New South Wales Supreme Court CITATION : Michael Alan WILSON v STATE RAIL AUTHORITY OF NEW SOUTH WALES & Anor [2009] NSWSC 537 HEARING DATE(S) : 25 June 2008 (supplementary written submissions) JUDGMENT DATE : 17 June 2009 JUDGMENT OF : Hidden J DECISION : Proceedings against 1st Defendant dismissed. CATCHWORDS : WORKERS COMPENSATION - claim for work injury damages - determination of separate questions - application for summary dismissal - injury suffered in 1981-3 - proceedings commenced in 2007 - Chapter 7 of WIM Act - 2006 Guidelines - whether plaintiff must show at least 15 % WPI Uniform Civil Procedure Rules Limitation Act 1969 LEGISLATION CITED : Workers Compensation Act 1987 Workplace Injury Management and Workers Compensation Act 1998 Workers Compensation Legislation Further Amendment Act 2001 CATEGORY : Procedural and other rulings Attileh v State Rail Authority [2005] NSWCA 64, 62 NSWLR 439 Hobbs v Costain Australia Ltd (1995) 11 NSWCCR 56 CASES CITED : Berowra Holdings Pty Ltd v Gordon [2006] HCA 32, 225 CLR 364 Kimberly-Clark Australia Pty Ltd v Thompson [2006] NSWCA 264, 67 NSWLR 187 Maxwell v Murphy (1956-57) 96 CLR 261 Wattyl Australia Pty Ltd v McArthur [2008] NSWCA 326 Michael Alan WILSON (Respondent/Plaintiff) PARTIES : STATE RAIL AUTHORITY OF NEW SOUTH WALES (Applicant/1st Defendant) Robert Arthur REARDON (2nd Defendant) FILE NUMBER(S) : SC 2007/20443 COUNSEL : S Campbell SC & M Snell (Respondent/Plaintiff) G M Watson SC & R Gambi (Applicant/1st Defendant) SOLICITORS : Carroll & O'Dea (Respondent/Plaintiff) Astridge & Murray (Applicant/1st Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HIDDEN J Wednesday 17 June 2009 2007/20443 Michael Alan Wilson v State Rail Authority of NSW and Anor JUDGMENT 1 HIS HONOUR: These are proceedings for personal injury in which I am asked, pursuant to Part 28 rule 2 of the Uniform Civil Procedure Rules, to determine certain questions separately from any other question. An amended notice of motion filed by the first defendant, the State Rail Authority of NSW, sought the determination of eight questions, but prior to the hearing of the motion the parties refined those to three. Before I set them out, it is best to examine briefly the nature and history of the proceedings. 2 The plaintiff, Michael Alan Wilson, was employed by the first defendant, to which I shall refer as the SRA, in about August 1981, when he was 15 years old. He remained in that employment until mid January 1983. During that period he was sexually assaulted on several occasions by the second defendant, Robert Arthur Reardon, who was also employed by the SRA. Mr Reardon was later convicted of offences arising from this conduct and sentenced to a term of imprisonment. It is Mr Wilson's case that the sexual assaults occurred in circumstances constituting a breach of the SRA's duty to him as an employee. He seeks damages for the assaults and for psychological injury said to have resulted from them. 3 He made a Workers Compensation claim on 21 February 2006. The proceedings in this Court were instituted by a statement of claim filed on 7 December 2007. To do so he required leave under the Limitation Act 1969, which had been granted on 13 November 2007 by Malpass AsJ. 4 The three questions I must decide relate to the bearing upon the proceedings of the Workers Compensation Act 1987 (to which I shall refer as the WCA) and the Workplace Injury Management and Workers Compensation Act 1998 (to which I shall refer as the WIM Act). As expressed in a joint memorandum of the parties, they are as follows: (a) Do the provisions of Part 5 Division 3 of the Workers Compensation Act 1987, including ss.151G and 151H, apply to the Plaintiff's claim for damages? (b) Irrespective of the answer to (a), do the provisions of Division 2 of Part 2 and Divisions 2-5 of Part 3 (except s.284) of Chapter 7 of WIM Act as they apply to the Plaintiff's claim for damages require him to demonstrate that he has suffered a 15% permanent impairment before he is entitled to commence proceedings for damages, and if so, which of them? (c) If the answer to either (a) or (b) is yes; what follows? Should the answer to either of those questions be favourable to it, the SRA then seeks an order under Part 28 rule 4 of the Rules that the proceedings against it be dismissed. 5 Put shortly, Mr Watson SC, who appeared with Mr Gambi for the SRA, argued that the proceedings fail to comply with mandatory provisions of the WIM Act and are, accordingly, of no legal effect. Reliance was placed upon Attileh v State Rail Authority [2005] NSWCA 64, 62 NSWLR 439, in which the Court of Appeal examined this somewhat labyrinthine legislation. 