclusion with the reasoning of the joint judgment in Berowra Holdings. As their Honours explained, at [19]: "There is no doubt that s 151C imposes a form of restriction or bar upon the commencement of court proceedings, but the dispute concerns the effect of non-compliance. Resolution of that issue requires close attention to the words of the statute and the statutory scheme in general." One effect of non-compliance may be a failure to engage s 151A(3)(a), even though the proceedings are not properly described as a "nullity". They are effective for some purposes, but not for others. 128 There are considerations which weigh against this approach. The first is the uncertainty of knowing whether an election has been made where proceedings were commenced within the six month period following notice of the injury, but where it is not known whether the employer will take objection. In other words, if the bar to entitlement is waived by the employer, the plaintiff becomes (retrospectively) a person entitled to commence proceedings, and their commencement becomes an effective election. Although avoidance of double recovery used to depend on s 151B and not upon the election, if the employer did not object to the contravention of s 151C(1), the commencement of the proceedings in the prohibited period must at some stage become an effective election. It might have been inconvenient not to know with certainty when the event which precluded a claim for permanent loss compensation crystallised. 129 However, the extent of the inconvenience should not be overstated. It is only the prejudicial effect to the employer which is of concern and the remedy for the uncertainty lay within its hands. Further, inconvenience to the employer (who would never suffer double recovery) may be offset by prejudice to the employee, who may be wholly deprived of compensation for his non-economic loss. 130 A second consideration is that the limitation period contained in s 151D adopts similar language to s 151C regarding the entitlement of the person to commence proceedings. It has been accepted that the commencement of proceedings after the expiration of the three year limitation period will amount to an effective election: indeed, that has been held to be the case even where proceedings were commenced out of time, pursuant to a grant of leave, which grant was reversed on appeal: see State of New South Wales v Connor [2003] NSWCA 200. However, that decision was based upon a line of authority in this Court dealing with cases where proceedings could be commenced only with leave of the Court: see Whisprun Pty Ltd v Sams [2002] NSWCA 394; Jol v State of New South Wales (1998) 45 NSWLR 283. As explained by Sperling J in Whisprun (Beazley and Heydon JJA agreeing) at [15]: "The purpose of s 151D(2) … is to preclude claims from being brought after the lapse of a specified time, otherwise than under the supervision of the court for cause shown. That purpose is equally well served by deciding the question of leave after the proceedings are commenced as by deciding the question before the proceedings are instituted." An important distinction between ss 151C and 151D is that the latter contained an exception where leave of the Court is obtained, whereas the former, the section presently under consideration, did not. 131 As was explained in Whisprun at [16] and reiterated in Gordon v Berowra Holdings, 62 NSWLR 427 at [40]-[41], even in relation to similar provisions, the effect of non-compliance can only be determined by reference to the specific legislative purpose: see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [93]. As noted above, not only is the operation of the two sections dissimilar, but the purpose is quite different. A standard form of limitation period is designed to avoid stale claims. The six month initial period of compulsory delay has, in a sense, the opposite purpose – namely, to avoid overhasty filing of litigation before opportunities for a negotiated settlement have been explored: Berowra Holdings, 62 NSWLR 427 at [46] (Mason P). There is thus no reason why non-compliance with s 151C should have had the same effect, in relation to the old s 151A, as non-compliance with s 151D. 132 A third consideration is the possibility of a contrary line of appellate authority dealing with s 151C. However, the Court was assured that the only case which addressed the operation of the provisions currently in question was a decision of the Compensation Court (Neilson J) in Deng v GMS Fulfilment Services Ltd (2003) 25 NSWCCR 446. That decision placed significant weight on the analogous situation under s 151D and, for reasons noted above, such reasoning is not persuasive. 133 While much information is to be obtained from the historical exegesis in the judgment of McColl JA in relation to the statutory history of workers compensation legislation, in my view that history does not provide guidance in determining the precise matter of statutory construction raised by this appeal. 134 A construction which places a premium on the employee obtaining flawless legal advice (in an area where change is the norm) by putting in the hands of the employer a power immediately to strike out a claim for damages as invalid, but to rely upon the same claim as a valid election, precluding a claim for compensation, is unattractive. It goes further than promoting a policy against double claims (let alone double recovery) and effectively precludes litigation of any claim. Such a construction does not further any discernable statutory purpose: it tends to undermine the statutory entitlements to compensation for non-economic loss. There being no power to undo an ill-advised or mistaken commencement of proceedings, if there is a construction which avoids a blatant subjection of substantive rights to procedural precision, it should be preferred. 135 A purposive construction, giving effect to these considerations, requires that ss 151A and 151C be read together so that, taken as part of a statutory scheme, the prohibition in s 151C is given effect in s 151A as a limitation on the period within which an effective election can be made. Thus, the election made in the present case was not legally effective, because the Appellant was not at the relevant time a person entitled to make such an election, and is now entitled to pursue his claim for compensation, in accordance with the current law. 136 The appeal should be allowed and the decision of the Commission set aside. The Respondent should pay the Appellant's costs of the appeal. ********** 11/12/2006 - Headnote was not forwarded - Paragraph(s) cover pages 3, 4 and 5 12/12/2006 - Tools in title of judgment and headnote should read Tool - Paragraph(s) Front page 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. 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