6 In Attileh at [6]-[9], Mason P sketched the history of the interaction of the common law and the WCA prior to the enactment in 1998 of the WIM Act. Until 1987 claims by employees against employers for damages in respect of work related injuries were regulated, for the most part, by the common law. When the WCA was enacted in 1987, Part 5 abolished common law rights to recover damages from employers in respect of injuries for which they were liable to pay compensation under the Act. Those provisions came into force on 30 June 1987. However, in 1989 a new Part 5 was inserted restoring the right to common law damages, albeit with significant modifications. That new Part applied only to injuries suffered at or after 4pm on 30 June 1987. The result, as Mason P pointed out at [9], was two regimes in relation to substantive rights in claims for damages for workplace injuries, the distinction between them turning upon the date on which the injury occurred. 7 The WCA and the WIM Act co-exist. The effect of s 2A of the WCA is that that Act is to be construed as if it were part of the WIM Act and, in the event of any inconsistency between the two acts, the WIM Act prevails to the extent of that inconsistency. Of course, the legislative scheme preserves the distinction between statutory compensation and common law damages. 8 Central to the argument in the present case is Chapter 7, Part 2, Division 2 of the WIM Act. That division is headed "Making a claim for compensation or damages", and its application is set out in s 259 as follows: S 259 (1) This Division applies to the making of a claim after the commencement of this section (even if the injury concerned was received before the commencement of this section). (2) However, this Division does not apply to the making of a claim for work injury damages if court proceedings to recover the work injury damages concerned were commenced before the commencement of this section. For the purposes of the division, the expression "work injury damages" is defined in s 250 in such a way as to embrace Mr Wilson's claim. The commencement date of the division was 1 January 2002. 9 Clearly, subs (2) does not apply to the present proceedings, which were commenced well after 1 January 2002. On the face of it, the terms of subs (1) make the division applicable, Mr. Wilson's claim for damages being made after the commencement of the section, although related to an injury suffered before that commencement. However, that matter is not as simple as it seems because of the terms of s 251 of the WIM Act. This was a matter considered, but not resolved, by the members of the court in Attileh. I do not propose to set out s 251 or refer to the Honours' observations about it. It is sufficient to say that Mason P (at [45]) thought it arguable that subs (1) did not apply to that appellant's claim, while Tobias JA (at [61]-[62]) thought that it did and Santow JA (at [59]) preferred to express no final view about the matter. 10 In the event, the resolution of that issue was not necessary for their Honours' decision, any more than it is for mine. The decisive provision was Clause 8 of Part 18C of Schedule 6 to the WCA. That schedule is headed "Savings, Transitional and Other Provisions", and Part 18C contains provisions consequential upon certain amending legislation in 2001. Clause 8, headed "New Procedures for Making a Claim", provides: Clause 8: (1) Division 2 of Part 2 (sections 259-264) and Divisions 2-5 of Part 3 (sections 274-283), except section 284, of Chapter 7 of the 1998 Act extend (subject to any modifications prescribed by the regulations for the purposes of this clause) to the making of a claim after the commencement of those sections even if the claim is an existing claim. (2) This clause has effect despite section 251 of the 1998 Act. The "1998 Act", of course, is the WIM Act . The expression "existing claim" used in subclause (1) is defined in s 250 of the WIM Act , but it need not concern us. 11 It will be seen that Question (b) which I am asked to answer is based upon the terms of that clause. In Attileh, the appellant had commenced proceedings for damages against his former employer on 11 April 2002. All members of the court agreed that his claim was caught by Clause 8, so that Division 2 of Part 2 of Chapter 7 of the WIM Act applied to it. Mason P noted at [3] that none of the procedural requirements in Division 2 had been satisfied before the statement of claim was filed. His Honour held that the trial judge had been correct to dismiss the proceedings, noting at [29] that it was common ground that in that event, compliance with those requirements being mandatory, the proceedings were "of no legal effect …". On this, the crucial issue which determined the outcome of the appeal, Santow and Tobias JJA agreed: [59] and [60]. 12 The provisions in Division 2 relevant to the present case are ss 260 and 262. Section 260(1) provides that a claim must be made in accordance with the applicable requirements of the WorkCover Guidelines. Section 262 provides that court proceedings for the recovery of work injury damages cannot be commenced until a claim for the damages has been made. The SRA contends that the proceedings in this Court are of no effect because those provisions have not been complied with. Before the proceedings were instituted there had not been a claim in accordance with the WorkCover Guidelines. 13 By s 4 of the WIM Act, "WorkCover Guidelines" means guidelines issued under s 376. That section empowers the WorkCover Authority to issue guidelines in relation to a number of things, including "the assessment of the degree of permanent impairment of an injured worker as a result of an injury …": subs (1)(a). Mr Watson supplied a copy of Guidelines issued on 25 October 2006, which were said to be applicable to Mr Wilson's case. By Clause 1 of Part 6 of those Guidelines, a claim for work injury damages must relate to an injury resulting in "at least 15 % Whole Person Impairment (WPI)". 14 Section 313 of the WIM Act provides that, if there is a dispute as to whether the degree of permanent impairment of an injured worker resulting from an injury is sufficient for an award of damages, a claimant for work injury damages cannot commence court proceedings for recovery of those damages unless the degree of permanent impairment has been assessed by an approved medical specialist under Part 7 of Chapter 7. There was such a dispute in the present case, and the issue of the degree of permanent impairment was referred to an approved medical specialist, Dr Julian Parmegiani, psychiatrist. On 30 October 2007 Dr Parmegiani certified that Mr Wilson suffered 9 % WPI. Mr Wilson's appeal against that assessment, for which provision is made in Chapter 7, Part 7, was rejected. 15 Mr Campbell SC, who appeared with Mr Snell for Mr Wilson, pointed out that, putting aside the question of WPI, his client had made a claim for work injury damages as required by s 262 of the WIM Act. He relied upon the Workers Compensation claim of 21 February 2006, to which I have referred, together with certain correspondence at that time between the solicitors for the parties. Mr Watson took no issue of that proposition. His only argument was that, because Mr Wilson could not establish 15 % WPI, the claim failed to comply with s 260(1). Thus, he argued, it was not, and never could be, a valid claim. Counsel were agreed that it is upon the question of 15 % WPI that my decision turns. 16 Mr Campbell produced an earlier incarnation of the Guidelines, issued in December 2001. They did not impose a requirement of 15% WPI and Mr Campbell argued that they were the applicable Guidelines at the time Mr Wilson made his claim in February 2006. To this Mr Watson responded that the Guidelines upon which he relied, although issued in October 2006, are expressed to apply to "injuries notified" from 1 January 2002 and "claims made" from 1 January 2002, even if the injury was received before that date. In oral argument, that dispute was overtaken by consideration of s 151H of the WCA. 17 That section in its present form was introduced into Part 5 of the WCA, providing for modified common law damages, in 2001. It provides that no damages may be awarded "unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15 %". (At the same time s 151G was recast, limiting the nature of damages which might be recovered. Although that section is referred to in the first of the questions I am asked to answer, it is not germane to my decision and need not be examined.) When Part 5 was recast in 1989 to restore limited rights to common law damages, it was s 151U(1) which provided that the Part applied to a cause of action arising from an injury sustained at or after 4.00pm on 30 June 1987. The 2001 amendments left that section unchanged. 18 Mr Campbell argued that the 15 % WPI threshold for an award of damages finds its statutory force in s 151H, rather than in the procedural provisions in Chapter 7 of the WIM Act and the Guidelines. By s 151U(1), the argument continued, that threshold is confined to injuries received from 4.00pm on 30 June 1987. Mr Wilson's claim, of course, arises from injuries sustained much earlier than that, so as to fall within the "generally unrestricted" regime of common law claims: Attileh, per Mason P at [9]. 19 It was ss 149 and 150 of the WCA in its original form which had abolished the recovery of common law damages. That abolition was reversed in 1989 by s 151U(2), providing that the new Part 5 had effect "as if sections 149 and 150, as originally enacted, had never been enacted". In Hobbs v Costain Australia Ltd (1995) 11 NSWCCR 56, Cole JA, with whom Kirby P and Handley JA agreed, said at [64]: In my view the 1989 amending Act, and in particular the provisions of section 151U(2), make clear that it was not the intention of the Parliament to negate or deprive a worker of a complete cause of action for common law damages for injuries suffered resulting from events which occurred prior to 4.00pm on 30 June 1987. 20 On the face of it, Mr Wilson's claim for damages falls within the generally unrestricted regime, his cause of action having accrued before June 1987. The position urged by the SRA, Mr Campbell argued, would effectively deprive people in his position "of their common law rights, not by clear and express language and necessary intendment but by a side-swipe delivered by wholly procedural provisions in Chapter 7" of the WIM Act. 21 He referred to Berowra Holdings Pty Ltd v Gordon [2006] HCA 32, 225 CLR 364. That case related to s 151C(1) of the WCA, providing that a person to whom compensation is payable under that Act is not entitled to commence court proceedings for damages in respect of the relevant injury until six months after notice of injury has been given to the employer. The Court was concerned with the effect of non-compliance with that provision. A worker had commenced proceedings for damages before the expiry of the relevant six month period, and a number of steps had been taken in those proceedings by both parties before the employer sought their summary dismissal on the basis that, their having been commenced in contravention of s 151C, they were a nullity. 22 In the plurality judgment, their Honours noted that the right to modified common law damages conferred by Part 5 remained "a right sourced at common law, albeit with its enjoyment regulated" by that Part. After examination of authority, their Honours said (at [23]) that the "approach of the courts has consistently been to require very clear legislative intent before treating a statutory provision as taking away common law rights of a plaintiff, where there is an alternative construction available". The employer's submission that the proceedings were a nullity was rejected. Non-compliance with the provision did not deprive a court of jurisdiction to entertain a claim. Rather, it rendered the proceedings "vulnerable to an application by the defendant to strike out the initiating process or to move for summary dismissal" (at [36]), an application which the court would consider with "regard to the procedural history and the relevant rules of court" (at [34]). 23 In the present case, Mr Campbell argued, the SRA urges a construction of the relevant provisions of the WIM Act which would have the effect of taking away Mr Wilson's unmodified common law right to damages where that right is preserved by the substantive provisions of Part 5 of the WCA. As he put it, that construction "erects the 15 % barrier as a matter of procedural law where no 15 % barrier exists as a matter of substantive law". Such an approach, he argued, would be inconsistent with the cannon of construction expressed in [23] of Berowra Holdings v Gordon. 24 Mr Campbell pointed out that, unlike the present case, in Attileh there had been no compliance with s 262 of the WIM Act at all. No question arose in that case about whether someone "who had pre-June '87 rights" had to comply with a requirement of 15 % WPI. That being so, he argued, Attileh is not decisive of the issue which I must determine. 25 He also called in aid some dicta of Basten JA, with whom Ipp JA agreed, in Kimberly-Clark Australia Pty Ltd v Thompson [2006] NSWCA 264, 67 NSWLR 187. The issue in that case was whether the procedural requirements of Chapter 7 of the WIM Act applied to proceedings for damages for nervous shock brought by the widow of a worker who died of injuries sustained in the course of his employment. All the members of the Court (including Bryson JA) held that they did not, because the statutory concept of "work injury damages" does not extend to a claim for nervous shock brought by a stranger to the employment relationship. 26 However, Basten JA went on to note that the focus of the argument had been certain requirements in Part 6 of Chapter 7: s 315, requiring a claimant for work injury damages to serve upon the employer a "pre-filing statement", and s 318A, requiring such a claimant to refer the claim for mediation before commencing proceedings to recover those damages. At [32] ff His Honour observed that, in the light of their terms and their position in the statutory scheme, those sections relate to earlier provisions, ss 280A and 281, by which a claimant for work injury damages is required also to claim lump sum compensation, whereupon the employer upon whom that claim is made must take certain steps. Neither s 315 nor s 318A, his Honour said, would be engaged in a case where those requirements were not applicable. As his Honour put it at [44]: It will be seen that the provisions of Part 6 operate sequentially. Accordingly, if there is no requirement for a claim for lump sum compensation, s 281 does not operate; if s 281 does not operate s 315 is not engaged, and if s 315 is not engaged, nor is s 318A. 27 Drawing an analogy from that reasoning in the present case, Mr Campbell acknowledged that Mr Wilson's claim was for work injury damages requiring compliance with s 262 of the WIM Act and, accordingly, engaging s 260. However, he argued, insofar as the procedural scheme involved a worker establishing 15 % WPI, Mr Wilson could bypass that requirement because, for the reasons previously advanced, he did not have to comply with it. 28 As oral submissions developed, Mr Watson referred me to another aspect of the legislation which could be a complete answer to these arguments. As I have said, s 151H of the WCA in its present form was introduced in 2001. It was one of a series of amendments set out in Schedule 1 to the Workers Compensation Legislation Further Amendment Act 2001. For this purpose, it is necessary to return to Part 18C of Schedule 6 to the WCA. Clause 9 of that Part is headed "Amendments relating to common law damages". Subclause (1) of that clause provides: 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. 29 The relevant amendments commenced on 27 November 2001. Mr Wilson launched his proceedings for damages, of course, well after that date. Mr Watson submitted that the effect of clause 9(1) is to render those proceedings subject to s 151H as it now stands, so that damages cannot be recovered unless the injury resulted in a WPI of at least 15 %. By the terms of the clause, this would be so even though Mr Wilson's injury was sustained long before the amended section came into force. 30 Of course, it is important to have regard to the canon of construction referred to at [23] of Berowra Holdings v Gordon. What their Honours said there harked back to the familiar statement of principle by Dixon CJ in Maxwell v Murphy (1956-57) 96 CLR 261 at 267: The general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. 31 Mr Watson argued that here the legislative intention to affect existing rights does appear "with reasonable certainty", and that there is no alternative construction available. Insofar as s 151U(1) of the WCA provides that Part 5 of that Act applies to claims arising from injuries suffered on or after 30 June 1987, he said, the effect of the concluding words of clause 9(1) is to confine the operation of that subsection to proceedings for damages "commenced in a court before the commencement of the amendment". 32 Mr Campbell submitted that the clause should not be interpreted in this way because, in cases such as that of Mr Wilson, it would be a major derogation of vested common law rights. It may be that, to the extent that clause 9 bears upon Part 5 of the WCA, it was intended to affect only claims within the ambit of that Part as it was recast in 1989, that is, claims for injuries sustained from 30 June 1987. In Wattyl Australia Pty Ltd v McArthur [2008] NSWCA 326, it was accepted that s 151H applied to the injured worker: see the judgments of Beazley JA at [43] - [46] and [52], and Young CJ in Eq at [139] - [141]. However, in that case the worker suffered his injury in March 2000. 33 While I can see the force of Mr Watson's submission, this is not a matter which I need to decide for present purposes. Nor it is one about which I would express any concluded view in the absence of fuller argument and an examination of the legislative history. 34 However, for present purposes the question is academic as I am satisfied that Mr Wilson's claim is subject to the requirement of 15 % WPI because of the mandatory procedures under Chapter 7 of the WIM Act. Those procedures include the threshold of 15 % WPI imposed by the October 2006 Guidelines. As I have said, those Guidelines are expressed to apply to injuries notified and claims made from 1 January 2002 (even if the injury was received before that date). Nothing in those Guidelines, or in their context as part of the Chapter 7 procedures, suggest that that particular guideline is directed only to claims under Part 5 of the WCA for injuries suffered from 30 June 1987. 35 The legislative scheme, including clause 8 of Part 18C of Schedule 6 to the WCA, evinces a parliamentary intention that claims for damages after 1 January 2002 are confined to the more serious class of case, delineated by the minimum 15 % WPI. That is so regardless of when the injury was sustained. By s 259(2), a claimant is relieved of that requirement only if proceedings were instituted before that date. 36 In Attileh at [57], Mason P said of clause 8 of Part 18C of the Schedule: The language of that clause is intractably emphatic and it reinforces the generality of s 259 of the Workplace Injury Management and Workers Compensation Act . It means that the new procedures found in Ch 7, Pt 2, Div 2 apply to the making of any type of claim after 1 January 2002. Among those new procedures is the requirement, imposed by s 260(1), to make a claim in accordance with the applicable requirements of the Guidelines. A WPI of at least 15 % is one of those requirements. Unfortunately, it erects an insurmountable barrier to Mr Wilson's pursuit of damages. The fact that WPI was not specifically raised as an issue in Attileh does not make that case relevantly distinguishable. 37 Mr Wilson can draw no comfort from Hobbs v Costain, which was decided before the WIM Act was passed. Berowra Holdings v Gordon was relied upon for statements of principle but, of course, was not concerned with the provisions in issue here. The dicta of Basten JA in Kimberly-Clark v Thompson do not assist him. In the view I have taken, this is not a case in which it could be said that sequential procedural provisions do not apply because it is unnecessary to meet a requirement foundational to those provisions. 38 Wattyl Australia v McArthur was decided after I reserved judgment in this matter. I am indebted to counsel for bringing it to my attention and for furnishing written submissions about it. The Court of Appeal held that an injured worker's claim for damages should be dismissed because he had failed to make a claim for lump sum compensation in accordance with s 280A of the WIM Act. 39 The case involved the same provisions of Chapter 7 with which the court was concerned in Kimberly-Clark v Thompson, and the dicta of Basten JA were referred to. The court held that the worker's obligation to comply with s 280A was not contingent upon his entitlement to lump sum compensation or his prospects of success in obtaining it. Nor was he relieved of the obligation by abandoning any claim for lump sum compensation. In the course of her judgment, Beazley JA examined relevant provisions of the WIM Act and the WCA, and their rationale, as well as reviewing the High Court's reasoning in Berowra Holdings v Gordon. 40 I find nothing in that decision which could affect my conclusion in the present case. In the result, all three members of the court (which included Young CJ in Eq and Grove J) were agreed that the proceedings had to be dismissed. Beazley JA (at [87] – [89]) preferred to approach the matter upon the basis, elucidated in Berowra Waters v Gordon, that it was for the employer to determine whether to insist upon compliance with s 280A. Of course, the employer did. 41 Let me, then, answer the three questions posed by the parties in the light of the manner in which the case was argued. Question (a), concerning the applicability of ss 151G and 151H of the WCA, I do not need to answer. In response to question (b), I find that the provisions of Division 2 of Part 2 of Chapter 7 of the WIM Act require Mr Wilson to demonstrate 15 % WPI before he is entitled to commence proceedings for damages. 42 That being so, in answer to question (c), the proceedings against the SRA must be dismissed. If necessary, I shall hear the parties on costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.